SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB



         Annual Report Pursuant to Section 13 or 15(d) of the Securities
                              Exchange Act of 1934

                      For the fiscal year ended December 31, 1999

                         Commission file number 0-22136

                          MENLO ACQUISITION CORPORATION
             (Exact name of registrant as specified in its charter)



              Delaware                                           77-0332937
(State or other jurisdiction of                               (IRS Employer
 incorporation or organization)                         Identification No.)




                       100 Misty Lane Parsippany, NJ 07054
               (Address of principal executive offices) (Zip Code)


       Registrant's telephone number, including area code: (973) 560-1400

Securities registered pursuant to Section 12(b) of the Act: None

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

          Title of each class:
     Common stock $0.0001 par value

Indicate by check mark whether the registrant (1) has filed all reports required
by  Section  13 or 15(d)  of the  Securities  Exchange  Act of 1934  during  the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days. Yes           No X

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

At March 28, 2000 the  registrant  had issued and  outstanding  an  aggregate of
5,263,348 shares of its common stock.

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company's Proxy Statement for the Annual Meeting of Shareholders
to be held on June 7, 2000, are incorporated by reference in Part III. The
Company's proxy statement will be filed within 120 days after December 31, 1999.

The issuers revenues from its most recent fiscal year were $13,594,524.

Aggregate  market  value  of the  voting  stock  held by  non-affiliates  of the
registrant on March 28, 2000 was $597,128.

<PAGE>


                           Menlo Acquisition Corporation
                         Annual Report on Form 10-KSB
                  For the Fiscal Year Ended December 31, 1999

                               Table of Contents

     PART I

       Item 1.    Description of Business
       Item 2.    Description of Property
       Item 3.    Legal Proceedings
       Item 4.    Submission of Matters to a Vote of Security Holders

     PART II

       Item 5.    Market for Common Equity and Related Stockholder Matters
       Item 6.    Management's Discussion and Analysis of Financial Condition
                     and Results of Operations
       Item 7.    Financial Statements
       Item 8.    Changes in and Disagreements with Accountants on
                     Accounting and Financial Disclosure

     PART III

       Item 9.    Directors, Executive Officers, Promoters and Control Persons;
                     Compliance with Section 16(a) of the Exchange Act
       Item 10.   Executive Compensation
       Item 11.   Security Ownership of Certain Beneficial Owners and Management
       Item 12.   Certain Relationships and Related Transactions
       Item 13.   Exhibits and Reports on Form 8-K

<PAGE>


ITEM 1. DESCRIPTION OF BUSINESS

Cautionary Statement Regarding Forward-Looking Statements

The statements in this business  section that are  forward-looking  are based on
current   expectations   and  actual   results   may  differ   materially.   The
forward-looking   statements   include  those   regarding   future  adoption  of
regulations and statutes having an impact on the Company's business,  the impact
of current  regulations and statutes,  the possible impact of current and future
claims  against  the  Company  based  upon  negligence  and  other  theories  of
liability,  and the ability to successfully complete one or more acquisitions as
part  of the  Company's  growth  strategy.  Forward-looking  statements  involve
numerous  risks and  uncertainties  that could  cause  actual  results to differ
materially, including, but not limited to, the possibilities that the demand for
the  Company's  services may decline as a result of possible  changes in general
and  industry  specific  economic  conditions  and the  effects  of  competitive
services  and  pricing;  one or more  current or future  claims made against the
Company  may  result  in  substantial  liabilities;  and such  other  risks  and
uncertainties  as are  described  in reports  and other  documents  filed by the
Company from time to time with the Securities and Exchange Commission.

Menlo Acquisition Corporation

Menlo   Acquisition   Corporation   ("Menlo")  is  a  publicly  traded  Delaware
Corporation  formerly doing business as Focus Surgery Inc.  ("Focus").  Menlo is
now a holding company engaged in acquiring other operating businesses.  Prior to
the  consummation  of the Second  Amended Plan of  Reorganization  in March 1999
further  described below,  Focus  specialized in the research and development of
techniques and equipment for non-invasive  surgeries. On February 9, 1996, Focus
filed a petition for relief under Chapter 11 of the  Bankruptcy  Code. In August
1996,  while in  bankruptcy,  Focus sold  substantially  all of its assets to an
unrelated  company.  As part of the sale,  Focus  transferred  all rights to the
"Focus   Surgery,   Inc."  name  to  the  buyer  and  amended  its  Articles  of
Incorporation to change its name to Menlo Acquisition Corporation.

Environmental Waste Management  Associates,  LLC, a New Jersey limited liability
company ("EWMA LLC"), and Environmental Waste Management Associates,  Inc. a New
Jersey  corporation  ("EWMA  Inc." and,  together  with EWMA LLC,  "EWMA"),  are
environmental consulting firms providing a broad range of environmental services
related to the  investigation and remediation of hazardous waste sites. EWMA has
offices in Parsippany and West Windsor, New Jersey.

Integrated Analytical Laboratories,  LLC, a New Jersey limited liability company
("IAL  LLC"),  and  Integrated  Analytical  Laboratories,   Inc.  a  New  Jersey
corporation ("IAL Inc." and, together with IAL LLC, "IAL"),  are firms providing
analytical   laboratory   services  to  the  environmental  and   pharmaceutical
industries. IAL is located in Randolph, New Jersey.

EWMA,  Inc.  and IAL,  Inc.  were  organized  under the laws of the State of New
Jersey in 1987 and each sold primarily all of their  respective  assets,  except
accounts receivable,  to the aforementioned limited liability companies in April
1997. EWMA, Inc. and IAL, Inc.  currently have no operations but exist primarily
for  the  purpose  of  collecting  outstanding  receivables.  Additionally,  the
personnel of EWMA and IAL remained as employees of EWMA, Inc. and IAL, Inc.

EWMA,  LLC;  EWMA,   Inc.;  IAL,  LLC;  and  IAL,  Inc.;  are  further  defined,
collectively,as "the Acquired Entities"

Reverse Acquisition:

On  March  10,  1999,  Menlo  and  the  Acquired  Entities  consummated  certain
transactions  pursuant to the Second Amended Plan of  Reorganization  filed with
the Bankruptcy  Court on August 12, 1998 and approved on August 26, 1998.  Menlo
converted  all of its  outstanding  shares of existing  common  stock to 263,348
shares of new common  stock with a par value of $.0001 per share.  Additionally,
Menlo  issued  5,000,000  shares of new common  stock in exchange for 99% of the
equity interest in the Acquired Entities (the "acquisition").  Subsequently, the
remaining 1% of the acquired  entities was purchased from an  affilliated  party
for a nominal amount ($1).

As a result of the  acquisition  and the  subsequent  1% purchase,  the Acquired
Entities became wholly owned subsidiaries of Menlo. Former owners and members of
the Acquired  Entities became the owners of  approximately  95% of the 5,263,348
shares  of  common  stock of Menlo  outstanding  upon  the  consummation  of the
acquisition.  Stockholders  of Menlo  prior  to the  acquisition  comprised  the
ownership  of  the  remaining  5% of  outstanding  shares  at  the  date  of the
acquisition. Therefore, the transaction was treated for accounting purposes as a
"purchase  business  combination"  and a "reverse  acquisition"  effective as of
March 10, 1999 in which Menlo was the legal  acquirer and the Acquired  Entities
were the accounting acquirer.

Accordingly, the assets and liabilities of the accounting acquirer (the Acquired
Entities)  continued to be accounted for at their historical  carrying values as
of March 10, 1999. As further  explained in the Financial  Statements,  the fair
value of the 263,348  shares deemed to have been issued to the  stockholders  of
Menlo prior to the acquisition was included in the total cost of the acquisition
of Menlo. The total cost was then allocated to the fair values of the net assets
acquired  and the  excess  of the cost  over the  fair  value of the net  assets
acquired was allocated to goodwill.  The accompanying  consolidated statement of
operations for the years ended December 31, 1999 and 1998 reflect the results of
operations  of the Acquired  Entities.  Prior to the  acquisition , Menlo was in
bankruptcy and had limited operating  activity,  therefore no activity for Menlo
from the  effective  date of the  acquisition  is reflected in the  accompanying
statements.

Business and Management of Menlo

As a public  holding  company,  Menlo's sole assets are its  investments  in the
Acquired  Entities.  While Menlo is a public  reporting  company,  the  Acquired
Entities  will not be  reporting  companies,  and there is no present  intent to
register any of the Acquired Entities as a reporting company.  The management of
Menlo will overlap significantly with that of the Acquired Entities.

As a holding  company Menlo will not have ongoing  sources of revenues or income
apart from the Acquired Entities. Therefore, Menlo will be entirely dependent on
the financial ability of the Acquired Entities to pay dividends to it and on the
declaration and payment of such dividends by the Acquired  Entities for funds to
meet its  financial  obligations.  The Board of Directors  of Menlo,  which will
control the timing and amount of any  dividends,  initially  will be composed of
individuals closely associated with the Acquired Entities, and the former owners
of the Acquired  Entities will own  sufficient  Common Stock of Menlo to control
the election of directors in the future.

Environmental Waste Management Associates (EWMA) - Consulting Segment

General

EWMA  provides  a  broad  range  of   environmental   services  related  to  the
investigation and remediation of hazardous waste sites.  EWMA's services include
(i)  investigation  of the nature and extent of contamination at affected sites;
(ii) design of remedial treatment systems;  (iii) construction and management of
such treatment systems; (iv) regulatory assistance; and (v) real estate transfer
assistance.

At the time it commenced  operations in 1987,  EWMA primarily  performed Phase I
environmental  site  assessments and underground  storage tank removal.  Shortly
thereafter,  in response to its customers' needs, it substantially  expanded its
environmental  services and developed a  comprehensive  hazardous  waste service
line, including a broad range of services related to environmental investigation
and remediation of soil and groundwater.  More recently,  EWMA also has expanded
its  services  into the  areas of  industrial  hygiene  and  health  and  safety
compliance.

EWMA  generally   provides  services  for  its  customers  pursuant  to  written
agreements.  These  agreements  are  primarily on a "fixed  price"  basis,  with
additions and changes effected  through change orders,  and, to a lesser extent,
on a "time-and-materials" basis.

Services

EWMA provides  consulting,  engineering,  construction  and analytical  services
utilizing  a  diverse  staff of  qualified  scientists,  engineers,  geologists,
hydrogeologists,  industrial  hygienists and chemists.  Project management teams
are  organized  to  effect  efficient  communication,  technical  expertise  and
subcontractor support, in light of the nature and scope of each project.

EWMA also provides services to determine if an environmental  hazard exists at a
subject site and to assess the nature of any such risk, particularly in light of
the  nature  and  extent of the  hazard  with  respect  to human  health and the
environment.  Customers  generally seek these  services in connection  with real
estate transfers and site audits.  These services  include,  but are not limited
to,  historical data gathering and review,  site  investigation  and evaluation,
sample   collection   through   intrusive  and   non-intrusive   methods,   risk
determination and remedial design and implementation.

EWMA pioneered the use of "Plume  Dating," which is a method of determining  the
"age" of certain  contamination.  It is also a technique to help  determine  the
past,  present and future risk factors of environmental  hazards.  EWMA provides
Plume  Dating  services in  conjunction  with  "expert  witness"  testimony  for
customers and attorneys.  This "chemical finger printing" may help determine the
fair allocation of liability among responsible parties.

EWMA provides  remedial  design  services  based on the results of site history,
investigation  and risk  analysis.  Depending  on these  factors and  applicable
regulatory requirements,  a remedial design can take several forms, ranging from
natural  attenuation to large scale  treatment  systems to alternative  remedial
technologies.  EWMA assists  customers in  determining  the most cost  effective
method  of  remediation  and has the  capability  to  provide  a broad  range of
services  relating  to  the  design,  building,  maintenance  and  operation  of
appropriate   remediation  systems.  In  connection  with  its  remedial  design
services,  EWMA also  undertakes the processes  necessary for regulatory  permit
approval.

EWMA has extensive  experience in the design,  construction  and  maintenance of
treatment  systems.  Such  remedial  systems are designed to treat  contaminants
found in the soils and groundwater. Such contaminates generally are hydrocarbons
and solvents from leaking  underground  tanks and local spills.  EWMA's remedial
treatment  systems  are  designed  to  reduce  contamination  in the  soils  and
groundwater to levels acceptable for human health. Technologies utilized include
both in-situ and ex-situ  treatment,  chosen from among carbon  absorption,  air
stripping,   soil  venting,  air  sparging,   in-situ  oxidative  injection  and
biological  degradation.  EWMA continues to adopt and employ new technologies in
an ongoing attempt to provide the most cost effective remediation possible.

EWMA audits  facilities with respect to indoor air quality and health and safety
issues.  In addition,  EWMA designs and  implements  plans to address indoor air
quality  and health and  safety  concerns  at its  customers'  facilities.  Both
monitoring  of these  plans  and on site  services  are  necessary  to  document
compliance with applicable federal,  state and local requirements,  from federal
Occupational  Safety and Health  Administration  ("OSHA")  and Toxic  Substances
Control Act ("TSCA")  regulations to noise and nuisance  limitations  imposed by
local statute or ordinance.

EWMA also provides on-site, operational services to remove, replace and retrofit
underground storage tanks. EWMA provides a broad range of services in connection
with  compliance  with  applicable  federal  and  state  regulations.  EWMA also
provides  a range  of  other  operational  services,  including  excavation  and
backfilling of soils,  subsurface  exploration and support for treatment  system
installation.

Customers and Marketing

EWMA's customers are primarily private-sector  organizations.  During the fiscal
year ended  December 31, 1999,  approximately  95% of EWMA's gross revenues were
derived  from  private-sector  customers  with  the  remainder  associated  with
public-sector customers. No single customer accounted for more than 5% of EWMA's
revenues in 1999.

EWMA  identifies  new  customers   through   marketing   efforts,   utilizing  a
professional  sales and marketing  staff.  EWMA  participates in and presents at
trade shows and  technical  conferences  and produces  literature to support its
marketing program.

Competition

EWMA operates  primarily in New Jersey,  New York and  Pennsylvania and competes
against  companies  that are both  much  larger  and  smaller  than  EWMA.  EWMA
generally  competes  on the  basis of price  and  service,  including  technical
expertise.  EWMA  believes  that  it is  competitive  because  of  its  industry
contacts,  customer  relationships,  sales and  marketing  efforts,  competitive
pricing and technical expertise.

Personnel

EWMA  provides  its  services  through a staff of  approximately  65  employees,
consisting  of  approximately  45  professional   staff  (including   engineers,
geologists,  hydrogeologists  and biologists) and 20 support personnel.  None of
EWMA's  employees are  represented by a labor union,  and EWMA is not a party to
any collective  bargaining  agreement.  EWMA believes its employee relations are
good.

Integrated Analytical Laboratories (IAL) - Lab Segment

General

IAL  provides   analytical   laboratory   services  to  the   environmental  and
pharmaceutical   industries.   IAL's   services  also  include   collection  and
transportation  of  samples  from  the  customer's  site to the  laboratory  and
delivery of the results package to the customer.

Environmental  consulting and  remediation  companies  generally do not have the
in-house  capability to perform analytical  services,  as such, IAL historically
has serviced  such  companies.  Also,  because  companies in the  pharmaceutical
industry similarly frequently out-source analytical services,  IAL more recently
has  positioned  itself to capture this  pharmaceutical  business as well.  Many
large  pharmaceutical  companies  have  facilities  in and  around  New  Jersey.
Therefore,  IAL is both technically and geographically  well positioned to serve
this market.

IAL provides services on both a "job-by-job" and "bid" basis. Where projects are
undertaken on a job-by-job  basis,  IAL provides its customers  with a published
rate  sheet,  which  is  updated   periodically  based  upon  prevailing  market
conditions,  and which sets out the cost for each  analytical  parameter and the
time frame for each analysis to be completed.

IAL owns or leases with an option to purchase substantially all of the equipment
necessary to conduct the contracted  analyses.  This capital equipment is highly
sophisticated  and  maintenance  intensive.  Each type of  analysis  requires  a
specialized  type of equipment  that is maintained  and operated by  experienced
chemists according to applicable regulations and protocol.

IAL is required  by federal and state  regulations  to maintain  strict  Quality
Assurance/Quality   Control  ("QA/QC")  procedures.   IAL's  QA/QC  program  was
developed in  accordance  with the Good  Laboratory  Practices  and Current Good
Manufacturing  Practices of the U.S. Food and Drug  Administration  (the "FDA").
This program calls for routine and independent assessments of IAL's performance,
data and  procedures  to assure  compliance  with  approved  Standard  Operation
Procedures, which cover applicable aspects of the FDA's laboratory regulations.

To conduct its business, IAL also must maintain  certifications for each type of
analysis  performed  and from most  states  from  which IAL  receives  a sample,
although a number of states allow for certification  reciprocity.  IAL currently
runs approved soil,  wastewater and drinking water analyses for New Jersey,  New
York,  Connecticut  and  Rhode  Island.  In  addition,   pursuant  to  available
certification  reciprocity,  IAL  currently  is permitted to receive and perform
analyses on samples from Pennsylvania, Colorado and Maryland. IAL also holds FDA
and U.S.  Department of Agriculture  ("USDA")  certifications to perform certain
analyses.  Once  granted,  continuation  of these  certifications  generally  is
subject  to annual  performance  evaluations,  as well as  periodic  unannounced
in-house audits of IAL's laboratory facilities.

Customers and Marketing

Substantially all of IAL's customers are  private-sector  organizations.  Except
for EWMA, which accounted for 16.7%, no single customer  accounted for more than
5% of IAL's gross revenues during fiscal 1999.

IAL identifies and attracts new customers  through  marketing  efforts utilizing
its in-house  professional sales and marketing staff. While IAL's facilities are
located in New Jersey,  it accepts and processes samples from any state in which
it currently is certified or in which  certification  reciprocity  permits it to
perform the desired  analysis.  IAL  participates  in trade shows and  technical
conferences and produces literature to support its marketing program.

Competition

There has been a consolidation of the laboratory  industry during the last three
to  four  years.  As  a  consequence,  pricing  of  analytical  services,  which
previously had been on a downward trend,  has stabilized.  However,  competition
continues to be primarily on the basis of price and service, including technical
expertise.  IAL  believes  that  its  competitive  pricing,  contacts,  customer
relationships,  sales and marketing efforts and technical  expertise allow it to
remain stable and competitive.  IAL competes against companies, certain of which
are substantially  larger,  but many of which are of approximately the same size
as, or smaller than, IAL.

Personnel

IAL  provides  its  services  through  a staff of  approximately  60  employees,
consisting  of  approximately  40  professional   staff  (including   engineers,
chemists,  biologists and other  scientists) and 20 support  personnel.  None of
IAL's employees are represented by a labor union,  and IAL is not a party to any
collective bargaining agreement. IAL believes its employee relations are good.

In-Situ Oxidative Technologies

In-Situ  Oxidative  Technologies  ("ISOTEC")  is  owned  50% by Dr.  Richard  S.
Greenberg, Menlo's Chief Executive Officer, and 50% by an unrelated third party.
ISOTEC  is in the  business  of  remediating  contaminated  properties  using  a
proprietary  in-situ  treatment  program.  The services  performed by ISOTEC are
similar in nature to those provided by the operating  segments of Menlo.  During
1999 and 1998, EWMA and IAL have generated  revenue  directly from ISOTEC in the
amounts of  approximately  $183,000 and $36,000,  respectively  (see the related
party footnote in the accompanying notes to consolidated  financial statements).
Additionally, the similar nature of ISOTEC's services has enabled EWMA to obtain
contracts  and generate  revenues with  unrelated  customers in the past and may
potentially enable it to continue to do so in the future.

On  December  6,  1999,  Menlo  entered  into an  agreement  with  ISOTEC and an
unrelated  third party to advance it operating  capital.  As of the date of this
agreement,  the  Company was owed  approximately  $195,000  for  services it had
provided on behalf of ISOTEC, of which approximately $162,000 was outstanding as
of  December  31,  1998.   In   consideration   for  Menlo   entering  into  the
aforementioned agreement, ISOTEC agreed to repay in full the outstanding balance
of  approximately  $195,000.  In addition,  Menlo was granted the opportunity to
purchase up to 50% of ISOTEC.

The  agreement  calls for Menlo to advance  operating  funds up to  $250,000  to
ISOTEC in equal amounts to that being advanced by the unrelated  third party. In
return,  Menlo  will  receive  an  option  to  purchase  20% of Dr.  Greenberg's
ownership  interest in ISOTEC (10% of the  Company)  for each $50,000 or portion
thereof loaned to ISOTEC. The options are exercisable through June 30, 2001 at a
price of $1,000 per option.  As of March 28, 2000,  Menlo had loaned  $80,000 to
ISOTEC  and  therefore  has  two  options  to  purchase  a  total  of 40% of Dr.
Greenberg's  interest (20% of the Company) for $2,000. Due to ISOTEC's financial
condition,  Menlo's $80,000 advance/option investment in ISOTEC is being carried
at $0. Management does not intend to make any advances in excess of the $250,000
total  commitment to ISOTEC until ISOTEC shows an improvement in their financial
condition and ability to pay.

Potential Liability and Insurance

The Company, in the normal course of business,  encounters  potential liability,
including claims for errors and omissions, resulting from the performance of its
services.  The Company is party to lawsuits and is aware of  potential  exposure
related to certain claims. In the opinion of management,  adequate provision has
been made for all known  liabilities that are currently  expected to result from
these  matters,  and in the  aggregate,  such claims are not  expected to have a
material  impact  on the  financial  position  and  liquidity  of  the  Company.
Currently,  the  Company is provided a $5 million  per  occurrence,  $10 million
aggregate  professional  services  insurance policy through an unrelated,  rated
carrier. The Company also maintains a general liability insurance policy with an
unrelated, rated carrier.

ITEM 2. DESCRIPTION OF PROPERTY

EWMA operates out of two facilities located in Parsippany and West Windsor,  New
Jersey. The Parsippany facility consists of approximately  18,000 square feet of
office space leased from Greenberg Property LLC, a company controlled by Richard
S. Greenberg.  The lease,  which is at $14 per square foot, expires in June 2007
and is subject to two  five-year  renewal  options.  The West  Windsor  facility
consists of approximately 5,200 square feet of office and warehouse space leased
from an unaffiliated  lessor. The lease, which is at $5 per square foot, expires
in December 2000. Additionally, EWMA leases a warehouse facility in Boonton, New
Jersey  utilized for  equipment  and supply  storage.  The facility  consists of
approximately  6400  square  feet at a cost of $6 per  square  foot.  The  lease
expires in December 2004 and is leased from an unaffiliated  Lessor.  Management
believes that EWMA's  facilities  are adequate for EWMA's current needs and will
support  anticipated  future growth for at least the next five years.  EWMA also
expects, based on current market conditions, that suitable additional space will
be available on commercially acceptable terms as required in the future.

IAL operates out of facilities  located in Randolph,  New Jersey,  consisting of
five units of office and warehouse space leased from an unaffiliated lessor. The
lease,  which calls for monthly  payments of $6,875,  expires in December  2000.
Management  has entered  into a contract to purchase  the  facility in which IAL
operates  from the  current  unaffiliated  lessor at a cost of  $1,850,000.  The
contract is subject to certain contingencies,  including a mortgage contingency,
which are not yet satisfied.  Purchase of the facility will support  anticipated
future  growth  for at least the next five  years.  IAL also  expects,  based on
current market conditions,  that suitable  additional space will be available on
commercially acceptable terms as required in the future.

The principal offices of Menlo  Acquisition  Corporation are located at the EWMA
facility.

Menlo  believes  that the space  afforded by its  properties is adequate for the
current needs of its businesses.

ITEM 3.LEGAL PROCEEDINGS

The Company is currently  subject to certain claims and lawsuits  arising in the
ordinary  course  of  its  business.  In the  opinion  of  management,  adequate
provision has been made in the Company's  Consolidated  Financial Statements for
all known  liabilities  that are currently  expected to result from these claims
and  lawsuits,  and in the  aggregate  such  claims are not  expected  to have a
material effect on the financial position of the Company.  The estimates used in
establishing  these  provisions  could differ from actual results.  Should these
provisions change  significantly,  the effect on operations for any quarterly or
annual reporting period could be material.

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

The Company did not submit any  matters to the vote of security  holders  during
the fourth quarter of the fiscal year-ended December 31, 1999.

PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

The shares of Common  Stock of the  Company  trade on the OTC  "Bulletin  Board"
under the symbol "MENL". The range of high and low reported closing sales prices
for the Common Stock as reported by Nasdaq during the fiscal year ended December
31, 1999 were as follows:

                                         High                   Low
                                         ----                   ---
Fiscal Year 1999
-------------------
Quarter Ended:
         March 31, 1999.............    $1.50                  $1.00
         June 30, 1999..............    $3.00                  $1.25
         September 30, 1999.........    $3.00                  $2.50
         December 31, 1999..........    $2.625                 $0.25

Fiscal Year 1998
--------------------

Quarter Ended:
         March 31, 1998.............      *                      *
         June 30, 1998..............      *                      *
         September 30, 1998.........      *                      *
         December 31, 1998..........      *                      *

The prices set forth above reflect inter dealer prices,  without retail mark-up,
mark-down or commission and may not necessarily represent actual transactions.

*During 1998, there was a limited trading market for the shares of Focus,  which
had not yet emerged from bankruptcy.



Holders

On March 28, 2000, as reported by the Company's transfer agent, shares of Common
Stock were held by 367 holders of record.

Dividends

The Company did not pay any dividends during 1999. The payment by the Company of
dividends,  if any, is within the  discretion of the Board of Directors and will
depend on the Company's earnings, if any, its capital requirements and financial
condition,  as well as other relevant  factors.  The Board of Directors does not
intend to declare any dividends in the foreseeable  future,  but instead intends
to retain earnings, if any, for use in the Company's business operations.

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

Cautionary Statement Regarding forward-Looking Statements

This  report  contains  forward-looking  statements  made  pursuant to the "safe
harbor" provisions of the Private Securities  Litigation Reform Act of 1995. The
statements  are  identified  by words  such as "will,"  "expect,"  "anticipate,"
"plans," or  "intends"  and by other  descriptions  of future  circumstances  or
conditions. Such statements are based on current expectations and actual results
may differ  materially.  The  forward-looking  statements  include,  but are not
limited to, the possible impact of current and future claims against the Company
based upon  negligence  and other  theories  of  liability,  the level of future
purchases  of  fixed  assets  and  the  possibility  of  the  Company's   making
acquisitions during the next 12 to 18 months. Forward-looking statements involve
numerous  risks and  uncertainties  that could  cause  actual  results to differ
materially, including, but not limited to, the possibilities that the demand for
the  Company's  services may decline as a result of possible  changes in general
and  industry  specific  economic  conditions  and the  effects  of  competitive
services  and  pricing;  one or more  current or future  claims made against the
Company  may  result  in  substantial  liabilities;  and such  other  risks  and
uncertainties  as are  described  in reports  and other  documents  filed by the
Company from time to time with the Securities and Exchange Commission.

The following  discussion  should be read in conjunction  with the  consolidated
financial statements and notes thereto appearing elsewhere in this report.

Results of Operations
(In thousands of dollars, except share data)

The following tables set forth, for the years indicated: (i) the percentage that
certain items in the consolidated  statements of income and comprehensive income
of the  Company  bear to  gross  revenues,  and  (ii)  the  percentage  increase
(decrease) in dollar amounts of such items from year to year.

Comparison for Fiscal Years 1999 and 1998

                                                               Percentage
                                                                Increase
                                                               (Decrease)
                                                                 Fiscal
                                                                  Year
                                     Percentage                  Ended
                                  of Gross Revenue              12/31/99
                                  Fiscal Year Ended                vs.
                              12/31/99         12/31/98         12/31/98

Gross revenue                   100.0%          100.0%             5.8%
Direct project costs and other
   costs of operations           38.6            45.6            (10.5)%
                               ------          ------            -------
       Net revenue               61.4            54.4             19.5%
                               ------          ------            ------

Expenses:
    Labor and related expenses   13.6            14.6             (0.8)%
    Selling, general and
       administrative            38.0            37.8              6.3%
                              -------         -------           --------
       Totals                    51.6            52.4              4.3%
                               ------          ------            ------

Income from operations            9.8             2.0            404.2%

Other income (loss)               0.7            (2.6)           128.4%
                               ------         --------           ------

Income (loss) before income
   taxes                         10.5            (0.6)         2,108.5%
                                =====            =====         =========

Gross  revenues for the fiscal year ended  December 31, 1999 were $13,594 versus
$12,848 for the fiscal year 1998,  an increase of 5.8%.  Lab revenues  increased
$832 (net of inter-segment  billing) and Consulting  revenues decreased slightly
by $85.  Consulting revenue is composed of both hours billed by the professional
staff and  pass-through  billing of  subcontractor  costs associated with client
projects.  The amount of pass-through  billing decreased in 1999 versus 1998 but
was almost entirely offset by increased  utilization of the  professional  staff
versus the prior year. Profitability from hours billed is greater than that from
pass-through billing and resulted in increased income from operations as further
discussed below. The significant  increase in the revenue of the Lab segment was
a result of effective direct sales efforts from a larger sales force than in the
prior year, greater utilization of equipment used in performing Lab services and
the broadening of the customer base into the pharmaceutical industry.


Income  from  operations  was $1,331 in 1999 as  opposed to $264 for 1998.  This
represents an increase of 404.2%. Operating margins rose to 9.8% for the current
period from 2.0% for fiscal 1998.  The  increase in operating  income and margin
was due to higher  profitability in both the Consulting and Lab segments.  There
was a  significant  reduction  in the  dollar  amount  of direct  project  costs
incurred  in the  Consulting  segment  in  1999.  Consulting  revenue,  however,
remained  relatively  constant.  A  significantly  larger portion of revenue was
generated from  professional  services,  which is a more  profitable  component.
Therefore,   a  larger   percentage   of  revenue  was   recognized  as  income.
Profitability  of the Lab segment  resulted from the  increased  volume as noted
above. In the Lab segment,  marginal costs decrease as the volume increases.  It
costs  approximately  the same to  perform  one  analysis  as it does to perform
several  of  the  same  type.  Therefore,   as  analysis  volume  and  equipment
utilization  increase,  costs  remain  relatively  constant  and more  income is
generated.

Labor and related expenses remained relatively constant as compared to the prior
year.

Selling,  general and  administrative  expenses  increased  6.3% compared to the
prior year  primarily due to the increase in the Lab segment  direct sales force
and their associated direct selling expenses.

Other  income  (loss),  which is composed of  interest  expense,  administrative
income and sundry, was 128.4% greater than in 1998. The 1998 other income (loss)
amount of  ($334)  included  a charge of $306  related  to the  write-off  of an
accounts  receivable from an insolvent  affiliate.  No such charges were made in
1999.  Interest  expense  decreased  62.6% in 1999 as  compared  to  1998.  This
decrease was due to limited use of a revolving line of credit  throughout  1999.
There  have been no  amounts  outstanding  on the line  since  early  March 1999
whereas  there was  significant  usage of the facility  during 1998  (Borrowings
averaged approximately $500 throughout 1998). Additionally,  interest charges on
an  equipment  loan  held  by the  Lab  segment  have  decreased  due to  normal
amortization of the loan throughout 1999.

Income  before taxes for the period was $1426  compared  with a loss of ($71) in
1998, an increase of 2,108.5%.  The substantial  increase in income before taxes
in 1999 resulted from the issues discussed above. Additionally, the results from
1998  included  non-recurring  items  such  as  the  affiliate  write-off.   Tax
provisions  were  recorded at an  effective  rate of 40% for both 1999 and 1998.
Basic net income  (loss)  per share was $.16 in 1999  versus a loss of ($.01) in
1998. The Company had 5,263,348 shares  outstanding at December 31, 1999 and the
December  31, 1998 per share amount was  calculated  assuming the same number of
shares  were also  effectively  outstanding  at that  date.  For the year  ended
December 31, 1999,  diluted  earnings per share have not been presented  because
there were no  additional  shares  derived  from the  assumed  exercise of stock
options and the  application  of the treasury  stock method.  For the year ended
December 31, 1998, the Company had no potentially dilutive common shares.

Liquidity and Capital Resources

Net cash provided by  operations  for fiscal year 1999 was $2,852 as compared to
$510 for the prior  fiscal  year.  The  largest  factor of the  increase in cash
provided  by  operations  was the  implementation  of a new  project  accounting
software system in the Consulting  segment.  This enabled more timely billing of
the  Company's  services  and  resulting  in  improved  monitoring  of  accounts
receivable and quicker  conversion to cash.  Additional  factors  increasing the
cash  provided  by  operations  were:   substantial   increase  in  net  income,
implementation  of  more  stringent  cash  management  policies,  collection  of
accounts  receivable  from affiliated  companies and improved  vendor  relations
resulting in longer payment terms.

The Company made net capital  expenditures  on equipment and furnishings of $483
in 1999 compared to similar net capital expenditures of $484 the prior year. The
Company anticipates that its capital expenditures,  excluding acquisitions,  for
the upcoming year will be slightly  higher than those  incurred in 1999 in order
to maintain the technology within its Lab segment.  The Company utilized cash of
$506 in 1999 to re-pay, in full,  amounts  outstanding on its credit line and to
reduce a loan secured by equipment  used by the Lab  segment.  In 1998,  $694 of
cash was used for similar purposes.  Additionally,  for investment purposes, the
Company purchased $181 of marketable securities and approximately $500 of United
States  Government  securities  during 1999. No such  purchases were made during
1998.  Excess  operating  cash will continue to be invested in order to maximize
returns while maintaining acceptable risk tolerances.

The Company, in the normal course of business,  encounters  potential liability,
including claims for errors and omissions, resulting from the performance of its
services.  The Company is party to lawsuits and is aware of  potential  exposure
related to certain claims. In the opinion of management,  adequate provision has
been made for all known  liabilities that are currently  expected to result from
these  matters,  and in the  aggregate,  such claims are not  expected to have a
material  impact  on the  financial  position  and  liquidity  of  the  Company.
Currently,  the  Company is provided a $5 million  per  occurrence,  $10 million
aggregate  professional  services  insurance policy through an unrelated,  rated
carrier. The Company also maintains a general liability insurance policy with an
unrelated, rated carrier.

At December  31,  1999,  the Company  had cash and cash  equivalents  on hand of
$1,182.  The Company has a $750 revolving  credit line agreement that expires on
April 30,  2000.  The  banking  relationship  with the  current  lender  will be
terminated  at the  expiration  date of the credit  line.  Management  is in the
process of  negotiating  a similar line of credit as part of an overall  banking
relationship  with  a  new  lender.   Management  foresees  no  difficulties  in
finalizing  this new  relationship by the expiration date of the current one. At
December 31, 1999,  borrowings  under the line were $0 leaving $750 available to
the Company compared to $400  outstanding at December 31, 1998.  Borrowings were
available  to the Company at an interest  rate of 9.50% at December 31, 1999 and
8.50% at December  31, 1998.  The Company is in  compliance  with all  covenants
pertaining to the credit line agreement.

The Company  believes that its available  cash, as well as cash  generated  from
operations  and its  available  credit  line,  will be  sufficient  to meet  the
Company's  cash  requirements  for the balance of the fiscal  year.  The Company
intends  to  actively  search  for   acquisitions  to  expand  its  geographical
representation and enhance its technical capabilities.  Additionally,  the Board
of Directors has determined that acquisitions in aligned  businesses may provide
more  potential   users  of  the  Lab  segment  and  monetary   savings  due  to
consolidation  of  administrative  functions.  The Company  expects to utilize a
portion of its liquidity over the next 12 to 18 months for capital expenditures,
including  acquisitions  and  investments  in aligned  businesses.

Other than as  discussed  in Item 1. -  Description  of  Business,  there are no
present  agreements,  understandings  or other  arrangements with respect to any
acquisition or investment.  However,  future agreements concerning  acquisitions
may require the Company to obtain additional financing.

Year 2000 Compliance

The potential  risks of the Year 2000 issue were taken  seriously by the Company
and it devoted  resources to address the issue.  The Company  established a Year
2000  oversight  committee,  which was  assigned  to address the  following  key
components related to the Year 2000 issue:

          - Information applications, including the Company's project management
            and  accounting  systems
          - Computer  hardware,  software,  operating systems and network
            infrastructure including telecommunications systems
          - Facility and administrative systems
          - Major suppliers and customers' systems

The Company  also  conducted  an inventory  and  assessment  of its hardware and
software  for Year 2000  compliance.  All  non-compliant  components  identified
(hardware or software) were made compliant or replaced with compliant  versions.
Facility and administrative systems that support the Company (such as telephone,
security systems, etc.) were also assessed for Year 2000 compliance and required
upgrades to such hardware and software were completed.

The costs associated with Year 2000 compliance were not material and fell within
normally  anticipated  operating  and  capital  spending.  These  costs were not
material to the financial position of the Company.

The Company believes that the completion of its Year 2000 Project  significantly
reduced  the  probability  of  major   interruptions   to  its  normal  business
operations.  To date,  the Company  has not  experienced  any Year 2000  related
difficulties

Seasonal Trends

The Company does not believe that its business is subject to seasonal trends.

Inflation

The Company  does not believe that  inflation  had a  significant  impact on the
Company's results of operations for the periods presented.  On an ongoing basis,
the Company  attempts to minimize  any  effects of  inflation  on its  operating
results by controlling  operating  costs,  and,  whenever  possible,  seeking to
insure that billing rates reflect increases in costs due to inflation.

ITEM 7.  FINANCIAL STATEMENTS

         The  financial  statements  of the  Company are set forth in a separate
section of this Annual Report on Form 10-KSB. See "Item 13. Exhibits and Reports
on Form 8-K" and the Index to  Financial  Statements  on page F-1 of this Annual
Report on Form 10-KSB.


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

         None

<PAGE>


                  PART III

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

See the section  captioned  "Election of  Directors"  included in the  Company's
Proxy  Statement in connection  with its Annual Meeting  scheduled to be held on
June 7, 2000, which section is incorporated herein by reference.

ITEM 10. EXECUTIVE COMPENSATION

See the section  captioned  "Executive  Compensation"  included in the Company's
Proxy  Statement in connection  with its Annual Meeting  scheduled to be held on
June 7, 2000, which section is incorporated herein by reference.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     (a) Security Ownership of Certain Beneficial Owners

     See the section captioned "Principal  Shareholders of the Company" included
in the Company's Proxy Statement in connection with its Annual Meeting scheduled
to be held on June 7, 2000 which section is incorporated herein by reference.

     (b) Security Ownership of Directors and Officers

     See the section captioned "Principal  Shareholders of the Company" included
in the Company's Proxy Statement in connection with its Annual Meeting scheduled
to be held on June 7, 2000, which section is incorporated herein by reference.

     (c) Changes in Control

     The Company knows of no contractual arrangements which may, at a subsequent
date, result in a change of control of the Company.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

See the section captioned "Certain Transactions" included in the Company's Proxy
Statement  in  connection   with  its  Annual  Meeting   scheduled  to  be  held
June 7, 2000, which section is incorporated herein by reference.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits

         (1) The  financial  statements  of the Company and the report  thereon
          listed on the Index to  Financial  Statements  on page F-1  hereof are
          being filed as part of this Annual Report on Form 10-KSB.

         (2) The  following  exhibits  are  being  filed as part of this
         Annual Report on Form 10-KSB:



          2.1*      Agreement with In-situ Oxidative Technologies, Inc., Richard
                    S.Greenberg, Michael Mandelbaum, Rosebud, LLC and the
                    Company.

          2.2       Second Amended Plan of Reorganization filed as of August 12,
                    1998 with the United States Bankruptcy  Court,(incorporated
                    by reference to Item 3 of the Company's Current Report on
                    Form 8-K filed October 29, 1998.)

          3.1*      Certificate of  Incorporation  of Focal Surgery,  Inc.
                    (former name of the Company)dated October 21, 1992.

          3.2*      Amended and Restated Certificate of Incorporation of Focal
                    Surgery, Inc. (former name of the Company) dated
                    April 27, 1993.

          3.3*      Certificate of Amendment of Amended and Restated Certificate
                    of Incorporation of Focal Surgery, Inc.(former name of the
                    Company) dated September 24, 1993.

          3.4*      Certificate of Amendment of Certificate of Incorporation of
                    Focal Surgery, Inc. (former name of the Company) dated
                    June 17, 1994.

          3.5*      Certificate of Amendment of Certificate of Incorporation of
                    Focus Surgery, Inc. (former name of the Company) dated
                    February 4,1997.

          3.6*      Second Amended and Restated Certificate of Incorporation of
                    Menlo Acquisition Corporation dated March 10,1999.

          3.7*      By-Laws of the Company.

          4.1*      Form of Certificate for Common Stock.

          4.2*      1999 Stock Option Plan of the Registrant.

          4.3*      Form of Nonstatutory Stock Option Agreement under the 1999
                    Stock Option Plan.

          4.4*      Form of Incentive Stock Option Agreement under the 1999
                    Stock Option Plan.

          10.1*     Lease  dated  as  of  June 23, 1997 between  Greenberg
                    Property, LLC and the Company.

          10.2*     Contract for property purchase dated as of February 2, 2000
                    between Integrated Analytical Laboratories, LLC and
                    East Morris Realty Associates, LLC, and Letter of Extension
                    Dated March 15, 2000.

          10.3*     Letter Agreement dated August 26, 1997 between PNC Bank,
                    National Association and Integrated Analytical
                    Laboratories, LLC.

          10.4*     Letter Agreement dated August 26, 1997 between PNC Bank,
                    National Association and Environmental Waste Management
                    Associates, LLC.

          10.5*     Letter Agreement dated February 22, 2000 between PNC Bank,
                    National Association and Environmental Waste Management
                    Associates, LLC.

          10.6      Employment Agreement dated as of June 1998 between the
                    Company and Lawrence B. Seidman  (incorporated by reference
                    to Exhibit 10.1 of the Company's Current Report on Form 8-K
                    filed May 10, 1999).

          10.7      Employment Agreement dated as of June 1998 between the
                    Company and Richard S. Greenberg (incorporated by reference
                    to Exhibit 10.2 of the Company's Current Report on Form 8-K
                    filed May 10, 1999).

          16        Letter on change in certifying accountant (incorporated by
                    reference to Item 4 of the Company's Current Report on
                    Form 8-K filed May 10, 1999).

          21*       Subsidiaries of the Registrant

          27*       Financial Data Schedule.
*Exhibits marked with an asterisk are attached as Exhibits to this Annual
  Report.

          (b)       Reports on Form 8-K

          No  reports on Form 8-K were  filed  during the fourth  quarter of the
period covered by this report.


<PAGE>


                                  SIGNATURES

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

                                 Menlo Acquisition Corporation
                                 (Registrant)


                                 By:  /s/ Richard S. Greenberg
                                      ---------------------
                                      Richard S. Greenberg
                                      Chairman of the Board

                                 Date:  March 28, 2000


In accordance  with the  Securities  Exchange Act of 1934,  this report has been
signed below by the  following  persons on behalf of the  registrant  and in the
capacities and on the dates indicated.

           Name                   Title                         Date
           ----                   -----                         ----

                             Chairman of the Board,        March 28, 2000
                             Chief Executive Officer
                             and Director (principal
 /s/ Richard S. Greenberg    executive officer)
 ------------------------
 Richard S. Greenberg

                             President, General Counsel    March 28, 2000
/s/ Lawrence B. Seidman      and Director
-------------------------
 Lawrence B. Seidman

                             Chief Financial Officer       March 28, 2000
/s/Frank Russomanno          (principal financial and
-------------------------    accounting officer)
 Frank Russomanno

/s/ George Greenberg         Secretary and Director        March 28, 2000
-------------------------
George Greenberg