SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q



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

                  For the quarterly period ended  November 30, 1996
                                                  -----------------

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

                  For the transition period from _________ to __________

                           Commission File No. 0-19350
                                               -------
                                 ViroGroup, Inc.

             (Exact name of registrant as specified in its charter)



          Florida                                               59-1671036
-------------------------------                            --------------------
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                             Identification No.)



     428 Pine Island Road SW
       Cape Coral, Florida                                   33991
---------------------------------------                    ----------  
(Address of principle executive office)                    (zip code)

Registrant's telephone number including area code:  (941) 574-1919
                                                    --------------
   
Indicated  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  registrant's  common stock,  $.01 Par
Value, as of January 12, 1996 was 6,361,708.





                                  page 1 of 13


<PAGE>



                        VIROGROUP, INC. AND SUBSIDIARIES
                               INDEX TO FORM 10-Q
                         QUARTER ENDED NOVEMBER 30, 1996

                                                                          Page
                                                                          ----

Part I- Financial Information

Consolidated Balance Sheets
 November 30, 1996 and August 31, 1996                                       3

Consolidated Statements of Operations
 Three Months Ended November 30, 1996 and
 November 30, 1995                                                           4

Consolidated Statements of Cash Flows
 Three Months Ended November 30, 1996 and
 November 30, 1995                                                           5

Notes to Consolidated Financial Statements                                   6

Management's Discussion and Analysis of
  Financial Condition and Results of Operations                             10


Part II - Other Information                                                 12


Signature Page                                                              13
























                                  page 2 of 13


<PAGE>




                        VIROGROUP, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                         NOVEMBER 30 AND AUGUST 31, 1996
<TABLE>
<CAPTION>

                                                                   November 30,     August 31,
                                                                      1996             1996
                                                                   -----------       ----------
                                                                   (Unaudited)
<S>                                                                <C>              <C>   
                                    ASSETS
CURRENT ASSETS:
    Cash and cash equivalents....................................  $    40,076      $   191,001
    Accounts receivable, net of allowance for doubtful
      accounts of $492,136, and $502,551, respectively...........    2,478,059        3,384,426
    Unbilled accounts receivable.................................      501,049          717,946
    Prepaid income taxes.........................................       21,685           26,840
    Prepaid expenses and other...................................      236,709          204,313
                                                                   -----------       ----------    
          Total current assets...................................    3,277,578        4,524,526

AMOUNTS DUE FROM STATE AGENCY, net...............................    2,693,132        2,812,737
PROPERTY AND EQUIPMENT, net......................................      500,215          543,746
OTHER ASSETS.....................................................       33,433           35,261
                                                                   -----------       ----------
                                                                   $ 6,504,358      $ 7,916,270
                                                                   ===========      ===========

                         LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
    Accounts payable.............................................  $   805,757      $ 1,160,354
    Accrued liabilities..........................................    1,155,529        1,197,026
    Current maturities of long-term debt.........................        6,151            9,447
    Notes payable................................................    1,810,054        2,491,429
                                                                   -----------       ----------
          Total current liabilities..............................    3,777,491        4,858,256
                                                                   -----------       ----------
COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
    Preferred stock, $.01 par value, 50,000,000 shares
      authorized, 0 shares outstanding...........................        ---               ---
    Common stock, $.01 par value, 50,000,000 shares
      authorized, 6,361,708 issued and outstanding...............       63,618           63,618
    Additional paid-in capital...................................   18,277,867       18,277,867
    Accumulated deficit..........................................  (15,614,618)     (15,283,471)
                                                                   -----------       ----------
          Total shareholders' equity.............................    2,726,867         3,058,014
                                                                   -----------       ----------
                                                                   $ 6,504,358      $ 7,916,270
                                                                   ===========      ===========
</TABLE>




           The accompanying notes to consolidated financial statements
                  are an integral part of these balance sheets.





                                  page 3 of 13


<PAGE>


                        VIROGROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  Three Months Ended November 30, 1996 and 1995
                                   (Unaudited)



                                                        1996           1995
                                                     -----------    -----------

GROSS REVENUES.....................................  $ 2,694,509    $ 4,165,650

COST OF GROSS REVENUES ............................    1,910,298      2,900,593
                                                     -----------    -----------
    Gross profit...................................      784,211      1,265,057

SELLING, GENERAL & ADMINISTRATIVE EXPENSES,
    including rentals to related party of
    $46,500 in 1995................................    1,106,060      1,410,717
                                                     -----------    -----------
    Loss from operations...........................     (321,849)      (145,660)

OTHER INCOME (EXPENSE):
    Net interest expense...........................      (42,574)       (46,986)
    Other, net.....................................       33,275          3,526
                                                     -----------    -----------

    Loss before income taxes ......................     (331,148)      (189,120)

PROVISION FOR INCOME TAXES.........................          ---            ---
                                                     -----------    -----------
    Net loss.......................................  $  (331,148)   $  (189,120)
                                                     ===========    =========== 

LOSS PER SHARE:
    Net loss per common share......................  $      (.05)   $      (.03)
                                                     ===========    =========== 

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING.........    6,361,708      6,361,708
                                                     ===========    ===========











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

                                  page 4 of 13


<PAGE>



                        VIROGROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  Three Months Ended November 30, 1996 and 1995
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                      1996             1995
                                                                   -----------      -----------
<S>                                                                <C>              <C>    
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net Loss.....................................................  $  (331,148)     $  (189,120)
    Adjustments to reconcile net loss to net
    cash provided by (used in) operating activities
       Depreciation and amortization.............................       85,418          103,184
       Provision for recovery of bad debts.......................       27,851          (52,292)
       Gain on disposition of property and equipment.............       (2,321)            (157)
     Changes in assets and liabilities:
         Decrease (increase) in-
           Accounts receivable and amounts due from state agency.      999,951         (591,087)
           Unbilled accounts receivable..........................      216,897          506,301
           Prepaid income taxes..................................        5,155              800
           Prepaid expenses and other assets.....................      (32,396)          55,221
         Increase (decrease) in-
           Accounts payable......................................     (354,597)        (389,483)
           Accrued liabilities,..................................      (41,497)        (297,264)
                                                                   -----------      ----------- 
           Total adjustments.....................................      904,461         (664,777)
                                                                   -----------      -----------
         Net cash provided by (used in) operating activities.....      573,313         (853,897)
                                                                   -----------      -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of property and equipment..........................      (42,597)         (10,049)
    Proceeds from sale of property and equipment.................        3,030           23,668
                                                                   -----------      -----------
      Net cash (used in) provided by investing activities........      (39,567)          13,619
                                                                   -----------      -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from notes payable..................................    1,879,018        3,257,360
    Repayment of notes payable...................................   (2,560,393)      (2,426,934)
    Repayment of long-term debt..................................       (3,296)          (6,721)
    Repayment of capitalized lease obligations...................          ---           (9,816)
                                                                   -----------      -----------
      Net cash (used in) provided by financing activities........     (684,671)         813,889
                                                                   -----------      -----------
DECREASE IN CASH AND CASH EQUIVALENTS............................  $  (150,925)     $   (26,388)

CASH AND CASH EQUIVALENTS, beginning of period...................      191,001          104,793
                                                                   -----------      -----------
CASH AND CASH EQUIVALENTS, end of period.........................  $    40,076      $    78,404
                                                                   ===========      ===========
SUPPLEMENTAL DISCLOSURES:

    Interest paid................................................  $    43,904      $    18,253
                                                                   ===========      ===========
</TABLE>



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






                                  page 5 of 13


<PAGE>



                        VIROGROUP, INC., AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 1996
                                   (UNAUDITED)


(1)     Basis of Presentation

The  consolidated  balance  sheet as of August 31, 1996,  which has been derived
from  audited  statements,  and the  unaudited  interim  consolidated  financial
statements  included  herein,  have  been  prepared  pursuant  to the  rules and
regulations of the Securities and Exchange  Commission.  Certain information and
note disclosures  normally included in annual financial  statements  prepared in
accordance with generally accepted accounting  principles have been condensed or
omitted pursuant to those rules and  regulations,  although the Company believes
that the  disclosures  made are adequate to make the  information  presented not
misleading.

In the opinion of the Company, the accompanying unaudited consolidated financial
statements  contain  all  adjustments   (consisting  of  only  normal  recurring
accruals)  necessary to present fairly the financial  position of the Company as
of  November  30,  1996,  and the results of  operations  and cash flows for the
three-month periods ended November 30, 1996 and 1995.

The accounting  policies followed for quarterly financial reporting purposes are
the  same as those  disclosed  in the  Company's  audited  financial  statements
contained in its Annual  Report on Form 10-K for the year ended August 31, 1996,
as filed with the Securities and Exchange Commission.

(2)     Loss Per Share

Loss  per  share  is  calculated  by  dividing  net loss  attributed  to  common
shareholders  by the weighted  average  number of common shares and common share
equivalents  outstanding  during the periods.  Common share  equivalents are not
considered  for  periods  in which  there is a loss,  as their  impact  would be
antidilutive.  Primary  and  fully  diluted  loss per share are the same for all
periods presented.

(3)     Amounts Due From State Agency

During fiscal 1994, the Company  aggressively  expanded its participation in the
State  of  Florida  financed  programs  to  provide  environmental  services  to
evaluate,  assess and remediate contaminated  underground petroleum storage tank
sites. Through its Inland Protection Trust Fund, the State of Florida reimburses
certain  costs to clean up  eligible  contaminated  sites.  Primarily  due to an
estimated  unfunded  $450  million  backlog and annual tax revenues of only $100





                                  page 6 of 13


<PAGE>


million,  in March 1995 new  legislation  directed  the  Florida  Department  of
Environmental  Protection to cease processing,  with certain limited exceptions,
applications for reimbursement of costs to clean up UST sites eligible for state
funds.

In May, 1996 a new law (The 1996 Act) was passed which  implemented  significant
changes to the  reimbursement  program and addressed the estimated  $450 million
backlog of unpaid  claims.  This 1996 Act  provides for the  elimination  of the
reimbursement  program  effective August 1, 1996 and requires all  reimbursement
applications to be submitted by December 31, 1996.  Also, The 1996 Act creates a
non-profit  public benefit  corporation,  which is expected to be operational by
the Spring of 1997, to finance the unpaid backlog.  This non-profit  corporation
is charged  with  financing  the  estimated  unpaid $450  million  backlog  with
certificates  of  indebtedness.  Payment  of  claims  will  be on a  first-come,
first-served  methodology based on application filing date and an assumed annual
funding  rate of $100  million.  Claims  paid will be subject  to a 3.5%  annual
discount in consideration for the anticipated accelerated payment as compared to
the previously  expected period of 4 to 5 years. The Company estimates the State
will not make significant payments under the program until the fourth quarter of
fiscal 1997 to the second quarter of fiscal 1998.

Due to the State's  cancellation of the 1995 law and other prior law relating to
the  program,  and the  provisions  of the 1996 Act, the Company in prior fiscal
years  recorded  valuation  allowances  on the  amounts due to reflect the state
mandated  discount  and  potential  denied  costs.  At  August  31,  1996  these
allowances  totaled $931,665 with $889,937  applied as a valuation  allowance to
the amounts due resulting in a net amount of $2,812,737 shown as the Amounts Due
from State Agency, net, in the accompanying consolidated balance sheet at August
31,  1996  and  $41,728  which  is  included  as an  accrued  liability  in this
consolidated balance sheet at August 31, 1996 to reflect the Company's liability
to pay discounts and denied costs on receivables financed by third- parties.

At November 30, 1996 these allowances  totaled $913,918 with $825,974 applied as
an valuation allowance to the amounts due resulting in a net of $2,693,132 shown
as the Amounts Due From State  Agency,  net,  in the  accompanying  consolidated
balance  sheet at November 30, 1996 and $87,944  which is included as an accrued
liability in the consolidated  balance sheet at November 30, 1996 to reflect the
Company's  liability to pay discounts and denied costs on receivable financed by
third-parties.

Of the  approximately  $3.1  million in unfiled  reimbursement  applications  at
August 31, 1996,  the Company  during the three  months ended  November 30, 1996
financed  approximately  $220,000 with third-party  financing entities and filed
approximately  $43,500  directly  with the State.  The Company uses  third-party
financing  because the Company will receive the cash from the  financing  entity
upon  application  filing thus not waiting the estimated 13 months to be paid by
the State,  and the cost of borrowing  from these third parties is less than the
cost of borrowing through the Company's revolving credit line.




                                  page 7 of 13


<PAGE>




Specifically,  the Company  has entered  into  several  arrangements  to finance
substantially  all the  claims to be filed  with the  State  for  reimbursement.
Generally,  these  arrangements  require  the  Company  to pay a 3 - 4%  prepaid
interest  fee at the time the  financing  entity  pays  the  Company.  This is a
non-refundable  fee to cover  administrative  costs and interest costs for up to
the first nine months. If the State has not paid the financing entity within the
first nine  months,  the  interest  costs are  .6875% per month for each  month,
thereafter.  In addition,  the Company must place 13% of the amounts financed in
an interest  bearing escrow account to provide for potential  state denied costs
and state  mandated  interest  discount.  The  interest  earned on the  escrowed
amounts accrues to the Company's benefit and will be recorded as interest income
in the period earned.  The Company estimates it could have as much as a $232,000
liability to the financing entity in excess of the amounts escrowed. The Company
expects to have sufficient funds to pay this potential unfunded liability.

At November  30, 1996 the Company  had  financed  approximately  $419,000 of the
amounts due from the state agency and had recorded in prepaid expenses and other
assets in the  accompanying  consolidated  balance  sheet  escrowed  amounts  of
$89,100.  The  interest  portion of these  amounts will be amortized to interest
expense over a period of the next nine months.

Subsequent to November 30, 1996 the Company filed or financed all of its amounts
due from the State prior to the state mandated  filing  deadline of December 31,
1996.  Of the total $3.9 million in amounts due from the state agency during the
term of the  program,  the Company  financed  approximately  $3.2  million  with
third-parties and filed $.7 million directly with the State.

(4)     Notes Payable

Notes payable at November 30 and August 31, 1996,  consisted of advances against
a $3.0 million line of credit. Under this line of credit, the Company may borrow
up to $3.0  million at an interest  rate of prime  (8.25% at November  30, 1996)
less .25%. Laidlaw, Inc. in lieu of its commitment to provide up to $3.0 million
in debt  financing to the Company  pursuant to the terms of the preferred  stock
conversion agreement of June 26, 1995, caused a letter of credit to be issued to
collateralize  the $3.0 million note.  Substantially all of the Company's assets
secure  this  obligation  to  Laidlaw  in the event of a draw upon the letter of
credit.  The line of credit  expires  January  20, 1997 and the letter of credit
expires  February 20, 1997.  At the letter's  expiration,  Laidlaw has stated it
will comply with the terms of the preferred stock conversion  agreement  whereby
an affiliate  will make  available  to the Company for a three-year  period from
June 26, 1995 up to $3.0 million in financing with advances  thereunder carrying
an interest  rate equal to that  available to Company from  alternative  sources
with the principal and interest to be paid in equal quarterly  installments over
a three-year  period commencing with the line of credit  expiration,  or in lieu
thereof,  cause to be issued under  similar terms as the present  letter,  a new
letter of credit of up to $3.0 million to secure the Company's borrowings.




                                  page 8 of 13


<PAGE>




(5)     Restructuring Charge

Primarily due to the May,  1996 law enacted  relating to the Florida UST Program
and a continued  decline in forecasted  landfill design work, as well as general
market conditions, the Company in fiscal 1996 implemented the third phase of its
restructuring  program. This action resulted in a one-time restructing charge to
Operating  Expenses in fiscal 1996 totaling  $326,428.  The restructuring  costs
remaining to be paid at August 31, 1996 were $174,072 and is included in accrued
liabilities in the August 31, 1996  consolidated  balance  sheet.  For the three
month period ending November 30, 1996,  $29,892 was charged against this accrual
primarily for employee  severance pay and lease expenses on closed offices.  The
Company  believes  the balance of the accrued  restructuring  charge of $144,180
which is  included  in  accrued  liabilities  in the  accompanying  consolidated
balance sheet at November 30, 1996 is adequate to absorb the remaining estimated
restructuring charges.

(6)     Significant Customer Disclosure

The Company  operates in one  industry  segment,  as  contemplated  by Financial
Accounting  Standards  Board  Statement  No. 14.  During the three  months ended
November 30,  1996,  Laidlaw  Environmental  Services,  Inc. and its  affiliates
accounted for approximately 10% and Intercity  Products,  State of Tennessee and
Southern Wood Piedmont  accounted  for 18%, 13% and 10%, of  consolidated  gross
revenues,  respectively.  At November 30, 1996, amounts due from these customers
aggregated  $649,699,  and are  included in  "accounts  receivable,  net" in the
accompanying consolidated balance sheet.
























                                  page 9 of 13


<PAGE>



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

Results of Operations
---------------------

Comparison  of three months ended  November  30, 1996 and 1995.  Gross  revenues
decreased by 35% to  $2,694,509  for the three  months  ended  November 30, 1996
compared  to  $4,165,650  for the same  period of  fiscal  year  1996.  This 35%
decrease in gross revenues results from changes in gross revenues at each of the
Company's two divisions,  Environmental (Enviro) and Hydrogeological (Hydro), as
follows:

                             Gross Revenues For the
                               Three Months Ended
                                   November 30
                               ------------------
                                                              % Increase
          Division                1996           1995        (Decrease)
          --------                ----           ----        ----------

Enviro Florida                $  607,695     $1,177,597         (48)

Enviro South Carolina            779,522      1,429,668         (45)

Enviro Tenn                    1,056,735        913,557          16
                              ----------     ---------- 
TOTAL ENVIRO DIVISION          2,443,952      3,520,822         (31)

HYDRO DIVISION                   250,557        644,828         (61)
                              ----------     ----------
TOTAL VIROGROUP, INC.         $2,694,509     $4,165,650         (35)%
                              ==========     ==========           


Florida  operations  had a decrease in gross revenues of $569,902 from the prior
year. Of this decrease, approximately $135,000 is due from office closures while
the balance was mainly due to the curtailment of the Florida UST program. Of the
$650,146  decrease  in  gross  revenues  from  the  South  Carolina  operations,
approximately $220,000 is due from the closure of the California operation while
the remainder of the balance mainly due to a decrease in landfill design work in
South Carolina. The increase in Tennessee operations gross revenues is primarily
due to two large  remediation  projects  which should  continue  into the second
quarter  of fiscal  1997.  This  increase  was net of an  approximately  $88,000
decrease in gross  revenues  caused by the closure of the New Orleans  office in
fiscal 1996.

Cost of gross revenues is approximately  71% compared to  approximately  70% for
the prior year.  This slight  increase  is mainly due to a large  percentage  of
gross revenues being generated by subcontractors which generally carries a lower
profit margin than fee revenues directly generated by the Company's professional
staff.


                                  page 10 of 13


<PAGE>



Selling,  general and  administrative  expenses decreased by $304,657 or by 22%.
This decrease was mainly accomplished  through the reduction of staff personnel,
office closures and management cost controls.

Net interest expense decreased by $4,412 or by 9% primarily due to lower average
amounts  borrowed due to the  collection of accounts  receivable and amounts due
from the state agency. Other income increased by $29,749 mainly due to insurance
recoveries on damaged equipment.

The Company has not  provided a  provision  for income  taxes due to the current
year's net loss and has not  recorded  any tax  benefit.  It has provided a 100%
valuation  allowance  of the  deferred  tax asset that  results from federal and
state net  operating  loss carry  forwards  due to the lack of  availability  of
federal and state taxable income within the carryback  period,  available  under
the  federal  and  state  tax laws as well as the  inability  to  determine  the
likelihood  that future  federal and state taxable  income will be sufficient to
utilize the deferred tax asset.

The net loss for the three months ended  November 30, 1996 increased by $142,028
when compared to the prior year. This net loss is primarily  attributable to the
decline in gross revenues.

Liquidity and Capital Resources as of November 30, 1996
-------------------------------------------------------

The Company's  operating  activities provided net cash of $573,313 for the three
months ended November 30, 1996. This cash was primarily  provided by liquidation
of  accounts  and  unbilled  receivables  as well as amounts  due from the state
agency.  This cash was used to pay down the bank revolving credit line, accounts
payable and accrued liabilities as well as to purchase equipment.

Working capital,  including Amounts Due from State Agency decreased by $285,788.
Accounts receivable,  and unbilled receivables at November 30, 1996 decreased by
a combined  amount of $1,123,264  when compared to these  balances at August 31,
1996. This decrease is primarily the result of the decrease in gross revenues as
well as  increased  collections  on accounts  receivable.  Accounts  payable and
accrued  liabilities  at November  30, 1996  decreased  by a combined  amount of
$396,094  primarily  due to the  decrease in gross  revenues  and the payment of
suppliers upon filing reimbursement  applications with the State of Florida. The
increase  in amounts  paid for  interest  are mainly due to prepaid  interest on
amounts due from the state agency which have been financed by third parties.

Inflation has not  significantly  affected the Company's  financial  position or
operations.  Borrowings  under the  $3,000,000  line of credit bear  interest at
prime less .25%. The prime rate at November 30, 1996 was 8.25%. No assurance can
be given  that  inflation  or the prime rate will not  significantly  fluctuate,
either of which could adversely affect the Company's results of operations.






                                  page 11 of 13


<PAGE>



ITEM 5.  OTHER INFORMATION

None



ITEM 6.  EXHIBITS AND REPORTS OF FORM 8-K

Exhibit 27 - Financial Data Schedule (Electronic filing only)


Reports on Form 8-K

None






































                                  page 12 of 13


<PAGE>



                                   SIGNATURES

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

                                     VIROGROUP, INC.




Date:  January 12, 1996              By:  /s/ Sylvester O. Ogden
                                        ----------------------------------------
                                          Sylvester O. Ogden, President, and
                                          Chief Executive Officer, and Chairman



Date:  January 12, 1996              By:  /s/ Larry Ackerly
                                        ----------------------------------------
                                          Larry Ackerly, Chief Financial Officer































                                  page 13 of 13