<PAGE>   1


                    U.S. SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C. 20549
                                  FORM 10-KSB
(Mark One)
         [X]      ANNUAL REPORT UNDER SECTION 13 OR 15(d)      [No Fee Required]
                  OF THE SECURITIES EXCHANGE ACT OF 1934        ---------------

                  For the fiscal year ended March 28, 1998

         [ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d)  [No Fee Required]
                  OF THE SECURITIES EXCHANGE ACT OF 1934        ---------------

For the transition period from ___________________ to ________________________
Commission file number  0-25528

                              ENVIROQ CORPORATION
                 (Name of small business issuer in its charter)

                Delaware                                    59-3290346
      (State or other jurisdiction of                     (I.R.S. Employer
      incorporation or organization)                     Identification No.)

      3918 Montclair Road, Suite 206
            Birmingham, Alabama                                 35213
 (Address of principal executive offices)                    (Zip Code)

                   Issuer's telephone number: (205) 870-0588

         Securities registered under Section 12(b) of the Exchange Act:

Title of each class                 Name of each exchange on which registered
 
       None                                         None
       ----                                         ----

         Securities registered under Section 12(g) of the Exchange Act:

                                  Common Stock
                              --------------------
                                (Title of class)

         Check whether the issuer: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

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

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure
will be contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [X]

         As of June 4, 1998, the aggregate market value of the voting stock of
the Registrant held by non-affiliates was approximately $1,379,414, based on
$3.25 per share being an average of the bid and asked prices listed on the OTC
Bulletin Board system.

         State issuer's revenues for its most recent fiscal year: $1,304,357

         As of June 4, 1998, the Registrant had issued 1,009,377 shares of
Common Stock, par value $0.01.

         Transitional Small Business Disclosure Format YES     NO  X
                                                           ---    ---


                                       1
<PAGE>   2


                                     PART I

         ITEM 1.  DESCRIPTION OF BUSINESS

                  BUSINESS DEVELOPMENT: HISTORY.

                  Enviroq Corporation, a Delaware corporation (the "Company"),
         was incorporated on February 9, 1995. At the time of its
         incorporation, the Company was a wholly-owned subsidiary of a Delaware
         corporation formerly named Enviroq Corporation ("Old Enviroq"). Prior
         to April 18, 1995, the Company was named New Enviroq Corporation ("New
         Enviroq"). On April 18, 1995, Old Enviroq distributed all of the
         issued and outstanding capital stock of New Enviroq to the holders of
         the common stock of Old Enviroq (the "Distribution"). Following the
         Distribution, the Company changed its name from New Enviroq
         Corporation to Enviroq Corporation. Also following the Distribution,
         Old Enviroq merged (the "Merger") with a subsidiary of Insituform
         Mid-America, Inc. ("IMA") and changed its name to Insituform
         Southeast, Inc. ("Insituform Southeast"). In a transaction subsequent
         to and unrelated to the Merger, IMA was acquired by Insituform
         Technologies, Inc.

                  The Company's principal executive office is located at 3918
         Montclair Road, Suite 206, Birmingham, Alabama 35213, and its
         telephone number is (205) 870-0588. The Company's mailing address is
         P. O. Box 130062, Birmingham, Alabama 35213.

                  BUSINESS AND BUSINESS STRATEGY OF ISSUER.

                  The Company is currently principally engaged in the
         development, commercialization, formulation and marketing of
         spray-applied resinous products, and in the treatment of municipal
         wastewater biosolids. The Company's operations are conducted primarily
         through Sprayroq(R), Inc., a Florida corporation of which the Company
         owns 50% of the outstanding capital stock ("Sprayroq"). Sprayroq is
         engaged in the development, commercialization, manufacture and
         marketing of spray-applied resinous materials. The Company also owns
         100% of the outstanding capital stock of Synox(R) Corporation, a
         Delaware corporation ("Synox"). Synox has been engaged in the
         research, development and marketing of a process for the treatment of
         municipal wastewater biosolids. During the fiscal year ended March 30,
         1996, management of the Company elected to minimize the activities of
         Synox and to write off substantially all of the assets of Synox.
         During the fiscal year ended March 28, 1998, the Synox demonstration
         facility in Jacksonville, Florida was dismantled. As of March 28,
         1998, all remaining assets of Synox had been fully depreciated. See
         "Description of Business -- Background on Operations of Synox
         Corporation." Accordingly, during the fiscal year ended March 28,
         1998, most of the income and gross profit of the Company was
         attributable to the operations of Sprayroq.

                  The management of the Company believes the strong financial
         position of the Company, along with its status as a public company,
         may offer opportunities for growth or 



                                       2
<PAGE>   3

         other strategic alliances, and has been searching for opportunities to
         leverage the Company's advantages to bring additional value to its
         shareholders. On April 23, 1998, Enviroq announced that its board of
         directors has approved entering into an Agreement and Plan of
         Reorganization (the "Reorganization Plan") by which Enviroq will merge
         with a subsidiary of Intrepid Capital Corporation ("Intrepid"), a
         newly-formed corporation. The merger would be consummated through a
         transaction in which Enviroq stockholders would receive shares of
         Intrepid common stock, as well as cash. See Item 6, "Management's
         Discussion and Analysis of Financial Condition and Results of
         Operations." The business of Intrepid may or may not involve the
         Company's traditional business and markets. The Reorganization Plan
         and related transactions are subject to a number of conditions
         including, without limitation, the approval of the stockholders of
         Enviroq, and there can be no assurance that these conditions will be
         fulfilled.

                  Pursuant to the Merger, the Company and IMA entered into
         several related agreements which included the Subordinated Promissory
         Note (the "Note"), the Covenant Not to Compete Agreement (the
         "Covenant'), and the Consulting Agreement. On March 12, 1996, the
         Company and IMA executed an agreement (the "Settlement Agreement") to
         settle all claims and counterclaims made, or that could have been
         made, by the parties to related lawsuits between the parties with
         respect to several matters arising out of the Merger, including the
         Subordinated Promissory Note. The Company received $3,335,000 as
         payment in full under the Settlement Agreement, which includes the
         Note and the Consulting Agreement. In the Settlement Agreement, the
         parties, which included the Company, IMA, and Insituform Technologies,
         Inc., released each other, subject to limited exceptions, from all
         claims that the parties had or may have had or may have arising out of
         the Note, the Merger Agreement (including the Expense Deficit as
         defined in the Merger Agreement) and the related lawsuits. In the
         Settlement Agreement, the Company was not released from certain
         obligations under the related agreements including, without
         limitation, the Covenant.

                  BACKGROUND ON OPERATIONS OF SPRAYROQ, INC.

                  Sprayroq, Inc. was initially organized in January, 1991 as
         Enviroq Resin Development, Inc., a Florida corporation, to be a member
         of a joint venture to develop, commercialize, manufacture and market
         technology and know-how relating to the spray application of chemicals
         and additives in the rehabilitation, repair and reconstruction of
         certain pipes, pipelines, manholes, wetwells, drains and wastewater
         treatment facilities. The other member of this joint venture was
         Replico Development Company, Inc., a Pennsylvania corporation
         ("Replico"). In February, 1992, the name of Enviroq Resin Development,
         Inc. was changed to Sprayroq, Inc. In March, 1992, Replico contributed
         all of its rights and interests in the joint venture to Sprayroq in
         exchange for 50% of the outstanding common stock of Sprayroq, which
         resulted in the Company and Replico each owning fifty percent of the
         outstanding capital stock of Sprayroq. Pursuant to the Stockholder
         Agreement dated as of March 25, 1992 between the Company (as a
         successor to Old Enviroq), Sprayroq and Replico (the "Stockholder
         Agreement"), the parties agreed to vote their respective shares to
         elect three directors designated by the Company and two directors
         designated by Replico. At this same time, Sprayroq assumed all of the
         obligations of the joint venture, including the payment 



                                       3
<PAGE>   4

         obligations of the joint venture pursuant to a promissory note dated
         March 25, 1992 from the joint venture to the Company in the principal
         amount of $181,143.29. The Stockholder Agreement also provides that
         the stockholders of Sprayroq may make loans to Sprayroq for legitimate
         business purposes.

                  Since its organization, Sprayroq has engaged in the
         development, commercialization, formation and marketing of
         spray-applied resinous materials. At the present time, Sprayroq has
         developed two products; SprayWall(R) and SprayShield(R). Sprayroq has
         also developed additional materials utilizing polyureas, epoxies and
         other resin technologies which may have future commercial application.
         Sprayroq has entered into licensing agreements with seven installers
         to provide for the promotion, sale and installation of SprayWall, and
         two installers for the promotion, sale and installation of
         SprayShield. Both SprayWall and SprayShield have significant corrosion
         and abrasion resistance. SprayWall is a spray-applied resinous
         material that can achieve structural strength and is relatively rigid.
         SprayWall was initially developed to be utilized for the
         reconstruction of manholes. Other SprayWall applications include the
         reconstruction of vaults, underground tanks, as a corrosion resistant
         lining for underground pipe, etc. SprayShield is a pliable,
         spray-applied elastomeric material for waterproofing use in flumes and
         tanks, and has also been installed in truck beds of truck trailers for
         containment of potential spillage, during shipment, of hazardous
         materials. Other uses of SprayShield include installation inside the
         bodies of dump trucks to reduce damage from abrasion and the lining of
         pipes for corrosion protection.

                  Sprayroq was organized with minimum capital, and has obtained
         operating funds primarily from the Company. Of the total amount owed
         to the Company by Sprayroq, $547,219 was loaned by the Company
         pursuant to written promissory notes made by Sprayroq to the Company
         (collectively, the "Sprayroq Notes"). The Sprayroq Notes became due on
         April 1, 1995. On October 15, 1996, the board of directors of Sprayroq
         voted to restructure and consolidate this debt with the Company, and a
         Consolidated Note evidencing the restructured debt was executed on
         October 21, 1996, by Sprayroq. The principal amount of the debt as of
         October 21, 1996 was approximately $840,000. The rate of interest on
         the debt is 7% per annum, and the debt will be amortized over a
         30-year period, with the balance of the principal due, in the form of
         a "balloon" payment, on October 1, 2001. As of March 28, 1998, the
         balance owed under the Consolidated Note was approximately $492,000.

                  Under the Stockholder Agreement between the Company and
         Replico, the Company is given certain rights of control over Sprayroq,
         including the right to designate its executive officers and to elect a
         majority of the board of directors. Since the formation of Sprayroq,
         the chief executive officer of Sprayroq has also been the chief
         executive officer of the Company. Nevertheless, from time to time
         during fiscal year 1998 and continuing to the present, one or more of
         the principals of Replico has, either on their own behalf or on the
         behalf of Replico, raised issues or otherwise questioned the Company's
         management of and designation of officers of Sprayroq. Among such
         issues and questions is the suggestion of a conflict of interest, as
         yet undefined, in connection with the election of William J. Long as
         the chief executive officer of both Sprayroq and the Company. Another
         such issue relates to the assertion that Replico and/or certain
         affiliates of Replico should be free to engage in certain 



                                       4
<PAGE>   5

         ventures that may present opportunities for Sprayroq and/or be
         competitive with Sprayroq, or that utilize certain technology and/or
         technology rights belonging to Sprayroq, and that the corresponding
         responses of Sprayroq's management to Replico might somehow be
         improper. Management of the Company believes that all actions taken
         have been entirely within the terms and the spirit of the Stockholder
         Agreement with respect to the management of Sprayroq, and Sprayroq's
         responses to the questions and issues raised by Replico and or its
         principals. However, no assurances can be given that Replico or its
         affiliates will not pursue claims against Sprayroq, the Company,
         and/or their respective affiliates, or that the outcome of such
         matters will be favorable to the Company.


                  BACKGROUND ON OPERATIONS OF SYNOX CORPORATION.

                  Synox was organized as a Delaware corporation on May 23,
         1986, and was acquired by the Company on September 30, 1991. The
         primary purpose of Synox was to perform research and development with
         respect to processes and methods related to municipal wastewater
         treatment, particularly suspended solids and nutrients (known in the
         industry and referred to hereafter as "biosolids"). Synox has obtained
         a license to utilize technology relating to a process for the
         treatment of municipal wastewater biosolids (the "Synox Process(R)"),
         and other related processes for producing and managing usable end
         products from wastewater biosolids. The intellectual property and
         know-how underlying the Synox Process is licensed to Synox by Long
         Enterprises, Inc., an Alabama corporation controlled by Charles A.
         Long, Jr., a Director of the Company and the father of William J.
         Long, the President, Chief Executive Officer and a Director of the
         Company ("Long Enterprises").

                  The research and development activities of Synox included the
         creation of a mobile pilot testing unit, as well as efforts to achieve
         processes that meet the highest treatment standards of the U.S.
         Environmental Protection Agency (the "EPA"). Such processes are known
         as Processes that Further Reduce Pathogens ("PFRP"). Synox also
         invested approximately $995,000 in the design and construction of a
         full scale demonstration plant located in Jacksonville, Florida.

                  As a result of the lack of activity in the markets addressed
         by the Synox Process, the Company elected, during fiscal year 1996, to
         reduce substantially the operations at Synox in order to minimize
         expense. The two full-time employees of Synox were terminated and the
         full scale demonstration plant of Synox located in Jacksonville,
         Florida was closed. Substantially all of the assets of Synox were
         written off during fiscal year 1996. The demonstration plant was
         dismantled during fiscal year 1998. Nevertheless, management of the
         Company believes that the Synox Process may become valuable in the
         future, provided that, among other factors, a full implementation and
         vigorous enforcement of the existing EPA Regulations is realized;
         funding becomes available to municipalities to enable municipalities
         to implement processes such as the Synox Process; the Synox Process,
         at such time in the future, is competitive and viable; and, at such
         time in the future, the beneficial use of Class A biosolids is
         generally accepted.



                                       5
<PAGE>   6


                  In March of 1993, the Company received notification from the
         EPA that a committee of the EPA has recommended PFRP equivalency for
         the Synox Process, which means that the Synox Process achieves the
         EPA's "Class-A" standard of treatment of municipal wastewater
         biosolids (sludge). Under the EPA Regulations, the EPA has reserved
         the "Class-A" designation for those processes that can achieve the
         highest standards of treatment, allowing beneficial re-use of
         biosolids with minimal regulation. The Company believes that the
         patented Synox Process is the only "Class-A" designated process that
         treats biosolids in a liquid form, is non-biological and does not
         require heat or the addition of alkaline materials for disinfection,
         resulting in several important advantages. The Synox Process is
         relatively fast, achieving Class-A treatment in less than a day. Other
         processes may require from several days to several weeks. Unlike most
         other processes, Synox treats biosolids in liquid form and does not
         require an odor-causing dewatering step prior to treatment. In
         addition, the Synox in-vessel process is designed to provide for
         pathogen kill and to control objectionable odors.


                  EPA REGULATIONS.

                  The treatment and disposal of municipal biosolids are
         regulated by the EPA, under authority of Section 405(d) of the Clean
         Water Act, as amended (the "CWA"). On February 19, 1993, the EPA
         published new regulations relating to the treatment, disposal and
         usage of biosolids. These new regulations were, the Company believes,
         the result of a major effort by the EPA to develop regulations
         containing guidelines for the use and disposal of biosolids, including
         standards that are intended to adequately protect public health and
         the environment from reasonably anticipated adverse effects from the
         use and disposal of biosolids. The EPA has also set performance
         standards for owners and operators of sewage treatment works. The EPA
         Regulations also provide for other standards such as performance,
         long-term storage, vector attraction, reporting, etc.

                  Management has observed that, to date, the adoption by the
         EPA of its new regulations on February 19, 1993 has not resulted in a
         meaningful increase in the sales of biosolids equipment. Management
         believes that this lack of market activity is primarily the result of
         a lack of funding for improvements, required by the new regulations,
         to municipal treatment works. Management also believes that full
         implementation and vigorous enforcement of the new regulations must be
         realized before a potential market for the Synox Process may be
         developed. There can be no assurance, however, that vigorous
         regulatory enforcement will occur or will lead to a developed market
         for the Synox Process or otherwise benefit Synox or the Company.
         Management of the Company has seen a trend towards a general reduction
         in emphasis (primarily politically) in these regulations which could
         adversely impact any future value of the Synox Process.



                                       6
<PAGE>   7


                  SALES AND MARKETING.

                  The Company's organization includes operations for sales and
         marketing. At the present time, Synox Corporation is conducting no
         full-time sales and marketing programs, and relies on the senior
         officers of the Company to monitor market developments that might
         result in potential sales of the Synox Process. Sprayroq Corporation
         employs one salesperson to coordinate activities among Sprayroq's
         licensees and to secure new licensees. From time to time, the
         Company's senior officers and directors also participate in sales and
         marketing of the Company's products and services.

                  The Company and Sprayroq conduct marketing activities, which
         typically include: (i) identifying new markets and market strategies,
         trade shows, advertising, new releases and other promotional
         activities; (ii) brochures, video, Internet "Web" pages, and slide
         presentations; and (iii) other sales aids and investor relations.
         Sales and marketing activities are directed to potential licensees,
         engineers (both in the municipal and industrial sectors), public works
         officials, consulting engineers, mayors, and other public officials to
         introduce them to, and educate them about, the products and services
         offered by the Company.


                  CUSTOMERS.

                  Sprayroq's sales are almost exclusively to its licensees. The
         majority of Sprayroq's revenues are derived from the sale of resinous
         materials, principally SprayWall and SprayShield. Additional revenues
         are derived from fees arising out of license agreements, along with
         related sales of equipment, spare parts, and technical support. These
         licensees market, sell and install Sprayroq products primarily to
         municipal and industrial customers. An aggregate of 89% of Sprayroq's
         sales for fiscal year 1998 were made to two customers which amounted
         to sales totaling approximately $1,007,000 and $151,000, to Insituform
         Southeast, Inc. and Slaughter Construction Company, Inc.,
         respectively. Synox Corporation currently has no customers.

                  MARKETS.

                  Sprayroq.

                  Sprayroq currently intends to continue to market its products
         though its licensed installers and to continue to attempt to obtain
         additional licensees for the current Sprayroq products. If additional
         products are developed by Sprayroq, such products may be marketed
         through existing or new licensed installers. Since Sprayroq products
         may be utilized in various ways by various industries, existing
         licensed installers may or may not be appropriate to market certain
         new Sprayroq products. Depending upon the background and expertise of
         any particular licensed installer, Sprayroq may elect to allow that
         licensee to market new products, elect to find another organization
         which is more suitable, or pursue the marketing of the product
         directly.



                                       7
<PAGE>   8

                  The Company believes that the market for spray-applied
         resinous materials is large. Any municipality and any larger
         industrial plant are among potential customers for Sprayroq products.
         In addition, the Company has identified significant potential markets
         in the lining of truck beds, containment vessels and/or structures and
         subterraneous vaults.


                  Synox.

                  The Company decided to minimize the operations of Synox
         during fiscal year ended March 30, 1996. If, however, at any time in
         the future, the Company determines that it is in the best interest of
         the Company to develop and increase the operations of Synox, its
         market is likely to primarily consist of 1,000 publicly owned
         treatment works treating more than 5 million gallons of wastewater per
         day, operated by municipalities in the United States.


                  COMPETITION.

                  Sprayroq.

                  Sprayroq faces competition, either directly from companies
         marketing similar resin products, or indirectly, from other techniques
         and technologies which accomplish similar results in a different
         manner. Other companies provide resin materials which may be
         spray-applied, or are similar but which are applied in a different
         manner, or are not similar but which provide similar results.

                  The SprayWall product was developed specifically for use in
         the reconstruction of manholes and related structures. Management is
         unaware of any product that offers a similar combination of spray
         application of polyurethanes, long-term structural performance, and
         high resistance to corrosion. There are, however, a number of products
         which are utilized in the refurbishment or reconstruction of manholes.
         Many of these products are less expensive and offer viable
         competition.

                  The Company is also aware of other products which exhibit
         certain of the qualities of SprayShield. The Company believes that
         SprayShield has significant adhesive qualities combined with corrosion
         and abrasion resistance. Various paints and thin coatings are
         available that are easily spray-applied and offer corrosion
         protection. The Company is aware of other products which offer similar
         abrasion resistance, but is unaware, however, of any product which
         offers all of the qualities of SprayShield.

                  The development of products utilizing urethane, polyesters,
         and epoxies is growing rapidly, with the announcement of new products
         occurring frequently. Sprayroq's products are not patented and are
         protected only to the extent offered as know-how and trade secrets.
         There can be no assurance that other competitors will not develop
         products similar or superior to those of Sprayroq.



                                       8
<PAGE>   9

                  Management is aware of other processes which may become
         significant future competitors of the Company's products. Among such
         processes are those that involve techniques based on in-pipe curing or
         spray-applied lining. In addition, there are other types and methods
         of applied linings and coatings which are competitive to the Company's
         products, particularly in the lining of manholes.


                  Synox.

                  If the Company determines to develop and increase the
         operations of Synox, Synox would be likely to face competition from a
         number of suppliers employing more traditional, well-known and
         accepted methods of wastewater biosolids treatment. All biosolids
         treatment processes, including the Synox Process, have strengths and
         weaknesses and no one process is the best choice in all situations.
         Competing biosolids treatment processes include alkaline
         stabilization/fixation, heat drying/pelletizing, and composting. For
         some potential customers, more conventional treatment methods will be
         adequate. There are a number of companies marketing specific
         technologies that offer many of the same advantages as the Synox
         Process over conventional wastewater biosolids treatment techniques.
         Many of these companies employ techniques that may produce soil
         amendment products or fuel from the treated biosolids. These
         companies, which are well established and better financed than Synox,
         constitute substantial, direct competition for Synox. See "Description
         of Business -- Background on Operations of Synox Corporation."

                  PATENTS AND LICENSES.

                  Sprayroq.

                  Sprayroq currently has not pursued registering any patents
         with respect to its products. Management believes that the
         formulations of the SprayWall and SprayShield products are proprietary
         to Sprayroq and are protected as know-how and trade secrets. Sprayroq
         has licensed the formulation of the SprayWall product to Mitsui
         Chemical and Toa Grout, Inc. of Japan.

                  Synox.

                  Synox is the exclusive licensee under a license agreement
         dated May 27, 1986, as amended on May 16, 1991, October 5, 1994,
         December 20, 1996, and December 22, 1997 between Synox and Long
         Enterprises (the "License Agreement"), pursuant to which Synox has
         obtained rights to six U.S. patents relating to the Synox Process.



                                       9
<PAGE>   10


                  The patents and patent applications covered by the License
Agreement, and their expiration dates are listed below:

<TABLE>
<CAPTION>
         Number            Name         Description                             Expiration
         -------------------------------------------------------------------------------------
         <S>               <C>          <C>                                     <C>
         4,487,699         Long         Sewage Biosolids Treatment              Dec. 11, 2001
                                        Apparatus and Process
         4,582,612         Long         Improved Sewage Biosolids               Apr. 15, 2003
                                        Treatment Apparatus
         4,659,464         Long         Apparatus for Dispersing                Apr. 21, 2004
                                        Biosolids With Gas Impingement
         4,695,388         Long         Apparatus and Process for               Sept. 22, 2004
                                        Rapid Sewage Biosolids Separation
         4,936,983         Long         Sewage Biosolids Treatment              June 26, 2007
                                        with Gas Injection
         5,147,563         Long         Improved Sewage Sludge Treatment        Sept. 29, 2009
                                        With Gas Injection
</TABLE>

                  The License Agreement grants to Synox exclusive rights to
         license the Synox Process in the following territory comprising the
         states of Maryland, Delaware, Virginia, West Virginia, North Carolina,
         South Carolina, Florida, Georgia, Alabama, Kentucky, Tennessee,
         California, Texas, Arizona, New Mexico and the District of Columbia.

                  As amended, the License Agreement expires on September 28,
         2011 or the later date of termination of the last to expire of any
         patent issued pursuant to the patent applications and continuations in
         part relating to the subject matter of the License Agreement in
         existence on May 16, 1991, and thereafter prosecuted by the licensor
         or its assignor, Charles A. Long, Jr. (the "Long License Expiration").

                  Under the License Agreement, Synox is obligated to pay
         royalties of 4% of the total contract value of each Synox Process
         installation (which begins with a storage unit for thickened biosolids
         and ends with biosolids thickening and chemical contact), less
         allowable deductions, such as the building, site preparation, paving,
         land and landscape. No such installations have been completed or are
         currently contemplated.

                  Minimum annual royalties (based on retaining the existing
         territory of 15 states listed above) are due each January 1, for the
         ensuing calendar year through the Long License Expiration. On January
         1, 1995, a minimum royalty payment of $45,168 was made, and the
         minimum royalty payments for 1996 and 1997 were waived as the result
         of amendments to the License Agreement. The License Agreement was
         amended on December 22 1997 to change the expiration date of the
         license and to provide that no minimum royalty payment would be due on
         January 1, 1998 but that such minimum royalty payments would resume on
         January 1, 1999 in accordance with the following schedule:



                                      10
<PAGE>   11

<TABLE>
<CAPTION>
                  Date Due                                                      Amount
                  ----------------------------------------------------------------------
                  <S>                                                  <C>
                  January 1, 1999                                      $      90,335.51
                  January 2, 2000                                      $     180,671.02
                  January 1, 2001                                      $     180,671.02
                  January 1, 2002 and on each January  1
                  through Long License Expiration                      $     225,838.77
</TABLE>

                  SUPPLIERS.

                  The Company purchases raw materials and other supplies from a
         variety of sources and is not dependent upon any one source. While
         Sprayroq does utilize a third party to blend its products, other
         companies provide similar blending services. In addition, Sprayroq has
         performed such blending in the past and would be able to resume
         blending quickly, if required.

                  OPERATIONAL RISKS AND INSURANCE.

                  To cover various insurable risks, the Company has in force
         $2,000,000 in general liability insurance ($1,000,000 per occurrence),
         $1,000,000 in automobile liability insurance, and $1,000,000 in
         "umbrella" coverage. In addition, the Company carries various property
         coverages and worker's compensation policies as required by each
         jurisdiction in which it does business.

                  At the present time, Sprayroq's principal products are
         characterized as polyurethanes and utilize several chemicals,
         including diisocyanates. Diisocyanates have been in general use for
         many years, in many applications including automobile parts,
         insulation, floor coverings, and roofing. Guidelines regarding the use
         of diisocyanates were published by the U.S. Department of Health,
         Education and Welfare, Public Health Service, Center for Disease
         Control, and National Institute for Occupational Safety and Health
         (NIOSH) in September, 1978. Additional documentation regarding
         recommended precautions and procedures to be used with such chemicals
         has been provided by the suppliers of the chemicals, and by Sprayroq,
         and Sprayroq instructs all licensees to follow the procedures set
         forth in this documentation. Sprayroq's current supplier of
         diisocyanates reports that diisocyanates and other such chemicals have
         been in general use for more than fifty years, and that the issues
         relating to their safe use are well known. There can be no assurance,
         however, that NIOSH or other regulatory organizations, governmental
         agencies, etc. might, in the future, determine that such chemicals are
         hazardous or otherwise harmful, or might otherwise regulate or prevent
         their use.



                                      11
<PAGE>   12

                  Sprayroq's licensee in Denmark had previously reported that
         the spraying of diisocyanates in a confined space is not allowed
         according to a regulatory agency of the Danish government. During
         fiscal year 1997, this licensee reported that the spraying of
         diisocyanates was permitted in Denmark. The management of Sprayroq is
         not aware of any other similar prohibition of the use of diisocyanates
         in other countries. While the management of Sprayroq understands that
         the previous objections of the Danish regulatory agency are apparently
         no longer in effect, there can be no assurance that such objection
         will not persist, nor can assurance be given that similar objections
         will not occur in the future in other countries, geographical and/or
         political divisions.


                  EQUIPMENT.

                  The Company owns or leases a number of trailers, vans, and
         other equipment which are necessary to the operations of the Company.

                  RESEARCH AND DEVELOPMENT.

                  The Company engages in research and development ("R&D")
         efforts to develop new products, improve existing products, reduce its
         costs and expand potential applications. The Company incurred R&D
         expenses with respect to Sprayroq of approximately $5,000 in the year
         ended March 28, 1998 and $23,000 in the year ended March 29, 1997.


                  EMPLOYEES.

                  As of May 28, 1998, the Company had three full-time employees
         and three part-time employees.


         ITEM 2.  PROPERTIES

                  (a) The Company owns approximately 10.6 acres of real estate
         adjacent to Old Enviroq's facilities at 11511 Phillips Highway South
         in Jacksonville, Florida. At the present time, this acreage is
         undeveloped and is zoned industrial light and light industrial. The
         Company currently has no plans to improve or develop the property and
         has advertised the property for sale.

                  The Company leases, on a month-to-month basis, approximately
         1,300 square feet of office space located at 3918 Montclair Road,
         Birmingham, Alabama 35213. This leased space serves as the principal
         executive offices of the Company and may be canceled upon 90 days
         notice. The Company believes that these executive offices are adequate
         for the conduct of the business of the Company. The Company's Sprayroq
         subsidiary also leases approximately 5,000 square feet of
         office/warehouse space at 4707 Alton Court, Irondale, Alabama 35210.



                                      12
<PAGE>   13

         This space serves as the executive offices, training, blending, and
         warehouse for Sprayroq and may be canceled upon 90 days written
         notice.

                  (b) The Company does not typically invest in real estate,
         real estate mortgages or related securities. There is no policy of the
         Company which places restrictions or limitations on the percentage of
         assets which may be invested or the type of investment, and this
         policy may be changed without the vote of the Company's shareholders.
         It is not the policy of the Company to acquire assets primarily for
         possible capital gain or primarily for income.

                  Management believes that the foregoing properties are
         adequately insured.


         ITEM 3.  LEGAL PROCEEDINGS

                  The Company is involved, from time to time, in various legal
         proceedings incidental to the conduct of its business. The Company is
         not currently engaged in any legal proceedings that are presently
         expected to have a material adverse effect on the Company.



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

                  No matter was submitted to a vote of the Company's
         shareholders during the period covered by this Item 4.



                                      13
<PAGE>   14


                                    PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         At the present time, the common stock of the Company is traded in the
over-the-counter markets, and bid/asked quotations may be found on the OTC
Bulletin Board under the symbol "ENVQ." The following table sets forth for the
last two fiscal years, the high and low bid and asked prices of the common
stock of the Company. The information set forth below has been obtained from
the OTC Bulletin Board and is believed to be reliable. The reported high and
low bid and asked quotations do not reflect actual trades, but are dealer
prices without mark-ups, mark-downs or commissions.

<TABLE>
<CAPTION>
                                    --------------------------------------------------------------
                                                          FISCAL YEAR 1997
                                    --------------------------------------------------------------
  Quarter Ended                        Low              High              Low              High    
                                       Bid              Bid               Ask              Ask
                                    --------------------------------------------------------------
  <S>                               <C>                 <C>               <C>              <C>
  First Quarter(1)                       N/A               N/A              N/A               N/A
  Second Quarter                       $1.25             $2.00            $2.00             $2.50
  Third Quarter                        $0.63             $1.63            $1.00             $2.50
  Fourth Quarter                       $0.25             $0.63            $0.75             $1.50
                                    ---------------------------------------------------------------
                                                          FISCAL YEAR 1998
                                    ---------------------------------------------------------------
  Quarter Ended                        Low              High              Low              High    
                                       Bid              Bid               Ask              Ask
                                    ---------------------------------------------------------------
  <S>                               <C>                 <C>               <C>              <C>
  First Quarter                        $0.64             $1.50            $1.50             $3.00
  Second Quarter                       $0.75             $1.00            $1.25             $3.00
  Third Quarter                        $0.38             $0.75            $0.57             $1.25
  Fourth Quarter                       $0.50             $0.75            $0.88             $1.50
</TABLE>

         (1) Management has not been able to obtain any information with respect
         to trades of the common stock of the Company that may have occurred 
         from the date of the Distribution on April 18, 1995 through 
         August 15, 1996, which would include all of the first quarter of fiscal
         year 1997.



         There were 361 shareholders of record as of June 4, 1998, which number
does not include shareholders whose shares were held of record by brokers, but
does include each brokerage firm holding stock as a nominee.

         The Company has not paid any cash dividends on its common stock since
its organization, and currently intends to retain any earnings of the Company
for the Company's operations and the expansion of its business. Other than state
corporate law limitations, there are no restrictions on the Company's ability to
pay dividends.



                                      14
<PAGE>   15

         ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS

                  This discussion should be read in conjunction with the
         Company's consolidated financial statements and notes thereto included
         elsewhere herein.


                  RESULTS OF OPERATIONS.

                  Revenue.

                  Revenues for the fiscal year ended March 28, 1998 were
         approximately $1,304,000 as compared to approximately $1,339,000 for
         fiscal year ended March 29, 1997, a decrease of 2.6%. Approximately
         $1,284,000 in revenues for fiscal year 1998 resulted from the sales of
         materials, parts, support, etc., while approximately $20,000 in
         revenues were derived from licenses fees. Approximately $1,153,000 in
         revenues for fiscal year 1997 resulted from the sales of materials,
         parts, support, etc., while approximately $186,000 in revenues were
         derived from licenses fees. The decrease in revenues for fiscal year
         1998 as compared to fiscal year 1997 was primarily attributable to
         decreases in the number of new license agreements procured by
         Sprayroq, which resulted in a corresponding decrease in license fees.

                  Gross Profit.

                  For fiscal year 1998, the Company's gross profit margin was
         53.5%, as compared to 44.8% for fiscal year 1997. The increased gross
         profit margin over fiscal year 1997 is due primarily to the increased
         proportion of Sprayroq resin sales to total sales, with a
         corresponding decrease in the proportion attributable to license fees.

                  Selling, General and Administrative Expenses.

                  Selling, General and Administrative expenses ("S,G&A") for
         fiscal year 1998 were approximately $761,000 as compared to
         approximately $759,000 for fiscal year 1997, an increase of less than
         1%. S,G&A for fiscal year 1998 was approximately unchanged as compared
         to fiscal year 1997 primarily as a result of decreases in expenses,
         primarily payroll, at Sprayroq, which were offset by increases in
         expenses, primarily legal expenses relating to the Reorganization Plan
         as referred to herein, as well as the payment of a bonus.

                  Net Income/(Loss).

                  For fiscal year 1998, the Company had net income of
         approximately $74,000, as compared to net income of approximately
         $54,000 for fiscal year 1997, an increase of 37.0%. The increase in net
         income is primarily attributable to increases in gross profit and
         other income. In addition, the Company had income tax expense of
         approximately $21,000 in fiscal year 1998 which reduced the pre-tax
         income of $94,348, as compared to income tax benefit of 



                                      15
<PAGE>   16

         approximately $72,000 in fiscal year 1997, which offset the pre-tax
         loss of $17,732.

                  Financial Condition.

                  Total assets, stockholders' equity, and working capital
         increased during fiscal year 1998, as compared to fiscal year 1997.
         The increase during fiscal year 1998 was primarily the result of the
         increase in net income, along with increases in property, plant and
         equipment.

                  At March 28, 1998, the Company had approximately $2,820,000
         in working capital and a current ratio of 32.0-to-1, as compared to
         $2,784,000 in working capital and a current ratio of 32.2-to-1 at
         March 29, 1997.

                  The Company's cash and cash equivalents totaled approximately
         $2,545,000 at March 28, 1998. The Company's operating activities
         provided cash of approximately $202,000, as compared to cash used by
         operating activities of approximately $1,247,000 in fiscal year 1997.
         Cash in the amount of approximately $36,000 was used in investing
         activities during fiscal year 1998, as compared to cash of
         approximately $3,000 used in investing activities in fiscal year 1997.

                  In fiscal years 1998 and 1997, approximately $36,000 and
         $5,000, respectively, was expended for capital assets.

                  Depreciation expense was approximately $8,000, and
         amortization expense was zero in fiscal year 1998, as compared to
         depreciation and amortization expense of $27,000 in fiscal year 1997.
         Net fixed assets were approximately $359,000 at the end of fiscal year
         1998, as compared to approximately $330,000 at the end of fiscal year
         1997, an increase of 8.8%. This increase is primarily attributable to
         the purchase of equipment offsetting accumulated depreciation.

                  The Company does not believe that there is any appreciable
         seasonal impact on the business of the Company, although extreme cold
         weather may impair installation of spray-applied materials, which may
         result in decreased resin sales by Sprayroq.

                  The Company's undeveloped property in Jacksonville, Florida
         (approximately 10.6 acres) is currently being offered for sale, which
         may result in an increase in the Company's cash.

                  Other than normal trade accounts payable, taxes and normal
         accrued expenses incurred in the ordinary course of business, the
         Company is not currently aware of other material contingencies.

                  Operating cash flow combined with available cash are
         currently expected to provide resources for the Company's working
         capital needs for the foreseeable future. To the extent that the
         Company is not able to meet its financial goals, however, the
         Company's revenues may not be sufficient to satisfy the Company's
         working capital needs. Consequently, no 



                                      16
<PAGE>   17

         assurance can be given that the Company's revenues will be sufficient
         to adequately fund the Company's future working capital requirements.

                  The operating results and financial statements of the Company
         include all of the operating results of Sprayroq, without discount or
         reduction based upon the fact that the Company owns 50% of the
         outstanding capital stock of Sprayroq, and controls the operations of
         Sprayroq. The minority interest in Sprayroq is not reflected in the
         financial statements because of its accumulated deficit position.

                  On April 23, 1998, Enviroq announced that its board of
         directors has approved entering into an Agreement and Plan of
         Reorganization (the "Reorganization Plan") by which Enviroq will merge
         with a subsidiary of Intrepid Capital Corporation ("Intrepid"), a
         newly-formed corporation. The merger would be consummated through a
         transaction in which Enviroq stockholders would receive shares of
         Intrepid common stock, as well as cash. Simultaneously with the
         Enviroq-Intrepid merger, Institutional Asset Management, Inc. ("IAM")
         and Capital Research Corporation ("CRC") will also merge with
         newly-formed subsidiaries of Intrepid. As a result of the transaction,
         Enviroq, IAM and CRC will become wholly-owned subsidiaries of Intrepid
         (the "Mergers").

                  According to the Reorganization Plan, the shares of Intrepid
         common stock issued in the mergers will be registered securities under
         the Securities Exchange Act of 1934, as amended. It is anticipated
         that the common stock of Intrepid will be traded in the
         over-the-counter markets. The Reorganization Plan also contemplates
         that Enviroq stockholders will receive $2,250,000 in cash and
         1,009,377 shares of Intrepid common stock. This would result in
         Enviroq stockholders receiving approximately $2.23 in cash and one 
         share of Intrepid common stock for each issued and outstanding share of
         Enviroq stock. The stockholders of IAM and CRC will receive 
         approximately 1,206,149 shares of Intrepid common stock in exchange for
         all of the outstanding common stock of IAM and CRC. Completion of the 
         Mergers are subject to a number of conditions, including approval of
         Enviroq stockholders, the receipt by Enviroq of a fairness opinion from
         its investment banker, and other conditions.


         ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                  The consolidated financial statements of the Company as of
         March 28, 1998 and other information required by Item 310(a) of
         Regulation S-B are set forth on pages F-1 through F-10 hereof.


         ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING 
                  AND FINANCIAL DISCLOSURE

                  There have been no changes in or disagreements with the
         Company's accountants regarding accounting procedures or financial
         disclosure.



                                      17

<PAGE>   18

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF THE
        COMPANY; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         Executive officers and directors of the Company as of the date hereof
are as follows:


<TABLE>
<CAPTION>
                                 DIRECTOR    POSITIONS WITH
NAME                       AGE   SINCE(1)     THE COMPANY
----                       ---   --------    --------------
<S>                        <C>   <C>         <C>
Antonio M. Marinelli       78     1995       Chairman of the Board
                                             and Director

William J. Long            46     1995       President, Chief Executive
                                             Officer and Director

Charles A. Long, Jr        70     1995       Director

Michael X. Marinelli       39     1995       Director

Thomas W. Brander          49     1997       Director

Alexander P. Zechella      77     1995       Director
</TABLE>


         Antonio M. Marinelli has been Chairman of the Board and a Director of
the Company since April 1995. Prior to April 1995, Mr. Marinelli had been
Chairman of the Board of Old Enviroq since 1981. Mr. Marinelli is, and has been
for over five years, Vice Chairman of the Board and a Director of Intercounty
Construction Company of Florida, Inc. ("Intercounty"), a heavy construction
contractor and a wholly-owned subsidiary of Micam Industries, Inc. ("Micam").

         William J. Long has been President, Chief Executive Officer and a
Director of the Company since April 1995. Prior to April 1995, Mr. Long had been
Vice President-Marketing and a Director of Old Enviroq since October 1984. Since
May 25, 1995, Mr. Long has been Chairman of the Board and a Director of
Sullivan, Long & Hagerty, an Alabama corporation ("SLH"), a heavy construction
contractor, which is the parent of SCE, Incorporated, an Alabama corporation
("SCE"), a heavy construction contractor. Prior to October, 1995, Mr. Long had
been Chief Executive Officer of SCE and SLH. Prior to May 25, 1995, Mr. Long had
been a Director and Senior Vice President of SCE, and a Director and Senior Vice
President of SLH, for over five years.

(1)   All directors of the Company hold office for a term of one year or until
      such director's successor is elected and qualified.


                                       18


<PAGE>   19


         Charles A. Long, Jr., has been a Director of the Company since April
1995. Prior to April, 1996, Mr. Long had served as Secretary-Treasurer of the
Company. Prior to April 1995, Mr. Long had served as Secretary-Treasurer and a
Director of Old Enviroq since October 1981. Prior to May 25, 1995, Mr. Long also
served since 1970 as the Chairman of the Board and Chief Executive Officer of
SCE and SLH and is currently a director of both SCE and SLH.

         Michael X. Marinelli is an associate with the Washington, D.C. law firm
of Baker & Botts. He graduated from Catholic University Law School in 1989. Mr.
Marinelli served as Assistant Secretary of the Company from January 1987 to July
1987. He served as Special Assistant to the General Manager of Insituform East,
Inc., from February 1986 to August 1986. From October 1985 to February 1986, Mr.
Marinelli served as assistant to the President of the Company, and from October
1984 to October 1985, he was a sales representative for the Company. He has
served as a Director of the Company since April 1995. Prior to April 1995, he
had served as a Director of Old Enviroq since October 1984.

         Thomas W. Brander served from 1988 until April, 1998 as a Senior Vice
President of Compass Bankshares in Birmingham, Alabama. From 1987 until 1988,
Mr. Brander served as a Vice President for American International Group in New
York, NY. From 1976 until 1987, Mr. Brander served in various positions with
Citibank, NA in Sydney, Australia, Atlanta, GA, and New York, NY.

         Alexander P. Zechella served from September 1983 to April 1984, as
Chairman of Charter Oil Company and Executive Vice President of The Charter
Company ("Charter"). From April 1984 until his retirement in December, 1985 Mr.
Zechella served as President, Chief Executive Officer, and Chief Operating
Officer of Charter. Mr. Zechella has served as a Director of the Company since
April 1995. Prior to April 1995, he had served as a Director of Old Enviroq
since April 1987.

         Marinelli Securities Associates, a Florida general partnership ("MSA"),
is the record owner of 294,900 shares.

         Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons that no Forms 5 were
required by those persons, the Company believes that, during the fiscal year
ended March 28, 1998, all filing requirements applicable to its officers,
directors, and greater-than-10% beneficial owners have been complied with.

         William J. Long, a Director and Chief Executive Officer of the Company,
is the son of Charles A. Long, Jr., also a Director of the Company. Michael X.
Marinelli, a Director of the Company, is the son of Antonio M. Marinelli, also a
director of the Company.


                                       19


<PAGE>   20


ITEM 10. EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

         The following table sets forth certain information respecting the
compensation paid to the Chief Executive Officer of the Company during the
fiscal year ended March 28, 1998 and relevant preceding fiscal years:


                           SUMMARY COMPENSATION TABLE

                           Annual Compensation Awards


<TABLE>
<CAPTION>
            Name and                                                                 All Other
            Principal                                          Salary              Compensation
            Position                      Year                   ($)                    ($)
         ----------------                 ----                 -------             ------------

         <S>                              <C>                  <C>                 <C>
         William J. Long                  1998                 $85,000              $50,000 (1)
         President and                    1997                 $84,133                   --
         Chief Executive                  1996                 $58,335                   --
         Officer
</TABLE>


(1)  Bonus of $50,000, of which $20,000 was paid in fiscal year 1998, and the
     remaining $30,000 to be paid in the first quarter of fiscal year 1999.

         Directors' Compensation. Non-employee directors of the Company are paid
$1,000 per quarter for a maximum of six meetings of the Board of Directors and
Committees of the Board. In the event that additional meetings of the Board of
Directors are required, the non-employee Directors are compensated at a rate of
$1,000 per meeting. All Directors and Officers are reimbursed for travel
expenses incurred in connection with their attendance at meetings of the Board
of Directors.

         In addition, non-employee directors are entitled to receive options to
purchase shares of the Company's common stock pursuant to a Non-Employee
Directors Stock Option Plan (the "Directors' Plan"). Options for up to 100,000
shares of common stock are authorized to be issued under the Directors' Plan.
The Directors' Plan allows the Company's Stock Option Committee to grant options
to non-employee directors for a price of not less than eighty-five percent (85%)
of the fair market value of the Company's common stock on the dates that the
options are granted. Options are exercisable in whole or in part, from time to
time, until five (5) years from the date of grant, except that, absent a change
in control of the Company, each option terminates upon the discontinuance of the
option holder's service as a Director of the Company for any reason except death
or disability. Sale of common stock purchased upon exercise of an option is
prohibited for two (2) years from the date of exercise or three (3) years from
the date of grant, whichever is later, unless there is a change in control of
the Company or in the event of the Director's death. Each option agreement under
the Directors' Plan provides, among other things, that shares of Common Stock
will be issued and delivered to the Director upon payment to the Company of the
exercise price of such shares and that the option price and number of shares
subject to such option will be adjusted for stock splits, stock dividends or
other similar changes in the Company's capital structure. No options were issued
during fiscal 1998 under the Directors' Plan.


                                       20


<PAGE>   21


         Incentive Stock Option Plan. Options may be granted under the Company's
Incentive Stock Option Plan (the "ISO Plan"), which provides for the issuance to
key employees of incentive stock options ("ISOs") within the meaning of Section
422A of the Internal Revenue Code of 1986, as amended. The ISO Plan is
administered by the Stock Option Committee of the Board of Directors (the
"Committee"). As of June 20, 1996, the Committee was authorized to issue up to
100,000 shares of common stock pursuant to the exercise of the ISOs. The option
price of each ISO granted is 100% of the fair market value of the common stock
on the date of grant. If an ISO is granted to an optionee who holds more than
10% of the combined voting power of all classes of the Company's stock at the
date of the grant, the option price is 110% of fair market value of the common
stock on the date of grant. The ISO Plan provides for the exercise of ISOs at
the maximum rate of 25% in the first 12 months after grant and 25% in each
12-month period thereafter. To the extent not exercised, an optionee may
accumulate his or her ISOs and exercise them, in whole or in part, in any
subsequent period but not later than 10 years from the date on which the option
was granted. No options were issued during fiscal year 1998 to executive 
officers of the Company under the ISO Plan.

         Compensation Committee Interlocks and Insider Participation. Thomas W.
Brander, Antonio M. Marinelli and Alexander P. Zechella serve on the
Compensation Committee of the Board of Directors.


                                       21


<PAGE>   22


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The table set forth below presents certain information regarding the
beneficial ownership as of June 4, 1998 by (i) each shareholder known to the
Company to own more than five percent of any class of the Company's outstanding
securities entitled to vote; (ii) directors of the Company; and (iii) all
executive officers and directors of the Company as a group.

<TABLE>
<CAPTION>
                                                   AMOUNT AND NATURE             PERCENT OF CLASS
NAME AND ADDRESS OF                                  OF SECURITIES                  (EXCLUDING
BENEFICIAL OWNER                                   BENEFICIAL OWNER(1)          TREASURY SHARES)(2)
-------------------                                -------------------          -------------------
<S>                                                <C>                          <C> 
Insituform of North America, Inc.                   73,800 shares                       7.3%
   3315 Democrat Road                               of common stock
   Memphis, Tennessee 38118

Marinelli Securities Associates (3)                 294,900 shares                     29.2%
   2100 North Dixie Highway                         of common stock
   Fort Lauderdale, Florida 33305

Charles A. Long, Jr. (4)                            5,686 shares                        0.6%
   P. O. Box 12887                                  of common stock
   Birmingham, Alabama 35202

William J. Long (4)(5)                              263,389 shares                     26.1%
   3918 Montclair Road, Suite 206                   of common stock
   Birmingham, Alabama 35213

Antonio M. Marinelli (3)(6)                         299,559 shares                     29.7%
                                                    of common stock

Michael X. Marinelli (3)(7)                         295,420 shares                     29.3%
                                                    of common stock

Thomas W. Brander                                   14,061 shares                       1.4%
   3763 West Jackson Blvd                           of common stock
   Birmingham, Alabama 35213

Alexander P. Zechella                               4,221 shares                        0.4%
   1000 Vicar's Landing Way, #F-109                 of common stock
   Ponte Vedra Beach, Florida 32082

All officers and directors                          584,942 shares                     58.0%
  as a group (7 persons)                            of common stock
</TABLE>


(1)      Included in such beneficial ownership are shares of common stock
         issuable upon the exercise of certain options exercisable immediately
         or within 60 days of June 4, 1998, as follows: None.


                                       22


<PAGE>   23


(2)      The percentages represent the total of the shares listed in the
         adjacent column divided by the issued and outstanding shares of common
         stock as of June 4, 1998, plus any options exercisable immediately or
         within 60 days.

(3)      Marinelli Securities Associates ("MSA") is a Florida general
         partnership and is the record owner of 294, 900 shares. The partners of
         MSA are Micam Industries, Inc. ("Micam") (41.16%), Estate of Orlando M.
         Marinelli (7.65%), Marion Marinelli (7.65%), Antonio M. Marinelli
         (7.65%), Phyllis Marinelli (7.65%), Michelle Marinelli (7.06%), Kim
         Vreeland (7.06%), Michael X. Marinelli (7.06%), and Michael J.
         Marinelli (7.06%). Michael X. Marinelli, a director of the Company, is
         a partner in MSA. Accordingly, the shares owned by MSA may be deemed to
         be beneficially owned by each of them. The address of each of the
         above-named partners is the same as the address of MSA.

(4)      Charles A. Long, Jr. is the record owner of 3,312 shares. Also includes
         2,374 shares owned of record by Long Enterprises, Inc. Both Charles A.
         Long, Jr., and William J. Long are directors, executive officers, and
         controlling shareholders of Long Enterprises, Inc.

(5)      William J. Long is the record owner of 257,975 shares. Also includes an
         aggregate of 3,040 shares owned of record by William J. Long's wife and
         children, and 2,374 shares owned by Long Enterprises, Inc., of which
         William J. Long is a director, executive officer, and controlling
         shareholder. Mr. Long has pledged 257,706 shares to First Commercial
         Bank as security for a loan.

(6)      Antonio M. Marinelli is the record owner of 4,659 shares.

(7)      Michael X. Marinelli is the record owner of 120 shares. Also includes
         400 shares owned of record by Michael X. Marinelli's sons.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Directors Charles A. Long, Jr., and William J. Long, and other members
of the Long family may be deemed to be in control of Assurance Agency, Inc., an
Alabama corporation and an insurance broker ("Assurance"), Long Technologies,
Inc., a research and development company, Integrid, Inc., a consulting company,
Sullivan, Long & Hagerty, and Long Enterprises, Inc.

         The Company has had a number of transactions, which are described
below, with the businesses named above. The Company believes that the
transactions were or are on terms that are no less favorable to the Company than
those which could reasonably have been obtained from an unaffiliated party.

         In April, 1996, Assurance sold its book of business and certain other
assets to LMJ Corporation. Among other of the terms relating to this sale was
the right of Assurance to receive a percentage of future commissions arising out
of the book of business sold to LMJ by Assurance. With respect to insurance
purchased by the Company from LMJ, LMJ pays 22% of the commissions from such
business to Assurance. During fiscal year 1998, a portion of the Company's
insurance (primarily relating to Director's and Officer's insurance) was
provided through LMJ Corporation for a total of approximately $29,000. For
fiscal years 1996 and 1997, the Company paid Assurance approximately $58,000 and
$66,000, respectively. In April, 1997, much of the Company's insurance was
purchased from an unaffiliated third party, although LMJ retained the portion of
insurance relating to workers'


                                       23


<PAGE>   24


compensation. Management believes that the Company will make payments to LMJ
during fiscal year 1999 for certain insurance needs equal to approximately
$30,000.

         Synox is party to the License Agreement with Long Enterprises. Pursuant
to the License Agreement, Synox has obtained from Long Enterprises rights to
five U.S. patents relating to the Synox Process. During fiscal years 1996, 1997
and 1998 the Company made no payments to Long Enterprises pursuant to the
License Agreement. See "Description of Business -- Patents and Licenses."

         During fiscal years 1998, 1997 and 1996, the Company paid approximately
$29,000, $13,000, and $2,800, respectively, to Market Potential, Inc., a company
controlled by Patricia L. Ford, for advertising and marketing services performed
for the Company. Ms. Ford is the sister of William J. Long and the daughter of
Charles A. Long, Jr. Market Potential, Inc. sub-leases office space from the
Company, and paid approximately $4,000 for this space during fiscal year 1998
and, for the period after September, 1997, $3,000 during fiscal year 1997.
Market Potential, Inc. sub-let offices, through August, 1996, to the Company,
for which, the Company paid approximately $1,000 to Market Potential, Inc.
during fiscal year 1997.

         Charles A. Long, Jr. sub-leases office space from the Company, and paid
the Company approximately $2,000 for this space during fiscal year 1998, and
approximately $1,400 during fiscal year 1997.

         Integrid, Inc., a company owned by William J. Long, sub-leases office
space from the Company, and paid the Company approximately $1,300 for this space
during fiscal year 1998, and $800 during fiscal year 1997.

         Old Enviroq acquired all of the outstanding common stock of Synox from
its existing stockholders on September 30, 1991. The stockholders of Synox at
the time of that merger received shares of Old Enviroq valued at $672,000 in the
aggregate plus the right to receive additional shares of Old Enviroq, dependent
on the earnings of Synox, up to a maximum value of $2,017,000. The right to
receive these additional shares was represented by certificates of contingent
shares of Old Enviroq ("Contingent Share Certificates"). In addition to other
past stockholders of Synox, certain directors of the Company or their
affiliates, including Long Enterprises, Inc., and Sullivan, Long & Hagerty,
Inc., Estate of Orlando M. Marinelli, Antonio M. Marinelli, former director W.
T. Goodloe Rutland, and Alexander P. Zechella, hold Contingent Share
Certificates.

         The Company has issued replacement contingent share certificates
representing the contingent right to receive shares of common stock of the
Company ("New Contingent Share Certificates"), partly in consideration of the
agreement of the holders of the Contingent Share Certificates to surrender their
Contingent Share Certificates. The New Contingent Share Certificates have rights
and privileges substantially similar to those afforded by the Contingent Share
Certificates except that (i) any shares to be issued pursuant to the New
Contingent Share Certificates will be shares of the common stock of the Company
rather than Old Enviroq, and (ii) the arbitration provisions contained in the
Contingent Share Certificates giving the holders thereof the right to arbitrate
the reasonableness of the decision to abandon the Synox Process are not
contained in the New Contingent Share Certificates.

                                       24


<PAGE>   25


         Synox has issued certain promissory notes to certain directors and
officers of the Company and certain of their affiliates. The aggregate amount of
such notes as of May 28, 1998 was approximately $1,091,179. These notes provide
that interest will be deferred and paid only if and after Synox has after-tax
net income and then only to the extent that the amount of interest paid does not
exceed the amount of such after-tax net income; and principal will be paid after
Synox has accumulated retained earnings, and then only to the extent that the
payment of such indebtedness does not exceed the amount of such retained
earnings. Management believes that the attainment of sufficient retained
earnings by Synox is not likely in the foreseeable future, and consequently such
notes are not recorded as liabilities in the Company's financial statements.

         Any future transactions with officers, directors, principal
stockholders, or affiliates of any officers, directors, or principal
stockholders will be on terms which management believes are no less favorable to
the Company than those which could reasonably be obtained from an unaffiliated
party and will be subject to the approval of a majority of the disinterested
directors.


                                       25


<PAGE>   26


ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

         (a) The following financial statements are filed with this report on
Form 10-KSB:

<TABLE>
<CAPTION>
                                                                   Page
                                                                   Reference
                                                                   ---------
         <S>                                                       <C>
         Independent Auditors' Report                                 F-1
         Consolidated Balance Sheets                                  F-2
         Consolidated Statements of Income                            F-3
         Consolidated Statements of Stockholders'                        
           Equity                                                     F-4
         Consolidated Statements of Cash Flows                        F-5
         Notes to Consolidated Financial                              F-6
           Statements                                                     
</TABLE>


(b) The Company filed a report on Form 8-K on April 23, 1998. No financial
statements were filed with respect to the Report on Form 8-K and the report
consisted of disclosures made in respect of Item 5 of Form 8-K.



                [remainder of this page intentionally left blank]


                                       26


<PAGE>   27







ENVIROQ CORPORATION AND SUBSIDIARIES



CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS 
ENDED MARCH 28, 1998 AND MARCH 29, 1997
AND INDEPENDENT AUDITORS' REPORT








<PAGE>   28


INDEPENDENT AUDITORS' REPORT

To The Board of Directors and Stockholders of
  Enviroq Corporation:

We have audited the accompanying consolidated balance sheets of Enviroq
Corporation and subsidiaries as of March 28, 1998 and March 29, 1997, and the
related consolidated statements of income, stockholders' equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Enviroq Corporation and
subsidiaries as of March 28, 1998 and March 29, 1997, and the results of their
operations and their cash flows for the years then ended in conformity with
generally accepted accounting principles.

Birmingham, Alabama
May 11, 1998




<PAGE>   29


ENVIROQ CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
MARCH 28, 1998 AND MARCH 29, 1997


<TABLE>
<CAPTION>
                                                                      1998           1997
<S>                                                               <C>            <C>        
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                                       $ 2,545,100    $ 2,379,613
  Accounts receivable (Note 6)                                         78,404        314,772
  Inventories                                                         168,184         52,830
  Refundable income taxes                                              63,470        100,189
  Prepaid expenses and other assets                                    36,884         24,494
                                                                  -----------    -----------
           Total current assets                                     2,892,042      2,871,898
                                                                  -----------    -----------
OTHER ASSETS:
  Employee notes receivable                                            11,858         13,819
  Deferred taxes (Note 2)                                              10,650
                                                                  -----------    -----------
           Total other assets                                          22,508         13,819
                                                                  -----------    -----------
PROPERTY, PLANT AND EQUIPMENT:
  Land                                                                310,135        310,135
  Operating equipment                                                  44,160         25,563
  Other equipment and vehicles                                         57,917         40,241
                                                                  -----------    -----------
                                                                      412,212        375,939
  Less accumulated depreciation                                        53,279         45,506
           Property, plant and equipment, net                         358,933        330,433
                                                                  -----------    -----------
TOTAL                                                             $ 3,273,483    $ 3,216,150
                                                                  ===========    ===========
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable and accrued expenses                           $    46,733    $    69,292
  Salaries, wages and related taxes                                    25,203         18,824
                                                                  -----------    -----------
           Total liabilities                                           71,936         88,116
                                                                  -----------    -----------
COMMITMENTS AND CONTINGENCIES (Note 4)

STOCKHOLDERS' EQUITY (Note 3):
  Common stock (par value $.01 per share, authorized
    10,000,000 shares, issued and outstanding 1,009,377 shares)        10,094         10,094
  Additional paid-in capital                                        6,190,647      6,190,647
  Accumulated deficit                                              (2,999,194)    (3,072,707)
                                                                  -----------    -----------
          Total stockholders' equity, net                           3,201,547      3,128,034
                                                                  -----------    -----------
TOTAL                                                             $ 3,273,483    $ 3,216,150
                                                                  ===========    ===========
</TABLE>

See notes to consolidated financial statements.


                                      F-2


<PAGE>   30


ENVIROQ CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED MARCH 28, 1998 AND MARCH 29, 1997


<TABLE>
<CAPTION>
                                                      1998           1997
<S>                                               <C>            <C>        
REVENUES (Note 6):
  Net revenues from sales and support             $ 1,284,357    $ 1,152,972
  Revenues from licenses                               20,000        185,835
                                                  -----------    -----------
           Total revenues                           1,304,357      1,338,807
                                               
COST OF REVENUES                                      605,940        738,666
                                                  -----------    -----------
GROSS PROFIT                                          698,417        600,141
                                               
SELLING, GENERAL AND ADMINISTRATIVE            
  EXPENSES (Note 5)                                   761,199        759,418
                                                  -----------    -----------
LOSS FROM OPERATIONS                                  (62,782)      (159,277)
                                                  -----------    -----------
OTHER INCOME:                                  
  Interest                                            124,113        136,958
  Other, net                                           33,017          4,587
                                                  -----------    -----------
                                                      157,130        141,545
                                                  -----------    -----------
INCOME (LOSS) BEFORE INCOME TAXES                      94,348        (17,732)
                                               
INCOME TAX (EXPENSE) BENEFIT (Note 2)                 (20,835)        71,799
                                                  -----------    -----------
NET INCOME                                        $    73,513    $    54,067
                                                  ===========    ===========
BASIC AND DILUTED NET INCOME PER SHARE            $      0.07    $      0.05
                                                  ===========    ===========
WEIGHTED AVERAGE SHARES OUTSTANDING                 1,009,377      1,009,377
                                                  ============   ===========
</TABLE>


See notes to consolidated financial statements.


                                      F-3


<PAGE>   31


ENVIROQ CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED MARCH 28, 1998 AND MARCH 29, 1997


<TABLE>
<CAPTION>
                                                Additional
                                 Common           Paid-In         Accumulated
                                 Stock            Capital           Deficit               Total

<S>                             <C>             <C>                <C>                  <C>       
BALANCE, MARCH 25, 1996         $10,094         $6,190,647         $(3,126,774)         $3,073,967

  Net income                                                            54,067              54,067
                                -------          ---------          ----------           ---------
BALANCE, MARCH 29, 1997          10,094          6,190,647          (3,072,707)          3,128,034

  Net income                                                            73,513              73,513
                               --------          ---------           ---------           ---------
BALANCE, MARCH 28, 1998         $10,094         $6,190,647         $(2,999,194)         $3,201,547
</TABLE>


See notes to consolidated financial statements.


                                      F-4


<PAGE>   32


ENVIROQ CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 28, 1998 AND MARCH 29, 1997


<TABLE>
<CAPTION>
                                                                                    1998              1997
<S>                                                                            <C>               <C>  
OPERATING ACTIVITIES:
  Net income                                                                   $    73,513       $    54,067
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
      Depreciation                                                                   7,774             8,715
      Amortization                                                                                    17,989
      Gain on sale of property, plant and equipment                                                   (2,000)
      Provision for uncollectible notes receivable                                                    10,000
      Changes in assets and liabilities provided (used) cash:
        Accounts receivable                                                        236,368          (188,375)
        Interest receivable                                                                            7,890
        License fees receivable                                                                        4,030
        Inventories                                                               (115,354)           65,560
        Income taxes                                                                36,719        (1,140,693)
        Prepaid expenses and other assets                                          (12,391)              514
        Other assets                                                                (8,689)            3,181
        Accounts payable and accrued expenses                                      (22,559)          (96,462)
        Salaries, wages and related taxes                                            6,379             9,010 
                                                                               -----------        ----------

          Net cash provided by (used in) operating activities                      201,760        (1,246,574) 
                                                                               -----------        ----------

INVESTING ACTIVITIES:
  Proceeds from sale of property, plant and equipment                                                  2,000
  Additions to property, plant and equipment                                       (36,273)           (4,803)
                                                                               -----------        ----------
          Net cash used in investing activities                                    (36,273)           (2,803)
                                                                               -----------        ----------
NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                                                                 165,487        (1,249,377)

CASH AND CASH EQUIVALENTS AT
  BEGINNING OF YEAR                                                              2,379,613         3,628,990 
                                                                               -----------        ----------

CASH AND CASH EQUIVALENTS
  AT END OF YEAR                                                               $ 2,545,100        $2,379,613 
                                                                               ===========        ==========
</TABLE>

See notes to consolidated financial statements.


                                      F-5


<PAGE>   33

ENVIROQ CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      ORGANIZATION - Enviroq Corporation (the "Company") was incorporated on
      February 9, 1995. Prior to April 18, 1995, the Company was named "New
      Enviroq." The Company was initially a wholly-owned subsidiary of a
      predecessor company which was named Enviroq Corporation (hereafter
      referred to as "Old Enviroq"). On April 18, 1995, a transaction was
      completed in which all of the outstanding shares of New Enviroq were
      distributed to the shareholders of Old Enviroq (the "Distribution"), and
      the name of Old Enviroq was changed to Insituform Southeast, Inc.
      Insituform Southeast, Inc. was then merged (the "Merger") into a
      subsidiary of Insituform MidAmerica ("IMA"), after which the name of New
      Enviroq was then changed to Enviroq Corporation. Also on April 18, 1995,
      the stock of Synox Corporation ("Synox"), a wholly-owned subsidiary of Old
      Enviroq, and Sprayroq, Inc. ("Sprayroq"), a 50% owned subsidiary of Old
      Enviroq, approximately 11 acres of unimproved land and $500,000 in cash
      were transferred to the Company, a newly formed public entity effective
      April 18, 1995, at their respective book values. Each share of common
      stock of Old Enviroq issued and outstanding was converted into a right to
      receive a cash payment equal to the pro-rata portion of the merger
      consideration of $15,250,000.

      NATURE OF OPERATIONS - The Company's operations are conducted primarily
      through Sprayroq. Sprayroq is engaged in development, commercialization,
      manufacture and marketing of spray-applied resinous materials.

      FISCAL YEAR - The Company's 1998 and 1997 fiscal years ended on March 28,
      1998 and March 29, 1997, respectively. Fiscal years 1998 and 1997 included
      52 weeks.

      PRINCIPLES OF CONSOLIDATION - These consolidated financial statements
      include the accounts of the Company and its subsidiaries, Synox and
      Sprayroq. All significant intercompany transactions are eliminated in
      these consolidated financial statements. The Company controls the
      operations and activities of Sprayroq. There is no recognition of the
      minority interest in this subsidiary because of its accumulated deficit
      position.

      ACCOUNTING ESTIMATES - The preparation of financial statements in
      conformity with generally accepted accounting principles requires
      management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities and disclosure of contingent assets and
      liabilities at the date of the financial statements and the reported
      amounts of revenues and expenses during the reporting periods. Actual
      results could differ from those estimates.

      CASH EQUIVALENTS - Cash equivalents consist of highly liquid investments
      purchased with an original maturity of three months or less.

      INVENTORIES - Inventories, consisting of raw materials and supplies, are
      valued at the lower of cost (first-in, first-out method) or market.

      PROPERTY, PLANT AND EQUIPMENT - Property, plant and equipment is carried
      at cost, less accumulated depreciation. Depreciation is provided
      principally on the straight-line method over the estimated useful lives of
      the assets, which range from three to twenty years. Repairs and
      maintenance costs are charged to expense as incurred.


                                      F-6


<PAGE>   34


      RESEARCH AND DEVELOPMENT COSTS - Research and development costs are
      expensed as incurred. Such costs were $5,170 (1998) and $22,798 (1997).

      LICENSE FEES - Sprayroq licenses its technology for use within certain
      geographic regions. These licenses allow the licensee use of the
      proprietary technology within their territory and are subject to
      restrictions as specified in the individual agreements.

      NET INCOME PER SHARE - In February 1997, the Financial Accounting
      Standards Board ("FASB") issued Statement of Financial Accounting
      Standards ("SFAS") No. 128, Earnings Per Share. SFAS No. 128 replaces the
      presentation of primary earnings per share with a presentation of basic
      earnings per share, requires dual presentation of basic and diluted
      earnings per share on the face of the income statement for all entities
      with complex capital structures, and provides guidance on other
      computational changes. The Company adopted this statement for all periods
      presented in the accompanying consolidated statements of income.

      RECENTLY ISSUED ACCOUNTING STANDARDS - In June 1997, the FASB issued SFAS
      No. 130, Reporting Comprehensive Income, and SFAS No. 131, Disclosures
      About Segments of an Enterprise and Related Information, both of which
      will be effective for the Company in fiscal year 1999. Management does not
      expect the adoption of these Statements to have a material impact on the
      Company's financial statements and disclosures.

      RECLASSIFICATIONS - Reclassifications have been made to certain 1997
      amounts to conform with the 1998 presentation.

2.    INCOME TAXES

      Income tax (expense) benefit for the years ended March 28, 1998 and March
      29, 1997 consists of the following:

<TABLE>
<CAPTION>
                                                1998            1997
      <S>                                    <C>             <C>     
      Current:
        Federal                              $ (16,789)      $ 73,342
        State                                  (14,696)        (1,543)
                                             ---------       --------
      Total current                            (31,485)        71,799
      Deferred - Federal                        10,650 
                                             ---------       --------
                                             $ (20,835)      $ 71,799
                                             =========       ========
</TABLE>

      The differences between the income tax (expense) benefit and income taxes
      computed using the federal statutory rate are as follows:


<TABLE>
<CAPTION>
                                                                                   1998            1997

         <S>                                                                    <C>              <C>     
         Income tax (expense) benefit at federal statutory rate                 $ (33,268)      $  5,059 
         State income taxes, net of federal tax benefit                            (4,214)        (1,019)
         Benefit of operating loss carryback                                                      71,796 
         Nondeductible expenses                                                                   (6,116) 
         Benefit from lower tax brackets                                           17,191          3,209 
         Other                                                                       (544)        (1,130) 
                                                                                ---------       --------
         Income tax (expense) benefit                                           $ (20,835)      $ 71,799 
                                                                                =========       ========
</TABLE>


                                       F-7


<PAGE>   35


      The types of temporary differences and their related tax effects are
      summarized as follows:

<TABLE>
<CAPTION>
                                                                                    1998           1997
      <S>                                                                        <C>             <C>     
      Deferred tax assets (long-term):
        Net operating loss and credit carryforwards                              $ 37,238        $ 25,803
        Valuation allowance                                                       (26,588)        (25,803) 
                                                                                 --------        --------

                   Deferred tax assets                                           $ 10,650        $     -- 
                                                                                 --------        --------
</TABLE>


      A valuation allowance has been established against the net deferred income
      tax asset. Such valuation allowance can be adjusted in future periods as
      the probability of realization of the net deferred tax asset increases.

      During 1996, Enviroq elected to waive its right to all but $79,000 of
      future use of Synox's net operating loss carryforwards. At March 28, 1998,
      Synox had a remaining net operating loss carryforward of approximtely
      $75,000 which, if not utilized, will expire in 2010. The Company also has
      a general business credit carryforward of approximately $9,000 at March
      28, 1998, which will expire in March 2009, if not utilized.

3.    RETIREMENT AND INCENTIVE PLANS

      The Company has a retirement plan for its employees pursuant to Section
      401(k) of the Internal Revenue Code. Participants may make contributions
      by salary reduction pursuant to Section 401(k) of the Internal Revenue
      Code.

      Non-employee Directors are entitled to receive options to purchase shares
      of the Company's common stock pursuant to a Non-Employee Directors Stock
      Option Plan (the "Directors' Plan"). Options for up to 100,000 shares of
      common stock are authorized to be issued under the Directors' Plan. The
      Directors' Plan allows the Company's Stock Option Committee (the
      "Committee") to grant options to non-employee Directors for a price of not
      less than eighty-five percent of the fair market value of the Company's
      common stock on the dates that the options are granted. Options are
      exercisable in whole or in part, from time to time, until five years from
      the date of grant, except that, absent a change in control of the Company,
      each option terminates upon the discontinuance of the option holder's
      service as a Director of the Company for any reason except death or
      disability. Sale of common stock purchased upon exercise of an option is
      prohibited for two years from the date of exercise or three years from the
      date of grant, whichever is later, unless there is a change in control of
      the Company or in the event of the Director's death. Each option agreement
      under the Directors' Plan provides, among other things, that shares of
      Common Stock will be issued and delivered to the Director upon payment to
      the Company of the exercise price of such shares and that the option price
      and number of shares subject to option will be adjusted for stock splits,
      stock dividends or other similar changes in the Company's capital
      structure.

      The Company also has an Incentive Stock Option Plan (the "ISO Plan")
      administered by the Committee which provides for the issuance to key
      employees of incentive stock options ("ISOs") within the meaning of
      Section 422A of the Internal Revenue Code of 1986, as amended. The
      Committee is authorized to issue up to 100,000 shares of common stock
      pursuant to the exercise of the ISOs. The option price of each ISO granted
      is 100% of the fair market value of the common stock on the date of grant.
      If an ISO is granted to an optionee who holds more than 10% of the
      combined voting power of all classes of the Company's stock at the date of
      the grant, the option price is 110% of fair market value of the common
      stock on the date of grant. The ISO Plan provides for the exercise of ISOs
      at the maximum rate of 25% in the first 12 months after grant and 25% in
      each 12-month period thereafter. To the extent not exercised, an optionee
      may accumulate


                                      F-8


<PAGE>   36


      his or her ISOs and exercise them, in whole or in part, in any subsequent
      period but not later than 10 years from the date on which the option was
      granted.

      No options have been issued by the Company under the Directors' Plan or
      the ISO Plan.

4.    COMMITMENTS AND CONTINGENCIES

      Synox is the exclusive licensee of certain technology and know-how under a
      license agreement with a company controlled by certain affiliates of the
      Company. The agreement currently covers 15 states in the license
      territory. Under the terms of its license agreement (as amended), Synox is
      subject to minimum royalty provisions and to the maintenance of a $50,000
      net worth and the performance of other material provisions of the license
      agreement. Minimum annual royalties (based upon retaining the 15 states
      currently under the agreement) are due each January 1, for the ensuing
      calendar year through the license expiration. The license agreement was
      amended on December 22, 1997 to change the expiration date of the license
      and to provide that no minimum royalty payment would be due on January 1,
      1998, but that such minimum royalty payments would resume on January 1,
      1999, in accordance with the following schedule.

<TABLE>
<CAPTION>
      DUE DATE                                              AMOUNT
      
      <S>                                                  <C>     
      January 1, 1999                                      $ 90,336
      January 1, 2000                                       180,671
      January 1, 2001                                       180,671
      January 1, 2002 through 2009                          225,839
</TABLE>

      Pursuant to the merger agreement between Old Enviroq and Synox, the
      stockholders of Synox at the time of the merger received Old Enviroq
      shares valued at $672,000 in the aggregate plus the right to receive
      additional shares of Old Enviroq, dependent on the earnings of Synox, up
      to a maximum value of $2,017,000. In addition, the then existing
      obligations of Synox under promissory notes to certain shareholders
      amounting to $767,376 plus additional interest at 7.66%) shall become
      payable by Synox in cash only after such time as (i) all the contingent
      shares have been issued and (ii) accumulated retained earnings are
      available for such payment. Interest shall become payable only to the
      extent of available net earnings. Management believes it is unlikely that
      Synox will achieve the required levels of retained earnings. Therefore,
      these promissory notes are not recorded as liabilities in the accompanying
      consolidated balance sheets. As a result of the Distribution of Company
      shares referred to in Note 1, the obligation to issue contingent shares
      became an obligation of the Company to issue its shares in lieu of Old
      Enviroq shares. To the extent additional, contingent shares become
      issuable in the future or additional obligations become payable in the
      future, such consideration will be recorded at that time at its fair value
      and accounted for as additional intangible assets.

5.    RELATED PARTY TRANSACTIONS

      During fiscal years 1998 and 1997, the Company paid approximately $29,000
      and $13,000, respectively, to a marketing and public relations company
      controlled by a family member of certain stockholders of the Company.
      During fiscal 1997, the Company paid approximately $58,000 to an insurance
      agency controlled by stockholders of the Company.

6.    SIGNIFICANT CUSTOMERS AND CONCENTRATION OF CREDIT RISK

      The Company had sales transactions with two and four unrelated customers
      which accounted for approximately 89% and 92% of total sales in fiscal
      1998 and 1997, respectively. Trade accounts


                                      F-9


<PAGE>   37


      receivable included approximately $77,445 and $303,000 due from these
      customers at March 28, 1998 and March 29, 1997, respectively.

7.    SUBSEQUENT EVENT

      On April 22, 1998, the Company entered into an Agreement and Plan of
      Reorganization (the "Merger Agreement") with Institutional Asset
      Management, Inc. ("IAM"), a Florida corporation, Capital Research
      Corporation ("CRC"), a Florida corporation, Intrepid Capital Corporation
      ("Intrepid Capital"), a newly formed Delaware corporation and a subsidiary
      of the Company, and three wholly-owned subsidiaries of Intrepid Capital
      formed to effect the transactions contemplated in the Merger Agreement.
      Subject to the terms and conditions of the Merger Agreement, including
      without limitation the approval of the stockholders of the Company, the
      Company will be merged into a wholly-owned subsidiary of Intrepid Capital,
      which will occur simultaneously with similar mergers between wholly-owned
      subsidiaries of Intrepid Capital and each of CRC and IAM. As a result of
      the simultaneous mergers, the Company, CRC and IAM will become
      wholly-owned subsidiaries of Intrepid Capital.





                                    * * * * *


                                      F-10


<PAGE>   38



         The following exhibits are filed as part of this Form 10-K or are
incorporated herein by reference, and this list comprises the Exhibit Index.

                             Description of Exhibit

         Item

         *2.01     Agreement and Plan of Reorganization dated April 22, 1998, by
                   and among the Company, Intrepid Capital Corporation,
                   Institutional Asset Management, Inc., Capital Research
                   Corporation, Freedom Holdings of Alabama, Inc., IAM Merger
                   Sub, Inc., and CRC Merger Sub, Inc. Exhibit 2 to the Report
                   on Form 8-K, dated April 23, 1998, is incorporated herein by
                   reference (Commission File No. 0-25528).

         *3.01     Certificate of Incorporation of New Enviroq Corporation.
                   Exhibit 3.01 to the Company's Registration Statement on Form
                   10-SB/A2 dated April 12, 1995, is incorporated herein by
                   reference (Commission File No. 0-25528).

         *3.02     Certificate of Amendment to Certificate of Incorporation of
                   New Enviroq Corporation. Exhibit 3.02 to the Company's
                   Registration Statement on Form 10-SB/A2 dated April 12, 1995,
                   is incorporated herein by reference (Commission File No.
                   0-25528).

         *3.03     Bylaws of New Enviroq Corporation. Exhibit 3.03 to the
                   Company's Registration Statement on Form 10-SB/A2 dated April
                   12, 1995, is incorporated herein by reference (Commission
                   File No. 0-25528).

         *4.01     Certificate of Designation of Rights and Preferences of
                   Series A Preferred Stock. Exhibit 4.01 to the Company's
                   Registration Statement on Form 10-SB/A2 dated April 12, 1995,
                   is incorporated herein by reference (Commission File No.
                   0-25528).

         *4.02     Form of Certificate of Common Stock. Exhibit 4.02 to the
                   Company's Registration Statement on Form 10-SB/A2 dated April
                   12, 1995, is incorporated herein by reference (Commission
                   File No. 0-25528).

         *4.03     Form of Certificate of Series A Preferred Stock. Exhibit 4.03
                   to the Company's Registration Statement on Form 10-SB/A2
                   dated April 12, 1995, is incorporated herein by reference
                   (Commission File No. 0-25528).

         *4.04     Stock Agreement, dated April 22, 1998, by and among certain
                   shareholders of the Company, Institutional Asset Management,
                   Inc., and Capital Research Corporation. Exhibit 4 to the
                   Report on Form 8-K, dated April 23, 1998, is incorporated
                   herein by reference (Commission File No. 0-25528).


                                       27


<PAGE>   39


         *10.01    Merger Agreement between Enviroq Corporation, New Enviroq
                   Corporation, Insituform Mid-America, Inc. and IMA Merger Sub,
                   Inc. dated as of November 2, 1994. Exhibit 10.01 to the
                   Company's Registration Statement on Form 10-SB/A2 dated April
                   12, 1995, is incorporated herein by reference (Commission
                   File No. 0-25528).

         *10.02    Form of Consulting Agreement between New Enviroq Corporation
                   and Insituform Mid-America, Inc. Exhibit 10.02 to the
                   Company's Registration Statement on Form 10-SB/A2 dated April
                   12, 1995, is incorporated herein by reference (Commission
                   File No. 0-25528).

         *10.03    Form of Covenant Not to Compete Agreement between New Enviroq
                   Corporation, Insituform Mid-America, Inc., Marinelli
                   Securities Associates, and SCE, Inc. Exhibit 10.03 to the
                   Company's Registration Statement on Form 10-SB/A2 dated April
                   12, 1995, is incorporated herein by reference (Commission
                   File No. 0-25528).

         *10.04    License Agreement between Synox Corporation and Long
                   Enterprises, Inc. dated May 26, 1986, together with
                   amendments dated May 16, 1991 and October 5, 1994. Exhibit
                   10.05 to the Company's Registration Statement on Form
                   10-SB/A2 dated April 12, 1995, is incorporated herein by
                   reference (Commission File No. 0-25528).

         *10.05    Shareholder Agreement between Sprayroq, Inc. Enviroq
                   Corporation, and Replico Development Company, Inc. dated
                   March 25, 1992. Exhibit 10.06 to the Company's Registration
                   Statement on Form 10-SB/A2 dated April 12, 1995, is
                   incorporated herein by reference (Commission File No.
                   0-25528).

         *10.06    License Agreement dated May 22, 1992, between Sprayroq, Inc.
                   and Enviroq Services, Inc. Exhibit 10.07 to the Company's
                   Registration Statement on Form 10-SB/A2 dated April 12, 1995,
                   is incorporated herein by reference (Commission File No.
                   0-25528).

         *10.07    License Agreements dated June 12, 1994, between Sprayroq,
                   Inc., Toa Grout Kogyo Company, LTD., and Sprayroq, Inc., and
                   Mitsui Toatsu Chemicals, Inc. Exhibit 10.08 to the Company's
                   Registration Statement on Form 10-SB/A2 dated April 12, 1995,
                   is incorporated herein by reference (Commission File No.
                   0-25528).

         *10.08    Amended and Restated Promissory Notes dated September 27,
                   1991 and issued by Synox Corporation in favor of Charles A.
                   Long, Jr. in the principal amounts of $6,000, $6,000, $6,000,
                   $3,000, $6,000, and $6,000, respectively. Exhibit 10.09 to
                   the Company's Registration Statement on Form 10-SB/A2 dated
                   April 12, 1995, is incorporated herein by reference
                   (Commission File No. 0-25528).

         
                                       28


<PAGE>   40
         *10.09    Amended and Restated Promissory Notes dated September 27,
                   1991 and issued by Synox Corporation in favor of Long
                   Enterprises, Inc. in the principal amount of $3,000. Exhibit
                   10.10 to the Company's Registration Statement on Form
                   10-SB/A2 dated April 12, 1995, is incorporated herein by
                   reference (Commission File No. 0-25528).

         *10.10    Amended and Restated Promissory Notes dated September 27,
                   1991 and issued by Synox Corporation in favor of Sullivan,
                   Long and Hagerty, Inc. in the principal amounts of $132,000,
                   $17,020, $22,000, $11,000, $11,000 $11,000 $22,000, $11,000,
                   $22,000, and $22,000, respectively. Exhibit 10.11 to the
                   Company's Registration Statement on Form 10-SB/A2 dated April
                   12, 1995, is incorporated herein by reference (Commission
                   File No. 0-25528).

         *10.11    Amended and Restated Promissory Notes dated September 27,
                   1991 and issued by Synox Corporation in favor of Orlando M.
                   Marinelli in the principal amounts of $66,000, $8,510,
                   $11,000, $5,500, and $1,000, respectively. Exhibit 10.12 to
                   the Company's Registration Statement on Form 10-SB/A2 dated
                   April 12, 1995, is incorporated herein by reference
                   (Commission File No. 0-25528).

         *10.12    Amended and Restated Promissory Notes dated September 27,
                   1991 and issued by Synox Corporation in favor of Antonio M.
                   Marinelli in the principal amounts of $66,000, $8,510,
                   $11,000, $5,500, and $1,000, respectively. Exhibit 10.13 to
                   the Company's Registration Statement on Form 10-SB/A2 dated
                   April 12, 1995, is incorporated herein by reference
                   (Commission File No. 0-25528).

         *10.13    Amended and Restated Promissory Notes dated September 27,
                   1991 and issued by Synox Corporation in favor of Road
                   Machinery, Inc., in the principal amounts of $22,000,
                   $11,000, $11,000, $11,000 and $10,000, respectively. Exhibit
                   10.14 to the Company's Registration Statement on Form
                   10-SB/A2 dated April 12, 1995, is incorporated herein by
                   reference (Commission File No. 0-25528).

         *10.14    Amended and Restated Promissory Notes dated September 27,
                   1991 and issued by Synox Corporation in favor of Micam
                   Industries, Inc., in the principal amounts of $11,000, and
                   $11,000 respectively. Exhibit 10.15 to the Company's
                   Registration Statement on Form 10-SB/A2 dated April 12, 1995,
                   is incorporated herein by reference (Commission File No.
                   0-25528).

         *10.15    Amended and Restated Promissory Notes dated September 27,
                   1991 and issued by Synox Corporation in favor of Marinelli
                   Securities Associates in

                                       29

<PAGE>   41


                   the principal amount of $10,000. Exhibit 10.16 to the
                   Company's Registration Statement on Form 10-SB/A2 dated April
                   12, 1995, is incorporated herein by reference (Commission
                   File No. 0-25528).

         *10.16    Non-Employee Director Stock Option Plan of the Company, as
                   amended. Exhibit 10.17 to the Company's Registration
                   Statement on Form 10-SB/A2 dated April 12, 1995, is
                   incorporated herein by reference (Commission File No.
                   0-25528).

         *10.17    Incentive Stock Option Plan of the Company. Exhibit 10.18 to
                   the Company's Registration Statement on Form 10-SB/A2 dated
                   April 12, 1995, is incorporated herein by reference
                   (Commission File No. 0-25528).

         *10.18    Mutual Release and Settlement Agreement dated March 12, 1996
                   by and between the Company, Insituform Mid-America, Inc. and
                   Insituform Technologies, Inc. Exhibit 10.18 to the Company's
                   Annual Report on Form 10-KSB dated June 26, 1996 is
                   incorporated herein by reference (Commission File No.
                   0-25528).

         *10.19    Promissory Note dated March 27, 1993 in the aggregate
                   principal sum of $206,203.46 made by Sprayroq, Inc. in favor
                   of the Company. Exhibit 10.19 to the Company's Annual Report
                   on Form 10-KSB dated June 26, 1996 is incorporated herein by
                   reference (Commission File No. 0-25528).

         *10.20    Promissory Note dated March 26, 1994 in the aggregate
                   principal sum of $159,872.95 made by Sprayroq, Inc. in favor
                   of the Company. Exhibit 10.20 to the Company's Annual Report
                   on Form 10-KSB dated June 26, 1996 is incorporated herein by
                   reference (Commission File No. 0-25528).

         *10.21    SprayWall System License Agreement dated December 1, 1993,
                   between Sprayroq, Inc., a Florida corporation, and
                   Southwestern Underground Supply and Environmental Services,
                   Inc., a Texas corporation. Exhibit 10.21 to the Company's
                   Annual Report on Form 10-KSB dated June 26, 1996 is
                   incorporated herein by reference (Commission File No.
                   0-25528).

         *10.22    Form of SprayWall License Agreement dated January 1, 1996,
                   between Sprayroq, Inc., a Florida corporation and Per
                   Aarsleff A/S, a corporation organized and existing under the
                   laws of Denmark. Exhibit 10.22 to the Company's Annual Report
                   on Form 10-KSB dated June 26, 1996 is incorporated herein by
                   reference (Commission File No. 0-25528).

         *10.23    Consolidated Note dated October 21, 1996 and issued by
                   Sprayroq, Inc. in favor of the Company in aggregate principal
                   sum of $840,249. Exhibit 10.01 to the Company's quarterly
                   report on Form 10-QSB dated November 5, 1996 is incorporated
                   herein by reference (Commission File No. 0-25528).

                                       30

<PAGE>   42


         *10.24    Further Amended Agreement as of December 20, 1996 by and
                   between Long Enterprises, Inc. and Synox Corporation. Exhibit
                   10.01 to the Company's quarterly report on Form 10-QSB dated
                   February 11, 1997 is incorporated herein by reference
                   (Commission File No. 0-25528).

         *10.25    Further Amended Agreement as of December 22, 1997 by and
                   between Long Enterprises, Inc. and Synox Corporation. Exhibit
                   10.01 to the Company's quarterly report on Form 10-QSB dated
                   February 10, 1998 is incorporated herein by reference
                   (Commission File No. 0-25528).

         *10.26    Agreement and Plan of Reorganization by and among Intrepid
                   Capital Corporation, the Company, Freedom Holdings of
                   Alabama, Inc., Institutional Asset Management, Inc., IAM
                   Merger Sub, Inc., Capital Research Corporation, and CRC
                   Merger Sub, Inc. dated as of April 22, 1998. Exhibit 2 to the
                   Report on Form 8-K, dated April 23, 1998, is incorporated
                   herein by reference (Commission File No. 0-25528).

          21.0     Subsidiaries:

                   1. Synox Corporation, a Delaware corporation (100%). 
                   2. Sprayroq, Inc., a Florida corporation (50%).

            27     Financial Data Schedule (for SEC use only)


* Exhibits incorporated by reference
                                       31


<PAGE>   43




                                   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.

                                   ENVIROQ CORPORATION

Date: June 19, 1998                By: /s/ William J. Long
                                      -----------------------------------------
                                               William J. Long, President
                                               and Chief Executive 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 in the capacities and on the dates indicated.


<TABLE>
<CAPTION>
Signature                                                 Title                                    Date
---------                                                 -----                                    ----


<S>                                                       <C>                                      <C>
/s/  William J. Long
-------------------------------------------               President, Chief Executive               June 19, 1998
     William J. Long                                      Officer and Director (Principal
                                                          Executive Officer and Principal
                                                          Financial and Accounting Officer)
/s/ Charles A. Long, Jr.
-------------------------------------------               Director                                 June 19, 1998
    Charles A. Long, Jr.

/s/ Antonio M. Marinelli
-------------------------------------------               Chairman of the Board of                 June 19, 1998
    Antonio M. Marinelli                                  Directors, Secretary/Treasurer,
                                                          Director

/s/ Michael X. Marinelli
-------------------------------------------               Director                                 June 19, 1998
    Michael X. Marinelli

/s/ Thomas W. Brander
-------------------------------------------               Director                                 June 19, 1998
    Thomas W. Brander

/s/ Alexander P. Zechella
-------------------------------------------               Director                                 June 19, 1998
    Alexander P. Zechella
</TABLE>



                                       32