<PAGE>

                         SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C.  20549

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

                                    FORM 10-QSB
                                          
(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, 1998

    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 Small Business Issuer as Specified in its Charter)


                  NEBRASKA                          47-0709577
     -------------------------------            -------------------
     (State or Other Jurisdiction of             (I.R.S. Employer
     Incorporation or Organization)             Identification No.)
                                       
                              10890 THORNMINT ROAD
                          SAN DIEGO, CALIFORNIA  92127
        (Address, Including Zip Code, of Principal Executive Offices)
                                          
                                 (619) 675-1660
              (Registrant's Telephone Number, Including Area Code)
                                          
         Securities registered pursuant to Section 12(b) of the Act:  None
            Securities registered pursuant to Section 12(g) of the Act:
                           COMMON STOCK, $.005 PAR VALUE
                           -----------------------------
                                  (Title of Class)



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 July 30, 1998, 16,516,980
shares of the Registrant's Common Stock, $.005 par value per share, were
outstanding.



Transitional Small Business Disclosure Format (check one):

YES             NO    X    
    -------        -------


<PAGE>

                               ECO SOIL SYSTEMS, INC.
                                 FORM 10-QSB INDEX
                                          
                                              
                                          

PART I.     FINANCIAL INFORMATION                                          PAGE
                                                                           ----

Item 1.        Financial Statements

               Condensed Consolidated Balance Sheets as of June 30, 1998
               (unaudited) and December 31, 1997                            3

               Condensed Consolidated Statements of Operations 
               (unaudited) for the Three Months and Six Months 
               Ended June 30, 1998 and 1997                                 4
                                
               Consolidated Statements of Cash Flows (unaudited) for 
               the Six Months Ended June 30, 1998 and 1997                  5

               Notes to Condensed Consolidated Financial Statements         6

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

                   
PART II.       OTHER INFORMATION

Item 2.        Changes in Securities and Use of Proceeds                   12

Item 4.        Submissions of Matters to a Vote of Security Holders        12

Item 5.        Other Information                                           13


Item 6.        Exhibits and Reports on Form 8-K                            16


                                       2
<PAGE>
                                          
                                       PART I
                                          
                               FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
                               Eco Soil Systems, Inc.
                                          
                       Condensed Consolidated Balance Sheets
                         (in thousands, except share data)

<TABLE>
<CAPTION>
                                                       June 30,        December 31,
ASSETS                                                   1998             1997   
                                                       --------        ------------
                                                      (unaudited)
<S>                                                    <C>             <C>
Current assets:
   Cash and cash equivalents                           $  1,325        $  3,125
     Short-term investments, available-for-sale             -             3,000
   Accounts receivable, net                              22,606          10,148
   Inventories                                           15,855           5,587
   Prepaid expenses and other current assets              3,710             536
                                                       --------        --------
Total current assets                                     43,496          22,396
Property and equipment, net                               3,945           1,150
Equipment under operating leases, net                     6,197           6,735
Intangible assets, net                                   13,752           6,515
Other assets                                                934             312
                                                       --------        --------
Total assets                                           $ 68,324        $ 37,108
                                                       --------        --------
                                                       --------        --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                    $ 15,903         $ 2,492
   Accrued expenses                                       5,627           2,151
   Current portion of long-term obligations              10,270           1,273
                                                       --------        --------
Total current liabilities                                31,800           5,916
Long-term obligations, net of current portion             1,615           1,412

Shareholders' equity:
   Preferred stock
      $.005 par value; 5,000,000 shares authorized;
      none issued and outstanding                            -               -  
   Common stock
      $.005 par value; 50,000,000 and 25,000,000             82              77
        shares authorized at June 30, 1998 and 
        December 31, 1997, respectively; 16,469,600 
        and  15,320,923 issued and outstanding at 
        June 30, 1998 and December 31, 1997,
        respectively         
            
   Additional paid-in capital                            48,710          43,708
   Warrants                                                 230             242
   Notes receivable from shareholders                       (15)           (282)
   Accumulated deficit                                  (14,098)        (13,965)
                                                       --------        --------
Total shareholders' equity                               34,909          29,780
                                                       --------        --------
Total liabilities and shareholders' equity             $ 68,324        $ 37,108
                                                       --------        --------
                                                       --------        --------
</TABLE>

SEE ACCOMPANYING NOTES.

Note:  The Balance Sheet at December 31, 1997 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 share data)

<TABLE>
<CAPTION>
                                            Three Months         Six Months
                                           Ended June 30,      Ended June 30,
                                        -------------------  ------------------
                                           1998      1997      1998      1997
                                        --------   --------  --------  --------
                                            (unaudited)          (unaudited)
<S>                                     <C>        <C>       <C>       <C>
Revenues:
   Turf/Golf                            $ 20,728   $ 11,120  $ 29,130  $ 15,049
   Agriculture                             6,156        180     6,163       180
                                        --------   --------  --------  --------
Total revenues                            26,884     11,300    35,293    15,229

Cost of revenues:
   Turf/Golf                              14,560      6,957    20,259     9,211
   Agriculture                             4,530         46     4,534        46
                                        --------   --------  --------  --------
Total cost of revenues                    19,090      7,003    24,793     9,257

Gross profit                               7,794      4,297    10,500     5,972

Operating expenses:
   Selling, general and administrative     5,382      2,798     9,178     5,085
   Research and development                   68         12       168       147
                                        --------   --------  --------  --------
Income before interest, depreciation 
    and amortization                       2,344      1,487     1,154       740
   Depreciation                              346         75       695       143
   Amortization of intangibles               275        127       458       344
                                        --------   --------  --------  --------

Income from operations                     1,723      1,285         1       253
Interest expense                             245         83       340       250
Interest income                              130        -         206       -  
                                        --------   --------  --------  --------
Net income (loss)                       $  1,608   $  1,202  $   (133)  $     3
                                        --------   --------  --------  --------
                                        --------   --------  --------  --------
Net income (loss) per share of 
   common stock - basic                 $    .10   $    .11  $   (.01)  $   .00
                                        --------   --------  --------  --------
Net income (loss) per share of 
   common stock - diluted               $    .08   $    .08  $   (.01)  $   .00
                                        --------   --------  --------  --------
Average number of common shares 
   outstanding:
     Basic                                16,665     11,405    16,029     9,199
                                        --------   --------  --------  --------
                                        --------   --------  --------  --------
     Diluted                              19,898     14,656    16,029    12,315
                                        --------   --------  --------  --------
                                        --------   --------  --------  --------
</TABLE>

SEE ACCOMPANYING NOTES.

                                       4
<PAGE>
                               Eco Soil Systems, Inc.
                                          
                        Consolidated Statements of Cash Flows
                                   (in thousands)
                                          
<TABLE>
<CAPTION>
                                                                 Six Months
                                                                Ended June 30,
                                                             -------------------
                                                                1998      1997  
                                                             --------   --------
                                                                 (unaudited)
<S>                                                           <C>       <C>
OPERATING ACTIVITIES
Net income (loss)                                             $  (133)  $      3
Adjustments to reconcile net income (loss) to net cash 
   used in operating activities:   
      Depreciation and amortization                             1,153        487
      Changes in operating assets and liabilities, 
      net of effect of acquired businesses:
         Accounts receivable                                   (3,835)    (5,648)
         Inventories                                           (4,957)    (8,560)
         Prepaid expenses and other assets                     (3,113)      (410)
         Accounts payable                                       3,249      4,498
         Accrued liabilities                                      (69)       528
                                                             --------   --------
Net cash used in operating activities                          (7,705)    (9,102)
                                                             --------   --------
INVESTING ACTIVITIES
Sale of short term investments                                  3,000        -  
Payments related to acquired businesses                        (2,321)    (1,289)
Purchase of property and equipment
Proceeds from note receivable                                    (787)      (578)
Purchase of patents and licenses                                  (25)       -  
                                                             --------   --------
Net cash used in investing activities                            (133)    (1,867)
                                                             --------   --------


FINANCING ACTIVITIES
Repayments to shareholders                                     (1,066)      (369)
Proceeds from long-term debt                                    5,845      2,572
Repayments of long-term debt                                     (575)    (5,236)
Payments on capital lease obligations                              (5)       (22)
Net proceeds from sale of common stock                          1,839     13,891
                                                             --------   --------
Net cash provided by financing activities                       6,038     10,836
                                                             --------   --------

Net decrease in cash and cash equivalents                      (1,800)      (133)
Cash  and cash equivalents at beginning of period               3,125        150
                                                             --------   --------
Cash  and cash equivalents at end of period                   $ 1,325   $     17
                                                             --------   --------
                                                             --------   --------
</TABLE>

SEE ACCOMPANYING NOTES.

                                       5

<PAGE>

                               ECO SOIL SYSTEMS, INC.
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                    (UNAUDITED)
                                          
                                          
1.   BASIS OF PRESENTATION

           The accompanying unaudited condensed consolidated financial 
statements have been prepared in accordance with generally accepted 
accounting principles for interim financial information and with the 
instructions to Form 10-QSB 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, 1998 and 1997 have been made.  The results of operations for 
the six-month period ended June 30, 1998 are not necessarily indicative of 
the results to be expected for the full fiscal year.

           The accompanying consolidated financial statements should be read 
in conjunction with the audited financial statements and notes thereto 
included in the Company's Annual Report on Form 10-KSB for the fiscal year 
ended December 31, 1997.


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 present issuable upon exercise of 
outstanding common stock options, warrants and preferred stock.  These shares 
are excluded when their effects are antidilutive.  As required by SFAS 128, 
the Company has restated prior periods to be presented consistently with the 
current year.

3.   INVENTORIES

           Inventories consist of the following, (in thousands):     

                                                  June 30,     December 31,
                                                    1998           1997
                                                  --------     ------------

                    Work in process               $  5,017        $ 1,072
                    Finished goods                  11,021          4,645
                    Reserve                           (183)          (130)
                                                  --------        -------
                                                  $ 15,855        $ 5,587
                                                  --------        -------
                                                  --------        -------

                                       6
<PAGE>

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


4.   COMPREHENSIVE INCOME

          In June 1997, the FASB issued Statement of Financial Accounting 
Standards No. 130, "Reporting Comprehensive Income" (SFAS 130).  SFAS 130 
requires that all items that are required to be recognized under accounting 
standards as components of comprehensive income be reported in a financial 
statement that is displayed with the same prominence as other financial 
statements.  The Company adopted this statement effective January 1, 1998, 
and has no components of comprehensive income, other than net income or loss, 
to report.

                                       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 looking 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, 1998.  Additionally, the financial statements and 
notes thereto and Management's Discussion and Analysis in the Company's 
Annual Report on Form 10-KSB for the year ended December 31, 1997 will 
provide additional information.

          In addition to other endeavors, the Company develops, markets and 
sells proprietary biological and traditional chemical products and 
distributes certain other biological and traditional chemical products to two 
principal markets: the golf and turf management market ("Turf/Golf") and the 
agricultural and crop market ("Agriculture").  

SECOND QUARTER ENDED JUNE 30, 1998 COMPARED TO SECOND QUARTER ENDED JUNE 30, 
1997

REVENUES
          
          For the second quarter of 1998, revenues were $26.9 million, an 
increase of 138% versus $11.3 million for the second quarter 1997. The 
increase in revenues reflects an increase in both Turf/Golf  and Agriculture 
revenues. 
     
          For the second quarter of 1998, Turf/Golf revenues were $20.7 
million, an increase of 86% versus $11.1 million for the second quarter 1997. 
The increase in Turf/Golf sales occurred in all three operating regions of 
the U.S. as a result of the first quarter of 1998 acquisitions of Cannon Turf 
Supply, Inc. and Benham Chemical Corporation in the midwest, the opening of 
warehouses in the west and stronger sales in the east.  
     
          For the second quarter of 1998, Agriculture revenues were  $6.2 
million, compared to $180,000 for the second quarter of 1997.  Agriculture 
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.
          
GROSS PROFIT

          For the second quarter of 1998, the Company's gross profit was $7.8 
million, an increase of 81% versus $4.3 million for the second quarter of 
1997. The increase in gross profit was due to the increase in both Turf/Golf 
and Agriculture revenues.  For the second quarter of 1998, the Company's 
gross margin was 29% versus 38% during the second quarter of 1997. The 
decrease in gross margin was due to a change in product mix.

          For the second quarter of 1998, the gross profit on Turf/Golf sales
was $6.2 million, an increase of 48% versus $4.2 million during the second
quarter of 1997.  The increase in gross profit on 


                                       8
<PAGE>

Turf/Golf sales is directly related to the increase in revenue, as previously 
discussed. For the second quarter of 1998, the gross margin on Turf/Golf 
products was 30% versus 37% during the second quarter of 1997.  The decrease 
in gross margin on Turf/Golf sales was due to a change in the product mix.  
     
     For the second quarter of 1998, the gross profit on Agriculture sales 
was $1.6 million, compared to $134,000 during the second quarter of 1997.  
The increase in gross profit on Agriculture sales was directly related to the 
increase in revenue. For the second quarter of 1998, the gross margin on 
Agriculture products was 26% versus 74% during the second quarter of 1997.  
The decrease in gross margin on Agriculture sales was due to a change in the 
product mix.  
     
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE

          For the second quarter of 1998, selling, general and administrative 
("SG&A") expense was $5.4 million, an increase of 92% versus $2.8 million 
during the second quarter of 1997.  The increase in SG&A expense was 
primarily due to additional overhead costs associated with the previously 
discussed acquisitions. 

     
RESEARCH AND DEVELOPMENT EXPENSE

          For the second quarter of 1998, research and development ("R&D") 
expense was $68,000, an increase of 467% versus $12,000 during the second 
quarter of 1997. The increase in R & D expense was due to ongoing analysis 
and testing of products for the Agriculture and Turf/Golf markets.

INTEREST EXPENSE

          For the second quarter of 1998, interest expense was $245,000, an 
increase of 195% versus $83,000 for the second quarter of 1997. The increase 
in interest expense reflects an increase in the amount of debt outstanding.
     
AMORTIZATION EXPENSE
     
          For the second quarter of 1998, amortization expense was $275,000, 
an increase of 117% versus $127,000 for the second quarter of 1997.  The 
increase in amortization expense is due to an increase in goodwill directly 
related to the Company's recent acquisitions.

NET INCOME

          For the second quarter of 1998, net income was $1.6 million or $.08 
per share versus net income of $1.2 million or $.08 per share during the 
second quarter of 1997.


SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO SIX MONTHS ENDED JUNE 30, 1997

REVENUES
     
          For the first six months of 1998, revenues were $35.3 million, an 
increase of 132% versus $15.2 million for the first six months of 1997. The 
increase in revenues reflects an increase in both Turf/Golf and Agriculture 
revenues.      



                                       9
<PAGE>

          For the first six months of 1998, Turf/Golf revenues were $29.1 
million, an increase of 94% versus $15 million for the first six months of 
1997. The increase in Turf/Golf revenues occurred in all three operating 
regions of the U.S. as a result of the first quarter of 1998 acquisitions of 
Cannon Turf Supply, Inc. and Benham Chemical Corporation in the midwest and 
from warehouse openings in the west and east. 

          For the first six months of 1998, Agriculture revenues were $6.2 
million, compared to $180,000 for the first six months of 1997. Agriculture 
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. 

GROSS PROFIT
     
          For the first six months of 1998, the Company's gross profit was 
$10.5 million, an increase of 76% versus $6.0 million for the first six 
months of 1997.  The increase in gross profit was due to the increase in both 
Turf/Golf and Agriculture revenues.  For the first six months of 1998, the 
Company's gross margin was 30% versus 39% for the first six months of 1997.  
The decrease in gross margin was due to a change in product mix.

          For the first six months of 1998, the gross profit on Turf/Golf 
sales was $8.9 million, an increase of 52% versus $5.8 million during the 
first six months of 1997.  The increase in the gross profit on Turf/Golf 
sales is directly related to the increase in revenue. For the first six 
months of 1998, the gross margin on Turf/Golf products was 30% versus 39% 
during first six months  of 1997.  The decrease in gross margin on Turf/Golf 
sales was due to a change in the product mix.  
     
          For the first six months of 1998, the gross profit on Agriculture 
sales was $1.6 million, compared to $134,000 during the first six months of 
1997.  The increase in the gross profit on Agriculture sales is directly 
related to the increase in revenue, as previously discussed. For the first 
six months of 1998, the gross margin on Agriculture products was 26% versus 
74% during the first six months of 1997.  The decrease in gross margin on 
Agriculture sales was due to a change in the product mix.  

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE 

          For the first six months of 1998, SG&A expense was $9.2 million, 
an increase of 80% versus $5.1 million during the first six months of 1997.  
The increase in SG&A expense was primarily due to additional overhead costs 
associated with the previously discussed acquisitions.
     
RESEARCH AND DEVELOPMENT
     
          For the first six months of 1998, R&D expense was $168,000, an 
increase of 14% versus $147,000 during the first six months of 1997. The 
increase in R&D expense was due to ongoing analysis and testing of products 
for the agriculture and golf markets.


INTEREST EXPENSE

          For the first six months of 1998 interest expense was $340,000, an 
increase of 36% versus $250,000 during the first six months of 1997.  The 
increase in interest expense reflects an increase in the amount of debt 
outstanding.


                                      10
<PAGE>

AMORTIZATION EXPENSE
     
          For the first six months of 1998, amortization expense was 
$458,000, an increase of 33% versus $344,000 during the first six months of 
1997.  The increase in amortization expense is due to an increase in the 
Company's goodwill directly related to the previously discussed acquisitions.

NET INCOME
   
          For the six months ended June 30, 1998 net loss was $133,000 or 
$.01 per share versus net income of $3,000 or $.00 per share for the six 
months ended June 30, 1997.
   
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 $3.7 million during the second quarter of 1998 and 
$7.8 million during the first six months of 1998.
     
          The Company has entered into negotiations to secure $15 million of 
senior subordinated notes, and a $20 million line of credit.  Financing is 
expected to close before the end of the third quarter.
     
          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
     
          The Company is in the process of upgrading its existing computer 
software and information technology and recognizes the need to ensure its 
operations will not be adversely impacted by Year 2000 software failures.  
The Company presently believes 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 
completed timely, the Year 2000 Problem could have a material impact on the 
operations of the Company.  Software failures due to processing errors 
potentially arising from calculations using the Year 2000 date are a known 
risk.  The project cost is approximately $20,000 and is expected to be 
completed not later than December 31, 1998, which is prior to any anticipated 
impact on the Company's operating systems.  The Company believes that with 
modifications to existing software and conversions to new software the Year 
2000 issue will not pose significant operation problems for its computer 
systems.



                                      11

<PAGE>

                                      PART II
                                          
                                 OTHER INFORMATION
                                          


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

RECENT SALES OF UNREGISTERED SECURITIES

          On April 30, 1998, the Company issued 225,284 shares of  the 
Company's common stock to the shareholders of Agricultural Supply, Inc. ("Ag 
Supply") pursuant to an Agreement and Plan of Merger dated as of April 30, 
1998 (the "Ag Supply Merger Agreement") by and among the Company, 
Agricultural Acquisition Sub, Inc., a wholly owned subsidiary of the Company 
("Ag Supply Merger Sub"), Ag Supply and the shareholders of Ag Supply (the 
"Ag Supply Shareholders"). Pursuant to the Ag Supply Merger Agreement, the 
Company issued to the Ag Supply Shareholders an aggregate of 225,284 shares 
of the Company's common stock and $456,000 in cash in exchange for all the 
outstanding common stock of Ag Supply. The issuance of the Company's common 
stock in connection with the Ag Supply Merger Agreement was effected pursuant 
to the exemption from registration provided by Section 4(2) of the Securities 
Act of 1933, as amended (the "Securities Act"), taking into account the 
representations of the Ag Supply Shareholders that they acquired the common 
stock of  the Company for their own account and the absence of general 
solicitation or advertising.

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

     On June 19, 1998, 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 2001
          Annual Meeting of Shareholders.  The votes cast for, against, withheld
          or abstained as to each nominee are set forth below.  
     
          NOMINEE                FOR            AGAINST     WITHHELD 
          ----------------------------------------------------------
          Jeffrey A. Johnson     12,806,964     none        82,887
          William S. Potter      12,880,051     none         9,800
          
     2.   To amend the Amended and Restated Articles of Incorporation of the
          Company to increase the number of authorized shares of Common Stock
          from 25,000,000 to 50,000,000 shares.
       
                                 FOR            AGAINST     ABSTAINED 
                                 ------------------------------------
                                 12,683,950     143,841     62,060
     
     3.   To approve the adoption of the 1998 Stock Option Plan of the Company
          and the reservation of 1,000,000 shares of Common Stock for the
          issuance thereunder.
     
                                 FOR            AGAINST     ABSTAINED 
                                 ------------------------------------
                                 8,024,364      871,934     52,826


                                       12
<PAGE>

     4.   To amend the Amended and Restated Articles of Incorporation of the
          Company to provide for a staggered Board of Directors consistent with
          the Company's Bylaws, Articles of Correction to Amended and Restated
          Articles of Incorporation and current practice.
     
                                 FOR            AGAINST     ABSTAINED 
                                 ------------------------------------
                                 7,347,039      1,549,483   52,602

     5.   To amend the Amended and Restated Articles of Incorporation of the
          Company to allow the Board of Directors to determine the size of the
          Board.
     
     
                                 FOR            AGAINST     ABSTAINED 
                                 ------------------------------------
                                 11,067,258     1,785,796   36,797
     
     
ITEM 5.  OTHER INFORMATION

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-KSB for the fiscal year ended 
December 31, 1997

          At June 30, 1998, the Company had an accumulated deficit of $14.1 
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 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 



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<PAGE>

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 does not engage in its own research and development 
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 $17 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.

     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 


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<PAGE>

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.

RECENT ACQUISITIONS

         The Company entered into a binding letter of intent effective June 
30, 1998, confirming agreements reached earlier in the month of June, to 
acquire Controlled Irrigation International, d.b.a. Yuma Sprinkler and Pipe 
Supply, and Riegomex S.A. de C.V., leading suppliers of low volume drip 
irrigation systems to the agricultural markets of Arizona, New Mexico and 
Central and Northern Mexico. The shareholders of the acquired company will 
exchange their shares for $300,000 cash and 48,989 shares of the Company's 
common stock.  The Company has also agreed to make certain earn-out payments 
in cash and the Company's common stock based on the earnings before interest, 
taxes, depreciation and amortization (EBITDA) of the acquired company for the 
years ending December 31, 1998 and 1999.  The maximum aggregate dollar value 
of the 1998 and 1999 earn-out payments would be $400,000 and $300,000, 
respectively. The cost of the acquired company will be up to $1.5 million, 
which includes the fair value of the consideration given and direct costs. 

         The Company entered into a binding letter of intent effective June 22,
1998, confirming agreements reached earlier in the month of June, to acquire the
remaining 50% interest in Agricultural Supply de Mexico, S.A. de C.V., a
distributor of micro irrigation products in Mexico.  The shareholders of the
acquired company will exchange their shares for $300,000 cash. The Company has
also agreed to make certain earn-out payments in the Company's common stock
based on the EBITDA of the acquired company for the years ending December 31,
1998 through 2003.  The maximum aggregate dollar value of the 1998 through 2003
earn-out payments would be $1.1 million.  The cost of the acquired company will
be up to $1.4 million, which includes the fair value of the consideration
given and direct costs. 


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<PAGE>

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

Exhibit:

     10.1.     1998 Stock Option Plan
     27.1.     Financial Data Schedule  

No reports on Form 8-K were filed with the SEC during the period ended June 30,
1998.
     


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<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 11, 1998                   By: /s/ William B. Adams
                                            --------------------
                                            William B. Adams
                                            Chairman and Chief Executive
                                            Officer

Date: AUGUST 11, 1998                   By: /s/ L. Jean Dunn, Jr.
                                            ---------------------
                                            L. Jean Dunn, Jr.
                                            Chief Financial Officer
  


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