UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OF 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the quarterly period December 31, 1997

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

For the transition period from ___________ to __________.

                         Commission file number 0-27240

                           ECOTYRE TECHNOLOGIES, INC.
                           --------------------------   
       (Exact name of small business issuer as specified in its charter)

          Delaware                                     11-3234026
(State of other jurisdiction of                     (I.R.S. Employer
 incorporation or organization)                    Identification No.)

                 895 Waverly Avenue, Holtsville, New York 11742
                 ----------------------------------------------
                    (Address of principal executive offices)

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 of 15 (d) of the  Exchange Act during the past 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
                                -----     -----

     As of February 23, 1998,  3,148,311  shares of $.001 par value Common Stock
of the registrant were outstanding.

     Index schedule found on Page No. 2







<PAGE>


                           ECOTYRE TECHNOLOGIES, INC.
                           --------------------------
                                      INDEX
                                      -----
                                                                   Page No.
                                                                   --------
PART I.     FINANCIAL INFORMATION

Item 1.     Financial Statements

  Condensed Balance Sheets - December 31, 1997 and March 31, 1997       3

  Condensed Statements of Operations - Nine Months and Three Months
       Ended December 31, 1997 and 1996                                 4

  Condensed Statements of Cash Flows - Nine Months Ended December
       31, 1997 and 1996                                                5

  Notes to Condensed Financial Statements                             6 - 8

Item 2.     Management's Discussion and Analysis of Financial 
            Condition and Results of Operations                       9 - 12

Part II.    OTHER INFORMATION

Item 6.     Exhibits and Reports on Form 8-K                            13

SIGNATURES                                                              14










<PAGE>
PART I.     FINANCIAL INFORMATION

Item 1.     Financial Statements

                           ECOTYRE TECHNOLOGIES, INC.
                            CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
                                     ASSETS
                                                           As of                   As of
                                                     December 31, 1997       March 31, 1997
                                                        (Unaudited)
                                                     -----------------       --------------
<S>                                                  <C>                 <C>
ASSETS

Current:

  Cash                                               $       25,191      $      127,392
  Account receivable net of allowance for
       doubtful accounts of $25,000 and $17,000             709,403             958,798
  Inventories (Note 2)                                      478,916             431,561
  Prepaid expenses                                          446,281             241,087
  Other current assets                                      166,436             120,999
                                                     --------------      --------------        
       Total current assets                               1,826,227           1,879,837
Property, plant and equipment, less accum depr.           2,384,269           2,295,089
Security deposits                                           232,420             244,815
Other assets                                                250,000             396,003
                                                     --------------      --------------  
  Total Assets                                       $    4,692,916      $    4,815,744
                                                     ==============      ==============  
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

  Current maturities of long-term debt               $         -        $       115,000
  Notes  payable                                            141,550                -
  Accounts payable                                          870,439           1,003,386
  Accrued expenses                                          196,364             149,687
  Preferred stock dividends payable                            -                120,277
  Current maturities of capitalized leases                    3,896               7,979
  Current maturities of machinery loan                      336,144             150,011
                                                     --------------     --------------- 
            Total current liabilities                     1,795,028           1,546,340
  Long-term debt, less current maturities                   150,000             150,000
  Capitalized leases, less current maturities                  -                 16,711
  Machinery loan, less current maturities                   534,993             849,989
  Deferred rent credits                                     319,799             313,169
                                                     --------------     ---------------
               Total liabilities                          2,553,185           2,876,209
                                                     --------------     ---------------  
Class A Redeemable Convertible Preferred - 
       2,000,000 shares authorized; 
       issued and outstanding - 1,202,775 
       (redemption amount of $1,202,775)                       -              1,193,090
                                                     --------------      --------------  
Stockholders' equity (Note 4):
  Serial Preferred Stock,  $.001 par value,  
  1,325,000 shares  authorized;  none issued                   -                   -
  Class A Preferred Stock, $.001 par value, 
       2,000,000 authorized; 252,114 issued and 
       outstanding (liquidation value of $252,114)          252,114                -
  Class B Preferred, $.001 par value, 675,000 
       shares authorized; 450,000 issued and outstanding 
       (liquidation value $450,000)                         450,000                -
  Common Stock, $.001 par value 30,000,000 shares 
       authorized; issued and outstanding - 
       3,121,134 and 908,143                                  3,121                 908
  Paid in capital                                        11,886,121           7,852,407
  Deficit                                               (10,451,625)         (7,106,870)
                                                     --------------    ----------------    
                                                     $    2,139,731    $        746,445
                                                     --------------    ----------------  
       Total stockholder's equity                    $    4,692,916    $      4,815,744
                                                     ==============    ================  
<FN>
                 See accompanying notes to financial statements
</FN>
</TABLE>
<PAGE>
                           ECOTYRE TECHNOLOGIES, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                      For the Nine Months Ended   For the Three Months Ended
                                              December 31,               December 31,
                                              ------------               ------------
                                          1997          1996         1997          1996
                                      (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
                                     ------------  ------------  ------------  -----------
<S>                                  <C>           <C>            <C>          <C>        
Net sales                            $  2,452,934  $  1,598,351   $   315,697  $   797,013
Cost of sales                           3,657,006     3,121,370     1,444,155    1,432,992
                                     ------------  ------------  ------------  -----------
               Gross profit            (1,204,072)   (1,523,019)   (1,128,458)    (635,979)
                                     ------------  ------------  ------------  -----------
Operating expenses:
  Selling and shipping                    479,113       469,934       111,503      157,683
  General and administrative              909,086       895,487       333,496      321,500
                                     ------------  ------------  ------------  -----------
  Total operating expenses              1,388,199     1,365,421       444,999      479,183
                                     ------------  ------------  ------------  -----------
Loss from operations                   (2,592,271)   (2,888,440)   (1,573,457)  (1,115,162)
                                     ------------  ------------  ------------  -----------
Other expenses, income

  Interest expense, net of
       interest income                     94,746        17,741        26,669        5,766
  Loss on marketable
       securities                          93,783          -             -            -
                                     ------------  ------------  ------------  -----------
  Total other expenses                    188,529        17,741        26,669        5,766
                                     ------------  ------------  ------------  -----------
Loss before taxes                      (2,780,800)   (2,906,181)   (1,600,126)  (1,120,928)
  Income taxes                             10,355         4,243          -           1,046
                                     ------------  ------------  ------------
Net loss                             $ (2,791,155) $ (2,910,424) $ (1,600,126) $(1,121,974)
                                     ------------  ------------  ------------  -----------
Preferred stock dividends (Note 3)        553,600       186,686       217,325       61,609
Net loss attributable to common
     stockholders                    $ (3,344,755) $ (3,097,110) $ (1,817,451) $(1,183,583)
                                     ============  ============  ============  ===========   
Net loss per share (Notes 3 and 4)   $      (1.57) $      (5.81) $      (0.58) $     (1.68)
                                     ============  ============  ============  ===========
<FN>
                 See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>


                           ECOTYRE TECHNOLOGIES, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                  Nine Months Ended
                                                                     December 31,
                                                              --------------------------   
                                                                  1997          1996
                                                              --------------------------
                                                               (Unaudited)   (Unaudited)
                                                              --------------------------
<S>                                                           <C>            <C>
Cash flows from operating expenses:
  Net loss                                                    $(2,791,155)   $(2,910,424)
  Adjustments to reconcile net loss to net cash used
       in operating activities:
       Depreciation and amortization                              162,442        168,799
       Deferred rent                                                6,630         30,757
       Issuance of stock for payment of services                  222,324
       Loss on sale of marketable securities                       93,783           --
       Allowance for possible losses on accounts receivable         8,000          6,000
  Decrease (increase) in assets:
       Accounts receivable                                        254,395       (551,177)
       Inventory                                                  (47,355)      (146,115)

       Other assets                                               (92,233)       (44,713)

  Increase (decrease) in liabilities:
       Accounts payable                                          (132,947)       392,181
       Accrued expenses                                            46,677           --
                                                              -----------    -----------   
Net cash used in operating activities                          (2,269,439)    (3,054,692)
                                                              -----------    -----------
Cash flows from investing activities:
  Proceeds from sale of marketable securities:                    356,217           --
  Capital expenditures - net                                     (251,622)      (571,801)
                                                              -----------    -----------
Net cash provided by (used in) investing activities               104,595       (571,801)
Cash flows from financing activities:
  Proceeds from sale of capital stock                           2,100,750      1,558,354
  Proceeds from bank loan                                            --          396,333
  Repayment of bank loan                                         (200,000)
  Proceeds from working capital loan                              141,550
  Repayment of working capital loan                               (30,000)          --
  Proceeds  from long term notes and  warrants
  Proceeds  from bridge  financing
  Repayment of capitalized lease obligations and
       equipment loans                                           (149,657)       (78,570)
  Net cash provided by financing activities                     2,062,643      1,676,117
                                                              -----------    ----------- 
  Net (decrease) in cash                                         (102,201)    (1,950,376)
  Cash and cash equivalents, beginning of period                  127,392      2,782,952
                                                              -----------    -----------
  Cash and cash equivalents, end of period                         25,191        832,576
                                                              -----------    -----------
  Interest paid                                               $    94,754    $    66,287
                                                              ===========    ===========
<FN>
                 See accompanying notes to financial statements
</FN>
</TABLE>
<PAGE>
                           ECOTYRE TECHNOLOGIES, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 1.     Basis of Presentation

  The accompanying unaudited condensed financial statements included herein have
been prepared in accordance with generally  accepted  accounting  principles for
interim period  reporting in conjunction  with the  instructions to Form 10-QSB.
Accordingly,  these statements do not include all of the information required by
generally accepted accounting  principles for annual financial  statements,  and
are subject to year-end  adjustments.  In the opinion of  management,  all known
adjustments  (consisting of normal  accruals and reserves)  necessary to present
fairly the interim  financial  results for the period have been included.  It is
suggested  that  these  interim  statements  be read  in  conjunction  with  the
financial  statements and related notes included in the Company's 10-KSB for the
year ended March 31, 1997.

  The  operating  results for the nine months  ended  December  31, 1997 are not
necessarily  indicative  of the results to be expected  for the year ended March
31, 1998.

Note 2.     Inventories

     Inventories have been valued at the lower of cost or market. The components
of inventory at December 31, 1997 and March 31, 1997 consist of:
<TABLE>
<CAPTION>
                                      December 31,               March 31,
                                         1997                      1997
                                     ---------------------------------------
<S>                                  <C>                      <C>           
                 Raw materials       $    213,445             $      252,221
                 Work in process           22,797                      9,765
                 Finished goods           242,674                    169,575
                                     ------------             --------------
                                     $    478,916             $      431,561
                                     ============             ==============   
</TABLE>

Note 3.     Net Loss Per Share

  Net loss per share is based on the  weighted  average  number of Common  Stock
outstanding  during each period.  Common Stock equivalents and other potentially
dilutive  securities are antidilutive.  Net loss has been adjusted for accretion
of preferred dividends. (See Note 4)
<PAGE>
                           ECOTYRE TECHNOLOGIES, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)
                                   (Continued)


Note 4.     Private Placements

  On September 26, 1997, the Company commenced a private placement of its common
stock which provided net proceeds  through  September 1997 of $63,000 by issuing
42,000  shares of its common stock at a price of $1.50 per share.  On October 2,
1997, the Company  received an additional  $500,000 by issuing 333,333 shares of
its Common Stock in connection with this private placement.

Class A Redeemable Convertible Preferred Stock.

  Effective April 17, 1997, the Certificate of  Incorporation of the Company was
amended upon approval from its redeemable  Convertible Preferred shareholders to
modify their existing  stock.  The redemption  provision has been eliminated and
the conversion rate of Preferred  Stock into Common Stock has been reduced.  The
Class A Convertible Preferred Stock is now convertible by multiplying the number
of  shares to be  converted  by the sum of $1.00  plus all  accrued  and  unpaid
dividends  divided by the lesser of $21.00 per share or 75% of the  closing  bid
price for a five day trading period  immediately  prior to the conversion  date.
Commencing  July 15, 1997,  each holder of Class A Convertible  Preferred  Stock
shall be  entitled  to  convert up to 25% of their  shares  per  month.  Through
December 31, 1997, 1,072,886 shares have been converted to Common Stock.

  The discount in the  conversion  rate of the  convertible  preferred  stock to
common is required to be  reflected  as  additional  dividends  ratably over the
conversion  period.  Accordingly,  the Company recorded accreted preferred stock
dividends related to this discount of $470,933 or ($.14) per share (attributable
to the common  stockholders)  for the nine months  ended  December  31, 1997 and
$9,874  (attributable  to the common  stockholders)  for the three  months ended
December 31, 1997.

Class B Convertible Preferred Stock.

  Effective April 17, 1997, the Certificate of  Incorporation of the Company was
amended upon approval from its Board of Directors to authorize 675,000 shares of
Class B  Convertible  Preferred  Stock,  with a par  value  of $.001  per  share
(liquidation preference $1.00 per share; cumulative dividend of 10%).

  In April 1997, a principal stockholder of the Company purchased 450,000 shares
of Class B Convertible  Preferred  Stock for $450,000.  Such preferred  stock is
convertible  into  common  stock by  multiplying  the  number  of  shares  to be
converted by the sum of $1.00 plus all accrued unpaid dividends divided by $2.45
per share. The holder of the Class B Convertible  Preferred Stock has agreed not
to convert or sell said stock until May 22, 1998.


Reverse Stock Split

  On  June  2,  1997,  the  Company,  with  the  approval  of its  shareholders,
effectuated  a  one-for-seven  reverse  stock  split.  All  share  and per share
information  in the  financial  statements  reflects  the effects of the reverse
stock split.
<PAGE>
Note 5.     Income Taxes

  Income taxes are based on  annualized  statutory  federal and state income tax
rates.  The provision for income taxes exclude a benefit for net operating  loss
carryforwards.

Note 6.     Supplemental Cash Flow Information

  Non-cash  investing  and financing  activities  during the three months period
ending December 31, 1997 was as follows:
<TABLE>
<S>                                                  <C>
  Exchange of Class A Convertible Preferred shares
  for Common Stock                                   $     242,642
</TABLE>

<PAGE>
Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operation

General

  The Company operated as a wholesale  distributor of remolded  automobile tires
since its  inception in April 1993. In accordance  with its business  plan,  the
Company has substantially curtailed distribution  operations,  concentrating its
efforts on its manufacturing  operations.  In its distribution  operations,  the
Company  resold its products  primarily to retail tire  replacement  centers and
tire distributors.

  The Company commenced limited manufacturing operations in December 1995 at its
65,000 square foot leased facility in Holtsville, New York. See "Properties". To
commence  manufacturing,  the Company had purchased 20 mold presses,  molds, one
extruder,  one  buffing  machine  and related  ancillary  equipment.  Additional
equipment was purchased in 1996 to increase the  Company's  production  capacity
and limit down time due to  machinery  failures  and  maintenance.  The  Company
ordered  new molds from Italy in  November  1996 to be  utilized  in its current
presses  which should allow the Company to increase  its  production  of popular
high performance and light truck tires with  anticipated  higher profit margins,
decreasing its production of smaller tire sizes which are sold at lower margins.
The molds  have  arrived  at the  Company's  facility  and have  been  placed in
production.  Also, in March 1997, the Company  acquired certain of the assets of
Butler  Retreading,  Inc.,  a private  18 year old high  performance  retreading
Company based in Marietta,  Georgia.  Butler's equipment is expected to increase
the Company's present press capacity and position the Company to increase sales,
with  intended  higher  gross  profit  margins from the new mix of tires it will
produce. The asset acquisition,  which includes Butler's client base, machinery,
equipment  and  inventory,  was  financed  principally  by  the  proceeds  of  a
$1,000,000  loan from  PhoenixCor.  Inc., a wholly owned  subsidiary of Sumitoma
Bank. Production commenced at the Company's facility during the quarter.

On October 22, 1997, the Company entered into an Acquisition Agreement with Tire
Group International,  Inc. ("TGI"), a wholesale tire distributor. The closing of
this  transaction is subject to Board of Directors  approval and the securing of
necessary financing.

Results of Operations

  Nine Months Ended December 31, 1997 Compared to Nine Months Ended December 31,
1996.

  Net Sales.  The Company's  net sales of  $2,452,934  for the nine months ended
December 31, 1997  represent  an increase of $854,583  compared to net sales for
the nine months ended  December 31, 1996.  The increase is  attributable  to the
Company's  operations of its  manufacturing  facility for the entire nine months
ending  December  31,  1997 as compared  to limited  operations  during the nine
months  ending  December  31,  1996.  The  increase  was  partially  offset by a
refocusing of the Company's  sales effort from the  exportation  of high volume,
low margin, passenger tires to lower volume, higher margin, high performance and
light truck tires. This change in marketing strategy was necessitated,  in part,
from the  exportation  from Asia of cheap 13" and 14"  passenger  tires into the
U.S. and Central and South American  markets.  Pressure on margins has increased
with the continued  turmoil  principally  in the Asian and  Brazillian  currency
markets.

  Cost of Sales. The Company's cost of sales for the nine months ending December
31, 1997 was $3,657,006 as compared to $3,121,370,  representing  an increase of
$535,636. This increase was due primarily as a result of increased manufacturing
costs to support the increase in sales.  During the nine months  ended  December
31,  1996,  the Company was  primarily in its initial  stages of  manufacturing,
operating at an average plant capacity of 30%.
<PAGE>
     Gross Loss. The Company's gross loss for the nine months ended December 31,
1997 was  ($1,204,072) as compared to a gross loss of ($1,523,019)  for the nine
months ended December 31, 1996.  The decrease in gross loss is directly  related
to the Company  operating its facility at a higher percentage of capacity during
the nine months ended  December 31, 1997 than during the nine month period ended
December 31, 1996.

     Operating  Expenses.  The Company incurred selling,  shipping,  general and
administrative  expenses of  $1,388,199  for the nine months ended  December 31,
1997 as compared to $1,365,421 for the nine months ended December 31, 1996. Such
expenses  represent 57% and 85% of net sales for the nine months ended  December
31, 1997 and December 31, 1996, respectively.  The decline of such expenses as a
percentage of sales represents the Company's  continuing efforts to contain such
expenses  as it expands its  operations.  The  increase of selling and  shipping
expenses is a result of the  increased  sales and the  additional  selling costs
incurred therein.

     Other Expenses.  The Company  incurred net interest  expense of $94,746 for
the nine months  ended  December 31, 1997  compared to net  interest  expense of
$17,741 for the nine months ended  December  31, 1996.  The increase in interest
expense  for the nine  months  ending  December  31,  1997 is the  result of the
borrowing principally related to the machinery loan.

     Net Loss.  As a result of the  foregoing  factors,  the  Company's net loss
decreased from ($2,910,424) for the nine months ended December 31, 1996 to a net
loss of  ($2,791,155)  for the nine months ended December 31, 1997. The net loss
attributable to common  stockholders  increased from ($3,097,110) or ($5.81) per
share  (adjusted for reverse  split) to  ($3,344,755)  or ($1.57) per share.  As
further  explained  in Note 4, the  principal  component  of the increase in the
preferred stock dividends relates to preferred dividends accreted of $470,933.

Three Months Ended December 31, 1997 Compared to Three Months Ended December 31,
1996.

     Net Sales.  The  Company's net sales of $315,697 for the three months ended
December 31, 1997  represents  a decrease of $486,316  compared to net sales for
the three months ended December 31, 1996. The decrease was  attributable  to the
Company's  change in focus from the  exportation  of high  volume,  low  margin,
passenger tires to lower volume, higher margin, high performance and light truck
tires.  This change in marketing  strategy was  necessitated,  in part, from the
exportation from Asia into the U.S.,  Central and South American market place of
cheap 13" and 14" passenger  tires.  Pressure on margins has increased  with the
continued turmoil principally in the Asian and Brazilian currency markets.

     Cost of Sales.  The  Company's  cost of sales for the  three  months  ended
December 31, 1997 was  $1,444,155  as compared to  $1,432,992,  representing  an
increase of $11,163.  This  increase  was due  primarily to the  exisiting  cost
structure in place,  which is being addressed  through  adjustments in the labor
pool and  renegotiation of material  purchase  agreements.  The Company believes
that its gross margin will improve with the  increased  sales  anticipated  as a
result of the refocusing of it's marketing strategy towards higher margin tires,
along with the changes being implemented in it's cost structure.

     Gross Loss.  The Company's  gross loss for the three months ended  December
31, 1997 was  ($1,128,458)  as compared  to a gross loss of  ($635,979)  for the
three months ended December 31, 1996, an increase of ($492,479). The increase in
gross  loss is  primarily  due to the  Company's  redefining  of it's  marketing
strategy.
<PAGE>
     Operating/Other Expenses. The Company incurred selling,  shipping,  general
and administrative  expenses of $444,999, and net interest expense of $26,669 in
the three  months  ended  December  31, 1997 as compared to $479,183 of selling,
shipping, general and administrative expenses and $5,766 of net interest expense
in the three months ended December 31, 1996. The decrease in selling,  shipping,
general and administrative  expenses were attributable primarily to the decrease
in costs related to the decrease in sales during the three months ended December
31, 1997.  The increase in interest  expenses is primarily  due to the Company's
higher outstanding borrowing principally related to the machinery loan.

     Net Loss.  The Company  sustained a net loss of  ($1,600,126)  in the three
months ended December 31, 1997 as compared to a net loss of  ($1,121,974) in the
three months ended  December 31, 1996,  an increased  loss of $478,152.  The net
loss attributable to common stockholders  increased from ($1,183,583) or ($1.68)
per share (adjusted for reverse split) to ($1,817,451) or ($.58) per share.

Liquidity and Capital Resources

     At December 31, 1997, the Company had cash and cash  equivalents of $25,191
and working capital of $31,199. As further discussed in Note 4, through December
31, 1997, the Company raised approximately $2,100,750 from the private placement
of common stock and has  effectuated  an  amendment  to its Class A  Convertible
Preferred  stock  removing the  requirement to pay  approximately  $1,325,000 on
January 15,  1998.  The Company  will be  required to raise  additional  working
capital to meet its continuing  obligations.  If the Company is  unsuccessful in
generating additional working capital, the Company's business will be materially
and adversely affected.

     As indicated in the Company's  annual report on Form 10-KSB,  the Company's
financial  statements have been prepared assuming that the Company will continue
operating as a going concern.  The Company has sustained  losses since inception
and requires  additional working capital.  These factors raise substantial doubt
about the  Company's  ability to  continue  as a going  concern.  The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.

     The Company used cash in operating  activities  in the amount of $2,269,439
for the nine months ended  December 31, 1997 and  $3,054,692 for the nine months
ended December 31, 1996 which was primarily related to the loss from operations.
The Company  purchased  machinery  and  equipment in the amounts of $251,622 and
$571,801 for the nine months  ending  December 31, 1997 and 1996,  respectively.
Financing  provided to fund operating  activities and fixed asset  purchases for
the nine months ended  December  31, 1997 was  provided by the  proceeds  from a
private  placement of common stock of  $2,100,750  and proceeds from the sale of
marketable  securities of $356,217.  Operating and investing  activities for the
nine months  ended  December  31, 1996 were funded from a bank line of credit of
$396,333.

     Accounts  Receivable  - At December 31,  1997,  the net account  receivable
balance was $709,403, a decrease of $249,395. The decrease is due to the reduced
sales realized  during the three month period ended  December 31, 1997.  Payment
terms range from cash payment to various net terms in  accordance  with industry
practice.  During the current  fiscal  year,  the Company has not  incurred  any
significant write-offs.

     On  March  21,  1997,  the  Company   acquired  certain  assets  of  Butler
Retreading,  Inc.  The  aggregate  purchase  price  was  approximately  $939,000
consisting of $750,000 in cash provided by long term financing and 42,857 shares
of common  stock of the  Company  valued at  $189,000,  or $4.41 per share,  the
quoted  market  price of the  Company's  shares  as of March  21,  1997.  During
September,  1997, the Company received and installed substantially all equipment
purchased from Butler.
<PAGE>
     In connection  with the  acquisition,  the Company  entered into a new loan
agreement  with  PhoenixCor,  Inc., a wholly owned  subsidiary of Sumitoma Bank.
PhoenixCor,  Inc.  assumed  the  balance of the  previous  loan in the amount of
$139,589 and provided financing in the amount of $860,411,  for a total new loan
of  $1,000,000.  The loan is payable in 3 monthly  installments  of $11,205 from
April 1997 through June 1997, 3 monthly  installments  of $19,609 from July 1997
through  September  1997 and 42  monthly  installments  of  $28,012  thereafter,
including interest at 11.4% per annum. PhoenixCor,  Inc. has a security interest
in  all of  the  Company's  equipment.  As  part  of a  current  negotiation  to
restructure the payment terms of the loan  agreement,  the Company made payments
totaling  $39,600 for the three month period  ending  December  31, 1997.  It is
expected that any changes to the loan agreement  will be completed  prior to the
end of the current fiscal year.

     The Company has entered  into a 10-year,  9-month  lease with one five year
renewal option for approximately 65,000 square feet of manufacturing,  warehouse
and office space in Holtsville,  New York during fiscal 1995, which provides for
minimum annual rental obligations of approximately  $282,750, plus utilities and
maintenance,  subject  to 5%  annual  increases.  As long as the  Company  is in
substantial  compliance with its obligations  under this Lease, it has an option
to purchase these premises for $2,500,000. If this option has not been exercised
by October 1, 1997,  the purchase  price will increase by 5% of that date and on
each  anniversary  thereof up to and  including  October 1, 2004. If the Company
elects to purchase these premises, it will be required to tender a deposit equal
to 10% of the purchase price and consummate the purchase  within sixty (60) days
thereafter, whereupon the balance of the purchase price will be due. This option
may be exercised at any time up to July 31, 2005.  The Company is utilizing this
facility  for its  manufacturing  operations,  as well  as for  warehousing  its
inventory and as its corporate offices.  The Company's capital  requirements may
change  depending upon numerous  factors and the Company may require  additional
financing  from  time to time,  particularly  in order to  effectuate  expansion
activities,  if any. As of December  31,  1997,  the Company has no  significant
commitments for additional capital  expenditures,  nor has the Company exercised
the purchase option.

Seasonality

     While there is a year-round  demand for automobile  tires,  automobile tire
sales in the  Northeastern  United  States are  generally  strongest  during the
second and third calendar  quarters of the year.  Seasonality may have an impact
on the  Company's  operations  including  cash flow,  insofar as the  Company is
required  to control  inventory  levels to reflect  projected  quarterly  sales.
However,  since the Company anticipates that approximately 50% of its sales will
be in the Western  United States and other regions where all purpose  automobile
tires are used year round,  it does not  believe  that  seasonality  will have a
material adverse impact on its operations.
<PAGE>

PART II.    OTHER INFORMATION

ITEM 6.     Exhibits and Reports on Form 8-K

       (a)  Exhibits
            --------
            27 - Financial Data Schedule (for electronic submission only)

       (b)  Reports on Form 8-K
            -------------------
            None
<PAGE>
                           SIGNATURES

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

Dated  :    February 23, 1998             ECOTYRE TECHNOLOGIES, INC.
                                          (Registrant)

                                          By:  /s/ Lawrence Dobroff
                                              -------------------------
                                              Lawrence Dobroff,
                                              Chief  Financial Officer