SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB


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

         For the quarterly period ended December 31, 1998 or

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

         For the transition period from __________ to __________

                        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 December 31, 1998, was 8,567,148.

51601:031

<PAGE>

               ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
                                   FORM 10-QSB
                FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1998

                                Table of Contents
<TABLE>
<CAPTION>

                                                                                           PAGE
                                                                                           ----
Item 1     Financial Statements                                                            

<S>                                                                                          <C>
           Balance Sheet at December 31, 1998 (unaudited)                                    1

           Statements of Operations for the three months ended December 31, 1998             2
           and 1997 (unaudited)

           Statements of Cash Flows for the three months ended December 31, 1998            3-4
           and 1997 (unaudited)

           Statement of Stockholders' Equity                                                 5

           Notes to Consolidated Financial Statements (unaudited)                           6-8

Item 2     Management's Discussion and Analysis or Plan of Operations                        9

           General                                                                           9

           Results of Operations                                                            10

           Liquidity and Capital Resources                                                  10


                           PART II. OTHER INFORMATION


Item 1     Legal Proceedings                                                                12

Item 2     Changes in Securities                                                            12

Item 3     Defaults Upon Senior Securities                                                  12

Item 4     Submission of Matters to a Vote of Security Holders                              12

Item 5     Other Information                                                                12

Item 6     Exhibits and Reports on Form 8-K                                                 12

Signature                                                                                   13

Exhibit Index                                                                               13
</TABLE>

51601:031

<PAGE>


ITEM 1.   Financial Statements             

                ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
                          (A Development Stage Company)

                              FINANCIAL STATEMENTS

                      THREE MONTHS ENDED DECEMBER 31, 1998

                                      
<PAGE>



                ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
                          (A Development Stage Company)

                                 BALANCE SHEETS


                                     ASSETS

<TABLE>
<CAPTION>
 
                                                       December 31,            September 30,
                                                            1998                    1998
                                                      (Unaudited)                        
                                                      --------------           --------------  
<S>                                                     <C>                      <C>       
CURRENT ASSETS
  Cash                                                  $  602,032               $1,447,444
  Marketable securities                                    222,258                  385,012
  Notes receivable                                         485,000                        -
  Notes receivable, related parties                        147,116                  135,000
  Interest receivable                                       12,017                    1,446
  Other                                                      8,400                        -
                                                        ----------               ----------
     Total current assets                                1,476,823                1,968,902
                                                        ----------               ----------
EQUIPMENT                                                   93,936                   77,581
                                                        ----------               ----------
OTHER ASSETS
  Notes receivable, related parties                         19,515                   31,631
  Deposits                                                   3,220                   13,220
  Mining rights                                              5,000                    5,000
                                                        ----------               ----------
     Total other assets                                     27,735                   49,851
                                                        ----------               ----------
TOTAL ASSETS                                            $1,598,494               $2,096,334
                                                        ==========               ==========
</TABLE>

                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

<S>                                                     <C>                      <C>       
CURRENT LIABILITIES                                 
  Accounts payable                                      $        -               $   11,450
  Accrued salaries                                          68,000                   44,000
                                                        ----------               ----------

     Total current liabilities                              68,000                   55,450
                                                        ----------               ----------

STOCKHOLDERS' EQUITY
  Common stock, $.01 par value, authorized
   20,000,000 shares; issued and outstanding
   8,567,148 shares                                         42,735                   42,735
  Preferred stock, $.01 par value, authorized
   20,000,000 shares; issued and outstanding
   3,000 shares                                                 30                       30
  Additional paid-in capital                             8,335,647                8,335,647
  Deficit accumulated during development stage          (6,003,582)              (5,627,088)
  Retained (deficit) prior to development stage           (695,452)                (695,452)
  Accumulated other comprehensive loss                    (148,884)                 (14,988)
                                                        ----------                ----------
                                                         1,530,494                2,040,884
                                                        ----------               ----------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $1,598,494               $2,096,334
                                                        ==========               ==========
</TABLE>

                       See notes to financial statements.
                                                                                

                                       1
<PAGE>



                ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
                          (A Development Stage Company)

                            STATEMENTS OF OPERATIONS

                  THREE MONTHS ENDED DECEMBER 31, 1998 AND 1997
                                   (Unaudited)

                                      
                                                      Three Months Ended
                                                         December 31,     
                                                1998                  1997  
                                              --------              --------
SALES                                         $      -              $      -
                                              --------              --------
EXPENSES
  Consulting                                    26,016                 7,386
  Depreciation                                   8,694                     -
  Legal and professional                        96,925                12,366
  Liability insurance                                -                    92
  Miscellaneous                                 13,180                   756
  Office supplies and expenses                   8,424                 8,942
  Other expenses                                     -                     -
  Rent                                           8,328                 2,520
  Repairs and maintenance                          454                     -
  Research and development                      88,400               213,904
  Salaries and payroll taxes                    78,156                19,308
  Telephone and utilities                        4,470                   116
  Travel                                        37,257                 6,324
  Write down of mining rights                        -                     -
                                              --------              --------
     Total expenses                            370,304               271,714
                                              --------              --------
LOSS FROM OPERATIONS                          (370,304)             (271,714)
                                              --------              --------
OTHER INCOME (EXPENSE)
  Interest income                               22,668                 1,799
  Interest expense                                   -                (3,090)
  Loss on sale of marketable securities        (28,858)                    -
                                              ---------             --------
                                                (6,190)               (1,291)
                                              --------              --------
LOSS BEFORE EXTRAORDINARY ITEM                (376,494)             (273,005)
EXTRAORDINARY ITEM
  Gain on extinguishment of debt                     -                     -
                                              --------              --------
NET LOSS                                      (376,494)             (273,005)
PREFERRED STOCK DIVIDEND                             -                     -
                                              --------              --------
NET LOSS ATTRIBUTABLE TO
 COMMON STOCKHOLDERS                         ($376,494)            ($273,005)
                                              ========              ========
NET LOSS PER COMMON SHARE                        ($.04)                ($.03)
                                              ========              ========

                       See notes to financial statements.
                                       2

<PAGE>

                ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
                          (A Development Stage Company)

                            STATEMENTS OF CASH FLOWS

                  THREE MONTHS ENDED DECEMBER 31, 1998 AND 1997
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                        
                                                                Three Months Ended
                                                                    December 31,
                                                          ---------------------------    
                                                            1998              1997   
                                                          --------         ----------

<S>                                                      <C>                <C>       
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                               ($376,494)         ($273,005)
                                                          --------           --------
  Adjustments to reconcile net loss
   to net cash used in operating
   activities:
    Depreciation and amortization                            8,694                  -
    Loss on sale of marketable securities                   28,858                  -
    Loss on abandoned equipment                                  -                  -
    Write down of mining rights                                  -                  -
    Gain on extinguishment of debt                               -                  -
    Noncash research and development                             -            131,250
    Noncash consulting fees                                      -                  -
    Noncash executive compensation                               -              2,308
    (Increase) decrease in operating assets:
      Prepaid expenses                                           -                  -
      Interest receivable                                  (10,571)              (784)
      Deposits                                              10,000             (2,520)
      Other                                                 (8,400)                 -
    Increase (decrease) in operating liabilities:
      Accounts payable                                     (11,450)            (6,078)
      Accrued salaries                                      24,000             17,000
      Accrued interest                                           -             (1,910)
      Settlement payable                                         -            (17,005)
                                                          --------           --------
          Total adjustments                                 41,131            122,261
                                                          --------           --------

NET CASH USED IN OPERATING ACTIVITIES                     (335,363)          (150,744)
                                                          --------           --------

CASH FLOWS FROM INVESTING ACTIVITIES
  Loans to related parties                                (485,000)           (12,116)
  Purchase of equipment                                    (25,049)                 -
  Purchase of mining rights                                      -            (25,000)
  Purchase of marketable securities                       (204,785)                 -
  Proceeds from sale of marketable
   securities                                              204,785                  -
                                                          --------           --------

NET CASH USED IN INVESTING ACTIVITIES                    ($510,049)          ($37,116)
                                                          --------           --------
</TABLE>


                       See notes to financial statements.
 
                                       3
<PAGE>


                ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
                          (A Development Stage Company)

                      STATEMENTS OF CASH FLOWS (CONTINUED)

                  THREE MONTHS ENDED DECEMBER 31, 1998 AND 1997
                                   (Unaudited)



                                                         Three Months Ended
                                                             December 31,
                                                   -----------------------------
                                                      1998              1997   
                                                   ---------         ----------

CASH FLOWS FROM FINANCING ACTIVITIES
  Sale of common stock                            $        -           $ 90,625
  Sale of preferred stock                                  -                  -
  Costs to raise capital                                   -                  -
  Loan payments                                            -                  -
  Common stock redeemed                                    -                  -
                                                  ----------           --------

NET CASH PROVIDED BY FINANCING
 ACTIVITIES                                                -             90,625
                                                  ----------           --------

NET INCREASE/DECREASE IN CASH                       (845,412)           (97,235)

CASH, OCTOBER 1                                    1,447,444            271,360
                                                  ----------           --------

CASH, DECEMBER 31                                 $  602,032           $174,125
                                                  ==========           ========



                       See notes to financial statements.
                                                                               

                                       4
<PAGE>



                ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
                          (A Development Stage Company)

                        STATEMENT OF STOCKHOLDERS' EQUITY

                      THREE MONTHS ENDED DECEMBER 31, 1998
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                           
                                                                                           
                                      Common stock         Preferred stock                 
                                      ------------         ---------------                 
                                    # of                        # of                       
                                   shares          Amount      shares           Amount     
                                   ------          ------     --------          ------     
<S>                               <C>         <C>              <C>       <C>         
Balance at
 September 30,
 1998                             8,567,148   $    42,735      3,000     $         30

Common stockholder
 loss for the
 period                                  --            --            --            --         

Unrealized loss on
 marketable
 securities                              --            --            --            --    
                                -----------   -----------   -----------   -----------
Balance at
 December 31,
 1998                             8,567,148   $    42,735         3,000   $        30
                                ===========   ===========   ===========   ===========

                                          Deficit             Retained                                                      
                                        accumulated            deficit            Accumulated                               
                       Additional       during the         prior to the             other               Total          
                        paid-in         development          development        comprehensive        stockholders'     
                         capital          stage                stage                 loss              equity          
                       ----------      -----------         ------------           ----------        -------------      
Balance at
 September 30,
 1998                  8,567,148      ($5,627,088)         (695,452)              ($14,988)           $2,040,884

Common stockholder
loss for the
 period                       --         (376,494)               --                     --              (376,494)

Unrealized loss on
 marketable
 securities                   --               --                --               (133,896)             (133,896)
                     -----------      -----------         -----------            -----------         -----------

Balance at
 December 31,
 1998                $ 8,335,647      ($6,003,582)        ($695,452)             ($148,884)          $ 1,530,494
                     ===========      ============       ===========              ===========         ============
</TABLE>








                       See notes to financial statements.

                                                                              

                                       5
<PAGE>

 


                ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                      THREE MONTHS ENDED DECEMBER 31, 1998
                                   (Unaudited)


1.  Summary of significant accounting policies

    Financial statements

    The balance  sheet as of December 31, 1998,  and the related  statements  of
    stockholders'  equity,  operations and cash flows for the three months ended
    December  31,  1998  and  1997,  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
    months ended December 31, 1998 are not necessarily indicative of the results
    that may be  achieved  for any other  interim  period or for the fiscal year
    ending September 30, 1999.  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, 1998.

    Fair market value of financial instruments

    The fair market  value of the notes  receivable  approximates  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. See Note 4 for further discussion.

    Loss per share

    The computations of loss per share of common stock are based on the weighted
    average number of shares  outstanding of 8,567,148 (1998),  7,813,398 (1997)
    and 7,536,197 (cumulative period).


                                       6
<PAGE>

                ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
                          (A Development Stage Company)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                      THREE MONTHS ENDED DECEMBER 31, 1998
                                   (Unaudited)



1.  Summary of significant accounting policies (continued)

    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 securities.

    Concentration of credit risk

    The Company primarily transacts its business with two financial institutions
    and may maintain deposits in excess of federally insured limits. At December
    31, 1998,  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.

2.  Notes receivable

         At December 31, 1998, notes receivable consist of the following:

                  Note receivable, interest at         
                  10% per year, collateralized
                  by interest in a mining company,
                  due by June 15, 1999.                                $185,000

                  Note receivable, collateralized
                  by equipment and common stock,
                  interest at 12% per year, due
                  by February 26, 1999.                                 100,000

                  Note receivable, uncollateralized,
                  interest at 10% per year, due by
                  February 6, 1999.                                     200,000
                                                                       ---------
                                                                       $485,000
                                                                       =========


                                       7
<PAGE>

                ENVIRONMENTAL PRODUCTS & TECHNOLOGIES CORPORATION
                          (A Development Stage Company)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                      THREE MONTHS ENDED DECEMBER 31, 1998
                                   (Unaudited)
<TABLE>
<CAPTION>

3.       Stock options and warrants outstanding

                                                Options          Exercise
                                                Warrants          price                           Exercise date     
                                                --------          -----                           -------------     

<S>                                              <C>               <C>                              <C> 
         Options granted                         280,000           $.1875                           July 16, 1999 to
                                                                                                  September 30, 2006
         Options granted                          50,000            .1875                   Up to September 30, 2006
         Warrants issued                         300,000           2.0000                     Up to January 21, 2001
         Warrants issued                         300,000           3.8750                           Up to April 2003
                                                 -------

         Options/warrants
         outstanding at
         December 31, 1998                       930,000
                                                 =======

         Options/warrants
         exercisable at
         December 31, 1998                       850,000
                                                 =======


4.       Accumulated other comprehensive loss balances

         At December 31, 1998, the accumulated other  comprehensive loss balance
         consists of the following:

                                                           Unrealized
                                                             loss on
                                                           securities
                                                           ----------

                  Balance at September 30, 1998              $ 14,988

                  Net unrealized loss for the
                  quarter ended December 31, 1998             133,896
                                                             --------

                  Balance at December 31, 1998               $148,884
                                                             ========
</TABLE>
                                       8

<PAGE>



Item 2.           Management's Discussion and Analysis or Plan of Operations

The  following  discussion  should  be read in  conjunction  with the  financial
statements and notes thereto  appearing  elsewhere in this  quarterly  report on
Form 10-QSB for the quarter  ended  December  31, 1998 (the "Form  10-QSB").  In
addition to historical  information,  this Form 10-QSB contains forward- looking
statements.  The  forward-looking  statements  contained  herein are  subject to
certain  risks and  uncertainties  that  could  cause  actual  results to differ
materially from those reflected in the forward- looking statements. Factors that
might cause such a difference  include,  but are not limited to, those discussed
in the  section  entitled  "Management's  Discussion  and  Analysis  or  Plan of
Operations."  Readers  are  cautioned  not to  place  undue  reliance  on  these
forward-looking  statements,  which reflect management's analysis only as of the
date hereof.  Environmental Products & Technologies  Corporation (the "Company")
undertakes no obligation to publicly revise these forward-looking statements, or
to reflect  events or  circumstances  that arise after the date hereof.  Readers
should carefully  review the risk factors  described in other documents that the
Company  has  filed  and  will  continue  to file  from  time to time  with  the
Securities and Exchange Commission.

GENERAL

         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 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 raising  capital,  product  and  supplier
development,  and marketing  future  products.  No products have been assembled,
manufactured or marketed at this time, except that the Company has assembled one
prototype  Closed-Loop Waste Management  System for  demonstration  purposes and
three prototype systems for operation by various universities.

         The Company has projected expenses of $750,000 through June 1999. As of
December  31,  1998,  the  Company had  approximately  $825,000 of cash and cash
equivalents and,  accordingly,  even if the Company were to generate no revenues
through June 1999,  the Company would not need to seek  additional  financing to
satisfy its cash requirements.  The Company intends to continue its research and
development activities during the next twelve months.

         The Company intends to continue  product  development  with the test of
three  full-scale  systems  to  be  operated  at  Utah  State  University,   Cal
Poly-Pomona  and the  University of Wisconsin.  These units will be employed for
continued  demonstrations  and  sales  activity.  While  the  development  of an
input/feed conveyor system has been completed, a variable discharge mechanism to
load and unload the  bioreactor  needs to be completed.  In addition,  a liquids
waste process has been developed but needs to have its testing completed.


51601:031
                                       9
<PAGE>



RESULT OF OPERATIONS

COMPARISON OF THREE MONTHS ENDED DECEMBER 31, 1998 AND 1997.

         The Company  recognized no revenue for the three months ended  December
31, 1998,  and for the three months  ended  December 31, 1997.  During each such
quarter,  the  Company's  efforts  were  directed  at  researching,   designing,
developing and testing its Closed-Loop Waste Management System and, in addition,
during the quarter  ended  December 31, 1998,  the Company  commenced  marketing
efforts for the Closed-Loop Waste 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 the three months ended December
31, 1998, decreased by $125,504,  or approximately 59%, to $88,400 from $213,904
for the three months ended  December  31,  1997.  This  decrease in research and
development  expenses  reflects  finalization  of  the  Company's  research  and
development  efforts  and the  commencement  of testing  its  Closed-Loop  Waste
Management System.

         General and  administrative  expenses  primarily consist of general and
administrative  costs  related to the salaries of the  Company's  administrative
personnel and associated costs, including legal and consulting fees. General and
administrative  expenses for the three months ended December 31, 1998, increased
by  $224,094,  or  approximately  388%,  to $281,904  from $57,810 for the three
months  ended  December 31, 1997.  This  increase in general and  administrative
expenses is mainly attributed to increased spending for the following:
legal and professional fees, salaries and payroll taxes, and travel.

         The Company's loss from  operations for the three months ended December
31, 1998,  increased by $98,590, or approximately 36%, to $370,304 from $271,714
for the three  months  ended  December  31,  1997.  This  increase  in loss from
operations is mainly attributed to increased general and administrative expenses
that were partially offset by reduced research and development expenses.

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
March 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
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
this  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  continued  research and  development,  working  capital and general
corporate  purposes.  The Private  Placement  Warrants have an initial  exercise
price of $3.875 per share.  The Private  Placement  Warrants 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,  reorganizations,   reclassifications,   consolidations,  certain
dilutive  sales of  securities  for which the  Private  Placement  Warrants  are

51601:031
                                       10
<PAGE>


exercisable  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;  (ii) a
consulting agreement with Strategic Planning Consultants,  Inc., a consultant to
the Company; and (iii) an office lease that expires December 31, 1999.

         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 unforseen 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  limitation,  the extent and
timing of sales of the Company's waste management system,  future product costs,
the timing and costs  associated with the  establishment  and/or  expansion,  as
appropriate,  of  the  Company's  manufacturing,  development,  engineering  and
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 debt or equity financing.  There can be no assurance that,
if and when needed,  additional  financing  will be  available,  or available on
acceptable  terms.  The  inability  to obtain  additional  financing or generate
sufficient cash from operations could require the Company to reduce or eliminate
expenditures  for capital  equipment,  research and  development,  production or
marketing of its products,  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.





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<PAGE>



                           PART II. OTHER INFORMATION

Item 1                     Legal Proceedings

                           None.

Item 2                     Changes in Securities.

                           None

Item 3                     Defaults Upon Senior Securities

                           None.

Item 4                     Submission of Matters to a Vote of Security Holders

                           None.

Item 5                     Other Information

                           None

Item 6                     Exhibits and Reports on Form 8-K

                           (a)      Exhibits:

                                    27.1  Financial Data Schedule

                           (b)      Reports on Form 8-K

                                    None.


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                                       12
<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:            February 12, 1999        By:  /s/Marvin Mears
                                                --------------------------------
                                                Marvin Mears
                                                Chief Executive Officer
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                                       13