10QSB

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10 QSB

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

For the quarterly period ended March 31, 2001, or

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

For the transition period from October 1, 2000 to March 31, 2001.

                        Commission File Number 000-24877

                ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
             (Exact name of registrant as specified in its charter)

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

Delaware                                                              77-0096608
--------------                                                     -------------
(State or other jurisdiction of                                 (I.R.S. Employer
Incorporation or Organization)                               Identification No.)


                        5380 NORTH STERLING CENTER DRIVE
                           WESTLAKE VILLAGE, CA 91361
           (Address of principal executive offices including zip code)

                                 (818) 865-2205
              (Registrant's Telephone number, including area code)

                                 NOT APPLICABLE
(Former  Name,  Former  Address,  and Former  Fiscal Year, if changed Since Last
                                    Report)

indicate  by check  mark  whether  the  registrant:  (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
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X]      No [ ]

The number of shares  outstanding of the issuer's common stock,  par value $0.01
per share, as of March 31, 2001, was 9,202,437.

<PAGE>


                ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
                                   FORM 10-QSB
                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000

                                Table of Contents

                                                                        PAGE
                                                                        ====
Item 1  Financial Statements

Balance sheet at March 31, 2000 (unaudited)                                1

Statements of Operations for the three and six months ended
December 31, 2000 and 1999 (unaudited)                                     2

Statement of Comprehensive Loss                                            3

Statements of Cash Flows for the three and six months ended
March 31, 2000 and 1999 (unaudited)                                        4

Notes to Financial Statements (unaudited)                                5-7

Item 2  Management's Discussion and Analysis of Plan of Operations         8

General                                                                    8

Results of Operations                                                      8

Liquidity and Capital Resources                                            8


<PAGE>




                ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
                          (A Development Stage Company)

                              FINANCIAL STATEMENTS

                    THREE AND SIX MONTHS ENDED MARCH 31, 2001




<PAGE>

                ENVIRONMENTAL PRODUCTS TECHNOLOGIES CORPORATION
                         (A Development Stage Company)
                                 BALANCE SHEETS
                                     ASSETS
<TABLE>
<CAPTION>
                                                                          MARCH 31,  SEPTEMBER 30,
                                                                              2001           2000
                                                                       (Unaudited)     (Audited)
                                                                       -----------    -----------
<S>                                                                    <C>            <C>
CURRENT ASSETS
              Cash                                                     $    66,754    $   145,208
              Marketable securities                                          1,354         10,332
              Notes receivable, net of allowances of $200,000                 --             --
              Current portion of notes receivable, related                    --
                          parties, net of allowance of $217,659             67,146         67,146
              Interest receivable                                           73,476         45,787
              Other                                                         23,437         27,063
                                                                       -----------    -----------
                          Total current assets                             232,167        295,536
                                                                       -----------    -----------

EQUIPMENT                                                                   26,099         26,274
                                                                       -----------    -----------

OTHER ASSETS
              Notes receivable, related parties                               --              415
              Deposits                                                       3,220          3,220
              Mining rights                                                  5,000          5,000
                                                                       -----------    -----------
                          Total other assets                                 8,220          8,635
                                                                       -----------    -----------

TOTAL ASSETS                                                           $   266,486    $   330,445
                                                                       ===========    ===========

                       LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
              Accounts payable                                         $   332,437    $   218,786
              Accrued interest                                              42,327          6,667
              Due to Officers                                               56,898         16,856
              Convertible note payable                                   1,000,000           --
              Accrued salaries                                             410,000        370,542
                                                                       -----------    -----------
                          Total current liabilities                      1,841,662        612,851
                                                                       -----------    -----------

Convertible note payable                                                      --          500,000
                                                                       -----------    -----------

Total liabilities                                                        1,841,662      1,112,851
                                                                       -----------    -----------

STOCKHOLDERS' DEFICIT
              Common stock, $.01 par value, authorized
               20,000,000 shares; issued and outstanding
              9,202,437 shares                                              92,024         92,024
              Preferred stock, $.01 par value,
              authorized 20,000,000 shares; issued
              and outstanding 2,000 shares                                      20             20
              Additional paid-in capital                                 8,951,833      8,951,833
              Deficit accumulated during
                development stage                                       (9,800,658)    (9,016,866)
              Accumulated deficit prior to
                development stage                                         (695,452)      (695,452)
              Accumulated other comprehensive loss                        (122,943)      (113,965)
                                                                       -----------    -----------
                          Total stockholders' deficit                   (1,575,176)      (782,406)
                                                                       -----------    -----------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                            $   266,486    $   330,445
                                                                       ===========    ===========
</TABLE>

                       See notes to financial statements.


                                       1
<PAGE>

                ENVIRONMENTAL PRODUCTS TECHNOLOGIES CORPORATION
                         (A Development Stage Company)

                            STATEMENTS OF OPERATIONS

                                FOR THE PERIODS
                                  (unaudited)
<TABLE>
<CAPTION>
                                                    THREE MONTHS ENDED           SIX MONTHS ENDED        October 1, 1995
                                                         MARCH 31,                   MARCH 31,                 to
                                                   2001           2000          2001           2000      March 31, 2001
                                               -----------    -----------    -----------    -----------    -----------
<S>                                            <C>            <C>            <C>            <C>            <C>
SALES                                          $      --      $      --      $      --      $      --      $      --
                                               -----------    -----------    -----------    -----------    -----------

EXPENSES
       Selling, general and administrative         216,849        128,737        526,052        367,309      4,398,092
       Research and development                    207,805        136,688        249,774        176,044      1,374,430
       Write-down note receivable                     --             --             --             --          200,000
       Write-down note receivable -                   --             --             --             --             --
            related party                             --             --             --             --          454,359
       Write-down of investment                       --             --             --             --           58,887
                                               -----------    -----------    -----------    -----------    -----------
            Total expenses                         424,654        265,425        775,826        543,353      6,485,768
                                               -----------    -----------    -----------    -----------    -----------

LOSS FROM OPERATIONS                              (424,654)      (265,425)      (775,826)      (543,353)    (6,485,768)

OTHER INCOME (EXPENSE)                                --             --             --             --             --
       Interest income                              12,662         19,029         27,694         38,269        247,912
       Interest expense                            (21,493)          --          (35,660)          --          (65,640)
       Loss on sale of marketable securities          --             --             --          (28,858)      (200,961)
                                               -----------    -----------    -----------    -----------    -----------

            Total other income (expense)            (8,831)        19,029         (7,966)         9,411        (18,689)
                                               -----------    -----------    -----------    -----------    -----------

Net loss before provision for income taxes        (433,485)      (246,396)      (783,792)      (533,942)    (6,504,457)

Provision for Taxes                                   --             --             --             --            4,799
                                               -----------    -----------    -----------    -----------    -----------

Loss before extraordinary item                    (433,485)      (246,396)      (783,792)      (533,942)    (6,509,256)

Extraordinary item
       Gain on extinguishment of debt                 --             --             --             --           64,208
                                               -----------    -----------    -----------    -----------    -----------

Net loss                                          (433,485)      (246,396)      (783,792)      (533,942)    (6,445,048)

Preferred stock premium                               --             --             --             --       (3,295,610)
                                               -----------    -----------    -----------    -----------    -----------

NET LOSS ATTRIBUTABLE TO
       COMMON SHAREHOLDERS                     $  (433,485)   $  (246,396)   $  (783,792)   $  (533,942)   $(9,740,658)
                                               ===========    ===========    ===========    ===========    ===========

NET LOSS PER COMMON SHARE                      $     (0.05)   $     (0.03)   $     (0.09)   $     (0.06)
                                               ===========    ===========    ===========    ===========

Weighted-average common shares
            outstanding                          9,202,437      8,905,597      9,202,437      8,905,597
</TABLE>


                       See notes to financial statements.

                                       2
<PAGE>


                ENVIRONMENTAL PRODUCTS TECHNOLOGIES CORPORATION
                         (A Development Stage Company)

                        STATEMENTS OF COMPREHENSIVE LOSS

                                FOR THE PERIODS
                                  (Unaudited)
<TABLE>
<CAPTION>
                                      THREE MONTHS ENDED            SIX MONTHS ENDED       October 1, 1995
                                           MARCH 31,                   MARCH 31,                 to
                                    2001           2000           2001          2000       March 31, 2001
                                -----------    -----------    -----------    -----------    -----------
<S>                             <C>            <C>            <C>            <C>            <C>
Net loss                        $  (433,485)   $  (246,396)   $  (783,792)   $  (533,942)   $(9,740,658)

Other comprehensive loss:
       Net of tax
       Unrealized holding
       loss on marketable              --             --             --             --         (122,943)
       securities

       Add:  Reclassification
       adjustment for losses
       included in net loss            --             --             --             --             --
                                -----------    -----------    -----------    -----------    -----------

Net unrealized loss                    --             --             --             --         (122,943)
                                -----------    -----------    -----------    -----------    -----------

Comprehensive loss              $  (433,485)   $  (246,396)   $  (783,792)   $  (533,942)   $(9,863,601)
                                ===========    ===========    ===========    ===========    ===========
</TABLE>


                       See notes to financial statements.

                                       3
<PAGE>

                ENVIRONMENTAL PRODUCTS TECHNOLOGIES CORPORATION
                         (A Development Stage Company)

                            STATEMENTS OF CASH FLOWS

                                FOR THE PERIODS
<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED            SIX MONTHS ENDED      October 1, 1995
                                                             MARCH 31,                    MARCH 31,                to
                                                       2001           2000           2001          2000      March 31, 2001
                                                   -----------    -----------    -----------    -----------    -----------
<S>                                                <C>            <C>            <C>            <C>            <C>
CASH FLOWS FROM
OPERATING ACTIVITIES

Net loss                                           $  (433,485)   $  (246,396)   $  (783,792)   $  (533,942)   $(6,445,048)
                                                   -----------    -----------    -----------    -----------    -----------
Adjustments to reconcile net loss
       to net cash used in
       operating activities:
       Depreciation and amortization                     2,766          8,694          5,532         17,388         76,294
       Loss on sale of marketable securities              --             --             --             --          200,961
       Write-down of interest receivable                  --             --             --             --          (45,037)
       Write-down of notes receivable                     --             --             --             --          200,000
       Write-down of notes receivable -
            related parties                               --             --             --             --          458,191
       Write-down of investment                           --             --             --             --           58,887
       Loss on abandonment of property
            and equipment                                 --             --             --             --            1,093
       Write down of mining rights                        --             --             --             --           35,000
       Gain on extinguishment of debt                     --             --             --             --          (64,208)
       Noncash research & development                     --             --             --             --          131,250
       Noncash consulting fees                            --             --             --             --          536,306
       Noncash executive compensation                     --             --             --             --           23,460
       Stock issued for services rendered                 --             --             --             --          236,866
       Stock issued in connection with
            legal settlement                              --             --             --             --          105,000
       Stock issued for obtaining patent                  --             --             --             --           45,000
        (Increase) decrease in operating assets:
            Interest receivable                        (12,662)       (19,029)       (27,689)       (38,269)       (73,476)
            Prepaid and other assets                      --             --             --             --          (23,438)
            Other assets                                  --             --           (3,626)          --           (3,220)
       Increase (decrease) in
            Accounts payable                            80,973        142,787        120,903        416,879        327,178
            Accrued salaries and benefits               21,458         24,000         39,458         48,000        466,888
            Accrued interest                            21,493           --           35,660           --           49,647
            Settlement payable                            --             --             --             --           10,000
            Due to officer                              18,292           --           40,042           --           43,620
                                                   -----------    -----------    -----------    -----------    -----------
NET CASH USED IN
OPERATING ACTIVITIES                                  (301,165)       (89,944)      (573,512)       (89,944)    (3,648,786)


CASH FLOWS FROM INVESTING ACTIVITIES
       Investment in related party                        --             --             --             --          (16,077)
       Loans to related parties                           --             --             --             --         (554,631)
       Loans to unrelated parties                         --             --             --             --         (216,800)
       Purchase of equipment                              --             --           (5,357)          --         (103,473)
       Purchase of mining rights                          --             --             --             --          (40,000)
       Purchase of marketable securities                  --             --             --             --         (604,785)
       Proceeds from sale of marketable
            securities                                    --             --             --             --          279,514
       Proceeds from loans                                --             --              415           --            1,411

NET CASH USED IN
                                                   -----------    -----------    -----------    -----------    -----------
INVESTING ACTIVITIES                                      --             --           (4,942)          --       (1,254,841)
                                                   -----------    -----------    -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
       Proceeds from convertible note payable          300,000           --          500,000           --        1,000,000
       Proceeds from exercise of warrants                 --             --             --             --          532,812
       Proceeds from sale of preferred stock              --             --             --             --        3,000,000
       Proceeds from sale of common stock                 --             --             --             --          820,100
       Costs to raise capital                             --             --             --             --         (357,023)
       Common stock redeemed                              --             --             --             --           (5,700)
       Loan payments                                      --             --             --             --          (22,000)
NET CASH PROVIDED BY FINANCING
                                                   -----------    -----------    -----------    -----------    -----------
       ACTIVITIES                                      300,000           --          500,000           --        4,968,189
                                                   -----------    -----------    -----------    -----------    -----------

NET INCREASE/(DECREASE) IN CASH                         (1,165)       (89,944)       (78,454)       (89,944)        64,562

CASH, BEGINNING                                         67,919        105,058        145,208        105,058          2,192
                                                   -----------    -----------    -----------    -----------    -----------

CASH, ENDING                                       $    66,754    $    15,114    $    66,754    $    15,114    $    66,754
                                                   ===========    ===========    ===========    ===========    ===========
</TABLE>


                       See notes to financial statements.

                                       4
<PAGE>

1. Nature of Business

The Company was  incorporated  in 1983 as CCRS,  III, Inc. In 1989,  the Company
changed  its name to Central  Corporate  Reports  Services,  Inc.,  merged  with
Information  Bureau Inc. and operated in the financial public relations business
until March 1990 when the Company became  inactive.  In 1990 the Company changed
its name back to  Combined  Assets,  Inc.  and in 1991  changed  its name to ACP
International,  Inc. and in 1994 changed its name back to Combined Assets,  Inc.
In January 1995,  the  Company's  name was changed to  Environmental  Products &
Technologies Corporation.  At the end of 1995, the Company commenced development
of a waste  management  system to control  odors and solid  stream  waste in the
farming  industry.  In  addition,   the  Company  is  developing  organic  based
insecticides  for  agricultural,  commercial and residential use. The Company is
currently in the development  stage of operations and, to this time, has devoted
its time to rising  capital,  product and  supplier  development  and  marketing
future products. No product has been assembled, manufactured or marketed at this
time other than prototypes assembled for demonstration and testing purposes.

2. Summary of significant accounting policies

Financial statements

The  balance  sheet  as of  March  31,  2001,  and  the  related  statements  of
stockholders'  equity,  operations and cash flows for the six months ended March
31, 2001, and 2000, are unaudited. Such unaudited financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial reporting and with the instructions to Form 10-QSB. Accordingly,  they
do not include all of the  information  and  disclosures  required by  generally
accepted accounting principles for complete financial statements. In the opinion
of  management,  all  adjustments,   consisting  of  normal  recurring  accruals
considered  necessary for a fair presentation,  have been included.  Results for
the three and six months ended March 31, 2001, are not necessarily indicative of
the results that may be achieved for any other interim  period or for the fiscal
year ending September 30, 2001.  These statements  should be read in conjunction
with the financial statements and related notes included in the Company's Annual
Report on Form 10-KSB for the year ended  September 30, 2001.

Fair market value of  financial  instruments

The fair market value of the notes receivable  approximate cost based on current
borrowing  rates.  Equity  securities held by the Company include  available for
sale securities,  which are reported at fair value. Unrealized holding gains and
losses for available for sale securities are excluded from earnings and reported
net of any income tax affect as a component of stockholders' equity.

                                       5
<PAGE>

Loss per share

The Company calculates loss per share in accordance with SFAS No. 128, "Earnings
per  Share".  Basic loss per share is computed by  dividing  loss  available  to
common shareholders by the weighted-average number of common shares outstanding.
Diluted  loss per share is computed  similar to basic loss per share except that
the  denominator is increased to include the number of additional  common shares
that would have been  outstanding if the potential common shares had been issued
and if the additional common shares were dilutive.  For the three and six months
ended March 31, 2001 and 2000, the following  potential  common shares have been
excluded  from the  computation  of diluted  net loss per share for all  periods
presented because the effort would have been anti-dilutive:

                                                           2001      2000
                                                         -------   -------
Options outstanding under the Company's
  stock option plans                                      50,000    50,000
Warrants issued for services rendered                    325,000   325,000
Warrants issued with convertible note
  payable                                                500,000       ---

Comprehensive net loss

On October 1, 1998, the Company  adopted FASB No. 130,  Reporting  Comprehensive
Income. Statement No. 130 requires the reporting of comprehensive income/loss in
addition to net income/loss from operations.  Comprehensive income/loss requires
the inclusion of certain financial information not recognized in the calculation
of net income/loss,  including  unrealized holding gains and losses on available
for sale of securities.  Total  comprehensive  loss is shown in the Statement of
Comprehensive   Loss.

Concentration  of  credit  risk

The Company primarily  transactions its business with two financial institutions
and may maintain  deposits in excess of federally  insured limits.  At March 31,
2001, the Company has not  experienced  any losses in such accounts and believes
it is not exposed to any significant credit risk on cash and cash equivalents.

                                       6
<PAGE>

3. Property and equipment

Property and equipment at March 31, 2001, consisted of the following:

        Office equipment                             $ 30,335
        Computer equipment                             70,313
        Leasehold improvements                          1,732
                                                     --------
                                                      102,380
        Less accumulated depreciation
        And amortization                               76,281
                                                     --------
        Total                                        $ 26,099
                                                     ========

4. Convertible Note Payable

On August 7, 2000, the Company entered into a convertible  loan agreement with a
third party to borrow up to $1,000,000.  The total amount borrowed is due on the
earlier of (1) February 7, 2002 (2) the 365th day  following  the earlier of (a)
the last funding date or (b) the 30th day following  the funding date  resulting
in the  loan  balance  being  greater  than or  equal  to  $900,000,  or (3) the
occurrence  of certain  events,  including  failure to register the common stock
into which the note can be converted  within 180 days from the effective date of
the note

During the quarter ended March 31, 2001, the Company did not register the common
stock into which the note can be converted.  As a result, the amount outstanding
at $1,000,000 is currently  due and is  classified as a current  liability.  The
Company is currently in the process of preparing the registration statement.


                                       7
<PAGE>

Item 2.  MANAGEMENTS  DISCUSSION  AND ANALYSIS OR PLAN OF OPERATIONS

RESULTS OF OPERATION

COMPARISON OF THREE AND SIX MONTHS ENDED MARCH 31, 2001, AND 2000.

         The Company  generated  no revenue  for the three and six months  ended
March 31, 2001, and 2000.  During each such quarter,  the Company's efforts were
directed  at  researching,  designing,  developing  and  testing its Closed Loop
Management System.

         Research  and  development  expenses  primarily  consist of the cost of
personnel and equipment needed to conduct the Company's research and development
efforts.  Research  and  development  expenses  for three months ended March 31,
2001, increased by $71,117, or 52%, from $136,688 to $207,805.  This increase in
research  and  development   expenses  reflects  expenses  associated  with  the
research,  design and development of the Company's Closed -Loop Waste Management
System.  For the six months  ended  March 31,  2001,  research  and  development
expenses increased by $73,730, or 42%, from $176,044 to $249,774.

         General and  administrative  expenses  for three months ended March 31,
2001, increased by $ 88,112, or approximately 68% to $216,849, from $128,737 for
the  three  months  ended  March  31,  2001.   This   increase  in  general  and
administrative  expenses was  primarily  the result of the increase in salaries,
travel,  legal and  professional  expenses.  For the six months  ended March 31,
2001,  general and administrative  expenses increased by $158,743,  or 43%, from
$367,309 to $526,052.

LIQUIDITY AND CAPITAL RESOURCES

         The  Company's  primary  capital needs have been to fund the design and
development of its prototype  Closed-Loop Waste Management System. The Company's
primary  sources of liquidity  have been private  placements  of equity and debt
securities and loans from officers/ stockholders on an as needed basis.

         Between  October and December  1995, the Company sold 100,000 shares of
Common Stock for an aggregate of $10,000, or $.10 per share. Between January and
December  1996, the Company sold 400,000 shares of Common Stock for an aggregate
of $189,650,  or approximately $.47 per share.  Between April and June 1996, the
Company sold 40,000 shares of Common Stock for an aggregate of $35,000,  or $.87
per share.  Between July and September  1996, the Company sold 480,000 shares of

                                       8
<PAGE>

Common  Stock for an aggregate of  $149,200,  or  approximately  $.31 per share.
Between June and September 1997, the Company sold 550,000 shares of Common Stock
for an aggregate of $337,925,  or approximately  $.614 per share. The figures in
the paragraph do not give effect to the two-for-one forward stock split that was
effected by the Company in May 1998.

         In April  1998,  the  Company  sold 3,000  shares of Series A preferred
Stock  together with warrants  (the  "Private  Placement  Warrants") to purchase
300,000 shares of Common Stock (the "1998 Private Placement") for gross proceeds
of $3,000,000.  The net proceeds to the Company of approximately $2,675,000 will
be used for  continue  research  and  development,  working  capital and general
corporate purpose. The Private Placement Warrants have an initial exercise price
of $3.875 per share and expire on March 31,2003.  The Private Placement Warrants
contain  provisions  for the  adjustment of the exercise price and the aggregate
number of shares issuable upon exercise under certain  circumstances,  including
without   limitation,    stock   dividends,   stock   splits,    reorganization,
reclassification, consolidations, certain dilutive sales of securities for which
the Private Placements Warrants are exercise able below the then existing Market
Price (as  defined) and failure to maintain a  sufficient  number of  authorized
shares of Common Stock for issuance  and delivery  upon  exercise of the Private
Placement Warrants.

         The Company also has commitments under (i) an employment agreement with
Marvin Mears, the Company's  President and Chief Executive Officer;  and (ii) an
office lease that expires December 31, 2001.

         Based on its  current  operating  plan,  the Company  anticipates  that
additional  financing  will be required to finance  its  operations  and capital
expenditures.  The Company's  currently  anticipated levels of revenues and cash
flow are  subject to many  uncertainties  and cannot be  assured.  Further,  the
Company's  business plan may change, or unforeseen  events may occur,  requiring
the  Company to raise  additional  funds.  The amount of funds  required  by the
Company will depend upon many factors, including without limitations, the extent
and timing of sales of the Company's  waste  management  system,  future product
cost, the timing and cost associated with the  establishment and / or expansion,
as appropriate,  of the Company's  manufacturing,  development,  engineering and


                                        9
<PAGE>


customer  support  capabilities,  the timing and cost of the  Company's  product
development  and  enhancement  activities and the Company's  operating  results.
Until the Company generates cash flow from operations,  which will be sufficient
to satisfy  its cash  requirements,  the Company  will need to seek  alternative
means for financing its operations and capital expenditures and / or postpone or
eliminate certain investments or expenditures.  Potential  alternative means for
financing may include leasing capital equipment,  obtaining a line of credit, or
obtaining additional,  or available on acceptable terms. The inability to obtain
additional  financing or generate  sufficient cash form operations could require
the Company to reduce or eliminate expenditures for capital equipment,  research
and development, production or marketing of its product, or otherwise curtail or
discontinue  its operations,  which could have a material  adverse effect on the
Company's business, financial condition and results of operations.  Furthermore,
if the Company  raises funds through the sale of additional  equity  securities,
the Common Stock currently outstanding may be further diluted.

INFLATION

         Although  certain  of the  Company's  expenses  increase  with  general
inflation  in the  economy,  inflation  has not  had a  material  impact  on the
Company's financial results to date.

                                       10
<PAGE>

                                    SIGNATURE

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be signed on its  behalf  by the  undersigned,  thereunder  duly
authorized.


                                     ENVIRONMENTAL PRODUCTS &
                                     TECHNOLOGIES CORPORATION

Dated:  May 10, 2001                 By: /s/ Marvin Mears
                                     --------------------
                                             Marvin Mears
                                             Chief Executive Officer




                                       11
<PAGE>