<PAGE>   1

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC. 20549
                                   FORM 10-KSB

[x]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934.

For the fiscal year ended       September 30, 1999
                          ------------------------------

                                       or

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
     OF 1934

Commission file number             0-22388
                       ---------------------------------


                          US INDUSTRIAL SERVICES, INC.
        (Exact name of small business issuer as specified in its charter)


               Delaware                                       99-0273889
    (State or other jurisdiction of                        (I.R.S. Employer
    incorporation or organization)                        Identification No.)


11011 Jones Road, Houston, Texas                               77070
--------------------------------------------------------------------------------
(Address of principal executive offices)                     (Zip Code)

                                 (281) 774-7000
                           (Issuer's telephone number)


              (Former name, former address and former fiscal year,
                         if changed since last report)

      Securities registered under Section 12(b) of the Exchange Act: None

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

                          COMMON STOCK, $ .01 PAR VALUE
                                (Title of Class)

Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months, and (2) has been
subject to such filing requirements for the past 90 days.
YES [ ]  NO [X]

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.[ ]

Issuer's revenues for its most recent fiscal year: $10,050,000

As of March 31, 2000, the aggregate market value of the voting stock held by
non-affiliates was $1,985,150 (1,588,120 shares held by persons other than
affiliates) at an average of the high and low bid and high and low asked prices
of $1.25 as reported by NASDAQ.

At March 31, 2000, 8,763,978 shares of Common Stock were outstanding.

Documents incorporated by reference: None

Transitional Small Business Disclosure Format (Check one):      YES [ ] NO [X]


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                          US INDUSTRIAL SERVICES, INC.

                                Table of Contents

<TABLE>
<CAPTION>
                                                                                                                    Page
<S>                <C>      <C>                                                                                     <C>
         PART I
                   Item 1.  Description of Business....................................................................3
                   Item 2.  Description of Property....................................................................9
                   Item 3.  Legal Proceedings.........................................................................10
                   Item 4.  Submission of Matters to a Vote of Security Holders.......................................10
         PART II
                   Item 5.  Market For Common Equity And Related Stockholder Matters..................................11
                   Item 6.  Management's Discussion and Analysis of Plan..............................................11
                   Item 7.  Financial Statements......................................................................14
                   Item 8.  Changes In and Disagreements with Accountants on Accounting and Financial Disclosure......30
         PART III
                   Item 9.  Directors, Executive Officers, Promoters and Control Persons; Compliance with
                            Section 16(A) of The Exchange Act.........................................................31
                   Item 10. Executive Compensation....................................................................32
                   Item 11. Security Ownership of Certain Beneficial Owners and Management............................32
                   Item 12. Certain Relationships and Related Transactions............................................33
                   Item 13. Exhibit and Reports on Form 8-K...........................................................33
</TABLE>


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                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

Organization and Recent Developments

         US Industrial Services, Inc. a Delaware corporation (the "Company" or
"USIS"), is the successor to EIF Holdings, Inc., a Hawaii corporation ("EIFH").
In May 1998, the EIFH shareholders approved a merger with and into USIS, a
newly-formed wholly owned subsidiary of EIFH. The merger, which became effective
in June 1998, resulted in a change in name and in the state of incorporation and
also in a 1-for-10 reverse stock split of the outstanding Common Stock. All
share information in this report gives effect to the reverse stock split.

         Subsequent to the May 1998 reincorporation and recapitalization (the
"Reincorporation"), the Company effected a conversion of a substantial portion
of its unsecured debt to equity, disposed of most operating businesses and is
seeking to refocus its activities in other industries.

         In November 1997, the Company completed the acquisition of J.L. Manta,
Inc. an Illinois corporation ("Manta"), which provided specialty coatings and
industrial maintenance services. The consideration paid by the Company included
$4,725,321 of cash and $2,235,312 of convertible promissory notes, payable in
installments, with the final payment due on November 18, 2000. The Company also
entered into Retention Bonus Agreements with key Manta managers providing for
bonus payments aggregating $900,000 to be amortized by the company over a six
year period and issued 50,000 options to purchase 50,000 shares of USIS Common
Stock, with a life of three years and an exercise price of $3.40. In connection
with the acquisition, Manta entered into a $10.0 million credit facility.

         In November 1998, the Company sold the assets and liabilities of Manta,
including the credit facility, to Kenny Industrial Services, L.L.C. ("Kenny"),
for $23.0 million, consisting of a combination of $3.0 million of cash, a short
term note of $15.0 million, which was paid December 15, 1998, and $5.0 million
in notes due as follows: $1 million in November 1999, $1 million in November
2000, $1 million in November 2001 and $2 million in November 2002; together with
interest at 5%.

         On December 31, 1998, the Company sold the assets and liabilities of
P.W. Stephens Residential Inc. ("Residential") American Temporary Sanitation
Inc. for $2.4 million, consisting of $1 million in cash and a five year
promissory note for $1.4 million, payable in equal quarterly installments
through 2004, together with interest at the Prime Rate plus 2.5% per annum.

         Upon the Reincorporation, American Eco Corporation, an Ontario, Canada
corporation ("American Eco"), acquired 1,000,000 shares of the Company's Common
Stock pursuant to a February 1996 Stock Purchase Agreement. The closing had been
delayed pending the Recapitalization. At that time, American Eco held certain
promissory notes (the "Notes") of the Company consisting of outstanding
principal and interest in the aggregate amount of $17.9 million. The outstanding
amount of the Notes had been reduced by $1 million, representing the purchase
price for the 1,000,000 shares. In 1996, American Eco had provided the Company a
$5.2 million line of credit, which line of credit was convertible into shares of
the Company's Common Stock at a price equal to 85.0% of the five day weighted
average price of such shares immediately preceding the conversion date.

         As of July 24, 1998, American Eco sold the Notes to USIS Acquisition,
L.L.C. (the "Holder") for $5.0 million in cash and a secured promissory note for
$12.9 million repayable on January 29, 1999. The Holder converted the Notes into
5,295,858 shares of the Company's Common Stock, and secured its promissory note
to American Eco with a pledge of the 5,295,858 shares. In November 1998, the
Holder advised American Eco that the Holder would not be able to pay its note at
maturity, and American Eco took ownership of the pledged shares in discharge of
the Holder's note. Since November 1998, American Eco has owned 7,175,858 shares
of the Company's Common Stock representing 81.9% of the outstanding shares, see
Item 11, Security Ownership of Certain Beneficial Owners and Management.

Historical

         EIF Holdings, Inc. was formed in the State of Hawaii in 1989, and
migrated to Delaware in 1998 and in connection therewith changed its name to
U.S. Industrial Services, Inc. Until late 1997, the Company was primarily
engaged in environmental construction related industries, more specifically,
asbestos abatement, both commercial and residential, lead removal, and soil and
groundwater remediation. The Company was also involved, to a limited extent, in
the energy management business. These activities, in particular the commercial
asbestos abatement business, involved a high percentage of relatively large,
fixed-price contracts under which the Company assumed significant financial
risks. The


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Company incurred substantial losses on a number of major contracts and
consequently reported substantial operating losses during the three-year period
ended September 30, 1997.

         In May 1997, the Company changed its focus to the specialized
maintenance industry, an industry characterized by a predominance of cost-plus
contracts, creditworthy industrial customers and significant repeat business.
Management also sought to eliminate unprofitable operations, reduce the Company
overhead costs, recapitalize the Company's balance sheet, and effect
acquisitions in the specialized maintenance industry. The acquisition of Manta
was a result of this strategy.

         The primary businesses of the Company have been acquired through a
series of acquisitions. In January 1993, the Company acquired P.W. Stephens
Contractors, Inc., ("P.W. Stephens") which was engaged in the environmental
contracting industry, primarily focusing on the removal of materials containing
asbestos, but also offering lead hazard removal, insulation and other hazardous
materials clean-up services. Services were offered to the commercial, industrial
and institutional markets, primarily in the states of California, Hawaii and
Nevada. These operations were conducted out of seven branch offices located
throughout the service area. Services were offered to the residential market in
California through Residential, a California corporation, and a wholly-owned
subsidiary of P. W. Stephens. As previously mentioned, Residential was sold as
of December 31, 1998. In the fourth quarter of 1996, the Company assumed the
assets of QHI, Inc., a California corporation out of bankruptcy, which provided
asbestos abatement services to the commercial, industrial and institutional
markets.

         The commercial asbestos operations of P. W. Stephens had generated
operating losses over each of the years from 1995 to 1997. As part of
management's efforts to eliminate unprofitable operations, all of the operations
of P. W. Stephens, with the exception of Residential, were discontinued by the
Company in May 1997.

         In August 1994, the Company acquired VonGuard Holdings, Inc.
("Vonguard"), and its subsidiaries. VonGuard was formed as a Missouri
corporation in 1992, as a holding company to acquire FCA Services, Inc. ("FCA")
and Remediation Services, Inc. ("RSI"). FCA had been in business since 1987 and
RSI since 1989. In June 1996, VonGuard and Enstar-North American, Inc., a
subsidiary of VonGuard, were merged into FCA and the name of the entity was
changed to P. W. Stevens Services, Inc., a Missouri corporation. At the same
time, Select Abatement, Inc., a subsidiary of VonGuard, was merged into RSI and
the name of that entity was changed to P. W. Stephens Contractors, Inc., a
Missouri corporation. P.W. Stephens Services, Inc. and P. W. Stephens
Contractors, Inc. (Missouri) are collectively referred to as "P. W. Stephens -
St. Louis" or "St. Louis". P. W. Stephens - St Louis provides industrial
cleaning and remediation services, including soil and groundwater remediation,
hazardous materials management and clean-up, asbestos abatement and lead hazard
removal service, to clients, primarily located in the states of Illinois, Iowa,
Missouri, Nebraska and Washington.

         In December 1994, the Company acquired Kelar Controls, Inc., a
California corporation ("Kelar"). Kelar primarily installed new or retrofitted
energy management controls and conservation equipment for large storage and
warehouse facilities. Management of the Company determined that the business of
Kelar was not consistent with the strategic direction of the Company and sold
Kelar to Regal Oak Properties, Inc., effective June 30, 1997, for a one-year 10%
interest-bearing note in the principal amount of $2.5 million. This note,
including interest, was satisfied in August of 1998.

Services Provided By Continuing Subsidiaries

         P.W. Stephens St. Louis provides its environmental services through
P.W. Stephens Services, Inc. and P.W. Stephens Contractors, Inc. P.W. Stephens
Services, Inc. provides asbestos abatement and lead hazard removal for
commercial, industrial, governmental, and residential clients primarily in the
states of Illinois, Iowa, Missouri, Nebraska and Washington. P.W. Stephens
Contractors, Inc. provides soil and groundwater remediation and hazardous
material management cleanup for industrial, commercial, and governmental
clients. P.W. Stephens Services, Inc., through its RSI Hydro Services division,
offers industrial cleaning services primarily for industrial, commercial, and
governmental clients utilizing ultra-high pressure water technology. The work of
P.W. Stephens St. Louis is generally performed under cost-plus-fee contracts or
fixed price contracts. P.W. Stephens St. Louis provides services to its clients
through its office in St. Louis, Missouri.


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Environmental Remediation Services

         Asbestos Abatement

         From 1910 until 1978, asbestos was a common ingredient in building
materials due primarily to its ability to retard fire, absorb heat from
friction, provide insulation from heat and cold, resist corrosion and add
tensile strength. The Environmental Protection Agency, ("EPA"), began to ban the
use of asbestos in construction products in 1973, in response to evidence that
asbestos causes certain forms of cancer and poses other health hazards. The
first Federal regulations requiring the removal of asbestos, however, did not
appear until 1986 when Congress passed the Asbestos Hazard Emergency Response
Act ("AHERA"). This legislation required all public schools to identify
materials containing asbestos and develop management programs. An increase in
awareness of asbestos hazards led to an increased demand for abatement. However,
since 1990, there has been a trend toward management in place rather than
removal where possible. The EPA now recommends abatement only when other
options, such as management in place, will not work, or when renovation will
disturb the material and cause a potential health risk to workers. Although
there are currently no laws requiring the removal of asbestos from buildings,
there are numerous federal, state and local regulations which govern the removal
or disturbance of asbestos through demolition, renovation, remodeling, or
repairs.

         The Company's asbestos abatement services include complete removal of
asbestos-containing materials as well as encapsulation and enclosure. The
Company's workers remove asbestos in accordance with the regulations promulgated
by the EPA, the Occupational Safety and Health Administration ("OSHA") and
various state and local agencies.

         Before any removal can begin, the work area must be sealed off from
other parts of the building as well as from the outdoor environment. Containment
of the work area requires the construction of barriers on the walls and floors.
These barriers must be made of polyethylene plastic sheeting sealed at the seams
or, in some cases, more permanent materials to provide a continuous isolation
that will prevent fibers from escaping. Once contained the work area can be
accessed only through one entrance and an air filtration system is required to
further prevent escape of any asbestos fibers. The Company constructs a
three-stage worker decontamination chamber which is generally comprised of a
clean room where workers prepare for the work, a shower room and a dirty room
where contaminated clothing is discarded. Signs and barricades are posted around
the work area, positioned so that an individual can take protective steps to
avoid exposure.

         The containment areas are equipped with high efficiency negative
pressure air filtration machines. The negative air units, equipped with HEPA
filters, ensure that air is decontaminated before being exhausted outside the
building. Additional pre-filters are used to trap large particles before they
reach the HEPA filter. At certain times during the abatement process, air
samples are taken to indicate the level of airborne fibers both inside and
outside the work area in order to protect the worker and building occupants.

         Prior to removal, workers wet the asbestos containing material and then
remove it in small sections before it dries. Gross removal is considered
complete only when no visible clumps of asbestos-containing materials remain on
the surface. All surfaces are then thoroughly scrubbed. After cleaning, the
surface is coated with a penetrating encapsulate to seal off any potential
residual fibers remaining. Plastic sheeting on walls and floors is also covered
with a mist of sealant.

         Before the isolation barrier is dismantled, a final air sample is
taken. When the level of airborne fibers is equal to or below 0.01 fibers per
cubic centimeter (f/cc), the isolation barrier can be removed and disposed of in
the same manner as asbestos waste. After removal, the work area is thoroughly
cleaned using high efficiency particulate air filter vacuuming and wet mopping
of all surfaces.

         Each asbestos field worker must complete training and safety programs
as required by state and federal regulations. Workers are required to wear a
suitable respirator, a one-piece disposable suit that contains head and foot
covers, and rubber gloves at all times while working in contaminated areas.
Suits and gloves are disposed of and replaced after each exit from the
containment work area.

         The Company believes that the asbestos abatement market will continue
to offer business opportunities, driven by factors such as the existence of
strict regulation, building renovation and demolition, catastrophe repairs and
restoration, public awareness and desire for an asbestos free environment,
worker demand for protection, and liability concerns of building owners,
contractors, realtors, lending institutions and insurance companies.

         Lead Abatement

         Lead-based paint is considered the most prevalent source of lead
poisoning in the United States, posing a risk to occupants and construction
workers. Lead was added to paint used on the interior and exterior of buildings
to shorten drying time and increase the durability of paint. The EPA began to
restrict the use of lead-based paint during the 1970s. The largest initial
market for lead-based paint abatement is public housing. Laws concerning the
disclosure, identification and abatement of lead-based paint already exist in
some states. Federal regulations require the inspection of all Housing and Urban
Development ("HUD") housing built prior to 1978 and abatement of any existing
hazards.


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         The Company removes lead from various surfaces using various techniques
including wet sanding, stripping or component replacement and ultra high
pressure water blasting (see "Industrial Cleaning" herein). The Company also
encapsulates and encloses surfaces of lead based coated products. As with
asbestos removal, dust minimization and control of the environment are required.

         Each lead field worker and supervisor must complete training programs
required by state regulations. The training course provider must be licensed by
the appropriate state agencies and the course must meet EPA recommended
standards. The Company believes that it is in compliance with these training
requirements.

         Soil and Groundwater Remediation and Hazardous Materials Cleanup

         The Company performs soil and groundwater remediation and hazardous
materials services. Soil remediation is used to repair or contain environmental
damage caused when hazardous materials have been allowed to leak into the soil.
When hazardous materials are released into the environment, site remediation may
be necessary to eliminate potential health risks and contamination of land, air
and water. Soil and groundwater remediation services offered by the Company
include underground storage tank cleaning, removal and installation; soil
sampling and analysis; excavation and disposal; soil stabilization; bioventing;
bio-remediation; soil vapor extraction/air sparging, groundwater remediation and
soil recycling. The Company also offers system installation/operation and site
restoration.

         Before a remediation project begins, an environmental assessment is
usually conducted to identify the type and extent of contamination. The Company
generally performs this assessment through a joint venture with an independent
environmental engineering firm or it is conducted by the client's environmental
consultant. Once the assessment is completed, the Company will then assist in
formulating a remediation solution which meets the client's individual needs.

         Industrial Cleaning

         The Company provides industrial cleaning services primarily using
hydroblasting technology. Hydroblasting utilizes high-water pressure ranging
from 20,000 pounds per square inch (psi) to 40,000 psi, at a very low flow rate,
to remove protective coatings and product buildup in industrial and commercial
settings. Hydroblasting can remove urethane coatings, fiberglass coatings,
rubberized coatings, and lead-base paint from steel and concrete substrates.
Hydroblasting can also be used to cut steel and concrete through the use of
entrained abrasive without the risk of sparking. Industrial cleanings services
are also utilized in cleaning barges, railroad cars and conveyor systems in
manufacturing and distribution plants.

Raw Materials

         The Company obtains its raw materials, supplies and small tools used in
its operations from multiple vendors. Although unforeseen costs and delays could
occur resulting from catastrophic environmental emergencies, the Company
believes that sufficient sources of raw materials exist to cover its operational
needs.

Strategy

         In November 1998, the Company adopted a strategic plan to sell off all
industrial service and environmental companies with the goal of rebuilding the
Company with a clean balance sheet and engaging in a line of business related to
another industry. The implementation of this strategy began when the Company
sold the assets and liabilities of Manta on November 30, 1998. The second step
was completed on December 31, 1998 when the Company sold the assets and
liabilities of Residential. Management is continuing to evaluate strategic
alternatives.

Customers

         The shift in strategic direction of the Company is resulting in changes
in the Company's customer list. At the present time, the Company provides
services through its subsidiary P.W. Stephens St. Louis. Services are primarily
provided in the states of Illinois, Iowa, Missouri, Nebraska and Washington.
Most of the customers are manufacturing facilities and government installations.

         For the year ended September 30, 1999, the Company had three
significant customers that accounted for approximately 19%, 15% and 14% of total
sales, respectively. At September 30, 1999 the amounts due from these three
customers was approximately $371,000, $27,000 and $259,000, respectively. During
the fiscal year ended September 30, 1998, no customer accounted for more than
ten percent (10%) of the Company's annual revenues.


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Competition

         At the present time, the Company provides services through its
subsidiary P.W. Stephens St. Louis. Services are primarily in the states of
Illinois, Iowa, Missouri, Nebraska and Washington. These markets are all
competitive markets in which numerous other companies compete on the basis of
quality, service and price. Many of the competitive firms have revenues and
capital resources exceeding those of the Company. The Company believes that
competitive pressures will continue, but that it will continue to receive a
reasonable share of the contracts awarded based on its reputation in the
industry, ability to meet competitive pricing levels and to provide high quality
service to its customers.

Insurance and Bonding

         The Company obtains insurance covering certain general risks inherent
in the industrial service industry such as the liability from delays, fires or
breaches in the enclosure or "containment" of a work area resulting from its
acts or the acts of subcontractors.

         Commercial and industrial projects involving environmental cleanup or
demolition often require contractors to post both performance and payment bonds,
or letters of credit in lieu thereof, at the time of execution of a contract.
These bonds are required to protect the interests of the general public and
private owners in order to guarantee that the projects will be completed and all
subcontractors and vendors are paid. The Company is currently meeting its
bonding needs through its relationships with various bonding companies as
projects require.

Government Regulation

         The Company's industrial clean-up operation, particular those
operations related to environmental and asbestos removal, are strictly regulated
by statutes and regulations administered by several federal, state and local
agencies. These statutes and regulations cover all aspects of the environmental
health and safety industry as well as the construction industry in general. The
Company's operations and compliance with statutes and regulations are reviewed
by various governmental agencies and, from time to time, these agencies may make
requests for information or issue citations for noncompliance.

         Federal Regulation

         Asbestos abatement operations are subject to regulation by federal,
state, and local governmental authorities, including OSHA, EPA and the United
States Department of Transportation ("DOT"). In general, OSHA regulations set
the maximum asbestos fiber exposure levels applicable to employees and the EPA
regulations provide asbestos fiber emission control standards. The EPA requires
use of accredited persons for both inspection and abatement. OSHA has
promulgated regulations specifying airborne asbestos fiber exposure standards
for workers, engineering and administrative controls, workplace practices, and
medical surveillance and worker protection requirements. OSHA's construction
standards require companies removing asbestos fibers to conduct air monitoring,
to provide decontamination units and to appropriately supervise the operations.
Transportation and disposal activities are also regulated. The DOT sets
standards for management of the packaging and transportation of asbestos.

         Lead hazard removal is currently regulated by OSHA and the EPA. In
general, OSHA regulations set the permissible lead exposure level for
construction workers and EPA regulates emission of lead into the air and soil.
Disposal of lead containing material is regulated under the Resource
Conservation Recovery Act (RCRA). The EPA has been mandated by Title X (the
Residential Housing Act of 1992) to have contractor training and certification
requirements in place during 1994. These interim training guidelines were
implemented on November 1, 1994.

         State and Local Regulations

         P.W. Stephens St. Louis provides services in the states of Illinois,
Iowa, Missouri, Nebraska and Washington. Each state has its own local laws and
regulations to supplement the federal laws. A number of states have promulgated
regulations setting forth such requirements as registration or licensing of
asbestos abatement contractors, training courses and licensing for workers,
notification of intent to undertake abatement projects and requires approvals
from certain state agencies. Management believes the Company holds all necessary
licenses and permits required by these states for business operation.

         Soil and Groundwater Remediation and Hazardous Waste Management

         The Company and its customers are subject to extensive and evolving
environmental regulations administered by the EPA, OSHA and various other
federal, state and local environmental and safety and health agencies relating
to its soil and groundwater remediation services as well as its hazardous waste
management services. Although the Company's


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customers remain responsible by law for their environmental problems, the
Company must itself comply with the requirements of those laws applicable to its
services. Because the field of environmental protection is rapidly developing
and subject to varying interpretations, the Company cannot predict the extent to
which its operations may be affected by future enforcement policies as applied
to existing laws or by the enactment of new environmental laws and regulations.
Moreover, any predictions regarding possible liability are further complicated
by the fact that under current environmental laws the Company could be jointly
and severally liable for certain activities of third parties over whom the
Company has little or no control. Although management believes that the Company
is currently in substantial compliance with all applicable laws and regulations,
the Company could be subject to fines, penalties or other liabilities or
otherwise adversely affected by existing or subsequently enacted laws or
regulations. The principal environmental laws affecting the Company and its
customers in these areas are briefly discussed below.

         The Resource Conservation and Recovery Act of 1976, as amended
("RCRA"), and the regulations promulgated by the EPA thereunder establish a
strict and comprehensive regulatory program governing the handling and treatment
of hazardous waste. The EPA has promulgated regulations under RCRA for new and
existing treatment, storage and disposal facilities including incinerators,
storage and treatments tanks, storage containers, storage and treatment surface
impoundments, waste piles and landfills. RCRA defines solid and hazardous waste,
regulates the preparation of wastes for shipment, record keeping and reporting
requirements. Specific approved disposal methods are also defined for different
waste streams.

         The Safe Drinking Water Act ("SDWA") was established to protect
groundwater and drinking water sources. Two types of drinking water standards
were established to limit the amount of contamination that may be in drinking
water: primary standards with a maximum contaminant level (MCL) to protect human
health, and, secondary standards that involve the color, taste, smell or other
physical characteristics of a drinking water source.

         The Clean Water Act ("CWA") controls the discharge of toxic materials
discharged into surface streams and other navigable waters. The EPA has
established effluent standards covering 129 toxic pollutants. Toxic and
hazardous waste are generated primarily from industries and farmlands.
Industries discharging directly into surface streams and other navigable waters
are regulated by a NPDES (National Pollutant Discharge Elimination System)
permit. Discharges into municipal sewer plants are required to meet pretreatment
requirements.

         The Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ("CERCLA", also referred to as the "Superfund Act") governs the
clean-up of sites at which hazardous substances are located or at which
hazardous substances have been released or are threatened to be released into
the environment. CERCLA authorizes the EPA to compel responsible parties to
clean up sites and provides for punitive damages for noncompliance. CERCLA
imposes joint and several liability for the costs of clean-up and damages to
natural resources.

         Health and Safety Regulations

         The operation of the Company's environmental activities are subject to
the requirements of the OSHA and comparable state laws. Regulations promulgated
under OSHA by the Department of Labor require employers of persons in the
transportation and environmental industries, including independent contractors,
to implement hazard communications, work practices and personnel protection
programs in order to protect employees from equipment safety hazards and
exposure to hazardous chemicals.

         Other Laws

         The Company's activities are subject to various federal environmental
protection and similar laws, including, without limitation, the Clean Air Act,
the Hazardous Materials Transportation Act and the Toxic Substances Control Act.
Many states, also have adopted laws for the protection of the environment which
may affect the Company, including laws governing the generation, handling,
transportation and disposition of hazardous substances as well as laws governing
the investigation and clean-up of, and liability for, contaminated sites. Some
of these state provisions are broader and more stringent than existing federal
laws and regulations. The failure of the Company to comply and conform its
operations to the requirements of any of these federal or state laws could
subject the Company to substantial liabilities which could have a material
adverse affect on the Company, its operations and financial condition. The
Company cannot predict the extent to which it may be affected by any law or rule
that may be enacted or enforced in the future, or any new or different
interpretations of existing laws or rules.

         Compliance

         The Company believes that it is in substantial compliance with all
local, state and federal regulations relating to its operations. To insure such
compliance the Company has developed and maintains its own quality control
program. As one


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aspect of this program, the Company's quality control officers perform random
inspections before, during, and after project operations. Categories of
inspection include isolation barriers, decontamination units, protective
equipment, negative pressure, work practices, general housekeeping, air
monitoring, disposal, detail and final clean-up, demobilization and enforcement
of state regulations.

Research and Development

         Research and development activities for the fiscal years ended
September 30, 1999 and 1998 have not been material and the Company has had no
customer sponsored research activities during each of these periods.

Employees

         As of March 31, 2000, the Company had approximately 46 full-time
personnel employed as executives, managers, project managers, safety directors,
sales and estimators, as well as administrative and clerical support. In
addition, the Company also employs an hourly direct labor force which totaled
approximately 169 employees, some of whom are represented by unions under
collective bargaining agreements. Such bargaining agreements between the Company
and the unions represent employees based upon geographic region and expire at
various times. All of the employees represented by such agreements are employed
in the St. Louis operations. The Company believes that it has satisfactory
relations with its employees.

Seasonality

         The Company's business is subject to variations in revenues and results
of operations for interim periods and from year to year. Increased revenues may
not always result in a corresponding increase in results of operations. These
conditions are due to a number of characteristics shared by the Company to
varying degrees with most other members of the industry, including the
following: (1) its business is seasonal (typically less activity in the winter
months) and is affected by the scheduling of work at commercial properties and
outages at utilities and other industrial facilities; (2) its business is labor
intensive; (3) its performance on a given project is often dependent on the
performance of other contractors, who are working on the same job, over which
the Company has no control; and (4) costs ultimately incurred by the Company on
a job may be materially affected by such risks as technical problems, labor
shortages and disputes, time extensions, weather, delays caused by external
timing of large contracts, especially if all or a substantial part of the
performance of such contracts occurs within one or two quarters. Accordingly,
quarterly results or other interim results should not be considered indicative
of results to be expected for any other quarter or for the full fiscal year.

Royalties, Patents and Trademarks

         The Company does not currently own any patents, royalties, trademarks,
licenses, franchises or concessions which are material to its business.

ITEM 2. DESCRIPTION OF PROPERTY

         The Company's principal corporate office is located at 11011 Jones
Road, Houston, Texas which consists of office space shared with American Eco at
no incremental cost to the Company.

         P.W. Stephens St. Louis leases one principal facility located at 1525
S. 8th Street, St. Louis, Missouri which has both office and warehouse space in
support of its operations. The leased property consists of approximately 7,000
square feet and has a monthly rent of $2,950 and expires in December 2004.

         P.W. Stephens St. Louis purchased property in November, 1999 consisting
of 3.2 acres with improvements located in Granite City, Illinois. P.W. Stephens
St. Louis uses this facility to house its emergency response, environment
remediation, asbestos abatement and residential renovation operations.

         The Company currently leases properties as necessary to support its
operations. One of the leased facilities located in California is not being
utilized and has been sublet since January 1, 1998. Both the lease and the
sublease expire concurrently in July 2002. The Company believes that the
remaining facilities are sufficient to meet the needs of its current operations
and that substitute and or additional space will be available as needed to
accommodate expansion of operations and growth through acquisitions.


                                       9
<PAGE>   10


ITEM 3. LEGAL PROCEEDINGS

         The nature and scope of the Company's business operations bring it into
regular contact with the general public, a variety of businesses and government
agencies. These activities inherently subject the Company to the hazards of
litigation, which are defended in the normal course of business. Management
believes that such proceedings are either adequately covered by insurance, or if
uninsured, by the estimated losses it has recorded to date. The resolution of
such claims, however, could have a material effect on the Company's results of
operations or cash flows..

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

         The Company did not submit any matter to a vote of shareholders during
the last quarter of fiscal 1999.


                                       10
<PAGE>   11


                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Prices

         The Common Stock of the Company is traded in the over-the-counter
market. Quotations are published in the National Quotation Bureau "Pink Sheets"
and the OTC Bulletin Board under the symbol USIS. The following table sets
forth, for the fiscal quarters indicated, the range of high ask and low bid
quotations for the Company's Common Stock as reported by the National Quotation
Bureau, Inc. The quotations presented are between broker-dealers and do not
retail mark-ups, mark-downs or other fees and commissions. As a result, the
following quotations may not reflect actual transactions.

<TABLE>
<CAPTION>
         Fiscal Year ended September 30, 1999:                       HIGH ASK             LOW BID
                                                                     --------             -------
<S>                                                                  <C>                  <C>
         Quarter ended September 30, 1999                             19.00                 2.63
         Quarter ended June 30, 1999                                  11.06                 0.31
         Quarter ended March 31, 1999                                  1.70                 0.38
         Quarter ended December 31, 1998                               3.42                 1.25
</TABLE>

<TABLE>
<CAPTION>
         Fiscal Year ended September 30, 1998:                       HIGH ASK             LOW BID
                                                                     --------             -------
<S>                                                                  <C>                  <C>
         Quarter ended September 30, 1998                              2.00                 1.25
         Quarter ended June 30, 1998                                   6.50                 1.00
         Quarter ended March 31, 1998                                  0.49                 0.28
         Quarter ended December 31, 1997                               0.58                 0.38
</TABLE>

Stockholders

         As of March 31, 2000, the Company had approximately 79 record holders
of its Common Stock, as reflected on the books of the Company's transfer agent.
Significant number of shares are held in street name and as such the Company
believes the actual number of beneficial owners is higher.

Dividends

         The Company has not established a policy concerning payment of regular
dividends nor has it paid any dividends on its Common Stock to date. Any payment
of dividends in the future will be determined by the Board of Directors in light
of conditions then existing, including the Company's earnings, financial
condition, capital requirements and debt covenants.

Recent Sales of Unregistered Securities

         Not applicable.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN

General

         The Company has been engaged in the business of asbestos abatement,
lead abatement, soil and hazardous waste remediation and industrial cleaning.
The Company services commercial, industrial and governmental customers primarily
located in the states of Illinois, Iowa, Missouri, Nebraska and Washington.

         Since Manta and Residential were sold in the first quarter of fiscal
year 1999, management has chosen to offer a comparison of operations for
subsidiaries that were held by the Company for both 1999 and 1998. Management
feels that this would present the most accurate comparison of operations between
the two years. However, where material, the effect of Manta and Residential on
the financial results of the Company is noted.

                              Results of Operations
                                  1999 vs. 1998
                              Continuing Operations


                                       11
<PAGE>   12


         Revenue:

         Revenue for the year ended September 30, 1999 increased 78.6% to
$10,050,000 from $5,628,000 for the same period in 1998. The increase in revenue
can be attributed to performance under a significant contract for soil
remediation at the Hanford Nuclear Project in Hanford, Washington, that began in
March 1999.

         Gross Profit:

         Gross profit for the year ended September 30, 1999 increased 36.8% to
$2,236,000 from $1,635,000 for the same period in 1998. The increase in the
gross profit margin can be attributed to the increased sales activity. Gross
profit margins decreased from 29.1% to 22.2% primarily due to lower margins
relating to the soil remediation contract at the Hanford Nuclear Project.

         Selling, General and Administrative Expenses:

         Selling, general and administrative expenses for the year ended
September 30, 1999 were $2,267,000 compared to $1,585,000 for the same period in
1998. Approximately $370,000 of this increase is attributable to a change in the
allocation of corporate expenses to discontinued operations between the two
years. As a percentage of total revenues adjusted for this change, selling,
general and administrative expenses decreased to 22.6% in fiscal 1999 compared
to 34.7% in fiscal 1998.

         Other Expenses:

         Other expenses for the years ended September 30, 1999 and 1998 were
$5,388,000 and $814,000 respectively. The expenses in 1999 were due primarily to
write-offs of certain notes receivable, the loss on disposal of certain
securities and financing fees The primary factor contributing to expense for
1998 was interest expense on various notes from the Manta acquisition.

         Provision for Income Tax

         In fiscal 1998 the Company recognized $3,842,000 of income tax benefits
of the Company's net operating loss carryforwards. In fiscal 1999 the Company
reserved $1,038,000 of these net operating loss carryforwards.

         Discontinued Operations

         Discontinued operation income for the year ended September 30, 1999
amounted to $3,361,000 compared to $1,323,000 for the year ended September 30,
1998. The income for the year ended September 30, 1999 included only two months
of Manta's operations and three months of Residential's operations, while the
year ended September 30, 1998 included a full year for each of these operations.
The reduction from operations was offset by the recognition of a gain of
$3,345,000 upon the sale of Manta.

Liquidity and Capital Resources

         The Company's existing capital resources as of September 30, 1999
consists of cash and notes totaling $6,346,000, compared to $2,350,000 as of
September 30, 1998. This increase is the result of the sale of the assets, and
liabilities, of Manta and Residential for cash and notes. Management believes
that the cash and funds available are sufficient to meet its anticipated cash
requirements to operate its sole operating unit P.W. Stephens St. Louis.

         During fiscal year 1999 the Company utilized net cash in operating
activities of $11,625,000, including a net loss of $3,096,000.

         The Company's investing activities provided $17,170,000, primarily due
to collections from notes receivable and cash received at the time of the sale
of Manta and Residential.

         The Company's financing activities in fiscal 1999 utilized $7,614,000,
primarily due to payments on long-term debt made concurrently with the sale of
Manta.

         Cash requirements consist of working capital needs, obligations under
its leases and promissory notes and capital expenditures. The Company believes
that its current cash position, the expected cash flow from operations and, if
required, advances from its majority shareholder should be sufficient throughout
the next twelve months to finance its working capital needs, planned capital
expenditures and debt service requirements.


                                       12
<PAGE>   13

Information Regarding Forward Looking Statements

         This Form 10-KSB includes forward looking statements within the meaning
of section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements include statements concerning
plans, objectives, goals, strategies, future events or performance and
underlying assumptions and other statements which are other than statements of
historical facts. Forward looking statements involve risks and uncertainties
which could cause actual results or outcomes to differ materially. The Company's
expectations and beliefs are expressed in good faith and are believed by the
Company to have a reasonable basis but there can be no assurance that
management's expectations, beliefs or projections will be achieved or
accomplished. In addition to other factors and matters discussed elsewhere
herein, the following are important factors that, in the view of the Company,
could cause actual results to differ materially from those discussed in the
forward-looking statements: the availability of debt or equity capital to fund
the Company's working capital needs and capital requirements, the ability of the
Company to manage its operations effectively, the collection and realization of
its investments and notes receivable, the economic conditions that could affect
demand for the Company's services, the adverse outcome of litigation and
proceedings, the ability of the Company to complete projects profitably and the
severe weather conditions that could delay projects.

Impact of the Year 2000 Issue

         The Year 2000 Issue is the result of computer programs being written
using two digits rather than four digits to define the applicable year. Any of
the Company's computer programs that have data-sensitive software may recognize
a date using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices or engage in other routine business activities.

         During 1999, the Company conducted an assessment of issues related to
the Year 2000 Issue and determined that no issues existed which would cause its
computer systems not to properly utilize dates beyond December 31, 1999. At this
time, the Company cannot fully determine the impact that Year 2000 issues will
have on its customers or suppliers. If the Company's customers or suppliers do
not convert their systems to become Year 2000 compliant, the Company may be
adversely impacted. The Company believes that its vendors and customers are in
compliance with the Year 2000 Issue and has not had any material problems. The
Company has completed the Year 2000 project.


                                       13
<PAGE>   14


ITEM 7. FINANCIAL STATEMENTS

                                 C O N T E N T S

<TABLE>
<CAPTION>
                                                                                                      Page
<S>                                                                                                   <C>
Independent Auditor's Report - current..................................................................15

Independent Auditor's Report - predecessor..............................................................16

Consolidated Balance Sheet .............................................................................17

Consolidated Statements of Operations  .................................................................18

Consolidated Statements of Stockholders' Equity ........................................................19

Consolidated Statements of Cash Flows...................................................................20

Notes to Consolidated Financial Statements .............................................................21
</TABLE>


                                       14
<PAGE>   15


                     INDEPENDENT AUDITORS' REPORT - CURRENT



TO THE BOARD OF DIRECTORS
U.S. INDUSTRIAL SERVICES, INC.:

We have audited the accompanying consolidated balance sheet of U.S. Industrial
Services, Inc. as of September 30, 1999, and the statements of operations,
shareholders' equity and cash flows for the year then ended. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of U.S.
Industrial Services, Inc as of September 30, 1999, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.





                                      MERDINGER, FRUCHTER, ROSEN & CORSO, P.C.
                                      Certified Public Accountants
Los Angeles, California
February 4, 2000


                                       15
<PAGE>   16


                   INDEPENDENT AUDITORS' REPORT - PREDECESSOR



To the Stockholders and Directors of
U.S. INDUSTRIAL SERVICES, INC.

We have audited the accompanying consolidated statements of operations,
stockholders' equity and cash flows for U.S. Industrial Services, Inc. (formerly
EIF Holdings, Inc.) for the year ended September 30, 1998. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.

We conducted our audit 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 audit of the statements of operations, stockholders' equity
and cash flows provides a reasonable basis for our opinion.

In our opinion, the statements of operations, stockholders' equity and cash
flows referred to above present fairly, in all material respects, the results of
operations and cash flows for U.S. Industrial Services, Inc. for the year ended
September 30, 1998 in conformity with generally accepted accounting principles.




KARLINS ARNOLD & CORBITT, P.C.
(SUCCESSORS TO KARLINS FULLER ARNOLD
AND KLODOSKY, P.C.)


The Woodlands, Texas
December 1, 1998


                                       16
<PAGE>   17


                         U.S. INDUSTRIAL SERVICES, INC.
                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 1999
                                 (In Thousands)


<TABLE>
<S>                                                                                            <C>
                               ASSETS
CURRENT ASSETS
         Cash                                                                                  $        280
         Accounts receivable, less allowance for doubtful accounts of $140                            2,414
         Notes receivable, current portion                                                            1,489
         Costs and estimated earnings in excess of billings on contracts in
           progress                                                                                     321
         Prepaid expenses and other current assets                                                      249
         Deferred income tax, current portion                                                           275
                                                                                               ------------
                  TOTAL CURRENT ASSETS                                                                5,028
                                                                                               ------------

PROPERTY, PLANT AND EQUIPMENT, NET                                                                    1,800
                                                                                               ------------

OTHER ASSETS
         Prepaid expenses and other assets                                                               10
         Notes receivable, less current portion                                                       4,577
         Deferred income tax, less current portion                                                    3,145
         Goodwill, net of amortization of $282                                                          660
                                                                                               ------------
                  TOTAL OTHER ASSETS                                                                  8,392
                                                                                               ------------

                  TOTAL ASSETS                                                                 $     15,220
                                                                                               ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
         Accounts payable and accrued liabilities                                              $      2,676
         Current portion of obligations under capital leases                                            417
         Current portion of long-term debt                                                               58
         Due to affiliates, net                                                                         843
         Billings in excess of costs and estimated earnings on contracts in
           progress                                                                                     246
                                                                                               ------------
                  TOTAL CURRENT LIABILITIES                                                           4,240
                                                                                               ------------

LONG-TERM LIABILITIES
         Obligations under capital leases, less current portion                                         934
         Long-term debt, less current portion                                                           134
                                                                                               ------------
                  TOTAL LONG-TERM LIABILITIES                                                         1,068
                                                                                               ------------
                  TOTAL LIABILITIES                                                                   5,308
                                                                                               ------------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
         Common stock, $.01 par value, 25,000 authorized, 8,764 outstanding                              88
         Additional paid-in capital                                                                  22,684
         Accumulated deficit                                                                        (12,860)
                                                                                               ------------
                  TOTAL SHAREHOLDERS' EQUITY                                                          9,912
                                                                                               ------------

                  TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                   $     15,220
                                                                                               ============
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       17
<PAGE>   18


                         U.S. INDUSTRIAL SERVICES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED SEPTEMBER 30, 1999 AND 1998
                   (In Thousands except for per share amounts)

<TABLE>
<CAPTION>
                                                                                        1999        1998
                                                                                      --------    --------
<S>                                                                                   <C>         <C>
REVENUE                                                                               $ 10,050    $  5,628
                                                                                      --------    --------

COSTS AND EXPENSES
      Direct costs of revenue                                                            7,814       3,993
      Selling, general and administrative expenses                                       2,267       1,585
                                                                                      --------    --------
      Total operating costs                                                             10,081       5,578
                                                                                      --------    --------

OPERATING EARNINGS (LOSS)                                                                  (31)         50
                                                                                      --------    --------

OTHER EXPENSES
      Write-off of notes receivable                                                      1,204          --
      Loss on disposal of securities                                                     1,298          --
      Financing fees                                                                     2,849          --
      Interest expense, net                                                                 37         814
                                                                                      --------    --------
      Total other expenses                                                               5,388         814
                                                                                      --------    --------

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES                                     (5,419)       (764)

INCOME TAX PROVISION (BENEFIT)                                                           1,038      (3,842)
                                                                                      --------    --------

EARNINGS (LOSS) FROM CONTINUING OPERATIONS                                              (6,457)      3,078
                                                                                      --------    --------

DISCONTINUED OPERATIONS (NET OF INCOME TAX EFFECT OF $0)
      Earnings from operations of residential asbestos business                            224         189
      Earnings (loss) from operations of industrial maintenance business                  (208)        489
      Gain from sale of industrial maintenance business                                  3,345          --
      Earnings from operations of commercial asbestos business                              --         645
                                                                                      --------    --------
      Total earnings from discontinued operations                                        3,361       1,323
                                                                                      --------    --------

NET EARNINGS (LOSS)                                                                     (3,096)      4,401

OTHER COMPREHENSIVE LOSS
      Unrealized loss on securities available for sale (net of income tax effect of
          $457)                                                                             --        (888)
                                                                                      --------    --------
COMPREHENSIVE EARNINGS (LOSS)                                                         $ (3,096)    $ 3,513
                                                                                      ========    ========

BASIC EARNINGS (LOSS) PER COMMON SHARE
      Earnings (loss) from continuing operations                                      $  (0.74)   $   0.85
      Earnings from discontinued operations                                               0.39        0.36
                                                                                      --------    --------
      Net earnings (loss) per common share                                            $  (0.35)   $   1.21
                                                                                      ========    ========
FULLY DILUTED EARNINGS (LOSS) PER COMMON SHARE
      Earnings (loss) from continuing operations:                                     $  (0.74)   $   0.77
      Earnings from discontinued operations                                               0.39        0.30
                                                                                      --------    --------
      Net earnings (loss) per common share                                            $  (0.35)   $   1.07
                                                                                      ========    ========
WEIGHTED AVERAGE NUMBER OF SHARES USED IN COMPUTING EARNINGS (LOSS) PER COMMON
SHARE
      Basic                                                                              8,764       3,636
                                                                                      ========    ========
      Fully diluted                                                                      8,764       4,373
                                                                                      ========    ========
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       18
<PAGE>   19


                         U.S. INDUSTRIAL SERVICES, INC.
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED SEPTEMBER 30, 1999 AND 1998
                                 (In Thousands)


<TABLE>
<CAPTION>
                                                                                 Accumulated
                                               Common Shares       Additional       other                           Total
                                            Shares       Dollar     paid-in     Comprehensive    Accumulated    Shareholders'
                                         Outstanding     Amount     Capital         Income         Deficit         Equity
                                         -----------   ----------  ----------   -------------    -----------    -------------
<S>                                      <C>           <C>         <C>          <C>              <C>            <C>
Balance, September 30, 1997                    2,468   $       25  $    3,799   $          --    $   (14,164)   $     (10,340)
Conversion of long-term debt                   6,296           63      18,837              --             --           18,900
Unrealized loss on securities, net                --           --          --            (888)            --             (888)
Net income                                        --           --          --              --          4,400            4,400
                                         -----------   ----------  ----------   -------------    -----------    -------------
Balance, September 30, 1998                    8,764           88      22,636            (888)        (9,764)          12,072

Realized loss on securities, net                  --           --          --             888             --              888
Issuance of warrants                              --           --          48              --             --               48
Net loss                                          --           --          --              --         (3,096)          (3,096)
                                         -----------   ----------  ----------   -------------    -----------    -------------
Balance, September 30, 1999                    8,764   $       88  $   22,684   $          --    $   (12,860)   $       9,912
                                         ===========   ==========  ==========   =============    ===========    =============
</TABLE>

              The accompanying notes are an integral part of these
                       Consolidated Financial Statements.


                                       19
<PAGE>   20


                         U.S. INDUSTRIAL SERVICES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED SEPTEMBER 30, 1999 AND 1998
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                                 1999        1998
                                                                               --------    --------
<S>                                                                            <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss)                                                            $ (3,096)   $  4,400
     Adjustments to reconcile net earnings (loss) to net cash used in
     operating activities:
         Depreciation and amortization                                              582       1,906
         Gain on sale of Manta assets and liabilities                            (3,345)         --
         Loss on disposal of machinery and equipment                                  6          95
         Change in deferred income tax                                              871      (4,403)
         Non cash expense, net                                                       --       1,291
         Write-off of securities available for sale                               1,298          --
         Write-off of notes receivable                                              904          --
         Issuance of warrants                                                        48          --
         Change in accounts receivables                                          (1,527)       (555)
         Change in notes receivable - accrued interest                             (232)         --
         Change in receivable, officer                                               --        (145)
         Change in costs and estimated earnings in excess of
            billings on jobs in progress                                           (248)       (586)
         Change in prepaid retention bonus                                           --        (763)
         Change in inventory                                                         --         165
         Change in prepaid expenses and other current assets                        (85)        478
         Change in other assets                                                     (48)        150
         Change in accounts payable and accrued liabilities                      (8,458)       (499)
         Change in due to affiliates                                                843          --
         Change in net liabilities of discontinued operations                        --      (1,509)
         Change in billings in excess of costs and estimated
            earnings on jobs in progress                                            862        (368)
                                                                               --------    --------
Net cash used in operating activities                                           (11,625)       (343)
                                                                               --------    --------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Proceeds from notes receivable                                              15,066          --
     Advances for notes receivable                                                 (760)         --
     Divestiture of businesses, net of cash sold                                  3,282          --
     Acquisition of business, net of cash acquired                                   --         172
     Proceeds from sale of machinery and equipment                                   --         252
     Capital expenditures                                                          (418)       (932)
                                                                               --------    --------
Net cash provided by (used in) investing activities                              17,170        (508)
                                                                               --------    --------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from notes payable                                                     --       6,210
     Principal payments on long-term debt                                        (7,778)     (7,578)
     Proceeds from securities available for sale                                     --       4,264
     Proceeds from long-term debt                                                   164          --
                                                                               --------    --------
Net cash provided by (used in) financing activities                              (7,614)      2,896
                                                                               --------    --------

NET INCREASE (DECREASE) IN CASH                                                  (2,069)      2,045

CASH AT BEGINNING OF YEAR                                                         2,349         304
                                                                               --------    --------

CASH AT END OF YEAR                                                            $    280    $  2,349
                                                                               ========    ========
Supplemental disclosures of cash flow information:
Cash paid for:
Interest                                                                       $     37    $  1,888
Income Taxes                                                                         60         106
Supplemental schedule of non-cash investing and financing activities:
Machinery and equipment acquired through capital lease obligations             $  1,631    $    471
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       20
<PAGE>   21


                         U.S. INDUSTRIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNT)

1.  BASIS OF PRESENTATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Company Description and Nature of Operations

U.S. Industrial Services, Inc. and its wholly owned subsidiaries (the "Company"
or "USIS"), (formerly "EIF Holdings, Inc.") is a multi-state service company,
specializing in industrial cleaning and remediation services, including soil and
groundwater remediation, hazardous materials management and clean-up, asbestos
abatement and lead hazard removal services, to its customers located primarily
in the states of Illinois, Iowa, Missouri, Nebraska and Washington. The Company
is a majority-owned subsidiary of American Eco Corporation ("AEC").

Effective June 22, 1998, the Company completed a recapitalization and
reincorporation through a merger with USIS, a newly-formed Delaware corporation,
and wholly-owned subsidiary of EIF Holdings, Inc. USIS became the surviving
company, and all outstanding shares of EIF common stock were exchanged on a
one-for-one basis for shares of USIS common stock.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant intercompany
transactions and balances have been eliminated in consolidation.

Fair Value of Financial Instruments

The Company measures its financial assets and liabilities in accordance with
generally accepted accounting principles. For certain of the Company's financial
instruments, including cash, accounts receivable, costs and estimated profits in
excess of billings on contracts in progress, accounts payable and accrued
liabilities and billings in excess of costs and estimated profits on contracts
in progress, the carrying amounts approximate fair value due to their short
maturities. The amounts shown for long-term debt approximate fair value, since
the interest rates are at fair market value. Also, the amounts for capital lease
obligations also approximate fair value because current interest rates offered
to the company for debt of similar maturities are substantially the same.

Uses of 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 period.
Actual results could differ from these estimates.

Concentration of credit risk

Financial instruments, which potentially subject the company to concentrations
of credit risk, consist of cash and notes and accounts receivable. The company
places its cash with high quality financial institutions and at times may exceed
the FDIC $100,000 insurance limit. The company offers its services predominately
in the states of Illinois, Iowa, Missouri, Nebraska and Washington, and it
extends credit based on an evaluation of a customer's financial condition,
generally without collateral. Exposure to losses on accounts receivable is
principally dependent on each customer's financial condition. The Company
monitors its exposure for credit losses and maintains allowances for anticipated
losses, if required.

The Company, as a condition for entering into construction contracts, has
outstanding surety bonds totaling approximately $1,698 as of September 30, 1999.
The bonds are collateralized by contract receivables.

Securities Available for Sale

Equity securities are classified as "available for sale" as defined by Financial
Accounting Standards Board ("FASB") Statement of Financial Accounting Standard
("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity
Securities". In accordance with that Statement, they are reported at aggregate
fair value with unrealized losses excluded from earnings and reported as other
comprehensive income, net of deferred taxes. The cost of securities sold is
determined by the average cost method.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation of plant and
equipment is provided over the estimated useful lives of the respective assets
using the straight-line method, generally from five to ten years. Leasehold
improvements are amortized over the life of the lease.


                                       21
<PAGE>   22
                         U.S. INDUSTRIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNT)


Goodwill

Goodwill is amortized on a straight-line basis over 20 years. Management
reviews, on an annual basis, the carrying value of goodwill in order to
determine whether an impairment has occurred. Impairment is based on several
factors including the Company's projection of future undiscounted operating cash
flows. If an impairment of the carrying value were to be indicated by this
review, the Company would adjust the carrying value of goodwill to its estimated
fair value.

Long-Lived Assets

Long-lived assets to be held and used are reviewed for impairment whenever
events or changes in circumstances indicate that the related carrying amounts
may not be recoverable. When required, impairment losses on assets to be held
and used are recognized based on the fair value of the assets and long-lived
assets to be disposed of are reported at the lower of carrying amount or fair
value less cost to sell.

Revenue Recognition

The Company recognizes revenues and profits on contracts using the
percentage-of-completion method. Under the percentage-of-completion method,
contract revenues are accrued based upon the percentage that accrued costs to
date bear to total estimated costs. As contracts can extend over more than one
accounting period, revisions in estimated total costs and profits during the
course of work are reflected during the period in which the facts requiring the
revisions become known. Losses on contracts are charged to income in the period
in which such losses are first determined.

The percentage-of-completion method of accounting can result in the recognition
of either costs and estimated profits in excess of billings or billings in
excess of costs and estimated profits on contracts in progress, which are
classified as current assets and liabilities, respectively, in the accompanying
balance sheet. The current asset account represents costs incurred and profits
earned that have not been billed to the customer on uncompleted construction
contracts. The current liability account represents deferred income on
uncompleted construction contracts. Generally accepted accounting principles for
percentage-of-completion accounting require the classifications as current
assets and liabilities. Revenues from time and material contracts are recognized
currently as the work is performed.

Stock Based Compensation

The Company uses the intrinsic value method of accounting for stock-based
compensation in accordance with Accounting Principles Board Opinion ("APB")
No. 25, "Accounting for Stock Issued to Employees" and related interpretations.
See Note 13 for pro forma disclosure of net income and earnings per share under
the fair value method of accounting for stock-based compensation as proscribed
by SFAS No. 123, "Accounting for Stock-Based Compensation".

Income taxes

Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily from different depreciation methods for financial accounting
and income tax purposes and retainage receivables which are recognized when
collected for income tax purposes. The deferred taxes represent the future tax
return consequences of those differences, which will either be taxable or
deductible when the assets and liabilities are recovered or settled.

Per Share Data

Basic earnings (loss) per share has been calculated on the basis of net earnings
for the year divided by the weighted average number of common shares outstanding
during the period. Fully diluted earnings (loss) per share additionally assumes
all options and warrants have been exercised at the later of the beginning of
the fiscal period or the option issue date. For fiscal year 1999, 895 options
and 96 warrants have been excluded as their impact would have been
anti-dilutive.

Reclassifications

Certain reclassifications have been made to the prior year financial statements
to conform with the current year presentation. Also, since the Company currently
operates only in the environmental services industry, no separate segment data
is presented as determined under the provisions of SFAS No. 14.

2.  NOTE RECEIVABLE

<TABLE>
<S>                                                                                                <C>
Kenny Industrial Services, L.L.C., due November 1999, interest at 5%,
    collateralized by assets sold, which has been collected.                                          $1,000
Kenny Industrial Services, L.L.C., due November 2002, interest at
    5%,collateralized by assets sold.                                                                  1,000
Kenny Industrial Services, L.L.C., due in annual installments November 2000
    through 2002, interest at 5%, collateralized by assets sold.                                       3,000
American Temporary Sanitation, Inc., $1,220 note presented net of
    unrecognized gain of $776, interest at prime rate plus 2.5%, due in
    quarterly installments of $72, collateralized by assets sold, see Note 6.                            554
Eco Environmental, Inc., due on demand, interest at 10%, collateralized by
    accounts receivable.                                                                                 300
Miscellaneous                                                                                            212
                                                                                                   ---------
                                                                                                       6,066
         Less: current portion                                                                         1,489
                                                                                                   ---------
         Long-term portion                                                                            $4,577
                                                                                                   =========
</TABLE>


                                       22
<PAGE>   23


                         U.S. INDUSTRIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNT)


3.  COSTS AND ESTIMATED EARNINGS ON CONTRACTS IN PROGRESS

Costs and estimated earnings on uncompleted contracts are summarized as follows:

<TABLE>
<S>                                                                                                 <C>
         Costs incurred on contracts in progress.................................                   $ 2,279
         Estimated earnings......................................................                       558
                                                                                                    -------
                                                                                                      2,837
         Less: billings to date..................................................                     2,762
                                                                                                    -------
                                                                                                    $    75
                                                                                                    =======
</TABLE>

The amounts above are included in the accompanying balance sheet under the
following captions:

<TABLE>
<S>                                                                                                 <C>

         Costs and estimated earnings in excess of billings on contracts in progress                $   321
         Billings in excess of costs and estimated earnings on contracts in progress                   (246)
                                                                                                    -------
                                                                                                    $    75
                                                                                                    =======
</TABLE>

4.  PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following as of September 30,
1999:

<TABLE>
<S>                                                                                                 <C>
         Machinery and equipment.................................................                   $ 1,880
         Trucks and automobiles..................................................                       335
         Office equipment........................................................                        75
         Leasehold improvements..................................................                        60
                                                                                                    -------
                                                                                                      2,350
         Less: accumulated depreciation and amortization........................                        550
                                                                                                    -------
                                                                                                    $ 1,800
                                                                                                    =======
</TABLE>

For the years ended September 30, 1999 and 1998, depreciation expense was $530
and $1,761, respectively.

5.  ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts Payable and Accrued Liabilities consisted of the following as of
September 30, 1999:

<TABLE>
<S>                                                                    <C>
                     Accounts payable, trade                           $ 1,215
                     Due on sale of Manta                                1,000
                     Contingent liabilities                                200
                     Accrued wages                                         152
                     Miscellaneous accruals                                109
                                                                       -------
                            Total                                      $ 2,676
                                                                       =======
</TABLE>

6.  BUSINESS COMBINATIONS AND DISPOSITIONS

JL Manta, Inc. - Effective October 31, 1997, the Company completed its
acquisition of JL Manta, Inc. ("Manta"), an Illinois corporation which provided
specialized maintenance services for clients in the industrial, environmental
and low-level nuclear sectors. Pursuant to the terms of a Stock Purchase
Agreement, the Company acquired all the issued and outstanding common stock, no
par value per share, of Manta (the "Manta Stock") from the stockholders of Manta
(the "Manta Stockholders") for consideration of $4,725 in cash and $2,235 in
convertible promissory notes of the Company. Concurrent with the closing of the
Acquisition, certain Manta stockholders and key employees entered into Retention
Bonus Agreements with the Company providing for bonus payments in the aggregate
amount of $900 to be amortized by


                                       23
<PAGE>   24


                         U.S. INDUSTRIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNT)


the Company over a six year period, of which $763 remained as prepaid expenses
as of September 30, 1998. The purchase price and expenses associated with the
acquisition exceed the fair value of net assets acquired by approximately
$2,000.

In November 1998 the Company sold the assets and liabilities of Manta to Kenny
Industrial Services, L.L.C. for $23,000, consisting of a combination of $3,000
of cash, a short term note of $15,000, which was paid December 15, 1998, and
$5,000 in notes. At this time, the name of the Company's subsidiary was changed
to Atnam, Inc. This divestiture resulted in the payment or transfer to the
purchaser of all amounts previously due to Manta Stockholders.

P W Stephens Residential - On December 31, 1998 the Company sold the assets and
liabilities of P. W. Stephens Residential, Inc. ("Residential") to American
Temporary Sanitation, Inc. for $2,400, consisting of $1,004 in cash and a
promissory note for $1,396 payable quarterly through 2004, together with
interest at prime rate plus 2.5% per annum. Since the purchaser is a highly
leveraged entity and its liabilities consist of the amounts due to the Company
and funds borrowed from a third party to finance the down payment, recognition
of the gain on this sale has been deferred in accordance with Staff Accounting
Bulletin Topic 5-U "Gain Recognition on the Sale of a Business or Operating
Assets to a Highly Leveraged Entity".

7.  LONG-TERM DEBT

The Company has several notes payable to various lenders for the purchase of
equipment and vehicles. The notes are secured by the equipment and vehicles
purchased. The equipment and vehicle notes payable consisted of the following as
of September 30, 1999:


<TABLE>
<S>                                                                                                       <C>
         Monthly installments of $1 including principal and interest at 8.55% and 8.65%, due
              April 2002........................................................................          $  53
         Monthly installments of $1 including principal and interest at 8.4% and 6.9%, due
              November 2002.....................................................................             37
         Monthly installments of $1 including principal and interest at 8.3% due December 2002..             17
         Monthly installments of $1 including principal and interest at 8.5% due March 2003.....             24
         Monthly installments of $1 including principal and interest at 9.0% due November 2003..             61
                                                                                                          -----
                                                                                                            192
         Less: current portion..................................................................             58
                                                                                                          -----
         Long-term portion......................................................................          $ 134
                                                                                                          =====
</TABLE>

The aggregate principal payments on long-term debt during the fiscal years
subsequent to September 30, 1999 are: 2000 - $58; 2001 - $62; 2002 - $56; 2003 -
$16.

8.  LEASES

The Company leases office and warehouse space under a non-cancelable operating
lease that expires in December 2004. Also, the Company leases equipment under
non-cancelable equipment leases, which have been recorded as capital lease
obligations. Future minimum lease payments under the non-cancelable operating
and capital leases are as follows:

<TABLE>
<CAPTION>
                                                                         Capital       Operating
                 Year Ended September 30,                                 Leases        Leases
                 ------------------------                               ----------    -----------
<S>                                                                     <C>           <C>
                 2000                                                   $      486    $       147
                 2001                                                          472            148
                 2002                                                          321            106
                 2003                                                          131             46
                 2004                                                           75             44
                                                                        ----------    -----------
                     Total minimum lease payments                            1,485    $       491
                                                                                      ===========

                 Less: Amount representing interest                            134
                                                                       -----------
                 Present value of net minimum lease payments                 1,351
                 Less: current portion                                         417
                                                                       -----------
                 Long-term portion                                     $       934
                                                                       ===========
</TABLE>


                                       24
<PAGE>   25
                         U.S. INDUSTRIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNT)


For the years ended September 30, 1999 and 1998 rent expense was approximately
$44 and $35, respectively.

The following is a summary of equipment held under capital lease obligations as
of September 30, 1999:

<TABLE>
<S>                                                                    <C>
                  Machinery and equipment                              $ 1,529
                  Less: Accumulated depreciation                           145
                                                                       -------
                  Net                                                  $ 1,384
                                                                       =======
</TABLE>

The Company's principal corporate office is located in Houston, Texas, which
consists of office space shared with AEC at no incremental cost to the Company.

As Lessor

The Company entered into an agreement to sub-lease an office and warehouse
facility to an outside party from January 1, 1998 to July 31, 2002. Future
minimum rents receivable under non-cancelable leases are: 2000 - $101; 2001 -
$102; and 2002 - $60.

9.   SECURITIES AVAILABLE FOR SALE

Securities available for sale consisted of 180 shares of common stock of AEC as
of September 30, 1998. These shares were issued to the Company in lieu of cash
in conjunction with the Amendment dated September 30, 1997 to the existing line
of credit, which increased the maximum borrowing amount under the line to
$20,000. These securities reflected a value of $2.28 per share as of September
30, 1998 on the consolidated balance sheet, which reflected the market value.
The Company intended to sell these securities to settle certain of the company's
existing obligations.

Proceeds and gross realized gains (losses) from the sale of securities
classified as available for sale for the years ended September 30, 1999 and 1998
was as follows:

<TABLE>
<CAPTION>
                                                     1999            1998
<S>                                               <C>             <C>
                  Gross proceeds                  $      --       $   4,264
                  Gross realized gain (loss)      $  (1,298)      $      55
</TABLE>

10.  FEDERAL INCOME TAX

The components of the provision (benefit) for income taxes are as follows for
the years ended September 30, 1999 and 1998:

<TABLE>
<CAPTION>
                                                      1999            1998
<S>                                               <C>             <C>
                  Current tax expense:
                    U.S. Federal                     $   --          $   234
                    State and local                      38               77
                                                     ------          -------
                  Total current                          38              311
                                                     ------          -------
                  Deferred tax expense (benefit)
                    U.S. Federal                      1,000           (4,153)
                    State and local                      --               --
                                                     ------          -------
                  Total deferred                      1,000           (4,153)
                                                     ------          -------
                  Total tax provision (benefit)
                    from continuing operations       $1,038          $(3,842)
                                                     ======          =======
</TABLE>

The reconciliation of the effective income tax rate to the Federal statutory
rate is as follows for the years ended September 30, 1998 and 1998:

<TABLE>
<CAPTION>
                                                      1999            1998
<S>                                                 <C>             <C>
                  Federal income tax rate             (34.0)%         (34.0)%
                  State and local income tax rate        --           (10.0)%
                  Effect of reversal of deferred
                    tax valuation allowance              --          (458.9)%
                  Effect of deferred tax
                    valuation allowance                53.2%             --
                                                     ------          ------
                  Effective income tax rate            19.2%         (502.9)%
                                                     ======          ======
</TABLE>

Deferred tax assets and liabilities reflect the net tax effect of temporary
differences between the carrying amount of asset and liabilities for financial
reporting purposes and amounts used for income tax purposes. Significant
components of the Company's deferred tax assets are as follows as of
September 30, 1999:

<TABLE>
<S>                                                               <C>
                  Deferred tax assets
                    Loss carryforwards                               $4,420
                    Less: valuation allowance                         1,000
                                                                     ------
                  Net deferred tax assets                             3,420
                  Less: current portion                                 275
                                                                     ------
                  Long-term portion                                  $3,145
                                                                     ======
</TABLE>


At September 30, 1999, the Company had net carryforward losses of approximately
$10,000. Net operating loss carryforwards expire starting in 2016 through 2020.
Per year availability may be subject to change of ownership limitation under
Internal Revenue Code Section 382.


                                       25
<PAGE>   26


                         U.S. INDUSTRIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNT)

11.  LITIGATION, COMMITMENTS AND CONTINGENCIES

The nature and scope of the Company's business operations bring it into regular
contact with the general public, a variety of businesses and government
agencies. These activities inherently subject the Company to potential
litigation, which are defended in the normal course of business. At September
30, 1999, there were various claims and disputes incidental to the business. The
Company believes that the disposition of all such claims and disputes,
individually or in the aggregate, should not have a material adverse affect upon
the Company's financial position, results of operations or cash flows. As of
September 30, 1999, the Company has not been named as a responsible party for
any environmental issues under the Federal Superfund Law.

12.  RELATED PARTY TRANSACTIONS

The Company is involved in various related party transactions. These
transactions are summarized as follows:

Pursuant to a Management Services Agreement effective May 1, 1999, between AEC
and the Company, AEC had agreed to provide certain services to the Company in
exchange for a management fee to be paid on a monthly basis. The services
include providing the Company with management guidance in addition to
guaranteeing certain of the Company's obligations with its creditors, in order
to allow the Company to receive favorable terms with its creditors. The
agreement provides for a monthly payment of $40. For the year ended September
30, 1999, total management fees were $200, which are included in due to
affiliates in the consolidated balance sheet, as further described below.

During fiscal year 1999 the Company borrowed $643 of funds from AEC to pay
general operating expenses. This amount is due on demand and is included in due
to affiliates.

For the year ended September 30, 1998, the Company incurred costs of $292 to AEC
in return for AEC guaranteeing certain debt relating to the acquisition of
Manta. In addition the Company incurred interest expense with AEC in the amount
of $1,096 for the year ended September 30, 1998.

For the year ended September 30, 1998, the Company received rent and fee income
in the amount of $81 from two companies related to Manta.


                                       26
<PAGE>   27


                         U.S. INDUSTRIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNT)


13.  EQUITY

Stock split

Effective June 22, 1998, the Company effected a one-for-ten reverse stock split,
reducing the number of shares of outstanding common stock from 24,618 to 2,468.
All applicable share and per share data have been adjusted for the stock split.

Warrants

During the year ended September 30, 1999, the company issued warrants, related
to financing fees, for the purchase of 96 shares of the Company's common stock
at $1.50 price per share, for 5 years. The warrants had an aggregate fair value
at date of grant of $48. The fair value for the warrants was estimated at the
date of grant using the Black-Scholes option pricing model with the following
weighted-average assumptions: weighted-average risk-free interest rate of 6.1%;
dividend yield of 9%; weighted-average volatility factors of the expected market
price of the Company's common stock of 183%; and a weighted average expected
life of the warrants of 2.5 years.

Stock Options

The company's board of directors approved the 1998 Stock Option Plan (the
"Plan"). The Plan covers two types of options: incentive stock options and
non-qualified stock options. The aggregate number of shares that may be issued
pursuant to the Plan may not exceed 1,000 shares. The exercise price for the
options shall be determined by the Plan administrator at the date of grant, but
shall not be less than the fair market value of the stock at the date of grant.
The option period can be no more than 10 years and the options will vest over a
period of time determinable by the committee.

Pro forma information regarding net income and earnings per share is required by
SFAS No. 123, "Accounting for Stock-Based Compensation", and has been determined
as if the Company had accounted for its employee stock options under the fair
value method of that Statement. The weighted average fair values at date of
grant for options granted during 1999 and 1998 were $0.31 and $4.12, and were
estimated at the date of grant using a Black-Scholes option pricing model with
the following weighted average assumptions for both 1999 and 1998: weighted
average risk-free interest rates of 6.1%; dividend yields of 0%; weighted
average volatility factors of the expected market price of the Company's common
stock of 183%; and a weighted average expected life of the option of 2.5 years.

This option valuation model requires input of highly subjective assumptions.
Because the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing model does not necessarily provide a reliable single
measure of the fair value of its employee stock options.

The Company has adopted only the disclosure provisions of SFAS No. 123. It
applies Accounting Principles Bulletin ("APB") Opinion No. 25, "Accounting for
Stock Issued to Employees", and related interpretations in accounting for its
plans and does not recognize compensation expense for its stock-based
compensation plans other than for restricted stock and options issued to outside
third parties. If the Company had elected to recognize compensation expense
based upon the fair value at the grant date for awards under these plans
consistent with the methodology prescribed by SFAS 123, the Company's net
earnings (loss) would be decreased (increased) by approximately $534 and $329
for the years ended September 30, 1999 and 1998, respectively, to the pro forma
amounts indicated below.

<TABLE>
<CAPTION>
                                                   1999             1998
<S>                                              <C>               <C>
                    Net earnings (loss)
                        As reported              $ (3,096)         $ 4,401
                        Pro forma                $ (3,630)         $ 4,072
</TABLE>

The following summarizes the Company's stock option transactions under the stock
option plan:


                                       27
<PAGE>   28


                         U.S. INDUSTRIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNT)


<TABLE>
<CAPTION>
                                                                SHARE OPTIONS          WEIGHTED AVERAGE
                                                                 OUTSTANDING            EXERCISE PRICE
                                                                ---------------     ------------------------
<S>                                                             <C>                 <C>
       Outstanding, September 30, 1997                                --                        --
            Granted                                                  240                     $4.46
                                                                ---------------

       Outstanding, September 30, 1998                               240                     $4.46
            Granted                                                  655                     $0.44
                                                                ---------------

       Outstanding, September 30, 1999                               895                     $1.52
                                                                ===============



       Options Exercisable, September 30, 1998                       160                     $4.46
                                                                ===============

       Options Exercisable, September 30, 1999                       815                     $1.23
                                                                ===============
</TABLE>

Following table summarizes the outstanding and exercisable options grouped by
range of exercise prices as of September 30, 1999:

<TABLE>
<CAPTION>
                                                             Weighted           Weighted
                                                              Average            Average
                              Range of                       Exercise           Remaining
                           Exercise Prices                     Price               Life
                   ---------------------------------      --------------      -------------
<S>                                                       <C>                 <C>
                   $0.41 to $1.10                              $0.44               3.12
                   $3.40 to $4.74                              $4.46               1.5
</TABLE>

14.  RETIREMENT PLANS

A majority of the Company's laborers are covered by union sponsored,
collectively bargained multi-employer pension plans. The Company contributed and
charged to expense approximately $160 and $65 in fiscal years 1999 and 1998,
respectively, for such plans. The plans' administrators do not provide
sufficient information to enable the Company to determine its share, if any, of
unfunded vested benefits.

15.  DISCONTINUED OPERATIONS

Residential

In December 1998, the Company sold the assets and liabilities of Residential to
American Temporary Sanitation, Inc. The results of operations for the respective
periods presented are reported as a component of discontinued operations in the
consolidated statement of operations. The following table summarizes results of
operations for Residential for the years ended September 30, 1999 and 1998.

<TABLE>
<CAPTION>
                                                                                    1999          1998
<S>                                                                                <C>           <C>
         Net revenues.........................................................     $ 1,690       $ 6,054
         Operating earnings...................................................         146           187
         Earnings from discontinued operations................................         224           189
</TABLE>

Manta

In November 1998, the Company sold the assets and liabilities of Manta to Kenny
Industrial Services, L.L.C. The results of operations for the respective periods
presented are reported as a component of discontinued operations in the
consolidated statement of operations. The following table summarizes results of
operations for Manta for the years ended September 30, 1999 and 1998.

<TABLE>
<CAPTION>
                                                                                     1999          1998
<S>                                                                                <C>           <C>
         Net revenues.........................................................     $ 11,220      $ 46,642
         Operating earnings (loss) ...........................................         (253)          853
         Earnings (loss) from discontinued operations.........................         (208)          489
</TABLE>


                                       28
<PAGE>   29


                         U.S. INDUSTRIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNT)


Commercial Asbestos

In May 1997, the company decided to discontinue the commercial asbestos
abatement operations of P. W. Stephens contractors, Inc. ("PWSC") and QHI
Stephens, Inc. ("QHI"). The results of operations for the respective periods
presented are reported as a component of discontinued operations in the
consolidated statement of operations. The following table summarizes results of
operations for PWSC and QHI for the years ended September 30, 1999 and 1998.

<TABLE>
<CAPTION>
                                                                                  1999        1998
<S>                                                                             <C>         <C>
         Net revenues.........................................................  $     --    $     --
         Operating earnings ..................................................        --         645
         Earnings  from discontinued operations...............................        --         645
</TABLE>

16.  EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share:

<TABLE>
<CAPTION>
                                                                                     1999      1998
<S>                                                                                <C>        <C>
Numerator:
Net earnings (loss) for basic earnings per share ...............................   $(3,096)   $ 4,401
Effect of dilutive securities - convertible debt ...............................        --        268
                                                                                   -------    -------
     Numerator for diluted earnings per share, after assumed conversions .......   $(3,096)   $ 4,669
                                                                                   =======    =======
Denominator:
     Denominator for basic earnings per share, weighted-average shares .........     8,764      3,636
     Effect of dilutive securities - convertible debt ..........................        --        737
                                                                                   -------    -------
     Denominator for diluted earnings per share - adjusted weighted-average
     shares and assumed conversions ............................................     8,764      4,373
                                                                                   =======    =======

Basic earnings (loss) per share ................................................   $ (0.35)   $  1.21
Diluted earnings (loss) per share ..............................................   $ (0.35)   $  1.07
</TABLE>

The Company adopted Statement of Financial Accounting Standards (SFAS) No. 128,
"Earnings per Share", and restated for all periods presented. All earnings per
share amounts presented have been restated to reflect the one-for-ten reverse
stock split.

17.  CONCENTRATION OF CREDIT RISK

Revenues
For the year ended September 30, 1999, the Company had three significant
customers that accounted for approximately 19%, 15% and 14% of total sales. At
September 30, 1999, the amounts due from these three customers was approximately
$371, $27, and $259, respectively. For the year ended September 30, 1998, the
Company had no significant customers.

Labor
As of September 30, 1999 the Company employed approximately 169 hourly workers
and 46 salaried workers in its St. Louis operations. A portion of the hourly
employees are represented by various unions. The collective bargaining
agreements with these unions expire on various dates.

18.  SUBSEQUENT EVENT

In November 1999, the company purchased a building for $217. The purchase was
financed by the issuance of a note payable to a financial institution. The note
is for $255 at 9.0% interest per annum, with monthly principal and interest
payments of $2, and a final payment of $207, due November 1, 2004. The note is
secured by a deed of trust against the building purchased and is guaranteed by
the Parent.

The Company has identified a transaction that when concluded would involve a
strategic merger with an industrial service provider whereby a significant
number of additional shares of the Company would be issued to the strategic
merger partner pending the Company bringing its filings current with the
Securities and Exchange Commission. Management has the ability and intent to
consummate this transaction. This transaction is subject to customary due
diligence, board, and shareholder approval.


                                       29
<PAGE>   30



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

         On November 23, 1999, the Board of Directors of the Company appointed
Merdinger, Fruchter, Rosen & Corso, P.C. as its independent certifying
accountants for the fiscal year ended September 30, 1999. The Company chose not
to continue the engagement of its present accountants, Karlins, Arnold & Corbitt
P.C. ("Karlins"), the independent certifying accounting firm which audited the
financial statements of the Company during fiscal years ended September 30, 1998
and 1997. The reports of Karlins for either of the past two fiscal years did not
contain an adverse opinion or a disclaimer of opinion or were qualified or
modified as to uncertainty, audit scope, or accounting principles.


                                       30
<PAGE>   31


                                    PART III

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

         As of March 31, 2000, the directors and executive officers of the
Company were:

<TABLE>
<CAPTION>
              NAME                                   AGE                   POSITION WITH COMPANY
<S>                                                  <C>        <C>
Michael E. McGinnis                                   50        Chairman of the Board, President and CEO
Michael Appling Jr.                                   33        Director, Chief Financial Officer
Andreas O. Tobler                                     48        Director
</TABLE>

         The terms of the Board of Directors will expire annually at the next
stockholders meeting. The Company's officers are elected by the Board of
Directors and hold office at the will of the Board. There is no family
relationship between any of the officers or directors.

Executive Officers

         MICHAEL E. MCGINNIS has been a director of the Company since February
1996, having served as its Chairman of the Board from June 1996 to October 1997,
and as its President from March 1996 to August 1996. He has been Chief Executive
Officer and a director of American Eco since 1993 and 1994, respectively, and
has been President since December 1998, having served as President from 1993 to
July 1998. He was President and Chief Executive Officer of Eco Environmental,
Inc. from 1992 until it was acquired by American Eco in 1993. For 27 year prior
thereto, he served in various operational and administrative capacities for The
Brand Companies, one the largest asbestos abatement contractors in the United
States.

         MICHAEL APPLING JR. has served as director and Chief Financial Officer
since November 1999. Also, Mr. Appling served as Chief Financial Officer and
Vice President of American Eco Corporation during that period. Prior to joining
the Company, from September 1997 to May 1999, Mr. Appling served as Vice
President, Finance and Accounting and Director of Corporate Development for
ITEQ, Inc., an industrial service and manufacturing company. From 1991 to 1997,
Mr. Appling worked for the audit practice of Arthur Andersen LLP most recently
as manager where he served several public companies extensively involved in
mergers and acquisitions.

         MR. DAVID L. NORRIS served on the Board from January 28, 1999 until he
resigned on November 3, 1999.

Outside Directors

         ANDREAS O. TOBLER has served as a director of the Company since
November 1993. He served as Vice President and Treasurer of the Company from
January 1995 and November 1993, respectively, to February 1997. Since September
1998, Mr. Tobler has served as Chief Executive Officer and Director of the Board
of Sector Communications Inc., a U.S. public company focusing on
telecommunication and related businesses with operations in Switzerland and
Bulgaria. Since October 1996, Mr. Tobler has served as a principal and an
officer of Online Capital GmbH, a private financial advisory company
headquartered in Switzerland. He also served as the Managing Director of its
affiliate Cornerstone Financial Corporation, a U.S. private financial company
until September 1998. From 1989 to 1991, Mr. Tobler was Managing Partner of
Royal Trust (Switzerland).

Significant Employees

         William Hladick has served as President of P.W. Stephens St. Louis
since 1996. Mr. Hladick has served as Vice President, Director of Operations,
and Business Development Manager of P.W. Stephens St. Louis since 1990.

         The Board of Directors of the Company held three meetings during the
fiscal year ended September 30, 1999, and each director attended all of the
meetings.


                                       31
<PAGE>   32
ITEM 10. EXECUTIVE COMPENSATION

         Compensation

         The following table discloses the compensation awarded to or earned by
the Chief Executive Officer and the other most highly compensated executive
officers of the Company as of the end of fiscal 1999 whose annual salary plus
other forms of compensation exceeded $100,000 ("Named Executive Officers"):


<TABLE>
<CAPTION>
                               FISCAL 1999 ANNUAL COMPENSATION
                       -----------------------------------------------
        NAME
        AND                                          OTHER ANNUAL
      POSITION            SALARY        BONUS       COMPENSATION(1)
      --------            -------       ------      ---------------
<S>                       <C>           <C>        <C>
Michael E. McGinnis
President, CEO                -0-          -0-           -0-
</TABLE>

         No other officers received compensation during fiscal year 1999.

         Employment Contracts

         There are no employment agreements with any executive officers.

         Stock Options

         The following table provides information with respect to stock options
granted to the Named Executive Officers during fiscal 1999.

                              STOCK OPTIONS GRANTED
                     IN FISCAL YEAR ENDED SEPTEMBER 30, 1999

<TABLE>
<CAPTION>
                                                                               Market
                                                % of Total                    Value of
                                                  Options                    Securities
                                  Securities    Granted to                   Underlying
                                    Under      Employees in                  Options on
                                   Options       Financial      Exercise     the Date of    Expiration
                  Name           Granted (#)       Year           Price         Grant          Date
                  ----           -----------   ------------     --------     -----------    ----------
<S>                              <C>           <C>              <C>          <C>            <C>
         Andreas Tobler               30,000        20%            $1.10         $33,000     1/28/04
                                     100,000                       $0.41         $41,000     5/07/04

         Michael McGinnis            250,000        38%            $0.41        $102,500     5/07/04
</TABLE>


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth information regarding the beneficial
ownership of the Common Stock of the Company as of March 31, 2000 concerning (i)
persons known to the Company to be the beneficial owners of more than 5% of the
outstanding Common Stock, (ii) by each director and (iii) by all directors and
officers as a group.

<TABLE>
<CAPTION>
                                        STATUS OF                AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER            BENEFICIAL OWNER            BENEFICIAL OWNERSHIP(1)                PERCENT
------------------------            ----------------            -----------------------                -------
<S>                              <C>                           <C>                                     <C>
American Eco Corporation         Beneficial owner of more             7,175,858(3)                        81.9%
                                 than 5% of Common Stock

Michael E. McGinnis              Chairman of the Board,               7,175,858(2)(3)                     81.9%
                                 Director, President & CEO

Andreas Tobler                   Director                                 2,845                              *

Michael Appling Jr.              Director, CFO                               --                             --
</TABLE>

         *    Represents less than 1% of the issued and outstanding shares of
              Common Stock.


                                       32

<PAGE>   33


         **   The principal executive offices of American Eco are 154 University
              Avenue, Toronto, Ontario, Canada M5H 3Y9.
         1)   Unless otherwise noted, all of the shares shown are held by
              individuals or entities possessing sole voting and investment
              power with respect to such shares. The number of shares
              beneficially owned includes shares which each beneficial owner has
              the right to acquire within 60 days of March 31, 2000.
         2)   Includes 7,175,858 shares beneficially owned by American Eco, of
              which Mr. McGinnis is President and CEO. Mr. McGinnis disclaims
              beneficial ownership of the Company's securities owned by American
              Eco.

         3)   On January 21, 2000, American Eco and USIS entered into a
              Settlement Agreement with Deere park Capital, L.L.C. ("Deere
              Park"), settling a litigation that Deere Park had instituted
              against American Eco based upon guarantees that American Eco had
              given to Deere Park of certain indebtedness to Deere Park.
              American Eco agreed to pay $2.8 million to Deere Park on or before
              May 15, 2000, and secured its payment obligation by a pledge of
              all shares of USIS.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         As of July 24, 1998, American Eco sold the Notes to USIS Acquisition,
L.L.C. (the "Holder") for $5.0 million in cash and a secured promissory note for
$12.9 million repayable on January 29, 1999. The Holder converted the Notes into
5,295,858 shares of the Company's Common Stock, and secured its promissory note
to American Eco with a pledge of the 5,295,858 shares. In November 1998, the
Holder advised American Eco that the Holder would not be able to pay its note at
maturity, and American Eco took ownership of the pledged shares in discharge of
the Holder's note. At December 31, 1998, American Eco owned 7,175,858 shares of
the Company's Common Stock representing 81.9% of the outstanding shares, Item
11, Security Ownership of Certain Beneficial Owners and Management. Michael E.
McGinnis, who is a director and officer of USIS, is President and CEO of
American Eco.

         As of September 30, 1998, Frank J. Fradella, former President and a
director of the Company, owed the Company $424,655. This amount had been part of
a loan which was originally transferred from American Eco to the Company when
Mr. Fradella assumed his position as President of the Company in May 1997. The
amount represented the remaining balance of a forgivable loan made to Mr.
Fradella upon his employment with American Eco in September 1996. The increase
during the year ended September 30, 1998 resulted from additional borrowings by
Mr. Fradella. The revised total balance of $424,655 is being amortized over the
next four years, as Mr. Fradella will serve as a consultant to the Company in
pursuing and reviewing acquisition candidates for the Company. The amount due
bears no interest and is unsecured. During fiscal year 1999 the unamortized
balance of this note was reserved for financial statement purposes.

ITEM 13.  EXHIBIT AND REPORTS ON FORM 8-K
-------   -------------------------------

(a)      Exhibits

<TABLE>
<CAPTION>
Regulation S-B
Exhibit Number    Description of Exhibit
--------------    ----------------------
<S>               <C>
    2.1           Exchange of Stock Agreement and Plan of Reorganization between
                  EIF Holdings, Inc. and P.W. Stephens Contractors, Inc. [filed
                  as an Exhibit to the Current Report of the Company on Form 8-K
                  for the Date of Event January 31, 1993 and incorporated herein
                  by reference].
    2.2           Acquisition Agreement between EIF and Von Guard Holdings, Inc.
                  and its subsidiaries [filed as an Exhibit to the Current
                  Report of the Company on Form 8-K for the Date of Event August
                  2, 1994 and incorporated herein by reference].
    2.3           Sale of Stock Agreement by and between EIF, Kelar Controls,
                  Inc. and its shareholders [filed as an Exhibit to the Annual
                  Report of the Company on Form 10-KSB for the fiscal year ended
                  December 31, 1994 and incorporated herein by reference].
    2.4           Agreement and Plan of Merger, dated March 2, 1998 between USIS
                  and EIF Holdings [filed as Exhibit 10.1 to the Current Report
                  on form 8-K for the Date of Event June 18, 1998 and
                  incorporated herein by reference].
    3.1           Certificate of Incorporation [filed as Exhibit 3.1 to the
                  Current Report on form 8-K for the Date of Event June 19, 1998
                  and Incorporated herein by reference].
    3.2           By-Laws [filed as Exhibit 3.2 to the Current Report on form
                  8-K for the Date of Event June 19, 1998 and Incorporated
                  herein by reference].
    4.1           1998 Stock Option Plan.
    10.1          Promissory Note Line of Credit Agreement, dated March 1, 1996,
                  with American Eco Corporation ("American Eco") [filed as an
                  Exhibit to the Annual Report of the Company on Form 10-KSB for
                  the year ended September 30, 1996 and incorporated herein by
                  reference].
    10.2          Agreement, dated February 2, 1996, between EIF and American
                  Eco [filed as an Exhibit to the Current Report of the Company
                  on Form 8-K for the Date of Event February 2, 1996 and
                  incorporated herein by reference].
    10.3          Management Agreement effective October 1, 1996 between the
                  Company and American Eco [incorporated by reference to Exhibit
                  10.1 to the Registrant's Form 10-QSB for the quarter ended
                  December 31, 1996].
</TABLE>


                                       33
<PAGE>   34


<TABLE>
<S>               <C>
    10.4          Settlement Agreement and Mutual Release, dated April 4, 1996,
                  among Kelar, Kelly McMahon, and Larry Thomas (as plaintiffs)
                  and EIF and the other defendants [filed as an Exhibit to the
                  Annual Report of the Company on Form 10-KSB for the year ended
                  September 30, 1996 and incorporated herein by reference].
    10.5          Agreement and General Release, dated as of November 8, 1996,
                  among Richard Austin, EIF, PW Stephens and American Eco [filed
                  as an Exhibit to the Annual Report of the Company on Form
                  10-KSB for the year ended September 30, 1996 and incorporated
                  herein by reference].
    10.6          Lease Agreement, dated January 9, 1997, between Aetna Life
                  Insurance Company and EIF, for premises in Anaheim, California
                  [filed as an Exhibit to the Annual Report of the Company on
                  Form 10-kSB for the year ended September 30, 1996 and
                  incorporated herein by reference].
    10.7          Promissory Note dated December 13, 1996 between the Company
                  and Truman Harty. [incorporated by reference to Exhibit 10.2
                  to the Registrant's Form 10-QSB for the quarter ended December
                  31, 1996].
    10.8          Revolving Line of Credit dated September 1, 1996 between the
                  Company and Turner Holdings, Inc. [incorporated by reference
                  to Exhibit 10.3 to the Registrant's Form 10-QSB for the
                  quarter ended December 31, 1996].
    10.9          Acquisition Agreement by and between the Company and Regal Oak
                  Properties, Inc. dated June 30, 1997 for the sale of Kelar
                  Controls, Inc. [incorporated by reference to Exhibit 10.1 to
                  the Registrant's Form 10-QSB for the quarter ended June 30,
                  1997].
    10.10         Secured Promissory Note between the Company and Regal Oak
                  Properties, Inc. dated June 30, 1997. [incorporated by
                  reference to Exhibit 10.2 to the Registrant's Form 10-QSB for
                  the quarter ended June 30, 1997].
    10.11         Security Agreement Pledge between the Company and Regal Oak
                  Properties, Inc. dated June 30, 1997. [incorporated by
                  reference to Exhibit 10.3 to the Registrant's Form 10-QSB for
                  the quarter ended June 30, 1997].
    10.12         Renewal, Extension and Enlargement Promissory Note between the
                  Company and Truman Harty dated April 4, 1997. [incorporated by
                  reference to Exhibit 10.4 to the Registrant's Form 10-QSB for
                  the quarter ended June 30, 1997].
    10.13         Stock Purchase Agreement, dated September 30, 1997, among EIF
                  and each of the stockholders of JL Manta, Inc. [incorporated
                  by reference to Exhibit 10.1 to the Registrant's Form 8-K for
                  the date of event November 19, 1997].
    10.14         $6.5 Million Convertible Promissory Note issued by EIF to
                  Deere Park Capital Management, Inc., as nominee for EIFH Joint
                  Venture, L.L.C. and Certain Reg. D Hedge Funds. [incorporated
                  by reference to Exhibit 10.2 to the Registrant's Form 8-K for
                  the date of event November 19, 1997].
    10.15         $2.5 Million Convertible Promissory Note from EIF to Deere
                  Park Capital Management, Inc. ("Deere Park"). [incorporated by
                  reference to Exhibit 10.3 to the Registrant's Form 8-K for the
                  date of event November 19, 1997].
    10.16         Convertible Promissory Note of EIF, issued to Leo J. Manta.
                  [incorporated by reference to Exhibit 10.4 to the Registrant's
                  Form 8-K for the date of event November 19, 1997].
    10.17         Pledge Agreement by and among EIF, Deere Park Equities, L.L.C.
                  and Deere Park Capital Management, Inc., as nominee for EIFH
                  Joint Venture, L.L.C. and certain Reg. D Hedge Funds,
                  regarding $6.5 Million Promissory Note from EIF. [incorporated
                  by reference to Exhibit 10.13 to the Registrant's Form 8-K for
                  the date of event November 19, 1997].
    10.18         Security Agreement executed by the Company in favor of Harris
                  [incorporated by reference to Exhibit 10.14 to the
                  Registrant's Form 8-K for the date of event November 19,
                  1997].
    10.19         Subordination Agreement between Harris and Deere Park Capital
                  Management, Inc. [incorporated by reference to Exhibit 10.15
                  to the Registrant's Form 8-K for the date of event November
                  19, 1997].
    10.20         Subordination Agreement between Harris and EIF. [incorporated
                  by reference to Exhibit 10.16 to the Registrant's Form 8-K for
                  the date of event November 19, 1997].
    10.21         Security Agreement between Deere Park and EIF. [incorporated
                  by reference to Exhibit 10.17 to the Registrant's Form 8-K for
                  the date of event November 19, 1997].
    10.22         Registration Rights Agreement between EIF and each of the
                  Sellers. [incorporated by reference to Exhibit 10.18 to the
                  Registrant's Form 8-K for the date of event November 19,
                  1997].
    10.23         Employment Agreement between EIF and Michael J. Chakos.
                  [incorporated by reference to Exhibit 10.19 to the
                  Registrant's Form 8-K for the date of event November 19,
                  1997].
    10.24         Form of Registration Rights Agreement. [incorporated by
                  reference to Exhibit 10.20 to the Registrant's Form 8-K for
                  the date of event November 19, 1997].
    10.25         Form of Guaranty. [incorporated by reference to Exhibit 10.21
                  to the Registrant's Form 8-K for the date of event November
                  19, 1997].
</TABLE>


                                       34
<PAGE>   35


<TABLE>
<S>               <C>
    10.26         Renewal, Extension and Modification Revolving Line of Credit
                  Note effective July 1, 1997 between EIF and American Eco
                  Corporation [incorporation by reference to Exhibit 10.37 to
                  the Registrant's Form 10-KSB for the year ended September 30,
                  1997 and incorporated herein by reference].
    10.27         Second Amendment Revolving Line of Credit Note effective
                  September 30, 1997 between EIF and American Eco [incorporated
                  by reference to Exhibit 10.38 to the Registrant's Form 10-KSB
                  for the year ended September 30, 1997 and incorporated herein
                  by reference].
    10.28         Asset Purchase Agreement, dated November 30, 1998, among USIS
                  and Kenny Industrial Services, L.L.C. and Manta [incorporated
                  by reference to Exhibit 2 to the Registrant's Form 8-K for an
                  event of November 30, 1998].
    10.29         Form 8-K for an event of July 27, 1998 to report a change in
                  control and conversion of debt.
    10.30         Form 8-K for an event of December 29, 1999 to report a reduction
                  in the number of authorized shares in the Preferred Stock.
    10.31         Form 8-K for an event of November 23, 1999 to report a change
                  in auditors from Karlins, Arnold & Corbitt P.C. to Merdinger,
                  Fruchter, Rosen & Corso, P.C.
   *10.32         Asset Purchase Agreement between American Temporary
                  Sanitation, Inc. and P.W. Stephens Residential, Inc. dated
                  December 4, 1998.
    *21           Subsidiaries of the Registrant
    *27           Financial Data Schedule
</TABLE>

         ------------------
         * Filed herewith

(b) Reports on Form 8-K

         The Company filed a Current Report on 8-K for an event of December 29,
1999 to report a reduction in the number of authorized shares in the Preferred
Stock.

         The Company filed a Current Report on 8-K for an event of November 23,
1999 to report a change in auditors from Karlins, Arnold & Corbitt P.C. to
Merdinger, Fruchter, Rosen & Corso, P.C.


                                       35
<PAGE>   36


                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, US Industrial
Services, Inc. caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                  US Industrial Services, Inc.
                                  (Registrant)

                                  By: /s/ Michael E. McGinnis
                                      -----------------------
                                      Michael E. McGinnis
                                      Chief Executive Officer

Dated:  April 26, 2000

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

          By:  /s/ Michael E. McGinnis               Dated: April 26, 2000
               -----------------------
               Michael E. McGinnis
               Chairman, CEO & President

          By:  /s/ Michael Appling Jr.               Dated: April 26, 2000
               -----------------------
               Michael Appling Jr.
               CFO

          By:  /s/ Andreas O. Tobler                 Dated: April 26, 2000
               ---------------------
               Andreas O. Tobler
               Director


                                       36
<PAGE>   37


                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
Number         Description
-------        -----------
<S>            <C>
10.32          Asset Purchase Agreement between American Temporary
               Sanitation, Inc. and P.W. Stephens Residential, Inc. dated
               December 4, 1998.
21             Subsidiaries of the Registrant
27             Financial Data Schedule
</TABLE>


                                       37