<PAGE>

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                     ---------------------------------------
                                    FORM 10-Q

(Mark One)
 X Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
---
1934.
For the quarterly period ended June 30, 1999

__ Transition report under Section 13 or 15(d) of the Exchange Act.
For the transition period from ___________ to ___________

Commission File Number:  0-21975

                             ECO SOIL SYSTEMS, INC.
             (Exact Name of Registrant as Specified in its Charter)

             NEBRASKA                                47-0709577
 -------------------------------                 -------------------
 (State or Other Jurisdiction of                  (I.R.S. Employer
  Incorporation or Organization)                 Identification No.)

                              10740 THORNMINT ROAD
                           SAN DIEGO, CALIFORNIA 92127
          (Address, Including Zip Code, of Principal Executive Offices)

                                 (858) 675-1660
              (Registrant's Telephone Number, Including Area Code)


Check 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
   -----          -----

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of August 4, 1999, 17,677,526
shares of the Registrant's Common Stock, $.005 par value per share, were
outstanding.

<PAGE>

                             ECO SOIL SYSTEMS, INC.
                                 FORM 10-Q INDEX


PART I.     FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                                                             PAGE
                                                                                                             ----
<S>            <C>                                                                                           <C>
Item 1.        Financial Statements

               Consolidated Balance Sheets as of June 30, 1999 (unaudited) and                                 3
               December 31, 1998

               Condensed Consolidated Statements of Operations for the Three                                   4
               Months and Six Months Ended June 30, 1999 and June 30, 1998
               (unaudited)

               Consolidated Statements of Cash Flows for the Six Months Ended                                  5
               June 30, 1999 and June 30, 1998 (unaudited)

               Notes to Condensed Consolidated Financial Statements                                            6

Item 2         Management's Discussion and Analysis of Financial Condition and Results                         8
               of Operation

Item 3         Quantitative and Qualitative Disclosures About Market Risk                                      13


PART II.       OTHER INFORMATION

Item 1         Legal Proceedings                                                                               14

Item 2         Changes in Securities and Use of Proceeds                                                       N/A

Item 3         Defaults Upon Senior Securities                                                                 N/A

Item 4         Submission of Matters to a Vote of Security Holders                                             14

Item 5         Other Information                                                                               15

Item 6         Exhibits and Reports on Form 8-K                                                                18
</TABLE>

                                       2

<PAGE>

                                     PART I
Item 1.  Financial Information

                             Eco Soil Systems, Inc.

                           Consolidated Balance Sheets
                      (In Thousands, Except Share Amounts)



<TABLE>
<CAPTION>
                                     ASSETS
                                                                                                  June 30,         December 31,
                                                                                                    1999               1998
                                                                                                ------------       ------------
<S>                                                                                             <C>                <C>
Current Assets:
       Cash and cash equivalents                                                                 $  5,060           $  3,410
       Accounts receivable, net of allowance for doubtful accounts of $1,938 and $1,261
         at June 30, 1999 and December 31, 1998, respectively                                      29,386             13,523
       Finished goods inventory                                                                    17,769             10,475
       Prepaid expenses and other current assets                                                    7,599              6,288
                                                                                                ------------       ------------
Total current assets                                                                               59,814             33,696
Equipment under construction                                                                        2,038              2,823
Equipment under operating leases, net                                                               7,888              8,019
Property and equipment, net                                                                         7,420              5,541
Intangible assets, net                                                                             14,005             14,571
Other assets                                                                                        2,271              2,355
                                                                                                ------------       ------------
Total assets                                                                                     $ 93,436           $ 67,005
                                                                                                ------------       ------------
                                                                                                ------------       ------------

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
       Accounts payable                                                                          $ 35,772           $  8,037
       Accrued expenses                                                                             5,673              7,061
       Current portion of long-term obligations                                                    10,199                178
                                                                                                ------------       ------------
Total current liabilities                                                                          51,644             15,276

Long-term obligations, net of current portion                                                      15,262             22,620
Deferred gain on sale/leaseback of building                                                           538                566

Commitments

Shareholders' equity:
       Preferred stock
            $.005 par value; 5,000,000 shares authorized; none issued and outstanding                   -                  -
       Common stock                                                                                    87                 85
            $.005 par value; 50,000,000 shares authorized; 17,434,043 and
            17,064,576 shares issued and outstanding at June 30, 1999 and
            December 31, 1998, respectively
       Additional paid-in capital                                                                  52,499             51,485
       Warrants                                                                                     1,125                958
       Notes receivable from shareholders                                                              (4)               (15)
       Accumulated deficit                                                                        (27,715)           (23,970)
                                                                                                ------------       ------------

Total shareholders' equity                                                                         25,992             28,543
                                                                                                ------------       ------------

Total liabilities and shareholders' equity                                                       $ 93,436           $ 67,005
                                                                                                ------------       ------------
                                                                                                ------------       ------------
</TABLE>

See accompanying notes

Note: The balance sheet at December 31, 1998 is derived from the audited
financial statements at that date, but does not include all of the
disclosures required by generally accepted accounting principles.

                                       3

<PAGE>

                             Eco Soil Systems, Inc.

                 Condensed Consolidated Statements of Operations
                    (In thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                           Three Months                   Six Months
                                                                          Ended June 30,                Ended June 30,
                                                                    --------------------------    ---------------------------
                                                                       1999           1998           1999            1998
                                                                    -----------    -----------    -----------     -----------
                                                                    (unaudited)    (unaudited)    (unaudited)     (unaudited)
<S>                                                                 <C>            <C>            <C>             <C>
Revenues:
    Turf Partners                                                     $ 34,164       $ 20,728       $ 45,823        $ 29,130
    Agricultural Supply                                                  6,509          6,156         12,102           6,163
                                                                    -----------    -----------    -----------     -----------
          Total revenues                                                40,673         26,884         57,925          35,293

Cost of revenues:
    Turf Partners                                                       25,444         14,632         34,696          20,331
    Agricultural Supply                                                  4,056          4,530          8,119           4,534
                                                                    -----------    -----------    -----------     -----------
          Total cost of revenues                                        29,500         19,162         42,815          24,865

Gross profit:                                                           11,173          7,722         15,110          10,428

Operating expenses:
    Selling, general and administrative                                  8,681          5,656         16,449           9,801
    Research and development                                               159             68            252             168
    Amortization of intangibles                                            284            275            593             458
    Legal settlement                                                       198              -            198               -
                                                                    -----------    -----------    -----------     -----------

Income (loss) from operations                                            1,851          1,723         (2,382)              1

Interest expense                                                           796            245          1,506             340
Interest income                                                              -            130            143             206
                                                                    -----------    -----------    -----------     -----------
Net income (loss)                                                     $  1,055       $  1,608         (3,745)           (133)
                                                                    -----------    -----------    -----------     -----------

Net income (loss) per share of common stock, basic                    $   0.06       $   0.10       $  (0.22)       $  (0.01)
                                                                    -----------    -----------    -----------     -----------
Net income (loss) per share of common stock, diluted                  $   0.06       $   0.08       $  (0.22)       $  (0.01)

Shares used in calculating net income (loss) per share, basic           17,341         16,665         17,262          16,029
                                                                    -----------    -----------    -----------     -----------
Shares used in calculating net income (loss) per share, diluted         19,080         19,898         17,262          16,029
                                                                    -----------    -----------    -----------     -----------
</TABLE>

                                       4

<PAGE>

                             Eco Soil Systems, Inc.

                      Consolidated Statement of Cash Flows
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                                        SIX MONTHS ENDED JUNE 30,
                                                                                       ----------------------------
                                                                                          1999               1998
                                                                                       ---------          ---------
<S>                                                                                    <C>                <C>
OPERATING ACTIVITIES:
Net loss                                                                               $ (3,745)          $   (133)
Adjustments to reconcile net cash provided by/(used in) operating activities:                                    -
   Depreciation and amortization                                                          1,753              1,153
   Amortization of debt issuance costs and discount
      on long-term debt                                                                     185                  -
   Provision for losses on accounts receivable                                              124                  -
   Loss/(gain) on sale of property and equipment                                             97                  -
   Compensation expense incurred upon issue of stock options/warrants                       242                  -
Changes in operating assets and liabilities, net of effect of acquired
     businesses:
Accounts receivable                                                                     (15,987)            (3,835)
Inventories                                                                              (7,229)            (4,957)
Prepaid expenses and other assets                                                        (1,410)            (3,113)
Accounts payable                                                                         27,735              3,249
Accrued liabilities                                                                      (1,418)               (69)
                                                                                       ---------          ---------
Net cash provided by/(used in) operating activities                                         347             (7,705)

INVESTING ACTIVITIES:
Payments related to acquired businesses, net of cash acquired                                 -             (2,321)
Proceeds from the sale of property and equipment                                            111                  -
Purchase of property and equipment                                                       (2,314)              (787)
Sale of short-term investments                                                                -              3,000
Purchase of patents and licenses                                                            (16)               (25)
                                                                                       ---------          ---------
Net cash used in investing activities                                                    (2,219)              (133)

FINANCING ACTIVITIES:
Advances (to) from shareholders                                                              11             (1,066)
Proceeds from long-term obligations                                                       2,687              5,845
Repayments of long-term obligations                                                        (118)              (575)
Payments on capital lease obligations                                                         -                 (5)
Net proceeds from issuance of common stock                                                  942              1,839

                                                                                       ---------          ---------
Net cash provided by financing activities                                                 3,522              6,038
                                                                                       ---------          ---------

Net increase/(decrease) in cash                                                           1,650             (1,800)
Cash and cash equivalents at beginning of period                                          3,410              3,125
                                                                                       ---------          ---------

Cash and cash equivalents at end of period                                             $  5,060           $  1,325
                                                                                       ---------          ---------
                                                                                       ---------          ---------
</TABLE>

                                       5

<PAGE>


                             ECO SOIL SYSTEMS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.   BASIS OF PRESENTATION

     The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of Eco Soil Systems, Inc. (the "Company"), all
adjustments, consisting only of normal recurring adjustments, necessary for the
fair statement of the results for the three-month and six-month periods ended
June 30, 1999 and 1998 have been made. The results of operations for the
three-month and six-month periods ended June 30, 1999 are not necessarily
indicative of the results to be expected for the full fiscal year. For further
information, refer to the audited financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998.

2.   NET INCOME/(LOSS) PER SHARE

     In accordance with Financial Accounting Standards Board Statement No. 128,
"Earnings per share" ("SFAS 128") basic earnings per share is calculated
by dividing net income by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflects the potential
dilution of securities that could share in the earnings of the Company, such
as common stock which may be issuable upon exercise of outstanding common
stock options and warrants. These shares are excluded when their effects are
antidilutive.

3.   SEGMENT INFORMATION

     For purposes of analyzing and understanding the financial statements,
the Company's operations have been classified into the following business
segments:

     TURF PARTNERS: This segment enters into contracts with golf courses or
turf maintenance service businesses, or distributors which sell to those
end-user markets to manage the health and productivity of their soil during
the golf season. These contracts require the Company to perform a
comprehensive soil analysis at the beginning of the season, develop a
treatment regimen, install the Company's proprietary system at the customers
site, and provide the microbials throughout the season. This segment also
wholesales and distributes a wide range of traditional chemical and turf
maintenance products and golf course supplies to the above mentioned market.


                                        6
<PAGE>

     AGRICULTURAL SUPPLY: This segment enters into contracts with agricultural
growers to manage the health and productivity of their soil during the course of
the growing season, which requires the Company to perform a comprehensive soil
analysis at the beginning of the season, develop a treatment regimen, install
the Company's proprietary BioJect system at the customer's site, and provide the
microbials and other soil additive products for the customer to use throughout
the season. This segment also distributes a wide range of irrigation and other
agricultural supplies to growers. In 1998, the Company actively commenced its
soil maintenance service business and acquired several distributors or
irrigation and other agricultural supplies, and therefore created this business
segment. Prior to 1998, agricultural operations were insignificant and were not
considered to be a separate segment.

<TABLE>
<CAPTION>
                                 Revenues                 Segment Profits                Segment Assets
                          ----------------------      -----------------------       ----------------------
                                  For the three months ended June 30,                    As of June 30,
                          ---------------------------------------------------       ----------------------
                            1999          1998          1999           1998           1999          1998
                          --------      --------      --------       --------       --------      --------
<S>                       <C>           <C>           <C>            <C>            <C>           <C>
Turf Partners             $34,164       $20,728       $ 3,456        $ 2,904        $60,948       $45,121
Agricultural Supply         6,509         6,156           984            549         25,507        16,287
Corporate and Other             -             -        (3,385)        (1,845)         6,981         6,916
                          --------      --------      --------       --------       --------      --------
Total                     $40,673       $26,884       $ 1,055        $ 1,608        $93,436       $68,324
</TABLE>

4.   LEGAL SETTLEMENT

     In November 1998, the Company executed a term sheet with the Palladin
Group, L.P. ("Palladin") concerning negotiations for a possible investment by
Palladin in certain new classes of securities of the Company which, at the
time, the Company was considering issuing to a certain fund managed by
Palladin. The Company subsequently terminated the negotiations in December
1998. An affiliate of Palladin, Halifax Fund, L.P. ("Halifax"), filed a
lawsuit on or about March 19, 1999 in San Diego Superior Court alleging that
the termination violated duties owed by the Company to Halifax under the term
sheet. The lawsuit sought compensatory damages of approximately $2.6 million
and punitive damages of approximately $12.0 million. In July 1999, the
Company executed Settlement and Release Agreements with Halifax Fund, L.P.,
Palladin Group, L.P., Granite Financial Group, Inc., and Midori Capital
Corporation. These agreements mutually release and discharge all claims
arising from this litigation. The settlement required the Company to pay
termination charges and attorney's fees of $198,000.

                                       7

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         Certain statements contained in this Management's Discussion and
Analysis that are not related to historical results are forward looking
statements. Actual results may differ materially from those projected or implied
in the forward statements. Further, certain forward looking statements are based
upon assumptions of future events, which may not prove to be accurate. These
forward looking statements involve risks and uncertainties including but not
limited to those referred to below. See "Item 5. Other Information.
Factors That Could Affect Future Performance."

         This information should be read in conjunction with the financial
statements and notes thereto included in Item 1 of this report for the quarter
ended June 30, 1999. Additionally, the financial statements and notes thereto
and Management's Discussion and Analysis in the Company's Annual Report on Form
10-K for the year ended December 31, 1998 will provide additional information.

         In addition to other endeavors, the Company develops, markets and
sells proprietary biological and traditional chemical products to two
principal segments: The turf and golf management market ("Turf Partners") and
the agricultural and crop market ("Ag Supply").

SECOND QUARTER ENDED JUNE 30, 1999 COMPARED TO SECOND QUARTER ENDED JUNE 30,
1998

REVENUES

         For the second quarter of 1999, revenues were $40.7 million, an
increase of 51% versus $26.9 million for the second quarter 1998. The increase
in revenues reflects an increase in both Turf Partners and Ag Supply revenues.

         For the second quarter of 1999, Turf Partners revenues were $34.2
million, an increase of 65% versus $20.7 million for the second quarter 1998.
The increase in Turf Partners sales occurred in all three operating regions of
the U.S. Proprietary sales for Turf Partners remained consistent during the
second quarter of 1999 and 1998 at $2.1 million, while distributed sales
increased to $32.1 million in the second quarter 1999 from $18.6 million in the
second quarter of 1998. The increase in distributed revenue is due to the
expansion of the Company's turf business. During the second quarter of 1999,
Turf Partners completed the integration of the sales force assumed from the
Scott's Company in December 1998 and completed the stocking of several new
warehouses and the realignment of its distribution networks.

         For the second quarter of 1999, Ag Supply revenues were $6.5 million,
an increase of 6%, versus $6.2 million for the second quarter of 1998. Ag Supply
revenues were affected favorably by the acquisitions of Ag Supply de Mexico,
Yuma Sprinkler & Pipe Supply and Riegomex S.A. de C.V. in June 1998. These
acquisitions enabled the Company to expand proprietary sales in Mexico and the
U.S. to $638,000 in the second quarter of 1999 compared to $54,000 in the second
quarter of 1998. Distributed sales for the Ag Supply division decreased to $5.9
million in the second quarter of 1999 from $6.1 million in the second quarter of
1998.

                                       8

<PAGE>

GROSS PROFIT

          For the second quarter of 1999, the Company's gross profit was $11.2
million, an increase of 45% versus $7.7 million for the second quarter of 1998.
The increase in gross profit was due to the increase in both Turf Partners and
Ag Supply revenues. For the second quarter of 1999, the Company's gross margin
was 27% versus 29% during the second quarter of 1998. The decrease in gross
margin was due to the mix of proprietary and distributed sales during the
quarter. Proprietary sales, which carry higher gross margins than distributed
sales, did not grow proportionately to distributed sales during the second
quarter of 1999.

          For the second quarter of 1999, the gross profit on Turf Partners
sales was $8.7 million, an increase of 43% versus $6.1 million during the second
quarter of 1998. The increase in gross profit on Turf Partners sales is directly
related to the increase in revenue, as previously discussed. For the second
quarter of 1999, the gross margin on Turf Partners products was 26% versus 29%
during the second quarter of 1998. The decrease in gross margin on Turf Partners
sales was due to a change in the product mix.

         For the second quarter of 1999, the gross profit on Ag Supply sales was
$2.5 million, compared to $1.6 million during the second quarter of 1998. The
increase in gross profit on Ag Supply sales was directly related to the increase
in revenue. For the second quarter of 1999, the gross margin on Ag Supply
products was 38% versus 26% during the second quarter of 1998. The increase in
gross margin on Ag Supply sales was due to a change in the product mix.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE

          For the second quarter of 1999, selling, general and administrative
("SG&A") expense was $8.7 million, an increase of 53% versus $5.7 million during
the second quarter of 1998. The increase in SG&A expense was primarily due to
additional overhead costs associated with the acquisition of Agricultural Supply
in April 1998 and Ag Supply de Mexico, Yuma Sprinkler and Pipe Supply and
Riegomex in June 1998. SG&A expense as a percentage of sales remained consistent
at 21% for the second quarter of 1999 and 1998.

RESEARCH AND DEVELOPMENT EXPENSE

          For the second quarter of 1999, research and development ("R&D")
expense was $159,000, an increase of 134% versus $68,000 during the second
quarter of 1998. The increase in R & D expense was due to ongoing analysis and
testing of products for the Ag Supply and Turf Partners markets.

INTEREST EXPENSE

         For the second quarter of 1999, interest expense was $796,000, an
increase of 225% versus $245,000 for the second quarter of 1998. The increase in
interest expense reflects an increase in the amount of debt outstanding and
amortization of debt offering cost.

AMORTIZATION EXPENSE

         For the second quarter of 1999, amortization expense was $284,000, an
increase of 3% versus $275,000 for the second quarter of 1998. The increase in
amortization expense is due to an increase in the Company's goodwill directly
related to the Company's 1998 acquisitions, offset by $46,000 decrease of
amortization expense related to Turf Products and Turf Makers goodwill, written
off in December 1998.

                                       9

<PAGE>


NET INCOME

         For the second quarter of 1999, net income was $1.1 million or $.06 per
share versus net income of $1.6 million or $.08 per share during the second
quarter of 1998. During the second quarter of 1999, the Company incurred
$198,000 of expense in connection with a litigation settlement. See "Item 1.
Legal Proceedings."

SIX MONTHS ENDED JUNE 30, 1999 COMPARED TO SIX MONTHS ENDED JUNE 30, 1998

REVENUES

         For the first six months of 1999, revenues were $57.9 million, an
increase of 64% versus $35.3 million for the first six months of 1998. The
increase in revenues reflects an increase in both Turf Partners and Ag Supply
revenues.

         For the first six months of 1999, Turf Partners revenues were $45.8
million, an increase of 57% versus $29.1 million for the first six months of
1998. The increase in Turf Partners revenues occurred in all three operating
regions of the U.S. Proprietary sales for Turf Partners decreased to $2.4
million during the first six months of 1999 from $3.5 million during the
first six months of 1998. The decrease in proprietary sales was due to a
decrease in BioJect usage as a result of the following: (i) our fall 1998
reorganization impaired sales momentum, (ii) integration of the sales force
assumed from the Scotts Company, (iii) new FreshPack programs taxed our sales
force, while providing customer a cheaper alternative to the BioJect, (iv)
long term customers grew tired waiting on EPA and additional biocontrol
products, (v) customers believed their improved turf, resulting from several
seasons of BioJect programs, could manage without a 1999 program. Distributed
sales increased to $43.4 million in the first six months of 1999 from $25.6
million in the first six months of 1998.

         For the first six months of 1999, Ag Supply revenues were $12.1
million, an increase of 96%, versus $6.2 million for the first six months of
1998. Ag Supply revenues were affected favorably by the acquisitions of
Agricultural Supply, Inc. in April 1998 and Yuma Sprinkler & Pipe Supply, and
Riegomex S.A. de C.V. in June 1998. These acquisitions enabled the Company to
expand proprietary sales in Mexico and the U.S. to $837,000 during the first six
months of 1999 compared to $61,000 in the first six months of 1998. Distributed
sales for the Ag Supply division increased to $11.3 million in the first six
months of 1999 from $6.1 million in the first six months of 1998 due to the 1998
acquisitions mentioned above.

GROSS PROFIT

         For the first six months of 1999, the Company's gross profit was
$15.1 million, an increase of 45% versus $10.4 million for the first six
months of 1998. The increase in gross profit was due to the increase in both
Turf Partners and Ag Supply revenues. For the first six months of 1999, the
Company's gross margin was 26% versus 30% for the first six months of 1998.
The decrease in gross margin was due to the mix of proprietary and
distributed sales during the first six months of 1999. Proprietary sales,
which carry higher gross margins than distributed sales, did not grow
proportionately to distributed sales during the first six months of 1999.

         For the first six months of 1999, the gross profit on Turf Partners
sales was $11.1 million, an increase of 26% versus $8.8 million during the
first six months of 1998. The increase in the gross profit on Turf Partners
sales is directly related to the increase in revenue. For the first six
months of 1999, the

                                       10

<PAGE>

gross margin on Turf Partners products was 24% versus 30% during first six
months of 1998. The decrease in gross margin on Turf Partners sales was due
to a change in the product mix.

         For the first six months of 1999, the gross profit on Ag Supply sales
was $4.0 million, an increase of 145%, compared to $1.6 million during the first
six months of 1998. The increase in the gross profit on Ag Supply sales is
directly related to the increase in revenue, as previously discussed. For the
first six months of 1999, the gross margin on Ag Supply products was 33% versus
26% during the first six months of 1998. The increase in gross margin on Ag
Supply sales was due to a change in the product mix.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE

         For the first six months of 1999, SG&A expense was $16.4 million, an
increase of 68% versus $9.8 million during the first six months of 1998. The
increase in SG&A expense was primarily due to additional overhead costs
associated with the previously discussed acquisitions. SG&A expense as a
percentage of sales remained consistent at 28%, for the first six months of 1999
and 1998.

RESEARCH AND DEVELOPMENT

         For the first six months of 1999, R&D expense was $252,000, an increase
of 50% versus $168,000 during the first six months of 1998. The increase in R&D
expense was due to ongoing analysis and testing of products for the Ag Supply
and golf markets.

INTEREST EXPENSE

         For the first six months of 1999 interest expense was $1.5 million, an
increase of 343% versus $340,000 during the first six months of 1998. The
increase in interest expense reflects an increase in the amount of debt
outstanding, and amortization of debt offering cost.

AMORTIZATION EXPENSE

         For the first six months of 1999, amortization expense was $593,000, an
increase of 29% versus $458,000 during the first six months of 1998. The
increase in amortization expense is due to an increase in the Company's goodwill
directly related to the previously discussed acquisitions, offset by a $92,000
decrease in amortization expense related to Turf Products and Turf Makers
goodwill written off in December 1998.

NET INCOME

     For the six months ended June 30, 1999 net loss was $3.7 million or $.22
per share versus net income of $133,000 or $.01 per share for the six months
ended June 30, 1998. During the six months ended June 30, 1999, the Company
incurred $198,000 of expense in connection with a litigation settlement. See
"Item 1. Legal Proceedings."

LIQUIDITY AND CAPITAL RESOURCES

         The Company has financed its operations from revenues from sales of its
products, sales of its Common Stock, borrowing from its principal shareholders
and bank financing. The Company's operating and investing activities used cash
of $1.9 million during the first six months of 1999 and $7.8 million during the
first six months of 1998.

                                       11

<PAGE>

         On June 30, 1999, the Company's wholly owned subsidiary, Turf Partners,
Inc., entered into a $25 million line of credit with Coast Business Credit. In
addition, the Company's wholly owned subsidiary Agricultural Supply, Inc.
entered into a $10 million line of credit with First National Bank. For
additional information on these lines of credit see "Item 5. Other Information -
Recent Developments."

         On July 31, 1999, the Company obtained a $2.5 million, two-year term
loan from Coast Business Credit. The term loan bears interest at Coast's
prime rate plus 2.25%, payable monthly. One third of the principal must be
repaid in level monthly payments during the second year of the term. The term
loan is secured by substantially all of the assets of the parent company, and
has been guaranteed by Turf Partners. The Company issued a warrant to
purchase 50,000 shares of common stock at an exercise price of $7.81 per
share to Coast in connection with the closing of the term loan transaction.

         The Company intends to fund its future operations and growth through a
combination of product revenues, borrowings available under the line of credit,
and public or private debt or equity financing. However, there can be no
assurance that such financing alternatives will be available under favorable
terms, if at all. The Company believes that it has sufficient resources to
finance its operations and future growth for at least the next twelve months.

YEAR 2000

         Many currently installed computer systems are coded to accept only two
digit entries in the date code field. These date code fields need to be modified
or upgraded to accept four digit entries to distinguish 21st century dates from
20th century dates. Many organizations are expending significant resources to
modify or upgrade their computer systems for such "Year 2000" compliance. We
presently believe that, with modifications to existing software and conversions
to new software, the Year 2000 problem can be mitigated. However, if such
modifications and conversions are not made, or are not timely completed, the
Year 2000 problem could have a material impact on our operations.

         The Year 2000 issue affects our internal systems, including
information technology ("IT") and non-IT systems. We are in the process of
upgrading our existing computer software and IT systems and recognize the
need to ensure our operations will not be adversely impacted by Year 2000
software failures. We rely upon microprocessor-based personal computers and
commercially available applications software. In addition, in the ordinary
course of our product development efforts, we have designed our current
proprietary equipment, consisting of hardware and software, including the
BioJect system itself, to be Year 2000 ready. We are also reviewing our
utility systems (heat, light, telephones, etc.) and other non-IT systems for
the impact of Year 2000. Additionally, should we undertake future
acquisitions, the Year 2000 risks that affect us can be expected to similarly
affect such potential acquisition candidates. We intend to review the systems
of all potential acquisitions for Year 2000 compliance. However, the failure
to correct a material Year 2000 problem either within the Company, within a
vendor or supplier or within a potential acquisition candidate could result
in an interruption in, or a failure of, certain normal business activities or
operations. Such interruptions or failures could materially adversely affect
our business, operating results and financial condition.

         We depend on smooth and timely interactions with our vendors, customers
and other third parties. Any unexpected costs or disruption in the operations or
activities of such vendors, customers or other third parties as a result of Year
2000 compliance issues within such entities could materially adversely affect
our business, operating results or financial condition. The Company intends to
take continuous steps to identify Year 2000 problems related to its vendors and
to formulate a system of working with key third-parties, including financial
institutions and utility-providers, to understand their ability to continue
providing services and products through the change to Year 2000.

         The cost of our Year 2000 compliance assessment and upgrade is being
funded from current operations. The cost to us of our Year 2000 identifications,
assessment, remediation and testing efforts, as well as costs we currently
expect to be incurred with respect to Year 2000 issues of third parties, is
expected to be approximately

                                       12

<PAGE>

$20,000. We will continue to consider the likelihood of a material business
interruption due to the Year 2000 issue and, if necessary, implement
appropriate contingency plans. A contingency plan has not been developed for
dealing with the most reasonably likely worst case scenario, and such
scenario has not yet been clearly identified. Since we have adopted a plan to
address these Year 2000 issues, we have not developed a comprehensive
contingency plan should Year 2000 issues fail to be addressed successfully or
in their entirety. However, if we identify significant risks or are unable to
meet our anticipated timeline, we will develop contingency plans as deemed
necessary at that time.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company's foreign sales are principally to Mexico. All foreign
transactions are denominated in U.S. dollars, therefore, the Company's exposure
to foreign currency fluctuations is minimal.

         The Company is exposed to changes in interest rates from its senior
subordinated notes, which are due in full in 2003. A hypothetical 100 basis
point adverse move (decrease) in interest rates along the entire interest rate
yield curve would adversely affect the net fair value of the Notes by
approximately $625,000 as of June 30, 1999.






                                       13

<PAGE>

                                     PART II

                                OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

         In November 1998, the Company executed a term sheet with the Palladin
Group, L.P. ("Palladin") concerning negotiations for a possible investment by
Palladin in certain new classes of securities of the Company which, at the time,
the Company was considering issuing to a certain fund managed by Palladin. The
Company subsequently terminated the negotiations in December 1998. An affiliate
of Palladin, Halifax Fund, L.P. ("Halifax"), filed a lawsuit on or about March
19, 1999 in San Diego Superior Court alleging that the termination violated
duties owed by the Company to Halifax under the term sheet. The lawsuit sought
compensatory damages of approximately $2.6 million and punitive damages of
approximately $12.0 million. In July 1999, the Company executed Settlement and
Release Agreements with Halifax Fund, L.P., Palladin Group, L.P., Granite
Financial Group, Inc., and Midori Capital Corporation. These agreements mutually
release and discharge all claims arising from this litigation. The settlement
required the Company to pay termination charges and attorney's fees of $198,000.

         From time to time, the Company is involved in legal proceedings, claims
and litigation arising in the ordinary course of business, the outcome of which,
in the opinion of management, would not have a material adverse effect on the
Company.

ITEM 4.  SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS

         On June 4, 1999, the Company held an Annual Meeting of Shareholders at
which the following proposals were voted on by shareholders:

         1.   Election of two directors for a three-year term to expire at the
              2002 Annual Meeting of Shareholders.

<TABLE>
<CAPTION>
                  Nominee              For               Against             Withheld
                  ----------------     ----------------------------------------------
                  <S>                  <C>               <C>                 <C>
                  William B. Adams     14,679,755           -                 125,540
                  Douglas M. Gloff     14,679,755           -                 125,540
</TABLE>

              In addition to Mr. Adams and Mr. Gloff, the following directors
              continued in office: Fridolin I. Fuckelmayer, S. Bradley Osborn,
              Edward C. Ford, William S. Potter and Edward N. Steel.

         2.   To amend the 1998 Stock Option Plan to increase the number of
              shares available for issuance thereunder to 1,600,000.

<TABLE>
<CAPTION>
                                    For           Against        Abstained        Broker Non-Votes
                                    --------------------------------------------------------------
                                    <S>           <C>            <C>              <C>
                                    7,981,295     2,234,569       92,965           4,496,466
</TABLE>

              3.  To approve the adoption of the 1999 Equity Participation Plan
                  of the Company and the reservation of 1,600,000 shares of
                  Common Stock for the issuance thereunder.

<TABLE>
<CAPTION>
                                    For            Against       Abstained        Broker Non-Votes
                                    --------------------------------------------------------------
                                    <S>           <C>            <C>              <C>
                                    7,280,350      2,937,597      90,882             4,496,466
</TABLE>


                                       14

<PAGE>




ITEM 5.  OTHER INFORMATION

RECENT DEVELOPMENTS

         On June 30, 1999, the Company's wholly owned subsidiaries Turf
Partners, Inc. and Agricultural Supply, Inc. entered into credit agreements with
Coast Business Credit (the "Coast Working Capital Facility") and San Diego-based
First National Bank (the "FNB Working Capital Facility"), respectively. The
Coast Working Capital Facility is a $25 million, three-year credit facility
based upon Turf Partners' eligible inventory and receivables and has an interest
rate of prime rate plus 1.00%. On July 2, 1999, Turf Partners drew down $15.1
million on the facility and the Company paid all amounts due under, and
terminated a line of credit with Imperial Bank. The Company had approximately
$10 million outstanding under a December 14, 1998 Credit Agreement with Imperial
Bank prior to the payoff. The FNB Working Capital Facility is a $10 million,
three-year credit facility based upon Agricultural Supply's eligible inventory
and receivables and has an interest rate of prime plus .25%. On July 2, 1999,
Agricultural Supply drew down $2.2 million on the facility.

         The foregoing summary of the terms of the Coast Working Capital
Facility and the FNB Working Capital Facility does not purport to be complete
and is qualified in its entirety by reference to the full text of the Coast
Working Capital Facility and the FNB Working Capital Facility and their
corresponding promissory notes, copies of which are attached hereto as Exhibits
10.3, 10.4 and 10.5 and incorporated herein by reference.

         In July 1999, Edward N. Steel joined the Company's board of
directors. Mr. Steel is currently President of Boardroom HomeBuilders, Inc.,
a privately held company that he founded in 1986, specializing in luxury
housing in the New York metropolitan area. Prior to that, Mr. Steel joined
the IBM Corporation in 1975 progressing through various marketing management
positions, including Manager of Strategic Planning for the personnel computer
division. In 1995, Mr. Steel became a partner of E&D I, LLC, which is a land
development and investment firm. Mr. Steel holds a B.A. from the University
of Miami and an MBA from Pace University.

FACTORS THAT COULD AFFECT FUTURE PERFORMANCE

         This report contains certain forward looking statements about the
business and financial condition of the Company, including various statements
contained in "Management's Discussion and Analysis of Financial Condition and
Results of Operations." The actual results of the Company could differ
materially from any forward looking statements contained herein. The following
information sets forth certain factors that could cause the actual results to
differ materially from those contained in the forward looking statements. For a
more detailed discussion of the factors that could cause actual results to
differ, see "Item 1: Business -- Factors That Could Affect Future Performance"
in the Company's Form 10-K for the fiscal year ended December 31, 1998.

         At June 30, 1999, the Company had an accumulated deficit of $27.7
million. The Company has been principally engaged in organizational activities,
research and development, licensing activities, product introductions and the
establishment of a sales and marketing organization. The Company's recent losses
have resulted in part from expenditures for product development, U.S. patent
protection and sales and marketing expenses, including the costs of the
Company's recent dealer acquisitions.

         In order to expand its business and achieve significant growth in
sales, the Company must continue to broaden its sales and marketing capability
and increase the size of its customer base, in part through the acquisition of
independent dealers and distributors. Although sales of certain of the Company's
products are growing, the Company's products and operations remain in the early
stages of market introduction and are subject to the risks inherent in the
commercialization of new product concepts. These risks include unforeseen
problems, delays, expenses and complications frequently encountered in the early
phases of research, development and commercialization of products, and expenses
associated with hiring and training additional sales, marketing and customer
service personnel.

         Distribution and sales of the Company's products have historically
occurred through direct sales efforts and independent dealers and distributors.
The Company has initiated a strategy of attempting to establish a nationwide
distribution system for its products through the acquisition of various
independent

                                       15

<PAGE>

dealers and distributors. Any failure to identify acquisition candidates
properly, any large expenditures on acquisitions that prove to be
unprofitable, or any inability to sell the Company's proprietary products
through the acquired distribution system could have a material adverse effect
on the Company's business, financial position and results of operations.

         The Company's success will be dependent in large measure upon its
ability to obtain and enforce patent protection for its products, maintain
confidentiality of its trade secrets and know-how and operate without
infringing upon the proprietary rights of third parties. Despite precautions
taken by the Company, it may be possible for a third party to copy or
otherwise obtain or use the Company's products or technology without
authorization, or to develop similar products or technology independently.

         The Company plans to acquire the rights to additional microbial
products. The Company manages limited research and development activity in
its own laboratory, and funds university research with respect to microbial
products. Although the Company is actively seeking to obtain licenses for
additional microbial products, there can be no assurance that the Company
will be successful in obtaining any such licenses on terms acceptable to the
Company, if at all.

         The Company may be exposed to liability resulting from the commercial
use of its products. Such liability might result from claims made directly by
customers or others manufacturing such products on behalf of the Company. The
Company currently carries a product liability insurance policy with an aggregate
limit of $15 million. There can be no assurance, however, that such product
liability insurance will adequately protect the Company against any product
liability claim. A product liability or other claim with respect to uninsured
liabilities or in excess of insured liabilities could have a material adverse
effect on the business and prospects of the Company.

         Some states have laws imposing liability on certain parties for the
release of fertilizers and other agents into the environment in certain manners
or concentrations. Such liability could include, among other things,
responsibility for cleaning up the damage resulting from such a release. In
addition, the federal Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA), commonly known as the "Superfund" law, and other
applicable laws impose liability on certain parties for the release into the
environment of hazardous substances, which might include fertilizers and water
treatment chemicals. The Company is also subject to certain other environmental
laws, including the Environmental Protection Act, the Toxic Substance Control
Act, the Resource Conservation and Recovery Act, the Clean Air Act and the Clean
Water Act and may be subject to other present and potential future federal,
state or local regulations. The Company does not currently maintain insurance
for any environmental claims which might result from the release of its products
into the environment in a manner or in concentrations not permitted by law.
Thus, a claim for environmental liability could have a material adverse effect
on the Company.

         The Company competes for market share with a number of companies that
manufacture and market chemical compounds. In addition, a number of companies
are developing biological and organic products for turf maintenance. Many of
these competitors have substantially greater capital resources, research and
development staffs and facilities than the Company, and many of these
competitors have extensive experience in turf maintenance. The fields of
biotechnology and related technologies in which the Company is engaged have
undergone rapid and significant technological changes. The Company expects that
the technologies associated with its research and development will continue to
develop rapidly. There can be no assurance that the Company will be able to
establish itself in such fields or, if established, that it will be able to
maintain a competitive position. Further, there can be no assurance that the
development by others of new or improved processes or products will not make the
Company's products and processes less competitive or obsolete.

                                       16

<PAGE>

         The Company is dependent upon the active participation of William B.
Adams, its Chairman of the Board and Chief Executive Officer, and Douglas M.
Gloff, its President and Chief Operating Officer. The loss of the services of
either of these individuals could have a material adverse effect upon the
Company's future operations. The Company's success depends in large part on its
ability to attract and retain qualified scientific, financial and management
personnel. The Company faces competition for such persons from other companies,
academic institutions, government entities and other organizations. There can be
no assurance that the Company will be successful in recruiting or retaining
personnel of the requisite caliber or in adequate numbers to enable it to
conduct its business as proposed.



                                       17

<PAGE>


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

Exhibit:
       10.1   Amendment No. 2 to Note and Warrant Purchase Agreement dated as of
              June 30, 1999 among the Company, Albion Alliance Mezzanine Fund,
              L.P. and Paribas Capital Funding LLC (including form of amended
              promissory note).
       10.2   Amended and Restated Guaranty Agreement dated as of June 30, 1999
              made by Agricultural Supply, Inc., Aspen Consulting Companies,
              Inc., Mitigation Services, Inc., Turf Partners, Inc. and Yuma
              Acquisition Sub, Inc.
       10.3   Loan and Security Agreement dated as of June 30, 1999 by and
              between Turf Partners, Inc. and Coast Business Credit.
       10.4   Loan Agreement dated as of June 30, 1999 between Agricultural
              Supply, Inc., Sistemas y Equipos Agricolas, S.A. de C.V. and
              Agricultural Supply de Mexico, S.A. de C.V. and First National
              Bank.
       10.5   Promissory Note made June 30, 1999 by Agricultural Supply, Inc. in
              favor of First National Bank.
       27.1   Financial Data Schedule.

No reports on Form 8-K were filed with the SEC during the period ended June 30,
1999.



                                       18

<PAGE>




SIGNATURES

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

                                       Eco Soil Systems, Inc.

Date  August 16, 1999                  By: /s/ William B. Adams
                                          --------------------------------
                                           William B. Adams
                                           Chairman and Chief Executive
                                           Officer

Date  August 16, 1999                  By: /s/ Mark D. Buckner
                                          --------------------------------
                                           Mark D. Buckner
                                           Chief Financial Officer,
                                           Corporate Secretary,
                                           and Senior Vice President


                                       19