UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB
(Mark One)

[X]  QUARTERLY  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934

For the quarterly period ended    March 31, 1998

[ ]  TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from ________________ to _______________

Commission File No.     33-55254-35

                      ENVIRONMENTAL DEVELOPMENT CORPORATION
        (Exact name of Small Business Issuer as specified in its charter)

         NEVADA                                       87-0500742
(State or other jurisdiction of         (I.R.S. Employer Identification Number)
incorporation or organization)

         R.R. #2, Site 25, Comp. 6
         Nelson, B. C., Canada                           V1L5P5
(Address of principal executive offices)               (Zip Code)


Issuer's telephone number, including area code     (250) 352-6880

         Indicate  by check mark  whether  the Issuer (1) has filed all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the preceding 12 months (or for such shorter  period that the Issuer
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. [X] Yes [ ] No

         Indicate  the  number of  shares  outstanding  of each of the  Issuer's
classes of common stock, as of the latest practicable date.

             Class                             Outstanding as of March 31, 1998
------------------------------------           ---------------------------------
$.001 PAR VALUE CLASS A COMMON STOCK                   4,000,000 SHARES


<PAGE>



                         PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements.

BASIS OF REPRESENTATION

General

         The accompanying  unaudited financial  statements have been prepared in
accordance with the instructions to Form 10-QSB and,  therefore,  do not include
all information and footnotes necessary for a complete presentation of financial
position,  results  of  operations,  cash  flows  and  stockholders'  equity  in
conformity  with generally  accepted  accounting  principles.  In the opinion of
management,  all adjustments considered necessary for a fair presentation of the
results of  operations  and  financial  position have been included and all such
adjustments are of a normal recurring nature.  Operating results for the quarter
ended March 31, 1998, are not necessarily  indicative of the results that can be
expected for the year ending December 31, 1998.

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

         The  Company  has had no  operational  history and has yet to engage in
business of any kind.  All risks inherent in new and  inexperienced  enterprises
are inherent in the Company's business.

         The Company was  incorporated  under the laws of the State of Nevada on
March 14, 1990. The Company's  operations up until February of 1998 consisted of
the  investigation  of  potential  business  ventures  which,  in the opinion of
management, would provide a source of eventual profit to the Company.

         In February of 1998, the Company acquired the following four companies:
(1) Specialty Coatings Ltd., an Alberta,  Canada corporation;  (2) Mike McCarthy
Construction  Ltd., a British  Columbia,  Canada  corporation;  (3) B.C. Thermal
Dynamic Coatings,  Inc., a British Columbia,  Canada  corporation;  and (4) West
Kootnay  Lite-Form  Ltd.,  a  British  Columbia,  Canada  corporation.  The four
companies  were  acquired  in a  stock-for-stock  exchange  pursuant  to Section
368(a)(1)(B) of the Internal Revenue Code.

         The Company is still in the organizational stage of development, though
the replacement of existing management has been completed,  and, therefore,  not
much  additional  information is presently  available.  Once the  organizational
process has been completed, the Company intends to manufacture roofing products,
oil field tank wraps and  supplies,  and market a  lite-form  building  process.
Initially,  the  market  for the  Company's  products  will be  limited to North
America.

         The Company had no financial  activity for the quarter  ended March 31,
1998.

                           PART II - OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

         (a)      Exhibits
                  99.1 Financial Statements as of March 31, 1998
                  27 Financial Data Schedule

         (b)      Reports on Form 8-K
                  A Form 8-K was filed on February 20, 1998  announcing a change
                  in  control  of the  Registrant  and  the  acquisition  of the
                  entities discussed in Item 2.


<PAGE>



                                   SIGNATURES

         Pursuant to the  requirements  of the  Securities  and  Exchange Act of
1934,  the Issuer has duly  caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                    ENVIRONMENTAL DEVELOPMENT CORPORATION



Dated:  May 22, 1998                /s/ Arnie Gustafson
                                    Arnie Gustafson, President and Director



<PAGE>


                                 SMITH & COMPANY
                          A PROFESSIONAL CORPORATION OF
                          CERTIFIED PUBLIC ACCOUNTANTS

MEMBERS OF:                                   10 WEST 100 SOUTH, SUITE 700
AMERICAN INSTITUTE OF                         SALT LAKE CITY, UTAH 84101
     CERTIFIED PUBLIC ACCOUNTANTS             TELEPHONE:       (801) 575-8297
UTAH ASSOCIATION OF                           FACSIMILE:       (801) 575-8306
     CERTIFIED PUBLIC ACCOUNTANTS             E-MAIL: smith&co@smithandcocpa.com
--------------------------------------------------------------------------------



                          INDEPENDENT AUDITOR'S REPORT

The Board of Directors and Shareholders
Environmental Development Corporation

The  accompanying   consolidated  balance  sheet  of  Environmental  Development
Corporation and subsidiaries as of March 31, 1998, and the related  consolidated
statements  of  operations,  and cash flows for the three months ended March 31,
1998 and 1997,  and the period from inception to March 31, 1998 were not audited
by us and, accordingly, we do not express an opinion on them.


                                             /s/ Smith & Company
                                        CERTIFIED PUBLIC ACCOUNTANTS

Salt Lake City, Utah
May 21, 1998


                                       F-1

<PAGE>



                      ENVIRONMENTAL DEVELOPMENT CORPORATION
                                AND SUBSIDIARIES
                          (A Development Stage Company)
                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                  March 31,
                                                                                    1998
                                                                           ----------------------
ASSETS
              CURRENT ASSETS
<S>                                                                        <C>                   
                  Cash in bank                                             $                    0
                                                                           ----------------------

                                              TOTAL CURRENT ASSETS                              0

OTHER ASSETS
              Organization costs                                                                0
                                                                                                0
                                                                           ----------------------

                                                                           $                    0
                                                                           ======================

LIABILITIES & EQUITY
              CURRENT LIABILITIES
                  Accounts payable                                         $                    0
                                                                           ----------------------

                                         TOTAL CURRENT LIABILITIES                              0

              STOCKHOLDERS' EQUITY 
                  Common Stock $.001 par value:
                      Authorized - 25,000,000 shares
                      Issued and outstanding
                       4,000,000 shares                                                     4,000
                  Additional paid-in capital                                               (3,000)
                  Deficit accumulated during the
                      development stage                                                    (1,000)
                                                                           ----------------------

                                        TOTAL STOCKHOLDERS' EQUITY                              0
                                                                           ----------------------

                                                                           $                    0
                                                                           ======================
</TABLE>


                                       F-2

<PAGE>



                      ENVIRONMENTAL DEVELOPMENT CORPORATION
                                AND SUBSIDIARIES
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                           3/14/90
                                                                     Three Months Ended                   (Date of
                                                                          March 31,                     inception) to
                                                                   1998               1997                 3/31/98
                                                            -----------------   -----------------  -----------------------
<S>                                                         <C>                 <C>                <C>                    
Net sales                                                   $               0   $               0  $                     0
Cost of sales                                                               0                   0                        0
                                                            -----------------   -----------------  -----------------------

                                              GROSS PROFIT                  0                   0                        0

General and administrative expenses                                         0                   0                    1,000
                                                            -----------------   -----------------  -----------------------

                                                  NET LOSS  $               0   $               0  $                (1,000)
                                                            =================   =================  =======================

Net income (loss) per weighted
           average share                                    $             .00   $             .00
                                                            =================   =================

Weighted average number of common
           shares used to compute net income
           (loss) per weighted average share                        4,000,000           1,000,000
                                                            =================   =================
</TABLE>


                                       F-3

<PAGE>



                                         ENVIRONMENTAL DEVELOPMENT CORPORATION
                                                   AND SUBSIDIARIES
                                             (A Development Stage Company)
                                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                      (Unaudited)


<TABLE>
<CAPTION>
                                                                                                        3/14/90
                                                                                                       (Date of
                                                                  Three Months Ended March 31,       Inception) to
                                                                     1998              1997             3/31/98
                                                               ---------------    ---------------  ----------------
OPERATING ACTIVITIES
<S>                                                            <C>                <C>              <C>              
  Net (loss)                                                   $             0    $             0  $         (1,000)
  Adjustments to reconcile net (loss) to cash used
     by operating activities:
       Amortization                                                          0                  0                50
                                                               ---------------    ---------------  ----------------
                                               NET CASH USED
                                     BY OPERATING ACTIVITIES                 0                  0              (950)

INVESTING ACTIVITIES
  Organization costs                                                         0                  0               (50)
                                                               ---------------    ---------------  ----------------

                                    NET CASH PROVIDED (USED)
                                     BY INVESTING ACTIVITIES                 0                  0               (50)

FINANCING ACTIVITIES
  Proceeds from sale of common stock                                         0                  0             1,000
                                                               ---------------    ---------------  ----------------

                                        NET CASH PROVIDED BY
                                        FINANCING ACTIVITIES                 0                  0             1,000
                                                               ---------------    ---------------  ----------------

                                            INCREASE IN CASH
                                        AND CASH EQUIVALENTS                 0                  0                 0

Cash and cash equivalents at beginning of year                               0                  0                 0
                                                               ---------------    ---------------  ----------------

                                   CASH AND CASH EQUIVALENTS
                                            AT END OF PERIOD   $             0    $             0  $              0
                                                               ===============    ===============  ================
</TABLE>


During the quarter ended March 31, 1998, the Company issued  3,000,000 shares of
its common stock to acquire four subsidiaries.



                                       F-4