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, 1998
                                   ---------------------------------------
                                          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                 (I.R.S. Employer)
          of incorporation or organization)            Identification No.)

          8111 Preston Rd, Suite 715, Dallas, Texas            75225      
          ----------------------------------------------------------------
          (Address of principal executive offices)          (Zip Code)

                                    (214) 891-9698
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                             (Issuer's telephone number)

                           54 Stiles Road, Salem, NH 03079
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                       (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 [X]  NO [ ]

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

          Issuer's revenues for its most recent fiscal year: $58,324,519

          As of December 31, 1998, the aggregate market value of the voting
          stock held by non-affiliates was $2,699,804 (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 $1.70 as reported by
          the National Quotation Bureau, Inc.

          At December 31, 1998, 8,763,978 shares of Common Stock were
          outstanding.

          Documents incorporated by reference: None

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


          <PAGE>


          US INDUSTRIAL SERVICES, INC.
          Table of Contents

                                                                      Page


          PART I
               ITEM 1.   DESCRIPTION OF BUSINESS  . . . . . . . . . . .   3
               ITEM 2.   DESCRIPTION OF PROPERTY  . . . . . . . . . . .  11
               ITEM 3.   LEGAL PROCEEDINGS  . . . . . . . . . . . . . .  11
               ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY
                         HOLDERS  . . . . . . . . . . . . . . . . . . .  11

          PART II
               ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED
                         STOCKHOLDER MATTERS  . . . . . . . . . . . . .  12
               ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN .  13
               ITEM 7.   FINANCIAL STATEMENTS . . . . . . . . . . . . .  16
               ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                         ON ACCOUNTING AND FINANCIAL DISCLOSURE . . . .  34

          PART III
               ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
                         CONTROL PERSONS; COMPLIANCE WITH SECTION
                         16(A) OF THE EXCHANGE ACT  . . . . . . . . . .  34
               ITEM 10.  EXECUTIVE COMPENSATION . . . . . . . . . . . .  35
               ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                         OWNERS AND MANAGEMENT  . . . . . . . . . . . .  36
               ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS  36
               ITEM 13.  EXHIBIT AND REPORTS ON FORM 8-K  . . . . . . .  37


                                      -2- 
          <PAGE>


                                        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 some operating businesses and is seeking to
          refocus its activities in other industries, one of which may be
          the commercial real estate construction and management business. 
          The Company has engaged a consulting firm to prepare a strategic
          business plan to assist in refocusing the Company.  The Company
          has not entered into any commitments with respect to these
          activities.

               In November 1997, EIFH completed the acquisition of J.L.
          Manta, Inc.  an Illinois corporation ("Manta"), which provided
          specialty coatings and industrial maintenance services.  The
          consideration paid by EIFH included $4,725,321 of cash and
          $2,045,184 of convertible promissory notes, payable in
          installments, with the final payment due on November 18, 2000. 
          EIFH also entered into Retention Bonus Agreements with key Manta
          managers providing for bonus payments aggregating $900,000 over a
          three-year period and committed to provide 500,000 options to
          purchase 500,000 shares of EIFH Common Stock.  In connection with
          the acquisition, Manta entered into a $10.0 million credit
          facility.

               In November 1998, USIS sold the assets of Manta and
          transferred related liabilities, including the credit facility,
          to Kenny Industrial Services, L.L.C., 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 four separate notes, the first three notes each for
          $1.0 million due in annual installments, and the final note for
          $2.0 million due in November 2002, together with interest at
          5.25%.

               On December 31, 1998, USIS sold the assets of P.W. Stephens
          Residential Inc. and transferred its related liabilities to
          American Temporary Sanitation Inc. for $2,400,000, consisting of
          $1,004,000 in cash and a five year promissory note for $1,396,000
          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 EIFH a $5.2
          million line of credit, which line of credit was increased to
          $20.0 million by September 1997.  The Notes were 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


                                      -3-
          <PAGE>


          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, 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, EIFH 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 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, Frank J. Fradella was named President and CEO
          of the Company.  Mr. Fradella had previously served as Vice
          President and Chief Operating Officer of American Eco.  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 P.W. Stephens Residential, Inc., a California
          corporation ("Residential"),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 Midwest.



                                      -4-
         <PAGE>
 

               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 EIFH 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 Midwestern
          states of Illinois, Missouri, Iowa, and Nebraska. 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.

          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.


                                      -5-
          <PAGE>

               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.

               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


                                      -6-
          <PAGE>

          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, one
          of which may be the commercial real estate construction and
          management business. The Company has engaged a consulting firm to
          prepare a strategic business plan to assist in refocusing the
          Company.

               The implementation of this strategy began when the Company
          sold the assets and transferred the liabilities of Manta on
          November 30, 1998. The second step was completed on December 31,
          1998 when the Company sold the assets and transfer the
          liabilities of P.W. Stephens Residential, Inc. Management is
          engaged in preliminary negotiations with several acquisition
          prospects, however no commitments have been entered into.

          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
          Midwestern part of the United States; primarily in the states of
          Illinois, Iowa, Kentucky and Missouri.  Most of the customers are
          manufacturing facilities and government installations.

               During the fiscal years ended September 30, 1998 and 1997,
          no customer accounted for more than ten percent (10%) of the
          Company's annual revenues.


                                      -7-
          <PAGE>


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

               At the present time, the Company provides services through
          its subsidiary P.W. Stephens St. Louis. Services are primarily
          provided in Midwestern part of the United States primarily in the
          states of Illinois, Iowa, Nebraska and Missouri. 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.



                                      -8-
         <PAGE>

               State and Local Regulations
               ---------------------------

               P.W. Stephens St. Louis provides services in the Midwestern
          part of the United States primarily in the states of Illinois,
          Iowa, Kentucky and Missouri. 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 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.



                                      -9-
         <PAGE>

               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 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, 1998 and 1997 have not been material and the
          Company has had no customer sponsored research activities during
          each of these periods.

          Employees
          ---------

               As of January 1, 1999, the Company had approximately 20
          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 50 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



                                      -10-
         <PAGE>

          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 8111
          Preston Rd, Suite 715, Dallas, Texas which consists of
          approximately 1,100 square feet with a monthly rent of $1,000
          expiring in January 1999 and thereafter on a month-to-month
          basis. The Company closed the office located in Salem, New
          Hampshire in December 1998, which office is leased through
          December 1999, and efforts are being made to sub-lease this
          office.

               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 April 1999.

               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. 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.


          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. The reserves for litigation and contingencies
          recorded by the Company as of September 30, 1998 amounted to
          $100,000.


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

               Not applicable.


                                      -11-

          <PAGE>


                                       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 NASDAQ 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.


               Fiscal Year ended September 30, 1998:   HIGH ASK  LOW BID
                                                       --------  -------

               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

               Fiscal Year ended September 30, 1997:   HIGH ASK  LOW BID
                                                       --------  -------

               Quarter ended September 30, 1997          0.72    0.34
               Quarter ended June 30, 1997               0.82    0.31
               Quarter ended March 31, 1997              0.97    0.28
               Quarter ended December 31, 1996           0.63    0.28


          Stockholders
          ------------

               As of December 31, 1998, the Company had approximately 197
          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
          ---------------------------------------

               During the fiscal quarter ended September 30, 1998, the
          Company issued 5,295,858 shares of its Common Stock upon
          conversion of Notes, see Item 1, Description of Business--
          Organization and Recent Developments.


                                      -12-

          <PAGE>

          ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN
          -----------------------------------------------------

               The Company has included on this Form 10-KSB certain
          forward-looking statements.  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, are
          statements relating to the Company's plans, goals, objectives,
          strategies, future performance and events as well as any other
          statements or representations other than those relating to
          historical data. Forward-looking statements inherently possess
          risks and uncertainties. As a result, although the Company's
          forward-looking statements are expressed in good faith, the
          Company's actual results could differ materially.


          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 residential customers primarily located in the
          mid-western areas of the United States.

               The Company's 1997 10-KSB did not include any financial
          information regarding Manta because it was purchased after
          September 30, 1997. Since Manta was sold on November 30, 1998,
          management has chosen to offer a comparison of operations for
          subsidiaries that were held by USIS for both 1998 and 1997.
          Management feels that this would present the most accurate
          comparison of operations between the two years. However, where
          material, the effect of Manta on the financial results of the
          Company is noted.

                                Results of Operations
                                    1998 vs. 1997
                                Continuing Operations

               Revenue:
               -------

          P.W. Stephens--Residential

               Revenue for the year ended September 30, 1998 decreased 1.6%
          to $6,054,000 from $6,141,000 for the same period in 1997. The
          decrease in revenue was negligible, and basically stayed
          consistent over the same period in 1997.


          P.W. Stephens-St. Louis

               Revenue for the year ended September 30, 1998 decreased
          20.0% to $5,839,000 from $7,293,000 for the same period in 1997.
          The decrease in revenue can be attributed to the threat of a
          labor strike within a primary client's facility. The client had
          suspended all large capital expenditures until the labor strike
          is resolved. This issue was resolve in October 1998.


               Gross Profit:
               ------------

          P.W. Stephens-Residential

               Gross Profit for the year ended September 30, 1998 decreased
          from $3,364,000 to $2,649,891 or 21.2% for the same period in
          1997. The decrease in the gross profit margin was the result of
          the Residential's marketplace becoming more competitive.



                                      -13-
          <PAGE>

          P.W. Stephens-St. Louis

               Gross Profit for the year ended September 30, 1998 increased
          from $1,570,690 to $1,635,000 or 4.1% for the same period in
          1997. The increase in the gross profit margin can be attributed
          to the incentive based plan implemented by management to
          effectuate a reduction in costs through successful project
          management programs.


               Selling, General and Administrative Expenses:
               --------------------------------------------

          P.W. Stevens-Residential

               Selling, general and administrative expenses (SG&A) for the
          year ended September 30, 1998 were $2,462,000 compared to
          $1,784,000 for the same period in 1997. The increase in SG&A
          expenses was due to several factors. Increases in corporate
          overhead, marketing, new hires and legal expenses all contributed
          to Residential's increase in SG&A.


          P.W. Stevens-St.Louis

               Selling, general and administrative expenses for the year
          ended September 30, 1998 were $1,958,000 compared to $1,628,000
          for the same period in 1997. The increase in SG&A was due to an
          increase in corporate overhead, marketing and new hires.


               Other Income and Expenses:
               -------------------------

               Other income and expenses for the years ended September 30,
          1998 and 1997 were $1,176,000 and $1,435,000 respectively.  The
          primary factor contributing to expense for 1998 was interest
          expense on various notes from the Manta acquisition. The decrease
          was primarily due to interest income received from the note due
          from Regal Oak Properties, Inc. from the sale of Kelar Controls,
          Inc. and management fees paid to the Company from outside
          entities. The income gained from these sources off-set the
          increase in interest expense attributed to notes payable from the
          Manta acquisition.


               Income From Continuing Operations
               ---------------------------------

               The income from continuing operations for the year ended
          September 30, 1998 increased to $3,756,000 compared to a net loss
          of $3,129,000 during the same period in 1997. The increase in
          income is a attributable to the recognition of the income tax
          benefits of the Company's net operating loss carryforwards.


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

               Discontinued operation income for the year ended September
          30, 1998 amounted to $645,000 compared to a loss of $3,684,000
          for the year ended September 30, 1997. The income for the year
          ended September 30, 1998 resulted primarily from final
          settlements with customers in excess of net amounts recorded as
          of September 30, 1998 and final settlements with trade creditors
          in amounts less than those recorded as of September 30, 1997.


                                      -14-

         <PAGE>

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

               The Company's existing capital resources consists of cash
          and notes totaling $8,170,000. 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.

               The Company plans to execute a strategic plan going forward
          to grow the company through acquisition which may require the
          Company to raise additional capital by issuing debt (straight or
          convertible) or equity securities in private or public offerings.
          There can be no assurance that the Company will be able to raise
          debt or that the Company will be able to issue its securities to
          coincide with the funding of certain capital requirements.


          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.

               Based on a recent assessment, the Company determined that it
          will be required to modify or replace significant portions of its
          software so that its computer systems will properly utilize dates
          beyond December 31, 1999. The Company presently believes that
          with modifications to existing software and conversions to new
          software, the Year 2000 Issue can be mitigated. However, if such
          modifications and conversions are not made, or are not completed
          timely, the Year 2000 Issue could have a material impact on the
          operations of the Company.

               Based on presently available information, the Company has
          initiated formal communications with all of its significant
          suppliers and large customers to determine the extent to which
          the Company is vulnerable to the failure of these third parties
          to remediate their own Year 2000 Issues. However, there can be no
          guarantee that the systems of other companies on which the
          Company's system rely will be timely converted, or that a failure
          to convert by another company or a conversion that is
          incompatible with the Company's systems, would not have material
          adverse effect on the Company.

               The Company will utilize both internal and external
          resources to reprogram, or replace, and test the software for the
          Year 2000 modifications. The Company plans to complete the Year
          2000 project within no later than August 1999. The total
          remaining cost of the Year 2000 project is estimated at $50,000
          and is being funded through the operating cash flows of the
          Company. The total project cost includes the purchase of new
          software, which will be capitalized. To date, the Company has not
          incurred any expense for its Year 2000 project.

               The costs of the project and the date on which the Company
          plans to complete the Year 2000 modifications are based on
          managements's best estimates, which were derived utilizing
          numerous assumptions of future events, including the continued
          availability of certain resources, third party modification plans
          and other factors. However, there can be no guarantee that these
          estimates will be achieved, and actual results could differ
          materially from such plans.  Specific factors that might cause
          such material differences include, but are not limited to, the
          availability and cost of personnel trained in this area, the
          ability to locate and correct all relevant computer codes and
          similar uncertainties.


                                      -15-


        <PAGE>

          ITEM 7. FINANCIAL STATEMENTS
          ----------------------------


                                   C O N T E N T S
                                   ---------------


                                                                        Page

          Independent Auditor's Report  . . . . . . . . . . . . . . . .  17

          Consolidated Balance Sheet  . . . . . . . . . . . . . . . . .  18

          Consolidated Statement of Operations  . . . . . . . . . . . .  20

          Consolidated Statement of Stockholders  Equity  . . . . . . .  21

          Consolidated Statement of Cash Flows  . . . . . . . . . . . .  22

          Notes to Consolidated Financial Statements  . . . . . . . . .  23


                                      -16-

          <PAGE>


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


                             Independent Auditor's Report
                             ----------------------------


          We have audited the accompanying consolidated balance sheet of
          U.S. INDUSTRIAL SERVICES, Inc. (formerly EIF Holdings, Inc.) as
          of September 30, 1998 and 1997 and the related consolidated
          statements of operations, stockholders' equity and cash flows for
          the years 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 financial statements referred to above
          present fairly, in all material respects, the financial position
          of U.S. INDUSTRIAL SERVICES, Inc. at September 30, 1998 and 1997,
          and the results of its operations and cash flows for the years
          then ended in conformity with generally accepted accounting
          principles.



                                   KARLINS FULLER ARNOLD & KLODOSKY, P.C.






          The Woodlands, Texas
          December 1, 1998

                                      -17-

          <PAGE>


                            U.S. INDUSTRIAL SERVICES, INC.
                              CONSOLIDATED BALANCE SHEET
                             SEPTEMBER 30, 1998 AND 1997



                                                     1998         1997
                                                     ----         ----

                                        ASSETS
                                        ------

          CURRENT ASSETS

               Cash . . . . . . . . . . . .       $ 2,349,491  $   304,678
               Accounts receivable, trade,
                    less allowance for
                    doubtful accounts of
                    $275,000 and $225,000,
                    respectively  . . . . .        14,722,153     3,768,252
               Accounts receivable, retention       1,106,887        39,115
               Receivable, officer  . . . .           120,507        70,000
               Securities available for sale          410,400     5,562,697
               Note receivable  . . . . . .             --        2,562,500
               Costs and estimated earnings
                    in excess of billings on
                    contracts in progress .         1,381,950        52,003
               Prepaid retention bonus  . .           762,500          --
               Supplies inventory . . . . .             --          165,079
               Prepaid expenses and other
                    current assets  . . . .           457,618       561,605
               Deferred income tax  . . . .         3,603,480          --
                                                   ----------    ----------
          TOTAL CURRENT ASSETS  . . . . . .        24,914,986    13,085,929
                                                   ----------    ----------

          PROPERTY, PLANT AND EQUIPMENT, NET        6,591,677       603,940

          OTHER ASSETS
               Prepaid expenses and other assets      611,359        20,520
               Receivable, officer  . . . .           304,148       210,000
               Investments  . . . . . . . .           246,000         --
               Goodwill, net of amortization
                 of $705,383 and $455,164,
                 respectively . . . . . . .         2,844,419       755,597
                                                   ----------    ----------
                                                    4,005,926       986,117
                                                   ----------    ----------
          TOTAL ASSETS  . . . . . . . . . .       $35,512,589   $14,675,986
                                                   ==========    ==========





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


                                      -18-
          <PAGE>


                            U.S. INDUSTRIAL SERVICES, INC.
                              CONSOLIDATED BALANCE SHEET
                             SEPTEMBER 30, 1998 AND 1997

                                                    1998          1997 
                                                    ----          ----


                    LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                    ----------------------------------------------

          CURRENT LIABILITIES
               Current portion of long-term
                 debt                          $ 8,704,380     $ 1,695,120 
               Note payable due to shareholder         -        17,609,424 
               Accounts payable, trade           5,250,736       1,678,071 
               Accrued liabilities               4,480,461         730,006 
               Reserve for contingencies           510,000       1,349,000 
               Net liabilities of discontinued
                 operations                        266,216       1,776,041 
               Billings in excess of costs and
                 estimated earnings on
                 contracts in progress             629,736        178,921
                                                 ---------      ----------
                    TOTAL CURRENT LIABILITIES    19,841,529     25,016,583 
                                                 ---------      ---------- 

          LONG-TERM DEBT
               Long-term debt                    3,598,577            - 
                                                 ---------      ----------

          TOTAL LIABILITIES                     23,440,106      25,016,583 
                                                 ---------      ---------- 

          COMMITMENTS AND CONTINGENCIES

          STOCKHOLDERS' EQUITY (DEFICIT)
               Preferred stock, $.01 par
                 value, 20,000,000
                 authorized, none
                 outstanding                          -               - 
               Common stock, $.01 par
                 value, 25,000,000 
                 authorized, 8,763,982
                 and 2,461,820 outstanding 
                 (after giving effect for
                 one-for-ten stock split),
                 respectively                       87,640       3,019,246 
               Additional paid-in capital       22,636,302         804,696 
               Accumulated other 
                 comprehensive income
                    Unrealized loss on
                      securities available
                      for sale                    (887,852)          -
               Accumulated deficit              (9,763,607)   (14,164,539) 
                                                -----------   ------------
                                                12,072,483    (10,340,597) 
                                                ----------    ------------

                                               $35,512,589    $14,675,986
                                               ===========    ===========




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

                                      -19-

          <PAGE>



                            U.S. INDUSTRIAL SERVICES, INC.
                         CONSOLIDATED STATEMENT OF OPERATIONS
                   FOR THE YEARS ENDED SEPTEMBER 30, 1998 AND 1997

                                                         1998         1997
                                                         ----         ----

     REVENUE                                        $58,324,519     $13,434,423
     COST OF REVENUE                                 44,291,727       8,399,561
                                                    -----------     ------------

          GROSS PROFIT                               14,032,792       5,034,862 
    
     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES    12,942,472       6,738,610
                                                    -----------     ------------
     INCOME (LOSS) FROM OPERATIONS                    1,090,320      (1,703,748)
                                                    -----------     ------------
     OTHER INCOME (EXPENSE)
          Other income (expense), net                   645,127          10,189 
          Interest income                               308,743            - 
          Interest expense                           (2,130,138      (1,434,992)
                                                    -----------     ------------
                                                     (1,176,268)     (1,424,803)
                                                    -----------     ------------
     LOSS BEFORE PROVISION FOR INCOME TAX               (85,948)     (3,128,551)
                                                    -----------     ------------
     PROVISION FOR INCOME TAX 
          Current                                           -              - 
          Deferred                                    3,842,116            - 
                                                    -----------     ------------
                                                      3,842,116            - 
                                                    -----------     ------------

     INCOME (LOSS) FROM CONTINUING OPERATIONS         3,756,168      (3,128,551)
                                                    -----------     ------------

     DISCONTINUED OPERATIONS, NET OF INCOME TAXES
     Loss from operations on discontinued commercial
       asbestos operations including provision of
       $300,000 for operating loss during phase out
       for the year ended September 30, 1997 and
       income from final settlements for the year
       ended September 30, 1998                        644,764      (5,765,745)
     Loss on disposal of assets from discontinued
       commercial asbestos operations                       -         (156,863)
     Loss from operations on discontinued
       operations of Kelar Controls, Inc.                   -          (86,672)
     Gain on sale of Kelar Controls, Inc.                   -         2,370,580
                                                    -----------     ------------
                                                       644,764       (3,683,700)
                                                    -----------     ------------

     NET INCOME (LOSS)                               4,400,932       (6,767,251)
                                                    -----------     ------------

     OTHER COMPREHENSIVE INCOME
     Unrealized loss on securities available
       for sale                                     (1,344,600)            - 
     Income tax effect on other comprehensive
       income                                          456,748             - 
                                                    -----------     ------------
                                                      (887,852)            - 
                                                    -----------     ------------

     COMPREHENSIVE INCOME                          $ 3,513,080      $(6,767,251)
                                                    ===========     ============

     Basic earnings per share
          Continuing operations                        $  1.03         $  (1.27)
          Discontinued operations                         0.18            (1.48)
                                                    -----------     ------------
                                                       $  1.21         $  (2.75)
                                                    ===========     ============
     Diluted earnings per share
     Continuing operations                             $  0.92         $  (1.27)
          Discontinued operations                         0.15            (1.48)
                                                    -----------     ------------
                                                      $   1.07         $  (2.75)
                                                    ===========     ============

     Weighted average number of common and
       common equivalent shares outstanding:
          Basic                                      3,635,866        2,461,820 
                                                    ===========     ============
          Diluted                                    4,372,910        2,461,820 
                                                    ===========     ============


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



                                      -20-

          <PAGE>


                            U.S. INDUSTRIAL SERVICES, INC.
                    CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                   FOR THE YEARS ENDED SEPTEMBER 30, 1998 AND 1997


                                          Common shares         Additional
                                       Shares        Dollar      paid-in
                                    outstanding      amount      capital
                                    -----------      ------      --------
          Balance, 
            September 30, 1996      24,618,201    $ 3,019,246  $   804,696

          Net loss                       -              -            -
                                    ----------    -----------  ------------
          Balance,
            September 30, 1997      24,618,201      3,019,246      804,696

          Reverse stock split      (22,150,077)    (2,994,565)   2,994,565

          Conversion of
            long-term debt           6,295,858         62,959   18,837,041

          Unrealized loss on
            securities, net              -              -            -

          Net income                     -              -            -
                                    ----------    -----------  ------------

          Balance, 
          September 30, 1998         8,763,982    $    87,640  $22,636,302
                                    ==========    ===========  ============


          

                                    Accumulated
                                       other           Retained
                                    comprehensive      earnings      
                                      income            amount       Total 
                                    -------------      --------      -----

          Balance, 
            September 30, 1996      $    -        $(7,397,288) $(3,573,346)

          Net loss                       -         (6,767,251)  (6,767,251)
                                    ----------    -----------  ------------
          Balance,
            September 30, 1997           -        (14,164,539) (10,340,597)

          Reverse stock split            -              -            -

          Conversion of
            long-term debt               -              -       18,900,000 

          Unrealized loss on
            securities, net          (887,852)          -         (887,852)

          Net income                     -          4,400,932    4,400,932 
                                    ----------    -----------  ------------

          Balance, 
          September 30, 1998        $(887,852)    $(9,763,607) $12,072,483 
                                    ==========    ===========  ============

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


                                      -21-

          <PAGE>


          

                            U.S. INDUSTRIAL SERVICES, INC.
                         CONSOLIDATED STATEMENT OF CASH FLOWS
                   FOR THE YEARS ENDED SEPTEMBER 30, 1998 AND 1997


                                                         1998         1997
                                                         ----         ----

     CASH FLOWS FROM OPERATING ACTIVITIES:
          Net income (loss)                         $ 4,400,932     $(6,767,251)
          Adjustments to reconcile net loss
            to net cash used in operating
            activities:
               Gain on sale of Kelar
                 Controls, Inc.                            -         (2,370,580)
               Depreciation and amortization          1,905,636         472,058 
               Loss on disposal of machinery
                 and equipment                           94,622         156,863 
               Change in deferred income tax         (4,403,480)          - 
               Non cash expense, net                  1,290,576           -
               Change in accounts receivables          (920,633)      2,413,415 
               Change in accounts receivable,
                 retention                              365,897           - 
               Change in receivable, officer           (144,655)          - 
               Change in costs and estimated
                 earnings in excess of billings
                 on jobs in progress                   (585,593)        274,340 
               Change in prepaid retention bonus       (762,500)          - 
               Change in inventory                      165,079         152,305 
               Change in prepaid expenses and
                 other current assets                   477,802         122,574 
               Change in other assets                   150,086          26,098 
               Change in accounts payable               171,144       2,792,148 
               Change in accrued liabilities            168,576           - 
               Change in reserve for contingencies     (839,000)      1,349,000 
               Change in net liabilities of
                 discontinued operations             (1,509,820)      1,776,041 
               Change in billings in excess of
                 costs and estimated earnings on
                 jobs in progress                      (367,866)       (558,555)
                                                    -----------     ------------
                    Net cash used in operating
                      activities                       (343,196)       (161,544)
                                                    -----------     ------------

     CASH FLOWS FROM INVESTING ACTIVITIES:
          Cash divested upon sale of Kelar
            Controls, Inc.                                 -            (53,750)
          Acquisition of business, net of
            cash acquired                               172,467
          Proceeds from sale of machinery
            and equipment                               251,529          99,500 
          Capital expenditures                         (932,413)       (198,228)
                                                    -----------     ------------
               Net cash used in investing
                 activities                            (508,417)       (152,478)
                                                    -----------     ------------

     CASH FLOWS FROM FINANCING ACTIVITIES:
          Proceeds from notes payable                 6,210,000       2,795,333 
          Principal payments on long-
            term debt                                (7,578,019)     (3,475,664)
          Proceeds from securities
            available for sale                        4,264,445 
          Proceeds from stockholder line
            of credit                                      -          1,120,800 
                                                    -----------     ------------
               Net cash provided by
                 financing activities                 2,896,426         440,469 
                                                    -----------     ------------

     NET INCREASE IN CASH                             2,044,813         126,447 

     CASH AT BEGINNING OF PERIOD                        304,678         178,231 
                                                    -----------     ------------

     CASH OF END OF PERIOD                          $ 2,349,491     $   304,678 
                                                    ===========     ============


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


      

                                      -22-
			
          <PAGE>


                            U.S. INDUSTRIAL SERVICES, INC.
                            NOTES TO FINANCIAL STATEMENTS
                             SEPTEMBER 30, 1998 AND 1997

          BASIS OF PRESENTATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
          POLICIES

          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 painting,
          fireproofing, hydroblasting and vacuum services. The major
          industries served include refining, petrochemicals, utilities,
          paper mills, steel production, food processing and public works.

          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.

          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 uncompleted contracts, 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.

          Securities Available for Sale -Equity securities are classified
          -----------------------------
          as "available-for-sale" as defined by SFAS 115. 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 was 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 forty years.

          Expenditures for additions, major renewals and betterments are
          capitalized and expenditures for maintenance and repairs are
          charged to earnings as incurred.

          When property, plant and equipment are retired or otherwise
          disposed of, the cost thereof and the applicable accumulated
          depreciation are removed from the respective accounts and the
          resulting gain or loss is reflected in earnings.

          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.

          Goodwill - Goodwill is amortized on a straight-line basis over 20
          --------
          - 40 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 - The Company reviews its long-lived assets and
          -----------------
          certain identifiable intangibles to be held and used for
          impairment whenever events or changes in circumstances indicate
          that the carrying amount of an asset may not be recoverable. If
          such events or changes in circumstances are present, a loss is
          recognized to the extent the carrying value of the asset is in


                                      -23-

          <PAGE>

                            U.S. INDUSTRIAL SERVICES, INC.
                            NOTES TO FINANCIAL STATEMENTS
                             SEPTEMBER 30, 1998 AND 1997

          excess of the sum of the undiscounted cash flows expected to
          result from the use of the asset and its eventual disposition.

          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. 

          Recapitalization - Effective June 22, 1998, the Company effected
          ----------------
          a one-for-ten reverse stock split, reducing the number of shares
          of outstanding common stock from 24,618,200 to 2,461,820.

          Immediately following the reverse-split, the Company completed a
          recapitalization and reincorporation through a merger with U.S.
          Industrial Services, Inc., 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.

          Concentration of credit risk - The Company has concentrated its 
          ----------------------------
          credit risk for cash by maintaining deposits at a financial
          institution which at times may exceed amounts covered by
          insurance provided by the U.S. Federal Deposit Insurance
          Corporation (FDIC). The maximum loss that would have resulted
          from that risk totaled $1,149,348 at September 30, 1998 for the
          excess of the deposit liabilities reported by the banks over the
          amounts that would have been covered by federal insurance. The
          Company has not experienced any losses in such accounts and
          believes it is not exposed to any significant credit risk to
          cash.

          The Company, as a condition for entering into construction
          contracts, has purchased surety bonds totaling approximately
          $11,250,000 and $450,000 for the years ending September 30, 1998
          and 1997 respectively. The bonds are collateralized by contract
          receivables.

          The Company operates and grants credit to customers throughout
          the United States.

          Letter of credit - The Company has an outstanding letter of 
          ----------------
          credit for insurance purposes, not reflected in the accompanying
          financial statements, in the amount of $1,086,647 at September
          30, 1998.

          Fair Value of Financial Instruments - The Company's financial 
          -----------------------------------
          instruments consist of cash and cash equivalents, contract
          receivables, accounts payable and notes payable. The Company
          believes that the carrying value of these instruments on the
          accompanying consolidated balance sheet approximates their fair
          value.

          Reclassifications - Certain reclassifications have been made to 
          -----------------
          the prior year financial statements to conform with the current
          year presentation.


          RECEIVABLE, OFFICER

          The receivable, officer is an amount due from Frank Fradella,
          former President of the Company. This receivable was originally
          transferred from American Eco Corporation ("AEC") when Mr.
          Fradella assumed his position as President of U.S. Industrial
          Services, Inc. The amount as of September 30, 1997 represented
          the remaining balance of a forgivable loan made to Mr. Fradella
          upon his employment with AEC in September 1996. The increase
          during the year ended September 30, 1998 resulted from additional
          borrowings to Mr. Fradella.  The revised total balance of
          $424,655 will be 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.


          SECURITIES AVAILABLE FOR SALE

          Securities available for sale consist of 180,000 shares and
          570,533 shares of common stock of AEC, as of September 30, 1998
          and 1997, respectively. These shares were issued to the Company
          in lieu of cash in conjunction with the Amendment dated 


                                      -24-
          <PAGE>
                            U.S. INDUSTRIAL SERVICES, INC.
                            NOTES TO FINANCIAL STATEMENTS
                             SEPTEMBER 30, 1998 AND 1997


          September 30, 1997, to the existing line of credit which increased 
          the maximum borrowing amount under the line to $20,000,000. These
          securities reflect a value of $2.28 and $9.75 per share as of
          September 30, 1998 and 1997, respectively, on the consolidated
          balance sheet, which reflects the market value. The Company
          intends to sell these securities to settle certain of the
          Company's existing obligations.  See "Note Payable due to
          Stockholder" and "Related Party Transactions" for additional
          disclosures.

          Proceeds and gross realized gains from the sale of securities
          classified as available-for-sale for the year ended September 30,
          1998 was as follows:


          Gross proceeds                                       $4,264,445
          Gross realized gains                                  $  55,464


          NOTE RECEIVABLE

          On June 30, 1997, the Company sold all of the issued and
          outstanding shares of stock in its wholly owned subsidiary, Kelar
          Controls, Inc. to Regal Oak Properties, Inc. ("Regal Oak") for
          $2,500,000. Pursuant to the acquisition agreement, the Company
          received a Promissory Note for the full amount of the purchase
          price. The note matures on June 30, 1998, bears interest at 10%
          and is secured by performance bonds. Refer to "Discontinued
          Operations" for additional disclosure.

          In August, 1998, Regal Oak remitted its payment of $2,780,822
          (including accrued interest of $280,822) directly to Turner
          Holdings, Inc. ($1,210,977) and Deere Park Capital Management,
          Inc. ($1,569,845), which are creditors of the Company, and which
          reduced the Company's obligations by such amounts to these
          creditors. Refer to "Long-term Debt" for additional disclosure.


          COSTS AND ESTIMATED EARNINGS ON JOBS IN PROGRESS

          Costs and estimated earnings on uncompleted contracts consist of
          the following:

                                                1998          1997
                                                ----          ----
          Costs incurred on jobs in
            progress  . . . . . . . . . .  $33,011,790   $2,188,031
          Estimated earnings  . . . . . .    6,305,039      413,922
                                           -----------   ----------
                                            39,316,829    2,601,953
          Less: billings to date  . . . .   38,564,615    2,728,871
                                           -----------   ----------
                                              $752,214    $(126,918)
                                           ===========   ==========

          The amounts above are included in the accompanying balance sheet
          under the following captions:
                                                 1998          1997
                                                 ----          ----
          Costs and estimated earnings in
            excess of billings on jobs in
            progress  . . . . . . . . . .    $1,381,950      $52,003
          Billings in excess of costs and
            estimated earnings on jobs in      (629,736)    (178,921)
            progress  . . . . . . . . . .    ----------   ----------
                                               $752,214    $(126,918)
                                             ==========   ==========


          PROPERTY, PLANT AND EQUIPMENT

          Property, plant and equipment consisted of the following:

                                                1998          1997
                                                ----          ----
          Land  . . . . . . . . . . . . .   $   35,000   $       --
          Buildings . . . . . . . . . . .      299,250           --



                                      -25-
          <PAGE>
   
                            U.S. INDUSTRIAL SERVICES, INC.
                            NOTES TO FINANCIAL STATEMENTS
                             SEPTEMBER 30, 1998 AND 1997


          Transportation equipment  . . .    3,883,701      514,944
          Machinery and equipment . . . .    3,590,342      814,199
          Office equipment  . . . . . . .      526,799      196,244
          Leasehold improvements  . . . .      713,667       97,439
                                             ---------    ---------
                                             1,622,827    9,048,759
          Accumulated depreciation and       2,457,082    1,018,887
            amortization  . . . . . . . .    ---------    ---------
                                            $6,591,677   $  603,940
                                             =========    =========

          The cost of fully depreciated assets still in service amounted to
          $280,788 and $531,127 at September 30, 1998 and 1997,
          respectively.


          BUSINESS COMBINATIONS

          JL Manta, Inc. - Effective October 31, 1997, the Company 
          --------------
          completed its acquisition of JL Manta, Inc. ("Manta"), an
          Illinois corporation which provides 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 $4,725,321 in cash and $2,235,312 in
          convertible promissory notes of the Company, payable in
          installments with a final payment due on November 18, 2000 (the
          "Manta Notes"). Subject to the approval by the Company's
          stockholders of an amendment to USIS's charter authorizing the
          requisite amount of stock, at any time after June 30, 1998 the
          holders of the Stockholder Notes may convert any principal
          payment due under the Stockholder Notes into shares of USIS's
          common stock, $0.01 par value per share (the "USIS Stock"), at a
          conversion price equal to the closing transaction price of the
          USIS Stock on the date a conversion notice is received by USIS
          (the "Conversion Price"). Concurrent with the closing of the
          Acquisition, certain Manta stockholders and key employees entered
          into Retention Bonus Agreements with USIS providing for bonus
          payments in the aggregate amount of $900,000 to be amortized by
          the Company over a six year period, of which $762,500 still
          remains as prepaid. The purchase price and expenses associated
          with the acquisition exceed the fair value of net assets acquired
          by approximately $2 million. Refer to "Subsequent Events" for
          additional disclosure.

          Also concurrently with the Manta Acquisition, in connection with
          financing provided to the Company, the Company issued a
          $6,500,000 Convertible Promissory Note. The note bears interest
          at the rate of 5 1/4% per annum, becomes due on May 18, 1999 and
          is secured by a pledge of all of the Manta stock. Subject to
          approval of the Company's Stockholders of an amendment to USIS's
          charter, authorizing the requisite amount of preferred and common
          stock, the Note is convertible into 5 1/4% preferred convertible
          stock at a conversion price of One Dollar ($1) per share, with
          such preferred convertible stock convertible into USIS common
          stock.

          Also in connection with the Manta Acquisition, the Company issued
          a $2,500,000 Promissory Note. The note bears interest at the rate
          of Nine Percent (9%) per annum and becomes due on February 16,
          1998. The loan amount represented by the note was used by the
          Company to refinance certain indebtedness of Manta.

          Manta has working capital and fixed asset based credit facilities
          which it utilizes in the normal course of business. Essentially
          all of the assets of Manta are pledged as security under one or
          more of these facilities. The loan agreements which govern these
          facilities contain typical covenants, including financial
          covenants, with which the Company must comply.

          The unaudited pro forma results, assuming the Manta acquisition
          had occurred at October 1, 1996, are as follows:

                                                 1998           1997
                                                 ----           ----
          Revenues  . . . . . . . . . . .      $62,769,435    $59,034,888 
          Net income (loss) from
            continuing operations . . . .        3,778,650     (2,569,684)
          Basic earnings per share  . . .            $1.04         $(1.04)

          The unaudited pro forma summary is not necessarily indicative of
          results of operations that would have occurred had the
          acquisition been made at the beginning of the periods presented,
          or of future results of operations of the combined companies.



                                      -26-
         <PAGE>

                            U.S. INDUSTRIAL SERVICES, INC.
                            NOTES TO FINANCIAL STATEMENTS
                             SEPTEMBER 30, 1998 AND 1997


          A summary of the above Manta business combination is as follows:

          Consideration . . . . . . . . . . . . . . . . . .   $9,294,000
          Assets  . . . . . . . . . . . . . . . . . . . . .   21,179,000
          Liabilities . . . . . . . . . . . . . . . . . . .  (13,860,000)
                                                             -----------
          Net book value  . . . . . . . . . . . . . . . . .    7,319,000
                                                             -----------
          Goodwill  . . . . . . . . . . . . . . . . . . . .   $1,975,000
                                                             ===========


          LONG-TERM DEBT


                                                    1998        1997
                                                    ----        ----
           Notes payable, payable $21,482
           monthly including interest from
           7.61% to 9.75%; collateralized by
           vehicles, equipment and building;
           maturing through November, 2005 . .  $416,792      $    --
           Note payable, payable $91,667
           monthly plus interest at the prime
           or libor rate plus 1.75%;
           collateralized by substantially all
           of the assets of Manta and the
           guaranty of USIS  . . . . . . . . . 4,478,331           --
           Note payable, due to Deere Park
           Capital Management, Inc., due May
           1, 1999, at 5.25% rate of interest,
           uncollateralized  . . . . . . . . . 5,017,364           --

           Notes payable to former
           stockholders of Manta ("Manta
           Notes"), due February, 2001, at
           5.25% rate of interest,
           collateralized by the guaranty of
           AEC . . . . . . . . . . . . . . . . 2,045,184           --

           Notes payable to former Manta
           stockholders and key employees,
           payable $22,060 quarterly, with
           interest at 5.25%, uncollateralized   264,701           --
           Note payable, due to Turner
           Holdings, Inc., due March 1, 1998,
           at 10% rate of interest, unsecured         --    1,030,000

           Notes payable, finance company for
           insurance premiums, due August 31,
           1998. Payable $59,208 monthly
           including interest at 7.64%,
           secured by unearned premiums  . . .        --      598,364

           Miscellaneous notes payable . . . .    80,585       66,756
                                              ----------    ---------
                                              12,302,957    1,695,120

           Current portion . . . . . . . . . . 8,704,380    1,695,120
                                              ----------    ---------
           Long-term portion . . . . . . . . . 
                                              $3,598,577   $       --
                                              ==========    =========

          The aggregate principal payments on long-term debt during the
          fiscal years subsequent to September 30, 1998 are: 1999 -
          $8,704,380; 2000 - $1,149,014; 2001 - $1,271,244; 2002 -
          $1,100,004; 2003 - $78,315.

          The Company entered into a revolving credit agreement with a
          bank, which provides for maximum borrowings of $4,000,000 at an
          interest rate of prime or libor plus 1.75%. Principal is payable
          on demand; however if no demand is made, principal is due on
          February 1, 1999. Interest on this credit agreement is payable
          monthly. At September 30, 1998, there was no outstanding balance
          on this agreement. This note is collateralized by substantially
          all of the assets of the Manta, and the guaranty of USIS.

          The above notes payable to former Manta stockholders and key
          employees were paid off upon the sale of Manta assets. Refer to
          "Subsequent Events" for additional disclosure.


                                      -27-
         <PAGE>

                            U.S. INDUSTRIAL SERVICES, INC.
                            NOTES TO FINANCIAL STATEMENTS
                             SEPTEMBER 30, 1998 AND 1997


          NOTE PAYABLE DUE TO STOCKHOLDER

          During the fiscal year ended September 30, 1996, the Company
          entered into a line of credit agreement with a major stockholder,
          American Eco Corporation, ("AEC"). The original terms of the AEC
          facility carried a maximum borrowing amount of $5,250,000, with
          interest at the prime rate plus 2% per annum, was unsecured and
          matured on July 31, 1997. Effective July 31, 1997, the line of
          credit agreement with AEC was renewed, extended and modified to
          increase the maximum borrowing amount to $15,000,000 and extended
          the maturity date to February 18, 1998. All other terms under the
          original line of credit agreement remained unchanged. On
          September 30, 1997, AEC executed another amendment to the line of
          credit facility increasing the maximum borrowing amount to
          $20,000,000.

          In July, 1998, AEC, pursuant to a Stock Purchase Agreement closed
          its purchase of 1,000,000 shares of USIS common stock in exchange
          for $1 million which reduced the outstanding balance under the
          Company's line of credit facility with AEC.

          Also in July, 1998, AEC sold $17.9 million of its outstanding
          line of credit to USIS Acquisition, LLC, ("UALC"), which
          exercised its rights under the agreement to convert the debt to
          equity. The conversion resulted in the issuance of 5,295,858
          shares of common stock to UALC, thus providing it with 60.4% of
          all outstanding USIS common stock. Refer to "Subsequent Events"
          for additional disclosure.


          OPERATING LEASES

          The Company leases office and warehouse space under operating
          leases that expire at various times through May, 2006. The
          Company leases warehouse space from a related party under a lease
          providing for base monthly rentals of $5,000. The monthly base
          rent is increased yearly by 4% until termination on May 15, 2006.
          The Company also pays all operating costs and real estate taxes
          for their space. Total rent expense for the years ended September
          30, 1998 and 1997 amounted to $430,555 and $300,778,
          respectively.

          Future minimum payments, by year and in the aggregate, under
          these operating leases, consisted of the following at September
          30, 1998:

             1999   . . . . . . . . . . . . . . . . .$296,614
             2000   . . . . . . . . . . . . . . . . . 131,316
             2001   . . . . . . . . . . . . . . . . . 114,420
                                                     --------
             2002   . . . . . . . . . . . . . . . . .  66,745
                                                     --------
                                                     $609,095
                                                     ========

          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
          noncancellable leases are:  1999 - $89,800; 2000 - $101,000; 2001
          - $102,100 and 2002 - $59,558.


          CASH FLOW INFORMATION

          For purposes of the Statement of Cash Flows, the Company
          considers all highly liquid debt instruments purchased with a
          maturity of three months or less to be cash equivalents.

                                               1998        1997
                                               ----        ----
          Supplemental disclosures of cash
          flow information:
          Cash paid for:
          Interest  . . . . . . . . . . . $1,887,892   $613,260
          Income taxes  . . . . . . . . . $  105,988   $     --

          Supplemental schedule of noncash
              investing and financing
              activities:


                                      -28-
         <PAGE>

                            U.S. INDUSTRIAL SERVICES, INC.
                            NOTES TO FINANCIAL STATEMENTS
                             SEPTEMBER 30, 1998 AND 1997


 

          Machinery and equipment acquired
              through long-term debt
              obligations . . . . . . . .  $470,802    $22,565


          Refer to "Discontinued Operations" footnote for sale of Kelar
          Controls, Inc. and to "Securities Available for Sale" footnote
          for marketable securities activity.


          FEDERAL INCOME TAX

          Deferred income tax assets and liabilities are computed for those
          differences that have future tax consequences using the currently
          enacted tax laws and rates that apply to the periods in which
          they are expected to affect taxable income. Valuation allowances
          are established, if necessary, to reduce the deferred tax asset
          to the amount that will more likely than not be realized. Income
          tax expense is the current tax payable or refundable for the
          period plus or minus the net change in the deferred tax assets
          and liabilities.

          Deferred federal income taxes result from temporary differences
          in the recognition of revenue and expense for tax and financial
          reporting purposes. Such temporary differences relate primarily
          to the method of recording depreciation and accounting for
          contracts in progress.

          Federal income tax expense for the years ended September 30, 1998
          and 1997 consists of the following:

                                               1998        1997
                                               ----        ----
          Current tax:
          Federal . . . . . . . . . . . .   $234,000    $    --
          State . . . . . . . . . . . . .     77,000         --
                                            --------    -------
                                             311,000         --
          Deferred tax  . . . . . . . . .    (82,000)        --
                                            --------    -------
                                            $229,000    $    --
                                            ========    =======

          The Company's provision for income taxes differs from applying
          the statutory U.S. federal income tax rate to income before
          income taxes. The primary differences result from providing for
          state income taxes and from deducting certain expenses for
          financial statement purposes but not for federal income tax
          purposes.

          The significant components of the net deferred tax liability at
          September 30, 1998 and 1997 are as follows:

                                               1998        1997
                                               ----        ----
          Plant and equipment depreciation  $458,000    $20,500
          Accounts receivable, retention     432,000         --
          Allowance for bad debts . . . .    (33,000)   552,500
          Goodwill  . . . . . . . . . . .    (37,000)        --
          Other reserves  . . . . . . . .    (29,000)        --
          Accrued liabilities . . . . . .    (73,000)   501,000
          Net operating loss carryforward         --  2,894,000
          Valuation allowance . . . . . .         -- (3,968,000)
                                            -------------------
          Net deferred tax liability  . .   $718,000$        --
                                            ===================

          The Company has net operating loss carryforwards of approximately
          $9,030,000 and $8,400,000 at September 30, 1998 and 1997
          respectively, for federal income tax purposes available to offset
          future financial income, expiring, if not used, periodically
          through the year 2012. An valuation allowance has not been
          established as of September 30, 1998, due to the subsequent sales
          of (a) significantly all of the net assets of J.L. Manta, Inc.
          and (b) significantly all of the net assets of P.W. Stephens
          Residential, Inc. Refer to "Subsequent Events" footnote for
          additional disclosure.


                                      -29-
          <PAGE>

                            U.S. INDUSTRIAL SERVICES, INC.
                            NOTES TO FINANCIAL STATEMENTS
                             SEPTEMBER 30, 1998 AND 1997


          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 the hazards of litigation, which are
          defended in the normal course of business. The Company is
          currently involved in several  litigations and  investigations 
          including regulatory compliance. Although the outcome of these
          claims is not clearly determinable at the present time,
          Management believes that such proceedings are adequately covered
          by the estimated losses it has recorded to date.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.


          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 October 1,
          1996, between AEC and the Company, AEC had agreed to provide
          certain services to the Company in exchange for a management fee
          to be accrued on a quarterly 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 quarterly
          payment of $1,000,000. AEC stopped providing management services
          to the Company shortly after the appointment of Frank Fradella as
          President and CEO of the Company in May 1997. Therefore the
          management fee was pro-rated for the third quarter and amounted
          to $300,000. For the year ended September 30, 1997, total
          management fees were $2,300,000. For the year ended September 30,
          1997, the total amount outstanding under the AEC facility was
          $17,609,424, including $835,311 for accrued interest.

          For the year ended September 30, 1998, the Company incurred costs
          of $292,471 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 $1,096,038
          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 $80,806 from two companies
          related to Manta.

          The Company leased warehouse and office facilities under an
          operating lease from an entity that was owned by a former
          stockholder. The Company incurred rent expense of $55,000 for the
          year ended September 30, 1997.


          WARRANTS AND OPTIONS

          In connection with funds advanced to the Company under a
          promissory note, and subsequent amendments and extensions to the
          note issued by an investor group, the Company committed to issue
          48,000 warrants, to purchase the Company's common stock. The
          exercise price of the warrants will be equal to the market value
          on the date of issue.


          RETIREMENT PLANS

          The Company, through its collective bargaining agreements with
          various unions, contributes to the unions' retirement plans. For
          the years ended September 30, 1998 and 1997, an expense of
          approximately $935,000 and $150,000 was incurred for these
          retirement plans, respectively.

          The Company contributes to a profit sharing plan covering all
          eligible employees. Contributions in the amount of $43,000 was
          expensed for the year ended September 30, 1998. No expense was
          incurred for the year ended September 30, 1997. The Company's
          policy is to fund the costs annually as incurred.



                                      -30-
         <PAGE>

                            U.S. INDUSTRIAL SERVICES, INC.
                            NOTES TO FINANCIAL STATEMENTS
                             SEPTEMBER 30, 1998 AND 1997


          DISCONTINUED OPERATIONS

          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
          statements of operations. The net loss of these operations
          subsequent to September 30, 1997 are included in the statements
          of operations under discontinued operations and therefore
          revenues, cost of revenue, selling, general and administrative
          expenses associated with the discontinued operations. The
          following table summarizes results of operations for PWSC and QHI
          for the year ended September 30, 1997.


                                                              1997    
                                                              ----    
           Net sales . . . . . . . . . . . . . . . . . . . $ 7,059,949
           Operating loss  . . . . . . . . . . . . . . . .  (5,765,745)
           Loss from discontinued operations . . . . . . .  (5,765,745)

          The following table summarizes the net liabilities related to the
          discontinued operations of PWSC and QHI for the year ended:

                                                              1997    
                                                              ----    
           Net working capital deficit . . . . . . . . . . $(1,930,988)
           Machinery and equipment, net  . . . . . . . . .     154,947
                                                           ------------
           Net liabilities related to discontinued       
           operations  . . . . . . . . . . . . . . . . . . $(1,776,041) 
                                                           ============

          Included in the current liabilities at September 30, 1997 is a
          provision for loss on discontinued operations of $300,000 which
          consists of estimated costs associated with the disposal and
          operating losses expected through February 28, 1998, the phase
          out period. During the current year, the Company sold certain
          machinery and equipment with a net book value of $258,933 related
          to the discontinued operations that could not be used in the
          existing businesses. The Company received proceeds of $99,950 for
          the sale of those assets resulting in a loss on disposition of
          assets in the amount of $156,863. The remaining machinery and
          equipment consists of vehicles that will be utilized in the
          Company's ongoing operations.

          Sale of Kelar
          -------------

          As of June 30, 1997, the Company completed the sale of all of the
          issued and outstanding shares of Kelar Controls, Inc. ("Kelar")
          to Regal Oak Properties, Inc. ("Regal Oak") for $2,500,000.
          Pursuant to the Acquisition Agreement, the Company received a
          Promissory Note for the full amount of the purchase price. The
          note is payable in one (1) installment due June 30, 1998, accrues
          interest at 10% per annum and is secured by performance bonds
          totaling $2,500,000. The results of operations for the respective
          periods presented are reported as a component of discontinued
          operations in the current year of the consolidated statements of
          operations.

          The following are summarized results of operations for Kelar for
          the years ended September 30, 1997.

                                             1997    
                                             ----    
           Net sales . . . . . . . . . . . $1,089,277
           Operating loss  . . . . . . . .    (86,672)
           Loss from discontinued
           operations  . . . . . . . . . .    (86,672)


                                      -31-
          <PAGE>

                            U.S. INDUSTRIAL SERVICES, INC.
                            NOTES TO FINANCIAL STATEMENTS
                             SEPTEMBER 30, 1998 AND 1997


          EARNINGS PER SHARE

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

                                               1998         1997
                                               ----         ----
           Numerator:
           Net income (loss) for basis
              earnings per share  . . . .  $4,400,932  $(6,767,251)
           Effect of dilutive securities -                            
             convertible debt  . . . . . .    268,510           --
                                           ----------  ------------
             Numerator for diluted
                earnings per share, after    
                assumed conversions  . . .   4,669,442  (6,767,251)
                                           ----------- ------------
           Denominator:
             Denominator for basic
                earnings per share,
                weighted-average shares  .   3,635,866     2,461,820
           Effect of dilutive securities -                                     
             convertible debt  . . . . . .     737,044            --
                                             ---------     ---------
             Denominator for diluted
                earnings per share -
                adjusted weighted-average
                shares and assumed           
                conversions  . . . . . . .   4,372,910     2,461,820
                                             ---------     ---------
           Basic earnings per share  . . .       $1.21       $(2.75)
                                             =========     =========
           Diluted earnings per share  . .       $1.07       $(2.75)
                                             =========     =========

          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.


          OTHER COMPREHENSIVE INCOME

          Changes in other comprehensive income for the year ended
          September 30, 1998 are shown below:

                Unrealized loss on securities
                  available for sale  . . . . . . $1,344,600
                Income tax benefit  . . . . . . .   (456,748)
                                                  -----------
                Net unrealized loss on securities
                  available for sale  . . . . . . $   887,852
                                                  ===========

          For the year ended September 30, 1997, the Company had not
          incurred any other comprehensive income.


          SUBSEQUENT EVENTS

          On November 20, 1998, UALC issued notice to AEC that they would
          be unable to meet their debt obligations to AEC. UALC surrendered
          all of their shares (5,295,858) to AEC. After this transaction,
          AEC owned approximately 82% of USIS.


          In November of 1998, USIS sold the assets of Manta and
          transferred related liabilities, including the credit facility,
          to Kenny Industrial Services, L.L.C., for $23,000,000 consisting
          of a combination of cash and notes.

          On December 31, 1998, USIS sold the assets of P.W. Stephens
          Residential Inc. and transferred its liabilities, to American
          Temporary Sanitation Inc. for $2,400,000, consisting of
          $1,004,000 in cash and a five year promissory note for $1,396,000
          payable quarterly through 2004, together with interest at the
          prime rate plus 2.5% per annum.



                                      -32-
          <PAGE>

                            U.S. INDUSTRIAL SERVICES, INC.
                            NOTES TO FINANCIAL STATEMENTS
                             SEPTEMBER 30, 1998 AND 1997


          INDUSTRY SEGMENT DATA

          The Company operates in two principal industries - (a)
          Industrial, commercial and governmental environmental remediation
          services and (b) residential asbestos abatement. It is the
          Company's policy to price intersegment contracts on an equivalent
          basis to that used for pricing external contracts. The following
          is a summary of selected data, determined under the provisions of
          SFAS No. 14, for these business segments:

                                              YEARS ENDED SEPTEMBER 30,
                                              -------------------------    
                                                 1998           1997
                                                 ----           ----
           Revenue
             Industrial maintenance
               services . . . . . . . . . . $46,642,024     $        --
             Environmental services . . . .   5,839,725       7,293,082
             Residential asbestos
               abatement  . . . . . . . . .   6,054,400       6,141,341
             Less intersegment revenue  . .    (211,177)             --
                                            -----------     -----------
                Total revenue . . . . . . . $58,324,519     $13,434,423
                                            ===========     ===========

           Operating income (loss)
             Industrial maintenance
               services  . . . . . . . . . $   853,178     $        --
             Environmental services  . . .    (322,764)        (57,247)
             Residential asbestos             
               abatement   . . . . . . . .     187,457       1,579,985
                                           -----------     -----------
                Total operating income . .     717,871       1,522,738
           Corporate income (expenses) . .     372,449      (3,226,486)
           Interest expense  . . . . . . .  (2,130,138)     (1,434,992)
           Interest income . . . . . . . .     308,743              --
           Other . . . . . . . . . . . . .     645,127          10,189
                                           -----------     -----------
             Loss before provision for     $   (85,948)    $(3,128,551)
               income taxes  . . . . . . . ===========     ===========

           Depreciation and amortization
             Industrial maintenance
               services  . . . . . . . . . $ 1,577,144     $        --
             Environmental services  . . .     205,860         213,328

             Residential asbestos
               abatement   . . . . . . . .      28,159          97,772
             Corporate   . . . . . . . . .      94,493           3,856
                                           -----------     -----------
                Total depreciation and     
                  amortization . . . . . . $ 1,905,636     $   314,956
                                           ===========     ===========

           Capital expenditures
             Industrial maintenance
               services  . . . . . . . . . $   690,817     $        --
             Environmental services  . . .      92,783          10,691
             Residential asbestos
               abatement   . . . . . . . .      87,861         135,616
             Corporate   . . . . . . . . .      60,952          31,388
                                           -----------     -----------
                Total capital expenditures $   932,413     $   177,696
                                           ===========     ===========

           Identifiable assets
             Industrial maintenance
               services  . . . . . . . . . $23,965,794     $        --
             Environmental services  . . .   2,083,945       3,955,112
             Residential asbestos
               abatement   . . . . . . . .   1,794,355       1,538,278
             Corporate   . . . . . . . . .   7,668,495       9,182,596
                                           -----------     -----------
                Total assets . . . . . . . $35,512,589     $14,675,986
                                           ===========     ===========


                                      -33-
          <PAGE>

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


          Not applicable


                                       PART III


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


          As of December 31, 1998, the directors and executive officers of
          the Company were:

           NAME                        AGE    POSITION WITH COMPANY
           ----                        ---    ----------------------
           Albert V. Furman             48    Chairman of the Board
           Michael E. McGinnis          48    Director
           Andreas O. Tobler            48    Director
           C. Thomas Mulligan           29    Vice President, Chief Financial
                                              Officer and Secretary Counsel

             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.

             Albert V. Furman has been Chairman of the Board of the Company
          since July 1998. He has been director/chairman of the investment
          committee at Texas Heritage Bancorp since 1993. He has been
          President of the Georgetown Golf Company since 1991. He was a
          full member of the Chicago Mercantile Exchange from 1973 to 1989.

             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. He has been a director of
          Dominion Bridge Corporation since February 1998.

             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 US public Company with operations in
          Switzerland and Bulgaria.  Sector focuses on telecommunication
          and related businesses.  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).


                                      -34-
         <PAGE>

             Thomas Mulligan has served as the Chief Financial Officer and
          General Counsel for the Company since July 1998, and Vice
          President and Secretary since September 1998.  He was an attorney
          for the law firm DeHay & Elliston, L.L.P. from November 1996 to
          July 1998. He attended law school at Southern Methodist
          University from 1993 to 1996.

             The Board of Directors of the Company held three meetings
          during the fiscal year ended September 30, 1998, and each
          director attended all of the meetings.


          ITEM 10. EXECUTIVE COMPENSATION
          -------------------------------

          Compensation
          -------------

          The following table sets forth all compensation actually paid or
          accrued by the Company for the fiscal year ended September 30,
          1998 to the Chief Executive Officer and other officers who
          received compensation in excess of $100,000.

                                        Annual Compensation
                                        -------------------

          Name and                                          Other Annual
          Principal Position  Year      Salary    Bonus     Compensation(1)
          -----------------   ----      ------    -----     ---------------

          Frank J. Fradella
          President, CEO(2)   1998      $208,333            $ 22,569
                              1997      $107,665

          Michael J. Chakos
          President(3)        1998      $ 83,076

          J. Drennan Lowell
          Executive V.P.(4)   1998      $149,683  $120,000  $189,583

          Joseph Vaillancourt
          Controller(5)       1998      $106,204            $ 37,500

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

          1)   Represents severance payments
          2)   Mr. Fradella became President and CEO in May 1997 and
               resigned as of May 1998.
          3)   Mr. Chakos served as President from May 1998 through
               September 1998.
          4)   Mr. Lowell served as Executive Vice President and CFO from
               October 1997 to July 1998.
          5)   Mr. Vaillancourt served as Controller from October 1997 to
               July 1998.

             The Company has not granted any options under its 1998 Stock
          Option Plan, nor granted any long-term awards.  There are no
          employment agreements with any employees.


                                      -35-
         <PAGE>

          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
          December 31, 1998 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.

                                                 Amount and Nature
             Name of                Status of      of Beneficial
          Beneficial Owner      Beneficial Owner   Ownership(1)    Percent
          -------------------------------------- ----------------- -------

          American Eco          Beneficial owner     7,175,858       81.9%
            Corporation**       of more than 5%
                                of Common Stock

          Albert V. Furman      Chairman                -0-          --
                                and Director

          Michael E. McGinnis   Director             7,175,858(2)    81.9%

          Andreas O. Tobler     Director                25,450        *

          All Officers & Directors
          (four persons)

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

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

          **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 December 31, 1998.

          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.


          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 former officer of USIS, is President and CFO 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


                                      -36-
         <PAGE>

          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.


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

          (a) Exhibits
              --------

          Regulation S-B
          Exhibit Number      Description of Exhibit
          --------------      ----------------------


             2.1         Exchange of Stock Agreement and Plan of
                         Reorganization between EIF Holdings, Inc. ("EIF")
                         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].

             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].


                                      -37-

           <PAGE>

             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. ("Manta") [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].


                                      -38-

            <PAGE>

             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].

             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 Exhbiti
                         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, Inc.[incorporated by reference to
                         Exhibit 2 to the Registrant's Form 8-k for an
                         event of November 30, 1998].

          *  21          Subsidiaries of the Registrant

          *  27          Financial Data Schedule

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

          (b) Reports on Form 8-K
              -------------------

               The Company filed a Current Report on Form 8-K for an event
          of July 27, 1998 to report a change in control and conversion of
          debt.


                                      -39-

          <PAGE>


                                      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/ C. Thomas Mulligan
                                         -----------------------
                                         C. Thomas Mulligan,
                                         Chief Financial Officer and
                                         General Counsel (Principal
                                         financial officer)

          Dated:  January 21, 1999



          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/ Albert V. Furman            Dated:  January 21, 1999
             -----------------------
              Albert V. Furman,
              Director


          By:/s/ Michael E. McGinnis         Dated:  January 21, 1999
              -----------------------
              Michael E. McGinnis,
              Director


          By:
             -----------------------
              Andreas O. Tobler,
              Director


          By:/s/ C. Thomas Mulligan          Dated: January 21, 1998
              ----------------------
              C. Thomas Mulligan,
              Chief Financial Officer
              and General Counsel
              (Principal financial officer)


                                      -40-

          <PAGE>


                                    EXHIBIT INDEX
                                    -------------


          Exhibit
          Number                 Description

           4.1                   1996 Stock Option Plan

           21                    Subsidiaries of the Registrant

           27                    Financial Data Schedule


                                      -41-