SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB
                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended September 30, 1999          Commission File Number: 0-29664

                            SOLUCORP INDUSTRIES LTD.

             (Exact Name of registrant as Specified in its Charter)

           YUKON                                         N/A
(State or other jurisdiction of                  (I.R.S. Employer
 incorporation or organization)                   Identification Number)

                 250 West Nyack Road, West Nyack, New York 10994
               (Address of Principal Executive Offices) (Zip Code)

       Registrant's telephone number, including Area Code: (914) 623 2333

         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  twelve  (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
         ninety (90) days. Yes [ X ] No [ ]

         As  of  September  30,  1999,  there  were  22,507,248  shares  of  the
         registrant's common stock, no par value, issued and outstanding.


<PAGE>

BASIS OF PRESENTATION

         The  following  unaudited  financial  statements  have been prepared in
accordance with generally accepted  accounting  principles for interim financial
information  without  audit.  In the  opinion  of  management,  all  adjustments
(consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
presentation  have been included.  These unaudited  statements should be read in
conjunction  with the  audited  financial  statements  of the  Company and notes
thereto  included in the Company's  Report for the twelve months ended  December
31, 1998.  The results of  operations  for the nine months ended  September  30,
1999,  are not  necessarily  indicative of the results which may be expected for
the full year ending December 31, 1999.

<PAGE>

                         PART 1 - FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

                             SOLUCORP INDUSTRIES LTD
                CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
                      (UNAUDITED - PREPARED BY MANAGEMENT)
                                (IN U.S. DOLLARS)


<TABLE>

<S>                                                    <C>         <C>         <C>          <C>

                                                       Three Months Ended      Nine Months Ended
                                                           September 30,            September 30,
                                                       ------------------      -------------------
                                                       1999         1998        1999        1998
                                                       ------------------      -------------------

Revenues
     Environmental clean-up and waste disposal     $439,995     $381,433  $2,852,590  $1,367,996
     Training Institute                                   0        1,000       3,990       9,396
     Allowances                                    (671,286)(1)        0    (671,286)          0
                                              --------------  ----------  ----------  ----------
                                                   (231,291)     382,433   2,185,294   1,377,392
                                              --------------  ----------  ----------  ----------
Cost of Sales and Revenue
     Environmental clean-up and waste disposal      859,724      345,083   3,256,508   1,200,793
     Training Institute                                   0        6,039      65,470       9,003
     Inventory storage costs                              0      112,843      29,643     252,589
                                              --------------  ----------   ---------  ----------
                                                    859,724      463,965   3,351,621   1,462,385
                                              --------------  ----------   ---------  ----------
Gross Margin                                     (1,091,015)     (81,532) (1,166,327)    (84,993)
Investment and Other Income                          56,650       30,701     307,477     139,075
License fees                                        500,000      500,000   1,500,000   1,575,758
                                              --------------  ----------   ---------  ----------
                                                   (534,365)     449,169     641,150   1,629,840
                                              --------------  ----------   ---------  ----------
Expenses
     Administrative and general                     505,384      737,939   2,002,900   2,507,011
     Corporate development and marketing                  0       85,726       1,389     342,173
     Depreciation and amortization                   74,962       91,243     224,888     248,905
                                              --------------  ----------   ---------   ---------
                                                    580,346      914,899   2,229,177   3,098,089
                                              --------------  ----------   ---------   ---------
Earnings (loss) from operations                  (1,114,711)    (465,730) (1,588,027) (1,468,249)
Other Income (expense)                            1,007,233(2)  (527,979)  1,007,233  (1,055,947)
                                              --------------  ----------   ---------   ---------
Earnings (loss) for the period                     (107,478)    (993,709)   (580,794) (2,524,196)
Deficit, beginning of period                    (17,271,263) (14,778,225)(16,797,947)(13,247,738)
                                              --------------  ----------   ---------   ----------
Deficit, end of period                          (17,378,741) (15,771,934)(17,378,741)(15,771,934)
                                                  =========    =========   =========    =========
Earnings (loss) per share                           ($0.005)      ($0.05)     ($0.03)     ($0.13)
                                                  =========    =========   =========    =========

</TABLE>

(1) Reflects  adjustments  on contract  with Western  Steel Limited made in this
period
(2) Reflects  adjustments  and  settlements  of Accounts  Payable in this
amount made in this period

The accompanying notes are an integral part of this statement.

<PAGE>

                            SOLUCORP INDUSTRIES LTD.
                           CONSOLIDATED BALANCE SHEET
                                (IN U.S. DOLLARS)

                                                  September 30,    December 31,
                                                     1999             1998
                                                 --------------    -------------
                                                  (Unaudited)       (Audited)
ASSETS
Current
         Cash                                      $         0   $           0
         Accounts receivable (Note 2)                  349,915       2,399,401
         License fees (Note 3)                               -          90,910
         Due from related parties (Note 5)           1,302,171       1,690,482
         Other receivables                              75,700          66,635
         Inventories (Note 6)                        2,127,092       1,538,560
         Prepaid expenses (Note 7)                   3,210,827         247,238
                                                 -------------     ------------
                                                     7,065,705       6,033,226
Long-term investment (Note 8)                          342,343         265,421
Capital assets (Note 9)                                156,284         311,124
                                                 -------------     ------------
TOTAL ASSETS                                       $ 7,564,332     $ 6,609,771
                                                     =========      ==========
LIABILITIES
Current
         Bank indebtedness                        $    371,117     $    58,359
         Accounts payable and accrued liabilities    2,104,650       1,708,195
         Customer deposits                              77,854          77,854
         Loans payable (Note 10)                     1,028,527         347,319
                                                 -------------      -----------
                                                     3,582,148       2,191,727
                                                 -------------      -----------
SHAREHOLDERS' EQUITY
Subscriptions received                                       -       1,161,901
Share capital (Note 11)                             21,360,925      20,054,090
Deficit                                            (17,378,741)    (16,797,947)
                                                 -------------      -----------
                                                     3,982,184       4,418,044
                                                 -------------      -----------
TOTAL LIABILITIES AND
SHAREHOLDER'S EQUITY                                 7,564,332       6,609,771
                                                     =========       =========
Subsequent events (Note 13)
Contingencies (Note 15)
Commitments (Note 17)

The accompanying notes are an integral part of this statement.

<PAGE>
                            SOLUCORP INDUSTRIES LTD.
         SCHEDULE OF ADMINISTRATIVE AND GENERAL EXPENSES (U.S. Dollars)
          THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 1999 & 1998

<TABLE>

<S>                                         <C>             <C>            <C>            <C>

                                                             Three Months Ended September 30,
                                                         ----------------------------------------
                                                             1999                          1998
                                            ---------------------------------------------  ------
                                                  U.S.         Canada            Total     Total
                                            -------------   --------------  -----------    ------
Advertising and promotion                    $  (1,111)             -         $ (1,111)        0
Automobile                                       2,111              -            2,111     5,393
Bad debts                                          200              -              200         0
Bank charges and interest                       72,012            230           72,242     1,443
Consulting and management fees                    (500)             -             (500)  126,291
Foreign exchange (gain) loss                         -              -                -     8,354
Insurance                                       (1,135)             -           (1,135)   19,826
Investor and public relations                        -              -                -         0
Legal, accounting and audit                    261,119              -          261,119   142,936
Office, printing and related                     7,902              -            7,902    58,596
Rent                                            64,435              -           64,435    34,430
Salaries and wages                              43,128         20,086           63,214   289,573
Telephone                                       12,345              -           12,345    34,980
Transfer and filing fees                             -              -                -        (7)
Travel                                          24,562              -           24,562    16,124
                                            -------------  ---------------  -----------   -------
                                             $ 485,068      $  20,316         $505,384 $ 737,939
                                              ========       =========       =========   ========

<S>                                       <C>               <C>               <C>        <C>


                                                          Nine Months Ended September 30,
                                            -----------------------------------------------------
                                                             1999                          1998
                                            ---------------------------------------------  ------
                                                  U.S.         Canada            Total     Total
                                            -------------   --------------  -----------    ------
Advertising and promotion                  $   10,001               -           10,001   $      0
Automobile                                     18,552               -           18,552     23,780
Bad debts                                         200               -              200     86,600
Bank charges and interest                     102,165             230          102,165          0
Consulting and management fees                137,460               -          137,460    541,102
Foreign exchange (gain) loss                        0               -                0     61,255
Insurance                                      70,720               -           70,720     20,261
Investor and public relations                   3,791               -            3,791     40,087
Legal, accounting and audit                   515,428               -          515,428    479,206
Office, printing and related                  208,357           3,978          212,335    227,768
Rent                                           114,30           3,497          117,805     97,927
Salaries and wages                            623,672          63,194          686,866    797,099
Telephone                                      91,521           3,635           95,156     76,278
Transfer and filing fees                            0               -                0        394
Travel                                         32,191               -           32,191     63,381
                                            -------------  ---------------  ----------   ---------
                                           $1,928,366        $ 74,534       $2,002,900 $2,507,011
                                             ========        =========       =========  ========

</TABLE>

<PAGE>

                             SOLUCORP INDUSTRIES LTD
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                      (UNAUDITED - PREPARED BY MANAGEMENT)
                                (IN U.S. DOLLARS)


<TABLE>

<S>                                                          <C>             <C>

                                                                    Nine Months Ended
                                                                         September 30,
                                                            -----------------------------------
                                                                       1999          1998
                                                            -----------------------------------
CASH PROVIDED BY (USED IN)
     Operating activities
         Net profit (loss) for the period                       $  (580,794)  $(2,524,196)
         Items not involving cash:
              Depreciation and amortization                         224,888       248,905
                                                            --------------- --------------
         Funds provided (used) from operations                     (355,906)   (2,275,291)
         Non-cash working capital changes                        (1,015,270)    ( 373,752)
                                                            --------------- --------------
             Cash provided by (used in) operating activities     (1,371,176)   (2,649,043)
                                                            --------------- --------------
     Financing activities
         Issue of common shares                                     144,934     1,987,100
         Due from related parties                                   388,311       330,137
         Loans receivable                                            (9,065)       50,000
         Loans payable                                              681,208       225,109
                                                            --------------- --------------
              Cash provided by (used in) financing activities     1,205,388     2,592,346
                                                            --------------- --------------
     Investment activities
         (Increase) decrease in capital assets                      (70,048)      (29,836)
         (Increase) decrease in long-term investments               (76,922)      (11,432)
                                                            --------------- --------------
         Cash provided by (used in) investment activities          (146,970)      (41,268)
                                                            --------------- --------------
     Increase (decrease) in cash position                          (312,758)      (97,965)
     Cash position, beginning of period                             (58,359)       26,646
                                                            --------------- --------------
     Cash position, end of period                                ($ 371,117)    ($ 71,319)
                                                                 ==========      =========


</TABLE>

The accompanying notes are an integral part of this statement.

<PAGE>

1.       Significant Accounting Policies

         (a)      Generally Accepted Accounting Principles

         The consolidated  financial statements have been prepared in accordance
         with accounting  principles  generally accepted in Canada, which differ
         in some respects from those in the United States. (See also Note 19.)

         (b)      Basis of Consolidation

         The  consolidated  financial  statements  include  the  accounts of the
         Company and its  subsidiaries.  At September  30, 1999,  the  Company's
         subsidiaries and its percentage equity in each are as follows:

                  BSM Industries (Canada), Inc.               100%
                  World Travel Plaza, Inc.                    100%
                  World Tec Equities, Inc.                    100%
                  EPS Environmental, Inc.                     100%
                  Environmental Training Institute, Inc.      100%
                           (incorporated in the USA)

         (c)      Cash and Cash Equivalents

         For purposes of balance sheet  clarification and the statements of cash
         flows, the Company  considers all highly liquid  investments  purchased
         with an  original  maturity  of  three  (3)  months  or less to be cash
         equivalents.

         (d)      Estimates

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and  assumptions   that  affect  the  reported  amount  of  assets  and
         liabilities  at the date of the financial  statements  and the reported
         amounts of revenue and expenses  during the  reporting  period.  Actual
         results could differ from those estimates.

         (e)      Fair Value of Financial Instruments

         The carrying  amounts  reported in the balance sheets for cash and cash
         equivalents, accounts receivable, loans and other receivables, accounts
         payable and accrued  liabilities  and loans  payable  approximate  fair
         market  value  because of the  immediate  short-term  maturity of these
         financial accounts. The fair value of the long-term investments are not
         readily   determinable  due  to  uncertainties  in  their  realization;
         however, where available, the quoted market prices have been disclosed.


<PAGE>

         (f)      Inventory

         Inventory is valued at the lower of cost and net realizable value. Cost
         is determined on a first-in, first-out basis.

         (g)      Long-term Investments

         Investments  are  recorded  at  cost  less a  provision  for  permanent
         impairment in value.

         (h)      Capital Assets

         Capital assets are recorded at cost.  Amortization is provided over the
         estimated useful lives of the assets on the following basis:

                  Computer                  30% declining balance
                  Furniture and office equipment     20% declining balance
                  Leasehold improvements               5 years straight-line
                  Remediation equipment              30% declining balance
                  Patent costs                       10 years straight-line

         (i)      Reporting Currency and Translation of Foreign Currency

         The  Company  has adopted  the United  States  dollar as its  reporting
         currency for its financial  statements  prepared  after March 31, 1996.
         The U.S. dollar is the currency of the primary economic  environment in
         which the Company  conducts its business and is considered  appropriate
         functional  currency for its  operations.  Accordingly,  the  financial
         statements  of the  Company  have been  translated  using the  temporal
         method with  translation  gains and losses  included  in the  earnings.
         Under this method the  operations  of the Company  have been  converted
         into U.S. dollars at the following rates of exchange:

                  (i)      Monetary  assets  and  liabilities  - at the  rate of
                           exchange prevailing at the balance sheet date.

                  (ii)     All other  assets and  liabilities  - at the exchange
                           rate prevailing at the time of the transactions

                  (iii)    Revenue and expenses - at the average  exchange rates
                           prevailing during the period

         (j)      Share Issue Costs

         Share issue costs are charged directly to the deficit.

         (k)      Revenue Recognition

         Revenue  from  on-site  remediation  projects is  recognized  using the
         percentage  of  completion  method of  accounting.  Under  this  method
         contract  revenue is  determined  by  applying  to the total  estimated
         income on each  contract,  a percentage  which is equal to the ratio of
         contract costs  incurred to date, to the most recent  estimate of total
         costs  which  will  have to be  incurred  upon  the  completion  of the
         contract. Costs and estimated earnings in excess of billings represents

<PAGE>

         additional earnings over billings,  based upon percentage completed, as
         outlined  above.  Similarly,  billings in excess of costs and estimated
         earnings  represent  excess of amounts  billed over income  recognized.
         Provision for estimated losses on uncompleted contracts are made in the
         period in which such losses are  determined.  As at September 30, 1999,
         there were no on-site projects in progress.

         Revenue  from  in-line  remediation  projects is  recognized  using the
         completed contract method. Under this method revenue is recognized when
         work is completed and invoiced.

         Revenue from license fees, option payments and royalties are recognized
         as they accrue in accordance with the terms of the relevant agreements.

         (l)      Research and Development

         Research and development  expenditures  less related  government grants
         are charged to operations.

         (m)      Earnings (Loss) Per Share

         The earnings  (loss) per share is computed  using the  weighted-average
         number of common shares outstanding during the period.

         n)       Accounting for Stock-Based Compensation

         In  October  1995  the  FASB  issued  SFAS  No.  123   "Accounting  for
         Stock-Based  Compensation".  The statement  encourages  all entities to
         adopt a new method of  accounting to measure  compensation  cost of all
         employee stock  compensation plans based on the estimated fair value of
         the award at the date it is granted. Companies are, however, allowed to
         continue  to  measure  compensation  cost for  those  plans  using  the
         intrinsic  value based method of accounting,  which  generally does not
         result in compensation  expense  recognition for most plans.  Companies
         that elect to remain  with the  existing  accounting  are  required  to
         disclose in a footnote to the financial  statement pro forma net income
         and,  if  presented,  earnings  per share,  as if SFAS No. 123 had been
         adopted. The accounting  requirements of SFAS No. 123 are effective for
         transactions  entered into in fiscal years beginning after December 15,
         1995.  Currently,   the  Company's  stock-based  compensation  plan  is
         accounted for using Canadian generally accepted  accounting  principles
         similar to the  intrinsic  value method  prescribed  by APB No. 25. The
         Company is in the process of computing  the effect of adopting SFAS No.
         123 and has not yet  made a  decision  on  whether  to  adopt  the U.S.
         accounting for the fiscal period ended  September 30, 1999.  Management
         believes the financial impact of adopting SFAS No.
         123 would be immaterial.


<PAGE>

2.       Accounts Receivable                                      (Audited)
                                                 September 30,     December 31,
                                                     1999              1998
                                                --------------   --------------
         Smart International Ltd.                      -            $2,006,984
         Other                                     459,353             804,156
                                                --------------   --------------
                                               $   459,353          $2,811,140

         Allowance for bad debts               $(  109,438)        $(  411,739)
                                                --------------   --------------
                                               $   349,915          $2,399,401
                                                  ========           ========
3.       License Fees

         By a letter  of intent  dated  June 4,  1997,  and an  agreement  dated
         September 15, 1997,  the Company  granted to Smart  International  Ltd.
         (Smart)  the right to  manufacture  chemicals  for the  Company and the
         right to exclusively engage in remediation  projects in China using the
         Company's  technology.  The agreement is for a ten-year term commencing
         June 1,  1997,  with an  option to renew  for a  further  10 years.  As
         consideration,  Smart  has  agreed  to pay  an  annual  license  fee of
         $2,000,000  per  year  plus a  royalty  of $5 per ton for  each  ton of
         processed  material in excess of 100,000  tons per contract  year.  The
         Company billed  $500,000  towards the license fee for the quarter ended
         September 30, 1999.  Pursuant to the agreement  with Smart which allows
         payments  to be offset  against  amounts  owed to Smart  for  inventory
         purchases,  this  amount  is  included  in  the  deposit  on  inventory
         purchases, and reflected in the total value of $3,165,489 for available
         inventory recorded for the period. No royalties were payable.
         (See also Note 7)

4.       Loans Receivable

         Nil

5.       Due From Related Parties

         Advances, primarily to directors and employees, related to directors in
         the  amount  of  $1,302,171  (December  31,  1998 -  $1,690,482),  bear
         interest at 8.5% and have no specific term of repayment. These advances
         were secured by marketable securities (market value December 31, 1998 -
         approximately  $50,000).  During the quarter ended  September 30, 1999,
         the Company received  repayments of $0 from the proceeds of the sale of
         the marketable securities and $515,524,  which was offset against loans
         payable by the Company to a third party. Additional advances of $0 were
         made to the related parties and interest of $27,095 was charged for the
         current  quarter.  As at September 30, 1999, the value of the remaining
         security has remained at approximately $50,000. Management expects that
         the  value of the  security  will  recover  and that the  amounts  due,
         including the current accrued interest, will be fully recovered.

<PAGE>

6.       Inventories                                               (Audited)
                                                September 30,     December 31,
                                                    1999              1998
                                               --------------   --------------
         Raw chemicals                            $2,122,028       $1,515,550
         Blended chemicals                             3,035           16,056
         Goods for resale                              2,029            6,954
                                               --------------   --------------
                                                  $2,127,092       $1,538,560
                                                   ========          ========


7.       Prepaid Expenses                                          (Audited)
                                                September 30,     December 31,
                                                    1999              1998
                                               --------------   --------------
         Consulting agreements                      $  5,041         $  5,041
         Rental expense                               36,360           36,360
         Deposit on inventory purchases (Note 7a)  3,165,489          201,900
         Other                                         3,937            3,937
                                               --------------   --------------
                                                  $3,210,827      $   247,238
                                                   ========          ========

         a)       Deposit On Inventory Purchases

         Pursuant to the agreement  with Smart,  the Company may offset  license
         fee payments against amounts owed to Smart for inventory purchases. Due
         to the anticipated,  and now realized,  increased requirement for large
         volumes of chemical  reagents  for  remediation  projects in 1999,  the
         Company  has offset  Smart's  fees as  deposits  on current  and future
         inventory. (See also Management Discussion and Analysis section on Cash
         Flow.)

<PAGE>

8.       Long-term Investments

<TABLE>

<S>                                                                          <C>                <C>

                                                                                (Audited)
                                                                               September 30, December 31,
                                                                                   1999         1998
                                                                             -------------- --------------
         (a)      Shares of Earthworks Industries Inc. accrued (see Note 17d).    46,598         46,598

         (b)        Convertible  debenture from Travel Plaza Developments,  Inc.
                    (Travel Plaza). The Company elected on December 28, 1994, to
                    convert the Cdn $50,000  debenture  into  250,000  shares of
                    Travel Plaza. Final regulatory  approval for this conversion
                    from the Alberta Stock Exchange is still pending  subject to
                    their acceptance of a financing arrangement and the approval
                    of minority  shareholders.  On August 21, 1996,  pending the
                    finalization  of the  required  financing  to  complete  the
                    project,  construction  was  temporarily  suspended  and the
                    stock of Travel Plaza has been halted from  trading.  Due to
                    these uncertainties,  the Company has written this down to a
                    nominal value.                                                     1              1

         (c)        Convertible  loan to Cortina  Integrated  Waste  Management,
                    Inc., a subsidiary of Earthworks  Industries,  Inc.  (public
                    company),  due  September 5, 2000,  with interest at 15% per
                    annum.  The  Company is entitled to convert all or a portion
                    of the loan into shares of  Earthworks  Industries,  Inc. at
                    any time.  During the term of this loan, the Company has the
                    right  to  offset   royalty   payments  due  to   Earthworks
                    Industries, Inc. against the loan balance. 295,743 218,821

         (d)        A 25% interest in John Beech Remediation Limited
                    (no market value).                                                 1              1

         (e)      70,000 shares of Global Technologies, Inc. (Note 10).                0              0
                                                                                --------      ---------
                                                                             $   342,343      $ 265,421
                                                                                ========      =========

9.       Capital Assets

<S>                                                                           <C>               <C>

                                                                                                   (Audited)
                                                                                September 30,    December 31,
                                                                                     1999            1998
                                                                                --------------  -------------
         Computers                                                              $    24,047     $     24,047
         Furniture and office equipment                                             121,292          121,292
         Remediation equipment                                                      449,675          454,327
         Leasehold improvements                                                      15,927           15,927
         Incorporation costs                                                            688              688
         Patent costs                                                                70,583           70,583
                                                                                --------------  --------------
                                                                                 $  682,212     $    686,864
         Less: Accumulated amortization                                             525,928          375,740

                                                                                --------------  --------------
                                                                                $   156,284     $    311,124
                                                                                   ========        =========
</TABLE>

<PAGE>

10.      Loans Payable

<TABLE>

<S>                                                                               <C>              <C>
                                                                                    September 30,    December 31,
                                                                                      1999               1998
                                                                                   --------------  --------------
                                                                                     (Unaudited)      (Audited)

         IDM Environmental  Corp.,  10.25%,  payable in monthly  installments of
         $22,008,  including  principal and interest,  maturing on July 1, 1998,
         secured by the Company's  treasury stock,  100,500 shares of Earthworks
         Industries,  Inc.  (Note 8a) and 70,000 shares of Global  Technologies,
         Inc. (Note 8e) held as investments by the Company.  The Company has not
         made any payments and IDM  liquidated all of the collateral and applied
         the proceeds towards the loan. IDM has subsequently  secured a judgment
         against the Company for the balance of the debt.
         (See also Note 13)                                                         $   206,277      $  206,277

         Global Technologies, Inc., due on demand ($100,000 Cdn).                        65,308          65,308

         London Venture Capital Corp.                                                   741,942          60,734

         Other                                                                           15,000          15,000
                                                                                   -------------- --------------
                                                                                     $1,028,527    $    347,319
                                                                                      =========        =========

</TABLE>

11.      Share Capital

         a)       Authorized:
                  200,000,000 common shares of no par value

         b)       Issued:


<TABLE>

<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                 Nine Months Ended              Nine Months Ended
                                                 September 30, 1999             September 30, 1998
                                                   (Unaudited)                    (Unaudited)
                                            Shares            Amount            Shares           Amount

                  Balance, beginning        19,528,640        $20,054,640       18,652,497       $18,135,240
                                            ----------         ----------       ----------       -----------
         Issued pursuant to
                  Stock options                      0                  0          494,000           959,100
                  Private placement          2,689,841          1,161,901                0                 0
                  Warrants                           0                  0           36,557            63,975
                  Shares for debt settlement   288,767            144,384           50,000           100,000
                  Finders agreement                  0                  0          142,593           361,500
                  License agreement                  0                  0          190,550           500,000
                                            ---------------------------------   -----------------------------
                                             2,978,608          1,306,285          913,700       $ 1,984,575
                                            ---------------------------------   -----------------------------
                  Allotted for cash                  0                  0            1,443             2,525
                                            ---------------------------------   -----------------------------
                  Balance, ending           22,507,248         21,360,925       19,567,640       $20,122,340
                                            =============================       ============================

</TABLE>

         c)       During the nine month period  ended  September  30,  1999,  no
                  stock  options  were  granted  by the  Company  to  employees,
                  directors and other associated  individuals.  At September 30,
                  1999, stock options were outstanding as follows:

                  Shares          Exercise Price             Expiration Date
--------------------------------------------------------------------------------
                  250,000             $1.38                 December 21, 1999
                   47,500             $1.75                 July 13, 2000
                   71,500             $1.75                 September 12, 2000
                   47,000             $1.75                 January 6, 2002
                1,638,329             $1.75                 June 9, 2002
                  872,210             $1.20                 November 4, 2002
                  431,000             $1.20                 February 19, 2003
                1,985,000             $1.20                 October 6, 2003

         d)       During the nine month period  ended  September  30,  1999,  no
                  warrants  were  issued and  outstanding  warrants  remained as
                  follows:

                  Shares          Exercise Price             Expiration Date
--------------------------------------------------------------------------------
                  750,000                  $2.75            September 10, 2000
                   25,000                  $4.00            April 4, 2001
                  300,000                  $7.50            June 3, 2002

         e)       At September 30, 1999, 1,675,000 common shares were
                  held in escrow (September 30, 1998 - 1,675,000).
                  Pursuant to an escrow agreement dated April 30, 1998,
                  these shares were subject to release on or before June 22,
                  1998, in the event that the Company attained certain
                  cash-flow targets.  Since these cash-flow targets were
                  not achieved, these escrowed shares are in the process
                  of being canceled.

12.      Income Taxes

         At  December  31,  1998,  the  Company  had   accumulated   tax  losses
         aggregating approximately $13,100,000, which may be carried forward and
         applied  against taxable income in future years up to 2003. The Company
         does not record the income tax benefit of these losses.

13.      Subsequent Events

         On October 7, 1999, a judgment in the amount of $288,833.20, to be paid
         to Tellus Consultants,  Inc. (Tellus) was recorded against the Company.
         This concluded an issue in which Tellus had previously agreed to settle
         a debt by  accepting  the  Company's  stock in lieu of payment.  Due to
         events  beyond the Company's  control,  the stock  certificate  was not
         delivered and the judgment was entered.

         On October 20, 1999, IDM Environmental  Corp. (IDM) obtained a judgment
         against the Company in the amount of $325,702.50.
         (See also Note 10)

<PAGE>

14.      Segmented Information

<TABLE>

<S>                                                 <C>             <C>           <C>


                                                       US Services                  Consolidated Totals
                                                       & Products        Canada             Total
                                                     --------------- ------------- ---------------------

         (a) Three Months Ended September 30, 1999:
                           (Unaudited)
             Revenue                                  $(  231,291)  $         0             $(231,291)
             License Fees                                 500,000             0               500,000
              Cost of Sales                               859,724             0               859,724
                                                      ----------------------------------------------------------------
             Operating earnings (loss)                  ( 591,015)            0              (591,015)

              Administrative and general                  485,068         20,316              505,384
              Corporate development and marketing               0              0                    0
              Amortization and depreciation                74,085            877               74,962
                                                      ----------------------------------------------------------------
              Segmented profit (loss)                 $(1,150,306)    $(  21,193)         $(1,171,361)
                                                      ----------------------------------------------------------------

              Unallocated:
              Investment and other income                                                   1,063,883
                                                                                     ----------------
              GAIN (LOSS) FOR THE PERIOD                                                  $  (107,478)
                                                                                     ------------------
              IDENTIFIABLE ASSETS                     $ 7,053,805  $     483,432           $7,537,237
                                                        =========      ==========           ==========

         (a) Three Months Ended September 30, 1998:
                           (Unaudited)
             Revenue                                  $   382,433  $           0           $  382,433
              License Fees                                500,000              0              500,000
              Cost of Sales                               463,965              0              463,965
                                                      ----------------------------------------------------------------
              Operating earnings (loss)                   418,468              0              418,468

              Administrative and general                  697,233         40,706              737,939
              Corporate development and marketing          71,731         13,995               85,726
              Amortization and depreciation                91,234              0               91,234
                                                      ----------------------------------------------------------------
              Segmented profit (loss)                 $(  441,730)     $( 54,701)           $(496,431)
                                                      ----------------------------------------------------------------
                       Unallocated:
                  Other income (expense)                                                     (527,979)
              Investment and other income                                                    $ 30,701
                                                                                     ------------------
              GAIN (LOSS) FOR THE PERIOD                                                   $( 993,709)
                                                                                     ------------------
              IDENTIFIABLE ASSETS                      $7,323,718      $ 560,597         $  7,884,315
                                                        =========      ==========             ==========


</TABLE>

<PAGE>

14.      Segmented Information

<TABLE>

<S>                                                 <C>             <C>           <C>


                                                      US Services                  Consolidated Totals
                                                       & Products        Canada             Total
                                                     --------------- ------------- ---------------------

         (c) Nine Months Ended September 30, 1999:
                           (Unaudited)
             Revenue                                  $ 2,185,294        $    0           $ 2,185,294
              License Fees                              1,500,000             0             1,500,000
              Cost of Sales                             3,351,621             0             3,351,621
                                                     ----------------------------------------------------------------
             Operating earnings (loss)                    333,673             0               333,673

              Administrative and general                1,928,366        74,534             2,002,900
              Corporate development and marketing           1,389             0                 1,389
              Amortization and depreciation               222,257         2,631               224,888
                                                     ----------------------------------------------------------------
              Segmented profit (loss)                $( 1,818,339)    $( 77,165)         $( 1,895,504)
                                                     ----------------------------------------------------------------

              Unallocated:
                  Other income (expense)                                                      989,788
              Investment and other income                                                     324,922
                                                                                        ------------------
              GAIN (LOSS) FOR THE PERIOD                                                  $  (580,794)
                                                                                        ------------------
              IDENTIFIABLE ASSETS                    $  7,053,805     $ 483,432           $ 7,537,237
                                                        =========     ==========           ==========

         (d) Nine Months Ended September 30, 1998:
                           (Unaudited)
             Revenue                                  $ 1,377,392         $   0          $  1,377,392
              License Fees                              1,575,758             0             1,575,758
              Cost of Sales                             1,462,385             0             1,462,385
                                                      ----------------------------------------------------------------
              Operating earnings (loss)                 1,490,765             0             1,490,765

              Administrative and general                2,374,603       132,408             2,507,011
              Corporate development and marketing         274,386        67,787               342,173
              Amortization and depreciation               242,545         6,360               248,905
                                                      ----------------------------------------------------------------
              Segmented profit (loss)                 $(1,400,769)   $( 206,555)          $(1,607,324)
                                                      ----------------------------------------------------------------
                       Unallocated:
                  Other income (expense)                                                   (1,055,947)
              Investment and other income                                                   $ 139,075
                                                                                       ------------------
              GAIN (LOSS) FOR THE PERIOD                                                  $(2,524,196)
                                                                                       ------------------
              IDENTIFIABLE ASSETS                     $ 7,323,718     $ 560,597           $ 7,884,315
                                                        =========    ==========            ==========


</TABLE>

<PAGE>

15.      Contingencies

         Legal Proceedings

         As  previously  reported,  the  staff of the  Securities  and  Exchange
         Commission has been investigating the affairs of the Company. The staff
         has advised the  Company's  attorneys  that the  Commission  intends to
         initiate proceedings against the Company and certain persons associated
         with the Company but no such proceedings have as yet been initiated.

16.      Related Party Transactions

         During the three months  ended  September  30,  1999,  the Company paid
         consulting  fees and salaries of $0 (September  30, 1998 - $126,291) to
         directors,  former  directors  and/or private  companies  controlled by
         directors and/or individuals related to directors.

17.      Commitments

         a)  The  Company  has  entered  into  numerous  non-exclusive  finder's
         agreements  with third  parties to promote  the  Company's  remediation
         process for soil and industrial wastes. The Company will pay between 1%
         and 7% commission  on gross  revenues  generated by the third  parties.
         These agreements expire within one and two years.

         b) The Company entered into a finder's  agreement with a third party to
         raise capital for the Company through private  placements.  The Company
         will pay a 5%  commission  on private  placements  raised  directly  or
         indirectly by the third party.  The agreement  expires on September 27,
         2000, with an option to renew for another five years.

         c) The Company has agreed to pay  royalties to  Earthworks  Industries,
         Inc.  (Earthworks),  a Canadian public  company,  based on Cdn $1/tonne
         (metric  ton)  of  soil  remediated  in  Canada  or the  United  States
         ($1/tonne  will be U.S.  dollars if soil is remediated in the USA). The
         Company  will  receive one share in  Earthworks  for each $1of  royalty
         paid,  to a maximum of  200,000  shares,  in minimum  blocks of 50,000.
         These shares are accrued as the soil is  remediated.  An  additional $1
         (Cdn or  U.S.)  will be paid  for  each  tonne  of soil  remediated  on
         contracts resulting from the efforts of Earthworks. The Company has the
         right to offset  royalty  payments  against the  convertible  loan from
         Cortina Integrated Waste Management, Inc. (See also Note 8c).


<PAGE>

18.      Economic Dependence

         During the nine months ended  September 30, 1999,  revenues of $439,995
         were  earned  from six  customers,  of which  $349,915  is  included in
         accounts receivable.

         License  fees of  $1,500,000  (September  30, 1998 -  $1,575,758)  were
         recognized in the nine months ended September 30, 1999, as disclosed in
         Note 3.

19.      Reconciliation to United States Generally Accepted Accounting
         Principles

         As  discussed  in  Significant  Accounting  Policies  (Note  1),  these
         consolidated  financial  statements  are  prepared in  accordance  with
         accounting  principles  generally  accepted in Canada.  Differences  in
         accounting  principles as they pertain to these consolidated  financial
         statements are as follows:

         Marketable Securities

         Under GAAP, the accounting  for  marketable  securities  depends on the
         classification of securities as held to maturity,  trading or available
         for sale. The  classification  would be based on  management's  intent.
         Marketable  securities included in long-term investments (Note 8) would
         be  classified  as being  available  for sale.  Under U.S.  GAAP,  such
         securities  would be recorded at fair value,  with any changes recorded
         in a separate  component of  shareholder's  equity.  Realized  gains or
         losses would be recorded on the income  statements.  At  September  30,
         1999, the effect on the  presentation of long-term  investment for U.S.
         GAAP purposes would not be material.

20.      Uncertainties - Year 2000 Computer Issue

         The effect of the Year 2000  Issue on the  Company  may be  experienced
         before,  on, or after  January  1,  2000,  and,  if not  satisfactorily
         addressed,  the impact on operations and financial  reporting may range
         from minor errors to significant systems failure which could affect the
         conduct of normal business  operations.  The Company's  services do not
         utilize  equipment  or systems  that depend on computer  software.  The
         Company's  accounting systems are personal computer based and presently
         utilize  off-the-shelf   accounting  software.  The  Company  plans  to
         purchase software  upgrades from software vendors,  and these purchases
         are not expected to have a material impact on the Company's  results of
         operations.  It is not possible,  at the present time, to be certain of
         all aspects of the Year 2000 Issue  affecting  the  Company,  including
         those related to he efforts of customers,  suppliers, or third parties,
         will be satisfactorily resolved.

<PAGE>

Item 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
         OF OPERATIONS AND FINANCIAL CONDITIONS

The following  discussion  should be read in conjunction  with the  consolidated
financial statements and notes thereto.

Nine  Months  Ended  September  30,  1999,  Compared  to the Nine  Months  Ended
September 30, 1998.

Liquidity and Capital Resources

At  September  30,  1999,  the Company had a working  capital of  $3,483,557,  a
decrease of $357,942 or 9.3% from the $3,841,499 reflected at December
 31, 1998. Within the current  liabilities,  significant  increases  occurred in
accounts  payable,  accrued  expenses and loans payable as a result of preparing
for projects which commenced during the nine-month period of 1999.

The Company has financed  its  operations  through  revenues  received  from MBS
sales,  projects and related revenues.  Extraordinary  expenses  associated with
Legal  Proceedings  are  being  financed  through  the  sale  of  the  Company's
securities  to certain  private  investors.  The Company  expects to continue to
provide  for its cash and  capital  needs in this manner  until  operations  are
sufficient to meet these needs.

Cash Flows

During the nine-month period ended September 30, 1999, the Company increased its
cash overdraft position $312,758 versus an overdraft cash position of $58,359 in
the comparable  period in 1998. In the current period,  cash was provided mainly
from sales  revenues,  and from  non-interest  bearing  demand loans.  Cash-flow
further reflects the out-flow of monies required to finance work in progress for
which  revenues  and profits will not be fully  realized  until later in 1999 or
2000.

The  Company  notes  that  the   multi-faceted   agreement  that  it  and  Smart
International  reached  with BOHAI  Chemical  group Co. to  commence  Phase 1 of
remediating  a stockpile of chromium  contaminated  soil and slag and to install
two In-line  remediation  systems at BOHAI plants in China should  generate cash
flow and reduce  current  inventory  in or by the first  quarter  of 2000.  This
agreement was publicly announced by the Company on September 1, 1999.

Results of Operations

Aggregate revenue (environmental clean-ups and waste disposal projects, Training
Institute fees and license fees)  increased to $3,685,294  from  $2,935,150;  an
increase of $750,144,  or 25.6%,  for the nine-month  period ended September 30,
1999. This resulted  primarily from increased  remediation  activity as projects
that were  initially  obtained  during 1998 reached their  on-site  start-up and
operational phases.

Cost of sales  increased to $3,351,621,  representing an increase of $1,889,236,
or 129.2%,  over the  comparable  1998 period's  $1,462,385,  when revenues were
significantly  lower. As the period entailed costs associated with large project
start-ups and  simultaneous  running,  for which invoicing will not be completed
until the fourth  quarter of 1999 or later,  and high  inventory  purchase costs
incurred in preparation for these projects and other contemplated projects.

<PAGE>

The Company  reported a Gross Margin Loss of $1,166,327 for the current  period,
which was an  increase  versus the loss of $84,993  recorded  in the  nine-month
period  ended   September  30,  1998.  The  Company  notes  that  the  currently
non-billable  project work and high costs  associated  with inventory  purchases
have restricted  profitability.  In addition,  the Company believes that project
costs do not yet reflect the full economy of scale  potential for  operations at
this stage in its development.

Investment  and  other  income  increased  to  $307,477  from  $139,075  in  the
comparable  period in 1998,  an increase of  $168,402.  This  increase  resulted
primarily  from an  equivalent  change to the income  received  from interest on
related  party loans and a  settlement  payment  from the  Tristate  Restoration
Company, Inc. lawsuit which was resolved during the first quarter.

Selling,  general and  administrative  expenses (SG&A)  decreased  $504,111,  or
20.1%, to $2,002,900 in the nine-month  period ended September 30, 1999,  versus
the 1998 comparable period's $2,507,011.  While significant contributions to the
1999 expenses were made by legal costs incurred by the Company.

For the nine-month  period ended  September 30, 1999, the Company is reporting a
loss  from  operations  of  $1,588,027,  versus  a  loss  of  $1,468,249  in the
comparable period of 1998. This loss, which reflects an increase of $119,778, or
8.2%,  is  disappointing,  although  the Company  recognizes  it to be a further
indicator of the large  abnormal  expenses that the Company  experienced  in the
1999 period, which are discussed above.

Other

In anticipation of significantly  increased  remediation in 1999 and thereafter,
the Company has been progressively increasing its inventory of the main chemical
ingredient  in  MBS  since  mid-1998,  as the  chemical  has a  relatively  long
lead-time prior to availability.  Although several major projects have commenced
in 1999, this build-up of inventory is still the primary reason for the value of
inventory  increasing  $588,532  to a total of  $2,127,092  from the  $1,538,560
recorded at December 31, 1998. The Company  believes that demand for product for
contracts already issued, most particularly the BOHAI agreement discussed above,
and  contracts  in process  and  pending in 1999 and 2000 will  result in a need
exceeding full utilization of the currently held inventory.

Three  Months  Ended  September  30,  1999,  Compared to the Three  Months Ended
September 30, 1998.

Aggregate revenue (environmental clean-ups and waste disposal projects, Training
Institute fees and license fees) decreased to $439,995 from $882,433; a decrease
of $442,438, or 50.1%, for the three-month period ended September 30, 1999. This
resulted  primarily  from an adjustment  to the Company's  contract with Western
Steel  Limited in the quarter,  as noted in Item 1 -  Consolidated  Statement of
Operations and Deficit.

<PAGE>

Cost of sales increased to $859,724,  representing  an increase of $395,759,  or
80.3%,  over the comparable  1998 period's  $463,965.  The period entailed costs
associated  with large project  start-ups and  simultaneous  running,  for which
invoicing will not be completed until the fourth quarter of 1999.

The Company  reported a Gross Margin Loss of $1,091,015 for the current  period,
which was an increase  versus the loss of $81,532  recorded  in the  three-month
period ended September 30, 1998.

Investment and other income  increased to $56,650 from $30,701 in the comparable
period in 1998, an increase of $25,949. This increase resulted primarily from an
equivalent change to the income received from interest on related party loans.

Selling,  general and  administrative  expenses (SG&A)  decreased  $232,555,  or
31.5%,  to $505,384 in the three-month  period ended September 30, 1999,  versus
the  1998  comparable  period's  $737,939.  As  previously  noted,  legal  costs
contributed significantly to this situation.

For the three-month  period ended September 30, 1999, the Company is reporting a
loss from operations of $1,114,711,  versus a loss of $465,730 in the comparable
period of 1998. This loss, which represents an increase of $648,981,  or 139.3%,
is viewed as a part of the Company's large abnormal expenses  experienced in the
1999 period, as previously discussed.

Year 2000 Issue

The effect of the Year 2000 Issue on the Company may be experienced  before, on,
or after January 1, 2000, and, if not  satisfactorily  addressed,  the impact on
operations  and financial  reporting may range from minor errors to  significant
systems  failure which could affect the conduct of normal  business  operations.
The  Company's  services  do not  utilize  equipment  or systems  that depend on
computer software.  The Company's accounting systems are personal computer based
and presently utilize  off-the-shelf  accounting software.  The Company plans to
purchase software  upgrades from software  vendors,  and these purchases are not
expected to have a material impact on the Company's results of operations. It is
not  possible,  at the present  time, to be certain that all aspects of the Year
2000 Issue  affecting  the Company,  including  those  related to the efforts of
customers, suppliers, or third parties, will be satisfactorily resolved.

Forward-looking Statements

Certain  matters  discussed  herein may  constitute  forward-looking  statements
within the meaning of the Private Securities  Litigation Reform Act of 1995 and,
as such, may involve risks and uncertainties.  These forward-looking  statements
relate to, among other things, expectations of the business environment in which
the Company operates, projections of future performance, perceived opportunities
in the market and  statements  regarding the Company's  mission and vision.  The
Company's actual results,  performance, or achievements may differ significantly
from the  results,  performance,  or  achievements  expressed or implied in such
forward-looking statements.

<PAGE>

                          PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         See Note 15.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         (a)      None

         (b)      None

         (c)      During the  quarter  ended  September  30,  1999,  the Company
                  issued  288,767  shares  of  stock  in  exchange  for cash and
                  forgiveness of debt in the amount of $144,384.

         (d)      Not Applicable

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None

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

         None

ITEM 5.  OTHER

         None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      The following exhibit is filed as part of this report:

                  -        Financial Data Schedule


         (b) No reports on Form 8-K have been filed during the quarter for which
this report is filed.

                                   SIGNATURES

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

Dated:   November 18, 1999          SOLUCORP INDUSTRIES LTD.




                                            By: /s/
                                                Peter Mantia - President