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 - January 31, 1997

                                       OR

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

For the transition period from                to 
                               --------------    ---------------------.

                         Commission file number 0-25312
             
                       STARTECH ENVIRONMENTAL CORPORATION
              ---------------------------------------------------
             (Exact name of registrant as specified in its charter)

State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization                      Identification No.)
        Colorado                                         84-1286576

                         79 Old Ridgefield Road
                          Wilton, Connecticut                  06897
                  --------------------------------------     -------
                 (Address of principal executive offices)    Zip Code

                                 (203) 762-2499
               --------------------------------------------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months,  and (2) has been subject to such filing  requirements
for the past 90 days.

                                 YES  X   NO
                                     ---     -----


Securities registered pursuant to Section 12(g) of the Act:

         Title of each class                Outstanding at March 14, 1997
         -------------------                -----------------------------

       Common Stock - No Par                         6,859,256





<PAGE>
                       STARTECH ENVIRONMENTAL CORPORATION

                                      INDEX

                                                                    PAGE NO.
                                                                    --------

PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements

             Balance Sheet - January 31, 1997
             and October 31, 1996                                       3

             Statement of Operations for the quarters ended
             January 31, 1997 and 1996                                  4

             Statement of Cash Flows for the quarters ended
             January 31, 1997 and 1996                                  5

             Notes to Financial Statements                              6

Item 2.   Management's Discussion and Analysis of Financial
             Condition and Results of Operations                       7-8

PART II - OTHER INFORMATION

             Item 1.  Legal Proceedings                                 9
             Item 2.  Changes in Securities                             9
             Item 3.  Defaults Upon Senior Securities                   9
             Item 4.  Submission of Matters to a Vote of
                         Security Holders                               9
             Item 5.  Other Information                                 9
             Item 6.  Exhibits and Reports on Form 8-K                 10

SIGNATURE                                                              11      










                                        2

<PAGE>
<TABLE>
<CAPTION>

                         PART I - FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.



                       STARTECH ENVIRONMENTAL CORPORATION
                                  BALANCE SHEET

                                                       January 31,    January 31,
ASSETS                                                    1997           1996
                                                       -----------    -----------
<S>                                                     <C>            <C>   
Current Assets:
         Cash and cash equivalents                     $   789,462    $   246,951
         Other current assets                               16,136
                                                       -----------    -----------

                  Total Current Assets                     805,598        246,951

         Other Assets                                      100,000
                                                       -----------    -----------
                                                       $   905,598    $   246,951
                                                       ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
         Accounts payable                              $    39,936    $    26,966
         Investor deposits                                 958,375
         Notes payable - short term                        100,000        100,000
         Other accrued expenses                             39,512          3,750
                                                       -----------    -----------

                  Total Current Liabilities              1,137,823        130,716

Stockholders' (deficit) equity:
         Preferred stock, no par value
         10,000,000 shares authorized,
         no shares issued or outstanding

         Common stock, no par value,
         800,000,000 shares authorized;
         shares issued and outstanding:
         5,453,000 at January 31, 1996 and
         5,453,000 at October 31, 1996                     653,834        273,468
         Additional paid-in capital                            300            300
         Accumulated deficit Net Income (loss)            (886,359)      (152,533)
                                                       -----------    -----------

                Total Stockholders' (deficit) equity      (232,225)       116,235

                                                       $   905,598    $   246,951
                                                       ===========    ===========




                       See notes to financial statements.

                                        3
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

                       STARTECH ENVIRONMENTAL CORPORATION
                             STATEMENT OF OPERATIONS


                                                   Quarter Ended       Quarter Ended
                                                  January 31, 1997    January 31, 1996
                                                  ----------------    ----------------

<S>                                                 <C>                  <C>        
Revenue                                             $         0          $         0

Operating expenses
         Selling expense                                 40,448               30,929
         General and administrative expense             141,512               86,656
                                                    -----------          -----------
                                                        181,960              117,525
Loss from operations

Other income (expense):
         Interest income                                  5,042                    0
         Interest expense                                 2,250                2,250
                                                    -----------          -----------

Net loss                                            $   179,168          $   119,835
                                                    ===========          ===========


Net loss per share                                  $      (.03)         $     (0.02)
                                                    ===========          ===========


Weighted average common
   shares outstanding                                 6,045,367            5,224,750
                                                    ===========          ===========





                        See notes to financial statement.

                                        4
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

                       STARTECH ENVIRONMENTAL CORPORATION
                             STATEMENT OF CASH FLOWS


                                                        Quarter Ended     Quarter Ended
                                                      January 31, 1997   January 31, 1996
                                                      ----------------   ----------------

<S>                                                     <C>                 <C>  
Cash flows from operating activities:
Net loss                                                $(179,168)          $(119,835)

(Increase) in other current assets                         (5,255)

Increase in accounts payable                               12,531               7,043

Increase in accrued expenses                                2,250               2,250
                                                        ---------           ---------

         Net cash used in operating activities           (169,672)           (110,542)
                                                        ---------           ---------

Cash flows from financing activities:
         Proceeds from issuances of
         common stock                                     678,375             272,468
                                                        ---------           ---------

Increase in cash and cash
equivalents                                               508,703             161,926

Cash and cash equivalents at beginning
of period                                                 280,759              85,025

Cash and cash equivalents at end of period              $ 789,462           $ 246,951








                        See note to financial statements

                                        5
</TABLE>


<PAGE>

                       STARTECH ENVIRONMENTAL CORPORATION
                          NOTES TO FINANCIAL STATEMENTS


Note 1.  Basis of Presentation

STARTECH   Environmental   Coloration   (the   "Company")   is  engaged  in  the
commercialization   and  continued   development  of  an  innovative  processing
technology for recycling industrial wastes.

Net loss per share is  determined  by dividing net loss by the weighted  average
number of common shares outstanding during the period. Common share equivalents,
which consist of stock which may be issuable upon exercise of outstanding  stock
options and warrants,  have been excluded  from the weighted  average  number of
common shares since their effect is anti-dilutive.

Certain  reclassifications  have  been  made for  consistent  presentation.  The
reclassifications  have no effect on the net loss for the period ending  January
31, 1997.

The information furnished is unaudited and reflects all adjustments  (consisting
of only normal recurring  adjustments) which, in the opinion of management,  are
necessary  for a fair  presentation  of the  financial  position  and results of
operations for the interim periods. The accompanying financial statements should
be read in  conjunction  with the  Company's  financial  statements  and related
footnotes  for the year  ended  October  31,  1996  which  are  included  in the
Company's  annual report on form 10-K. The results of operations for the quarter
ended  January  31,  1997 are not  necessarily  indicated  of the  results to be
expected for the full year.


Note 2.  Equity Transactions

During the quarter ended January 31, 1997,  309,027  shares of common stock were
issued as a result of the company  issuing a five percent (5%) stock dividend to
all  shareholders  of record on November 11, 1996.  Another  638,917 shares were
issued from the proceeds received a private  placement  offering which closed on
December 31, 1996. The equity proceeds  received by the company from the private
placement  was  $958,376.  There were also 60,938 "S-8" shares issued to various
vendors as provided by the 1995 Nonqualifying Stock Option Plan.






                                        6

<PAGE>



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

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

The Registrant was  incorporated  under the laws of the State of Colorado in May
1991 and has been dormant since 1991. During fiscal 1995, the Registrant entered
into negotiations with Startech Incorporated which culminated in the acquisition
of Startech on November 17, 1995.

Due to the prior dormancy of the Registrant,  no revenues were realized and only
nominal operating  expenses,  principally  filing fees, bank service charges and
legal services, and some minor start up costs have been incurred through October
31, 1995. These trends have changed due to the Startech acquisition.  On January
16,  1996 the name of the  registrant  was  changed  from  Kapalua  Acquisitions
Incorporated to STARTECH Environmental Corporation.


Liquidity and Capital Resources
-------------------------------

Liquidity for the quarter has been provided by previous and current stock sales.
The  Registrant is and will continue to be dependent  upon loans and/or  capital
contributions from shareholders or outside investors.  The Registrant's  capital
resource  requirements  for  future  periods  will  increase  due  to  increased
manufacturing, marketing and administrative demands. These needs are anticipated
to be met from operations of the Registrant's normal business activity.



Background
----------

The Registrant's activities (under its former name - Kapalua Acquisitions, Inc.)
during the two fiscal years  (November  1, 1993 to October 31,  1995)  consisted
primarily of  investigating  possible  business  opportunities.  On November 17,
1995, the Company completed the acquisition of all of the issued and outstanding
shares of common stock of Startech  Corporation,  a corporation  organized under
the laws of the State of Connecticut which engineers,  manufacturers and markets
Plasma  Waste  ConverterTM  ("PWC")  systems  to  recover,  recycle,  reduce and
remediate hazardous and nonhazardous waste materials.

On November 18, 1995, the Board of Directors of the Company unanimously approved
a change of  business  purpose of the Company  from one  seeking an  acquisition
candidate to one engaged in the business of recovering, recycling, reduction and
remediation of hazardous and nonhazardous waste materials.

                                        7

<PAGE>



General
-------

Startech   is  an   environmental   technology   corporation   engaged   in  the
commercialization  and  continued  development  of its Plasma Waste  ConverterTM
("PWC") systems for the recycling,  resource recovery, reduction and remediation
of  hazardous  and  nonhazardous  organic  and  inorganic  materials  and wastes
including radioactive wastes.

The Startech  Plasma  Waste  Converter is a  closed-loop  recycling  system that
converts  materials  formerly regarded as hazardous wastes into useful commodity
products.  The hazardous  waste can be organic and  inorganic,  in the form of a
gas,  liquid,  and solids or any combination  thereof.  Waste volume  reductions
higher than 300 to 1 have been  demonstrated.  Depending on the waste processed,
the principal  commodities produced by the system are a synthetic gas called PCG
(Plasma Converted Gas)TM, metals, and an obsidian-like inert silicate stone. The
PCG can be used as a chemical  feed stock to produce  polymers  and other common
industrial products, as a fuel to produce electricity, as a fuel source for fuel
cells,  as a heating plant fuel to reduce the cost and reliance on fossil fuels,
and in  desalinization  applications  to produce fresh water for  irrigation and
drinking.  The metals can be employed in the metallurgical  industry.  The stone
silicates  can  be  employed  in the  abrasives  industry,  and as an  aggregate
material for construction industry applications.








                                        8

<PAGE>



                           PART II - OTHER INFORMATION
                           ---------------------------



ITEM 1.  LEGAL PROCEEDINGS.

The company is a defendant in litigation  brought in Denver,  Colorado  District
Court by Delphina,  Ltd. in January 1997. The complaint demands the removal of a
restrictive  legend on shares purchased by Delphina,  Ltd. in 1995 and 1996. The
company has moved the matter to the Federal Courts from the District of Colorado
and Delphina, Ltd. has moved to remand. The proceedings are in their preliminary
stages.  The company  does not believe  there is any merit to the claim and will
vigorously contest the matter. No legal proceedings are known to be contemplated
by governmental authorities.


ITEM 2.  CHANGE IN SECURITIES.

No  constituent  instruments  defining the rights of the holders of any class of
registered securities of the Registrant have been materially modified. No rights
evidenced by any class of registered  securities have been materially limited or
qualified  by the  issuance or  modification  of any other class of  securities.
There are no working capital  restrictions or other limitations upon the payment
of dividends except as reported in the Registrant's FORM 10.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

There have been no defaults in the payment of principal  interest,  a sinking or
purchase  fund  installments,  or any other default no cured within thirty days,
with respect to any  indebtedness  of the  Registrant or any of its  significant
subsidiaries  exceeding  five percent (5%) of the total assets of the Registrant
and its consolidated subsidiaries.


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

No matters were submitted during the first quarter of the fiscal year covered by
this report to a vote of security holders.


ITEM 5.  OTHER INFORMATION.

None.


                                        9

<PAGE>



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K. - (by reference)


             (a)  Exhibits.

                  Exhibit 10.5   Private Placement Memorandum dated August 28,
                                 1996.


             (b)  Reports.

                  One  report on Form 8-K was filed  during  the  quarter  ended
                  January  31,  1997.  The only  subject of this  report was the
                  change of accountants  from Robert E. Moe and Associates  P.C.
                  (Spokane,  WA) to  Kostin,  Ruffkess  &  Company,  LLC.  (West
                  Hartford,  CT). The change was implemented for the convenience
                  of the  registrant.  There were no  disagreements  between the
                  registrant and Robert E. Moe and Associates P.C.










                                       10

<PAGE>


                                    SIGNATURE


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.

                                     STARTECH ENVIRONMENTAL CORPORATION



Date:  March 15, 1997                 By: /S/ John D. Watts
       --------------                     -----------------
                                          John D. Watts
                                          Vice President, Chief Finance Officer

                                       11