As filed with the Securities and Exchange Commission on October 8, 1997

Registration No. 333-________AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, Washington,VIA EDGAR,
ON APRIL 29, 1998
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------------------------

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------------------------

RCM TECHNOLOGIES, INC.
(Exact nameName of registrantRegistrant as specified in its charter)

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

DelawareNEVADA 95-1480559
(State or other JurisdictionOther jurisdiction of incorporation) (I.R.S. IdentificationEmployer
incorporation or organization) (Identification Number)

2500 McClellan Avenue
SuiteMCCLELLAN AVENUE
SUITE 350
Pennsauken, NJ 08109
-----------------------------------------------------------
(AddressPENNSAUKEN, NEW JERSEY 08109-4613
(609) 486-1777
Address, including zip code, and telephone number, including
area code, of registrant'sRegistrant's principal executive office and principal
place of business)
Mr. Leon Kopytoffices)
---------------------------

LEON KOPYT
2500 McClellan Avenue
SuiteMCCLELLAN AVENUE
SUITE 350
Pennsauken, NJ 08109
(609 )PENNSAUKEN, NEW JERSEY 08109-4613
(609) 486-1777
----------------------------------------------------------
Name,(Name, address, including zip code, and telephone number,
including area code, of agent for service)
with---------------------------

Please send a copy of all correspondence to:

Stephen M. Cohen, Esquire
Buchanan Ingersoll Professional Corporation
Eleven Penn Center, 14th Floor
1835 Market Street
Philadelphia, PA 19103MARK K. KESSLER MICHAEL J. SILVER
RICHARD A. SILFEN WALTER G. LOHR, JR.
WOLF, BLOCK, SCHORR AND SOLIS-COHEN LLP HOGAN & HARTSON L.L.P.
TWELFTH FLOOR PACKARD BUILDING 111 SOUTH CALVERT STREET
111 SOUTH 15TH STREET SUITE 1600
PHILADELPHIA, PENNSYLVANIA 19102 BALTIMORE, MARYLAND 21202
(215) 665-8700
-----------------------------------------------

Approximate date of proposed sale to the public:977-2000 (410) 659-2700

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable following the date on whicheffectiveness of this Registration Statement becomes effective.Statement.
---------------------------

If the only securities being registered on this Form are to bebeing offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]/ /

If any of the 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, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /

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
under the Securities Act, please check the following box. [X]
------------------------------

The Company hereby amends this Registration Statement on such date or
dates as may be necessary/ /
---------------------------

CALCULATION OF REGISTRATION FEE

(1) Includes 405,000 shares subject to delay its effective date until the Company shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effectiveUnderwriters' over-allotment option.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Section 8(a) ofRule 457(c) under the Securities Act of 1933, or until this Registration Statement shall become
effectiveas amended, on such date as the
Commission, acting pursuant to said Section 8(a)basis of the average of the high and low prices reported on the Nasdaq National
Market on April 27, 1998.
---------------------------

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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), may determine.

CALCULATION OF REGISTRATION FEE

- ------------------------------ -------------------- -------------------- --------------- ----------------
Proposed
Maximum
Title of Each Proposed Maximum Aggregate Amount of
Class of Securities Amount to be Offering Price Per Offering Registration
to be Registered Registered Share(1) Price Fee (2)
- ------------------------------ -------------------- -------------------- --------------- ----------------
- ------------------------------ -------------------- -------------------- --------------- ----------------

Shares of Common Stock, 1,500,813 $15.88 $23,832,910 $7,222
$.05 par value
- ------------------------------ -------------------- -------------------- --------------- ----------------
- ------------------------------ -------------------- -------------------- --------------- ----------------

Shares of Common Stock, 157,342 $15.00(4) $2,360,130 $ 716
$.05 par value(3)
- ------------------------------ -------------------- -------------------- --------------- ----------------
- ------------------------------ -------------------- -------------------- --------------- ----------------
Total $26,193,040 $7,938
- ------------------------------ -------------------- -------------------- --------------- ----------------

(1)Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457.
(2)Fee calculated upon the basis of the closing price of the Company's Common Stock on October 6, 1997 of
$15.88, which date is within five (5) business days prior to the date
of filing of this Registration Statement.
(3)Reflects shares issuable, if at all, upon the exercise of outstanding Class
C Warrants. (4) Reflects exercise price of outstanding Class C Warrants.
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

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.

PRELIMINARY

SUBJECT TO COMPLETION
PROSPECTUS DATED OCTOBER 8, 1997APRIL 29, 1998

2,700,000 SHARES

RCM TECHNOLOGIES, INC.

157,342 SharesCOMMON STOCK

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

Of the 2,700,000 shares of Common Stock offered by the Company pursuant to
certain outstanding Warrants

1,500,813 Shares of Common Stock
offered by certain Selling Security Holders

This Prospectus relates to an offeringhereby (the "Offering"),
2,509,980 shares are being sold by RCM Technologies, Inc. (the "Company") of 157,342 shares of common stock, $.05 par value per share (the
"Common Stock"), issuable upon the exercise, if at all, of certain outstanding
Class C Warrants (the "Warrants") that were issued by the Company in a public
offering that was completed on August 22, 1989. The Warrants are subject to an
exercise price, after giving effect to certain adjustment events, of $15.00 per
share of Common Stock, and
are scheduled to expire on December 31, 1997.

This Prospectus also relates to the potential resale, subject to
material restrictions upon sale, of up to 1,500,813 shares of Common Stock,
previously issued by the Company in private transactions, pursuant to
registration rights granted by the Company in conjunction with such
transactions. These190,020 shares are being offered by the holders identified as
"Selling Security Holders" in this Prospectus, including 1,234,201 shares being
offeredsold by certain directors and officers. Resalestockholders of the shares by the Selling
Security Holders may not occur prior to December 7, 1997. Thereafter, the
Selling Security Holders have agreed to further restrictions upon resale of the
shares. See "SELLING SECURITY HOLDERS."

The shares of Common Stock may be offered by the Selling Security
Holders identified in this Prospectus or by donees, pledgees, transferees, or
other successors in interest, for sale from time to time by the holders in
regular brokerage transactions, either directly or through brokers or to
dealers, in private sales or negotiated transactions, or otherwise, at prices
related to then prevailing market prices.Company (the
"Selling Stockholders"). The Company will not receive any of
the proceeds offrom the sale
of shares of Common Stock by the Selling Security
Holders although it will receive proceeds from the exercise, if at all, of all
of the Warrants. All expenses of the registration of such securities will be
borne by the Company. TheStockholders. See "Principal and Selling Security Holders, and not the Company, will
pay or assume all applicable brokerage commissions or other costs of sale as may
be incurred in the sale of such securities. See "SELLING SECURITY HOLDERS.Stockholders."

The Company will assume no responsibility for the sale of the shares of
Common Stock, nor can there be any assurances that a liquid trading market will
exist for the sale of the shares of Common Stock.
The Company's Common Stock is includedtraded on The NASDAQthe Nasdaq National Market
("NASDAQ") under the
symbol "RCMT." The closingOn April 28, 1998, the last reported sale price of the Company's Common
Stock as reported by NASDAQ on October 6, 1997 was $15.88.

No person is authorized to give any information or to make any
representations, other than as contained herein, in connection with the offer
made in this Prospectus, and any information or representation not contained
herein must not be relied upon as having been authorized by the Company or the
Selling Security Holders. This Prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any security other than the Common Stock
offered by this Prospectus, nor does it constitute an offer to sell or a
solicitation of any offer to buy any shares$23.00 per share. See "Price Range of Common Stock offered hereby to
any person in any jurisdiction where it is unlawful to make such an offer or
solicitation to such person. Neither the delivery of this Prospectus nor any
sale hereunder shall under any circumstances create any implication that
information contained herein is correct as of any time subsequent to the date
hereof.and Dividend
Policy."

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

PURCHASETHE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF THESE SECURITIES MAY INVOLVE MATERIAL RISKS. A DISCUSSION OF THESE
RISK FACTORS APPEARSRISK.

SEE "RISK FACTORS" COMMENCING ON PAGES 7 - 11.PAGE 7.

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

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

============================== ---------------------------- --------------------------- ============================

Underwriting Proceeds to
Discounts the Company
Class of Price to and or the Selling
Security Public Commissions Security
Holders
============================== ---------------------------- --------------------------- ============================

(1) Before deducting expenses of the Offering, all of which will be payable by
the Company, estimated at $600,000.

(2) $23,832,910(1)
Common Stock

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

Shares of $15.00(3) (2) $2,360,130(4)
Common Stock

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

(1) Represents the anticipated sale by the Selling Security Holders at
$15.88 per share, the last reported sales price reported on The NASDAQ
National MarketSM on October 6, 1997. There can be no assurances,
however, that the Selling Security Holders will be able to sell their
shares at this price, or that a liquid market will exist for the
Company's Common Stock. The Company will receive no proceeds upon the
sale of shares of Common Stock by the Selling Security Holders,
although the Company will receive proceeds from the exercise of the
Warrants.
(2) Exclusive of the costs of this offering, including among others,
filing, printing and professional fees, estimated at $50,000, which
will be borne entirely by the Company.
(3) Reflects the exercise price of the Class C Warrants.
(4) Reflects gross proceeds that may be realized by the Company upon the exercise, if at all, of the Class C
Warrants.

The date of this Prospectus is October ___, 1997.

AVAILABLE INFORMATION The Company has granted the Underwriters a 30-day option to purchase up to
405,000 additional shares of Common Stock solely to cover over-allotments,
if any. To the extent that the option is exercised, the Underwriters will
offer the additional shares at the Price to Public shown above. If the
option is exercised in full, the total Price to Public, Underwriting
Discounts and Commissions and Proceeds to Company will be $ , $
and $ , respectively. See "Underwriting."

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

The shares of Common Stock are offered by the several Underwriters, subject to
prior sale, when, as and if delivered to and accepted by them, and subject to
the informational requirementsright of the Securities Exchange ActUnderwriters to reject any order in whole or in part. It is
expected that the delivery of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information concerning the Company may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Commission's regional offices at: 7 World Trade Center, Suite 1300, New
York, New York 10048 and Northwest Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copiesshares of such materials may be obtained upon
written request addressed to the Commission at the Public Reference Section, at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In
addition, the Commission maintains a Web site at http://www.sec.gov containing
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission, including the Company.
The Common Stock is listed on NASDAQ and reports and other information
concerning the Company may alsooffered hereby will be
inspectedmade at the offices of The National
Association of Securities Dealers, Inc. at 1735 K Street, N.W.BT Alex. Brown Incorporated, Baltimore, Maryland on or
about , Washington, D.C.
20006.

In addition, the Company will provide without charge to each person to
whom this Prospectus is delivered, upon either the written or oral request of
such person, the Annual Report to Stockholders for the Company's latest fiscal
year and a copy of any or all of the documents incorporated herein by reference
other than exhibits to such documents. See "INCORPORATION1998.

BT ALEX. BROWN

BANCAMERICA ROBERTSON STEPHENS

LEGG MASON WOOD WALKER
INCORPORATED

THE DATE OF DOCUMENTS BY
REFERENCE.THIS PROSPECTUS IS , 1998

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK. SUCH
TRANSACTIONS MAY INCLUDE THE PURCHASE OF SHARES OF COMMON STOCK FOLLOWING THE
OFFERING TO COVER A SYNDICATE SHORT POSITION IN THE COMMON STOCK OR MAINTAIN THE
PRICE OF THE COMMON STOCK, AND THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION
OF THESE ACTIVITIES SEE "UNDERWRITING."

Such requests should be directed to Stanton Remer, RCM Technologies,
Inc., 2500 McClellan Avenue, Suite 350, Pennsauken, NJ 08109

The Company has filed with the Commission a registration statement
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"IN CONNECTION WITH THE OFFERING, CERTAIN UNDERWRITERS AND CERTAIN SELLING
GROUP MEMBERS MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON
STOCK ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE 103 OF REGULATION M
UNDER THE SECURITIES EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT"). This Prospectus does not contain all of 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, reference is hereby made to the Registration Statement.

INCORPORATION OF DOCUMENTS BY REFERENCE

The following documents previously filed with the Commission are
incorporated herein by reference:

(a) The Company's Registration Statement on Form S-1, Reg. No. 333-23753
filed on March 21, 1997, as thereafter amended, which contains a description of
the Company's Common Stock and certain rights relating to the Common Stock,
including any amendments or reports filed for the purpose of updating such
descriptions;

(b) The Company's Annual Report on Form 10-K for the year ended October
31, 1996;

(d) The Company's definitive Proxy Statement for the Annual Meeting of
Stockholders held April 25, 1997;

(e) The Company's Quarterly Reports on Form 10-Q for the quarters ended
January 31, 1997, April 30, 1997 and July 31, 1997;

(f) The Company's Current Report on Form 8-K dated January 21, 1997;

(g) The Company's Current Report on Form 8-K dated September 25, 1997;

(h) The Company's Current Report on Form 8-K dated September 26, 1997;
and

(i) In addition to the foregoing, all documents subsequently filed by
the Company pursuant to Section 13(a), 13(c), 14 and 15(d) of the Act (prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities remaining
unsold), shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of the filing of such reports and documents.SEE
"UNDERWRITING."

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the detailed
information and financial statements (including the notes thereto) appearing
elsewhere in orand incorporated by reference intoin this Prospectus. Unless otherwise
indicated, the information in this Prospectus does not give effect to the
exercise of the Underwriters' over-allotment option. Investors should carefully
consider the information set forth under the caption "Risk Factors." Unless the
context otherwise requires, the "Company" or "RCM" refers to RCM Technologies,
Inc. and its wholly owned subsidiaries. References to fiscal years are to the
respective fiscal years of the Company which end October 31.

THE COMPANY

The Company

The Company is a multi-regional provider of specialtyinformation technology and
other professional staffing services through its 3241 branch offices located in 1317
states. The Company's Information Technology Group offers responsive, timely and
comprehensive information technology staffing solutions to support the entire
systems applications development and implementation process. The Company's
information technology professionals have expertise in a variety of technical
disciplines, including enterprise software, network communications, database
design and development and client server migration. The Company provides contractalso offers
professional engineering staffing and temporary personnelproject management services, through its
Professional Engineering Group, for a variety of engineering disciplines, such
as aeronautical, electro-mechanical, nuclear and computer science. As of April
24, 1998, the Company employed approximately 1,000 information technology and
approximately 500 professional engineering personnel. The Company is also
engaged in the information technology,
professional engineering and technical, specialty healthcare and general support sectors of the staffing
industry to a diversified base of national, regional and
local customers.industry. During fiscal 1996,1997, the Company providedplaced employees with approximately
1,150 customers within a variety of industries. Representative customers include
AT&T, Bell Atlantic, Chase Manhattan Bank, Liberty Mutual Insurance, MCI, Merck,
Merrill Lynch, Northeast Utilities and 3M.

Since fiscal 1995, the Company has pursued an averageaggressive growth strategy
designed to transition the Company's business from general support staffing
services to higher growth, higher margin professional staffing services,
particularly information technology. In fiscal 1995, approximately half of 2,600
contractthe
Company's revenues were derived from general support staffing and the Company
did not offer information technology services. For the three months ended
January 31, 1998, information technology services contributed 57% of the
Company's revenues. Since the beginning of fiscal 1995, the Company has acquired
13 information technology or professional engineering staffing services
companies, aggregating $126.7 million in revenues for their respective latest
twelve months prior to acquisition. Through these acquisitions, the Company has
achieved substantial revenue growth, improved its operating profitability and
repositioned itself as a provider of information technology and other
professional staffing services. The Company's revenues increased from $26.9
million in fiscal 1995 to $114.0 million in fiscal 1997, a compound annual
growth rate of 106%. For the same period, the Company's operating income
increased from $857,000 to $8.5 million, and its operating margin improved from
3.2% to 7.4%. On a pro forma basis (as if all fiscal 1997 and fiscal 1998
acquisitions occurred at the beginning of fiscal 1997), the Company's fiscal
1997 revenues, operating income and operating margins were $165.5 million, $13.3
million and 8.0%, respectively. As a result of this repositioning, the Company
now operates in the fastest growing sector of the staffing industry and is
experiencing strong internal growth. For the three months ended January 31,
1998, the Company's internal revenue growth was 34% over the comparable
prior-year period.

The staffing industry has experienced rapid growth in recent years.
According to the Staffing Industry Report, revenues in the domestic temporary
staffing employeesindustry have grown from $24.6 billion in 1992 to an estimated $53.7
billion in 1997, a five-year compound annual growth rate of 17%. Temporary
staffing is now considered an effective tool for managing a company's investment
in human resources. Temporary staffing allows companies to expand and contract
employee levels based on current needs, thus converting fixed labor costs into
controllable variable costs while still maintaining a high degree of employee
skill level. Within the staffing industry, information technology staffing
services is the fastest growing sector, having increased from approximately $5.1
billion in 1992 to approximately $14.9 billion in 1997, a five-year compound
annual growth rate of 24%. This growth is a result of numerous factors,
including (i) the increasing importance to companies of information technology,
(ii) the need for companies to continually update and integrate hardware
platforms and software applications, (iii) the difficulties companies have in
sustaining the requisite information technology expertise internally, (iv) the
acceptance by companies of outsourcing information technology needs and (v) an
increasing preference by technical professionals to operate independently,
motivated by a desire to increase personal flexibility and work on a daily basis to approximately 700
customers, including a numbervariety of
Fortune 500technologies and projects. The temporary staffing industry is highly fragmented,
with over 7,000 staffing companies governmental units,
public utilities, as well as small to medium size retail, manufacturing,
professionalin the United States, and service organizations. Customers include Air Products &
Chemicals, AT&T, Beth Israel Medical Center, Consolidated Edison, Deloitte &
Touche, Mt. Sinai Hospital, Northeast Utilities, Sandoz Pharmaceuticals and
Sears.is undergoing
significant consolidation.

The Company's objective is to become a leading provider of specialtyinformation
technology and other professional staffing services in selected high growth,
high density regional markets throughout the United States. Management has designed the Company's blend of service offerings,
particularly within the information technology and niche professional
engineering sectors, to meet the varied staffing requirements of many medium and
large corporations. The Company intends
to expand internallyachieve this objective by (i) focusing on information technology and other
professional staffing services, (ii) strengthening its market presence in
selected regions throughout the country, (iii) making strategic acquisitions in
existing and new regions, (iv) promoting internal growth and (v) migrating its
product offerings to make
acquisitions bothhigher value-added services.

The Company typically enters a region by acquiring a profitable, growing
provider of information technology or other professional staffing services,
operated by a management team with an interest in joining the Company after the
acquisition. The Company believes its entrepreneurial and decentralized
operating environment is a key attribute in its existing marketsability to attract and in markets that are determined byclose
acquisitions, retain the management of acquired companies and promote internal
growth. The Company builds on the names, reputations and customer relationships
of acquired companies and shares operating policies, procedures and expertise
among its branches to have strong growth and specialty staffing requirements.
Additionally, theenhance operating efficiencies. The Company believes it can maximize the benefits of its
acquisitions by rapidlyalso focuses
on quickly integrating the general and administrative functions of the acquired companies fostering a decentralized entrepreneurial environmentin
order to realize administrative savings and synergies, integrate and establish
financial controls and relieve management of administrative burdens so that they
can focus on growing sales.

The Company plans to promote internal growth by focusing on the relationships with bothcontinuing to cross-sell
its customers and personnel.
Service to the general staffing sector, while not intended as a primary focusexisting mix of
the Company's operations, will continue to supplement the Company's specialty professional services and provide diversificationincreasing its revenues
from higher margin project management and consulting services. As an example of
cross-selling, the Company has successfully provided the services of its
Information Technology Group to the Company'sutility industry customer base of its
Professional Engineering Group. The Company believes the utilities industry is
in the early stages of a period of deregulation which will increase the
industry's need for information technology services. Additionally, the Company
plans to use the project management expertise of its Professional Engineering
Group to assist its Information Technology Group in expanding its sales of
higher value-added project management and geographic presence.consulting services.

The executive offices of the Company are located at 2500 McClellan Avenue,
Suite 350, Pennsauken, New Jersey 08109, and its telephone number is (609)
486-1777.

4
THE OFFERING

Securities Being Offered: This Prospectus relates
Common Stock offered by the Company............ 2,509,980 shares
Common Stock offered by the Selling
Stockholders................................. 190,020 shares(1)
Common Stock to be outstanding after the 10,393,868 shares(1)(2)
Offering.....................................
Use of Proceeds................................ For working capital and other general
corporate purposes, primarily to finance
future acquisitions, and repayment of bank
debt. See "Use of Proceeds."
Nasdaq National Market symbol.................. RCMT

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

(1) The Common Stock offered by the Selling Stockholders consists of shares to
an offeringbe issued by the Company upon the exercise of 157,342 -------------------------stock options (the "Selling
Stockholder Options") by the Selling Stockholders at a weighted average
exercise price of $3.20 per share.
(2) Does not include an aggregate of 1,959,525 shares of commonCommon Stock reserved
for issuance under the Company's stock $.05 par
value per share ("option plans. As of April 24, 1998,
options to acquire 1,103,875 shares (including the Selling Stockholder
Options) of Common Stock"),Stock at exercise prices ranging from $1.09 to $14.50
were outstanding, including options to acquire 403,950 shares which were not
exercisable as of the date of this Prospectus. Also does not include 55,855
shares of Common Stock issuable upon the exercise if at all, of certain outstanding279,274 Class C
Warrants (the "Warrants") that were issued byof the Company, in a public offering that was completed on August 22, 1989. The Warrants
are subject toat an exerciseeffective price after giving effect to certain adjustment
events, of $15.00
per share, as of Common Stock, andthe date of this Prospectus. The Warrants are scheduled to
expire on DecemberApril 30, 1998.

SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

FISCAL YEAR ENDED OCTOBER 31, THREE MONTHS ENDED JANUARY 31,
------------------------------------------ -------------------------------
PRO FORMA PRO FORMA
AS ADJUSTED AS ADJUSTED
1995 1996 1997 1997(1) 1997 1998 1998(2)
------- ------- -------- ----------- ------- ------- -----------

STATEMENT OF INCOME DATA:
Revenues:
Information technology....... $ -- $11,343 $ 50,665 $ 89,597 $ 8,298 $21,325 $26,545
Professional engineering..... 13,846 26,184 33,306 45,876 6,336 9,093 11,231
General support.............. 13,070 18,816 24,793 24,793 5,354 5,458 5,458
Specialty healthcare......... -- 4,696 5,195 5,195 1,163 1,356 1,356
------- ------- -------- -------- ------- ------- -------
Total revenues........... 26,916 61,039 113,959 165,461 21,151 37,232 44,590
Gross profit................... 4,537 12,259 27,127 39,022 5,100 9,152 10,903
Operating income............... 857 3,015 8,486 13,293 1,355 3,087 3,732
Income from continuing
operations(3)................ 849 2,368 4,840 7,737 781 1,777 2,161
Income from continuing
operations per share
(diluted)(3)................. $ 0.28 $ 0.55 $ 0.76 $ 0.92 $ 0.16 $ 0.22 $ 0.25
======= ======= ======== ======== ======= ======= =======
Supplemental income from
continuing operations
per share(4)................. $ 0.18 $ 0.38 $ 0.76 $ 0.92 $ 0.15 $ 0.22 $ 0.25
======= ======= ======== ======== ======= ======= =======
Weighted average number of
shares outstanding........... 3,008 4,321 6,361 8,377 4,962 8,177 8,567
OPERATING AND OTHER DATA:
Gross margin(5)................ 16.9% 20.1% 23.8% 23.6% 24.1% 24.6% 24.5%
Operating margin(6)............ 3.2% 4.9% 7.4% 8.0% 6.4% 8.3% 8.4%
Number of offices at
period-end................... 18 29 36 41 32 39 41

JANUARY 31, 1998
------------------------------------------
PRO FORMA
ACTUAL PRO FORMA(7) AS ADJUSTED(7)(8)
------- ------------ -----------------

BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 557 $ 557 $ 48,707
Working capital(9).......................................... 18,060 18,060 66,211
Total assets................................................ 58,462 65,282 113,433
Total debt.................................................. 2,000 8,700 2,000
Stockholders' equity........................................ 46,944 47,064 101,914

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

(1) Adjusted to give effect to (i) the acquisitions (and related financing
transactions) which occurred during fiscal 1997 and fiscal 1998 and (ii) the
reduction in interest expense resulting from the anticipated use of the
estimated net proceeds from the Offering (assuming a public offering of
539,785 shares at a price of $23.00 per share), as if all such transactions
had occurred as of the beginning of fiscal 1997. See "Use of Proceeds" and
"Unaudited Pro Forma Consolidated Condensed Statements of Operations."

(2) Adjusted to give effect to (i) the acquisitions (and related financing
transactions) which occurred during fiscal 1998 and (ii) the reduction in
interest expense resulting from the anticipated use of the estimated net
proceeds from the Offering (assuming a public offering of 389,792 shares at
a price of $23.00 per share), as if all such transactions had occurred at
the beginning of fiscal 1998. See "Use of Proceeds" and "Unaudited Pro Forma
Consolidated Condensed Statements of Operations."

(3) Income from continuing operations for fiscal 1997 does not include after tax
loss from discontinued operations of $363,000, or $0.06 per share.

(4) Assumes an effective tax rate of 42% for fiscal 1995, fiscal 1996 and the
three months ended January 31, 1997. This Prospectus also relatesThe Company's effective tax rates for
fiscal 1995, fiscal 1996 and the three months ended January 31, 1997 were
10%, 16% and 39%, respectively, due to the potential resale, subjectutilization of net operating loss
carryforwards.

(5) Gross margin is gross profit as a percentage of total revenues.

(6) Operating margin is operating income as a percentage of total revenues.

(7) Assumes the acquisitions which occurred subsequent to material
resrictions uponJanuary 31, 1998 had
occurred on January 31, 1998.

(8) Gives effect to the issuance and sale of up to 1,500,813 shares, as described under "SELLING
SECURITY HOLDERS" below, of Common Stock, previously issued by the Company in
private transactions, pursuant to registration rights granted by the Company in
conjunction with such transactions. These shares are being offered by the
holders identified as "Selling Security Holders" in this Prospectus, including
1,234,201 shares being offered by certain directors and officers. Resale of the
shares by the Selling Security Holders may not occur prior to December 7, 1997.
Thereafter, the Selling Security Holders have agreed to further restrictions
upon resale of the shares. See "SELLING SECURITY HOLDERS."

The2,509,980 shares of Common Stock
offered by the Company hereby, the issuance of 190,020 shares upon the
exercise of stock options by the Selling Security Holders may be
offered for saleStockholders and the anticipated
application of the estimated net proceeds therefrom (assuming a public
offering price of $23.00 per share). See "Use of Proceeds."

(9) Excludes Note payable-bank.

RISK FACTORS

This Prospectus and other reports and statements filed by the Company
(collectively, "Commission Filings") from time to time bywith the holders thereof in regular brokerage
transactions, either directlySecurities and
Exchange Commission (the "Commission") contain or through brokers or to dealers, in private sales
or negotiated transactions, or otherwise, at prices related to then prevailing
market prices. The Company will not receive any proceeds frommay contain certain
forward-looking statements and information that are based on the sale of shares
of Common Stock by the Selling Security Holders although it will receive
proceeds from the exercise, if at all,beliefs of the
Warrants. All expensesCompany's management as well as estimates and assumptions made by, and
information currently available to, the Company's management. When used in
Commission Filings, the words "anticipate," "believe," "estimate," "expect,"
"future," "intend," "seek," "plan" and similar expressions, as they relate to
the Company or its management, identify forward-looking statements. Such
statements reflect the current views of the registrationCompany with respect to future
events and are subject to certain risks, uncertainties and assumptions relating
to the Company's operations and results of such securities will be borne by the Company. The Selling
Security Holders,operations, competitive factors,
shifts in market demand and not the Company, will pay or assume all applicable
brokerage commissions or other costs of sale as may be incurredrisks and uncertainties, including, in
addition to any uncertainties specifically identified in the sale of
their securities.

The Common Stock is traded on The NASDAQ National Market under the symbol
"RCMT." On October 6, 1997, the closing price on NASDAQ was $15.88.
Number of shares of Common Stock outstanding.....................7,582,206(1)

Number of shares of Common Stock which may be
issued upon the exercise of the Warrants...........................157,342

Total number of shares of Common Stock
outstanding assuming exercise of the Warrants....................7,739,548

Total number of shares of Common Stock being offered
by Selling Security Holders......................................1,500,813
- ---------------------
(1) As of October 6, 1997.
- ---------------------

Use of Proceeds: The Company will not receive any of the proceeds from the
sale of any of the shares of Common Stock by the Selling Security Holders.

The net proceeds realized by the Company upon the exercise of the Warrants,
if at all, will be usedtext surrounding
such statements, uncertainties with respect to offset the general working capital requirements of
the Company. Inasmuch as the Company has received no firm commitments for the
exercise of the Warrants, there can be no assurances as to the amount of the net
proceedschanges or developments in
social, economic, business, industry, market, legal and regulatory circumstances
and conditions and actions taken or omitted to be realizedtaken by third parties,
including the Company.

Risk Factors:Company's stockholders, customers, competitors and legislative,
regulatory, judicial and other governmental authorities. Should one or more of
these risks or uncertainties materialize, or should the underlying assumptions
prove incorrect, actual results may vary significantly from those anticipated,
believed, estimated, expected, intended, sought or planned. The Common Stock offered hereby involves a high degree of risk.
See "RISK FACTORS."

Trading Symbol: Common Stock - RCMT.
Class C Warrants - RCMTZ

RISK FACTORS

An investment in the shares of Common Stock involves a high degree of
risk. Prospective investors should carefully consider the following risk
factors should be considered carefully in addition to the other information
set forth in this Prospectus in connection
with the investment in the shares of Common Stock.

When used incontained or incorporated by reference intoin this Prospectus before purchasing the
words "estimate," "project," "intend," "expect" and similar expressions are
intended to identify forward-looking statements regarding events and financial
trends which may affect the Company's future operating results and financial
position. Such statements are subject to risks and uncertainties that could
cause the Company's actual results and financial position to differ materially.
Such factors are described in detail below and in the Company's reports filed
with the Commission under the Exchange Act which are incorporated herein by
reference. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date made. The Company
undertakes no obligation to publicly release the result of any revisions to
these forward-looking statements to reflect events or circumstances after the
date made or to reflect the occurrence of unanticipated events.Common Stock offered hereby.

Ability to Achieve and Manage GrowthGrowth. The Company has experienced
significant growth since the beginning of fiscal 1995, principally through
acquisitions. Continued growth could place additional demands on its
administrative, operational and financial resources. The Company's ability to
achieve and manage its growth will depend on a number of factors, including the
availability of working capitalCompany's ability to support such
growth, existingattract and emerging competition, the Company'sretain management and other key personnel, its
ability to adapt and grow its management information systems, its ability to
maintain sufficient profit margins and the strengthlevel of demand for contract and
temporary personnel in the sectors in which the Company operates. There can be
no assurance that the Company will be able to continue to achieve or manage such
growth effectively and the failure to do so could have a material adverse effect
on the Company's business, financial condition and results of operations. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business -- Business Strategy."

Risks Associated with Future Acquisitions

A primary element of Acquisition and Integration of Acquired Businesses. As part of
its business strategy, the Company's growth strategy isCompany will continue to pursue
strategic acquisitionsevaluate opportunities to
acquire local and regional businesses that expand or complement the Company's
business. The
Company regularly reviews various strategic acquisition opportunities and
periodically engages in discussions regarding possible acquisitions. As a
result, negotiations may occur from time to time as appropriate opportunities
arise. There can be no assurance that the Company will be able to identify
additionalfind attractive
acquisition candidates on terms favorable toor effectively manage the integration of acquired
businesses into its existing business. If the expected operating efficiencies
from such transactions do not materialize, if the Company orfails to integrate new
businesses in a timely manner enter into acceptable agreementsits existing business or closeif the costs of such
integration exceed expectations, the Company's operating results and financial
condition would be adversely affected. Future acquisitions by the Company could
result in the incurrence of debt, the potentially dilutive issuance of equity
securities and the incurrence of contingent liabilities and amortization
expenses related to goodwill and other intangible assets, any such transactions,of which could
adversely affect the Company's operating results and financial condition. The
amount allocable to intangible assets on the Company's balance sheet may
increase in connection with acquisitions, which will increase the Company's
amortization expense. The Company had $29.5 million of intangible assets as of
January 31, 1998. In the event of any failure to do sosale or liquidation of the Company or a
portion of its assets, there can be no assurance that the value of the Company's
intangible assets will ever be realized. The carrying value of goodwill is
reviewed if the facts and circumstances suggest that it may be impaired. If this
review indicates that goodwill would not be recoverable, as determined based on
the undiscounted cash flows of the entity acquired over the remaining
amortization period, the Company's carrying value of the goodwill will be
reduced by the estimated shortfall of cash flows. Any future determination
requiring the write-off of a significant portion of unamortized intangible

assets could have a material adverse effect on the Company's ability to sustain its growth. In addition, management believes that the Company
will compete for acquisition candidates with other companies. Increased
competition for such acquisition candidates could have the effectfinancial condition
and results of increasing
the cost of pursuing this growth strategy or could reduce the number of
attractive candidates to be acquired. Future acquisitions could divert
management's attention from the daily operations of the Company and require
additional management, operational and financial resources. Moreover, there is
no assurance that the Company will be able to successfully integrate
acquisitions into its business or operate such acquisitions at expected levels
of revenue or profitability. Acquisitions may also have an adverse short-term
effect on the Company's operating results, dependence on retaining key
personnel, amortization of acquired intangible assets and risks associated with
unanticipated problems, liabilities or contingencies.

The Company may require additional debt or equity financing for future
acquisitions, which may not be available at all, or on terms favorable to the
Company. To the extent the Company uses shares of Common Stock for all or a
portion of the consideration to be paid in future acquisitions, dilution may be
experienced by existing stockholders, including the purchasers of Common Stock
in this offering. If the Company does not have cash resources sufficient for
such purpose or is not able to use its Common Stock as consideration for
acquisitions, its growth through acquisitions could be limited.

Dependence on Key Customers and Geographic Concentration

Although the Company provides services to a large number of customers,
approximately 24.6% and 24.3% of the Company's revenues in fiscal 1996 and the
nine months ended July 31, 1997, respectively, were derived from the Company's
top five revenue producing customers, with one customer accounting for
approximately 12.0% of the Company's revenues in each period. Similarly, a
substantial portion of the Company's revenues are currently derived from
services provided to customers in the Northeast, Midwest and California regions
of the United States. The loss of or a reduction in business from any major
customers or a deterioration of general economic conditions in these regions
could adversely affect the Company.operations.

Dependence on Availability of Qualified Temporary PersonnelPersonnel. The Company depends on
its ability to attract, train and retain qualified personnel who possess the
skills and experience necessary to meet the staffing requirements of its
customers. To remain competitive, the Company must
continually evaluate and update its database of personnel in each sector in
which it operates. Competition for the services of personnel within all of its
professional specialty groups is intense. Competition for information technology personnel is particularly
intense and demand for their services has, to date, substantially exceeded their
supply. The Company expects such competition to continue. Factors influencing
such competition include compensation, benefits, variety of assignments, growth
opportunities, relationships with other specialty staffing companies and full-time
employment opportunities. The Company, like others in the information technology
staffing industry, depends to a significant degree on the recruitment of
personnel from outside the United States. The availability of information
technology personnel from countries outside the United States is affected by the
number of visas granted under current United States immigration laws, and these
laws have made and may continue to make the recruitment of international
information technology personnel more difficult. There can be no assurance that
qualified personnel will continue to be available to the Company in sufficient
numbers and on terms of employment acceptable to the Company. The inability to
attract and retain qualified personnel in sufficient numbers, or to upgrade its
base of qualified personnel to keep pace with changing customer needs and
emerging technologies, could have a material adverse effect on the Company's
business, financial condition and results of operations. See "Business --
Operations."

Competitive Market. The staffing industry is highly competitive, with
limited barriers to entry. The Company's principal competitors are generally
local or regional independent staffing companies that are located in the
Company's various regional markets. The Company also encounters competition from
international and national companies. Certain of the Company's competitors have
more established operations and greater marketing, financial and other resources
than the Company. In addition, as part of the Company's growth strategy, the
Company competes for suitable acquisition candidates. Increased competition for
such acquisition candidates could have the effect of increasing the price for
acquisitions or reducing the number of suitable candidates for acquisition. The
Company expects that the level of competition will remain high in the future,
which could limit the Company's ability to maintain its market share or maintain
gross margins in the geographic regions or industry sectors in which it
operates, any of which could have a material adverse effect on the Company's
business, financial condition and results of operations. See "Business --
Competition."

Reliance on Key PersonnelPersonnel. The Company is highly dependent upon the
continued services and experience of its senior members of management, including
Leon Kopyt, Chairman of the Board and Chief Executive Officer. The loss of the
services of Mr. Kopyt or other senior members of management could have a
material adverse effect on the Company's business. The Company has employment
agreements with Mr. Kopyt and certain other senior members of management.

Fluctuations in Quarterly Operating Results

The Company has experienced, and is expected to continue experiencing,
quarterly variations in revenues and operating income as a result of many
factors, including the timing of assignments from customers, future
acquisitions, hiring of personnel and additional selling, general and
administrative expenses incurred to support new business as well as changes in
the Company's revenue mix. In connection with certain engineering projects, the
Company could incur costs in periods prior to recognizing revenues under those
contracts. In addition, the Company must plan its operating expenditures based
on revenue forecasts, and a revenue shortfall below such forecast in any quarter
would likely adversely effect the Company's operating results for the quarter.
While the effects of seasonality of the Company's business have been obscured by
its growth through acquisitions, the Company usually experiences lower revenues
in its first fiscal quarter due to the slowdown in business associated with the
holiday season.

Increased Costs of Employment

The Company is required to pay unemployment insurance premiums and
workers' compensation benefits for its contract and temporary employees.
Unemployment insurance premiums are set annually by the states in which
employees perform services and could increase periodically. There can be no
assurance that the Company will be able to increase the fees charged to its
customers in a timely manner and by an amount sufficient to cover increased
unemployment insurance premiums. Workers' compensation costs have increased as
various states in which the Company conducts operations have raised benefit
levels and liberalized allowable claims. The Company maintains workers'
compensation insurance for its employees under an insured program in its areas
of operation. There can be no assurance that the Company's actual workers'
compensation obligations will not exceed the amount of its insured coverage or
that the Company will be able to increase the fees charged to its customers
sufficiently to offset increased employment costs.

Liability for Customer and Employee ActionsActions. Providers of contract and temporary staffing services generally
place their employees in the workplace of other businesses.companies. The risk of employee
misconduct is attendant to the Company's business. These risks could include
claims relating to errors and omissions, misuse of proprietary information,
misappropriation of funds, discrimination and harassment, theft of customer
property, other criminal activity or torts and other claims. While theThe Company has not
historically experienced any material claims of these types, and has insurance
covering certain of these risks,risks. However, there can be no assurance that the
Company will not experience such claims or incur costs in connection with such
risks in the future,future. Further, there can be no assurance that insurance coverage
for such risks will continue to be available to the Company or that itcoverage
will be adequate to cover such liabilities.

Risks Related to Tax Status of Independent Contractors

Generally, the Company treats its technical personnel as employees for
federal and state tax purposes and pays all requisite Social Security taxes
(FICA), payroll taxes, unemployment taxes, workers' compensation insurance
premiums and other employee taxes and similar costs. In certain cases, however,
technical personnel desire to be treated as independent contractors for federal
and state tax purposes with respect to their assignments. In such cases, and if
appropriate, the individual is treated as an independent contractor for tax
purposes. Of the technical personnel, historically, less than 5% were treated as
independent contractors for federal and state tax purposes. The Company believes
that it is in material compliance with all applicable tax regulations concerning
the classification of its technical personnel, and has not, to date, been the
subject of any attempt by any federal or state authority to reclassify any of
the personnel it has treated as independent contractors. There can be no
assurance, however, that federal and state taxing authorities will not challenge
the Company's classification of technical personnel as independent contractors
in the future. If successful, such a challenge could result in the imposition of
additional taxes, interest and penalties, the amount of which could have a
material adverse effect on the Company's financial condition.

Risk of Government Regulations and Legislative ProposalsProposals. The Company's
costs of operations could increase if there are any material changes in
government regulations. Recent federal and state legislative proposals have
included provisions seeking to extend health insurance benefits to employees who
do not currently receive such benefits. As a result of the wide variety of
national and state proposals currently under consideration, the impact of such
proposals cannot be predicted. There can be no assurance that the Company will
be able to increase the feesrates charged to its customers in a timely

8
manner and in sufficient amountamounts to cover increased costs related to any new
benefits that may be extended to temporary employees as a result of such
legislation or regulations. It is not possible to predict whether any other
legislation or regulations affecting the Company's operations will be proposed
or enacted at the federal or state level; however, no assurancesassurance can be given
that if enacted, such legislation or regulations would not have a material
adverse effect on the Company.

Competitive Market

The temporary staffing industry is highly competitive, with limited
barriers to entry.Broad Discretion in Use of Proceeds. The Company competesintends to use
approximately $6.7 million of the net proceeds of the Offering to repay
indebtedness and will have broad discretion in using the remaining proceeds of
the Offering. The Company intends to use the balance of the net proceeds for
customersgeneral corporate purposes, primarily to finance future acquisitions. Although
the Company regularly reviews strategic acquisition opportunities, as of the
date of this Prospectus, the Company has no binding agreements with respect to
any material acquisitions. Consequently, there can be no assurance as to when or
how the remaining net proceeds from the Offering will be used. If the Company is
unable to promptly utilize such proceeds in connection with acquisitions, or to
otherwise use such proceeds in the geographic regionsgrowth of its business, the returns realized
from temporarily investing such proceeds may be substantially less than the
returns which could be realized if such proceeds were successfully invested in
which it operates with national, regionalthe business. See "Use of Proceeds."

Dependence on Key Customers. Although the Company provides services to a
large number of customers, approximately 21.9% and local, full service and
specialized staffing providers. Certain18.8% of the Company's
competitors have
greater marketing, financialrevenues for fiscal 1997 and other resources,the three months ended January 31, 1998,
respectively, were derived from the Company's top five customers. One such
customer accounted for approximately 11.5% and more established
operations, than8.4% of the Company's revenues
over the same periods, respectively. The loss of, or a reduction in, business
from any major customer could adversely affect the Company. AsSee "Business --
Sales and Marketing."

Fluctuations in Quarterly Operating Results. The Company has experienced,
and expects to continue experiencing, quarterly variations in revenues and
operating income as a result they may be better ableof many factors, including the timing of
assignments from customers, acquisitions, selling, general and administrative
expenses to respond or
adaptsupport new business and the incurrence of payroll taxes. In
connection with certain engineering projects, the Company could incur costs in
periods prior to new or emerging technologiesrecognizing revenues under those contracts. In addition, the
Company must plan its operating expenditures based on revenue forecasts, and changes in customer requirements or to
devote greater resources toa
revenue shortfall below the development, marketing and sales of their
services than the Company. The Company expects that the level of competition
will remain high in the future, which could limit the Company's ability to
maintain its market share or maintain gross margins in the geographic regions in
which it operates, either of which couldforecast for any quarter would likely have a materialan
adverse effect on the Company's operating results for the quarter. While the
effects of seasonality of the Company's business financial conditionhave been obscured by its
growth through acquisitions, the Company's branch offices usually experience
lower revenues in the Company's first fiscal quarter due to the slowdown in
business associated with the calendar year-end holiday season.

Shares Eligible for Future Sale. Sales of substantial amounts of Common
Stock in the public market following the Offering could adversely affect the
market price of the Common Stock. Upon the closing of the Offering, there will
be 10,393,868 shares of Common Stock outstanding, all of which will be freely
tradeable without restriction or further registration under the Securities Act,
unless held by an "affiliate" of the Company as that term is defined in Rule 144
under the Securities Act, which shares will be subject to the resale limitations
of Rule 144 and, resultsexcept for (i) 1,096,936 shares which have been registered for
resale and may be sold subject to certain contractual restrictions limiting
resales by each of operations.

General Economic Risks

DemandMessrs. Meyers and Blaire, to 50,000 shares, each, per week,
(ii) 55,265 shares which have been registered for professional staffing services is significantly affectedresale, but are subject to a
90-Day Lock-Up Period (as defined below), and (iii) 312,311 shares which may not
be sold until November 30, 1998 due to contractual restrictions. The sale of
914,425 shares held by the general leveldirectors and officers of economic activity. When economic activity slows, customers
may delaythe Company, is limited by
lock-up agreements. Under the terms of the lock-up agreements, these holders
have agreed that they will not, without the prior written consent of BT Alex.
Brown Incorporated, offer, sell, contract to sell or cancel plans that involveotherwise dispose of their
shares for a period of 90 days from the hiringdate of permanent or contract
technical personnel.this Prospectus (the "Lock-Up
Period"). Following expiration of the Lock-Up Period, all of the shares subject
to the lock-up agreement will be eligible for public resale. Sales of additional
shares in the public market could also occur upon the exercise of existing stock
options. The Company is unable to predict the leveleffect, if any, that future sales
of economic
activity at any particularshares, or the availability of shares for future sale, will have on the
market price for the Common Stock prevailing from time and fluctuations into time. Sales of
substantial amounts of Common Stock, or

the general economyperception that such influx of shares into the market could occur, could
adversely affect the market price for the Common Stock and could impair the
Company's business, operating results and financial
condition.future ability to obtain capital through offerings of equity
securities. See "Shares Eligible for Future Sale."

Effect of Certain Anti-Takeover ProvisionsAnti-takeover Provisions. Certain provisions of the
Company's Articles of Incorporation, as amended (the "Articles of
Incorporation"), and Amended and Restated Bylaws (the "Bylaws"), the Nevada
General Corporation Law,Revised Statutes, the Company's Stockholder Rights Plan (the "Rights Plan") and
the Second Amended and Restated Termination Benefits Agreement between the
Company and its Chief Executive Officer (the "Benefits Agreement") could delay
or frustrate the removal of incumbent directors and could make difficult a
change in control transaction including a merger, tender offer or proxy contest
involving the Company, even if such events could be viewed as beneficial by the
Company's stockholders. For example, the BylawsArticles of Incorporation provide for a
classified Board of Directors and the Articles of
Incorporation deny the right of stockholders to amend the
Bylaws without the consent of the Board and require advance notice of
stockholder nominations of directors. The Company is also subject to provisions
of the Nevada General
Corporation Law thatRevised Statutes, which prohibit a publicly held Nevada corporation that has 200
or more stockholders, at least 100 of whom are stockholders of record and Nevada
residents, from engaging in a broad range of business combinations with a person
who, together with affiliates and associates, owns 10% or more of the
corporation's outstanding voting shares (an "interested stockholder") for three
years after the person became an interested stockholder, unless the business
combination is approved in a prescribed manner. In addition, the Rights Plan
provides for substantial dilution of aan "acquiring person" as(as defined thereintherein)
in the event a person or group of persons acquires beneficial ownership of 15%
or more of the outstanding Common Stock of the Company or in the event of a merger or sale of
assets which is not approved by the "continuing directors," of the Company as(as
defined in the Rights Plan.Plan). Furthermore, in the event of a "change in control"
(as defined in the Benefits Agreement) which results in the termination of the
Chief Executive Officer, the Company would be required to make substantial
payments and, in certain circumstances, reduce the exercise price of options
issued to the Chief Executive Officer.

ACQUISITION PROGRAM

Since fiscal 1995, the Company has pursued an aggressive growth strategy
designed to transition the Company's business from general support staffing to
higher growth, higher margin professional staffing services, particularly
information technology. The Company has implemented this strategy through the
acquisition of 13 information technology or professional engineering staffing
services companies, aggregating $126.7 million in revenues for their respective
latest twelve months prior to the acquisition. Through these acquisitions, the
Company has achieved substantial revenue growth, improved its operating
profitability and repositioned itself as a provider of information technology
and other professional staffing services. A key element of the Company's growth
strategy is to continue to pursue strategic acquisitions. The Company believes
that its success in completing acquisitions is due to its entrepreneurial and
decentralized operating philosophy, its strong corporate-level support and
resources, its status as a public company and its ability to offer management of
the acquired companies an opportunity to join and participate in the growth of a
rapidly growing provider of information technology and other professional
staffing services. See "Business -- Growth Strategy."

The following table provides a summary of the acquisitions completed by the
Company since fiscal 1995:

NUMBER
DATE ACQUIRED COMPANY OF OFFICES HEADQUARTERS SERVICES (1) REVENUES (2)
- ------------- ------- ---------- ------------ ------------ -------------
(IN MILLIONS)

12/15/94 Great Lakes Design, Inc. 1 Grand Haven, MI PE $ 3.9
8/30/95 Cataract, Inc. 7 Newtown, PA PE 20.4
3/11/96 The Consortium 5 Fairfield, NJ IT, SH, GS 26.0
5/1/96 The Consortium of Maryland, Inc. 1 Bethesda, MD IT 5.6
9/13/96 Performance Staffing, Inc. 4 Louisville, KY PE 2.3
11/4/96 Programing Alternatives of 2 Minneapolis, MN IT 9.4
Minnesota, Inc.
4/1/97 Programming Resources Unlimited 1 Wayne, PA IT 2.4
8/4/97 Camelot Contractors Limited 1 Manchester, NH IT 16.2
9/29/97 Austin Nichols Technical 1 Kansas City, MO IT, PE 4.9
Temporaries, Inc.
9/29/97 J.D. Karin Consulting Services, 1 Flanders, NJ IT 4.9
Inc.
1/4/98 Northern Technical Services, Inc. 3 Milwaukee, WI IT 12.6
2/2/98 Staffworks, Inc. 2 Stanhope, NJ IT 12.6
2/2/98 Global Technology Solutions, Inc. 1 Sacramento, CA IT 5.5
-- ------
30 $126.7
== ======

- ------------------
(1) Services provided are abbreviated as follows:

IT - Information Technology
PE - Professional Engineering
SH - Specialty Healthcare
GS - General Support

(2) Represents approximate revenues in the latest 12 months prior to the date of
acquisition.

11
USE OF PROCEEDS

The net proceeds from the sale of the 2,509,980 shares of Common Stock
offered by the Company hereby and the issuance of 190,020 shares upon the
exercise of stock options by the Selling Stockholders are estimated to be
approximately $54.9 million ($63.7 million if the Underwriters' over-allotment
option is exercised in full), assuming a public offering price of $23.00 per
share and after deducting estimated underwriting discounts and commissions and
expenses of the Offering. The Company will not realizereceive any proceeds from the
sale of shares of
Common Stock offered by the Selling Security Holders. Other thanStockholders hereby.

The Company intends to use the net proceeds, after repayment of $6.7
million of indebtedness, of approximately $48.2 million ($57.0 million if the
Underwriters' over-allotment is exercised in full) for working capital and other
general corporate purposes, primarily to finance future acquisitions. Although
the Company regularly reviews strategic opportunities, as of the date of this
Prospectus, the Company has no binding agreements with respect to ordinary brokerage commissions or other costsany material
acquisition.

Approximately $6.7 million of sale, the costs of this
offering, including among others, printing, blue sky and professional fees,
estimated at $50,000, will be borne entirely by the Company. See "SELLING
SECURITY HOLDERS."

Although the Company will not realize anynet proceeds from the resale of
the shares by the Selling Security Holders, gross proceedsOffering will be realized by
the Company to the extent shares are issued upon the exercise of outstanding
Warrants. The gross proceeds which may be realized by the Company upon the
exercise of all of the Warrants will be $2,360,130. Inasmuch as the Company has
received no firm commitments for their exercise, there can be no assurance that
any or a substantial portion of the Warrants will be exercised.

Management cannot predict with any certainty the amount of proceeds, if
any, which may be generated from the exercise of the Warrants. The net proceeds
which may be realized by the Company, if any, upon the exercise of the Warrants
will not be utilized for any specific purpose other than to contribute to the
Company's working capital and be
used to continuerepay indebtedness outstanding under the operationsCompany's revolving credit
facility with Mellon Bank, N.A. (the "Revolving Credit Facility") which was
obtained for working capital purposes and acquisition financing. The Revolving
Credit Facility provides a revolving line of credit, which permits borrowings of
up to $20.0 million and expires on June 30, 1999. Borrowings under the Revolving
Credit Facility bear interest, at the Company's option, at LIBOR (London
Interbank Offered Rate) or the bank's prime rate, in each case plus applicable
margin. The weighted average interest rate at March 31, 1998, was 8.50% and, as
of such date, $8.7 million was outstanding under such facility. The Revolving
Credit Facility has been used to fund certain of the Company's acquisitions. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

Pending the uses described above, the Company intends to invest the net
proceeds in short-term, investment-grade securities.

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

The Company's Common Stock is traded on the Nasdaq National Market under
the symbol "RCMT." Prior to June 10, 1997, the Company's Common Stock was traded
on The Nasdaq SmallCap Market. The following table sets forth approximate high
and low sales prices by fiscal quarters for the periods indicated, as reported
by the market on which it was traded.

HIGH LOW
------ ------

FISCAL 1996
First Quarter........................................... $ 6.25 $ 2.66
Second Quarter.......................................... 13.25 4.22
Third Quarter........................................... 15.38 5.75
Fourth Quarter.......................................... 12.88 7.00

FISCAL 1997
First Quarter........................................... $10.38 $ 7.00
Second Quarter.......................................... 9.75 6.25
Third Quarter........................................... 11.75 6.88
Fourth Quarter.......................................... 16.63 11.88

FISCAL 1998
First Quarter........................................... $18.50 $14.38
Second Quarter (through April 28)....................... 30.13 16.38

On April 28, 1998, the last reported sale price of the Common Stock on the
Nasdaq National Market was $23.00 per share.

As of April 22, 1998, the approximate number of holders of record of the
Company's Common Stock was 1,736. Based upon the requests for proxy information
in connection with the Company's most recent Annual Meeting of Stockholders, the
Company believes the number of beneficial owners of its Common Stock exceeds
4,450.

The Company has never declared or paid a cash dividend on the Common Stock
and does not anticipate paying any cash dividends in the foreseeable future. It
is the current policy of the Company's Board of Directors to retain all earnings
to finance the development and expansion of the Company's business. Any future
payment of dividends will be at the discretion of the Board of Directors and
will depend upon, among other things, the Company's earnings, financial
condition, capital requirements, level of indebtedness, contractual restrictions
and other factors that the Board of Directors deems relevant. The Revolving
Credit Facility prohibits the payment of dividends or distributions on account
of the capital stock without the prior consent of Mellon Bank, N.A.

CAPITALIZATION

The following table sets forth the cash and cash equivalents, short-term
debt and capitalization of the Company, on a consolidated basis, as of January
31, 1998 (i) on an actual basis, (ii) on a pro forma basis to give effect to
acquisitions completed after January 31, 1998, and (iii) as adjusted to give
effect to the Offering, and the anticipated application of the estimated net
proceeds therefrom as set forth in accordance"Use of Proceeds." The table should be
reviewed in conjunction with the business strategy identifiedCompany's historical and pro forma consolidated
financial statements and related notes appearing elsewhere or incorporated by
management from timereference in this Prospectus.

JANUARY 31, 1998
--------------------------------------------
PRO FORMA
ACTUAL PRO FORMA (1) AS ADJUSTED (1)(2)
------- ------------- ------------------
(IN THOUSANDS)

Cash and cash equivalents......................... $ 557 $ 557 $ 48,707
======= ======= ========
Short-term debt
Note payable-bank(3)............................ $ 2,000 $ 8,700 $ 2,000
======= ======= ========
Long-term debt.................................... -- -- --
Stockholders' equity:
Preferred stock $1.00 par value; 5,000,000
shares authorized; no shares issued or
outstanding.................................. -- -- --
Common stock, $0.05 par value; 40,000,000 shares
authorized; 7,582,206 shares issued and
outstanding, actual and pro forma and
10,282,206 shares issued and outstanding, pro
forma as adjusted(4)......................... 381 381 516
Additional paid-in capital........................ 41,430 41,550 96,265
Retained earnings................................. 5,133 5,133 5,133
------- ------- --------
Total stockholders' equity........................ 46,944 47,064 101,914
------- ------- --------
Total capitalization.............................. $46,944 $47,064 $101,914
======= ======= ========

- ------------------
(1) Assumes that the acquisitions which occurred subsequent to time.

SELLING SECURITY HOLDERS

TheJanuary 31, 1998
had occurred on January 31, 1998.

(2) Gives effect to the sale of 2,509,980 shares of Common Stock offered by this Prospectus are being sold
for the account of the Selling Security Holders identified in the following
table (the "Selling Security Holders").

The following table sets forth the name of each Selling Security
Holder, the nature of his position, office, or other material relationship to
the
Company forhereby, the past three years, if any, and the numberissuance of 190,020 shares of Common Stock upon exercise
of each suchstock options by the Selling Security Holder (1) ownedStockholders, and the application of recordthe
estimated net proceeds therefrom (assuming a public offering price of $23.00
per share). See "Use of Proceeds."

(3) The Note payable-bank reflects amounts outstanding under the Revolving
Credit Facility. Amounts outstanding under the Revolving Credit Facility are
secured, in part, by current assets of the Company and, as a result, are
classified within the Company's Consolidated Financial Statements as current
liabilities. The Revolving Credit Facility requires the Company to maintain
minimum borrowings of October
3,1997; (2) which are$2 million. See Note 6 of Notes to be offered hereunder; (3) which are to be owned by each
such Selling Security Holder assuming the sale of all shares offered hereunder;
andConsolidated
Financial Statements appearing elsewhere in this Prospectus.

(4) the percentage of outstandingPro forma as adjusted does not include 122,496 shares of Common Stock
issuable upon the exercise of 612,479 Warrants of the Company, at an
effective price of $15.00 per share, as of January 31, 1998. The Warrants
are scheduled to expire on April 30, 1998. Pro forma as adjusted also does
not include 914,425 shares of Common Stock issuable upon the exercise of
outstanding stock options of the Company.

SELECTED HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

The selected consolidated financial data for, and as of the end of, each of
the years in the five year period ended October 31, 1997 are derived from the
audited consolidated financial statements of the Company included elsewhere or
incorporated by reference in this Prospectus. The selected consolidated
financial data for the three months ended January 31, 1997 and 1998 are derived
from the unaudited consolidated financial statements of the Company, which in
the opinion of management include all adjustments (consisting of only normal
recurring adjustments) necessary to present fairly the results of operations and
financial position for such periods. The results of operations for the three
months ended January 31, 1998 are not necessarily indicative of the results of
operations to be owned by each
Selling Security Holder before and afterexpected for the saleyear. The pro forma adjustments are described
in the accompanying notes to the pro forma consolidated financial statements.
The pro forma results of operations are not necessarily indicative of the
shares to be offered
hereunder. There can be no assuranceresults that anywould have occurred had the acquisitions been consummated as of the
Selling Security Holders
will offer for sale or sell any or allbeginning of the Common Stock offeredperiod presented or that might be attained in the future. The
following data should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the actual and
pro forma consolidated financial statements of the Company included elsewhere or
incorporated by them
pursuant toreference in this Prospectus.

Amount of Shares Percentage of Percentage
to be Owned After Common Stock to of Common Stock
Name and Relationship Number of Shares Number of Shares Sales of Shares be Owned before to be Owned
to RCM Technologies, Inc. Owned as of 10/3/97 to be Offered Offered Hereunder Sales (1) after SalesTHREE MONTHS
FISCAL YEAR ENDED OCTOBER 31, ENDED JANUARY 31,
-------------------------------------------------------------- -------------------------------
PRO FORMA PRO FORMA
AS ADJUSTED AS ADJUSTED
1993 1994 1995 1996 1997 1997(1) 1997 1998 1998(2)
------- ------- ------- ------- -------- ----------- ------- ------- -----------
Limeport Investments LLC(2) 138,312 138,312(3) 0 1.8% 0

Martin Blaire(4) 571,468 571,468(3)(6) 0 7.5% 0

Barry S. Meyers(4) 607,468 607,468(3)(6) 0 7.9% 0

Peter Kaminsky 80,265 55,265(7) 25,000 1.0% *

Alexander Valcic 6,905 6,425(5) 480 * *

Howard Ross 55,084 55,084(5) 0 * 0

Marie Tarmy 23,557 23,557(5) 0 * 0

Angela F. Trotman 7,471 7,471(8) 0 * 0

Richard E. Serodio 1,867 1,867(8) 0 * 0

Michael D. O'Keefe 1,867 1,867(8) 0 * 0

Amarly Corporation 11,204 11,204(8) 0 * 0

Alumax Inc. 20,825 20,825(3) 0 * 0
-----

Total 1,500,813
- ----------------------------------------------------------

Less than 1%.
(1) Based upon 7,582,206shares
STATEMENT OF INCOME DATA:
Revenues....................... $28,633 $29,239 $26,916 $61,039 $113,959 $165,461 $21,151 $37,232 $44,590
Cost of Common Stock outstanding as of October 6,
1997.
(2) Does not include 2,600 shares of Common Stock held by Peter Kuhlmann, a
principal of Limeport Investments LLC. (3) Resale of the shares being offered
hereunder may not commence until December 7, 1997.
(4) Director of the Company.
(5) Resale of the shares being offered hereunder may not commence until March
11, 1998.
(6) Resale of the shares being offered hereunder are subject to the
following limitations: (i) through March 11, 1998, resale shall be
limited to only those shares with an aggregate value of $258,000; (ii)services............... 24,387 23,864 22,379 48,780 86,832 126,439 16,051 28,080 33,687
------- ------- ------- ------- -------- -------- ------- ------- -------
Gross profit................... 4,246 5,375 4,537 12,259 27,127 39,022 5,100 9,152 10,903
Selling, general and
administrative............... 3,281 3,674 3,550 8,914 18,069 24,621 3,626 5,814 6,855
Depreciation and
amortization................. 113 93 130 330 572 1,108 119 251 316
------- ------- ------- ------- -------- -------- ------- ------- -------
Operating income............... 852 1,608 857 3,015 8,486 13,293 1,355 3,087 3,732
Other income (expense)......... (41) 5 86 (194) (185) 100 (85) (39) (24)
------- ------- ------- ------- -------- -------- ------- ------- -------
Income before income taxes..... 811 1,613 943 2,821 8,301 13,393 1,270 3,048 3,708
Income taxes................... 78 187 94 453 3,461 5,656 489 1,271 1,547
------- ------- ------- ------- -------- -------- ------- ------- -------
Income from March 11, 1998 to March 11, 1999, resales shall be limited to thatcontinuing
operations................... 733 1,426 849 2,368 4,840 7,737 781 1,777 2,161
Loss from discontinued
operations................... -- -- -- -- (363) (363) -- -- --
------- ------- ------- ------- -------- -------- ------- ------- -------
Net income..................... $ 733 $ 1,426 $ 849 $ 2,368 $ 4,477 $ 7,374 $ 781 $ 1,777 $ 2,161
======= ======= ======= ======= ======== ======== ======= ======= =======
Earnings per share (diluted):
Income from continuing
operations................. $ 0.28 $ 0.49 $ 0.28 $ 0.55 $ 0.76 $ 0.92 $ 0.16 $ 0.22 $ 0.25
Loss from discontinued
operations................. -- -- -- -- (0.06) (0.04) -- -- --
------- ------- ------- ------- -------- -------- ------- ------- -------
Net income................... $ 0.28 $ 0.49 $ 0.28 $ 0.55 $ 0.70 $ 0.88 $ 0.16 $ 0.22 $ 0.25
======= ======= ======= ======= ======== ======== ======= ======= =======
Supplemental net income per
share (diluted)(3)........... $ 0.18 $ 0.32 $ 0.18 $ 0.38 $ 0.70 $ 0.88 $ 0.15 $ 0.22 $ 0.25
======= ======= ======= ======= ======== ======== ======= ======= =======
Weighted average number of
shares that could have been sold during this period under
Rule 144 under the Securities Act (as that Rule was in effect as of the
closing of such transaction in March 1996; however, no greater than
50,000 shares per week per holder;outstanding........... 2,578 2,930 3,008 4,321 6,361 8,377 4,962 8,177 8,567

JANUARY 31, 1998
---------------------
OCTOBER 31, PRO FORMA
--------------------------------------------- AS
1993 1994 1995 1996 1997 ACTUAL ADJUSTED(4)
------ ------ ------- ------- ------- ------- -----------

BALANCE SHEET DATA:
Cash and (iii) after March 11, 1999,
resales are unlimited.
(7) Resale of the shares being offered hereunder may not commence until March 2,
1998. (8) Resale of the shares being offered hereunder may not commence until
January 21, 1998.
cash equivalents................................. $ 914 $2,534 $ 298 $ 6 $ 918 $ 557 $ 48,707
Working capital(5)........................................ 3,741 5,201 4,242 9,518 19,279 18,060 66,211
Total assets.............................................. 5,334 6,666 10,302 24,407 54,083 58,462 113,433
Total debt................................................ 74 35 935 2,747 2,000 2,000 2,000
Stockholders' equity...................................... 4,046 5,477 7,527 16,220 44,612 46,944 101,914

PLAN OF DISTRIBUTION

Warrants- ------------------
(1) Adjusted to give effect to (i) the acquisitions (and related financing
transactions) which occurred during fiscal 1997 and fiscal 1998 and (ii) the
reduction in interest expense resulting from the anticipated use of the
estimated net proceeds from the Offering (assuming a public offering of
539,785 shares at a price of $23.00 per share), as if all such transactions
had occurred as of the beginning of fiscal 1997. See "Use of Proceeds" and
"Unaudited Pro Forma Consolidated Condensed Statements of Operations."
(2) Adjusted to give effect to (i) the acquisitions (and related financing
transactions) which occurred during fiscal 1998 and (ii) the reduction in
interest expense resulting from the anticipated use of the estimated net
proceeds from the Offering (assuming a public offering of 389,792 shares at
a price of $23.00 per share), as if all such transactions had occurred at
the beginning of fiscal 1998. See "Use of Proceeds" and "Unauditied Pro
Forma Consolidated Condensed Statements of Operations."
(3) Assumes an effective tax rate of 42% for fiscal 1993, 1994, 1995 and 1996
and the three months ended January 31, 1997. The Company is offeringCompany's effective tax
rates for fiscal 1993, 1994, 1995, 1996 and the three months ended January
31, 1997 were 10%, 12%, 10%, 16% and 39%, respectively, due to the
utilization of net operating loss carryforwards.
(4) Assumes that the acquisitions which occurred subsequent to January 31, 1998
had occurred on January 31, 1998 and gives effect to the sale of 2,509,980
shares of Common Stock issuableoffered by the Company hereby, the issuance of
190,020 shares upon the exercise of 786,709 outstanding Class C Warrants.stock options by the Selling
Stockholders and the anticipated application of the estimated net proceeds
therefrom (assuming a public offering price of $23.00 per share). See "Use
of Proceeds."
(5) Excludes Note payable-bank.

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

OVERVIEW

The Class C WarrantsCompany is a multi-regional provider of information technology and
other professional staffing services through its 41 branch offices located in 17
states. Since its inception in 1971, the Company's business and strategy have
evolved substantially. Initially, the Company focused on the development of
environmental technologies and, until 1977, operated an aluminum recovery
facility in California. In 1981, the Company diversified its operations through
the acquisition of Intertec Design, Inc., a temporary staffing company that
provided professional engineering, clerical and light industrial personnel. In
fiscal 1992, at the recommendation of the current President and Chief Executive
Officer, Leon Kopyt, the Company discontinued its environmental business. In
fiscal 1994, the Company embarked on a strategy to position staffing services as
its core business.

Since fiscal 1995, the Company has pursued an aggressive growth strategy
designed to transition the Company's business from general support staffing
services to higher growth, higher margin professional staffing services,
particularly information technology. In fiscal 1995, approximately half of the
Company's revenues were issuedderived from general support staffing and the Company
did not offer information technology services. For the three months ended
January 31, 1998, information technology services contributed 57% of the
Company's revenues. Since the beginning of fiscal 1995, the Company has acquired
13 information technology or professional engineering staffing services
companies, aggregating $126.7 million in revenues for their respective latest
twelve months prior to acquisition. Through these acquisitions, the Company has
achieved substantial revenue growth, improved its operating profitability and
repositioned itself as a provider of information technology and other
professional staffing services.

The following table is presented to illustrate the Company's successful
transition of its business mix and sets forth, for the periods indicated, the
Company's (i) sources of revenues as a percentage of total revenues, (ii) gross
profit margin by sources of revenues, and (iii) gross profit by sources of
revenues as a percentage of total gross profit.

YEAR ENDED OCTOBER 31,
------------------------ THREE MONTHS ENDED
1995 1996 1997 JANUARY 31, 1998
------ ------ ------ ------------------

REVENUES:
Information technology........................ --% 18.6% 44.4% 57.3%
Professional engineering...................... 51.4 42.9 29.2 24.4
General support............................... 48.6 30.8 21.8 14.7
Specialty healthcare.......................... -- 7.7 4.6 3.6
----- ----- ----- -----
Total................................... 100.0% 100.0% 100.0% 100.0%

GROSS PROFIT MARGIN:
Information technology........................ --% 27.9% 29.8% 29.3%
Professional engineering...................... 17.2 17.7 19.0 18.3
General support............................... 16.5 18.1 18.5 16.2
Specialty healthcare.......................... -- 22.7 21.9 25.8
Gross profit margin..................... 16.9% 20.1% 23.8% 24.6%

GROSS PROFIT AS A PERCENTAGE OF TOTAL GROSS
PROFIT:
Information technology........................ --% 25.8% 55.6% 68.4%
Professional engineering...................... 52.5 37.7 23.3 18.2
General support............................... 47.5 27.8 16.9 9.6
Specialty healthcare.......................... -- 8.7 4.2 3.8
----- ----- ----- -----
Total................................... 100.0% 100.0% 100.0% 100.0%

The Company realizes revenues from the placement of contract and temporary
staffing personnel. These services are primarily provided to the customer at
hourly rates that are established for each of the Company's staffing personnel,
based upon their skill level and experience and the type of work performed.
Hourly billing rates for staffing services range from $60 to $85 for the
Information Technology Group, $50 to $75 for the Professional Engineering Group,
$8 to $18 for the General Support Group, and $40 to $70 for the Specialty
Healthcare Group. The Company also provides project management and consulting
work, primarily in the Professional Engineering Group, which are billed either
by agreed upon fee or hourly rates, or a combination of both. The billing rates
and profit margins for project management and consulting work are higher than
those received for professional staffing services. Hourly billing rates for
project management work range from $125 to $185 within the Information
Technology Group and $110 to $155 within the Professional Engineering Group. The
Company plans to expand its sales of higher margin consulting and project
management services. See "Business -- Growth Strategy."

The majority of the Company's services are provided under purchase orders.
Contracts are utilized on certain of the more complex assignments where the
engagements are for longer terms or where precise documentation on the nature
and scope of the assignment is necessary. Contracts, although they normally
relate to longer-term and more complex engagements, generally do not obligate
the customer to purchase a minimum level of services and are generally
terminable by the customer on 60 to 90 days notice. Revenues are recognized when
services are provided.

Costs of services consist primarily of salaries and compensation-related
expenses for billable staffing personnel, including payroll taxes, employee
benefits, worker's compensation and other insurance. Principally all of the
billable personnel are treated by the Company as employees. Selling, general and
administrative expenses consist primarily of salaries and benefits of personnel
responsible for operating activities and include corporate overhead expenses.
Corporate overhead expenses relate to salaries and benefits of personnel
responsible for corporate activities, including the Company's acquisition
program and corporate marketing, administrative and reporting responsibilities.
The Company records these expenses when incurred. Depreciation relates primarily
to the fixed assets of the Company. Amortization relates principally to the
goodwill resulting from the Company's acquisitions. These acquisitions have been
accounted for under the purchase method of accounting for financial reporting
purposes and have created goodwill which is being amortized over 40-year
periods.

The Company's net income for fiscal 1995 and 1996 has been determined after
giving effect to the utilization of a net operating loss carryforward. This
effectively reduced federal tax accruals to a minimal amount during those
periods and subjected the Company to composite tax rates of between 9.9% and
16.1%, principally as a result of state income taxes. As of January 31, 1997,
the Company had utilized principally all of its net operating loss carryforward
and, accordingly, expects that for the foreseeable future its net income will be
subject to full federal and state rates of taxation.

RESULTS OF OPERATIONS

The following table sets forth certain income statement data on a
historical and pro forma as adjusted basis as a percentage of revenue:

FISCAL YEAR ENDED OCTOBER 31, THREE MONTHS ENDED JANUARY 31,
--------------------------------------- -------------------------------
1997 1998
----------------------- -----------------------
PRO FORMA PRO FORMA
1995 1996 ACTUAL AS ADJUSTED(1) 1997 ACTUAL AS ADJUSTED(2)
----- ----- ------ -------------- ----- ------ --------------

Revenues............................ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of services.................... 83.1 79.9 76.2 76.4 75.9 75.4 75.5
----- ----- ----- ----- ----- ----- -----
Gross profit........................ 16.9 20.1 23.8 23.6 24.1 24.6 24.5
Selling, general and
administrative.................... 13.2 14.7 15.9 14.9 17.1 15.6 15.4
Depreciation and amortization....... 0.5 0.5 0.5 0.7 0.6 0.7 0.7
----- ----- ----- ----- ----- ----- -----
Operating income.................... 3.2 4.9 7.4 8.0 6.4 8.3 8.4
Other income (expense).............. 0.3 (0.3) (0.2) 0.1 (0.4) (0.1) (0.1)
----- ----- ----- ----- ----- ----- -----
Income before income taxes.......... 3.5 4.6 7.2 8.1 6.0 8.2 8.3
Income taxes........................ 0.3 0.7 3.0 3.4 2.3 3.4 3.5
----- ----- ----- ----- ----- ----- -----
Income from continuing operations... 3.2 3.9 4.2 4.7 3.7 4.8 4.8
----- ----- ----- ----- ----- ----- -----
Loss from discontinued operations... -- -- (0.3) (0.2) -- -- --
----- ----- ----- ----- ----- ----- -----
Net income.......................... 3.2% 3.9% 3.9% 4.5% 3.7% 4.8% 4.8%
===== ===== ===== ===== ===== ===== =====

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

(2) Adjusted to give effect to (i) the acquisitions (and related financing
transactions) which occurred during fiscal 1998 and (ii) the reduction in
interest expense resulting from the anticipated use of the estimated net
proceeds from the Offering (assuming a public offering of 389,792 shares at
a price of $23.00 per share), as if all such transactions had occurred at
the beginning of fiscal 1998. See "Use of Proceeds" and "Unauditied Pro
Forma Consolidated Condensed Statements of Operations."

THREE MONTHS ENDED JANUARY 31, 1998 COMPARED TO THREE MONTHS ENDED JANUARY 31,
1997

Revenues. Revenues increased 76.0%, or $16.1 million, for the three months
ended January 31, 1998 as compared to the comparable prior-year period. Of this
increase, approximately $8.8 million was attributable to revenue growth through
acquisitions made during fiscal 1997 and the three months ended January 31,
1998, and approximately $7.3 million was from internal growth. For the three
months ended January 31, 1998 compared to the three months ended January 31,
1997, the Company's internal revenue growth from operations owned during both
periods was 34%. Internal growth was primarily a result of adding new customers
to, and increasing sales to existing customers in, the Company's Information
Technology Group.

Cost of Services. Cost of services increased 74.9%, or $12.0 million, for
the three months ended January 31, 1998 as compared to the equivalent prior-year
period. This increase was primarily due to increased salaries and compensation
associated with the increased revenues experienced during this period. Cost of
services as a percentage of revenues decreased to 75.4% for the three months
ended January 31, 1998 from 75.9% for the comparable prior-year period. This
improvement was primarily due to a greater percentage of the Company's revenues
being derived from specialty staffing services.

Selling, General and Administrative. Selling, general and administrative
expenses increased 60.3%, or $2.2 million, for the three months ended January
31, 1998 as compared to the comparable prior-year period. This increase resulted
from the change in the mix of the business during the three months ended January
31, 1998, which required higher marketing, sales, recruiting and administrative
expenses than the comparable prior-year period. Selling, general and
administrative expenses as a

percentage of revenues decreased to 15.6% for the three months ended January 31,
1998 from 17.1% in the comparable prior-year period, primarily attributable to
the sharing of administrative overhead over a larger revenue base.

Depreciation and Amortization. Depreciation and amortization increased
111.8%, or $133,000, for the three months ended January 31, 1998 as compared to
the comparable prior year period. This increase was primarily due to the
amortization of intangible assets acquired in connection with the acquisitions
that occurred after January 31, 1997.

Other Income Expense, Net of Interest Income. Actual interest expense of
$55,000 for three months ended January 31, 1998, was partially offset by $16,000
of interest income, which was earned from the investment in interest-bearing
deposits of the net proceeds of the Company's public offering in June 1997,
after the repayment of bank debt. Interest expense decreased 38.9%, or $35,100,
for three months ended January 31, 1998 as compared to the comparable prior-year
period. This decrease was due to the decreased borrowings necessary to provide
the funds for working capital.

Income Tax. Income tax expense increased 159.7%, or $781,000, for the
three months ended January 31, 1998 as compared to the comparable prior-year
period. This increase was due to increased levels of income and an increase in
the effective tax rate from 38.5% to 41.7%. The increase in the effective tax
rate was primarily due to the non-deductibility of goodwill amortization.

YEAR ENDED OCTOBER 31, 1997 COMPARED TO YEAR ENDED OCTOBER 31, 1996

Revenues. Revenues increased 86.7%, or $52.9 million, for fiscal 1997, as
compared to fiscal 1996. Revenue growth was primarily attributable to
acquisitions. The Company completed five acquisitions in fiscal 1997,
aggregating $37.8 million in revenues for their respective latest twelve months
prior to acquisition.

Cost of Services. Cost of services increased 78.0%, or $38.0 million, for
fiscal 1997 as compared to fiscal 1996. This increase was primarily due to
increased salaries and compensation associated with the increased revenues
experienced during this period. Cost of services as a percentage of revenues
decreased to 76.2% for fiscal 1997 from 79.9% for fiscal 1996. This decline was
primarily attributable to a greater percentage of the Company's revenues being
derived from information technology and other professional staffing services.

Selling, General and Administrative. Selling, general and administrative
expenses increased 102.7%, or $9.2 million, for fiscal 1997 as compared to
fiscal 1996. This increase resulted from the change in the mix of the business
during the period which required higher marketing, sales, recruiting and
administrative expenses than fiscal 1996. Selling, general and administrative
expenses as a percentage of revenues increased to 15.9% for fiscal 1997 from
14.6% in fiscal 1996, primarily attributable to the increased sales, recruiting
and administrative expenses necessary to support the Company's continued growth
within the information technology sector. Corporate overhead expenses as a
percentage of revenues decreased to 3.6% of revenues in fiscal 1997 from 4.0% in
fiscal 1996, as these costs were spread over a larger revenue base.

Depreciation and Amortization. Depreciation and amortization increased
73.6%, or $242,600, for fiscal 1997 as compared to fiscal 1996. This increase
was primarily due to the amortization of intangible assets acquired in
connection with the acquisitions.

Other Income Expense, Net of Interest Income. Actual interest expense of
$444,300 for fiscal 1997 was partially offset by $259,700 of interest income,
which was earned from the investment in interest bearing deposits of the net
proceeds of the Company's public offering in June 1997, after the repayment of
bank debt. Interest expense increased 171.3%, or $280,500, for fiscal 1997 as
compared to fiscal 1996. This increase was due to the increased borrowings
necessary to provide the funds required for certain of the Company's
acquisitions as well as to refinance the working capital debt of some of the
acquired companies.

Income Tax. Income tax expense increased 663.1%, or $3.0 million, for
fiscal 1997 as compared to fiscal 1996. This increase was due to an increase in
the effective tax rate from 16.1% to 41.7% and increased levels of net income.
The increase in the effective tax rate was primarily due to the utilization of
principally all of the remaining net operating loss carryforward which offset
net income in prior periods.

Loss From Discontinued Operations. In fiscal 1997, the Company incurred a
one-time charge of $362,500 in connection with the settlement of a claim
relating to the Company's former operation of a materials recovery facility
prior to 1977. This segment of the Company's business was otherwise discontinued
in fiscal 1992.

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

Revenues. Revenues increased 126.8%, or $34.1 million, in fiscal 1996 as
compared to fiscal 1995. Revenue growth was primarily attributable to
acquisitions. Internal growth was experienced in the Information Technology and
Professional Engineering Groups and was offset by discontinued business in the
General Support Group due to unacceptable margins and workers' compensation
rates.

Cost of Services. Cost of services increased 118.0%, or $26.4 million, in
fiscal 1996 as compared to fiscal 1995. This increase was primarily due to
increased salaries and compensation associated with the increased revenues
experienced during this period. Cost of services as a percentage of revenues
decreased to 79.9% for fiscal 1996 from 83.1% for fiscal 1995. This decline was
primarily attributable to a greater percentage of the Company's revenues being
derived from information technology and other professional staffing services.

Selling, General and Administrative. Selling, general and administrative
expenses increased 151.0%, or $5.4 million, in fiscal 1996 as compared to fiscal
1995. This increase resulted from the change in the mix of the business during
fiscal 1996, which required higher marketing, sales, recruiting and
administrative expenses than in fiscal 1995. Selling, general and administrative
expenses as a percentage of revenues increased to 14.6% during fiscal 1996 as
compared to 13.2% for fiscal 1995. This increase was primarily attributable to
higher marketing, sales, recruiting and administrative expenses necessary to
support continued growth within the information technology sector. Corporate
overhead expenses as a percentage of revenues decreased to 4.0% of revenues in
fiscal 1996 from 4.6% of revenues in fiscal 1995, as these costs were spread
over a larger revenue base.

Depreciation and Amortization. Depreciation and amortization increased
152.8%, or $199,000, in fiscal 1996 as compared to fiscal 1995. This increase
was primarily due to the amortization of intangible assets acquired in
connection with the acquisitions that occurred or were fully realized during
fiscal 1996.

Other Income (Expense). Other income (expense) consists primarily of
interest income (expense) which changed by $268,000, from $104,000 in fiscal
1995 to ($164,000) in fiscal 1996. This increase was attributable to increased
borrowings necessary to provide the funds required for the acquisitions during
fiscal 1996.

Income Tax. Income tax expense increased 385.0%, or $360,000, in fiscal
1996 as compared to fiscal 1995. This increase was primarily due to the higher
level of profitability for fiscal 1996. The effective tax rates experienced by
the Company in fiscal 1996 and fiscal 1995 were 16.1% and 9.9%, respectively.
During each of these periods, the Company utilized a net operating loss
carryforward to offset current income.

PRO FORMA COMPARED TO ACTUAL RESULTS OF OPERATIONS

Since the beginning of fiscal 1995 and through the date of this Prospectus,
the Company has acquired 13 staffing companies with combined revenues of
approximately $126.7 million in their respective latest twelve months prior to
acquisition. All of these acquisitions have been accounted for using the
purchase method of accounting, and, accordingly, the Company's statements of
income include the operating results of the acquired businesses from the dates
of acquisition. The Company's

historical consolidated operating results have been significantly affected by
the number, timing and size of these acquisitions. Accordingly, pro forma
financial data are provided within this Prospectus for a more meaningful
representation of the Company's operating results.

Pro forma financial data have been prepared and included herein to give
effect to all acquisitions subsequent to October 31, 1997 as if they occurred as
of the beginning of fiscal 1997. Pro forma adjustments have been made to reflect
the elimination of certain non-recurring expenses that were identified at the
time of these acquisitions, primarily salary adjustments. The pro forma
financial data are not necessarily indicative of results of operations that
would have occurred had these acquisitions been consummated as of the beginning
of the periods presented or that might be attained in the future.

LIQUIDITY AND CAPITAL RESOURCES

To support its acquisition program and related working capital
requirements, the Company has historically used borrowings under its Revolving
Credit Facility and proceeds from offerings of Common Stock. On June 13, 1997,
the Company completed a public offering which raised $23.3 million in proceeds
for the Company. The net offering proceeds through January 31, 1998, have been
used to fund acquisitions (requiring $15.6 million) and retire bank debt. At
January 31, 1998, the Company had approximately $557,000 in cash and
approximately $11.7 million in unused loan availability under the Revolving
Credit Facility. During February 1998, the Company completed the acquisition of
two companies which required the use of $6.7 million of loan availability under
the Revolving Credit Facility and, as of March 31, 1998, the Company had
approximately $8.7 million outstanding under the facility.

Cash provided by operating activities was $2.8 million for the three months
ended January 31, 1998 compared to $1.1 million for the three months ended
January 31, 1997. This increase was the result of the increase of $1.1 million
in net income before depreciation and amortization and other non-cash charges
and the increase by $602,000 from changes in working capital, primarily an
increase in taxes payable which was in turn offset by an increase in accounts
receivable. Cash used in investing activities for the three months ended January
31, 1998 was $3.7 million compared to $5.2 million for the three months ended
January 31, 1997. This was principally the result of a larger acquisition in the
three months ended January 31, 1997 as compared to the acquisition completed in
the three months ended January 31, 1998. Cash provided by financing activities
for the three months ended January 31, 1998 was $554,000 compared to $4.2
million for the three months ended January 31, 1997. The increase in cash for
the three months ended January 31, 1998 was principally the result of proceeds
from the exercise of stock warrants. The increase in cash for the three months
ended January 31, 1997 represented a net increase in borrowings under the
Company's credit facility.

Cash used in operating activities was $3.8 million for fiscal 1997. This
was the result of $5.6 million of net income before depreciation and
amortization and other non-cash charges offset by $9.4 million from changes in
working capital, primarily an increase in accounts receivable and income taxes
payable, which was, in turn, offset by an increase in accrued payroll and
accounts payable. These changes were consistent with the Company's higher volume
of business. Cash used in investing activities for fiscal 1997 was $17.9
million, principally the result of acquiring four staffing companies which
required the use of $17.4 million of cash. Cash provided by financing activities
for fiscal 1997 was $22.5 million, principally the result of $23.3 million in
proceeds from the sale of common stock on June 13, 1997.

Cash used in operating activities was $1.9 million for fiscal 1996. This
was the result of $2.8 million of net income before depreciation and
amortization and other non-cash charges offset by $4.7 million from changes in
working capital, primarily an increase in accounts receivable, offset by an
increase in accrued payroll and income taxes payable. These changes were
consistent with the Company's higher volume of business. Cash used in investing
activities for fiscal 1996 was $1.2 million, principally a result of acquiring
three staffing companies which required the use of $1.0 million in cash. Cash
provided by financing activities for fiscal 1996 was $2.8 million, principally
the

result of a net increase in borrowings of $1.8 million under the Company's
credit facility and proceeds of $1.0 million from the private placement of its
common stock.

Cash provided from operating activities was $1.1 million for fiscal 1995.
This was the result of $980,000 of net income before depreciation and
amortization and other non-cash charges and an increase by $121,000 from changes
in working capital, primarily a decrease in accounts receivable, offset by an
increase in prepaid expenses and other current assets. Cash used in investing
activities for fiscal 1995 was $2.4 million, principally the result of acquiring
two staffing companies which required the use of $2.3 million of cash. Cash used
by financing activities for fiscal 1995 was $916,000, principally the result of
repayments under the Company's credit facility.

On December 19, 1996, the Company and its subsidiaries entered into an
amended and restated loan agreement with Mellon Bank, N.A. to provide the
Revolving Credit Facility. The Revolving Credit Facility is secured by accounts
receivable, contract rights and furniture and fixtures together with unlimited
guarantees from the Company. The Revolving Credit Facility requires the Company
and its subsidiaries to meet certain financial objectives and maintain certain
financial covenants with respect to net income, effective net worth, working
capital, senior indebtedness to effective net worth ratios, capital
expenditures, current assets to current liabilities ratios, consolidated working
capital and consolidated tangible net worth. At October 31, 1997 and January 31,
1998, the Company and its subsidiaries were in compliance with all financial
covenants contained within the Revolving Credit Facility.

Borrowings under the Revolving Credit Facility are to be used to meet cash
flow requirements for the subsidiaries as well as operating expenses for the
Company. Borrowings under the Revolving Credit Facility bear interest, at the
Company's option, at LIBOR (London Interbank Offered Rate) or the bank's prime
rate, plus applicable margin. At October 31, 1997 and January 31, 1998 there was
approximately $14.0 million and $11.7 million, respectively, of unused loan
availability under the Revolving Credit Facility. The Company intends to utilize
approximately $6.7 million of the net proceeds from the Offering to pay down the
Revolving Credit Facility which had a balance of approximately $8.7 million as
of March 31, 1998, although the Company does intend to draw on this line as
needed in the future.

Following the completion of the Offering, the Company expects to enter into
a new revolving credit agreement to replace the Revolving Credit Facility. Based
on proposals for the new revolving credit agreement received by the Company,
management believes that was completed on Augustthe Company will have availability under the
replacement facility ranging from $50 million to $75 million, an anticipated
increase of $30 million to $55 million from the current facility, and that
pricing under the new facility will be more favorable to the Company than is
offered under the current facility. Management continues to evaluate the
proposals for the new arrangement and, following the completion of the Offering,
will seek a commitment from the lending group proposing the terms management
believes are most favorable to the Company.

The Company anticipates that its primary uses of capital in future periods
will be for acquisitions and the funding of increases in working capital. The
Company has fully utilized the net proceeds made available through the June 1997
public offering. The Company's business strategy is to achieve growth both
internally through operations and externally through strategic acquisitions. The
Company's liquidity and capital resources may be affected in the future as the
Company continues to grow through implementation of this strategy which may
involve acquisitions facilitated through the use of cash and/or debt and equity
securities. Funding for future acquisitions will be obtained from the proceeds
of the Offering, the Revolving Credit Facility, funds generated through
operations and future financing transactions.

The Company does not currently have material commitments for capital
expenditures and does not anticipate entering into any such commitments during
the next twelve months. The Company continues to evaluate acquisitions of
various businesses which are complementary to its current operations. The
Company's current commitments consist primarily of lease obligations for office

22
1989.

space. The Class CCompany believes that its capital resources are sufficient to meet
its present obligations and those to be incurred in the normal course of
business for the next twelve months.

The Company may derive up to approximately $2.3 million of proceeds from
the issuance of up to approximately 157,000 shares of Common Stock that may
occur upon the exercise of all of its outstanding Warrants. As of January 31,
1998 and March 31, 1998, there were 612,479 and 377,234 Warrants outstanding,
respectively. Warrants were issued pursuant to the terms ofin a Warrant Agreement betweenpublic offering undertaken by the
Company during 1989, and American Stock Transfer & Trust Company (the "Warrant Agent").after several extensions, are scheduled to expire on
April 30, 1998. As adjusted by a subsequent recapitalizationsrecapitalization of the Company,
each five Class C
Warrants entitle the registered holder thereof to purchase one share of Common Stock at
an exercise price of $15.00 per share. The Class C Warrants were
initially scheduled to expire on January$15.00. As of March 31, 1990, however,1998, the expiration date
has been extended byCompany had received $1.2
million from the Company's Board of Directors to December 31, 1997. The
exercise price and number of shares issuable upon exercise of the Class C
Warrants is subjectWarrants.

YEAR 2000 COMPLIANCE

Many existing computer programs use only two digits to adjustmentidentify a year in
the eventdate field. These programs were designed and developed without considering
the impact of the upcoming change in the century. If not corrected, many
computer applications could fail or create erroneous results by or at the Year
2000. In connection with this problem (the "Year 2000 Issue"), and in order to
continue to deliver quality customer service and centrally manage its
operations, the Company is currently upgrading its internal information system.
The Company anticipates that the upgrade will be completed by the end of 1998;
however, if such upgrade is not completed in a recapitalization, stock
dividend, stock split or merger.

The Class C Warrants cantimely manner, the Year 2000
Issue may have a material effect on the operations of the Company. While the
total cost associated with the upgrade of the Company's system is not known at
this time, it is not expected to be exercised by surrenderingmaterial to the Warrant
AgentCompany's financial position
and is being capitalized as incurred. See "Business -- Information Systems."

IMPACT OF INFLATION

The effects of inflation on the Company's operations were not significant
during the periods presented.

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information," which is effective for all periods
beginning after December 15, 1997. SFAS 131 requires that public business
enterprises report certain information about operating segments in complete sets
of financial statements of the enterprise and in condensed financial statements
of interim periods issued to shareholders. It also requires that public business
enterprises report certain information about their products and services, the
geographic areas in which they operate, and their major customers. Management is
currently evaluating the impact of the disclosure requirements of this
statement.

BUSINESS

The Company is a Class C Warrant Certificate signedmulti-regional provider of information technology and
other professional staffing services through its 41 branch offices located in 17
states. The Company's Information Technology Group offers responsive, timely and
comprehensive information technology staffing solutions to support the entire
systems applications development and implementation process. The Company's
information technology professionals have expertise in a variety of technical
disciplines, including enterprise software, network communications, database
design and development and client server migration. The Company also offers
professional engineering staffing and project management services, through its
Professional Engineering Group, for a variety of engineering disciplines, such
as aeronautical, electro-mechanical, nuclear and computer science. As of April
22, 1998, the Company employed approximately 1,000 information technology and
approximately 500 professional engineering personnel. The Company is also
engaged in the specialty healthcare and general support sectors of the staffing
industry. During fiscal 1997, the Company placed employees with approximately
1,150 customers within a variety of industries. Representative customers include
AT&T, Bell Atlantic, Chase Manhattan Bank, Liberty Mutual Insurance, MCI, Merck,
Merrill Lynch, Northeast Utilities and 3M.

INDUSTRY OVERVIEW

The staffing industry has experienced rapid growth in recent years.
According to Staffing Industry Report, revenues in the domestic temporary
staffing industry have grown from $24.6 billion in 1992 to an estimated $53.7
billion in 1997, a five-year compound annual growth rate of 17%. This growth has
been driven by a change in the holder thereof or his duly
authorized agentrole of temporary staffing in corporations.
Initially thought of as a short-term solution for peak production periods and as
a temporary replacement for full-time personnel, the staffing industry is now
considered an effective tool for helping companies manage their investment in
human resources. Companies now use temporary personnel for varying lengths of
time to respond to increasingly complex assignments. The shift towards contract
personnel allows companies to expand and contract employee levels based on
current needs, thus converting fixed labor costs into controllable variable
costs while still maintaining a high degree of employee skill level. Relying on
temporary staffing companies also reduces the costs associated with recruiting,
training and terminating employees. In addition, changing government regulations
concerning such items as employee benefits, health insurance and retirement
plans have significantly increased employment costs related to permanent
employees. In response, an increasing number of companies are turning to
temporary staffing as an effective method of maintaining high employee skill
level while controlling labor costs.

According to Staffing Industry Report, information technology is the
fastest growing sector within the temporary staffing industry, growing at a 24%
five-year compound annual growth rate from 1992 to 1997. In recent years,
businesses have become increasingly dependent on the use of computer systems to
manage operations, automate routine tasks and disseminate information throughout
the company. As companies have increased their investments in technology in
order to remain competitive, the complexity and rapid development of new
technologies have driven the need for increased levels of technical support.
Faced with the formchallenge of electiondeveloping and supporting these updated systems,
companies are turning to purchaseinformation technology staffing services to provide
technical support. Utilizing outside information technology personnel allows a
company to focus on core operations, minimize its investment in its internal
information technology workforce and obtain technical support from professionals
with expertise in current technologies. Many companies have become comfortable
with outsourcing and now look outside of their organizations to utilize
individuals with the reverse siderequisite specialized technical skills for temporary or
project-oriented assignments.

The staffing industry is highly fragmented, with over 7,000 companies in
the United States. The industry is currently experiencing a trend toward
consolidation as large companies seek to reduce the number of vendors and look
to staffing companies that offer a wide range of services over a broad
geographic area. In addition, the demand for employees skilled in new
technologies exceeds the supply of qualified personnel. As employers find it
more difficult to locate full-time candidates with special

skills, they increasingly turn to temporary staffing companies to fill these
needs. The Company believes these industry conditions are making it more
difficult for small staffing companies to compete due to limited recruiting and
placement capabilities, limited working capital and limited management
resources. These factors are expected to accelerate the industry's consolidation
trend.

BUSINESS STRATEGY

RCM is dedicated to providing solutions to meet its customers' information
technology and other professional staffing needs. The Company's objective is to
be a leading provider of these specialty professional staffing services in
selected regions throughout the United States. The Company has developed
interrelated growth and operating strategies to achieve this objective. Key
elements of its growth and operating strategies are as follows:

GROWTH STRATEGY

Focus on Information Technology and Other Professional Staffing
Services. The Company will continue to focus on providing information
technology staffing services, the fastest growing sector of the certificate completedtemporary
staffing industry, as well as other professional staffing services. According to
Staffing Industry Report, revenues from information technology staffing services
grew at a 24% five-year compound annual growth rate from 1992 through 1997. In
addition to high growth rates, the Company believes that information technology
and signed. Surrendered Warrant Certificates must be
accompanied by paymentother professional staffing services offer more attractive profit margins
than traditional staffing services. As the Company has transitioned its business
mix to information technology and other professional staffing services, and away
from general support staffing, it has experienced substantial margin
improvement. The Company's operating profit margin for the three months ended
January 31, 1998 was 8.3% as compared to 3.2% in fullfiscal 1995, when approximately
half of the aggregate exercise priceCompany's revenue was derived from general support staffing and the
Company did not offer information technology staffing services. The Company also
believes that information technology and other professional staffing services
are less cyclical than traditional staffing services.

Strengthen Market Presence in Selected Regions Throughout the Country. The
Company believes that a substantial amount of the total market for information
technology and other professional staffing services is located in certain high
growth regions in the Class C
WarrantsUnited States. The Company's strategy is to expand into,
and strengthen its existing presence in, such high density, high growth regions.
Once established in a region, the Company concentrates on local and regional
accounts, as opposed to national accounts, and therefore competes primarily
against local and regional staffing companies with limited services, resources
and capabilities. The Company utilizes its mix of information technology and
other professional service offerings, recruiting and placement capabilities and
financial resources to distinguish itself from its competition and to achieve
significant customer penetration and retention. The Company enters new regions
by acquiring strong local or regional companies and improving their ability to
compete through the addition of the Company's resources. In February 1998, the
Company acquired Global Technology Solutions, Inc. of Sacramento, California,
thus establishing its first operations in the Northern California region, an
area characterized by strong demand for information technology and other
professional staffing services.

Continue Strategic Acquisitions. The Company has acquired 13 information
technology and other professional staffing companies since the beginning of
fiscal 1995. The staffing industry continues to be exercised, which payment may behighly fragmented, and the
Company plans to continue its aggressive acquisition program. The Company's
acquisition strategy is designed to strengthen its presence in its existing
markets, expand into new geographic regions and add complementary service
offerings or offer new professional staffing services. In targeting
acquisitions, the Company focuses on companies with (i) annual revenues of $35
million or less, (ii) a history of profitable operations and experienced
management personnel, (iii) substantial growth prospects and (iv) sellers who
desire to join the Company's management team. To retain and provide incentives
for management of its acquired companies, the Company typically structures a
significant portion of the acquisition price in the form of cash or certified
check. Upon exercise,multi-tiered
consideration based on growth of operating profitability of the acquired company
over a

two to three-year period. The Company believes its success in completing
acquisitions is due to its entrepreneurial and decentralized operating
philosophy, its strong corporate-level support and resources, its status as a
public company and its ability to offer management of the acquired companies an
opportunity to join and participate in the growth of a rapidly growing provider
of information technology and other professional staffing services.

Promote Internal Growth. The Company is experiencing strong internal
growth. For the three months ended January 31, 1998, the Company's internal
revenue growth was 34% over the comparable prior-year period. The Company
believes its high levels of internal growth are a result of the Company's
transition to information technology and other professional staffing services,
its location in strong operating regions and its strategy of acquiring companies
with strong growth prospects and integrating their administrative functions to
permit management to focus on increasing sales. The Company plans to maintain
high levels of internal growth by increasing sales to existing customers,
developing new customer relationships and cross-selling its professional
staffing services. The Company believes approximately 50% of its current
customers are users of both outsourced information technology and professional
engineering services. The Company has increased its efforts to cross-sell its
information technology and professional engineering services. As an example of
cross-selling, the Company will issuehas successfully provided the services of its
Information Technology Group to the utility industry customer base of its
Professional Engineering Group.

Migrate Product Offerings to Higher Value Added Services. The Company's
strategic transition to a provider of information technology and other
professional staffing services was designed to move the Company into higher
growth and higher margin sectors of the staffing industry. For the three months
ended January 31, 1998, 82% of the Company's revenues were generated by
information technology and professional engineering staffing services. The
Company believes it now has the opportunity to offer higher value-added services
such fully paidas project management and non-assessable
sharesconsulting services to its professional staffing
services customer base. The Company currently derives a substantial percentage
of Common Stockits professional engineering services revenues from project management work.
The Company plans to use the project management expertise of its Professional
Engineering Group to assist its Information Technology Group in expanding its
sales of higher margin consulting and project management services. The billing
rates and profit margins for project work and consulting services are higher
than those received for staffing services. The Company intends to achieve this
migration to higher value-added services through the internal sharing of its
engineering project management expertise as are specifiedwell as through acquisitions.

OPERATING STRATEGY

Foster a Decentralized Entrepreneurial Environment. A key element of the
Company's operating strategy is to foster a decentralized, entrepreneurial
environment for its employees. The Company fosters this environment by
continuing to build on the Class C Warrant Certificate as
tendered.

Selling Security Holders

The Selling Security Holders may be offering sharesnames, reputations and customer relationships of
Common Stock foracquired companies and by sharing their own account,operating policies, procedures and
not forexpertise with other branch locations to develop new ideas to best serve the
accountprospects of the Company. The Company believes an entrepreneurial business
atmosphere allows its branch offices to quickly and creatively respond to local
market demands and enhances the Company's ability to motivate, attract and
retain managers to maximize growth and profitability.

Develop and Maintain Strong Customer Relationships. The Company seeks to
develop and maintain strong interactive customer relationships by anticipating
and focusing on its customers' needs. The Company emphasizes a
relationship-oriented approach to business, rather than the transaction or
assignment-oriented approach used by many of its competitors. To develop close
customer relationships, the Company's branch managers regularly meet with both
existing and prospective clients to help design solutions for, and identify the
resources needed to execute, their strategies. The Company's branch managers
also maintain close communications with their customers during each project and
on an ongoing basis after its completion. The Company believes that this
relationship-oriented approach results in greater customer satisfaction and
reduced business development expense. Additionally, the Company believes that by
partnering with its customers to

design flexible staffing programs that can be expanded, contracted or redirected
into other specialty areas, it can generate new opportunities to service their
staffing requirements. The Company focuses on providing customers with qualified
individuals compatible with the needs of such customers and makes a concerted
effort to follow the progress of such relationships to ensure their continued
success.

Attract and Retain High Quality Contract and Temporary Personnel. The
Company believes it has been successful in attracting and retaining qualified
contract and temporary personnel by (i) providing stimulating and challenging
work assignments, (ii) offering competitive wages, (iii) effectively
communicating with its candidates, (iv) providing training to maintain and
upgrade skills and (v) aligning the needs of its customers with the
appropriately skilled personnel. The Company has been successful in retaining
qualified contract and temporary personnel due in part to its use of qualified
personnel designated as "ombudsmen" who are dedicated to maintaining contact
with, and monitoring the satisfaction levels of, the Company's contract and
temporary personnel, while they are on assignment.

Centralize Administrative Functions. The Company seeks to maximize its
operational efficiencies by integrating general and administrative functions at
the corporate level, and reducing or eliminating redundant functions and
facilities at acquired companies, typically within three months of an
acquisition. This enables the Company to quickly realize potential savings and
synergies, efficiently control and monitor its operations and allows acquired
companies to focus on growing their sales and operations.

OPERATIONS

The Company provides information technology and other professional staffing
services through the following groups: Information Technology, Professional
Engineering, General Support and Specialty Healthcare.

INFORMATION TECHNOLOGY

The Company's Information Technology Group offers responsive, timely and
comprehensive information technology staffing solutions to support the entire
systems applications development and implementation process. The Company's
information technology professionals have expertise in a variety of technical
disciplines, including enterprise software, network communications, database
design and development and client server migration.

In the course of a customer's systems applications project, the Information
Technology Group may prepare project plans, assist users in defining high level
functional specifications, perform system analysis and detailed design, select
and configure hardware, create custom application programs, develop migration
plans to move to a new operating platform or system, install and test the
system, obtain user acceptance, draft user documentation, train the customer's
employees to use the system and support, maintain and fine-tune the system on an
ongoing basis. In addition, the Information Technology Group supports a wide
variety of operating systems, programming languages, software tools and database
management applications, including UNIX, Windows, Solaris, Novell, Netware,
Sybase, Informix, Lotus Notes, Clipper, Visual Basic, Visual C++, Cobol II, CICS
and Fortran. The Company believes that its ability to provide information
technology staffing for a full range of such services provides an important
competitive advantage. The Company also strives to ensure that its consultants
have the expertise and skills needed to keep pace with rapidly evolving
information technologies.

Customers typically require the Company's services in order to fill gaps in
their range of professional staffing needs or to augment existing personnel in
response to expanded business needs. Engagements average in duration from three
to 12 months. The following are examples of the types of services that have been
provided by the Company's Information Technology Group:

o The Company provided 20 professionals to a large HMO to provide system
development, implementation, support, project management and training for
remote access capability. This system enables the HMO's remote personnel
and customers to access the HMO's main computing systems. The Company is
currently providing eight network engineers to develop and implement a
new high security firewall for the HMO's external network and computing
systems.

o The Company provided five professionals to a major Mid-Atlantic utility
for a project designed to improve internet and intranet connectivity
through site evaluation and design, including security analysis,
installation and support to ensure fully functional transitions. This
relationship was developed through the Company's Professional Engineering
Group.

o The Company provided 20 programming professionals to a multi-national
bank holding company to write custom software for a variety of business
analysis and programming applications. These programs are being developed
to conform to a number of different platforms and environments, including
IBM mainframe, UNIX, AS400, OS2 and Novell.

o The Company provided 25 professionals to a national communications
conglomerate to evaluate the viability and advisability of downsizing an
application to the client/server platform. The engagement entailed
analyzing the system against requirements, surveying system users to
assess satisfaction, assessing the system's suitability for client server
implementation, and preliminary evaluation of off-the-shelf systems.

As of April 22, 1998 approximately 1,000 information technology personnel
were employed by the Company.

PROFESSIONAL ENGINEERING

The Professional Engineering Group provides personnel to perform project
engineering, computer aided design, and other technical services either at the
site of the customer or, less frequently, at the Company's own facilities.
Representative services include utilities process and control, electrical
engineering design, system engineering design and analysis, mechanical
engineering design, procurement engineering, civil structural engineering
design, computer aided design and code compliance. The Professional Engineering
Group has also developed an expertise in providing engineering, design and
technical services to many customers in the aeronautical, paper and paper
products manufacturing industries and the nuclear power, fossil fuel and
electric utility industries.

The Company believes that the deregulation of the utilities industry and
the aging of nuclear power plants offer the Company an opportunity to capture a
significant share of professional staffing and project management requirements
of the utilities industry both in professional engineering services and through
cross-selling of its information technology services. Heightened competition,
deregulation and rapid technological advances are forcing the utilities industry
to make fundamental changes in its business process. These pressures have
compelled the utilities industry to focus on internal operations and maintenance
activities and to increasingly outsource their personnel requirements.
Additionally, the Company believes that increased performance demands from
deregulation should increase the importance of information technology to this
industry. The Company believes that its expertise and strong relationships with
certain customers within the utilities industry position the Company to be a
leading provider of professional services to the utilities industry.

The engagements of the Professional Engineering Group generally vary in
duration from three to 12 months. The following are examples of the types of
services that have been provided by the Company's Professional Engineering
Group:

o The Company is providing 50 contract engineers to a New England utility
involved in the restart of three major electrical generating stations.
The Company's engineers are reviewing platform design documentation,
updating safety analysis reports and establishing and documenting correct
plant configuration to be in accordance with applicable regulatory
requirements.

o The Company is providing 30 engineers to a major Canadian power producer
who recently initiated a long-term organizational and plant improvement
program. The Company's engineers are providing their expertise in the
areas of regulatory compliance, performance assurance and emergency
planning. As a result of this initial engagement, the Company also placed
several information technology professionals with this Canadian power
provider.

o The Company is providing 30 engineers to a large manufacturer of personal
hygiene and tissue products. The Company's engineers are designing mill
equipment used to convert paper into products and assisting with
evaluating configuration of management processes to install, operate and
support production facilities.

o The Company provided five engineers to a major Mid-Atlantic based
telecommunications company to provide telecommunication systems redesign.
This relationship was developed through the Company's Information
Technology Group.

As of April 22, 1998, approximately 500 engineering personnel were employed
by the Company.

GENERAL SUPPORT

The General Support Group provides contract and temporary services, as well
as permanent placement services, for full time and part time personnel in a
variety of functional areas, including office, clerical, data entry,
secretarial, light industrial, shipping and receiving and general warehouse.
Contract and temporary assignments range in length from less than one day to
several weeks or months. The General Support Group has been awarded multi-year
contracts by such customers as AT&T, First National Bank of Chicago, Mellon Bank
and Sears.

SPECIALTY HEALTHCARE

The Specialty Healthcare Group provides skilled, licensed healthcare
professionals, primarily physical therapists, occupational therapists and speech
language pathologists. The Specialty Healthcare Group provides services to
hospitals, nursing homes, pre-schools, sports medicine facilities and private
practices. Services include: in-patient, out-patient, sub-acute and acute care,
rehabilitation, geriatric, pediatric and adult day care. The Specialty
Healthcare Group does not provide nursing or home healthcare services. Typical
engagements range either from three to six months or are on a day-to-day shift
basis.

BRANCH OFFICES

The Company's branch organization consists of four operating regions with
41 offices located in 17 states. The region of, and services provided by, each
branch office are set forth in the table below.

NUMBER OF
REGION OFFICES SERVICES PROVIDED(1)
- ------ --------- --------------------

NORTHEAST
Connecticut.................. 3 PE, GS
Maryland..................... 1 IT
New Hampshire................ 1 IT
New Jersey................... 8 IT, PE, SH, GS
New York..................... 2 IT, PE, SH
Pennsylvania................. 3 IT, PE, GS
--
18
MIDWEST
Indiana...................... 1 GS
Iowa......................... 1 IT
Kentucky..................... 3 PE, GS
Michigan..................... 2 PE
Minnesota.................... 1 IT
Missouri..................... 1 IT, PE
Wisconsin.................... 3 IT, PE
--
12
SOUTHEAST
Georgia...................... 1 PE
North Carolina............... 1 PE
South Carolina............... 1 PE
--
3
WEST
Northern California.......... 1 IT
Southern California.......... 7 GS
--
8

- ------------------
(1) Services provided are abbreviated as follows:

IT -- Information Technology
PE -- Professional Engineering
SH -- Specialty Healthcare
GS -- General Support

Branch offices are primarily located in regions which the Company believes
have strong growth prospects for information technology and other professional
staffing services. The Company's branches are operated in a decentralized,
entrepreneurial manner with each branch office as an independent profit center.
The Company's branch managers are given significant autonomy in the daily
operations of their respective offices and, with respect to such offices, are
responsible for overall guidance and supervision, budgeting and forecasting,
sales and marketing strategies, pricing, hiring and training. Branch managers
are paid on a performance-based compensation system designed to motivate the
managers to maximize growth and profitability.

The Company believes that a substantial portion of the buying decisions
made by users of information technology and other professional staffing services
are made on a local or regional basis and that the Company's branch offices most
often compete with local and regional providers. Since the Company's branch
managers are in the best position to understand the local and regional
information technology and other professional staffing markets, and customers
often prefer local providers, the Company believes that a decentralized
operating environment maximizes operating performance and contributes to
employee and customer satisfaction.

From its headquarters in Pennsauken, New Jersey, the Company provides its
branch offices with centralized administrative, marketing, finance and legal
support. Centralized administrative functions minimize the administrative
burdens on branch office managers and allow them to spend more time focusing on
sales and marketing activities. The Company believes that its ability to rapidly
integrate the administrative functions of its acquisitions has greatly enhanced
its internal growth.

Most of the branch offices have one branch manager, one sales manager,
three salespersons and three recruiters. The Company's branch managers report to
product-line general managers. General managers meet with branch managers on a
regular basis to identify "best practices" for the various sales and marketing
and recruiting processes and assist the branch managers in implementing these
best practices. The Company's branch managers meet every three to six months to
discuss "best practices" and ways to increase the Company's cross-selling of its
professional services.

SALES AND MARKETING

Sales and marketing efforts are conducted at the local and regional level
through the Company's network of branch offices. The Company emphasizes
long-term personal relationships with customers which are developed through
regular assessment of customer requirements and proactive monitoring of
personnel performance. The Company's sales personnel make regular visits to
existing and prospective customers. New customers are obtained through active
sales programs and referrals. The Company encourages its employees to
participate in national and regional trade associations, local chambers of
commerce and other civic associations. The Company seeks to develop strategic
partnering relationships with its customers by providing comprehensive staffing
solutions for all aspects of a customer's information technology and other
professional staffing needs. The Company also concentrates on providing
carefully screened professionals with the appropriate skills in a timely manner
and at competitive prices. The Company constantly monitors the quality of the
services provided by its personnel and obtains feedback from its customers as to
their satisfaction with the services provided.

During fiscal 1997, the Company placed employees with approximately 1,150
customers in a variety of industries. Representative customers include AT&T,
Bell Atlantic, Chase Manhattan Bank, Liberty Mutual Insurance, MCI, Merck,
Merrill Lynch, Northeast Utilities and 3M. Although the Company serves numerous
Fortune 500 companies, the Company's relationships with these customers is
typically formed at the local or regional level as the Company does not actively
solicit national contracts, which typically have lower margins.

Northeast Utilities, for whom the Company provides professional engineering
staffing services, accounted for 8.4% of the Company's revenues for the three
months ended January 31, 1998. No other customer accounted for over 5.0% of the
Company's revenues during these periods. The Company's five and ten largest
customers accounted for approximately 21.9% and 30.3%, respectively, of the
Company's revenues for fiscal 1997 and 18.8% and 27.8%, respectively, of the
Company's revenues for the three months ended January 31, 1998.

RECRUITING AND TRAINING

The Company devotes a significant amount of time and resources, primarily
at the branch level, to locating, training and retaining its professional
staffing personnel. Full-time recruiters utilize the Company's proprietary
database of available personnel, which is cross-indexed by skill to match
potential candidates with the specific requirements of the customer. The
qualified personnel in the databases are identified through numerous activities,
including networking, referrals, the internet, job fairs, newspaper and trade
journal advertising, attendance at industry shows and presentations. The Company
also has several recruiters dedicated to recruiting highly skilled, highly
sought-after information technology personnel from international locations such
as Australia, Canada, England, India, Mexico, New Zealand, South Korea and other
European and Southeast Asian countries. International recruits are available to
all branch office locations through the Company's corporate headquarters.

The Company routinely performs verification of education and employment, as
well as personal and professional reference checks. As potential candidates are
identified, each individual participates in an extensive qualification process.
An in-house interview of the candidate is typically conducted by

both the recruiting and sales staff and candidates are evaluated and qualified
by a member of the Company's technical staff. Upon placement with the
appropriate customer, the employee is continually monitored and supervised to
ensure competent, timely and professional performance. Regular on-site visits by
the Company's representatives are made and the employees and their supervisors
are contacted. Professionals complete weekly status reports which are signed by
their supervisors and report regularly on the status of their projects in order
to identify and eliminate potential problems and issues which may arise. Exit
interviews are conducted upon completion of an assignment and the customer is
invited to confirm that all parties are satisfied with the work completed. The
Company also offers educational programs to upgrade the skills of its personnel,
particularly within its Information Technology Group.

The Company believes that a significant element to the Company's success in
retaining qualified contract and temporary personnel is the Company's use of
"ombudsmen." Ombudsmen are qualified Company personnel dedicated to maintaining
contact with, and monitoring the satisfaction levels of the Company's contract
and temporary personnel, while they are on assignment.

INFORMATION SYSTEMS

The Company has invested, and intends to continue to invest, substantial
resources to develop systems that will not
receive any proceedsenable it to deliver quality financial
and operating data to management, provide timely and accurate customer billing
and centrally manage its operations. The Company's internal information system
is linked to all of the Company's offices. This system supports Company-wide
operations such as payroll, billing, accounting and sales and management
reports. Additionally, each of the four service groups has separate databases to
permit efficient tracking of available personnel on a local basis. These
databases facilitate efficient matching of customers' requirements with
available temporary staffing personnel. For acquired companies, administrative
functions are integrated into the Company's information system and personnel
databases are updated accordingly. The Company typically completes this process
within three months of the acquisition.

The Company is currently running a beta version of an upgrade to its
current internal information system and it is expecting that the new system will
be fully operational by the end of 1998. The new system is provided by Applied
Datametrics and is currently used by numerous staffing companies. The new system
is year 2000 compliant and will expand management reporting capabilities and
provide the flexibility necessary for the Company's acquisition strategy.

COMPETITION

The staffing industry is highly competitive and fragmented, consisting of
more than 7,000 companies. There are limited barriers to entry and new
competitors frequently enter the market. The Company's principal competitors are
generally local or regional independent staffing companies that are located in
the Company's various regional markets. The Company also encounters competition
from international and national companies. Certain of the Company's competitors
have more established operations and greater marketing, financial and other
resources than the Company.

Additionally, the Company competes for suitable acquisition candidates
based on its entrepreneurial and decentralized operating philosophy, its strong
corporate-level support and resources, its status as a public company and its
ability to offer management of the acquired companies an opportunity to
participate in the growth of a rapidly growing provider of information
technology and other professional staffing services.

PRIOR BUSINESS OPERATIONS

The Company was previously engaged in the development of environmental
technologies and the operation, until 1977, of an aluminum recovery facility in
California. In fiscal 1992, the Company discontinued its environmental business.
On September 26, 1997, the Company settled a potential environmental claim
relating to the discontinued operations. In connection with such settlement, in
fiscal 1997, the Company incurred a loss from discontinued operations of
approximately $363,000. The Company believes, but cannot assure, that all
matters, environmental or otherwise, relating to the discontinued operations
have been concluded.

MANAGEMENT

EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES

The Company's executive officers, directors and key employees are as
follows:

EXECUTIVE OFFICERS AND DIRECTORS AGE OFFICE
- -------------------------------- --- ------

Leon Kopyt (1)....................... 51 Chairman, Chief Executive Officer, President and
Director
Stanton Remer (1).................... 48 Chief Financial Officer, Treasurer, Secretary and
Director
Brian A. Delle Donne................. 41 Executive Vice President of Operations; General
Manager of Information Technology
Rocco Campanelli..................... 47 Senior Vice President and General Manager of
Professional Engineering
Kevin D. Miller...................... 31 Senior Vice President of Corporate Development
Peter R. Kaminsky.................... 58 Senior Vice President of Information Technology
Norman S. Berson (2)................. 71 Director
Robert B. Kerr (2)(3)................ 55 Director
Woodrow B. Moats, Jr. (3)............ 65 Director

KEY EMPLOYEES
- -------------

Michael Farber....................... 43 Vice President of Information Technology
Frank Lentz.......................... 53 Vice President of Information Technology
Warren Lillund....................... 40 Vice President of Professional Engineering
Michael O'Keefe...................... 48 Vice President of Information Technology
Michael Saks......................... 41 Vice President and General Manager of Specialty
Healthcare and General Support

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

(1) Messrs. Kopyt and Remer are Class C directors of the Company and their terms
expire at the annual meeting of stockholders in 1999.

(2) Mr. Berson is a Class A director of the Company and his term expires at the
annual meeting of stockholders in 2000.

(3) Messrs. Kerr and Moats are Class B directors of the Company and their terms
expire at the annual meeting of stockholders in 2001.

Mr. Kopyt was appointed President and Chief Executive Officer in January
1992 and from May 1990 to that date served as Chief Operating Officer of the
Company. Additionally, Mr. Kopyt served as Chief Financial Officer and Treasurer
of the Company from 1992 to 1994. Mr. Kopyt's prior experience includes serving
as President and Chief Executive Officer of Socimi International, a European
transportation and defense products manufacturing company from 1981 to 1990. Mr.
Kopyt holds a B.S. in Electrical Engineering from Drexel University. Mr. Kopyt
has been a director of the Company since 1991 and Chairman of the Board since
1992.

Mr. Remer was appointed Chief Financial Officer and Treasurer in May 1994.
Mr. Remer's prior experience includes serving as an audit manager of a local
accounting firm in 1993, serving as Chief Financial Officer of Sterling Supply
Corporation from 1991 to 1992 and serving as managing partner of a regional
accounting firm from 1983 to 1991. Mr. Remer is a Certified Public Accountant
and holds a M.B.A. in Finance from Temple University and a B.S. in Textile
Engineering from the Philadelphia College of Textiles & Science. Mr. Remer has
been a director of the Company since 1992.

Mr. Delle Donne was appointed Executive Vice President of Operations in
April 1998. Mr. Delle Donne served as President of Knight Facilities Management,
a global planning, engineering and management consulting firm from 1997 to 1998.
Mr. Delle Donne also served as Senior Vice President of Ogden Projects, Inc.,
and President and Chief Operating Officer of Ogden Environmental Services

from 1989 to 1997. Mr. Delle Donne also served in various capacities with
Westinghouse Electric Corp. from 1978 to 1989. Mr. Delle Donne holds a B.A. in
Materials Engineering and Economics from Brown University.

Mr. Campanelli was appointed Senior Vice President and General Manager of
Engineering in September 1995. Previously, he was a Senior Vice President of
Operations and Marketing for Cataract, Inc. (acquired by the Company in August
1995). He also held the position of Northeast Regional Manager and Vice
President of Operations since joining Cataract in 1988. Mr. Campanelli's prior
experience includes serving as a Division Manager of Sales and Marketing and
Section Manager of the Management Services Section of Impell Corporation, a
division of Combustion Engineering, from 1976 to 1988. Mr. Campanelli holds a
B.S. in Nuclear Science and Engineering from Maritime College.

Mr. Miller was appointed Senior Vice President of Corporate Development in
July 1997. Mr. Miller's prior experience includes serving as an Associate in the
corporate finance department of Legg Mason Wood Walker, Incorporated from 1996
to 1997, serving as a business consultant for the Wharton Small Business
Development Center from 1995 to 1996 and serving in various capacities in both
the audit and corporate finance groups at Ernst & Young, LLP. Mr. Miller is a
Certified Public Accountant and holds a M.B.A. in Finance from the Wharton
School of the University of Pennsylvania and a B.S. in Accounting from the
University of Delaware.

Mr. Kaminsky was appointed Senior Vice President in May 1996. Mr. Kaminsky
was the founder of Consortium of Maryland, Inc. ("Consortium MD") (acquired by
the Company in May 1996). Mr. Kaminsky founded Consortium MD in 1980. Mr.
Kaminsky holds a B.S. in Science from American University.

Mr. Berson has been a shareholder in the law firm of Fineman & Bach, P.C.,
of Philadelphia, Pennsylvania, and its predecessors since 1981. The Company has
retained Fineman & Bach, P.C. to represent it on various legal matters. From
1967 to 1982, Mr. Berson was a member of the House of Representatives of the
Commonwealth of Pennsylvania. Mr. Berson has been a director of the Company
since 1987.

Mr. Kerr is founder and partner of Everingham & Kerr, Inc., a merger and
acquisition consulting firm located in Haddon Heights, New Jersey, which
provides professional intermediary services and other consulting services to
small and middle market manufacturing, distribution and service businesses. Mr.
Kerr's prior experience includes serving as Vice President-Sales, for
Shieldalloy Corporation, a specialty metals producer, from 1974 to 1987. Mr.
Kerr holds a B.S. in Mechanical Engineering and a B.A. in Arts and Sciences from
Pennsylvania State University and a M.B.A. in Management from Wayne State
University. Mr. Kerr has been a director of the Company since 1994.

Mr. Moats is President of W.B. Moats & Associates, Berwyn, Pennsylvania, a
marketing communications organization specializing in business-to-business
marketing. Mr. Moats' prior experience includes serving as Senior Vice
President-Corporate Marketing and Public Relations of National Railway
Utilization Corporation from 1975 to 1980. Mr. Moats is a graduate of the
University of Miami, Florida, as a marketing major specializing in advertising.
Mr. Moats has been a director of the Company since 1994.

Mr. Farber was appointed Vice President of Information Technology in March
1998 and has been with the Company since January 1996. Mr. Farber has 20 years
experience within the information technology industry in the service, software
and hardware arenas. For the two years prior to joining the Company, Mr. Farber
was President and owner of Management By Objective, an information technology
placement firm. Mr. Farber has previously held positions with Dun & Bradstreet,
where he was Director of Sales, as well as KDI, a manufacturer of multi-media
products, where he was Director of Business Development.

Mr. Lentz was appointed Vice President of Information Technology in
November 1996. Mr. Lentz was the founder of Programming Alternatives of
Minnesota, Inc. ("PAMI") (acquired by the Company in November 1996). Mr. Lentz
came to the Company with thirty years of experience in

the staffing industry. For seven years, he held several management positions
with General Employment Enterprises. He then spent ten years with Control Data
Corporation as the Vice President of the Cyber Search Division. He purchased
this division from Control Data in 1983 and formed PAMI.

Mr. Lillund was appointed Vice President of Professional Engineering in
January 1998. Previously, he was an owner of Northern Technical Services ("NTS,"
acquired by the Company in January 1998). Prior to joining NTS in 1994, Mr.
Lillund was a District Finance and Contract Marketing Manager for Xerox
Corporation and held various other sales and management positions from 1981 to
1994. Mr. Lillund holds a B.S. in Political Science and Psychology from the
University of Wisconsin-Oshkosh.

Mr. O'Keefe was appointed Vice President of Information Technology in
October 1997. Previously, he was a founder of Camelot Contractors Limited
(acquired by the Company in August 1997) and served as its Chief Executive
Officer. His prior experience includes serving as Vice President of MAS New
Hampshire and as Vice President and Treasurer of Technology Profiles Inc. MAS
New Hampshire and Technology Profiles Inc. are recruiting firms that serve the
information technology market. Mr. O'Keefe holds a B.A. from St. Anselm College
and a Master of Natural Science Degree from Worcester Polytechnic Institute.

Mr. Saks was appointed Vice President and General Manager of Specialty
Healthcare and General Support in March 1998. Mr. Saks previously served as Vice
President of Specialty Healthcare since May 1997 and joined The Consortium
(acquired by the Company in March 1996) in January 1994. Mr. Saks' prior
experience includes serving as Vice President of M.A. Management Associates, a
New York based Executive Search Firm. Mr. Saks holds a B.S. in Accounting from
Fairleigh Dickenson University.

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of April 24, 1998 and as adjusted to
reflect the sale of the shares of Common Stock offered hereby by: (i) each
person known by the Company to beneficially own 5% or more of the Company's
outstanding Common Stock; (ii) each of the Company's directors; (iii) the
Company's Chief Executive Officer; (iv) the four most highly compensated
executive officers of the Company (other than the Chief Executive Officer) who
were serving as such on October 31, 1997 and received total annual salary and
bonus in fiscal 1997 of more than $100,000; (v) the Selling Security Holders.Stockholders; and
(vi) all directors and executive officers of the Company as a group. Except as
otherwise indicated, each person set forth below has sole voting and investment
power on the shares reported.

SHARES BENEFICIALLY NUMBER SHARES TO BE
OWNED PRIOR TO OF SHARES BENEFICIALLY OWNED
OFFERING(1) BEING OFFERED(2) AFTER OFFERING
------------------- ---------------- -------------------
NAME AND ADDRESS(3) NUMBER PERCENT NUMBER PERCENT
------------------- --------- ------- -------- --------

Leon Kopyt (4)(5)................................ 1,100,008 13.1% 104,020 995,988 9.1%
Stanton Remer(5)(6).............................. 457,576 5.9 30,000 427,576 4.1
Peter R. Kaminsky (7)............................ 70,265 * -- 70,265 *
Norman S. Berson (5)(8).......................... 437,576 5.6 20,000 417,576 4.0
Robert B. Kerr (5)(9)............................ 435,576 5.6 18,000 417,576 4.0
Woodrow B. Moats, Jr. (5)(9)..................... 435,576 5.6 18,000 417,576 4.0
Wellington Management Company, LLP .............. 745,200 9.7 -- 745,200 7.2
75 State Street, 19th Floor
Boston, MA 02109
Barry S. Meyers (10) ............................ 555,468 7.2 -- 555,468 5.3
384 Highview Terrace
Ridgewood, NJ 07450
Martin Blaire (10) .............................. 541,468 7.0 -- 541,468 5.2
32 Lewis Road
Irvington, NY 10533
All directors and officers as a group
(9 persons)(3)(4)(5)(6)(7)(8).................. 1,443,068 15.8 190,020 1,253,048 10.8

- ------------------
* Represents less than one percent of the Company's outstanding Common Stock.

(1) The Selling Security Holders may be offering, subjectsecurities "beneficially owned" by an individual are determined in
accordance with the definition of "beneficial ownership" set forth in
regulations promulgated under the Securities Exchange Act of 1934, as
amended. Accordingly, the beneficial ownership of certain persons set forth
in the table above includes securities owned by or for, other persons,
securities as to material
restrictions, for sale upwhich such persons share voting or investment power and
securities which such persons have the right to 1,500,813acquire within 60 days
after the date of this Prospectus. The table has been prepared based on
7,693,868 shares of Common Stock previously issued
by the Company in private transactions pursuant to registration rights granted
by the Company in conjunction with such transactions.

Each Selling Security Holder will, prior to any sales, agree (a) not to
effect any offers or salesoutstanding as of the Common Stock in any manner other than as
specified in this Prospectus, (b) to inform the Company of any sale of Common
Stock at least one business day prior to such sale and (c) not to purchase or
induce others to purchase Common Stock in violation of Regulation M under the
Exchange Act.April 24, 1998.

(2) The Common Stock may be sold from time to time by the Selling Security
Holders identified in this Prospectus (see "SELLING SECURITY HOLDERS") or by
pledgees, donees, transferees or other successors in interest. Such sales may be
made on NASDAQ, on the over-the-counter market or otherwise at prices and at
terms then prevailing or at prices related to the then current market price, or
in negotiated private transactions. The Common Stock may be sold by one or more
of the following: (a) a block trade in which the broker or dealer so engaged
will attempt to sell the shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction; (b) purchases by a
broker or dealer for its account pursuant to this Prospectus; and (c) ordinary
brokerage transactions and transactions in which the broker solicits purchases.
In effecting sales, brokers or dealers engaged by the Selling Security Holders
may arrange for other brokers or dealers to participate. Brokers or dealers will
receive commissions or discounts from Selling Security Holders in amounts to be
negotiated immediately prior to the sale. Such brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Act in connection with such sales. The Company will not receive
any of the proceeds from the sale of these shares, although it has paid the
expenses of preparing this Prospectus and the related Registration Statement.
The Selling Security Holders have been advised that they are subject to the
applicable provisions of the Exchange Act.

Restrictions Upon Resale

All of the 1,500,813 shares of Common Stock being offered by the Selling Security Holders mayStockholders will
be issued by the Company upon the exercise of the Selling Stockholder
Options.

(3) The address of all directors and officers of the Company is c/o RCM
Technologies, Inc., 2500 McClellan Avenue, Suite 350, Pennsauken, New
Jersey 08109.

(4) Includes options to purchase 694,020 shares under the Company's stock
option plans and 38,312 shares with respect to which Mr. Kopyt has sole
voting power in the election of directors and disclaims beneficial
ownership. See "-- Certain Voting Arrangements."

(5) Includes 367,576 shares with respect to which each director is deemed to
have shared voting power as a member of the Board of Directors pursuant to
an arrangement under which the Board of Directors has power to vote the
shares. Each director disclaims beneficial ownership of those shares. See
"-- Certain Voting Arrangements."

(6) Includes options to purchase 90,000 shares under the Company's stock option
plans.

(7) Mr. Kaminsky has agreed to vote 55,265 of his shares in accordance with the
recommendation of the majority of the Board of Directors until the earlier
of: (i) May 2, 1998; or (ii) the termination of his employment agreement
with the Company. Includes options to purchase 15,000 shares under the
Company's stock option plans.

(8) Includes options to purchase 70,000 shares under the Company's stock option
plans.

(9) Includes options to purchase 68,000 shares under the Company's stock option
plans. Does not include options to purchase 2,000 shares under the
Company's stock option plans, which options are not exercisable within 60
days after the date of this Prospectus.

(10) In fiscal 1997, Messrs. Meyers and Blaire were officers and directors of
the Company. Messrs. Meyers and Blaire acquired their shares in March 1996
in connection with their sale of The Consortium to the Company. At the time
of the sale, each of Messrs. Meyers and Blaire entered into a two-year
employment agreement with the Company expiring on March 11, 1998 unless
renewed by the Company. In January 1998, the Company informed each of
Messrs. Meyers and Blaire that his employment agreement would not be
renewed. On February 19, 1998, Mr. Meyers' employment with the Company
ended and, effective March 12, 1998, Mr. Meyers resigned from the Company's
Board of Directors. On March 27, 1998, Mr. Blaire's employment with the
Company ended and, effective April 6, 1998, Mr. Blaire resigned from the
Company's Board of Directors.

CERTAIN VOTING ARRANGEMENTS

On February 5, 1996, the Company issued and sold prior276,625 shares of Common
Stock to December 7, 1997,Limeport Investments, LLC ("Limeport") in a private placement
transaction. In conjunction with this transaction, Limeport granted Mr. Kopyt an
irrevocable proxy entitling him to vote such shares solely in connection with
the election of directors of the Company, at any regular or special meeting of
the stockholders. The number of shares of Common Stock owned by Limeport
Investments at April 22, 1998 was 38,312.

Effective August 31, 1995, the Company completed the acquisition of
Cataract, Inc. ("Cataract") pursuant to a Merger Agreement dated July 31, 1995
(the "Cataract Merger Agreement"). Pursuant to the terms of the Cataract Merger
Agreement, the former Cataract shareholders pledged until November 30, 1998,
approximately 312,311 shares of the Company's common stock ("Cataract Shares")
they received as part of the merger consideration, in order to guarantee certain
performance criteria of Cataract established in the Cataract Merger Agreement.
Following the expiration of the pledge period, the Cataract Shares are to be
placed in a voting trust until the earlier of (i) the public or private sale of
such shares in open market transactions to unaffiliated third parties or (ii)
the resignation or removal from office of Leon Kopyt, currently Chief Executive
Officer and additionally,President of these shares, further material restrictions exist as follows:
55,265 shares may notthe Company. Notwithstanding the above, one-third of
the Cataract Shares shall be sold prior to March 2, 1998; 85,066 shares may notreleased from trust commencing August 31, 2000, and
thereafter an additional one-third of the Cataract Shares shall be sold prior to March 11, 1998; 22,409 shares may not be sold prior to January 21,
1998;released from
trust upon each of August 31, 2001 and 1,178,936 sharesAugust 31, 2002. During the period in
which the Cataract Shares are subject to pledge and the following further limitations:voting trust, the
Cataract Shares are to be voted by the Company's Board of Directors on behalf of
the former shareholders of Cataract.

Effective May 2, 1996, the Company completed the acquisition of Consortium
MD pursuant to a Merger Agreement dated April 23, 1996 (the "Consortium MD
Merger Agreement"). Pursuant to the terms of the Consortium MD Merger Agreement,
Peter Kaminsky, the former sole shareholder of Consortium MD and an executive
officer of the Company, agreed, among other things, to vote the 55,265 shares of
Common Stock received by him in connection with all matters to be voted on by
the stockholders of the Company, in accordance with the recommendation of the
majority of the Board of Directors. These provisions shall remain in effect
until the earlier of (i) through March 11,May 2, 1998 resale shall beor (ii) the termination of Mr. Kaminsky's
employment agreement with the Company.

The former shareholders of The Consortium, including Messrs. Meyers and
Blaire, have limited preemptive rights with respect to only those shares with an
aggregate valuecertain issuances of
$258,000; (ii) from March 11, 1998voting securities for cash by the Company. The rights are not applicable to March 11, 1999, resales
shall be limited to that numberthe
offering of shares of Common Stock made by the Company pursuant to this
Prospectus or other underwritten public offerings or to issuances of shares of
Common Stock pursuant to stock option plans.

SHARES ELIGIBLE FOR FUTURE SALE

Upon the closing of the Offering, there will be 10,393,868 shares of Common
Stock outstanding all of which will be freely tradeable without restriction or
further registration under the Securities Act, unless held by an "affiliate" of
the Company as that could have been sold during this
period underterm is defined in Rule 144 under the Securities Act, which
shares will be subject to the resale limitations of Rule 144 and, except for (i)
1,096,936 shares which have been registered for resale and may be sold subject
to certain contractual restrictions limiting resales by each of Messrs. Meyers
and Blaire to 50,000 shares, each, per week, (ii) 55,265 shares have been
registered for resale, but are subject to a 90-day Lock-Up Period (as thatdefined
below), and (iii) 312,311 shares may not be sold until November 30, 1998 due to
contractual restrictions. All other outstanding shares are subject to the resale
limitations of Rule was144.

In general, under Rule 144 as currently in effect, a stockholder (or
stockholders whose shares are aggregated) who has beneficially owned shares
constituting "restricted securities" (generally defined as securities acquired
from the Company or an affiliate of the closingCompany in a non-public transaction) 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 (i) one percent of then outstanding
Common Stock 103,938 shares of Common Stock immediately after the Offering
without giving effect to additional shares issued pursuant to the Underwriters'
over-allotment option) or (ii) the average weekly reported trading volume in the
Common Stock during the four calendar weeks preceding the date on which notice
of such transactionsale is filed pursuant to Rule 144. Sales under Rule 144 are also
subject to certain provisions regarding the manner of sale, notice requirements
and the availability of current public information about the Company. A
stockholder (or stockholders whose shares are aggregated) who is not an
affiliate of the Company for at least 90 days prior to a sale and who has
beneficially owned "restricted securities" for at least two years is entitled to
sell such shares under Rule 144 without regard to the limitations described
above.

The Company and its executive officers and directors have agreed not to
offer, sell, contract to sell or otherwise dispose of any shares of Common Stock
or rights to acquire such shares or securities convertible into or exchangeable
for Common Stock other than sales contemplated hereby or issued or to be issued
pursuant to employee stock option plans or in March 1996)connection with other employee
incentive compensation arrangements or agreements, in each case in effect on the
date of this Prospectus, for a period of 90 days after the date of this
Prospectus (the "Lock-Up Period"), however,without the prior written consent of BT Alex.
Brown Incorporated, as representative of the Underwriters.

Sales of additional shares in the public market could also occur upon the
exercise of 52,855 vested and exercisable employee stock options held by persons
not subject to the lock-up, and Class C Warrants to purchase 55,855 shares of
Common Stock. These sales could take place prior to the expiration of the
Lock-Up Period.

No prediction can be made as to the effect, if any, that future sales of
shares of Common Stock, or the availability of shares for future sale, to the
public will have on the market price of the Common Stock prevailing from time to
time. Sales of substantial amounts of Common Stock in the public market, whether
such shares are presently outstanding or subsequently issued, or the perception
that such sales could occur, could adversely affect prevailing market prices for
the Common Stock and could impair the Company's ability to raise capital in the
future through an offering of equity securities. The Company cannot predict when
or how many of such additional shares of Common Stock may be offered for sale or
sold to the public in the future.

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Underwriters named below (the "Underwriters"), through their Representatives, BT
Alex. Brown Incorporated, BancAmerica Robertson Stephens and Legg Mason Wood
Walker, Incorporated, have severally agreed to purchase from the Company and the
Selling Stockholders the following respective number of shares of Common Stock
at the public offering price less the underwriting discounts and commissions set
forth on the cover page of this Prospectus:

NUMBER OF
UNDERWRITERS SHARES
------------ -----------

BT Alex. Brown Incorporated.................................
BancAmerica Robertson Stephens..............................
Legg Mason Wood Walker, Incorporated........................

-----------
Total............................................... 2,700,000
===========

The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will purchase the total number of shares of Common Stock offered
hereby (other than those subject to the over-allotment described below) if any
of such shares are purchased.

The Company and the Selling Stockholders have been advised by the
Representatives that the Underwriters propose to offer the shares of Common
Stock to the public at the public offering price set forth on the cover page of
this Prospectus and to certain dealers at such price less a concession not in
excess of $ per share. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of $ per share to certain other
dealers. After commencement of the Offering, the Offering price and other
selling terms may be changed by the Representatives.

The Company has granted to the Underwriters an option, exercisable not
later than 30 days after the date of this Prospectus, to purchase up to 405,000
additional shares of Common Stock at the public offering price less the
underwriting discounts and commissions set forth on the cover page of this
Prospectus. To the extent that the Underwriters exercise such option, each of
the Underwriters will have a firm commitment to purchase approximately the same
percentage thereof that the number of shares of Common Stock purchased by each
of them as shown in the above table bears to 2,700,000, and the Company will be
obligated, pursuant to the option, to sell such shares to the Underwriters. The
Underwriters may exercise such option only to cover over-allotments made in
connection with the sale of the Common Stock offered hereby. If purchased, the
Underwriters will offer such additional shares on the same terms as those on
which the 2,700,000 shares are being offered.

In connection with the Offering, certain Underwriters may engage in passive
market making transactions in the Common Stock on the Nasdaq National Market
immediately prior to the commencement of sales in the Offering in accordance
with Rule 103 of Regulation M. Passive market making consists of displaying bids
on the Nasdaq National Market limited by the bid prices of independent market
makers and making purchases limited by such prices and effected in response to
order flow. Net purchased by a passive market maker on each day are limited to a
specified percentage of the passive market maker's average daily trading volume
in the Common Stock during a specified period and must be discontinued when such
limit is reached. Passive market making may stabilize the market price of the
Common Stock at a level above that which might otherwise prevail and, if
commenced, may be discontinued at any time.

Subject to applicable limitations, the Underwriters, in connection with the
Offering, may place bids for or make purchases of the Common Stock in the open
market or otherwise, for long or short account, or cover short positions
incurred to stabilize, maintain or otherwise affect the price of the Common
Stock, which may be higher than the price that might otherwise prevail in the
open market. There can be no greater than 50,000assurance that the price of the Common Stock will
be stabilized, or that stabilizing, if commenced, will not be discontinued at
any time. Subject to applicable limitations, the Underwriters may also place
bids or make purchases on behalf of the underwriting syndicate to reduce a short
position created in connection with the Offering. The Underwriters are not
required to engage in these activities and may end these activities at any time.

The Underwriting Agreement contains covenants of indemnity and contribution
between the Underwriters and the Company and the Selling Stockholders with
respect to certain civil liabilities, including liabilities under the Securities
Act.

The Company's officers and directors, who following the Offering will
beneficially own an aggregate of 914,425 shares per week per holder;of Common Stock, and (iii)the Company
have agreed not to offer, sell or otherwise dispose of any such Common Stock or
any shares of Common Stock issuable upon exercise of any options for Common
Stock for a period of 90 days after March 11, 1999, resales are
unlimitedthe date of this Prospectus without the
prior written consent of BT Alex. Brown Incorporated, except for the Common
Stock offered hereby.

LEGAL MATTERS

Certain legal matters in connection with this offeringthe Offering will be passed upon
for the Company by Buchanan Ingersoll Professional Corporation,Wolf, Block, Schorr and Solis-Cohen LLP, Philadelphia,
Pennsylvania. The validity of the shares of Common Stock being offered hereby has been
passed upon for the Company by Schreck Morris, Las Vegas, Nevada. STATEMENT OF INDEMNIFICATION

The Company's ArticlesAs to matters
of Incorporation provide thatNevada law, Wolf, Block, Schorr and Solis-Cohen LLP will rely upon the
Company shall,
toopinion of Schreck Morris. Certain legal matters in connection with the full extent permittedOffering
will be passed upon for the Underwriters by the Nevada General Corporation Law, indemnify
all persons whom it has the power to indemnify pursuant thereto, including
officers and directors of the Company. The Articles of Incorporation also
authorize the Company to maintain insurance to cover such liabilities. The
Company recently purchased Directors' and Officers' Liability Insurance to
protect directors and officers of the Company from any liability asserted
against them for acts taken or omissions occurring in their capacities as such.
The Company policy has an aggregate liability limit of $5,000,000. The Company
is not required to maintain such insurance and there can be no assurance that
the Company will continue to maintain such insurance or coverage in such
amounts.Hogan & Hartson L.L.P., Baltimore,
Maryland.

EXPERTS

The financial statements incorporatedas of October 31, 1996 and 1997 and for each of
the three years in the period ended October 31, 1997 included in this Prospectus
by reference
to the Annual Report on Form 10-K of RCM Technologies, Inc. for the year ended
October 31, 1996 have been so incorporated in reliance on the report ofaudited by Grant Thornton LLP, independent certified public
accountants, given on the authoritywhose report thereon is included herein, in reliance of said firm
as experts in auditing and accounting.

AVAILABLE INFORMATION

The Company is subject to the informational and reporting requirements of
the Exchange Act and, in accordance therewith, files reports, proxy statements
and other information with the Commission. Such reports, proxy statements and
other information concerning the Company may be inspected without charge, and
copies of all or any part thereof may be obtained from the Commission's
principal office in Washington, D.C. at Room 1024, 450 Fifth Street N.W.,
Washington, D.C. 20549, and at the Commission's regional offices at 7 World
Trade Center, Suite 1300, New York, New York 10048, and at Northwest Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such materials can be obtained upon written request addressed to the Commission,
Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Common Stock is listed for trading on the Nasdaq National
Market, and reports, proxy statements and other information concerning the
Company are on file for inspection at the offices of The Nasdaq Stock Market,
Inc., 1735 K Street, N.W., Washington, D.C. 20006. In addition, the Commission
maintains a Web site at http://www.sec.gov containing reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission, including the Company.

No dealer, salesperson or other personThe Company has been authorized in connectionfiled with this offeringthe Commission a Registration Statement on Form
S-3 under the Securities Act with respect to give any information or to make any representations other than
those contained inthe shares of Common Stock being
offered by 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. Neithercontain all of the
delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create an implication
that there has been no changeinformation set forth in the circumstancesRegistration Statement and the exhibits and
schedules thereto, certain parts of which have been omitted as permitted by the
rules and regulations of the Commission. For further information with respect to
the Company orand the facts
herein set forth since the date hereof.

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

TABLE OF CONTENTS

Page

Available Information...............................2
Incorporation of Documents by
Reference.........................................3
Prospectus Summary..................................4
Risk Factors........................................7
Use of Proceeds....................................12
Selling Security Holders...........................13
Plan of Distribution...............................14
Legal Matters......................................15
Statement of Indemnification.......................15
Experts............................................16

RCM TECHNOLOGIES, INC.

PROSPECTUS

October ___, 1997

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

157,342 Sharesshares of Common Stock Offeredoffered hereby, reference is made to
the Registration Statement, including the exhibits and schedules thereto.
Statements contained in this Prospectus as to the contents of any contract or
other document referred to herein are not necessarily complete and, where such
contract or other document is an exhibit to the Registration Statement, each
such statement is qualified in all respects by the provisions of such exhibit,
to which reference is hereby made.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents previously filed by the Company (File No. 1-10245)
with the Commission under the Exchange Act are incorporated by reference in this
Prospectus as of their respective dates: (i) the Company's Annual Report on Form
10-K for the fiscal year ended October 31, 1997, (ii) the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended January 31, 1998, (iii) the
Company's Current Reports on Form 8-K dated January 2, 1998 and March 17, 1998
and (iv) the description of the Common Stock contained in the Company's
Registration Statement on Form 10 filed under Section 12 of the Exchange Act on
March 1, 1982.

All documents filed by the Company pursuant to Certain Outstanding Warrants

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

1,500,813 SharesSection 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the shares of Common Stock Offeredoffered hereby shall
be deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the respective dates of filing of such documents, except as to any
portion of any future annual or quarterly report to the Company's stockholders
or proxy statement which is not deemed to be filed under those provisions. Any
statement contained in this Prospectus, or in a document, all or a portion of
which is incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently dated document, as the case may be,
which also is or is deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as modified or superseded, to constitute a part of this
Prospectus.

The Company undertakes to provide, without charge, to each person to whom a
copy of this Prospectus has been delivered, upon the request of such person, a
copy of any or all of the documents referred to above which have been or may be
incorporated by reference in this Prospectus, other than exhibits to such
documents, unless such exhibits are also specifically incorporated by reference
herein. Written or oral requests for such copies should be directed to the
Company at 2500 McClellan Avenue, Suite 350, Pennsauken, New Jersey 08109-4613,
Attention: Stanton Remer; telephone number (609) 486-1777.

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS

PAGE
REFERENCE
---------

Pro Forma Condensed Consolidated Statements of Operations
(Unaudited):

Three Months Ended January 31, 1998......................... F-2

Year Ended October 31, 1997................................. F-3

Notes to Unaudited Pro Forma Condensed Consolidated
Statements of Operations.................................. F-4

Consolidated Financial Statements:

Independent Auditors' Report................................ F-7

Consolidated Balance Sheets, October 31, 1996 and 1997 and
January 31, 1998 (Unaudited).............................. F-8

Consolidated Statements of Income, Years Ended October 31,
1995, 1996 and 1997 and the Three Months Ended January 31,
1997 and 1998
(Unaudited)............................................... F-9

Consolidated Statements of Changes in Shareholders' Equity,
Years Ended October 31, 1995, 1996 and 1997 and the Three
Months Ended January 31, 1998 (Unaudited)................. F-10

Consolidated Statements of Cash Flows, Years Ended October
31, 1995, 1996 and 1997 and the Three Months Ended January
31, 1997 and 1998 (Unaudited)............................. F-11

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

F-1

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED JANUARY 31, 1998
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

ACQUIRED PRO FORMA OFFERING PRO FORMA
HISTORICAL COMPANIES(A) ADJUSTMENTS PRO FORMA ADJUSTMENTS AS ADJUSTED
---------- ------------ ----------- ---------- ----------- -----------

Revenues.................... $ 37,232 $7,358 $ 44,590 $ 44,590
Cost of services............ 28,080 5,607 33,687 33,687
---------- ------ ---------- ----------
Gross profit................ 9,152 1,751 10,903 10,903
---------- ------ ---------- ----------
Selling, general and
administrative............ 5,814 1,618 (577)(b) 6,855 6,855
Depreciation and
amortization.............. 251 10 55 (c) 316 316
---------- ------ ----- ---------- ----------
Total operating
expenses.............. 6,065 1,628 (522) 7,171 7,171
---------- ------ ----- ---------- ----------
Operating income............ 3,087 123 522 3,732 3,732
Interest expense, net of
interest income........... (39) (9) (176)(d) (224) 200(f) (24)
---------- ------ ----- ---------- -------- ----------
Income before taxes......... 3,048 114 346 3,508 200 3,708
Income taxes................ 1,271 (65) 261 (e) 1,467 80(e) 1,547
---------- ------ ----- ---------- -------- ----------
Net income.................. $ 1,777 $ 179 $ 85 $ 2,041 $ 120 $ 2,161
========== ====== ===== ========== ======== ==========
Earnings per common share... $ 0.22 $ 0.25 $ 0.25
========== ========== ==========
Weighted average number of
shares outstanding........ 8,177,283 0 0 8,177,283 389,792(f) 8,567,075
========== ====== ===== ========== ======== ==========

See notes to pro forma condensed consolidated financial statement.

F-2

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
YEAR ENDED OCTOBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

ACQUIRED PRO FORMA OFFERING PRO FORMA
HISTORICAL COMPANIES(A) ADJUSTMENTS PRO FORMA ADJUSTMENTS AS ADJUSTED
---------- ------------ ----------- ---------- ----------- -----------

Revenues.................... $ 113,959 $51,502 $ 165,461 $ 165,461
Cost of services............ 86,832 39,607 126,439 126,439
---------- ------- ---------- ----------
Gross profit................ 27,127 11,895 39,022 39,022
---------- ------- ---------- ----------
Selling, general
and administrative........ 18,069 9,812 (3,260)(b) 24,621 24,621
Depreciation and
amortization.............. 572 48 488 (c) 1,108 1,108
---------- ------- ------- ---------- ----------
Total operating
expenses.............. 18,641 9,860 (2,772) 25,729 25,729
---------- ------- ------- ---------- ----------
Operating income............ 8,486 2,035 2,772 13,293 13,293
Other expense............... (185) (55) (1,572)(d) (1,812) 1,912(f) 100
---------- ------- ------- ---------- ---------- ----------
Income before taxes......... 8,301 1,980 1,200 11,481 1,912 13,393
Income taxes................ 3,461 764 666 (e) 4,891 765(e) 5,656
---------- ------- ------- ---------- ---------- ----------
Income from continuing
operations................ 4,840 1,216 534 6,590 1,147 7,737
Loss from discontinued
operations................ (363) (363) (363)
---------- ------- ------- ---------- ----------
Net income.................. $ 4,477 $ 1,216 $ 534 $ 6,227 $ 1,147 $ 7,374
========== ======= ======= ========== ========== ==========
Earnings per common share:
Income from continuing
operations.............. $ 0.76 $ 1.03 $ 0.92
Loss from discontinued
operations.............. (0.06) (0.05) (0.04)
---------- ---------- ----------
Net income................ $ 0.70 $ 0.98 $ 0.88
========== ========== ==========
Weighted average number of
shares outstanding........ 6,361,181 20,199 0 6,381,380 1,995,386(f) 8,376,766
========== ======= ======= ========== ========== ==========

See notes to pro forma condensed consolidated financial statement.

F-3

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS

1. BASIS OF PRESENTATION

The accompanying unaudited pro forma condensed consolidated statements of
operations (the "Pro Forma Financial Statements") are based on adjustments to
the historical consolidated statements of operations of RCM Technologies, Inc.
("RCM" or the "Company") to give effect to the acquisitions described in Note 3
(the "Acquired Companies"). The pro forma condensed consolidated statements of
operations assume all acquisitions described in Note 3 were consummated as of
the beginning of the periods presented. The pro forma condensed consolidated
statements of operations are not necessarily indicative of results that would
have occurred had the acquisitions been consummated as of the beginning of the
periods presented or that might be attained in the future. Certain information
normally included in financial statements prepared in accordance with generally
accepted accounting principles has been condensed or omitted pursuant to the
rules and regulations of the Securities and Exchange Commission. The Pro Forma
Financial Statements should be read in conjunction with the historical
consolidated financial statements of RCM, and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere in
this Prospectus.

2. FOOTNOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(a) THREE MONTHS ENDED JANUARY 31, 1998. The Acquired Companies statement of
operations represents historical operating data for fiscal 1998
acquisitions (described in Note 3) from November 1, 1997 to the earlier
of their respective dates of acquisition or January 31, 1998. Each of the
acquisitions has been accounted for under the purchase method of
accounting. Accordingly, the results of operations of each of the
Acquired Companies are included in the historical results of operations
of the Company from the date of its acquisition.

YEAR ENDED OCTOBER 31, 1997. The Acquired Companies statement of
operations represents historical operating data for fiscal 1997 and
fiscal 1998 acquisitions (described in Note 3) from November 1, 1996 to
the earlier of their respective dates of acquisition or October 31, 1997.
Each of the acquisitions has been accounted for under the purchase method
of accounting. Accordingly, the results of operations of each of the
Acquired Companies are included in the historical results of operations
of the Company from the date of its acquisition.

(b) The adjustments to reduce selling, general and administrative expenses
reflect redundant operating costs and non-recurring expenses that were
immediately identifiable at the time of the acquisitions. The adjustments
primarily reflect reductions in salaries for the difference between
compensation of certain sellers prior to consummation of the acquisition
and their compensation following the acquisitions as stipulated in their
respective employment agreements.

(c) Reflects additional amortization of goodwill over a 40 year period, as if
the Acquired Companies were acquired as of the beginning of the period
presented.

(d) Reflects additional interest expense that would have been incurred had
the Acquired Companies been acquired as of the beginning of the period
presented and the acquisition consideration was funded with debt. The
interest rate of 8% used to calculate pro forma interest on the assumed
additional debt reflects the Company's approximate borrowing rate.

(e) Reflects income taxes at the Company's effective tax rates.

(f) THREE MONTHS ENDED JANUARY 31, 1998. The Offering Adjustments assume the
issuance of 389,792 shares of Common Stock at $23.00, which, net of
estimated underwriting discounts and

F-4

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS -- (CONTINUED)

2. FOOTNOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS -- (CONTINUED)

offering expenses payable by the Company, would result in sufficient net
proceeds to repay acquisition related debt. These shares are assumed to
have been issued and the debt repaid, as of November 1, 1997, and thus
interest expense attributable to such debt has been eliminated.

YEAR ENDED OCTOBER 31, 1997. The Offering Adjustments assume that the
Company's secondary offering of 2,698,187 shares on June 10, 1997
were issued as of November 1, 1996. The Offering Adjustments also assume
the issuance of 539,785 shares of Common Stock at $23.00, which, net of
estimated underwriting discounts and offering expenses payable by the
Company, would result in sufficient net proceeds to repay acquisition
related debt. These shares are assumed to have been issued and the debt
repaid, as of November 1, 1996 and thus interest expense attributable to
such debt has been eliminated.

3. ACQUISITIONS

FISCAL 1997

PROGRAMMING RESOURCES UNLIMITED ("PRU"). On April 1, 1997, the Company
acquired certain operating assets of PRU, a Wayne, Pennsylvania-based provider
of information technology staffing services, for a purchase price consisting of:
(i) $600,000 in cash; (ii) $300,000 of contingent consideration, payable over
three years upon attaining certain earnings targets; and (iii) additional
consideration to the extent that during the three year period, PRU exceeds the
earnings targets. PRU generated revenue of approximately $2.4 million during the
fiscal year prior to the date of acquisition.

CAMELOT CONTRACTORS LIMITED ("CAMELOT"). On August 4, 1997, the Company
acquired all of the outstanding stock of Camelot, a Manchester, New
Hampshire-based provider of information technology staffing services, for a
purchase price consisting of: (i) $9.0 million in cash and 22,409 shares of
common stock valued at $318,433; (ii) $3.5 million of contingent consideration,
payable over three years upon attaining certain earnings targets; and (iii)
additional consideration to the extent that during the three year period,
Camelot exceeds the earnings targets. Camelot generated revenue of approximately
$16.2 million during the fiscal year prior to the date of acquisition.

AUSTIN NICHOLS TECHNICAL TEMPORARIES, INC. ("AUSTIN"). On September 29,
1997, the Company acquired all of the outstanding stock of Austin, a Kansas
City, Missouri-based provider of information technology and professional
engineering staffing services, for a purchase price consisting of: (i) $2.5
million in cash; (ii) $900,000 of contingent consideration, payable over three
years upon attaining certain earnings targets; and (iii) additional
consideration to the extent that during the three year period, Austin exceeds
the earnings targets. Austin generated revenue of approximately $4.9 million
during the fiscal year prior to the date of acquisition.

J.D. KARIN CONSULTING SERVICES, INC. ("J.D. KARIN"). On September 29, 1997,
the Company acquired all of the outstanding stock of J.D. Karin, a Flanders, New
Jersey-based provider of information technology staffing services, for a
purchase price consisting of: (i) $1.8 million in cash; (ii) $1.2 million of
contingent consideration, payable over three years upon attaining certain
earnings targets; and (iii) additional consideration to the extent that during
the three year period, J.D. Karin exceeds the earnings targets. J.D. Karin
generated revenue of approximately $4.9 million during the fiscal year prior to
the date of acquisition.

F-5

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS -- (CONTINUED)

3. ACQUISITIONS -- (CONTINUED)

FISCAL 1998

NORTHERN TECHNICAL SERVICES, INC. ("NTS"). On January 4, 1998, the Company
purchased of the outstanding stock of NTS, a Milwaukee, Wisconsin-based,
provider of information technology and professional engineering staffing
services, for a purchase price consisting of: (i) $3.1 million in cash; (ii)
$1.5 million of contingent consideration, payable over two years upon attaining
certain earnings targets; and (iii) additional consideration to the extent that
during the two year period, NTS exceeds the earnings targets. NTS generated
revenue of approximately $12.6 million during the fiscal year prior to the date
of acquisition.

STAFFWORKS, INC. ("STAFFWORKS"). On February 2, 1998, the Company purchased
all of the outstanding stock of Staffworks, a Stanhope, New Jersey-based
provider of information technology staffing services, for a purchase price
consisting of: (i) $3.0 million in cash; (ii) $2.0 million of contingent
consideration, payable over three years upon attaining certain earnings targets;
and (iii) additional consideration to the extent that during the three year
period, Staffworks exceeds the earnings targets. Any additional consideration
paid will be recorded as additional purchase price. Staffworks generated revenue
of approximately $12.6 million during the fiscal year prior to the date of
acquisition.

GLOBAL TECHNOLOGY SOLUTIONS ("GLOBAL"). On February 2, 1998, the Company
acquired all of the outstanding stock of Global, a Sacramento, California-based
provider of information technology staffing services, for a purchase price
consisting of: (i) $3.7 million in cash; (ii) $2.0 million of contingent
consideration payable over two years upon attaining certain earnings targets;
and (iii) additional consideration to the extent that during the two year
period, Global exceeds the earnings targets. Global generated revenues of
approximately $5.5 million during the fiscal year prior to the date of
acquisition.

4. EARNINGS PER SHARE

Pro forma earnings per share were computed by dividing net income
applicable to common stock by the average number of shares of common stock and
common stock equivalents outstanding during the period and the dilutive effect
of common stock issued in connection with the acquisition of the Acquired
Companies.

F-6

INDEPENDENT AUDITORS' REPORT

Board of Directors
RCM Technologies, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of RCM
Technologies, Inc. (a Nevada corporation) and Subsidiaries as of October 31,
1997 and 1996 and the related consolidated statements of income, changes in
shareholders' equity and cash flows for each of the three years in the period
ended October 31, 1997. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on the 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 consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
RCM Technologies, Inc. and Subsidiaries as of October 31, 1997 and 1996 and the
consolidated results of their operations and their consolidated cash flows for
each of the three years in the period ended October 31, 1997 in conformity with
generally accepted accounting principles.

We have also audited Schedules I and II of RCM Technologies, Inc. and
Subsidiaries as of and for each of the three years in the period ended October
31, 1997. In our opinion, these schedules present fairly, in all material
respects, the information required to be set forth therein.

/s/_ Grant Thornton LLP_______________
Grant Thornton LLP
Philadelphia, Pennsylvania
December 12, 1997
(Except for Note 4 regarding the
acquisition
of Northern Technical Services, Inc.
as to
which the date is January 5, 1998)

F-7

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

OCTOBER 31, JANUARY 31,
------------------------- -----------
1996 1997 1998
---- ---- ----
(UNAUDITED)

ASSETS
Current assets
Cash and cash equivalents.................... $ 5,989 $ 918,028 $ 557,089
Accounts receivable, net of allowance for
doubtful accounts of $76,000; $315,748 and
$331,000 in 1996, 1997 and 1998,
respectively.............................. 13,985,445 24,850,304 26,476,435
Prepaid expenses and other current assets.... 404,198 673,265 347,479
----------- ----------- -----------
Total current assets...................... 14,395,632 26,441,597 27,381,003
----------- ----------- -----------
Property and equipment, at cost
Equipment and leasehold improvements......... 1,644,831 2,508,680 3,390,018
Less: accumulated depreciation and
amortization.............................. 1,142,740 1,373,275 1,904,668
----------- ----------- -----------
502,091 1,135,405 1,485,350
----------- ----------- -----------
Other assets
Deposits..................................... 88,039 94,149 102,847
Intangible assets (net of accumulated
amortization
of $366,337; $804,640 and $989,797 in
1996, 1997 and 1998, respectively)........ 9,420,858 26,411,445 29,493,114
----------- ----------- -----------
9,508,897 26,505,594 29,595,961
----------- ----------- -----------
Total assets.............................. $24,406,620 $54,082,596 $58,462,314
=========== =========== ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Note payable - bank.......................... $ 2,746,636 $ 2,000,000 $ 2,000,000
Accounts payable and accrued expenses........ 734,791 1,315,937 1,619,559
Accrued payroll.............................. 2,789,725 4,501,502 4,193,615
Taxes other than income taxes................ 432,607 665,106 2,110,627
Income taxes payable......................... 920,439 679,937 1,396,852
----------- ----------- -----------
Total current liabilities................. 7,624,198 9,162,482 11,320,653
----------- ----------- -----------
Income taxes payable........................... 562,312 308,129 198,047
Shareholders' equity
Preferred stock, $1.00 par value; 5,000,000
shares authorized; no shares issued
or outstanding............................
Common stock, $0.05 par value; 40,000,000
shares authorized; 4,878,476; 7,582,206
and 7,624,152 shares issued in 1996, 1997
and 1998, respectively.................... 243,924 379,110 381,208
Additional paid-in capital................... 17,161,105 40,877,540 41,429,670
Treasury stock, at cost 62,800 shares........ (62,821)
Retained earnings (accumulated deficit)...... (1,122,098) 3,355,335 5,132,736
----------- ----------- -----------
16,220,110 44,611,985 46,943,614
----------- ----------- -----------
Total liabilities and shareholders'
equity................................. $24,406,620 $54,082,596 $58,462,314
=========== =========== ===========

The accompanying notes are an integral part of these financial statements.

F-8

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

THREE MONTHS ENDED
YEARS ENDED OCTOBER 31, JANUARY 31,
---------------------------------------- -------------------------
1995 1996 1997 1997 1998
---- ---- ---- ---- ----
(UNAUDITED) (UNAUDITED)

Revenues............................. $26,915,737 $61,039,173 $113,959,093 $21,150,721 $37,232,243
Cost of services..................... 22,378,817 48,779,886 86,832,348 16,051,317 28,080,004
----------- ----------- ------------ ----------- -----------
Gross profit..................... 4,536,920 12,259,287 27,126,745 5,099,404 9,152,239
----------- ----------- ------------ ----------- -----------
Operating costs and expenses
Selling, general and
administrative................... 3,549,810 8,914,102 18,068,899 3,625,653 5,813,557
Depreciation and amortization...... 130,397 329,680 572,279 118,629 251,256
----------- ----------- ------------ ----------- -----------
3,680,207 9,243,782 18,641,178 3,744,282 6,064,813
----------- ----------- ------------ ----------- -----------
Operating income..................... 856,713 3,015,505 8,485,567 1,355,122 3,087,426
----------- ----------- ------------ ----------- -----------
Other income (expense)
Interest expense, net of interest
income........................... 104,652 (163,695) (184,645) (84,801) (39,332)
Other, net......................... (18,760) (30,332)
----------- ----------- ------------ ----------- -----------
85,892 (194,027) (184,645) (84,801) (39,332)
----------- ----------- ------------ ----------- -----------
Income before income taxes........... 942,605 2,821,478 8,300,922 1,270,321 3,048,094
Income taxes......................... 93,500 453,539 3,460,989 489,334 1,270,693
----------- ----------- ------------ ----------- -----------
Income from continuing operations.... 849,105 2,367,939 4,839,933 780,987 1,777,401
Loss from discontinued operations,
net of income tax benefit of
$262,500 (Note 2).................. (362,500)
----------- ----------- ------------ ----------- -----------
Net income....................... $ 849,105 $ 2,367,939 $ 4,477,433 $ 780,987 $ 1,777,401
=========== =========== ============ =========== ===========
Basic earnings per share
Continuing operations.............. $ 0.29 $ 0.56 $ 0.80 $ 0.16 $ 0.23
Discontinued operations............ (0.06)
----------- ----------- ------------ ----------- -----------
Net income....................... $ 0.29 $ 0.56 $ 0.74 $ 0.16 $ 0.23
=========== =========== ============ =========== ===========
Diluted earnings per share
Continuing operations.............. $ 0.28 $ 0.55 $ 0.76 $ 0.16 $ 0.22
Discontinued operations............ (0.06)
----------- ----------- ------------ ----------- -----------
Net income....................... $ 0.28 $ 0.55 $ 0.70 $ 0.16 $ 0.22
=========== =========== ============ =========== ===========
Shares used in computing earnings per
share
Basic earnings per share........... 2,933,819 4,247,907 6,068,713 4,815,676 7,593,447
Diluted earnings per share......... 3,007,969 4,320,571 6,361,181 4,962,541 8,177,283

The accompanying notes are an integral part of these financial statements.

F-9

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
YEARS ENDED OCTOBER 31, 1995, 1996 AND 1997
AND THREE MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)

RETAINED
COMMON STOCK EARNINGS
-------------------- ADDITIONAL (ACCUMULATED TREASURY
SHARES AMOUNT PAID-IN CAPITAL DEFICIT) STOCK
------ ------ --------------- ------------ --------

Balance, October 31, 1994..... 2,942,713 $147,135 $ 9,732,308 ($4,339,142) ($62,821)
Issuance of common stock in
connection with
acquisitions............. 312,311 15,616 1,184,384
Net income.................. 849,105
--------- -------- ----------- ----------- --------
Balance, October 31, 1995..... 3,255,024 162,751 10,916,692 (3,490,037) (62,821)
Exercise of stock options... 10,000 500 15,438
Issuance of common stock in
connection with
acquisitions............. 1,336,827 66,841 5,242,807
Sale of common stock........ 276,625 13,832 986,168
Net income.................. 2,367,939
--------- -------- ----------- ----------- --------
Balance, October 31, 1996..... 4,878,476 243,924 17,161,105 (1,122,098) (62,821)
Retirement of Treasury
Stock.................... (62,800) (3,140) (59,681) 62,821
Exercise of stock options... 4,171 209 23,031
Sale of common stock........ 2,698,187 134,909 23,136,814
Issuance of common stock in
connection with
acquisitions............. 43,347 2,167 317,312
Issuance of common stock in
connection with legal
settlement............... 20,825 1,041 298,959
Net income.................. 4,477,433
--------- -------- ----------- ----------- --------
Balance, October 31, 1997..... 7,582,206 379,110 40,877,540 3,355,335
Exercise of Stock Options
(Unaudited).............. 7,100 356 49,931
Exercise of Warrants
(Unaudited).............. 34,846 1,742 502,199
Net Income (Unaudited)...... 1,777,401
--------- -------- ----------- ----------- --------
Balance, January 31, 1998
(Unaudited)................. 7,624,152 $381,208 $41,429,670 $ 5,132,736 $
========= ======== =========== =========== ========

The accompanying notes are an integral part of these financial statements.

F-10

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED
YEARS ENDED OCTOBER 31, JANUARY 31,
------------------------------------------ ---------------------------
1995 1996 1997 1997 1998
---- ---- ---- ---- ----
(UNAUDITED) (UNAUDITED)

Cash flows from operating activities:
Net income................................ $ 849,105 $ 2,367,939 $ 4,477,433 $ 780,987 $ 1,777,401
------------ ------------ ------------ ------------ ------------
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation and amortization............. 130,397 329,680 572,279 118,629 251,256
Non cash portion of legal settlement...... 300,000
Provision for losses on accounts
receivable.............................. 61,000 239,748 81,000 15,000
Changes in assets and liabilities:
Accounts receivable..................... 854,552 (8,522,460) (11,104,607) 278,442 (1,641,131)
Prepaid expenses and other current
assets................................ (405,116) 267,464 (137,067) (246,776) 325,786
Accounts payable and accrued expenses... (10,064) 262,684 581,146 (76,269) 303,622
Accrued payroll......................... (151,348) 1,606,791 1,711,777 (215,376) (307,887)
Billings in excess of costs and
estimated earnings.................... (148,229)
Taxes other than income taxes........... (18,938) 227,113 232,499 227,921 1,445,521
Income taxes payable.................... 1,482,751 (626,685) 162,914 606,833
------------ ------------ ------------ ------------ ------------
251,254 (4,284,977) (8,230,910) 330,485 999,000
------------ ------------ ------------ ------------ ------------
Net cash provided by (used in) operating
activities................................ 1,100,359 (1,917,038) (3,753,477) 1,111,472 2,776,401
------------ ------------ ------------ ------------ ------------
Cash flows from investing activities:
Increase in intangible assets............. (137,272) (141,826)
Property and equipment acquired........... (68,189) (128,264) (450,350) (80,546) (416,044)
(Increase) decrease in deposits........... (6,643) (44,965) (6,110) 4,333 (8,698)
Cash paid for acquisitions, net of cash
acquired................................ (2,345,966) (1,049,433) (17,426,351) (5,012,394) (3,125,000)
------------ ------------ ------------ ------------ ------------
Net cash used in investing activities..... (2,420,798) (1,222,662) (17,882,811) (5,225,879) (3,691,568)
------------ ------------ ------------ ------------ ------------
Cash flows from financing activities:
Net borrowing (repayments) under short
term debt arrangements.................. 176,278 1,832,201 (746,636) 4,253,364
Repayments of long term debt.............. (1,092,362) (20,090)
Sale of common stock...................... 1,000,000 23,271,723
Exercise of stock options and warrants.... 15,938 23,240 554,228
------------ ------------ ------------ ------------ ------------
Net cash provided by (used in) financing
activities................................ (916,084) 2,848,139 22,548,327 4,233,274 554,228
------------ ------------ ------------ ------------ ------------
Net increase (decrease) in cash and cash
equivalents............................... (2,236,523) (291,561) 912,039 118,867 (360,939)
Cash and cash equivalents, beginning of
period.................................... 2,534,073 297,550 5,989 5,989 918,028
------------ ------------ ------------ ------------ ------------
Cash and cash equivalents, end of period.... $ 297,550 $ 5,989 $ 918,028 $ 124,856 $ 557,089
============ ============ ============ ============ ============
Supplemental cash flow information:
Cash paid for:
Interest expense........................ $ 36,738 $ 163,811 $ 444,347 $ 90,189 $ 55,114
Income taxes............................ $ 220,498 $ 726,332 $ 3,825,174 $ 197,438 $ 663,860
Acquisitions:
Fair value of assets acquired........... $ 5,218,694 $ 7,302,476 $ 20,929,663 $ 5,641,380 $ 4,440,881
Liabilities assumed..................... 2,872,728 6,253,043 3,503,312 628,986 1,315,881
------------ ------------ ------------ ------------ ------------
Cash paid, net of cash acquired......... $ 2,345,966 $ 1,049,433 $ 17,426,351 $ 5,012,394 $ 3,125,000
============ ============ ============ ============ ============

The accompanying notes are an integral part of these financial statements.

F-11

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS AND DISCLOSURES AT AND FOR THE
THREE MONTHS ENDED JANUARY 31, 1997 AND 1998 ARE UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS

RCM Technologies, Inc. (the "Company"), through its wholly-owned
subsidiaries, is a multi-regional provider of professional staffing services.
The Company provides contract and temporary personnel in the Information
Technology, Professional Engineering, Specialty Healthcare and General Support
sectors of the staffing industry to a diversified base of national, regional and
local customers.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. All intercompany accounts and transactions
have been eliminated.

INTERIM UNAUDITED FINANCIAL INFORMATION

The accompanying interim unaudited consolidated financial statements have
been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission (SEC). Certain information and footnote
disclosures which are normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to SEC rules and regulations, although management believes that
the disclosures are adequate to make the information presented not misleading.
The information reflects all normal and recurring adjustments which, in the
opinion of Management, are necessary for a fair presentation of the financial
position of the Company and its results of operations for the interim periods
set forth herein. The results for the three months ended January 31, 1998 are
not necessarily indicative of the results to be expected for the full year.

GROSS PROFIT

The Company has realigned its Statement of Income presentation format to be
consistent with industry practices. Under the new format, gross profit
represents the difference between revenues and direct costs. The principal
components of direct costs are the wages and employee payroll taxes and benefits
associated with employees directly providing services to customers. Operating
and administrative costs, both variable and fixed, are shown below the gross
profit line. Prior period Statements of Income have been reclassified to be
consistent with the new format.

PROPERTY AND EQUIPMENT

Depreciation of equipment is provided for in amounts sufficient to relate
the cost of depreciable assets to operations over their estimated useful lives
on the straight-line basis. Estimated useful lives range from five to ten years.
Leasehold improvements are amortized over the lives of the respective leases or
the service lives of the improvements, whichever is shorter.

INCOME TAXES

The Company and its wholly-owned subsidiaries file a consolidated federal
income tax return. The Company follows the liability method of accounting for
income taxes. Under this method, deferred income tax assets and liabilities are
determined based on differences between the financial statement and income tax
bases of assets and liabilities using enacted tax rates in effect for the year
in which the differences are expected to reverse. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount
expected to be realized. Income tax expense is the tax payable for the period
and the change during the period in deferred tax assets and liabilities.

F-12

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURES AT AND FOR THE
THREE MONTHS ENDED JANUARY 31, 1997 AND 1998 ARE UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

REVENUE RECOGNITION

Revenue is recognized concurrently with the performance of services. When
the Company enters into long-term contracts for the supply of temporary
personnel, billings are rendered for employee hours worked according to
contractual billing rates.

PROFIT SHARING PLAN

The Company maintains 401(k) plans as of October 31, 1997, for the benefit
of eligible employees. The plans are profit-sharing plans, including a cash or
deferred arrangement pursuant to Section 401(k) of the Internal Revenue Code of
1986, as amended (the"Code"), sponsored by the Company to provide eligible
employees an opportunity to defer compensation and have such deferred amounts
contributed to the 401(k) plan on a pre-tax basis, subject to certain
limitations. The Company may, at the discretion of the Board of Directors, make
contributions of cash to match deferrals of compensation by participants.
Contributions charged to operations by the Company for fiscal years ended
October 31, 1995, 1996 and 1997 were $0, $0 and $6,246, respectively.
Contributions charged to operations by the Company for the three months ended
January 31, 1997 and 1998 were $3,267 and $8,516, respectively.

CASH EQUIVALENTS

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

EARNINGS PER SHARE

The Company adopted Financial Accounting Standard No. 128 "Earnings per
Share" (SFAS 128) in November 1997. SFAS revised standards for the computation
and presentation of earnings per share (EPS) requiring the presentation of both
basic and diluted earnings per share.

Basic EPS is computed by dividing net income by the weighted-average number
of common shares outstanding during each period. Diluted EPS is computed by
dividing net income by the weighted-average number of common shares outstanding
during the period after giving effect to potential dilution that could occur if
existing stock options were exercised.

A reconciliation of the basic and diluted earnings per share computations
for the year ended October 31, 1995, 1996 and 1997, and the three months ended
January 31, 1997 and 1998 is as follows (in millions except for per share
amounts):

WEIGHTED PER SHARE
YEAR ENDED OCTOBER 31, 1995 INCOME AVERAGE SHARES AMOUNT
- --------------------------- ------ -------------- ---------

Income from continuing operations............... $.8
Loss from discontinued operations...............
---
Basic earnings per share........................ .8 2.9 $.29
====
Effect of dilutive securities options........... .1
--- ----
Diluted earnings per share...................... $.8 3.0 $.28
=== ==== ====

Options to purchase 53,000 shares of common stock at prices ranging from
$3.44 to $19.85 per share, and warrants to purchase 157,342 shares of common
stock at $15 per share were outstanding

F-13

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURES AT AND FOR THE
THREE MONTHS ENDED JANUARY 31, 1997 AND 1998 ARE UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
during the year ended October 31, 1995 but were not included in the computation
of diluted EPS because their exercise prices were greater than the average
market price of the common shares.

WEIGHTED PER SHARE
YEAR ENDED OCTOBER 31, 1996 INCOME AVERAGE SHARES AMOUNT
- --------------------------- ------ -------------- ---------

Income from continuing operations............... $2.4
Loss from discontinued operations...............
----
Basic earnings per share........................ 2.4 4.2 $.56
====
Effect of dilutive securities options........... .1
---- ----
Diluted earnings per share...................... $2.4 4.3 $.55
==== ==== ====

Warrants to purchase 157,342 shares of common stock at $15 per share were
outstanding during the year ended October 31, 1996, but were not included in the
computation of diluted EPS because the exercise price was greater than the
average market price of the common shares.

WEIGHTED PER SHARE
YEAR ENDED OCTOBER 31, 1997 INCOME AVERAGE SHARES AMOUNT
- --------------------------- ------ -------------- ---------

Income from continuing operations............... $4.8 $.80
Loss from discontinued operations............... .3 (.06)
----
Basic earnings per share........................ 4.5 6.1 $.74
====
Effect of dilutive securities options........... .3
---- ----
Diluted earnings per share...................... $4.5 6.4 $.70
==== ==== ====

Options to purchase 10,000 shares of common stock at $10.63 per share and
warrants to purchase 157,342 shares of common stock at $15 per share were
outstanding during the year ended October 31, 1997, but were not included in the
computation of diluted EPS because their exercise prices were greater than the
average market price of the common shares.

The net income for the years ended October 31, 1995 and 1996 has been
calculated after taking into account the effect of the then available net
operating loss carryforward (NOL). Without giving effect to the NOL, the
Company's earnings per share, on a fully taxed basis would have been $.18 and
$.38, respectively.

WEIGHTED PER SHARE
THREE MONTHS ENDED JANUARY 31, 1997 INCOME AVERAGE SHARES AMOUNT
- ----------------------------------- ------ -------------- ---------

Income from continuing operations............... $ .8
Loss from discontinued operations...............
----
Basic earnings per share........................ .8 4.8 $.16
====
Effect of dilutive securities options........... .2
---- ----
Diluted earnings per share...................... $ .8 5.0 $.16
==== ==== ====

F-14

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURES AT AND FOR THE
THREE MONTHS ENDED JANUARY 31, 1997 AND 1998 ARE UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
Warrants to purchase 157,342 shares of common stock at $15.00 per share
were outstanding during the three months ended January 31, 1997, but were not
included in the computation of diluted EPS because the exercise prices were
greater than the average market price of the common shares.

WEIGHTED PER SHARE
THREE MONTHS ENDED JANUARY 31, 1998 INCOME AVERAGE SHARES AMOUNT
- ----------------------------------- ------ -------------- ---------

Income from continuing operations............... $1.7
Loss from discontinued operations...............
----
Basic earnings per share........................ 1.7 7.6 $.23
====
Effect of dilutive securities options........... .6
---- ----
Diluted earnings per share...................... $1.7 8.2 $.22
==== ==== ====

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 amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

INTANGIBLE ASSETS

Intangible assets primarily consist of goodwill associated with the
acquired businesses. Goodwill is amortized on a straight-line basis over 40
years. The carrying value of goodwill is reviewed if the facts and circumstances
suggest that it may be impaired. If this review indicates that goodwill will not
be recoverable, as determined based on the undiscounted cash flows of the entity
acquired over the remaining amortization period, the Company's carrying value of
the goodwill is reduced by the estimated shortfall of cash flows.

Other intangible assets consist primarily of non-compete agreements, which
are amortized over the term of the respective agreements. Amortization expense
for intangible assets for fiscal years 1995, 1996 and 1997 was $48,928, $211,337
and $411,213, respectively. Amortization expense for the three months ended
January 31, 1997 and 1998 was $87,107 and $185,307, respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of financial instruments approximates fair value. The
Company's financial instruments are accounts receivable, accounts payable and
long-term debt. The Company does not have any off-balance sheet financial
instruments or derivatives.

2. DISCONTINUED OPERATIONS

In Fiscal 1992, the Company discontinued the operations of an environmental
technology development business. In connection with the discontinued operations,
on September 26, 1997, the Company and Alumax, Inc. entered into a Settlement
Agreement, whereby the Company agreed to settle the potential controversy by
paying $300,000 and issuing 20,825 restricted shares of its common stock, valued
at $300,000 to Alumax, Inc. Professional fees associated with the settlement
were

F-15

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURES AT AND FOR THE
THREE MONTHS ENDED JANUARY 31, 1997 AND 1998 ARE UNAUDITED)

2. DISCONTINUED OPERATIONS -- (CONTINUED)
approximately $25,000. The charge to operations was $625,000 and the tax
effected result was $362,500, or $.06 per share.

3. SALE OF COMMON STOCK

On February 5, 1996, the Company issued and sold 276,625 shares of common
stock to Limeport Investments, LLC in a Private Placement transaction for
$1,000,000 ($3.615 per share). The purchase price was based on a twenty percent
discount to the twenty day average closing price prior to the purchase of the
shares. The shares are restricted securities. The President of the Company, Leon
Kopyt, has been granted certain voting rights over the remaining 138,313 shares
as long as they remain owned by Limeport Investments, LLC.

On June 13, 1997, the Company completed a public offering of 2,875,000
shares of Common Stock, of which 2,698,187 shares were offered and sold by the
Company and 176,813 shares were offered by certain Selling Security Holdersselling stockholders. The net
proceeds to the Company after offering costs was $23,271,723. The Company did
not receive any of the proceeds from the sale of the shares by the selling
stockholders.

4. ACQUISITIONS

THREE YEARS ENDED OCTOBER 31, 1997

During the three year period ended October 31, 1997, the Company acquired
ten businesses providing information technology and other professional staffing
services. These acquisitions, which are described below, have been accounted for
as purchases and, accordingly, the results of operations of the acquired
companies have been included in the consolidated results of operations of the
Company from the dates of acquisition.

On December 15, 1994, the Company purchased certain operating assets of
Great Lakes Design, Inc. for $200,000 in the form of a $150,000 note payable
over a period of two years, $50,000 in cash and certain earnout provisions.
Costs in excess of assets acquired of $52,800 are being amortized over a period
of forty years. A non-compete covenant of $107,100 is being amortized over a
five year period. The note payable had a final maturity date of December 1,
1996.

On August 30, 1995, the Company acquired Cataract, Inc., a supplier of
management, engineering, design and technical services to the nuclear power,
fossil fuel, electric utilities and process industries. The acquisition was
completed through a merger transaction pursuant to which Cataract, Inc. was
merged with and into a newly-created subsidiary of the Company, which then
concurrently changed its name to "Cataract, Inc."

The consideration payable to the former shareholders of Cataract, Inc.
consisted of $2,000,000 cash and 312,311 restricted shares of the Company's
common stock, valued at $1,200,000. The cost in excess of net assets acquired
was $3,385,966. The cost in excess of net assets acquired is being amortized
over a 40 year period. The shares issued to the former Cataract, Inc.
shareholders have been pledged to the Company for a period of three years to
secure the performance of certain conditions subsequent to the merger relating
to the achievement of certain levels of sales revenues that have been warranted
by the former Cataract, Inc. shareholders.

Following the expiration of the pledge period, the shares are to be placed
in a voting trust until the earlier of: (i) the public or private sale of such
shares in open market transactions to unaffiliated third

F-16

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURES AT AND FOR THE
THREE MONTHS ENDED JANUARY 31, 1997 AND 1998 ARE UNAUDITED)

4. ACQUISITIONS -- (CONTINUED)
parties; or (ii) the resignation or removal from office of Leon Kopyt, currently
Chief Executive Officer and President of the Company. Notwithstanding the above,
one-third of the shares shall be released from trust commencing upon the fifth
anniversary of the closing, and thereafter an additional one-third of the shares
shall be released from trust upon each of the sixth and seventh annual
anniversaries of the closing date.

During the period in which the shares are subject to pledge and the voting
trust, the shares are to be voted by the Company's Board of Directors on behalf
of the former shareholders of Cataract, Inc.

On March 11, 1996, the Company acquired all of the outstanding shares of
The Consortium, a provider of information technology and health care staffing
servicing private sector and government clients in the greater metropolitan New
York region.

The consideration paid to the former shareholders of The Consortium
consisted of 1.3 million restricted shares of the Company's common stock, valued
at $5,000,000, in exchange for all of the outstanding capital stock of The
Consortium. In connection with the public offering of common stock (note 3),
36,000 shares of restricted stock having a value of $342,000, were sold by a
selling shareholder of The Consortium. The Company filed a registration
statement on October 29, 1997, permitting the sale of $258,000 in value of
securities through March 1998. Thereafter, the remainder of these shares are
subject to significant restrictions on resale through March 11, 1999. The cost
in excess of net assets acquired of $4,940,700 is included in the Company's
Consolidated Balance Sheet as "Intangible Assets" and is being amortized over a
40 year period.

On May 1, 1996, the Company acquired The Consortium of Maryland, Inc.
("Consort MD"), a specialty provider of information technology personnel
services to major U.S. corporations in the greater metropolitan Washington, D.C.
region. Consort MD was not related or affiliated with The Consortium. The
acquisition was completed through a merger transaction pursuant to which Consort
MD was merged with and into a newly-created subsidiary of the Company, which
then concurrently changed its name to "The Consortium of Maryland, Inc."

The merger consideration paid to the former shareholder of Consort MD
consisted of $621,500 in cash and 55,265 restricted shares of the Company's
common stock valued at $378,638. The Company filed a registration statement on
October 29, 1997, permitting the sale of the restricted shares on or after May
1, 1998.

On September 13, 1996, the Company acquired all of the assets and assumed
all of the liabilities of Performance Staffing, Inc. ("PSI"). The consideration
paid to the former shareholders of PSI consisted of 2,500 shares of restricted
shares of the Company's common stock valued at $21,000. The restricted shares
were sold in the public offering referred to in note 3.

On January 7, 1997, the Company acquired Programming Alternatives of
Minnesota, Inc. ("PAMI"), a Minneapolis, Minnesota- based provider of
information technology personnel, particularly those with high demand
client-server skills. The acquisition was completed effective as of November 4,
1996 through a stock purchase transaction pursuant to which PAMI became a
wholly-owned subsidiary of the Company.

The purchase consideration paid to the former shareholders of PAMI
consisted of $4,500,000 cash and $1,625,000 contingent consideration payable
upon attaining certain earnings targets over a three year period. Additional
consideration may be made to the former shareholders of PAMI at the end of the
third anniversary of the purchase to the extent that operating income during
this period exceeds certain earnings targets. The purchase has been accounted
for under the purchase method of

F-17

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURES AT AND FOR THE
THREE MONTHS ENDED JANUARY 31, 1997 AND 1998 ARE UNAUDITED)

4. ACQUISITIONS -- (CONTINUED)
accounting. The cost in excess of net assets acquired of $5,045,486 is included
in the Company's Consolidated Balance Sheet as "Intangible Assets" and is being
amortized over a 40 year period.

On April 1, 1997, the Company acquired certain operating assets of
Programming Resources Unlimited ("PRU"), a provider of information technology
staffing services, for $600,000 cash plus $300,000 of contingent consideration
payable upon attaining certain earnings targets within a three-year period. The
Company also agreed to pay additional consideration to the shareholders of PRU
in the event that during the three-year period the performance of PRU exceeds
the established earnings targets. The cost in excess of net assets acquired of
$621,800 is included in the Company's Consolidated Balance Sheet as "Intangible
Assets" and is being amortized over a 40 year period.

On September 25, 1997, the Company acquired Camelot Contractors Limited
("Camelot"), a Manchester, New Hampshire-based provider of information
technology staffing services. The acquisition was completed effective as of
August 4, 1997, through a stock purchase transaction pursuant to which Camelot,
through an exchange of all of its outstanding shares of stock with the Company,
became a wholly-owned subsidiary of the Company.

The purchase consideration paid to the former shareholders of Camelot
consisted of $9,000,000 cash, 22,409 shares of common stock of the Company
valued at $318,433 and $3,500,000 contingent consideration payable upon Camelot
achieving certain earnings targets within a three-year period. An additional
earn-out payment may be made to the former shareholders at the end of each of
the three twelve month periods following the purchase, to the extent that
operating income exceeds earnings targets. The purchase has been accounted for
under the purchase method of accounting. The cost in excess of net assets
acquired of $7,451,600 is included in the Company's Consolidated Balance Sheet
as "Intangible Assets" and is being amortized over a 40 year period.

As part of the purchase, all of the 22,409 shares of common stock issued to
the former shareholders of Camelot were delivered into escrow as collateral to
secure the performance of certain financial conditions. The shares held in
escrow are subject to certain restrictions on resale, however, the Company filed
a registration statement on October 29, 1997 permitting the resale of such
shares after January 21, 1998.

On September 29, 1997, the Company acquired Austin Nichols Technical
Temporaries, Inc. ("Austin"), a Kansas City, Missouri-based provider of
information technology and professional engineering staffing services. The
acquisition was completed through a stock purchase transaction pursuant to which
Austin, through an exchange of all of its outstanding shares of stock with the
Company, became a wholly-owned subsidiary of the Company.

The purchase consideration paid to the former shareholders of Austin
consisted of $2,500,000 cash, and $900,000 contingent consideration payable upon
Austin achieving certain earnings targets within a three-year period. An
additional earn-out payment may be made to the former shareholders at the end of
each of the three twelve month periods following the Purchase, to the extent
that operating income exceeds these earnings targets. The purchase has been
accounted for under the purchase method of accounting. The cost in excess of net
assets acquired of $2,520,400 is included in the Company's consolidated Balance
Sheet as "Intangible Assets" and is being amortized over a 40 year period.

On September 29, 1997, the Company acquired J.D. Karin Consulting Services,
Inc. ("J.D. Karin"), a Flanders, New Jersey-based provider of information
technology staffing services. The acquisition was completed through a stock
purchase transaction pursuant to which J.D. Karin, through

F-18

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURES AT AND FOR THE
THREE MONTHS ENDED JANUARY 31, 1997 AND 1998 ARE UNAUDITED)

4. ACQUISITIONS -- (CONTINUED)
an exchange of all of its outstanding shares of stock with the Company, became a
wholly-owned subsidiary of the Company.

The purchase consideration paid to the former shareholders of J.D. Karin
consisted of $1,800,000 cash, and $1,225,000 contingent consideration payable
upon J.D. Karin achieving certain earnings targets within a three-year period.
An additional earn-out payment may be made to the former shareholders at the end
of each of the three twelve month periods following the purchase, to the extent
that operating income exceeds these earnings targets. The purchase has been
accounted for under the purchase method of accounting. The cost in excess of net
assets acquired of $1,795,900 is included in the Company's consolidated Balance
Sheet as "Intangible Assets" and is being amortized over a 40 year period.

The following unaudited results of operations have been prepared assuming
all acquisitions made through October 31, 1997 had occurred as of the beginning
of the periods presented. Those results are not necessarily indicative of
results of future operations nor of results that would have occurred had the
acquisitions been consummated as of the beginning of the periods presented.

YEAR ENDED OCTOBER 31,
---------------------------
1996 1997
---- ----

Revenues................................. $106,616,000 $136,384,000
Operating income......................... 6,789,000 10,804,000
Income from continuing operations........ 3,475,000 5,609,000
Loss from discontinued operations........ (363,000)
Net income............................... 3,475,000 5,246,000
Diluted earnings per share from
continuing operations.................. .72 .85
Diluted loss per share from discontinued
operations............................. (.05)
Diluted earnings per share............... $ .72 $ .80

The net income for the year ended October 31, 1996 has been calculated
after taking into account the effect of the then available net operating loss
carryforward (NOL). Without giving effect to the NOL, the Company's earnings per
share pro forma, on a fully taxed basis, would have been $.59.

THREE MONTHS ENDED JANUARY 31, 1998

On January 4, 1998, the Company purchased Northern Technical Services, Inc.
("NTS"), a provider of information technology and professional engineering
staffing services. The purchase price was $3,125,000 plus $1,500,000 contingent
consideration payable upon NTS achieving certain earnings targets within a
two-year period. The agreement provides for additional purchase consideration
upon the attainment of certain earnings targets at the end of each twelve month
period following the closing, for a period of two years. Any additional
consideration paid will be recorded as additional purchase price. Revenues for
the year ended November 30, 1997, provided by the management of NTS, were $12.6
million.

The following unaudited results of operations have been prepared assuming
that all acquisitions made through January 31, 1998 had occurred since November
1, 1997 had occurred at the beginning of the periods presented. Those results
are not necessarily indicative of results of future operations nor of

F-19

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURES AT AND FOR THE
THREE MONTHS ENDED JANUARY 31, 1997 AND 1998 ARE UNAUDITED)

4. ACQUISITIONS -- (CONTINUED)
results that would have occurred had the acquisitions been consummated as of the
beginning of the periods presented.

THREE MONTHS ENDED JANUARY 31,
-------------------------------
1997 1998
---- ----

Revenues................................... $30,834,000 $39,371,000
Operating income........................... $ 2,210,000 $ 3,250,000
Net income................................. $ 1,050,000 $ 1,848,000
Earnings per common share.................. $ .21 $ .23

5. PROPERTY AND EQUIPMENT

Property and equipment is comprised of the following:

OCTOBER 31, JANUARY 31,
----------------------- --------------
1996 1997 1998
---- ---- ----

Office equipment.......................... $1,453,711 $2,294,906 $3,165,249
Capitalized lease......................... 174,873 174,873 174,873
Leasehold improvements.................... 16,247 38,901 49,896
---------- ---------- ----------
1,644,831 2,508,680 3,390,018
Less: accumulated depreciation and
amortization............................ 1,142,740 1,373,275 1,904,668
---------- ---------- ----------
$ 502,091 $1,135,405 $1,485,350
========== ========== ==========

6. NOTE PAYABLE -- BANK

On December 19, 1996, the Company and its subsidiaries entered into an
amended and restated agreement with Mellon Bank, N.A. providing for a credit
facility of up to $20,000,000, increased from $10,000,000 at October 31, 1996,
(the "Revolving Credit Facility") which expires on June 30, 1999. The Revolving
Credit Facility is collateralized by accounts receivable, contract rights and
furniture and fixtures together with unlimited guarantees from the Company. The
Revolving Credit Facility requires the Company and its subsidiaries to meet
certain financial objectives with respect to financial ratios and earnings. At
October 31, 1997 and January 31, 1998, the Company and its subsidiaries were in
compliance with all financial covenants contained within the Revolving Credit
Facility.

Borrowing under the Revolving Credit Facility is based on 85% of accounts
receivable on which not more than ninety days have elapsed since the date of
invoicing. Borrowings under the Revolving Credit Facility bear interest, at the
Company's option, at LIBOR (London Interbank Offered Rate) or the bank's prime
rate, plus the applicable margin. The weighted average interest rate at October
31, 1997 and January 31, 1998 was 9.10% and 9.76%, respectively. The interest
rate charged by the bank at October 31, 1996 was the prime rate of 8.25%. At
October 31, 1997 and January 31, 1998, there was $13,985,000 and $11,679,000,
respectively, available under the Revolving Credit Facility.

F-20

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURES AT AND FOR THE
THREE MONTHS ENDED JANUARY 31, 1997 AND 1998 ARE UNAUDITED)

7. SHAREHOLDERS' EQUITY

COMMON SHARES RESERVED

Shares of unissued common stock were reserved for the following purposes:

OCTOBER 31, JANUARY 31,
--------------------- -----------
1996 1997 1998
---- ---- ----

Exercise of warrants......................... 157,342 157,342 122,496
Exercise of options outstanding.............. 214,400 1,087,400 1,208,950
Future grants of options..................... 760,300 382,300 253,650
--------- --------- ---------
Total........................................ 1,132,042 1,627,042 1,585,096
========= ========= =========

WARRANTS

At October 31, 1996 and 1997 and January 31, 1998, the Company had 786,709,
786,709 and 612,479 warrants outstanding to purchase 157,342, 157,342 and
122,496 shares, respectively, of the Company's common stock. As a result of a 1
for 5 reverse stock split in April 1996, each warrant continues to have an
exercise price of $3.00 per share, but five warrants are needed to convert to
one share of common stock. The warrants are scheduled to expire on April 30,
1998 unless otherwise extended by the Board of Directors.

INCENTIVE STOCK OPTION PLANS

On February 27, 1986, the shareholders approved the RCM Technologies, Inc.
1986 Incentive Stock Option Plan ("1986 Plan") which authorizes the issuance not
later than October 30, 1995 of up to 60,000 shares of Common Stock to officers,
directors and key employees of the Company and its subsidiaries.

On April 23, 1992, the shareholders approved the RCM Technologies, Inc.
1992 Incentive Stock Option Plan ("1992 Plan") which authorizes the issuance not
later than February 13, 2002 of options for up to 100,000 shares of Common Stock
to officers, directors and key employees of the Company and its subsidiaries.
The 1986 and 1992 Plans contain substantially the same terms. Options under all
plans are intended to be incentive stock options pursuant to Section 422A of the
Internal Revenue Code. The option terms for all plans cannot exceed ten years
and the exercise price cannot be less than 100% of the fair market value of the
shares at the time of grant.

On May 19, 1994, the shareholders approved the RCM Technologies, Inc. 1994
Nonemployee Directors Stock Option Plan ("1994 Plan") as a means of recruiting
and retaining nonemployee directors of the Company. There are 80,000 shares of
Common Stock reserved under the plan for issuance no later than July 19, 2004.
All director stock options are granted at fair market value at the date of
grant. The exercise of options granted is contingent upon service as a director
for a period of one year. If the optionee ceases to be a director of the
Company, any option granted shall terminate.

On August 15, 1996, (amended on January 15, 1997) the Board of Directors
approved the RCM Technologies, Inc. 1996 Executive Stock Plan ("1996 Plan")
which authorizes the issuance not later than August 15, 2006 of up to 1,250,000
shares of Common Stock to officers and key employees of the Company and its
subsidiaries.

F-21

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURES AT AND FOR THE
THREE MONTHS ENDED JANUARY 31, 1997 AND 1998 ARE UNAUDITED)

7. SHAREHOLDERS' EQUITY -- (CONTINUED)
The Company has adopted only the disclosure provisions of Financial
Accounting Standard No. 123, "Accounting for Stock- Based Compensation" (SFAS
123). It applies APB Opinion No. 25 and related interpretations in accounting
for its plans and does not recognize compensation expense for is stock-based
compensation plans. Had compensation cost been determined based on the fair
value of the options at the grant date consistent with SFAS 123, the Company's
net earnings and earnings per share would have been reduced to the pro forma
amounts indicated below:

YEAR ENDED OCTOBER 31,
-----------------------
1996 1997
---- ----

Net income:
As reported.................................. $2,367,939 $4,477,433
Pro forma.................................... $2,235,750 $2,542,196

Earnings per share:
As reported.................................. $ .55 $ .68
Pro forma.................................... $ .52 $ .39

These pro forma amounts may not be representative of future disclosures
because they do not take into effect proforma compensation expense related to
grants before November 1, 1995. The fair value of these options is estimated on
the date of grant using the Black-Scholes option-pricing model with the
following weighted-average assumptions for grants in fiscal year 1996 and 1997,
respectively: expected volatility of 30% for both years; risk-free interest
rates of 6.32% and 6.43%; and expected lives of 5 years for both years. The
weighted-average fair value of options granted during fiscal years 1996 and 1997
was $2.16 and $3.46, respectively.

The net income for the year ended October 31, 1996 has been calculated
after taking into account the effect of the then available net operating loss
carryforward (NOL). Without giving effect to the NOL, the Company's earnings per
share as reported and Pro forma, on a fully taxed basis, would have been $.38
and $.35, respectively.

Transactions related to all stock options are as follows:

YEARS ENDED OCTOBER 31, JANUARY 31,
---------------------------------------------------------------------- ----------------------
WEIGHTED- WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE EXERCISE
1995 PRICE 1996 PRICE 1997 PRICE 1998 PRICE
---- --------- ---- --------- ---- --------- ---- ---------

Outstanding options at
beginning of period...... 173,300 $3.11 163,300 $2.63 214,400 $3.54 1,087,400 $7.46
Granted.................... 50,300 2.66 61,100 5.64 883,200 8.40 130,000 14.50
Forfeited.................. (60,300) 4.01 (6,029) 6.68 (1,350) 9.98
Exercised.................. (10,000) 1.59 (4,171) 5.57 (7,100) 7.08
-------- --------- ----------- ----------
Outstanding options at end
of period................ 163,300 $2.63 214,400 $3.54 1,087,400 $7.46 1,208,950 $8.21
======== ========= =========== ==========

Exercisable options at end
of period................ 87,000 141,300 708,900 700,450
======== ========= =========== ==========
Option grant price per
share.................... $1.09 $1.09 $1.09 $1.09
to $8.13 to $8.13 to $10.625 to $14.50

F-22

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURES AT AND FOR THE
THREE MONTHS ENDED JANUARY 31, 1997 AND 1998 ARE UNAUDITED)

7. SHAREHOLDERS' EQUITY -- (CONTINUED)
The following table summarizes information about stock options outstanding
at October 31, 1997:

WEIGHTED-AVERAGE
RANGE OF NUMBER OF REMAINING WEIGHTED-AVERAGE
EXERCISE PRICES OUTSTANDING OPTIONS CONTRACTUAL LIFE EXERCISE PRICE
--------------- ------------------- ---------------- ----------------

$1.09-$ 1.64 22,000 5.3 years $ 1.24
$2.46-$ 3.69 130,300 7.0 years $ 2.96
$3.69-$ 5.54 45,020 8.3 years $ 5.00
$5.54-$ 8.31 516,880 9.0 years $ 7.14
$8.31-$12.46 373,200 9.7 years $10.14

The following table summarizes information about stock options outstanding
at January 31, 1998:

$ 1.09-$ 1.64 22,000 5.0 years $ 1.24
$ 2.46-$ 3.69 130,300 6.8 years $ 2.96
$ 3.69-$ 5.54 44,720 8.1 years $ 5.00
$ 5.54-$ 8.31 509,980 8.8 years $ 7.14
$ 8.31-$12.46 371,950 9.4 years $10.14
$12.46-$18.69 130,000 9.8 years $14.50

8. COMMITMENTS

EMPLOYMENT CONTRACT AND TERMINATION BENEFITS AGREEMENT

The Company has employment agreements with its President and certain senior
executives with a latest expiration date of September 30, 2000. The agreement
with the President provides for a bonus based on pre-tax earnings. No maximum
compensation limit exists. The aggregate commitment for future salaries at
October 31, 1997, excluding bonuses, was $2,754,500. In addition, an option plan
is available for all employees to receive stock options resulting from
recommendations by the Compensation Committee of the Board of Directors.

In December 1993, the Company entered into a Termination Benefits Agreement
with Mr. Kopyt that was subsequently amended and restated as of March 18, 1997
(the "Benefits Agreement"). Pursuant to the Benefits Agreement, following a
Change in Control (as defined therein) the remaining term of Mr. Kopyt's
employment is extended for five years (the "Extended Term"). If Mr. Kopyt's
employment is terminated thereafter by the Company other than for cause, or by
Mr. Kopyt for good reason (including, among other things, a material change in
Mr. Kopyt's salary, title, reporting responsibilities or a change in office
location which requires Mr. Kopyt to relocate): the Company is obligated to pay
Mr. Kopyt a lump sum equal to his salary and bonus for the remainder of the
Extended Term; the exercise price of the options to purchase 500,000 shares
granted to Mr. Kopyt under the 1996 Executive Stock Plan will be reduced to 50%
of the average market price of the Common Stock for the 60 days prior to the
date of termination if the resulting exercise price is less than the original
exercise price of $7.125 per share; and the Company shall be obligated to pay to
Mr. Kopyt the amount of any excise tax associated with the benefits provided to
Mr. Kopyt under the Benefits Agreement. If such a termination had taken place as
of October 31, 1997 and January 31, 1998, Mr. Kopyt would have been entitled to
cash payments of approximately $1.6 million and $3.4 million, respectively
(representing salary and excise tax payments).

F-23

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURES AT AND FOR THE
THREE MONTHS ENDED JANUARY 31, 1997 AND 1998 ARE UNAUDITED)

8. COMMITMENTS -- (CONTINUED)
The Company leases office facilities and various equipment under
noncancellable leases expiring at various dates through February 2007. Certain
leases are subject to escalation clauses based upon changes in various factors.
The minimum future annual operating lease commitments for leases with
noncancellable terms in excess of one year, exclusive of escalation, are as
follows:

YEAR ENDING OCTOBER 31, AMOUNT
- ----------------------- ------

1998.................................... $ 888,700
1999.................................... 635,000
2000.................................... 492,000
2001.................................... 437,500
2002.................................... 405,900
Thereafter.............................. 932,400
----------
Total................................... $3,791,500
==========

Rent expense for the years ended October 31, 1995, 1996 and 1997 was
$354,000, $498,000 and $814,000, respectively. Rent expense for the three months
ended January 31, 1997 and 1998 was $174,455 and $285,703, respectively.

9. MAJOR CUSTOMERS

Sales to major clients for the years ended October 31, 1995, 1996 and 1997
were as follows:

For the year ended October 31, 1995, three clients contributed $3,300,000,
$2,061,000 and $1,347,000, respectively (an aggregate of $6,708,000 or 24.9% of
total sales). Accounts receivable from these three clients represented 8.1% of
the total trade accounts receivable at October 31, 1995.

For the year ended October 31, 1996, one client contributed $7,776,000 or
12.7% of total sales. Accounts receivable from the client represented 13.3% of
the total trade accounts receivable at October 31, 1996.

For the year ended October 31, 1997, one client contributed $13,069,000 or
11.5% of total sales. Accounts receivable from the client represented 4.4% of
the total trade accounts receivable at October 31, 1997.

Sales to major clients for the three months ended January 31, 1997 and 1998
were as follows:

For the three months ended January 31, 1997, one client contributed
$2,482,000 or 11.7% of the total sales. Accounts receivable from the client
represented 4.0% of the total trade accounts receivable at January 31, 1997.

For the three months ended January 31, 1998, no one client contributed more
than 10% of the total sales.

10. RELATED PARTY TRANSACTIONS

A director of the Company is a shareholder in a law firm that rendered
various legal services to the Company. Fees paid to the law firm have not been
significant.

F-24

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURES AT AND FOR THE
THREE MONTHS ENDED JANUARY 31, 1997 AND 1998 ARE UNAUDITED)

11. INCOME TAXES

The components of income tax expense are as follows:

THREE MONTHS ENDED
YEAR ENDED OCTOBER 31, JANUARY 31,
------------------------------- ---------------------
1995 1996 1997 1997 1998
---- ---- ---- ---- ----

Current
Federal............ $10,000 $ 48,000 $2,282,603 $357,911 $ 973,226
State and local.... 83,500 405,539 915,886 131,423 297,467
------- -------- ---------- -------- ----------
Total income tax
expense--current... $93,500 $453,539 $3,198,489 $489,334 $1,270,693
======= ======== ========== ======== ==========

The income tax provisions reconciled to the tax computed at the statutory
Federal rate was:

THREE MONTHS
ENDED
YEAR ENDED OCTOBER 31, JANUARY 31,
------------------------ -------------
1995 1996 1997 1997 1998
---- ---- ---- ---- ----

Tax at statutory rate............................... 34.0% 34.0% 34.0% 34.0% 34.0%
State income taxes, net of Federal income tax
benefit........................................... 5.8 9.4 7.9 6.8 6.4
Net operating loss carry-overs...................... (32.3) (32.4) (1.9) (2.3)
Other, net.......................................... 2.4 5.1 1.7 1.3
----- ----- ----- ----- -----
9.9% 16.1% 41.7% 38.5% 41.7%
===== ===== ===== ===== =====

Significant components of the Company's deferred tax assets at October 31,
1996 and 1997 are as follows:

JANUARY 31,
1996 1997 1998
---- ---- -----------

Deferred tax assets due to:
Net operating loss carry-over....... $102,000 $ $
Tax credit carry-over............... 73,100
Depreciation of property and
equipment........................ 20,000
Allowance for doubtful accounts..... 132,000 132,000
-------- -------- --------
195,100 132,000 132,000
Less: 100% valuation allowance........ 195,100
-------- -------- --------
Total net deferred tax assets......... $ $132,000 $132,000
======== ======== ========

The valuation allowance was decreased during 1996 and 1997 by $967,887 and
$195,100, respectively, due to the utilization of net operating loss carry-overs
and the reversal of temporary differences.

F-25

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURES AT AND FOR THE
THREE MONTHS ENDED JANUARY 31, 1997 AND 1998 ARE UNAUDITED)

12. SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

YEAR ENDED OCTOBER 31, 1996

GROSS NET INCOME
SALES PROFIT NET INCOME PER SHARE (A)(B)
----- ------ ---------- ----------------

1st Quarter.......... $ 9,776,507 $ 1,790,629 $ 501,863 $.15
2nd Quarter.......... 13,785,626 2,473,426 386,736 .09
3rd Quarter.......... 17,378,155 3,798,231 684,937 .14
4th Quarter.......... 20,098,885 4,197,002 794,403 .16
----------- ----------- ---------- ----
Total..... $61,039,173 $12,259,288 $2,367,939 $.55
=========== =========== ========== ====

YEAR ENDED OCTOBER 31, 1997

GROSS NET INCOME
SALES PROFIT NET INCOME PER SHARE (A)
----- ------ ---------- -------------

1st Quarter.......... $21,150,721 $ 5,099,404 $ 780,987 $.16
2nd Quarter.......... 27,379,979 6,246,111 917,333 .18
3rd Quarter.......... 28,009,367 6,918,940 1,205,928 .19
4th Quarter.......... 37,419,026 8,862,290 1,573,185 .22
------------ ----------- ---------- ----
Total..... $113,959,093 $27,126,745 $4,477,433 $.70
============ =========== ========== ====

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

(a) Total of quarterly amounts do not agree to the annual amount due to separate
quarterly calculations of weighted average shares outstanding.

(b) The net income for the year ended October 31, 1996 has been calculated after
taking into account the effect of the then available net operating loss
carryforward (NOL). Without giving effect to the NOL, the Company's earnings per
share, on a fully taxed basis would have been $.38.

13. INTEREST EXPENSE, NET OF INTEREST INCOME

Interest expense, net of interest income consisted of the following:

THREE MONTHS ENDED
JANUARY 31,
-------------------
1995 1996 1997 1997 1998
---- ---- ---- ---- ----

Interest expense.................. $ (38,158) $(163,811) $(444,347) $(90,189) $(55,114)
Interest income................... 142,810 116 259,702 5,388 15,782
--------- --------- --------- -------- --------
$ 104,652 $(163,695) $(184,645) $(84,801) $(39,332)
========= ========= ========= ======== ========

14. NEW STANDARDS

In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information", which is effective for all periods
beginning after December 15, 1997. SFAS 131 requires that public business
enterprises report certain information about operating segments in complete sets
of financial statements of the enterprise and in condensed financial statements
of interim periods issued to shareholders. It also requires that public business
enterprises report certain information about their products and services, the
geographic areas in which they operate, and their

F-26

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(AMOUNTS AND DISCLOSURES AT AND FOR THE
THREE MONTHS ENDED JANUARY 31, 1997 AND 1998 ARE UNAUDITED)

14. NEW STANDARDS -- (CONTINUED)
major customers. Management is currently evaluating the impact of the disclosure
requirements of this statement.

15. SUBSEQUENT EVENTS (UNAUDITED)

On February 2, 1998, the Company purchased Staffworks, Inc. ("Staffworks"),
a privately-held, provider of technical professional and information technology
personnel. The purchase price was $3,000,000 plus $2,000,000 of contingent
consideration payable over three years. The agreement provides for additional
purchase consideration upon the attainment of certain earnings targets at the
end of each twelve month period following the closing, for a period of three
years. Any additional consideration paid will be recorded as additional purchase
price. Current annualized revenues provided by the management of Staffworks is
approximately $12.0 million.

On February 2, 1998, the Company acquired all of the outstanding stock of
Global Technology Solutions ("Global") for approximately $3.7 million cash plus
$2.0 million of consideration in the form of a two year promissory note payable
upon attaining certain earnings targets within a two-year period. The Company
also agreed to pay additional consideration to the former Global shareholder in
the event that during the two-year period the performance of Global exceeds the
established earnings targets. Global generated revenues of approximately $5.5
million during its fiscal year ended December 31, 1997. Through this
transaction, the Company acquired one branch office in Sacramento, California
which provides information technology staffing services, primarily to the San
Francisco Bay area.

F-27

NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDERS
OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON OR BY ANYONE IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE ANY SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF.

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

TABLE OF CONTENTS

PAGE
----

Prospectus Summary......................... 3
Risk Factors............................... 7
Acquisition Program........................ 11
Use of Proceeds............................ 12
Price Range of Common Stock and Dividend
Policy................................... 13
Capitalization............................. 14
Selected Historical and Pro Forma
Consolidated Financial Data.............. 15
Management's Discussion and Analysis of
Financial Condition and Results
of Operations............................ 16
Business................................... 24
Management................................. 33
Principal and Selling Stockholders......... 36
Shares Eligible for Future Sale............ 38
Underwriting............................... 39
Legal Matters.............................. 40
Experts.................................... 40
Available Information...................... 40
Incorporation of Certain Documents by
Reference................................ 41
Index to Financial Statements.............. F-1

2,700,000 SHARES

[RCM LOGO]

COMMON STOCK

-----------------------
PROSPECTUS
-----------------------

BT ALEX. BROWN

BANCAMERICA ROBERTSON
STEPHENS

LEGG MASON WOOD WALKER
INCORPORATED

, 1998

PART II

INFORMATION NOT REQUIRED IN THE REGISTRATION STATEMENT

ItemPROSPECTUS

ITEM 14. Other ExpensesOTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The estimated expenses to be paid by the Company in connection with the
sale of Issuance and Distribution.the securities being registered in the Registration Statement are as
follows:

The expenses in connection with the offering of shares pursuant to that
portion of the Registration Statement on Form S-3 are listed below. The Company
will pay each of these expenses.

Filing Fee -
Securities and Exchange Commission...................................Commission registration fee......... $7,938
Accountants' Fees and Expenses*..................................................$10,000
Fees and Expenses of the Company's Counsel.......................................$20,000 21,812
Printing and Engraving Expenses*.................................................$10,000engraving expenses............................. 80,000
Accounting fees and expenses................................ 40,000
Legal fees and expenses..................................... 190,000
NASD filing fees............................................ 7,894
Nasdaq National Market supplemental listing fee............. 17,500
Miscellaneous Expenses............................................................$2,062

TOTAL:........................................$50,000
- ------------------------------
*Estimated.expenses...................................... 242,794
--------
Total..................................................... $600,000
========

ItemITEM 15. Indemnification of Directors and Officers.INDEMNIFICATION OF DIRECTORS AND OFFICERS.

As permitted by the General Corporation Law of Nevada Revised Statutes (the "GCL""NRS"), the Company's
AmendedArticles of Incorporation and Restated Bylaws, (the "Bylaws") provide that a director shall not be
personally liable in such capacity for monetary damages for any action or any
failure to take any action, unless the director breaches or fails to perform the
duties of his or her office under the GCLNRS and the breach or failure to perform
constitutes self-dealing, willful misconduct or recklessness. These provisions, of the Bylaws,
however, do not apply to the responsibility or liability of a director pursuant
to any criminal statute or to the liability of a director for the payment of
taxes pursuant to local, Nevada or federal law. These provisions offer persons
who serve on the Board of Directors of the Company protection against awards of
monetary damages for negligence in the performance of their duties.

The Bylaws also provide that every person who is or was a director or
officer of the Company or of any corporation which he served as such at the
request of the Company, shall be indemnified by the Company against all expenses
and liabilities reasonably incurred by or imposed upon him, in connection with
any proceeding to which he may be made or threatened to be made, a party or in
which he may become involved by reason of his being or having been a director or
officer of the Company, or such other corporation, whether or not he is a
director or officer of the Company or such other corporation at the time the
expenses or liabilities are incurred. If the action is not by or in the right of
the Company, such person will be indemnified against expenses incurred to the
extent that he has been successful on the merits or otherwise in defense of such
action and against expenses incurred by him in connection therewith if he acted
in good faith and in a manner he reasonably believed to be in the best interests
of the Company, and with respect to any criminal action or proceeding, he had no
reasonable cause to believe his conduct was unlawful. If the action is by or in
the right of the Company, such person shall be indemnified by the Company
against expenses incurred by him to the extent he has been successful on the
merits or otherwise in defense of such action and against expenses incurred by
him if he acted in good faith and in a manner he reasonably believed to be in
the best interests of the Company, except that no indemnification will apply in
respect of any matter as to which such person is adjudged to be liable to the
Company for negligence or misconduct in the performance of his duty to the
Company.

In addition, the Articles of Incorporation authorize the Company to
maintain insurance to cover such liabilities. The Company has purchased
Directors' and Officers' Liability Insurance to protect directors and officers
of the Company from any liability asserted against them for acts taken or
omissions occurring in their capacities as such. The Company policy has an
aggregate liability limit of $10,000,000. The Company is not required to
maintain such insurance and there can be no assurance that the Company will
continue to maintain such insurance or coverage in such amounts.

Insofar as indemnification for liabilities under the Securities Act may be
permitted to directors, officers and controlling persons of the Company pursuant
to the foregoing provisions or otherwise, the Company has been advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim

II-1
for indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in a successful defense of any action, suit or proceeding) is
asserted by asuch director, officer or controlling person in connection with the
securities being registered, the Company 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 whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issuer.

Reference is made to Item 17 for the undertakings of the RegistrantCompany with
respect to indemnification of liabilities arising under the Securities Act

Item 16 - Exhibits.

The following Exhibits are filed as partAct.

ITEM 16. EXHIBITS.

1 Form of this Registration Statement:

(4)(a) Warrant Agreement dated September 1, 1989, with respect to Class C
Warrants between the Registrant and American Stock Transfer and Trust Company;
incorporated by reference to Exhibit 4 (b) of the Registrant's Form S-1
Registration Statement dated July 25, 1989, as amended August 16, 1989 and May
14, 1990 (Commission File No. 33-30109).

(4)(b) Rights Agreement dated as of March 14, 1996, between RCM
Technologies, Inc. and American Stock Transfer & Trust Company, as Rights Agent;
incorporated by reference to Exhibit 4 of the Registrant's Current Report on
Form 8-K dated March 19, 1996.

(5)Underwriting Agreement.
5 Opinion of Schreck Morris.
To be provided by amendment.

(23)(a)23.1 Consent of Grant Thornton LLP.
(23)(b)23.2 Consent of Schreck Morris. Included withinMorris (contained in Exhibit 5 hereto.

Item5).
24 Power of Attorney (see page II-3).
27.1* Restated Financial Data Schedule for Fiscal Year Ended October 31,
1997
(EDGAR version only).
27.2* Restated Financial Data Schedule for Fiscal Year Ended October 31,
1996
(EDGAR version only).
27.3* Restated Financial Data Schedule for Fiscal Year Ended October 31,
1995
(EDGAR version only).
- ------------------
* To be filed by amendment.

ITEM 17. Undertakings.UNDERTAKINGS.

(a) The undersigned CompanyRegistrant hereby undertakes:

(1) To file, duringundertakes that, for the purposes of
determining any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
Registration Statement:

(i) To include any prospectus required by Section
10(a)(3) ofliability under the Securities Act, of 1933, as amended (the "1933 Act");

(ii) To reflect in the prospectus any facts or events arising
after the effective dateeach filing 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 this Registration
Statement;

(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that the undertakings set forth in paragraphs (1)(i) and
(1)(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the CompanyRegistrant's annual report pursuant to Section 1313(a) or Section 15(d)
of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") that areis incorporated by reference in this
Registration Statement.

(2) That, for the purpose of determining any liability under the 1933
Act, each such post-effective amendmentStatement 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) That, for purposes of determining any liability under the 1933 Act,
each filing of the registrant's annual report pursuant to Section 13(a) or 15(d)
of the Exchange Act that is incorporated by reference in the registration
statement 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.

(5) To deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report to
stockholders that is incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Exchange Act; and, where interim financial information required to be presented
by Article 3 of Regulation S-X is not set forth in the Prospectus, to deliver,
or cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.

(6)(b) Insofar as indemnification for liabilities arising under the 1933Securities
Act may be permitted to directors, officers and controlling persons of
the CompanyRegistrant pursuant to the foregoing provisions, or otherwise, the
CompanyRegistrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the 1933Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities
(other than the payment by the CompanyRegistrant of expenses incurred or paid
by a director, officer or controlling person of the CompanyRegistrant 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 CompanyRegistrant 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 whether such
indemnification by it is against public policy as expressed in the
1933Securities Act and will be governed by the final adjudication of such
issue.

(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant under Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus 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.

II-2

SIGNATURES

In accordance withPursuant to the requirements of the Securities Act of 1933, the registrantRegistrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements offor filing on Form S-3 and authorizedhas duly caused this Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pennsauken, New Jersey on October
6, 1997.April 28, 1998.

RCM TECHNOLOGIES INC.

BY:By: /s /s/Leon Kopyt_____________ LEON KOPYT
------------------------------------
Leon Kopyt
Chairman of the Board,
President and Chief Executive
Officer

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below under the heading "Signatures" constitutes and appoints LEON KOPYT
his true and lawful attorney-in-fact and agent with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities to sign any or all amendments to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully for all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitutePOWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Leon Kopyt and Stanton Remer, and each of them
jointly and severally, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments to this
Registration Statement, and to file the same with all exhibits thereto, and
other documents in connection therewith (including, without limitation, any
related registration statement or amendment thereto filed in accordance with
Rule 462 under the Securities Act of 1933, as amended), with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully as to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitutes, may lawfully do or
cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

SIGNATURE TITLE DATE
--------- ----- ----

Signature Title Date
/s//s / LEON KOPYT Chairman of the Board of Directors, April 28, 1998
- ----------------------------------- President, Chief Executive Officer
Leon Kopyt Chairman, Chief(Principal Executive October 6, 1997
-------------------------------
Leon Kopyt Officer, President and
Director (principal executive
officer)
/s/Barry S. Meyers Chief Operating Officer, October 6, 1997
-------------------------------
Barry S. Meyers Executive Vice President and
Director
/s/Martin Blaire Executive Vice President and October 6, 1997
-------------------------------
Martin Blaire Director

/s/Stanton RemerOfficer)

/s / STANTON REMER Chief Financial Officer, October 6, 1997
-------------------------------
Stanton Remer Treasurer, April 28, 1998
- ----------------------------------- Secretary and Director (principal financial(Principal
Stanton Remer Financial and accounting officer)

/s/Accounting Officer)

/s / NORMAN BERSON Director April 28, 1998
- -----------------------------------
Norman S. Berson

/s / ROBERT B. KERR Director October 6, 1997
Norman S. Berson

/s/April 28, 1998
- -----------------------------------
Robert B. Kerr

/s / WOODROW B. MOATS, JR. Director October 6, 1997
Robert B. Kerr

/s/Woodrow B. Moats, Jr. Director October 6, 1997
-------------------------------April 28, 1998
- -----------------------------------
Woodrow B. Moats, Jr.

II-3

EXHIBIT INDEX

Exhibit No. Description Page1 Form of Underwriting Agreement.
5 Opinion of Schreck Morris (to be provided by amendment).

23(a)Morris.
23.1 Consent of Grant Thornton LLPLLP.
23.2 Consent of Schreck Morris (contained in Exhibit 5).
24 Power of Attorney (see page II-3).
27.1* Restated Financial Data Schedule for Fiscal Year Ended October 31,
1997 (EDGAR version only).
27.2* Restated Financial Data Schedule for Fiscal Year Ended October 31,
1996 (EDGAR version only).
27.3* Restated Financial Data Schedule for Fiscal Year Ended October 31,
1995 (EDGAR version only).
- ------------------
* To be filed by amendment.