<PAGE>
                           FORM 10-QSB
               SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C. 20549

(Mark One)

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

     For the quarterly period ended November 23,2001

                               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 No. 1-10655

                       ENVIRONMENTAL TECTONICS CORPORATION
              ---------------------------------------------------
             (Exact name of registrant as specified in its charter)

          Pennsylvania                                      23-1714256
---------------------------------                       -------------------
  (State or other jurisdiction                            (IRS Employer
of incorporation or organization                        Identification No.)

                           COUNTY LINE INDUSTRIAL PARK
                         SOUTHAMPTON, PENNSYLVANIA 18966
                    ----------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (215) 355-9100
               --------------------------------------------------
              (Registrant's telephone number, including area code)

     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 at least the past 90 days.

                              Yes  x           No
                                  ---             ---

     The number of shares outstanding of the registrant's common stock as of
December 31, 2001 is:  7,145,614

                                       1

<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                      Environmental Tectonics Corporation
                        Consolidated Income Statements
                                  (unaudited)
<TABLE>
<CAPTION>
                                       Three months ended:           Nine months ended:
                                   ---------------------------    ------------------------
                                   November 23,  November 24,     November 23, November 24,
                                      2001           2000           2001           2000
                                   -----------   -------------    ------------ -----------
                                     (thousands, except share and per share information)
<S>                                 <C>            <C>            <C>            <C>
Net Sales                           $ 8,230        $ 8,622        $23,984        $22,773
Cost of goods sold                    4,563          5,813         15,231         13,931
                                    -------        -------        -------        -------

Gross profit                          3,667          2,809          8,753          8,842
                                    -------        -------        -------        -------
Operating expenses:
Selling and administrative            2,199          2,030          5,966          5,575
Research and development                117            162            441            646
                                    -------        -------        -------        -------
                                      2,316          2,192          6,407          6,221
                                    -------        -------        -------        -------
Operating income                      1,351            617          2,346          2,621
                                    -------        -------        -------        -------
Other expenses:
Interest expense                        450            237            980            640
Other, net                               96             45            128             49
                                    -------        -------        -------        -------
                                        546            282          1,108            689
                                    -------        -------        -------        -------
Income before income taxes              805            335          1,238          1,932
Provision for income taxes              141            108             62            681
                                    -------        -------        -------        -------
Income before minority interest         664            227          1,176          1,251
Income (loss) attributable to
  minority interest                       2             -             (7)             24
                                    -------        -------        -------        -------
Net income                          $   662        $   227        $ 1,183        $ 1,227
                                    =======        =======        =======        =======

Per share information:
Income available to common
  shareholders                      $   662        $   227        $ 1,183        $ 1,227
Income per share:  basic            $  0.09        $  0.03        $  0.17        $  0.17
Income per share:  diluted          $  0.09        $  0.03        $  0.16        $  0.16
Number of shares:  basic          7,143,000      7,107,000      7,143,000      7,089,000
Number of shares:  diluted        7,497,000      7,488,000      7,496,000      7,511,000
</TABLE>


The accompanying notes are an integral part of the consolidated financial
statements.

                                       2
<PAGE>

               Environmental Tectonics Corporation
                   Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                                                           November 23, February 23,
                                                                              2001          2001
                                                                           -------------------------
                                                                           (unaudited)
----------------------------------------------------------------------------------------------------
                                                                           (amounts in thousands,
                                                                           except share information
<S>                                                                        <C>           <C>
                Assets
Current assets:
  Cash and cash equivalents                                                $   223        $    851
  Cash equivalents restricted for letters of credit                            696             544
  Accounts receivable, net                                                  19,582          16,776
  Costs and estimated earnings in excess of billings on
    uncompleted long-term contracts                                         11,830           9,595
  Inventories                                                                6,826           4,624
  Deferred tax asset                                                           615             615
  Prepaid expenses and other current assets                                    435             423
                                                                           -------        --------
    Total current assets                                                    40,207          33,428
Property, plant and equipment, at cost, net of accumulated depreci-
  ation of $9,095 at November 23, 2001 and $8,635 at Feb 23, 2001            5,493           5,337
Software development costs, net of accumulated amortization of
  $6,014 at November 23, 2001 and $5,670 at February 23, 2001                1,228           1,191
Other assets                                                                   586             749
                                                                           -------        --------
    Total assets                                                           $47,514        $ 40,705
                                                                           =======        ========
Liabilities and Stockholders' Equity
             Liabilities
Current liabilities:
  Current portion of long-term debt                                        $   291        $    643
  Accounts payable - trade                                                   3,223           1,929
  Billings in excess of costs and estimated earnings on
    uncompleted long-term contracts                                            899           1,712
  Customer deposits                                                          3,174           1,443
  Accrued income taxes                                                         900             754
  Accrued liabilities                                                        1,375           1,877
                                                                           -------        --------
    Total current liabilities                                                9,862           8,358
                                                                           -------        --------
Long-term debt, less current portion:
  Credit facility payable to banks                                          11,780           7,564
  Long-Term Bonds, net                                                       4,920           5,195
  Other                                                                         13              19
                                                                           -------        --------
                                                                            16,713          12,778
                                                                           -------        --------
Deferred income taxes                                                          674             674
                                                                           -------        --------
    Total liabilities                                                       27,249          21,810
                                                                           -------        --------

Minority interest                                                               95              99
                                                                           -------        --------
         Stockholders' Equity
Common stock; $.05 par value; 20,000,000 shares authorized;
  7,145,614 and 7,110,546 issued and outstanding at
  November 23, 2001 and February 23, 2001, respectively                        359             355
                                                                           -------        --------
Capital contributed in excess of par value of common stock                   6,701           6,514
                                                                           -------        --------
Foreign currency translation adjustment                                       (226)           (226)
Retained earnings                                                           13,336          12,153
                                                                           -------        --------
    Total stockholders' equity                                              20,170          18,796
                                                                           -------        --------
Total liabilities and stockholders' equity                                 $47,514        $ 40,705
                                                                           =======        ========
</TABLE>


The accompanying notes are an integral part of the consolidated financial
statements.

                                       3
<PAGE>

                       Environmental Tectonics Corporation
                      Consolidated Statements of Cash Flows
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                      Nine months ended
                                                                   November 23,  November 24,
                                                                       2001          2000
                                                                     -------        -------
                                                                     (amounts in thousands)
<S>                                                                  <C>            <C>
Cash flows from operating activities:
  Net income                                                         $ 1,183        $ 1,227
  Adjustments to reconcile net income to net cash used in
    operating activities:
    Depreciation and amortization                                      1,106          1,012
    Provision for losses on accounts receivable and inventories           82             83
    Minority interest                                                     (4)          (302)
    Changes in operating assets and liabilities:
      Accounts receivable                                             (2,807)        (5,783)
      Costs and estimated earnings in excess of billings on uncom-
        pleted long-term contracts                                    (2,235)        (2,499)
      Inventories                                                     (2,283)          (672)
      Prepaid expenses and other assets                                 (153)          (182)
      Other assets                                                         -            162
      Accounts payable                                                 1,294           (400)
      Billings in excess of costs and estimated earnings on uncom-
        pleted long-term contracts                                      (813)         1,662
      Customer deposits                                                1,731            284
      Accrued income taxes                                               146             17
      Other accrued liabilities                                         (500)          (300)
      Payments under settlement agreements                                 -            (48)
                                                                     -------        -------
Net cash used in operating activities                                 (3,253)        (5,739)
                                                                     -------        -------
Cash flows from investing activities:
  Acquisition of equipment                                              (616)        (1,907)
  Capitalized software development costs                                (381)          (330)
  Purchase of subsidiary, net                                              -            142
                                                                     -------        -------
Net cash used in investing activities                                   (997)        (2,095)

Cash flows from financing activities:
  Borrowings under credit facility                                     7,275          4,460
  Payments under credit facility                                      (3,059)        (2,500)
  (Repayment of)/proceeds from long-term bonds                          (275)         5,470
  Deferred financing costs                                                 -           (175)
  Cash equivalents restricted for letters of credit                     (152)          (751)
  Proceeds from issuance of common stock/warrants                        191            678
  Capital leases/other                                                  (358)           (66)
                                                                     -------        -------
Net cash provided (used) by financing activities                       3,622          7,116
                                                                     -------        -------

Effect of exchange rate changes on cash                                    -           (233)
Net increase (decrease) in cash and cash equivalents                    (628)          (951)
Cash and cash equivalents at beginning of period                         851          1,725
                                                                     -------        -------
Cash and cash equivalents at end of period                           $   223        $   774
                                                                     =======        =======
Supplemental schedule of cash flow information:
  Interest paid                                                          701            429
  Income taxes paid                                                      195            661

Supplemental information on noncash operating and investing activities:
  During the nine months ended November 23, 2001, the Company purchased
  for $100 a 99% ownership in ETC Europe, resulting in goodwill of $26.
  During the nine months ended November 24, 2000, 25,000 shares of the
  Company's Series A Preferred stock were converted into 666,666 shares
  of common stock, which was subsequently issued to Sirrom Capital
  Corporation.
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

                                       4
<PAGE>
                       Environmental Tectonics Corporation
                   Notes to Consolidated Financial Statements
  (amounts in dollars, except where noted and share and per share information)

1.  Basis of Presentation

     The accompanying consolidated financial statements include the accounts of
Environmental Tectonics Corporation ("ETC" or the "Company"), its wholly-owned
subsidiaries ETC International Corporation, Entertainment Technology
Corporation, and ETC Europe, and its majority-owned subsidiary ETC-PZL Aerospace
Industries, Ltd. ("ETC-PZL").

     The accompanying consolidated financial statements have been prepared by
Environmental Tectonics Corporation, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission, and reflect all
adjustments which, in the opinion of management, are necessary for a fair
statement of the results for the interim periods presented. All such adjustments
are of a normal recurring nature.

Certain information in footnote disclosures normally included in financial
statements prepared in conformity with accounting principles generally accepted
in the United States of America has been condensed or omitted pursuant to such
rules and regulations and the financial results for the period presented may not
be indicative of the full year's results, although the Company believes the
disclosures are adequate to make the information presented not misleading. These
financial statements should be read in conjunction with the financial statements
and the notes thereto included in the Company's Annual Report on Form 10-K for
the year ended February 23, 2001. Certain reclassifications have been made to
the fiscal 2001 financial statements to conform with the fiscal 2002
presentation.

2.  Earnings per Share

     Basic earnings per share excludes dilution and is computed by dividing
income available to common shareholders by the weighted average common shares
outstanding for the period. Diluted earnings per share reflects the potential
dilution that could occur if securities or other contracts to issue common stock
were exercised and converted into common stock or resulted in the issuance of
common stock that then shared in the earnings of the entity. The following table
demonstrates the components of basic and diluted earning per share for the three
and nine-month periods ended November 23, 2001 and November 24, 2000.

                                       5
<PAGE>
<TABLE>
<CAPTION>
                                                (amounts in thousands, except
                                               share and per share information)
                                       Three months ended:          Nine months ended:
                                  --------------------------------------------------------
                                    November 23,  November 24,   November 23, November 24,
                                      2001           2000           2001           2000
<S>                               <C>            <C>            <C>            <C>
Net income                              $662           $227         $1,183         $1,227

Income available to common
  stockholders                          $662           $227         $1,183         $1,227
                                   =========      =========      =========      =========
Basic earnings per share:
  Weighted average shares          7,143,000      7,107,000      7,143,000      7,089,000
  Per share amount                     $0.09          $0.03          $0.17          $0.17
                                   =========      =========      =========      =========

Diluted earnings per share:
  Weighted average shares          7,143,000      7,107,000      7,143,000      7,089,000
  Effect of dilutive securities:
    Stock options                     43,000         69,000         43,000        124,000
    Stock warrants                   311,000        312,000        310,000        298,000
                                   ---------      ---------      ---------      ---------
                                   7,497,000      7,488,000      7,496,000      7,511,000
  Per share amount                     $0.09          $0.03          $0.16          $0.16
                                   =========      =========      =========      =========
</TABLE>

3.  Accounts Receivable

     The components of accounts receivable are as follows:
<TABLE>
<CAPTION>
                                                                  November 23, February 23,
                                                                    2001           2001
                                                                   -------        -------
                                                                   (amounts in thousands)
<S>                                                                <C>            <C>
U.S. Government receivables billed and unbilled contract costs
  subject to negotiation                                           $ 6,229        $ 5,707
U.S. commercial receivables billed                                   6,199          2,484
International receivables billed and unbilled contract costs
  subject to negotiation                                             7,373          8,955
                                                                   -------        -------
Other                                                                  150              -
-----------------------------------------------------------------------------------------
                                                                    19,951         17,146
Less allowance for doubtful accounts                                  (369)          (370)
                                                                   -------        -------
                                                                   $19,582        $16,776
                                                                   =======        =======
</TABLE>

                                       6
<PAGE>

U.S. Government receivables billed and unbilled contract costs subject to
negotiation:

     Unbilled contract costs subject to negotiation represent claims made or to
be made against the U.S. Government under a contract for a centrifuge. These
costs were recorded beginning in fiscal year 1994, including $1,148,000 recorded
during the first quarter of fiscal 2001. The Company has recorded claims,
amounting to $3,898,000 to the extent of contract costs incurred, and accounts
receivable of $1,649,000 representing the balance due under the contract. With
respect to this portion of the claim, the Government has alleged defects and
other discrepencies as a basis for non-payment of contract amounts. To the
extent the Government is successful in this effort, payment of this balance due
would be reduced or completely offset. Claim costs have been incurred in
connection with U.S. Government caused delays, errors in specifications and
designs, and other unanticipated causes and may not be received in full during
fiscal 2002. In conformity with accounting principles generally accepted in the
United States of America, revenue recorded by the Company from a claim does not
exceed the incurred contract costs related to the claim. The Company currently
has approximately $12,000,000 in claims filed with the U.S. Government
(including the aforementioned recorded claim and accounts receivable balances),
which are subject to negotiation and audit by the U.S. Government. The U.S.
Government has responded to the claims with either denials or deemed denials
that the Company has appealed. In May 2000, the Company and the U.S. Government
reached an agreement in principle, which would have included resolution of all
U.S. Navy claims on a global basis and contracted additional work on the
centrifuge. In July 2000, the Company received notice that the Navy, citing an
inability to obtain the prerequisite approvals and thus the necessary funding to
effect the settlement, was rescinding the agreement. The Company is currently
engaged in litigation and has agreed to pursue Alternative Dispute Resolution
(ADR) procedures in parallel with the litigation.

International receivables and unbilled contract costs subject to negotiation

     International receivables billed includes $700,000 related to a certain
contract with the Royal Thai Air Force.

     In October 1993, the Company was notified by the Royal Thai Air Force
("RTAF") that the RTAF was terminating a certain $4,600,000 simulator contract
with the Company. Although the Company had performed in excess of 90% of the
contract, the RTAF alleged a failure to completely perform. In connection with
this termination, the RTAF made a call on a $230,000 performance bond, as well
as a draw on an approximately $1,100,000 advance payment letter of credit. Work
under this contract had stopped while under arbitration, but on October 1, 1996,
the Thai Trade Arbitration Counsel rendered its decision under which the
contract was reinstated in full and the Company was given a period of nine
months to complete the remainder of the work. Except as noted in the award, the
rights and obligations of the parties remained as per the original contract
including the potential invoking of penalties or termination of the contract for
delay. On December 22, 1997, the Company successfully performed acceptance
testing and the unit passed with no discrepancy reports. Although the contract
was not completed in the time allotted, the Company has requested an extension
on the completion time due to various extenuating circumstances, including
allowable "force majeure" events, one of which was a delay in obtaining an
export license to ship parts required to complete the trainers. On August 30,
2001, the Company received a payment of $230,000 representing the amount due on
the performance bond; the balance of $700,000 due on the contract is still under
review and at this point the Company is not able to determine what, if any,
impact the extended completion period will have upon the receipt of final
payment. However, the Company continues to pursue collection.

                                       7
<PAGE>

     Unbilled contract costs subject to negotiation represent claims made or to
be made against an international customer for two contracts covering 1996 to the
present. Claims receivables and resulting revenue aggregating $5,560,000 have
been recorded. Claim costs have been incurred in connection with customer caused
delays, errors in specifications and designs, other out-of-scope items and
exchange losses and may not be received in full during fiscal 2002. In
conformity with accounting principles generally accepted in the United States of
America, revenue recorded by the Company from a claim does not exceed the
incurred contract costs related to the claim. The Company has submitted a claim
for one of the contracts to the customer and has also submitted to the customer
requests for equitable contract price adjustments on the other contract. As a
related item, during the third quarter of fiscal 2000, the aforementioned
international customer, citing failure to deliver product within contract terms,
assessed liquidated damages totalling approximately $1,600,000 on two contracts
currently in progress. The Company disputes the basis for these liquidated
damages and plans to contest them vigorously. However, following generally
accepted accounting principles, the Company has reduced contract values and
corresponding revenue recognition by approximately $1,600,000.

      On July 20, 2001, the Company was notified by the international customer
that they were terminating the centrifuge contract, which was approximately 90%
complete. The termination included a request for the refund of advance milestone
payments made to date. At this point the Company is not able to assess the
ultimate impact of the termination on current operations and financial results.
As of November 23, 2001, the Company had recorded on its books the following
amounts for the contract inception to date: revenue (including claims revenue)
of $19,728,000, cost of goods sold of $13,202,000, costs and estimated earnings
in excess of billings on uncompleted long term contracts of $16,677,000, claims
receivables of $3,051,000, and billings in excess of costs and estimated
earnings on uncompleted long term contracts of $10,099,000.


4.  Inventories

     Inventories are valued at the lower of cost or market using the first in,
first out (FIFO) method and consist of the following (net of reserves):

                                    November 23, February 23,
                                      2001          2001
                                    -----------  -----------
                                     (amounts in thousands)
Raw materials                        $  382        $  359
Work in Process                       6,444         4,265
                                     $6,826        $4,624

5. Stockholders' Equity

     The components of stockholders' equity at February 23, 2001 and November
23, 2001 were as follows:

<TABLE>
<CAPTION>
                                    (amounts in thousands, except share information)
                                Common Stock     Additional Accumulated
                              ---------------      Paid in  other comp.  Retained
                              Shares    Amount     Capital    income     Earnings    Total
                            ---------   ------     -------    -----      --------   -------
<S>                         <C>          <C>       <C>         <C>        <C>       <C>
Balance, February 23,
  2001                      7,110,546    $355      $6,514      $ (226)   $12,153   $18,796

Net income for nine
  month period ended
  November 23, 2001             -          -          -           -        1,183     1,183
Other conprehensive loss        -          -          -           -           -          -
                            ---------    ----      ------     -------    -------   -------
Total comprehensive income      -          -          -           -           -      1,183
Shares issued in con-
  nection with employee
  stock option plans           35,068       4         187         -           -        191
                            ---------    ----      ------     -------    -------   -------
Balance at November 23,
  2001                      7,145,614    $359      $6,701       $(226)   $13,336   $20,170
                            =========    ====      ======     =======    =======   =======
</TABLE>

                                       9
<PAGE>

6.  Business Segment Presentation:

     The Company primarily manufactures under contract various types of
high-technology equipment that it has designed and developed. The Company
considers its business activities to be divided into two segments: Aircrew
Training Systems (ATS) and Industrial Simulation. The ATS business segment
produces devices which create and monitor the physiological effects of motion,
including spatial disorientation and centrifugal forces for the medical,
training, research and entertainment markets. The Industrial Group produces
chambers that create environments that are used for sterilization, research, and
medical applications. The following segment information reflects the accrual
basis of accounting:

                                          Industrial
                                ATS         Group       Total
                             ----------  ----------  ----------
                                    (amounts in thousands)
Three months ended
  November 23, 2001
-------------------
Net Sales                     $ 5,809    $ 2,421         $  8,230
Interest Expense                  380         70              450
Deprec. And Amort.                335        184              519
Operating Income                1,335        287            1,622
Income Tax Prov.                  206         36              242
Identifiable Assets            32,732      6,584           39,316
Expend. For Seg. Assets            16          4               20

Three months ended
  November 24, 2000
-------------------
Net Sales                     $ 5,758    $ 2,864          $ 8,622
Interest Expense                  209         28              237
Deprec. And Amort.                176        158              334
Operating Income                1,467       (560)             907
Income Tax Prov.                  441       (207)             234
Identifiable Assets            28,981      4,411           33,392
Expend. For Seg. Assets         1,391        151            1,542

Reconciliation to               2001       2000
consolidated amounts            ----       ----
   Corporate assets           $ 8,198    $ 8,458
                              -------    -------
   Total assets               $47,514    $41,850

   Segment operating income   $ 1,622    $   907
   Less interest expense         (450)      (237)
   Less income taxes             (242)      (234)
                              -------    -------
Total profit for segments     $   930    $   436

Corporate home off. exps.        (271)      (290)
Interest and other exps.          (96)      ( 45)
Income tax benefit                101        126
Minority interest                  (2)         0
                              -------    -------
Net income                    $   662    $   227
                              =======     ======

                                       10
<PAGE>

                                         Industrial
                                ATS         Group       Total
                            ----------  -----------  ----------
                                    (amounts in thousands

Nine months ended
  November 23, 2001
-------------------
Net Sales                     $ 16,395    $7,589         $23,984
Interest Expense                   822       158             980
Deprec. And Amort.                 748       358           1,106
Operating Income                 1,679     1,390           3,069
Income Tax Prov.                   333       (47)            286
Identifiable Assets             32,732     6,584          39,316
Expend. For Seg. Assets            510       106             616


Nine months ended
  November 24, 2000
-------------------
Net Sales                     $ 16,461    $6,312         $22,773
Interest Expense                   553        87             640
Deprec. And Amort.                 638       374           1,012
Operating Income                 4,153      (813)          3,340
Income Tax Prov.                 1,288      (316)            972
Identifiable Assets             28,981     4,411          33,392
Expend. For Seg. Assets          1,664       243           1,907

Reconciliation to consol. amts:   2001      2000
                                  ----      ----
   Corporate assets           $  8,198    $ 8,458
                              --------    -------
   Total assets               $ 47,514    $41,850

   Segment operating income   $  3,069    $3,340
   Less interest expense          (980)     (640)
   Less income taxes              (286)     (972)
                              --------    ------
Total profit for segments     $  1,803    $1,728

Corporate home off. exps.         (723)     (719)
Interest and other exps.          (128)      (49)
Income tax benefit                 224       291
Minority interest                    7       (24)
                              --------    ------
Net income                    $  1,183    $1,227
                              ========    ======

Segment operating income consists of net sales less applicable costs and
expenses related to those revenues. Unallocated general corporate expenses and
other miscellaneous fees have been excluded from total profit for segments.
General corporate are primarily central administrative office expenses including
executive salaries, stockholders expenses and legal and accounting fees. Other
miscellaneous expenses include banking and letter of credit fees. Property,
plant and equipment are not identified with specific business segments, as these
are common resources shared by all segments.

                                       11
<PAGE>

Approximately 69.4% of sales totaling $5,709,000 in the third quarter of fiscal
2002 were made to one international and one domestic customer primarily in the
ATS segment. Approximately 39.9% of sales totaling $3,442,000 in the third
quarter of fiscal 2001 were made to one domestic and one international customer
in the ATS segment.

Approximately 59.5% of sales totaling $14,265,000 in the nine months ended
November 23, 2001, were made to one international and one domestic customer
primarily in the ATS area. Approximately 47.2% of sales totaling $10,760,000 in
the nine months ended November 24, 2000, were made to two international
customers and one domestic customer primarily in the ATS segment.

Included in the segment information for the third quarter of fiscal 2002 are
export sales of $ 2,941,000. Of this amount, there are sales to commercial or
government accounts in Thailand of $1,729,000. Sales to the US government and
its agencies aggregate $122,000 for the period.

Included in the segment information for the third quarter of fiscal 2001 are
export sales of $4,108,000. Of this amount, there are sales to commercial or
government accounts in Great Britain of $1,425,000 and Africa of $786,000. Sales
to the US government and its agencies aggregate $315,000 for the period.

Included in the segment information for the nine months ended November 23,2001,
are export sales of $8,200,000. Of this amount, there are sales to commercial or
government accounts in Thailand of $2,971,000, Great Britain of $1,033,000 and
Japan of $1,103,000. Sales to the US government and its agencies aggregate
$939,000 for the period.

Included in the segment information for the nine months ended November 24, 2000,
are export sales of $10,490,000. Of this amount, there are sales to commercial
or government accounts in Great Britain of $3,394,000 and Africa of $2,313,000.
Sales to the US government and its agencies aggregate $1,888,000 for the period.


                                       12
<PAGE>

7.  Recent Accounting Pronouncements

     In January 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, " Accounting and
Derivative Instruments and Hedging Activity." SFAS No. 133 requires the
recognition of all derivative financial instruments as either assets or
liabilities in the Consolidated Balance Sheet, and the periodic adjustment of
those instruments to fair value. The classification of gains and losses
resulting from changes in the fair value of derivatives is dependent on the
intended use of the derivative and its resulting designation. Adjustments to
reflect changes in fair values of derivatives that are not considered highly
effective hedges are reflected in earnings. Adjustments to reflect changes in
fair values of derivatives that are considered highly effective hedges are
either reflected in earnings and largely offset by corresponding adjustments
related to the fair values of the hedged items, or reflected in other
comprehensive income until the hedged transaction matures and the entire
transaction is recognized in earnings. The change in fair value of the
ineffective portion of a hedge is immediately recognized in earnings. SFAS No.
133 is effective for periods beginning after June 15, 1999. This effective date
was later deferred to all periods beginning after June 15, 2000 by SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities-Deferral of the
Effective Date of FASB Statement Number 133" The adoption of SFAS No. 133 had no
impact on the Company's consolidated financial position or results of
operations.

     On June 29,2001, FASB approved for issuance SFAS No. 141, Business
Combinations, and SFAS No. 142, Goodwill and Intangible Assets. Major provisions
of these statements are as follows: all business combinations initiated after
June 30, 2001, must use the purchase method of accounting; the pooling of
interest method of accounting is prohibited except for transactions initiated
before July 1, 2001; intangible assets acquired in a business combination must
be recorded separately from goodwill if they arise from contractual or other
legal rights or are separable from the acquired entity and can be sold,
transferred, liscensed, rented or exchanged, either individually or as part of a
related contract, asset or liability; goodwill and intangible assets with
indefinite lives are not amortized but are tested for impairment annually,
except in certain circumstances, and whenever there is an impairment indicator;
all acquired goodwill must be assigned to reporting units for purposes of
impairment testing and segment reporting. Effective January 1, 2002, for
calendar year-end companies and February 24,2002 for the Company, goodwill will
no longer be subject to amortization. Although it is still reviewing the
provisions of these statements, management's preliminary assessment is that
these statements will not have a material impact on the Company's financial
position or results of operations.


                                       13
<PAGE>

Item 2.  Management's Discussion and Analysis of Results of
         Operations and Financial Condition
    (amounts in dollars, except where noted and share and per share amounts)

                    Forward Looking Statements
    Except for historical information, this report may be deemed to contain
"forward-looking" statements. The Company desires to avail itself of the Safe
Harbor provisions of the Private Securities Litigation Reform Act of 1995(the
"ACT") and is including this cautionary statement for the express purpose of
availing itself of the protection afforded by the ACT.
    These forward-looking statements include statements with respect to the
Company's vision, mission, strategies, goals, beliefs, plans, objectives,
expectations, anticipations, estimates, intentions, financial condition, results
of operations, future performance and business of the Company, including but not
limited to, (i) projections of revenue, costs of raw materials, income or loss,
earnins or loss per share, capital expenditures, growth prospects, dividends,
the effects of currency fluctuations, capital structure and other financial
items, (ii) statements of objectives or other plans of the Company or its
management or Board of Directors, including the introduction of new products, or
estimates or predictions of actions of customers, suppliers, competitors or
regulating authorities, (iii) statements of future economic performance, (iv)
statements of assumptions and other statementsabout the Company or its business,
and (v) statements preceeded by, followed by or that include the words "may",
"could", "should", "proforma", "lookind forward", "would", "believe", "expect",
"anticipate", "estimate", "intend", "plan", or similar expressions. These
forward-looking statements involve risks and uncertainties, which are subject to
change based on various important factors (some of which, in whole or in part,
are beyond the Company's control). The following factors, among others, could
cause the Company's financial performance to differ materially from the goals,
plans, objectives, intentions and expectations expressed in such forward-looking
statements: (1) the strength of the United States and global economies in
general and the strength of the regional and local economies in which the
Company conducts operations; (2) the effects of, and changes in, U.S. and
foreign governmental trade, monetary and fiscal policies and laws; (3) the
impact of domestic or foreign military or political conflicts and turmoil; (4)
the timely development of competitive new products and services by the Company
and the acceptance of such products and services by customers; (5) the
willingness of customers to substitute competitors' products and services and
vice versa; (6) the impact on operations of changes in U.S. and governmental
laws and public policy, including environmental regulations; (7) the level of
export sales impacted by export controls, changes in legal and regulatory
requirements, policy changes affecting the markets, changes in tax laws and
tariffs, exchange rate fluctuations, political and economic instability, and
accounts receivable collection; (8) technological changes; (9) regulatory or
judicial proceedings; (10) the impact of any current or future litigation
involving the Company, and; (11) the success of the Company at managing the
risks involved in the foregoing.
     The Company cautions that the foregoing list of important factors is not
exclusive. The Company does not undertake to update any forward-looking
statement, whether written or oral, that may be made from time to time by or on
behalf of the Company.

                                       14
<PAGE>

Results of Operations
Three months ended November 23, 2001 compared to November 24, 2000.

     The Company had net income of $662,000, or $.09 per share (diluted), versus
net income of $227,000 or $.03 per share (diluted), for the corresponding third
quarter of fiscal 2001. Sales for the quarter were $8,230,000, a decrease of
$392,000 or 4.5%, over the corresponding prior period. The primary contributors
to the sales decrease were reduced Sterilizer and Environmental shipments
(although both groups had significant work-in-progress at quarter end) and
international ATS sales, which have been negatively impacted by global economic
conditions. Partial offsets were increases in domestic Entertainment, which
recently settled open disputes with a major customer which generated additional
revenue in the quarter, and international Hyperbaric sales related to work on a
contract for equipment in Thailand. Overall, domestic sales were up $968,000, or
23.1% from the prior period, reflecting the aforementioned Entertainment
increase, and represented 62.8% of the Company's total sales, up from 48.7% a
year ago. Sales to the U.S. Government decreased $193,000 and represented 1.5%
of total sales versus 3.7% for the prior period. International sales were down
$1,167,000 or 28.4%, and represented 35.7% of total sales, down from 47.6% in
the prior period, reflecting the aforementioned global downturn. Throughout the
Company's history, most of the sales for Aircrew Training Products have been
made to international customers. The Company has subsidiaries in the United
Kingdom, Poland and Turkey, maintains regional offices in the Middle East, Asia,
and Canada, and uses the services of approximately 100 independent sales
organizations and agents throughout the world. In the three months ended
November 23, 2001, international sales totaling at least $500,000 were made to
Thailand. In the three months ended November 24, 2000, international sales
totaling at least $500,000 per country were made to Nigeria and Great Britain.
Fluctuations in sales to international countries from year to year primarily
reflect revenue recognition on the level and stage of development and production
on multi-year long-term contracts.
        Risks associated with international operations that might be different
from those domestically include the strength of global economies in general and
the strength of the regional and local economies in which the Company conducts
operations, the effect of foreign military or political conflicts and turmoil,
changes in foreign government trade, monetary and fiscal policies and laws,
export controls, exchange rate fluctuations and political and economic
instability. Unusual risks that might be associated with sales to less developed
nations include U.S. Dollar and monetary system controls and a heightened risk
of political, economic and civil turmoil.

                                       15
<PAGE>

     The Company recognizes revenue utilizing three methods. On long-term
contracts, the percentage of completion method is applied based on costs
incurred as a percentage of estimated total costs. Revenue recognized on
uncompleted long-term contracts in excess of amounts billed to customer is
reflected as an asset. Amounts billed to customers in excess of revenue
recognized on uncompleted long-term contracts are reflected as a liability. When
it is estimated that a contract will result in a loss, the entire amount of the
loss is accrued. The effect of revisions in cost and profit estimates for
long-term contracts is reflected in the accounting period in which the facts
requiring the revisions become known. Contract progress billings are based upon
contract provisions for customer advance payments, contract costs incurred, and
completion of specified contract milestones. Contracts may provide for customer
retainage of a portion of amounts billed until contract completion. Retainage is
generally due within one year of completion of the contract. Revenue recognition
under the percentage of completion method requires significant judgment and
therefore involves significant estimates, which are reasonably subject to
change. Revenue for contracts under $100,000, or to be completed in less than
one year, and where there are no post shipment services included in the
contract, and revenue on parts and services, are recognized as shipped. Revenue
on contracts under $100,000, or to be completed in less than one year, and where
post shipment services (such as installation and customer acceptance) are
required, is recognized after customer acceptance. Revenue for service contracts
is recognized ratably over the life of the contract with related material costs
expensed as incurred.
      In accordance with accounting principles generally accepted in the United
States of America, revenue on contract claims and disputes, for customer caused
delays, errors in specifications and designs, and other unanticipated causes,
and for amounts in excess of contract value, is generally appropriate if it is
probable that the claim will result in additional contract revenue and if the
amount can be reliably estimated.
      Revenue recorded on a contract claim cannot exceed the incurred contract
costs related to that claim. Significant claims outstanding at November 23, 2001
included the U.S. Navy ($5.5 million recorded) and two claims against an
international customer ($5.6 million recorded). Although claim receivables are
recorded as current assets in the financial statements, claim revenues may not
be received in full during fiscal 2002. Claims against the U.S. navy totaling
approximately $12.0 million were filed in previous years. The Company is
currently engaged in litigation with the U.S. Navy and has agreed to pursue
Alternate Dispute Resolution (ADR) procedures in parallel with the litigation.
One of the claims against the international customer was filed in March 2001,
and the other is being developed.

     Gross profit was up $858,000 or 30.5% from the prior period, as an improved
rate as a percent of sales completely offset the lower sales level. Rate
increases were evidenced in Environmental, Hyperbaric (which experienced higher
international sales at a higher rate) and Entertainment, up 19.7 percentage
points on a higher sales level, reflecting the aforementioned settlement.

     Selling and administrative expenses increased $169,000 or 8.3%, primarily
reflecting increased commissions and claims expenses. When adjusted for these
items, selling and administrative expenses on a pro-forma basis decreased
$97,000 or 5.7% from the prior year's corresponding quarter.

     Research and development expenses, which are charged to operations as
incurred, were down from the prior period reflecting reduced product development
primarily in the Company's Turkish operation.

     Interest and other expenses were up $264,000 or 93.6%. The major component
in this increase was the charge off of $195,000 of deferred finance costs
associated with the Company's refinancing in March 1997, which debt was
subsequently paid off.

                                       16
<PAGE>

     The Company's tax provision for the current quarter reflected a pro-forma
effective rate of 30% before a $100,000 research tax credit. The prior period
rate approximated the statutory rate of 35%.
      During fiscal 2002, the Company received inquiries and tax assessments for
the years 1995 through 1999 from Inland Revenue in Great Britain related to the
Company's Great Britain operation. In the Company's opinion, the assessments are
arbitrary and have no basis in fact. The Company plans to shortly complete and
file a formal response to Inland Revenue. Should additional taxes result, the
Company believes that any amount would be immaterial and the Company has some
options to offset any additional liability including filing for foreign tax
credits on the Company's U.S. tax return and applying any tax liability against
the Company's current income tax reserve.

Results of Operations
Nine months ended November 23,2001 compared to November 24, 2000.

     The Company had net income of $1,183,000, or $.16 per share (diluted),
versus net income of $1,227,000, or $.16 per share (diluted), for the
corresponding period of fiscal 2001. Sales for the nine months were $23,984,000,
an increase of $1,211,000 or 5.3% over the corresponding prior period. The
primary contributors to the sales increase were entertainment sales, which more
than doubled, and Hypo/hyperbaric sales (up 134.0%). Acting as partial offsets
were decreases in the other business groups and for the Company's Polish
Subsidiary, which has suffered from disruptions in the Polish government and
economy.

     Overall, domestic sales were up $4,449,000 or 42.8% over the prior period,
and represented 61.9% of the Company's total sales, up from 45.6% a year ago.
The primarily component to this increase was additional entertainment sales for
a large entertainment ride contract currently in progress. Government sales were
down $949,000 or 50.2% over the prior period, as the prior period included
additional governmental claims revenue of $572,000, and represented 3.9% of
total sales, down from 8.3% in the prior period. International sales were down
$2,289,000 or 21.8% and represented 34.2% of total sales, down from 46.1% for
the prior period, reflecting global economic conditions.
    During the nine months ended November 23, 2001, international sales totaling
at least $500,000 were made to Great Britain, Thailand, Russia, Japan and
Turkey. During the nine months ended November 24, 2000, international sales
totaling at least $500,000 per country were made to Great Britain and Nigeria.

     Gross profit decreased $89,000, or 1.0% and the rate as a percent of sales
dropped 2.3 percentage points, as the prior period included significant U.S.
Government claims revenue at a high rate as a percent of sales. As a percentage
of sales, gross profit was 36.5%, compared to 38.8% for the same period a year
ago.

                                       17
<PAGE>

     Selling and administrative expenses increased $391,000, or 7.0%, primarily
reflecting increased commissions and claims expenses. When adjusted for these
items, selling and administrative expenses on a pro-forma basis increased
$78,000 or 1.6%.

     Research and development expenses, which are charged to operations as
incurred, were down $205,000 or 31.7% between the periods reflecting reduced
product development primarily in the Company's Turkish Branch.

     Interest and other expenses were up $419,000 or 60.8% from the prior
period. The major component in this increase was the charge off of $195,000 of
deferred finance costs associated with the Company's refinancing in March 1997.
The debt was subsequently paid off. Additional contributors to the increase were
additional interest expense on higher borrowings albeit at a lower rate and less
interest income on lower invested cash.

     The Company's tax provision in the current period reflected a pro-forma
effective rate of 30% before a $300,000 research tax credit. The prior period
rate approximated the statutory rate of 35%.

Liquidity and Capital Resources

     During the nine month period ended November 23,2001, the Company used
$3,253,000 for operating activities. This was primarily a result of an increase
in accounts receivable, inventories and costs and estimated earnings in excess
of billings on uncompleted long-term contracts, and a decrease in billings in
excess of costs and estimated earnings on uncompleted long-term contracts. Cash
was generated by net income and non-cash expenses and increases in accounts
payable and customer deposits. Versus last year's corresponding period, net cash
used in operating activities reflected a decrease of $2,486,000 as the prior
period included a significant increase in accounts receivable.

     Investing activities, consisting of purchases for capital equipment and
capitalized software, as a total were down significantly from the prior period.

     Financing activities consisted primarily of bank borrowings to fund the
operating and financing cash requirements partially reduced by a mandatory
repayment of $275,000 on long term bonds and the payment of a $350,000 note
related to the original purchase of ETC-PZL, the Company's Polish Subsidiary. On
May 21, 2001, the Company signed an amendment to its revolving credit agreement,
which modified the Funds Flow Ratio loan covenant for the three fiscal quarters
through November 23, 2001.

                                       18
<PAGE>

Backlog

     The Company's sales backlog at November 23, 2001, and February 23, 2001,
for work to be performed and revenue to be recognized under written agreements
after such dates was approximately $30,865,000 and $40,439,000 respectively. In
addition, the Company's training and maintenance contracts backlog at November
23, 2001, and February 23,2001, for work to be performed and revenue to be
recognized after that date under written agreements was approximately $1,941,000
and $1,347,000 respectively.

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

     This report contains certain 'forward-looking statements' including,
without limitation, statements containing the words "believes", "anticipates",
intends", "expects", and words of similar import relating to the Company's
operations. There are important factors that could cause actual results to
differ materially from those indicated by such forward-looking statements
including contract delays and cancellations, political unrest in customer
countries, general economic conditions and the risk factors detailed from time
to time in ETC's periodic reports and registration statements filed with the
Securities and Exchange Commission, including, without limitation, ETC's Annual
Report on Form 10-K for the fiscal year ended February 23, 2001.




                                       19
<PAGE>

                   Part II - OTHER INFORMATION

Item 1.  Legal Proceedings
         none

Item 2.  Changes in Securities

     The constituent instruments defining the rights of the holders of any class
of securities were not modified nor were the rights evidenced by any class of
registered securities materially limited or qualified during the period covered
by this report.

Item 3.  Defaults Upon Senior Securities

     No defaults occurred during the period covered in this report.

Item 4.  Submission of Matters to Vote of Security Holders
         At the company's Annual Meeting of Stockholders held on August 30,
2001, the following proposal was adopted by the vote specified below. No other
matters were submitted to a vote of security holders at the Annual Meeting.

Proposal One: to elect five directors to serve until successors have been
elected and qualified.

                                                 Abstentions and
Nominee                 For       Withheld       Broker Nonvotes
--------               -----      ---------      ---------------
David Lazar           6,220,263    669,895              0
Richard McAdams       6,804,068     86,090              0
William F. Mitchell   6,804,068     86,090              0
Pete L. Stevens       6,889,338        820              0
Phillip L. Wagner     6,889,338        820              0

Item 5.  Other Information
         None

Item 6.  Exhibits and Reports on Form 8-K

(a)      Reports on Form 8-K
         none


                                       20
<PAGE>

                                   Signatures

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

Date:  January 14, 2002      ENVIRONMENTAL TECTONICS CORPORATION

                             (Registrant)

                             By:/s/Duane Deaner
                             -----------------------------------
                                Duane Deaner,
                                Chief Financial Officer
                                (authorized officer and
                                principal financial officer)














                                       21
<PAGE>

                                  EXHIBIT INDEX

 3.1  Articles of Incorporation (Incorporated herein by reference to Exhibit 3.1
      to the Registrant's Annual Report on Form 10-KSB for the fiscal year ended
      February 28, 1997).

 3.2  Bylaws (Incorporated herein by reference to Exhibit 3(ii) to the
      Registrant's Annual Report on Form 10-K for the fiscal year ended
      February 25, 1994).












                                       22