As Filed with the Securities Exchange Commission on January 13, 2005

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                    FORM 10-K
                                   (Mark One)

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

                  For the fiscal year ended September 30, 2004
                                       OR
          [_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934

                        Commission File Number: 000-21956

                               EVANS SYSTEMS, INC.
             (Exact name of registrant as specified in its charter)

                    Texas                              74-1613155
        (State or other jurisdiction                (I.R.S. Employer
      of incorporation or organization)          Identification number)

             102 South Mechanic, P.O. Box 550, El Campo, Texas 77437
   (Address, including Zip Code, of registrant's principal executive offices)

                                 (979) 245-2424
              (Registrant's telephone number, including area code)

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

                                                    Name of each exchange
         Title of each class                         on which registered
         -------------------                        ---------------------
   Common Stock, par value $.01 per share           NASDAQ-OTCBB Exchange

Indicate by check mark whether the Registrant 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 has been subject to such filing requirements
for the past 90 days. Yes [X] No[_]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X].

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [_] No [X]

<TABLE>
<S>                                                                               <C>
Approximate aggregate market value of common stock held by
non-affiliates of the registrant as of September 30, 2004                     $     294,000
Number of shares of common stock outstanding as of December 31, 2004             10,430,196
</TABLE>


DOCUMENTS INCORPORATED BY REFERENCE: None.


                                       1
<PAGE>

                                     PART I
                                     ------

This Annual Report on Form 10-K contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended and
Section 21E of the Securities Exchange Act of 1934, as amended, which are
intended to be covered by the safe harbors created thereby. Investors are
cautioned that all forward-looking statements involve risks and uncertainty,
including without limitation, the ability of the Company to successfully
implement its turnaround strategy, changes in costs of raw materials, labor, and
employee benefits, as well as general market conditions, competition and
pricing. Although the Company believes that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of the
assumptions could be inaccurate, and therefore, there can be no assurance that
the forward-looking statements included in this Annual Report will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as representation by the Company or any other person that
the objectives and plans of the Company will be achieved. In assessing
forward-looking statements included herein, readers are urged to carefully read
those statements. When used in the Annual Report on Form 10-K, the words
"estimate," "anticipate," "expect," "believe," and similar expressions are
intended to be forward-looking statements.

Item 1. Business

Evans Systems Inc. and its subsidiaries, (dba MC Star and collectively referred
to herein as the "Company") operate 3 convenience stores selling gasoline,
merchandise and fast food to the motoring public, provides environmental
remediation services in southern Texas and provide freight deliver services of
petroleum products.

On November 18, 2002, the Company sold its inventory in its three remaining
operating convenience stores and leased the stores and store equipment to
outside operators, effectively discontinuing its Texas Convenience Store Segment
operations. Under the lease agreements, the Company executed fuel contracts with
these outside operators, thereby maintaining the fuel volumes. The results of
operations of the Texas Convenience Store segment were classified as
discontinued operations and prior periods were restated. In April 2004, the
Company reacquired control of 2 of the stores due to the inability of the
lessee's to make required payments and the lessee's inability to maintain the
stores and equipment in proper working order. After unsuccessful attempts to
re-lease the stores, management reopened the stores as company-owned stores
during late April 2004. In addition, in July 2004, the Company reacquired
control of the remaining store due to the lessee's inability to make required
payments and reopened the store as a company-owned store. Accordingly, the
Company has reestablished its Texas Convenience Store Segment and the prior
period results of operations of these stores previously reported as discontinued
operations have been reclassified and included in income from continuing
operations for all periods presented. As a result of these transactions, fiscal
2004 includes operations from April 2004 to September 30, 2004, fiscal 2003
includes operations from October 1, 2002 to November 18, 2002, and fiscal 2002
includes operations from October 1, 2001 to September 30, 2002.

On July 1, 2004, the Company entered into an agreement with Mauritz & Couey (MC)
whereby the Company conveyed its Exxon, Chevron and unbranded fuel distribution
contracts and certain petroleum marketing distribution assets, accounts
receivable and inventory to MC for relief of amounts owed to MC for fuel
purchases and management fees, the assumption of the Company's line of credit
obligation by MC and the issuance of a note receivable. As a result of the
transaction, the Company discontinued its petroleum marketing distribution
segment and effectively disposed of the segment's assets. See Discontinued
Operations discussion below. From July 1, 2004 until December 31, 2004, the
Company continued to deliver fuel products to MC customers and the Company was
reimbursed by MC at common carrier freight rates, resulting in an immaterial
impact to the Company's operations. Effective January 1, 2005, the remaining
employees of the Petroleum Marketing segment were terminated and the Company
ceased delivering fuel products as a common carrier.


                                       2
<PAGE>


Operating results for each of the Company's segments follow (in thousands).

<TABLE>
<CAPTION>
                                                                                  September 30,
                                                                                  -------------
                                                                         2004         2003           2002
                                                                         ----         ----           ----
<S>                                                                  <C>            <C>           <C>
Texas Convenience Stores

Revenues                                                             $    947       $    341      $  5,068

Operating income (loss)                                                  (238)            43          (335)

Environmental Operations

Revenues                                                             $    973       $  1,241      $  1,105

Operating income (loss)                                                    35            217            44

Unallocated General and Administrative Expenses                      $    (53)      $   (372)     $   (675)

Total Continuing Operations
Revenues                                                             $  1,920       $  1,582      $  6,173

Operating income (loss)                                                  (256)          (112)         (966)

Texas Petroleum Marketing*

Revenues                                                             $ 12,936       $ 17,536      $ 19,685

Operating income (loss)                                                  (516)          (472)       (1,595)

*Texas Petroleum Marketing operations ceased July 1, 2004
</TABLE>

Texas Convenience Store Operations
----------------------------------

On November 18, 2002, the Company sold its inventory in its three remaining
operating convenience stores and leased the stores and store equipment to
outside operators, effectively discontinuing its Texas Convenience Store Segment
operations. In late April 2004 and early July 2004, the Company reacquired
control of the stores due to the lessee's inability to make required payments
and reopened the stores as company-owned stores. Accordingly, the Company has
reestablished its Texas Convenience Store Segment and the prior period results
of operations of these stores previously reported as discontinued operations
have been reclassified and included in income from continuing operations for all
periods presented. As a result of these transactions, fiscal 2004 includes
operations from April 2004 to September 30, 2004, fiscal 2003 includes
operations from October 1, 2002 to November 18, 2002, and fiscal 2002 includes
operations from October 1, 2001 to September 30, 2002.

The following table sets forth the revenues of the Texas Convenience Store
segment (in thousands):

<TABLE>
<CAPTION>
                                                                                  September 30,
                                                                                  -------------
                                                                        2004          2003         2002
                                                                        ----          ----         ----
<S>                                                                   <C>           <C>           <C>
Motor fuel sales                                                      $  648        $  208        $2,737
Inside merchandise and other sales                                       299           134         2,331
                                                                      ------        ------        ------
  Total sales                                                         $  947        $  342        $5,068
                                                                      ======        ======        ======
Number of operating stores at year-end                                     3            --             8
                                                                      ======        ======        ======
</TABLE>

                                       3
<PAGE>

At September 30, 2004, the Company operated 3 convenience stores, featuring
self-service motor fuels and a variety of food and non-food merchandise. The
Company's stores are located in smaller communities throughout the gulf coast
region of Texas.

Environmental Operations
------------------------

EDCO Environmental (dba Star Co) provides environmental assessment and
remediation services for the petroleum distribution industry in the southeast
Texas market area. Star Co currently focuses its efforts on the following
activities:

     Underground storage tank ("UST") removal        UST regulator upgrades
     Site assessments for regulatory agencies        UST repairs and maintenance
     Site clean up reimbursement

Star Co has provided environmental remediation services to customers ranging
from gasoline stations, convenience stores, public utilities, banks, major oil
companies, large industrial corporations, various small local enterprises and a
variety of governmental institutions and enterprises. The environmental
protection business is primarily the result of government mandate. In the
mid-1980's, the EPA initiated a program for the management of USTs throughout
the U.S. The EPA now requires stage II vapor recovery improvements at fuel
facilities rather than through on-board canisters in new motor vehicles.

A number of states, including Texas, have established remediation funds to
assist owners/operators in the clean up of leaking USTs. In Texas, this was
accomplished through the Groundwater Protection Act ("GPA"), which became
effective on September 1, 1989. The GPA, as amended, provides clean-up funds for
eligible expenses, less applicable deductibles. The fund is continually financed
by a fee assessed on motor fuels sold in the state. Financing programs secured
by assignments of rights to reimbursement by the Texas Commission on
Environmental Quality ("TCEQ") can be obtained for leaking petroleum storage
tank sites impacted by releases from USTs. For locations where contamination
already exists, the UST owner/operator must comply with TCEQ clean-up
regulations or risk fines of up to $10,000 per day and disqualification from the
benefits and funding of the GPA.

Under current Texas law and the requirements of the TCEQ, on September 30, 2005,
funding for the TCEQ's reimbursement programs will terminate. All environmental
work on TCEQ approved reimbursement locations must be completed on or before
September 30, 2005 in order to be considered for reimbursement. All
reimbursement applications must be submitted prior to September 30, 2006 for
reimbursement. Management is currently monitoring the Texas legislature to
determine if the deadline will be extended and additional funds appropriated to
the TCEQ for the reimbursement programs. There can be no assurance that the
deadlines will be extended or that additional funds will be appropriated to the
TCEQ.

Star Co. reported revenues of $974,000, $1,241,000 and $1,105,000 in 2004, 2003
and 2002, which were almost entirely from contracts under the TCEQ reimbursement
programs.

Discontinued Operations
-----------------------

On July 1, 2004, the Company entered into an agreement with Mauritz & Couey (MC)
whereby the Company conveyed its Exxon, Chevron and unbranded fuel distribution
contracts and certain petroleum marketing distribution assets, accounts
receivable and inventory with a net book value aggregating $1,629,000 to MC for
relief of amounts owed to MC for fuel purchases and management fees of
approximately $1,705,000, the assumption of the Company's line of credit
obligation by MC of $399,000 and the issuance of a note receivable of $88,000.
As a result of the transaction, the Company discontinued its petroleum marketing
distribution segment and effectively disposed of the segment's assets. The
results of operations of the Texas Petroleum Marketing segment have been
classified as discontinued operations and prior periods have been restated. The
Company has not allocated interest expense or general corporate overhead to
discontinued operations. The otherwise tax liability from this transaction is
offset by net operating loss carryforwards of the Company generated from
previous years losses. Accordingly, no provision has been recorded.

                                       4
<PAGE>

Employee Relations
------------------

At September 30, 2004, the Company employed 40 people, none of whom are
represented by any collective bargaining organizations. The Company has had no
work stoppages, slow downs or strikes. Effective January 1, 2005, the remaining
7 employees from the former Petroleum Marketing Segment were terminated.

Management considers its employee relations to be satisfactory.

Competition
-----------

All of the Company's business segments operate in a highly competitive
environment. The Company competes on the basis of price, service, and quality.
In addition, each of the respective business systems faces special competitive
factors. In all phases of operations, the Company encounters strong competition
from a number of companies, including some companies with significantly greater
resources than the Company. Many of these larger competitors employ financial
and personnel resources substantially in excess of those that are available to
the Company.

The convenience store industry is a retail service-oriented industry. It is
distinguished from other retail businesses by its emphasis on location and
convenience rather than price, and a commitment to customers who need to
purchase items quickly at extended hours. Convenience stores feature a wide
variety of items including groceries, dairy products, tobacco products,
beverages, and health and beauty aids. Many sell petroleum on a self-service
basis. Stores are generally designed with ample customer parking and quick
checkout procedures to maximize convenience as well as encourage impulse buying
of high margin items.

The convenience store industry is highly competitive, fragmented, and
regionalized. It is characterized by a few large companies and many small
independent companies. Several competitors are substantially larger and have
greater resources than the Company. The Company's primary competitors include
Diamond Shamrock, RaceTrac, Thomas Petroleum, and E-Z Mart. The Company also
competes with other convenience stores, small supermarkets, grocery stores, and
major and independent gasoline distributors who have converted units to
convenience stores.

Star Co. is a full service environmental company. In the past, the remediation
industry was not highly competitive, but increasingly companies are entering the
environmental business. The remediation industry is characterized by a few large
companies, some medium sized companies such as Star Co., and many small
independent companies. Some competitors are larger and have greater resources
than Star Co. Star Co. competes primarily with engineering firms and private
contractors in addition to other environmental remediation companies.

The continued growth in the remediation service is dependent upon market
penetration, customer base, government regulations, funding, and legislative
changes. Star Co.'s growth in underground storage tank upgrading depends upon
its ability to work efficiently, meet price competition, and will be adversely
affected by restrictions upon reimbursements by the TCEQ.

Item 2. Properties

The Company owns 17 commercial parcels of real estate in Texas. The properties
are comprised of convenience stores, service stations, plants and unimproved
sites suitable for retail development. It also leases another 3 retail locations
under operating lease agreements with varying terms and lives.

The Company's general offices are located in Bay City Texas in a 13,475 square
foot building. Adjacent to the offices are 14,784 square feet of additional
warehouse buildings together with bulk storage equipment, including 14 fuel
storage tanks and 20 lube oil and antifreeze tanks. These office buildings were
sold as part of the sale of the Texas Petroleum Marketing segment to MC. As part
of the sales agreement, the Company maintains use of the building at no cost
until either a formal lease agreement is entered into or the Company relocates
its offices.

                                       5
<PAGE>


Item 3. Legal Proceedings

The Company is subject to litigation, primarily as a result of customer and
vendor claims, in the ordinary conduct of its operations. Except as described
below, as of September 30, 2004, the Company had no knowledge of any legal
proceedings, which, by themselves, or in the aggregate, would not be covered by
insurance or could be expected to have a material adverse effect on the Company.

During fiscal 2003, the Company was notified that a lawsuit was filed against
the Company and several or its current and former officers and directors on
behalf of purchasers of the Company's common stock. The petition alleged that
the Company received funds from a Private Placement transaction with Comsight
Holdings, Inc., whereby Comsight agreed to act as a placement agent for
accredited investors to purchase a minimum of 1,250,000 and a maximum of
3,750,000 shares of the Company's common stock in a private placement to
accredited investors at $0.40 per share. On August 17, 2000, the Company issued
1,437,500 shares of common stock for total consideration of $575,000, which
included 625,000 shares for the plaintiffs. The Plaintiff's alleged that they
never received their 625,000 common shares or a refund of the subscription
funds. In April 2004, the Company and the former and current directors agreed to
settle the lawsuit. Under the settlement agreement, the Company agreed to
reissue the original 625,000 common shares to the plaintiff as well as issue an
additional 625,000 shares to the plaintiff. In addition, Mr. J.L. Evans, Sr.
agreed to forfeit 1/3 of his stock warrants and one former director agreed to
directly compensate the plaintiff $25,000.

During fiscal 2003, Matagorda County, Victoria County, Jackson County and
Brazoria County filed tax suits against the Company for failure to pay prior
years ad valorem taxes. The Company has accrued all prior years ad valorem taxes
at September 30, 2004.

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

None.

                                     PART II

Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters

Stock Information

Traded On the NASDAQ Over The Counter Bulletin Board (OTCBB) Quotation System --
The Company's Common Stock, $.01 par value, is listed on the OTCBB exchange
under the Symbol "EVSI.OB". At September 30, 2004, there were approximately 112
shareholders of record. The Company has not paid any cash dividends, and the
Company currently has no plans to adopt a regular cash dividend.

The aggregate market value of the Company's voting stock held by non-affiliates
was approximately $294,000 on September 30, 2004.

The high and low price range for the last two years, based on the closing sales
price as reported by NASDAQ\OTCBB, are below:

Dates                                                   High              Low
-----                                                   ----              ---
October 1, 2002 through December 31, 2002               .14               .04
January 1, 2003 through March 31, 2003                  .08               .02
April 1, 2003 through June 30, 2003                     .13               .03
July 1, 2003 through September 30, 2003                 .08               .04
October 1, 2003 through December 31, 2003               .13               .05
January 1, 2004 through March 31, 2004                  .19               .07
April 1, 2004 through June 30, 2004                     .14               .06
July 1, 2004 through September 30, 2004                 .09               .04

                                       6
<PAGE>

Item 6. Selected Financial Data

The following table sets forth certain selected financial data which should be
read in conjunction with the Consolidated Financial Statements and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included herein. Amounts are in thousands, except per-share data.

<TABLE>
<CAPTION>

                                                                                   September 30,
                                                                                   -------------
Income Statement Data                                            2004       2003        2002       2001        2000
---------------------                                            ----       ----        ----       ----        ----
<S>                                                           <C>        <C>         <C>       <C>         <C>
Revenues                                                      $ 1,920    $ 1,583     $ 6,173   $ 13,505    $ 26,723

Gross profit                                                      529        631       1,258      2,814       4,880

Operating income (loss)                                          (256)      (112)       (966)      (858)       (480)

Income (loss) from continuing operations                         (379)     1,697      (1,035)      (617)     (3,036)

Net income (loss)                                                (332)     1,225        (831)    (3,046)     (5,735)

Basic and diluted income (loss) from continuing
  operations per common share                                   (0.04)      0.17       (0.14)     (0.10)      (0.71)

Basic and diluted earnings (loss) per common share              (0.03)      0.12       (0.11)     (0.50)      (1.35)

Basic and diluted weighted average number common shares        10,157      9,846       7,588      6,134       4,263



Balance Sheet Data

Current assets                                                $ 1,289    $ 1,760     $ 2,194    $ 3,034     $ 6,516

Current liabilities                                             1,433      2,391       2,519     12,002      19,301


Current ratio                                                   .90:1      .87:1       .25:1      .34:1       .42:1

Total assets                                                    3,235      4,504       5,771     11,474      21,689

Long-term debt                                                  2,652      2,706       5,070        609         716

Total stockholders' equity (deficit)                             (850)      (593)     (1,818)    (1,137)      1,672
</TABLE>

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

The following discussion of the Company's financial condition and results of
operations should be read in conjunction with the financial statements and notes
thereto appearing elsewhere in this document.

During the three years in the period ended September 30, 2004, the Company has
recorded operating losses aggregating $1.33 million. In addition, the Company
had recorded operating losses from its Texas Petroleum Marketing segment, now
discontinued, aggregating $2.58 million during the three years in the period
ended September 30, 2004. At September 30, 2004, the Company has a working
capital deficit of $144,000 and a stockholders' deficit of $850,000.

In December 1999, the Company received notification from NASDAQ stock exchange
that the Company was not in compliance with two requirements for continued
listing on the NASDAQ NMS: the Company did not hold an annual stockholders
meeting in 1998 and the market value of the public float in the Company's common
stock did not meet or exceed a minimum level of $5 million. The Company was
subsequently delisted by NASDAQ on February 17, 2000. The Company's common stock
is now traded on the over-the-counter bulletin board system maintained by
NASDAQ. The Company's ability to raise additional equity capital in the future
could be adversely affected with the Company's common stock no longer listed on
a national exchange.

                                       7
<PAGE>

The Environmental Segment has made a marginal profit over the years and
maintained a positive cash flow. Management intends to expand the Environmental
Segment by creating a Testing Division. The Company is currently exploring the
feasibility of acquiring through merger a company currently performing line,
tank, and soil testing. Financial institutions have become increasingly aware of
potential environmental hazards and the cost associated there with, on
properties they finance. The need for testing to determine if any pollution
exist on properties will continue for an unforeseeable time into the future. For
this reason management believes adding a testing segment will increase the
revenues and profitability of the Environmental Segment.

Management will continue to reduce debt and provide working capital through
funds from operations and the sale of non-income producing assets. There can be
no assurance that any of management's plans as described above will be
successfully implemented or that the Company will continue as a going concern.

Application of Critical Accounting Policies

We have identified the policies below as critical to our business operations and
the understanding of our results of operations. The impact and any associated
risks related to these policies on our business operations is discussed
throughout Management's Discussion and Analysis of Financial Condition and
Results of Operations when such policies affect our reported and expected
financial results.

In the ordinary course of business, we have made a number of estimates and
assumptions relating to the reporting of results of operations and financial
condition in the preparation of our financial statements in conformity with
accounting principles generally accepted in the United States. We base our
estimates on historical experience and on various other assumptions that we
believe are reasonable under the circum-stances. The results form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results could differ
significantly from those estimates under different assumptions and conditions.
We believe that the following discussion addresses our most critical accounting
policies, which are those that are most important to the portrayal of our
financial condition and results of operations and require our most difficult,
subjective, and complex judgments, often as a result of the need to make
estimates about the effect of matters that are inherently uncertain.

Revenue Recognition

The Company's policy is to prepare its financial statements on the accrual basis
of accounting in accordance with generally accepted accounting principles.
Revenues from motor fuel sales to open dealer accounts are recognized when
delivered. Revenues from motor fuel sales and retail sales at convenience stores
are recognized when sold at the store. Expenses are recognized in the period in
which they are incurred.

Environmental segment revenue from fixed-price contracts is recognized using the
percentage-of-completion method, measured by the percentage of cost incurred to
date to estimated total cost at completion for each contract. Profit recognition
is deferred on each contract until progress reaches a level of completion
sufficient to establish the probable outcome. Provisions for estimated losses on
uncompleted contracts are made in the period in which such losses are
determined. Changes in job performance, job conditions, and estimated
profitability that result in revisions to costs are recognized in the period in
which the changes are determined. Because of the inherent uncertainties in
estimating, it is at least reasonably possible that such changes will occur
within the near term.

Inventories

Substantially all inventories are products held for sale. Inventories of gas,
diesel and other fuels, oil and grease, automotive products and accessories,
chemical products and convenience store products utilize the first-in, first-out
(FIFO) method of accounting and are stated at the lower of cost or market.

                                       8
<PAGE>

For a more comprehensive list of our accounting policies, including those that
involve varying degrees of judgment, see Note 1 of Notes to Consolidated
Financial Statements.



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

2004 compared to 2003
---------------------

Consolidated revenues from continuing operations increased $337,000, or
approximately 21%, to $1,920,000 in the year ended September 30, 2004. The
increase is primarily attributable to the presentation of operations of the
Texas Convenience Store segment due to the reestablishment of that Segment in
April 2004. The Texas Convenience Store segment results of operations include
operations for the period from late April 2004 (2 stores) and early July 2004 (1
store) to September 30, 2004, and only the period from October 1, 2002 to
November 18, 2002 during 2003 as the stores were leased to outside operators and
the segment was discontinued from November 18, 2002 to April 2004. The Company
subsequently reacquired control of those stores. Revenues from the Environmental
segment decreased marginally.

Consolidated gross profit from continuing operations decreased $102,000, or
approximately 16%, to $529,000 in the year ended September 30, 2004. Gross
profit expressed as a percentage of revenues ("Gross Margin") decreased to
approximately 28% of sales in 2004 from approximately 40% of sales in 2002. The
decrease in gross margin in 2004 is mainly attributable to the higher profit
margin of the Environmental segment negatively impacted by the lower profit
margins of the Texas Convenience Store segment, which had increased operations
in 2004 over 2003.

Consolidated operating expenses increased $42,000, or approximately 6%, in 2004
to $785,000. The increase in operating expenses was mainly attributable to the
increased operations of the convenience store segment, which resulted in
employment personnel increases of $99,000. General, administrative and other
operating expenses cost cuts resulted in savings of $9,000. Those reductions
were affected by the gain on asset sales of $2,000 in 2004, as compared to a
loss of $48,000 in 2002.

Consolidated operating losses increased $144,000 to $256,000 in 2004 as compared
with a loss of $112,000 in 2003. Excluding the effect of gain (loss) of assets
sales on operating losses in 2004 and 2003, consolidated operating losses
increased $194,000 from $258,000 in 2004 to $64,000 in 2003.

Consolidated loss from continuing operations decreased to $379,000 in 2004 as
compared to a consolidated income from continuing operations of $1,697,000 in
2003. Loss from continuing operations in 2004 includes $200,000 in interest
expense and $46,000 in other expenses offset by rent income of $123,000. Income
from continuing operations in 2003 includes a gain on the sales of non-operating
assets of $1,653,000, rental income of $216,000 and other income of $74,000
offset by $134,000 in interest expense.

Consolidated net income (loss) increased $1,557,000 to a net loss of $332,000 in
2004 as compared to a net income of $1,225,000 in 2003. Consolidated net loss in
2004 includes a $516,000 loss from discontinued operations of the Texas
Petroleum Marketing segment offset by a gain on the disposal of the Texas
Petroleum Marketing segment assets of $563,000. Consolidated net income in 2003
includes a $472,000 charge from discontinued operations of the Texas Petroleum
Marketing segment.

                                       9
<PAGE>

Texas Convenience Store Segment

The Company's stores are located in smaller communities throughout the gulf
coast region of Texas and feature self-service motor fuels and a variety of food
and non-food merchandise. During the year ended September 30, 2004, the Company
operated 2 convenience stores from the period April 2004 to September 30, 2004,
and 1 store from the period July 2004 to September 30, 2004. During the year
ended September 30, 2003, the Company operated 3 convenience stores from the
period October 1, 2002 to November 18, 2002, at which date the stores were
leased to outside operators. Accordingly, comparative analysis of the results of
operations of this segment between 2004 and 2003 will result in significant
fluctuations.

Total sales increased $605,000 in 2004 to $947,000 from $342,000 in 2003. Fuel
sales in 2004 were $648,000, as compared with $208,000 in 2003. Merchandise
sales increased to $299,000 in 2004 from $134,000 in 2003. Average selling price
per gallon increased in 2004 to approximately $1.62 per gallon, as compared with
$1.28 per gallon in 2003. The increase is due to nation wide cost increases in
2004 that raised selling prices per gallon.

Gross profit increased to $121,000 in 2004 as compared with $5,000 in 2003.
Gross Margin was approximately 13% and 1% in 2004 and 2003, respectively. Gross
margin in 2004 was more representative of the segments historical gross margins.
Merchandise Gross Margin increased in 2004, to approximately 35% of sales, as
compared to approximately 1% of sales in 2003. Fuel Gross Margin increased to
approximately 3% during 2004, as compared with approximately 1% during 2003.

Operating expenses during 2004 was $359,000 as compared with $294,000 in 2003,
an increase of $65,000 or approximately 22%.

The Convenience Store segment incurred an operating loss of $238,000 in 2004, as
compared with a loss of $289,000 in 2003.

Environmental Segment

EDCO Environmental (dba Star Co.) reported an operating profit of $35,000 in the
year ended September 30, 2004, as compared with $217,000 in 2003. Revenues from
environmental operations decreased $268,000 to $973,000 in 2004 as compared to
$1,241,000 in 2003. Gross profit for 2004 was $408,000 as compared to $626,000
in 2004, a decrease of $218,000. Gross Margin was approximately 42% and 50% in
2004 and 2003, respectively. The decrease is primarily attributable to decreased
contracts and revenues and increased costs in performing remediation services.
Operating expenses decreased $36,000, or approximately 9%, to $373,000 in 2004
as compared to $409,000 in 2003.

Star Co. will continue to focus its attention on environmental remediation
projects that have been pre-approved for reimbursement by the TCEQ fund as well
as projects by private insurers. Management intends to expand the Environmental
Segment by creating a Testing Division. The Company is currently exploring the
feasibility of acquiring through merger a company currently performing line,
tank, and soil testing. Financial institutions have become increasingly aware of
potential environmental hazards and the cost associated there with, on
properties they finance. The need for testing to determine if any pollution
exist on properties will continue for an unforeseeable time into the future. For
this reason management believes adding a testing segment will increase the
revenues and profitability of the Environmental Segment.

Unallocated General and Administrative Expenses

Unallocated general and administrative expenses increased $13,000 in 2004 to
$53,000 as compared with $40,000 in 2003. The increase is due to increased costs
of providing general corporate services.

2003 compared to 2002
---------------------

Consolidated revenues from continuing operations decreased $4,590,000, or
approximately 74%, to $1,583,000 in the year ended September 30, 2003. The
decrease is primarily attributable to the presentation of operations of the


                                       10
<PAGE>

Texas Convenience Store segment due to the reestablishment of that Segment in
April 2004. The Texas Convenience Store segment results of operations include
operations for the entire year of fiscal 2002, and only the period from October
1, 2002 to November 18, 2002 during 2003 as the stores were leased to outside
operators and the segment was discontinued on November 18, 2002. The Company
subsequently reacquired control of those stores. Revenues from the Environmental
segment increased marginally.

Consolidated gross profit from continuing operations decreased $627,000, or
approximately 50%, to $631,000 in the year ended September 30, 2003. Gross
profit expressed as a percentage of revenues ("Gross Margin") increased to
approximately 40% of sales in 2003 from approximately 20% of sales in 2002. The
increase in gross margin in 2003 is mainly attributable to the higher profit
margin of the Environmental segment not negatively impacted by the lower profit
margins of the Texas Convenience Store segment, which had limited operations as
discussed above.

Consolidated operating expenses declined $1,481,000, or approximately 66%, in
2003 to $743,000. The decrease in operating expenses were mainly attributable to
the limited operations of the convenience store segment, which resulted in
employment personnel reductions of $663,000, and general, administrative and
other operating expense cost cuts of $620,000. The effects of those reductions
was enhanced by a decrease on the loss on asset sales of $48,000 in 2003, as
compared to a loss of $205,000 in 2002.

Consolidated operating losses decreased $854,000 to $112,000 in 2003 as compared
with a loss of $966,000 in 2002. Excluding the effect of gain (loss) of assets
sales on operating losses in 2003 and 2002, consolidated operating losses
decrease $697,000 to $64,000 in 2003 compared to $761,000 in 2002.

Consolidated income from continuing operations increased to $1,697,000 in 2003
as compared to a consolidated loss from continuing operations of $1,035,000 in
2002. Income from continuing operations in 2003 includes a gain on the sales of
non-operating assets of $1,653,000, rental income of $216,000 and other income
of $74,000 offset by $134,000 in interest expense. Loss from continuing
operations in 2002 includes $67,000 in interest expense and $9,000 in other
expenses offset by interest income of $7,000.

Consolidated net income (loss) increased $2,056,000 to a net income of
$1,225,000 in 2003 as compared to a net loss of $831,000 in 2002. Consolidated
net income in 2003 includes a $472,000 charge from discontinued operations of
the Texas Petroleum Marketing segment. Consolidated net loss in 2002 includes an
extraordinary gain of $1,799,000 on the Restructuring Transactions offset by a
$1,595,000 charge from discontinued operations of the Texas Petroleum Marketing
segment.

Texas Convenience Store Segment

The Company's stores are located in smaller communities throughout the gulf
coast region of Texas. During the year ended September 30, 2003, the Company
operated 3 convenience stores, featuring self-service motor fuels and a variety
of food and non-food merchandise from the period October 1, 2002 to November 18,
2002, at which date the stores were leased to outside operators. During the year
ended September 30, 2002, the Company operated the same 3 stores for the entire
fiscal year as well as 5 other stores that were either sold or leased to outside
operators during 2001. Accordingly, comparative analysis of the results of
operations of this segment between 2003 and 2002 will result in significant
fluctuations.

Total sales decreased $4,726,000 or approximately 93% in 2003 to $342,000 from
$5,068,000 in 2002. Fuel sales in 2003 were $208,000, as compared with
$2,737,000 in 2002. Merchandise sales decreased to $134,000 in 2003 from
$2,331,000 in 2002. Average selling price per gallon decreased in 2003 to
approximately $1.28 per gallon, as compared with $1.47 per gallon in 2002. The
decrease is due to nation wide cost decreases in 2003 that lowered selling
prices per gallon.

Gross profit declined to $5,000 in 2003 as compared with $864,000 in 2002. Gross
Margin in the Texas Convenience Store segment was approximately 1% and 17% in
2003 and 2002, respectively. Merchandise Gross Margin decreased in 2003, to
approximately 1% of sales, as compared to approximately 29% of sales in 2002.
Fuel Gross Margin decreased to approximately 1% during 2003, as compared with
approximately 7% during 2002.

                                       11
<PAGE>

Operating expenses during 2003 in the Texas Convenience Store segment was
$294,000 as compared with $1,199,000 in 2002, a decrease of $905,000 or
approximately 75%.

The Convenience Store segment incurred operating losses of $289,000 and $335,000
in 2003 and 2002, respectively.

Environmental Segment

EDCO Environmental (dba Star Co.) reported an operating profit of $217,000 in
the year ended September 30, 2003, as compared with $44,000 in 2002. Revenues
from environmental operations increased $136,000 to $1,241,000 in 2003 as
compared to $1,105,000 in 2002. Gross profit for 2003 was $626,000 as compared
to $394,000 in 2002, an increase of $232,000. The increase is primarily
attributable to Star Co. management's continued focus on controlling
non-reimbursable costs and streamlining operations as well as increasing
revenues through new environmental remediation contracts. Operating expenses
increased $59,000, or approximately 17%, to $409,000 in 2003 as compared to
$350,000 in 2002.

Unallocated General and Administrative Expenses

Unallocated general and administrative expenses declined $635,000 in 2003 to
$40,000 as compared with $675,000 in 2002. The decrease is due to management's
continued focus on reducing costs and overhead.

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

Cash and cash equivalents were $341,000 and $216,000 at September 30, 2004 and
2003, respectively. The Company had a net working capital deficit of $144,000 at
September 30, 2004, as compared with a deficit of $631,000 at September 30,
2003.

Cash provided by operating activities was $177,000 for the year ended September
30, 2004. During that period, cash provided from investing activities was
$60,000, which was comprised of capital expenditures of $44,000 and note
receivable issuances of $55,000 offset by proceeds from the sales of assets of
$94,000 and repayments of notes receivable of $65,000. Cash used by financing
activities was $112,000, which was comprised of proceeds of $42,000 from new
debt borrowings offset by reductions of long-term debt of $154,000.

Cash used by operating activities was $127,000 for the year ended September 30,
2003. During that period, cash provided from investing activities was $200,000,
which was comprised of capital expenditures of $75,000 and note receivable
issuances of $69,000 offset by proceeds from the sales of assets of $309,000 and
repayments of notes receivable of $35,000. Cash used by financing activities was
$348,000, which was comprised of proceeds of $43,000 from new debt borrowings,
offset by $311,000 in debt repayments and $80,000 in net payments under the line
of credit agreement.

As of September 30, 2004, the Company had an aggregate of approximately
$2,795,000 in principal outstanding under various note agreements. Of this
total, one note dated June 24, 2002 for $2,600,000, payable to CSS, has amended
terms that call for payments of interest only at an annual rate of 10%
commencing December 1, 2003, with the principal balance and accrued but unpaid
interest due by December 24, 2007. Accrued and unpaid interest on this note was
approximately $87,000 at September 30, 2004.

Of the remaining principal outstanding aggregating an approximate $195,000,
approximately $112,000 is due to Travelers Express Co. under a forbearance note
agreement dated June 24, 2002 that calls for payment of principal and interest
over 36 months beginning June 22, 2003. Interest is calculated at prime plus 50
basis points. The remaining outstanding principal balance is due under various
terms to various third parties.

                                       12
<PAGE>

At September 30, 2004, the Company had an aggregate 10,471,831 shares of common
stock issued, with 10,430,196 issued and outstanding after consideration of
treasury stock. The Company is authorized to issue up to 15,000,000 shares of
common stock. Of the 4,569,804 shares of common stock available for issuance,
approximately 390,350 shares are reserved for vested stock options and 4,174,167
shares are reserved for warrants.

The Company intends to finance its working capital requirements through funds
from operations.

Recent Accounting Pronouncements
--------------------------------

In December 2003, the SEC issued SAB No. 104, Revenue Recognition, which
supersedes SAB 101, Revenue Recognition in Financial Statements. The adoption of
SAB 104 did not have a material impact on the Company's consolidated results of
operations or financial position. SAB 104 primarily rescinds the accounting
guidance contained in SAB 101 related to multiple-element revenue arrangements
that was superseded as a result of the issuance of Emerging Issues Task Force
("EITF") EITF 00-21, Accounting for Revenue Arrangements with Multiple
Deliverables. While the wording of SAB 104 has changed to reflect the issuance
of EITF 00-21, the revenue recognition principles of SAB 101 remain largely
unchanged by the issuance of SAB 104, which was effective upon issuance.

In December 2003, the FASB issued FIN 46R, a revision to FIN 46. FIN 46R
clarifies some of the provisions of FIN 46 and exempts certain entities from its
requirements. Entities that have adopted FIN 46 prior to this effective date can
continue to apply the provisions of FIN 46 until the effective date of FIN 46R,
which is the second quarter of fiscal 2005 for the Company. FIN 46R is not
expected to have a material impact on the Company's consolidated results of
operations or financial position.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Factors Affecting the Company's Business and Prospects

There are numerous factors that affect the Company's business and the results of
its operations. These factors include general economic and business conditions;
the level of demand for products and services and the level and intensity of
competition in the convenience store and environmental remediation industry.

The convenience store industry is highly competitive, fragmented, and
regionalized. It is characterized by a few large companies and many small
independent companies. Several competitors are substantially larger and have
greater resources than the Company. The Company's stores compete with other
convenience stores, small supermarkets, grocery stores, and major and
independent gasoline distributors who have converted units to convenience
stores.

The Company's environmental subsidiary StarCo Enviroservices has provided
environmental remediation services to customers almost entirely through
reimbursement funding by the TCEQ, with a smaller percentage funded by private
companies and insurance. Under current Texas law and the requirements of the
TCEQ, on September 30, 2005, funding for the TCEQ's reimbursement programs will
terminate. All environmental work on TCEQ approved reimbursement locations must
be completed on or before September 30, 2005 in order to be considered for
reimbursement. All reimbursement applications must be submitted prior to
September 30, 2006 for reimbursement. The TCEQ reimbursement funding program is
slated for discussion and possible extension during the 2005 Texas Legislative
session. The termination of the TCEQ reimbursement program will have an adverse
impact on StarCo's ability to operate. Management is currently monitoring the
Texas legislature to determine if the deadline will be extended and additional
funds appropriated to the TCEQ for the reimbursement programs. There can be no
assurance that the deadlines will be extended or that additional funds will be
appropriated to the TCEQ.

Item 8. Financial Statements and Supplementary Data

The Consolidated Financial Statements of the Company included in this annual
report on Form 10-K are listed under Item 15, Exhibits, Financial Statement
Schedules and Reports on Form 8-K.

                                       13
<PAGE>

Item 9. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure

None.

Item 9A. Controls and Procedures

The management of the Company, with the participation of the Chief Executive
Officer and Acting Chief Financial Officer, has evaluated the effectiveness of
the Company's disclosure controls and procedures (as defined in Rule 13a-15(e)
under the Securities Exchange Act of 1934) as of the end of the period covered
by this Report. Based on that evaluation, the Chief Executive Officer and Acting
Chief Financial Officer have concluded that the Company's disclosure controls
and procedures are effective in enabling the Company to record, process,
summarize, and report information required to be included in the Company's
periodic SEC filings within the required time period.

In addition, the management of the Company, with the participation of the
Company's Chief Executive Officer and Acting Chief Financial Officer, has
evaluated whether any change in the Company's internal control over financial
reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of
1934) occurred during the Company's fourth fiscal quarter. Based on that
evaluation, the Company's Chief Executive Officer and Acting Chief Financial
Officer have concluded that there has been no change in the Company's internal
control over financial reporting during the fourth fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.

                                    PART III

Items 10. Directors and Executive Officers of the Registrant

The following table sets forth certain information with respect to the Company's
current directors and officers.

NAME                                  POSITION                             AGE
----                                  --------                             ---
Thomas E. Cain                        Chairman of the Board                 49
Blair R. Couey                        Director and President                52
Randy Clapp                           Director                              50
Randal Dean Lewis                     Director                              61

The Company currently has 3 director positions unoccupied, including the
Secretary and Treasurer positions to the board of directors. The principal
occupation of each director and executive officer for at least the last five
years is set forth below:

Thomas E. Cain is President & CEO of Focus Capital Group LLC, which is a buyout,
and turnaround firm 50% owned by Focus Capital Group, Israel. He is also
Chairman of the Board for Frontstep distribution.com the acquisition corp for
Frontstep NASDAQ (FSTP), a $100M ERP software firm for the mid-market
manufacturing market. He currently serves Young Presidents Organization as
Chairman of the MIT/Sloan Presidents Seminar, Chairman of the Global Supply
Chain Conference and group leader for Harvard Business School Presidents
Education. Mr. Cain is also a Director for: Autom, the world's leader of church
goods; Chambers Belt Co. a leading manufacturer of designer leather accessories
for mass merchants; Landiscor, the world leader in aerial surveys; Poore
Brothers NASDAQ (SNAK), branded snack food manufacturer of intensely distinctive
products such as TGIFridays; Servus, Eastern Europe's leading supplier of POS's,
ATM's, large commercial system maintenance and support; WinHolt, leading
manufacturer of retail fixture. In 2001, Mr. Cain served as Chief Technology
Officer and Senior VP of Engineering for Interact Commerce, a $100M Software
Company that made ACT and SalesLogix until purchased by Sage. All product
development, globalization, customer/product support and delivery services
reported to him. He holds current Microsoft MCSE+I technical certifications and
a BS in mathematics from Arizona State University. In 1976, Mr. Cain formed
Distribution Architects that became one of North Americas largest and most
successful supply chain execution software companies. As President & CEO, he
merged it 23 years later with Symix Systems.

                                       14
<PAGE>

Blair R. Couey is a lifelong resident of El Campo, Texas and has been the
managing partner of Mauritz and Couey Petroleum Marketing in El Campo, Texas
since 1988. Mr. Couey has been on the Texas Petroleum and convenience Store
Board of Directors, representing Region VII of Gulf Coast of Texas since 1999.
Mr. Couey has also served on the El Campo, Texas Chamber of Commerce, Economic
Development Board and City Development Corp and is a graduate of Sam Houston
Business School.

Randy M. Clapp is a partner in the Texas law firm of Duckett, Bouligny &
Collins, LLP. He practices primarily in the areas of Estate Planning, Products
Liability Defense, Commercial Litigation, Real Estate, Oil and Gas, and Business
Planning. Mr. Clapp is a member of the State Bar of Texas, the U.S. District
Court for the Southern and Eastern Districts of Texas and the U.S. Court of
Military Appeals. He was educated at Trinity University, the University of Texas
School of Law, and the Judge Advocate General's School of Law in the U.S. Army.
Mr. Clapp presently serves on the board of directors of New First National Bank
and MC. He has received numerous awards, and has served as president of the
following organizations: University of Houston Victoria President's Advisory
Council, Wharton County Junior College Board of Trustees, Northside Education
Center, Memorial Hospital El Campo, West Wharton County Hospital District Board
of Trustees, El Campo Economic Development Corporation, Wharton County Bar
Association, El Campo Rotary Club and El Campo Chamber of Commerce.

Randal Dean Lewis, Ph.D has served as Dean of the College of Business
Administration at Sam Houston State University since 1996. He has progressed
through the academic ranks from instructor to professor of marketing during his
academic career. He has published numerous cases, held executive positions in
many community service organizations, and is currently a board member of a
global oil services corporation. During the 1980's, Dr. Lewis took leave from
academia and worked in the banking industry. In addition to his current
administrative duties, Dr. Lewis is active in numerous professional
organizations, consults with deans of business programs regarding AACSB
preparation, and serves on peer review teams.

Meetings and Committees of the Board of Directors

During the fiscal year ended September 30, 2004 ("Fiscal 2004"), the Company's
Board of Directors formally met on 2 occasions. Each of the directors attended
(or participated by telephone) more than 75% of such meetings of the Board of
Directors during Fiscal 2004. The Board of Directors has no committees.

Compensation of Directors

Effective June 24, 2002, director compensation was restructured to be
performance based. All directors are reimbursed for their reasonable
out-of-pocket expenses incurred in connection with their duties to the Company.

Item 11. Executive Compensation

The following sets forth, for the fiscal years ended September 30, 2004,
2003,and 2002, certain summary information concerning annual and long-term
compensation paid by the Company for services in all capacities to the current
and former Chief Executive Officer, and the other most highly compensated
executive officers of the Company at September 30, 2004 who received
compensation of at least $100,000 during the Fiscal 2004 (collectively, the
"Named Officers").

No officers of the Company are currently under an employment agreement. Mr.
Blair Couey, President, Chief Executive Officer and Acting Chief Financial
Officer, receives his compensation through the management agreement by and
between the Company and Mauritz & Couey dated June 24, 2002. Mr. J.L. Evans,
Sr., former CEO and President, employment agreement terminated June 24, 2002.
His salary for 2002 was $150,000. In addition to the salary compensation for Mr.
Evans, he also received lease income of $25,500 in fiscal 2002 for the rental of
various properties used by the Company.

                                       15
<PAGE>

OPTION/SAR Grants in Last Fiscal Year

There were no Options/SARs granted during Fiscal 2004 to the Named Officers.

Item 12. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information concerning ownership of the Company's
Common Stock, as of September 30, 2004, by (i) each person who is known by the
Company to be the beneficial owner of more than five percent of the Common
Stock, (ii) each of the Company's directors, (iii) each Named Officer, and (iv)
all current directors and executive officers of the Company as a group.

<TABLE>
<CAPTION>
                                                                      Amount of       Nature of      Percent of
                         Name and address                             Ownership     Ownership (2)      Class
-------------------------------------------------------------------- ------------- ------------------------------
<S>                                                                  <C>                <C>              <C>
Mauritz & Couey, P.O. Box 550, El Campo, TX 77437                    3,085,000            4                29.5%

Blair R. Couey, P.O. Box 550, El Campo, TX 77437                     3,085,000            5                29.5%

Randy Clapp, P.O. Box 550, El Campo, TX 77437                        3,085,000            6                29.5%

Cede & Co., Box 20, Bowling Green Station, New York, NY 10004        4,934,923                             47.1%

JP Morgan Chase Bank, P.O. Box 2258, Houston, TX 77252               1,104,015                             10.5%
Thomas E. Cain, P.O. Box 550, El Campo, TX 77437                     4,000,000            7                38.2%
Cain, Smith & Strong, L.P.,                                          1,600,000            8                15.3%

All executive officers and directors as a group                      3,085,000                             29.5%

</TABLE>

1.       Unless otherwise indicated, the address of each beneficial owner is
         c/o the Company, P.O. Box 550, El Campo, Texas 77437.
2.       Beneficial ownership has been determined in accordance with Rule 13d-3
         under the Exchange Act ("Rule 13d-3") and unless otherwise indicated,
         represents shares of which the beneficial owner has sole voting and
         investment power.
3.       The percentage of class is calculated in accordance with Rule 13d-3 and
         assumes that the beneficial owner has exercised any options or other
         rights to subscribe which are execrable within sixty (60) days and that
         no other options or rights to subscribe have been exercised by anyone
         else.
4.       Mauritz & Couey, a Texas General Partnership, is controlled by 8 Texas
         Corporations (Ross Couey Corporation, T.N & S.E. Mauritz Corporation,
         M.O.W. Corporation, Clapp Investments, Inc., Loli, Inc., Schiurring
         Interests, Inc, Coastal Commodities, Inc. and Maurco Corporation).
5.       Includes 3,085,000 shares held by Mauritz & Couey, of which Blair Couey
         claims beneficial ownership.
6.       Includes 3,085,000 shares held by Mauritz & Couey, of which Randy Clapp
         claims beneficial ownership.
7.       Includes 2,400,000 warrant shares beneficially held by Thomas Cain and
         1,600,000 warrant shares held by Cain, Smith & Strong, L.P., of which
         Thomas Cain claims beneficial ownership.
8.       Includes 1,600,000 warrant shares beneficially held by Cain, Smith &
         Strong, L.P., whose general partner is controlled by the wife of Thomas
         Cain.

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "Commission"). Officers, directors and greater than ten percent
shareholders are required by the Commission's regulations to furnish the Company
with copies of all Section 16(a) forms they file.

The Company believes, based solely on review of copies of such forms furnished
to the Company, or written representations that no Form 3, 4, or 5's were
required, that all Section 16(a) filing requirements applicable to its officers,
directors and greater than ten percent beneficial owners were complied with
during Fiscal 2004.

Item 13. Certain Relationships and Related Transactions

Effective June 24, 2002 and in conjunction with the Restructuring Transactions,
the Company entered into a Management and Support Services Agreement (the


                                       16
<PAGE>

"Management Agreement") with Mauritz & Couey, a Texas based general partnership
("MC") to provide certain managerial and operational services to the Company. At
September 30, 2004 and 2003, the Company owed MC approximately $14,043 and
$56,921, respectively, for expenses incurred under this agreement, which is
included in accounts payables.

During fiscal 2002, the Company entered into an agreement with MC to purchase
fuel products under MC's fuel supply contracts at $0.005 above rack price. At
September 30, 2004 and 2003, the Company owed MC $57,062 and $231,000,
respectively, which is included in accounts payables. As part of the disposal of
the Texas Petroleum Marketing segment, the Company was relieved of amounts owed
to MC under this agreement through July 1, 2004 aggregating $1,705,000. In
addition, from time to time, the Company will deliver fuel loads to MC customers
and MC will deliver fuel loads to the Company's customers. The Company and MC
charged one another freight only at common carrier rates. At September 30, 2004
and 2003, MC owed the Company approximately $65,573 and $6,211, respectively,
for freight on fuel the Company hauled for MC, which is included in accounts
receivable.

The Company senior debt holder is Cain, Smith & Strong, L.P. (CSS), whose
general partner is controlled by the wife of Thomas Cain, Chairman of the Board
of Directors. From time to time the Company makes advances to individuals who
are shareholders, directors, officers and/or employees. Such advances are
usually unsecured and accrue interest. There were no advances outstanding at
September 30, 2004 and 2003.


Item 14. Principle Accounting Fees and Services

                                                     2004              2003
                                                     ----              ----
                  Audit fees                       $62,000           $65,000
                  Audit-related fees                   -0-               -0-
                  Tax fees                           5,000             5,000
                  All other fees                       -0-               -0-

The Company currently does not have an audit committee. Therefore, the current
policy of the Board of Directors of the Company is to pre-approve all
professional services performed by the Company's independent accountants. The
Board of Directors pre-approved all such professional services for the year
ended September 30, 2004.

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K.

I.        The following financial statements, schedules and exhibits are filed
          as part of this report:

          (1)  and (2) Financial Statements and Financial Statement Schedules -
                   See Index to Consolidated Financial Statements on Page F-1.

          (3) Exhibits.
                   See Index to Exhibits on sequential page 18.

II.       Reports on Form 8-K - The Company filed one report on Form 8-K filed
          July 9, 2004, under the Securities and Exchange Act of 1934 during the
          year ended September 30, 2004

                                       17
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                         EVANS SYSTEMS, INC.
January 13, 2005
                                         /s/ Blair R. Couey
                                         ---------------------------------------
                                         Blair R. Couey
                                         President, Chief Executive Officer and
                                         Acting Chief Financial Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date(s) indicated:

/s/ Blair R. Couey
-----------------------------------------------------
Blair R. Couey,
President, Chief Executive Officer and Acting
Chief Financial Officer

/s/ Thomas E. Cain
-----------------------------------------------------
Thomas E. Cain
Chairman of the Board of Directors

/s/ Randy M. Clapp
-----------------------------------------------------
Randy M. Clapp
Director


                                       18
<PAGE>



INDEX TO EXHIBITS
-----------------
<TABLE>

     Exhibit                                                                                                      Sequential Page
     Number                              Description of Document                                                           Number
     ----------------------------------------------------------------------------------------------------------------------------
<S>            <C>

     3.1       Articles of Incorporation of the Company filed with the Texas Secretary of State on
               October 22, 19681. Filed with May 11, 1993 filing of Form S-1 Registration #33-62684.

     3.2       Certificate of Amendment to Articles of Incorporation of Evans Systems, Inc., filed with
               the Texas Secretary of State on September 21, 19921. Filed with May 11, 1993 filing of
               Form S-1 Registration #33-62684.

     3.3       Certificate Amendment of Articles of Incorporation of Evans Systems, Inc., filed with the
               Texas Secretary of State on April 9, 1993. Filed with May 11, 1993 filing of Form S-1
               Registration #33-62684.

     3.4       By-Laws of the Company. Filed with May 11, 1993 filing of Form S-1 Registration #33-62684.

     10.1      Phillips "66" Marketing Agreement dated October 21, 1986. Filed with May 11, 1993
               filing of Form S-1 Registration #33-62684.

     10.2      Amoco Lubricants Distributor Agreement dated June 21, 1990 and Schedule dated January 2,
               1992. Filed with May 11, 1993 filing of Form S-1 Registration #33-62684.

     10.3      Diamond Shamrock Storage Lease dated July 12, 1985. Filed with May 11, 1993 filing of Form
               S-1 Registration #33-62684.

     10.4      Star Enterprise "Texaco" Marketing Agreement effective July 1, 1993. Filed with May 11,
               1993 filing of Form S-1 Registration #33-62684.

     10.5      Shell Lubricants Reseller Agreement effective January 1, 1992. Filed with May 11, 1993
               filing of Form S-1 Registration #33-62684.

     10.6      Texaco Lubricants agreement effective July 1, 1990. Filed with May 11, 1993 filing of Form
               S-1 Registration #33-62684.

     10.7      Conoco Jobber Franchise Agreement effective April 1, 1990. Filed with May 11, 1993 filing
               of Form S-1 Registration #33-62684.

     10.8      Mobil Marine Distributor Agreement effective June 3, 1992. Filed with May 11, 1993 filing
               of Form S-1 Registration #33-62684.

     10.9      Form of Series B Warrants to Purchase Common Stock of Registrant. Filed with May 11, 1993
               filing of Form S-1 Registration #33-62684.

     10.10     Coastal Refinery & Marketing, Inc. Facilities Access Agreement, effective September 5,
               1989. Filed with May 11, 1993 filing of Form S-1 Registration #33-62684.

     10.11     FINA Lubricants Marketing Agreement dated February 1, 1989. Filed with May 11, 1993 filing
               of Form S-1 Registration #33-62684.

     10.12     Texaco Terminating Agreement dated April 30, 1986. Filed with May 11, 1993 filing of Form
               S-1 Registration #33-62684.

     10.13     Citgo Petroleum Distributor Franchise Agreement effective August 1, 1992. Filed with May
               11, 1993 filing of Form S-1 Registration #33-62684.

     10.14     Incentive Stock Option Plan. Filed with May 11, 1993 filing of Form S-1 Registration
               #33-62684.
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     10.15     Form of Incentive Stock Option Agreement. Filed with May 11, 1993 filing of Form S-1
               Registration #33-62684.

     10.16     Summary Plan Description of E.S.O.P. Filed with May 11, 1993 filing of Form S-1
               Registration #33-62684.

     10.17     Employment Contract with Bill R. Kincer, incorporated by reference from Exhibit 10.28 to
               the Company's Annual Report on Form 10-K for the year ended September 30, 1994.

     10.18     Pruett Petroleum, Inc. and Koonce Petroleum Company, Inc. agreement dated October 4, 1994,
               incorporated by reference from Exhibit 10.29 to the Company's Annual Report on Form 10-K
               for the year ended September 30, 1994.

     10.19     Employment Agreement with Richard A. Goeggel, effective June 16, 1998, incorporated by
               reference from Exhibit 10.19 to the Company's Annual Report on Form 10-K for the year
               ended September 30, 1998.

     10.20     Omitted.

     10.21     Employment Agreement with J.L. Evans, Sr., effective April 6, 1998, incorporated by
               reference from Exhibit 10.21 to the Company's Annual Report on Form 10-K for the year
               ended September 30, 1998.

     10.22     Stock Purchase Agreement dated as of October 30, 1998 by and among the Company, Synaptix
               Systems Corporation, a Colorado corporation, d.b.a. Affiliated Resources Corporation, and
               Way Energy, Inc., a Delaware corporation, incorporated by reference from Exhibit 10.22 to
               the Company's Annual Report on Form 10-K for the year ended September 30, 1998.

     10.23     Amendment No. 1 to Stock Purchase Agreement, dated December 39, 1998 by and among the
               Company, Synaptix Systems Corporation, a Colorado corporation, d.b.a. Affiliated Resources
               Corporation, and Way Energy, Inc., a Delaware corporation, incorporated by reference from
               Exhibit 10.23 to the Company's Annual Report on Form 10-K for the year ended September 30,
               1998.

     10.24     Loan Agreement between the Company and Texas Commerce Bank National Association, dated as
               of August 30, 1996, incorporated by reference from Exhibit 10.1 to the Company's Quarterly
               Report on Form 10-Q for the three months ended March 31, 1999.

     10.25     Amendment to Loan Agreement dated August 4, 1997, incorporated by reference from Exhibit
               10.2 to the Company's Quarterly Report on Form 10-Q for the three months ended March 31,
               1999.

     10.26     Amendment to Loan Agreement dated December 24, 1997, incorporated by reference from
               Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the three months ended
               March 31, 1999.

     10.27     Amendment to Loan Agreement dated April 23, 1998, incorporated by reference from Exhibit
               10.4 to the Company's Quarterly Report on Form 10-Q for the three months ended March 31,
               1999.

     10.28     Amendment to Loan Agreement dated March 31, 1999, incorporated by reference from Exhibit
               10.5 to the Company's Quarterly Report on Form 10-Q for the three months ended March 31,
               1999.

     10.29     Asset Purchase Agreement dated December 3, 1999, by and between TSC Services, Inc., Evans
               Systems, Inc., Diamond Mini Mart, Inc., Evans Oil Co., EDCO, Inc., and Way Energy Systems,
               Inc. incorporated by reference from Exhibit 2.1 to the Company's Current Report on Form
               8-K dated December 9, 1999.

     10.30     Amendment to Loan Agreement dated June 30, 1999

     10.31     Amendment to Loan Agreement dated August 31, 1999
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     10.32     Amendment to Loan Agreement dated November 30, 1999

     10.33     Stipulated Judgment dated December 1, 2000 in the District Court of Matagorda, Texas,
               130th Judicial District

     10.34     Deed in Lieu of Foreclosure dated September 26, 2000 by and between ChemWay, Inc., Way
               Energy, Inc. and Evans Systems, Inc.

     10.35     Earnest Money Contract (Convenience Stores) By and Between Evans Systems, Inc., Diamond
               Mini-Mart, Inc. and State Oil Company, LLC, incorporated by reference from Exhibit 10.35
               to the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2002.

     10.36     Amendment to Loan Agreement and Modification of Note, incorporated by reference from
               Exhibit 10.1 to the Company's Current Report on Form 8-K dated June 24, 2002

     10.37     Notice of Entire Agreement, incorporated by reference from Exhibit 10.2 to the Company's
               Current Report on Form 8-K dated June 24, 2002

     10.38     Promissory Note, incorporated by reference from Exhibit 10.3 to the Company's Current
               Report on Form 8-K dated June 24, 2002

     10.39     Release of Claims, incorporated by reference from Exhibit 10.4 to the Company's Current
               Report on Form 8-K dated June 24, 2002

     10.40     Assignment of Notes and Liens, incorporated by reference from Exhibit 10.5 to the
               Company's Current Report on Form 8-K dated June 24, 2002

     10.41     Form of Warrants issued to Cain, Smith & Strong II, L.P., Thomas E. Cain, J.L. Evans, Sr.,
               and Travelers Express Co., incorporated by reference from Exhibit 10.6 to the Company's
               Current Report on Form 8-K dated June 24, 2002

     10.42     Common Stock Purchase Agreement, incorporated by reference from Exhibit 10.7 to the
               Company's Current Report on Form 8-K dated June 24, 2002

     10.43     Registration Rights Agreement, incorporated by reference from Exhibit 10.8 to the
               Company's Current Report on Form 8-K dated June 24, 2002

     10.44     Evans Systems, Inc./J.L. Evans Agreement, incorporated by reference from Exhibit 10.9 to
               the Company's Current Report on Form 8-K dated June 24, 2002

     10.45     Management and Support Services Agreement, incorporated by reference from Exhibit 10.10 to
               the Company's Current Report on Form 8-K dated June 24, 2002

     *21.0     Subsidiaries of Registrant

     *31       Certification of Blair R. Couey, Chief Executive Officer and Acting Chief Financial
               Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

     *32       Certification of Blair R. Couey, Chief Executive Officer and Acting Chief Financial
               Officer pursuant to 18 U.S.C. Section 1350

     *Filed herewith.

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