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 year ended December 31, 2000

                         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   X        No

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. [ ]

At March 29, 2001 the  registrant  had issued and  outstanding  an  aggregate of
5,263,348 shares of its common stock.

The issuers revenues from its most recent year were $15,176,843.
                                                    -----------

Aggregate  market  value  of the  voting  stock  held by  non-affiliates  of the
registrant on March 29, 2001 was $179,682.
                                 --------

<PAGE>


                           Menlo Acquisition Corporation
                         Annual Report on Form 10-KSB
                      For the Year Ended December 31, 2000

                               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" or the "Company") is a publicly traded
Delaware  corporation  formerly doing business as Focus Surgery Inc.  ("Focus").
Menlo is 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."), are environmental  consulting firms providing
a broad  range  of  environmental  services  related  to the  investigation  and
remediation of hazardous  waste sites.  EWMA, LLC and EWMA, Inc. are referred to
collectively  as "EWMA." EWMA has offices in Parsippany  and West  Windsor,  New
Jersey and Englewood, Colorado.

Integrated Analytical Laboratories,  LLC, a New Jersey limited liability company
("IAL,  LLC"),  and  Integrated  Analytical  Laboratories,  Inc.  a  New  Jersey
corporation ("IAL, Inc."), are firms providing analytical laboratory services to
the  environmental  and  pharmaceutical  industries.  IAL, LLC and IAL, Inc. are
referred to collectively as "IAL." IAL is located in Randolph,  New Jersey. IAL,
LLC owns 100% of Integrated  Analytical Realty, LLC ("IAR,  LLC"), a real-estate
holding company that owns the building in which IAL, LLC operates.  IAR, LLC was
formed subsequent to the reverse acquisition described below.

Effective January 1, 2001, EWMA, Inc. and IAL, Inc., which had no operations but
primarily provided payroll services for other members of the consolidated group,
were merged into EWMA, LLC and IAL, LLC, respectively.

EWMA, LLC; EWMA,  Inc.; IAL, LLC; and IAL, Inc.; are referred to collectively as
the "Acquired Entities". The companies were related by common ownership prior to
the reverse acquisition described below.


<PAGE>

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").  During the year
ended  December  31,  2000,  Menlo  purchased  the  remaining 1% interest in the
Acquired Entities from an affiliated party for the nominal amount of $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 statements of
income for the years ended  December  31,  2000 and 1999  reflect the results of
operations of the Acquired  Entities for all periods and of Menlo  subsequent to
the  Acquisition  on March  10,  1999.  Prior to the  Acquisition,  Menlo was in
bankruptcy and had limited operating activities.

Business and Management of Menlo

As a public  holding  company,  Menlo's sole assets are its  investments  in the
Acquired Entities.  The management of Menlo overlaps  significantly with that of
the Acquired Entities.  As a holding company Menlo does not have ongoing sources
of revenues or income  apart from the  Acquired  Entities.  Therefore,  Menlo is
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 controls the timing and amount of any  dividends,  is
primarily composed of individuals closely associated with the Acquired Entities,
and the former owners of the Acquired  Entities 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.


<PAGE>

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.


<PAGE>

Customers and Marketing

EWMA's  customers are primarily  private-sector  organizations.  During the year
ended December 31, 2000, 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
2000.

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,  Pennsylvania and Colorado 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  60  full-time
employees,   consisting  of  approximately  40  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.


<PAGE>

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 federal,  as well as, numerous state regulatory
agencies for the environmental  industry.  In the pharmaceutical  industry,  the
QA/QC program follows the Current Good  Manufacturing  Practices ("cGMP") of the
U.S.  Food and Drug  Administration  (the "FDA").  The QA/QC  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 both the FDA and the Environmental Protection Agency's
(the "EPA") laboratory regulations.

When performing  environmental  testing, IAL must follow the mandated procedures
from the states in which the work  originates,  allowing IAL to conduct drinking
water, soil, solid waste, groundwater and wastewater analysis in most states. In
certain  states,  this means IAL must maintain  certifications  for each type of
analysis performed. 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.   IAL  currently   holds
certification,  either through direct certification or through  reciprocity,  in
California,  Connecticut,  Florida,  Illinois, Kansas, Louisiana, New Hampshire,
New Jersey,  New York,  Oregon,  Pennsylvania,  Rhode Island and Utah.  IAL also
holds an U.S.  Department  of  Agriculture  ("USDA")  soil permit  allowing  the
shipment and analysis of soil samples from all foreign sources.

For the  pharmaceutical  industry,  compliance  with FDA  guidelines  and audits
allows for the analyses of samples  throughout  the entire United States and the
world.  Continual  adherence to cGMP  guidelines and frequent audits by both the
FDA and  customers  allow IAL to  maintain  the  ability to  perform  analytical
testing.

Customers and Marketing

Substantially all of IAL's customers are private-sector organizations. No single
customer  accounted for more than 5% of IAL's gross revenues  during 2000,  with
the exception of EWMA, which accounted for 13.4% of the revenues.

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 four
to  five  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  full-time
employees,   consisting  of  approximately  40  professional   staff  (including
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.


<PAGE>

In-Situ Oxidative Technologies

In-Situ  Oxidative  Technologies  ("ISOTEC")  is  owned  50% by Dr.  Richard  S.
Greenberg,  Ph.D.,  Menlo's Chairman and 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 EWMA and IAL.  During 2000
and 1999,  EWMA and IAL  generated  revenues  directly  from  transactions  with
ISOTEC.  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 that gave Menlo
the opportunity to purchase up to 50% of the equity interest in ISOTEC, pursuant
to  certain  conditions.   (See  ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED
TRANSACTIONS for further information concerning this agreement).

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.
Management  believes that the Company's general liability insurance policy (with
an unrelated, rated carrier) is adequate.

ITEM 2. DESCRIPTION OF PROPERTY

EWMA operates out of three facilities. One is located in Parsippany, New Jersey,
another  in West  Windsor,  New  Jersey  and the third  facility  is  located in
Englewood,  Colorado.  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 ranges from
$6.25 to $6.75 per square  foot,  expires in  December  2005.  The  facility  in
Englewood, Colorado is leased by an affiliate and EWMA is charged a nominal rent
for use of office  space.  Additionally,  EWMA  leases a  warehouse  facility in
Boonton,  New Jersey  utilized for  equipment and supply  storage.  The facility
consists of approximately 6,400 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
six units of office and  warehouse  space.  The  building is owned by IAR, LLC a
wholly owned  subsidiary of IAL. The building was  purchased  during 2000 with a
combination  of internal  capital and a mortgage  obtained from an  unaffiliated
lending institution.  (See the long-term debt footnote in the accompanying notes
to consolidated  financial  statements).  Management  believes that 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 EWMA's
Parsippany, New Jersey facility.

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


<PAGE>

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 year ended December 31, 2000.

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 years ended  December 31,
2000 and 1999 were as follows:

                                        High                   Low
                                        ----                   ---
Year 2000
---------
Quarter Ended:
         March 31, 2000..........       $3.25                  $0.375
         June 30, 2000...........       $2.50                  $1.50
         September 30, 2000......       $1.625                 $0.80
         December 31, 2000.. ....       $1.1875                $0.8125

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

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

Holders

On March 29, 2001, as reported by the Company's transfer agent, shares of Common
Stock were held by 381 holders of record.


<PAGE>

Dividends

The Company did not pay any dividends during 2000. 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 table sets 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.


<PAGE>

Comparison for Years 2000 and 1999
                                                                Percentage
                                                                 Increase
                                                                (Decrease)
                                                                   Year
                                      Percentage                  Ended
                                   of Gross Revenue              12/31/00
                                      Year Ended                    vs.
                                12/31/00        12/31/99         12/31/99
                                --------        --------         --------
Gross revenue                     100.0%         100.0%           11.6%
Direct project costs and other
   costs of operations             37.9           38.6             9.6%
                                  -----           ----

       Net revenue                 62.1           61.4            12.9%
                                   ----           ----

Expenses:
    Labor and related expenses     14.4           13.6            18.1%
    Selling, general and
       administrative              37.3           38.0             9.6%
                                   ----           ----

       Totals                      51.7           51.6             11.8%
                                   ----           ----
Income from operations             10.4            9.8             18.7%

Other income                        1.5            0.7            142.1%
                                    ---          -----

Income before provision for
   income taxes                    11.9           10.5             26.9%
                                  =====         ======


Gross  revenues for the year ended December 31, 2000 were $15,177 versus $13,594
for the year ended  December  31,  1999,  an  increase  of 11.6%.  Lab  revenues
increased  $1,208  (net  of  inter-segment   billing)  and  Consulting  revenues
increased by $375.  The  significant  increase in the revenue of the Lab segment
was a continued  result of  effective  direct  sales  efforts.  The Lab has been
particularly successful in winning analytical testing bids from large consulting
firms.  In addition,  they have obtained a larger share of the work granted from
existing clients.  Significant investment made in equipment has also resulted in
increased  testing  capacity  and  greater  utilization  of  equipment  used  in
performing Lab services. Revenue has also increased due to the broadening of the
customer base into the pharmaceutical  industry.  The increase in the revenue of
the  Consulting  segment was primarily a result of the revenue  generated by the
Colorado  location which was opened in January 2000. Net revenue (that generated
directly  by  the   utilization  of  the   professional   staff)   increased  by
approximately  $209  while  the  pass-through  billing  of  subcontractor  costs
associated with client  projects  accounted for the remainder of the increase in
the Consulting segment.

Income from  operations  was $1,580 in 2000 as opposed to $1,331 for 1999.  This
represents an increase of 18.7%. Operating margins rose to 10.4% for the current
period  from 9.8% for 1999.  The  increase  in  operating  income and margin was
primarily due to the higher profitability of the Lab segment. In this operation,
marginal  costs  decrease  as  the  volume  of  testing   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.  Accordingly,  a
large percentage of the revenue increase noted above was retained as income.  In
the Consulting  segment,  operating  margins and income decreased as the revenue
gain was offset by higher labor and related  expenses  and selling,  general and
administrative costs as explained below.


<PAGE>

Labor and  related  expenses  increased  by 18.1% as compared to the prior year.
This  increase  was  a  result  of  higher  costs   associated   with  increased
compensation  rates in order to retain and attract qualified  personnel,  higher
employee  benefit costs and additional  personnel  associated  with the Colorado
office of the Consulting segment.

Selling,  general and  administrative  expenses  increased  9.6% compared to the
prior year  primarily  due to the  increase in the  following:  i) salaries  for
administrative personnel, ii) advertising costs and iii) expenses related to the
Colorado office of the Consulting segment.

Other  income  (expense),  which  is  composed  of  administrative  fee  income,
investment  income  and  interest  expense,  was  142.1%  greater  than in 1999.
Investment  income increased  substantially  due to higher cash balances on hand
and  invested  than  in the  prior  year.  Administrative  fee  income  remained
relatively  constant and interest expense decreased to a minimal amount in 2000.
The  interest  expense  reduction  was  due to the  repayment,  in  full,  of an
equipment loan held by the Lab segment.

Income  before taxes for the period was $1,809  compared with $1,426 in 1999, an
increase of 26.9%. The increase in income before taxes in 2000 resulted from the
issues discussed above. Tax provisions were recorded at an effective rate of 39%
for 2000 and 40% for 1999.  Basic net income  per share was $.21 in 2000  versus
$.16 in 1999. The Company had 5,263,348 shares  outstanding at both December 31,
2000 and 1999. For the years ended December 31, 2000 and 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.  Such potentially  dilutive  securities,  however,  could
dilute basic earnings per share in the future.

Liquidity and Capital Resources

Net cash  provided by  operations  for 2000 was $2,200 as compared to $2,852 for
the prior year.  The primary  components  of cash  provided by operations in the
current year were higher net income and continued improvement in the turnover of
outstanding accounts  receivable.  This was partially offset by the reduction in
accounts  payable made  possible by the  increased  cash  collections.  Although
significant  cash was  provided by  operations  this year,  it decreased by $652
versus the prior year. In 1999,  the large amount of cash provided by operations
was  primarily  a  result  of the  implementation  of a new  project  accounting
software system in the Consulting  segment.  This enabled more timely billing of
the  Company's  services  and  resulted  in  improved   monitoring  of  accounts
receivable and quicker  conversion to cash.  Additional  factors  concerning the
cash  provided  by  operations  in both  years were the  implementation  of more
stringent cash  management  policies and collection of accounts  receivable from
affiliated companies.

The Company made net capital expenditures on property, equipment and furnishings
of $1,401 in 2000 compared to net capital  expenditures  of $483 the prior year.
The most significant expenditure was the purchase of the Lab segment's operating
facility for  approximately  $1,850.  This  purchase was financed  with a $1,200
mortgage loan and approximately  $650 of Company working capital.  Additionally,
expenditures  were made to  maintain  and  enhance  the  technology  within  the
operating  segments.  The Company  anticipates  that its  capital  expenditures,
excluding  acquisitions,  for the  upcoming  year  will be  approximately  $600,
primarily to enhance the  technology  in the Lab segment.  The Company  utilized
cash of $284 in 2000 to re-pay, in full, a loan secured by equipment used by the
Lab segment and to reduce the mortgage  mentioned  above.  In 1999, $506 of cash
was used for similar reduction of then outstanding bank debt. Additionally,  the
Company redeemed  approximately  $497 of United States Government  securities in
2000 while 1999 activity  included a purchase of $181 of  marketable  securities
and approximately $497 of United States Government securities.  Excess operating
cash will  continue  to be  invested in highly  liquid  instruments  in order to
maximize returns while maintaining acceptable risk tolerances.


<PAGE>

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.

At December  31,  2000,  the Company  had cash and cash  equivalents  on hand of
$2,195 and  working  capital  of  $4,130.  The  Company  has a $1,000  revolving
line-of-credit  facility available to its operating segments.  In addition,  the
Company  has a $750 line that can be utilized  for  purchase  or  re-finance  of
equipment.  Any portion of the $750  equipment  line, if utilized,  will convert
into a term loan with a maximum five-year  amortization.  Outstanding borrowings
bear  interest at the prime rate less .5% (an  effective  rate of 9% at December
31,  2000).  These credit lines replace a previous  $750  revolving  credit line
agreement that expired on April 30, 2000. In conjunction  with that  expiration,
the Company paid off, in full,  its  long-term  debt in the amount of $248,  the
outstanding balance on April 30, 2000. This transaction left the Company with no
remaining  bank debt,  exclusive  of the $1,200  mortgage  discussed  above.  At
December 31, 2000, there were no other borrowings  outstanding  leaving the full
amounts of both the revolving line-of-credit and the equipment line available to
the  Company.  The  Company  is  in  compliance  with  all  financial  covenants
associated  with  the  credit  line  agreements  and the  mortgage.  Outstanding
borrowings are collateralized by substantially all of the Company's assets.

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 at least the next twelve  months.  The Company
intends  to  continue  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 intends 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.

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 and prices for its services 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.



<PAGE>

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

None

PART III

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

The Company's Board of Directors is presently  comprised of five members,  three
of which are also  officers  of EWMA.  Directors  of the  Company are elected to
serve for a one-year term or until their respective successors have been elected
and qualified.

The  following  section sets forth certain  information  regarding the Company's
Board of Directors and Executive Officers, as well as certain Executive Officers
of the  Subsidiaries  of the Company.  Except as  described in ITEM 12.  CERTAIN
RELATIONSHIPS   AND  RELATED   TRANSACTIONS,   there  are  no   arrangements  or
understandings  between any director  listed below and any other person pursuant
to which such director was selected.

The business  experience  of each  director and  executive  officer is set forth
below.

Richard S. Greenberg,  Ph.D.,  (Age 42) is Chairman and Chief Executive  Officer
and a Director of Menlo.  He has served as a Director  since March 10, 1999. Dr.
Greenberg  founded EWMA INC and IAL INC in 1987 and in April 1997 organized EWMA
LLC and IAL LLC.  He has  served  as  Chairman  and CEO of EWMA LLC and EWMA INC
since  their  respective  organization.   Dr.  Greenberg  has  had  considerable
experience in the environmental and chemical industries, including as a research
chemist  with E.I.  DuPont  De  Nemours  and  Company,  from  1983 to 1986.  Dr.
Greenberg  holds a Ph.D. in Chemistry  from the  University of  California,  San
Diego,  as well as a B.S.  degree in  chemistry  from Duke  University.  He is a
member of a number of professional  associations including the Water Environment
Federation, the American Chemical Society (Environmental Division), the American
Chemical Society (Organic  Division),  the Commerce and Industry  Association of
New Jersey,  the National Ground Water Association and the National  Association
of Corrosion Engineering. He has written and spoken extensively on environmental
matters and holds a number of patents.  Dr.  Greenberg  is the son of Elaine and
George Greenberg.

Lawrence B. Seidman (Age 53) is the President, General Counsel and a Director of
Menlo. He has been an executive officer of EWMA since January 1999.  Previously,
Mr.  Seidman has acted as a consultant  to EWMA INC and EWMA LLC and IAL INC and
IAL LLC on financial  and legal  matters since 1991. He has served as a Director
since March 10, 1999.  Since 1994,  he has been the Manager and President of the
Corporate  General Partner for several Limited  Liability  Companies and Limited
Partnerships  that buy and sell publicly traded bank and thrift stocks. He is on
the Board of Directors of First  Federal  Savings and Loan of East  Hartford and
Ambanc  Holding  Company,  Inc. Mr.  Seidman  holds a J.D.  degree from American
University and a B.S. degree in Marketing  Management from St. Peter's  College.
He also has taken post-graduate courses in taxation at Georgetown University.

George  Greenberg  (Age 73) is the  Secretary  and a Director  of Menlo.  He has
served as a Director  since March 10, 1999. He has been an officer of EWMA since
its   formation  in  1987,   serving  from  1987  to  1996  as  manager  of  the
transportation and disposal department and, from 1997 to the present, heading up
its  day-to-day  internal  Quality  Control/Quality   Assurance  operations.  In
addition,  he  is  responsible  for  procurement  of  equipment,  materials  and
supplies. Mr. Greenberg is the father of Dr. Richard S.Greenberg.


<PAGE>
Daniel  Lehrhoff  (Age 49) is a Director and Chairman of the Audit  Committee of
Menlo.  He has served as a Director since November 9, 2000. Mr.  Lehrhoff is the
President of I. Lehrhoff & Company, an appliance  distribution business that has
been in  existence  since 1918.  Additionally,  he is the  President of Sterling
Import-Export,  Inc., an importer and distributor of Table Top related products,
and Chief Executive Officer of Integrated Premium Concepts, Inc., a company that
designs, implements and fulfills programs for employee and customer incentives.

Dennis  Pollack  (Age 50) is a  Director  and Member of the Audit  Committee  of
Menlo.  He has served as a Director since November 9, 2000. Mr. Pollack has been
the  Managing  Director of Pegasus  Funding  Group  (Newton  Square,  PA.) since
December of 1996.  He is also  currently  acting as a  consultant  to the Valley
National Bank of Wayne,  New Jersey and the Connecticut  Bank of Commerce.  Over
the years, Mr. Pollack has served in various  positions from President and Chief
Executive  Officer to member of the board of directors of several  corporations,
banks and community organizations.

Frank Russomanno (Age 42) is the Chief Financial  Officer of Menlo as well as an
executive  officer of EWMA and IAL. Mr.  Russomanno has over 20 years experience
in the accounting and financial fields, having previously held varying positions
with Arthur  Andersen,  Warner-Lambert  and Olivetti.  He holds a B.S. degree in
accounting and a M.B.A. in finance from Seton Hall  University.  Mr.  Russomanno
has been associated with the Company since 1999.

Michael H. Leftin, Ph.D., (Age 44) is an executive officer of IAL. He has served
as  Laboratory  Director  of IAL  since  1988.  Dr.  Leftin  has  over 20  years
experience in the chemical  research and analytical  fields,  having  previously
held a senior research  position with Rohm and Haas. Dr. Leftin holds a Ph.D. in
Synthetic Organic Chemistry from the University of California, San Diego and has
performed  post-doctoral research at the Biophysica Foundation.  He also holds a
B.S. degree in Chemistry from the University of Colorado at Boulder.

Kevin D.  Orabone  (Age 41) is an  executive  officer of EWMA.  He has served as
Vice-President  of EWMA since 1998.  He has been employed by EWMA since 1989. In
his current  capacity,  Mr. Orabone is responsible  for the management of EWMA's
entire technical staff. Previously, he served in various positions of increasing
responsibility for the company. Mr. Orabone is a Licensed Professional Geologist
in the  state of  Indiana,  a  Professional  Geologist  in the  commonwealth  of
Pennsylvania and a Certified  Professional Geologist with the American Institute
of  Professional  Geologists.  He holds a M.S.  degree in Geology  from  Rutgers
University  and a B.S.  degree in Geology from the  University of Miami in Coral
Gables.  Mr. Orabone has completed advance training in ground water modeling and
hydrogeology  and is an active member of the National  Ground Water  Association
and the Geological Association of New Jersey.

Director Compensation

Outside  Directors  of the  Company  (Mr.  Lehrhoff  and  Mr.  Pollack)  receive
director's  fees in the amount of $1,250 per Board meeting.  The other directors
do not receive any compensation for serving in that capacity.

Compliance with Section 16(a) of the Exchange Act

Section  16(a)  of the  Exchange  Act  requires  that the  Company's  directors,
executive  officers and greater than 10 percent  beneficial owners file with the
Securities  and Exchange  Commission  certain  reports  regarding  such person's
ownership of the Company's securities.  Directors,  officers and greater than 10
percent beneficial owners are required by applicable  regulations to furnish the
Company  with copies of all Section  16(a)  forms they file.  Based  solely on a
review of the information  furnished to the Company,  the Company  believes that
during  the years  2000 and 1999,  all  filing  requirements  applicable  to its
directors, officers and greater than 10 percent beneficial owners were satisfied
on a timely basis, except that reports were not filed for two executive officers
(Mr.  Russomanno  and Mr.  Orabone)  upon the issuance of stock option grants in
1999 and for three  executive  officers  (Mr.  Russomanno,  Mr.  Orabone and Mr.
Leftin)  upon the issuance of stock  option  grants in 2000.  These late filings
were  inadvertent  and the required  filings were made promptly after noting the
failure to file.

ITEM 10. EXECUTIVE COMPENSATION

Executive Compensation

All of the officers  listed below were  compensated by the Acquired  Entities of
the  Company  for the  years  indicated.  Effective  January  1,  2001,  Dr.  R.
Greenberg,   Mr.  Seidman,  Mr.  Russomanno  and  Mr.  G.  Greenberg  are  being
compensated directly by Menlo.

The following table sets forth information  concerning  compensation paid by the
Acquired  Entities of the Company to the Named  Officers.  Information for years
prior to 1999 relates to compensation paid by the Acquired Entities before their
acquisition by the Company.


<PAGE>
-------------------------------------------------------------------------------
                                             Other
Name &                                      Annual                   All Other
Principal               Salary     Bonus     Comp.      Options     Compensation
Position        Year      $          $       $ (1)       # (3)           $
-------------------------------------------------------------------------------
Richard S. Greenberg, Ph.D. (a)
                2000   261,250         0
                1999   260,000         0
                1998   282,001     5,000

Lawrence B. Seidman (b)
                2000   156,750
                1999   145,788         0                               2,500 (4)
                1998        0          0                             143,778 (4)

Frank Russomanno (c)
                2000   101,539    23,000                 8,000
                1999   100,077(5)      0                 5,000
                1998        0          0

George Greenberg (d)
                2000    50,040         0    9,053(2)
                1999    50,040         0   11,546(2)
                1998    50,040    40,000   11,766(2)

Michael H. Leftin, Ph.D. (e)
                2000   130,000    35,213                 8,000
                1999   121,817         0
                1998   106,360         0

Kevin  D. Orabone (f)
                2000   108,416         0                 8,000
                1999   101,846         0                 5,000
                1998    92,579     7,500


(a) Chairman and CEO of the Company, Chairman and CEO of EWMA INC. and EWMA LLC
(b) President and General Counsel of the Company and EWMA INC. and EWMA LLC
(c) Chief Financial Officer of the Company and Acquired Entities
(d) Secretary of the Company
(e) President and CEO of IAL INC. and IAL LLC
(f) Vice President of EWMA, INC. and EWMA LLC


<PAGE>



(1)  Pursuant  to SEC rules,  the table  above  excludes  perquisites  and other
     personal  benefits  which do not  exceed  the  lesser of  $50,000 or 10% of
     salary and bonus.
(2)  The primary  component of Mr. George  Greenberg's  "Other Annual Comp." is
     automobile use in the amount of $6,868,  $9,362 and $9,582 for 2000, 1999
     and 1998, respectively.
(3)  For  additional  information  regarding  this  award,  see the  table
     below captioned  "Option  Grants  in Last  Fiscal  Year."
(4)  Mr.  Seidman became an employee of EWMA INC. as of January 11, 1999. Prior
     to that date he was retained as a consultant. The amounts shown in this
     column are fees paid for those consulting services.
(5)  Mr. Russomanno became an employee of EWMA INC. as of January 4, 1999.

The following table provides information  regarding stock options granted during
2000.

                        OPTION GRANTS IN LAST FISCAL YEAR

                          Number of    % of Total
                          Securities     Options       Exercise
                          Underlying    Granted to     Or Base
                            Option      Employees       Price        Expiration
Name                        Grant     During the Year   ($/Sh)          Date
--------------------------------------------------------------------------------
Richard S. Greenberg, Ph.D.    0            --            --               --
Lawrence B. Seidman            0            --            --               --
Frank  Russomanno           8,000         9.11           1.00           11/30/10
George Greenberg               0            --            --               --
Michael H. Leftin, Ph.D.    8,000         9.11           1.00           11/30/10
Kevin D. Orabone            8,000         9.11           1.00           11/30/10
--------------------------------------------------------------------------------
All executive officers     24,000        27.33           1.00           11/30/10
as a group

(1)  The vesting schedule of the option is 20% annually beginning one year from
     the grant date of December 1, 2000.

Prior to March 10, 1999, no options were issued or outstanding.

Employment Agreements

On June 1, 1998, the Company entered into a five-year  employment agreement with
Messrs. Seidman and Greenberg.  The agreement provides for an annual base salary
in an amount not less than $150,000 and $260,000,  respectively.  The agreements
became  effective on March 10, 1999. The term of the agreement is  automatically
extended for  successive  one (1) year periods,  unless the Company  provides at
least sixty (60) days  notice in advance of year-end  that the term is not to be
extended.  The agreement  provides for  termination  upon Messrs.  Seidman's and
Greenberg's death, for cause or in the case of certain other events specified in
the agreement.

If Messrs. Seidman's and Greenberg's employment is "involuntarily terminated" by
the Company other than in connection  with or within 60 months after a change in
control of the  Company  they will be  entitled  to receive (i) payment of their
base salary during the remaining term of the agreement in the same manner and at
the same times  received  while  employed and (ii) for the remaining term of the
agreement,  substantially the same health insurance  benefits received as of the
date of termination. The term "involuntary termination" means termination by the
Company  other than for cause or due to the  retirement,  death or disability of
either Messrs. Seidman or Greenberg,  and includes a material reduction of their
current duties, benefits and responsibilities.


<PAGE>



If Messrs.  Seidman's and Greenberg's employment is involuntarily  terminated in
connection  with or within 60 months  after a change in control  of the  Company
they will be entitled to receive  (i) a lump sum cash  payment  equal to 299% of
their  "base  amount" of  compensation  and (ii) for the  remaining  term of the
agreement  substantially the same health insurance  benefits as they received as
of the date of  termination.  The lump sum  payment is subject to  reduction  to
ensure that all amounts  payable by the Company to either  person in  connection
with a change in control are  deductible  by the Company for federal  income tax
purposes.

Based on their salary at December 31, 2000, if Messrs. Seidman and Greenberg had
been terminated as of that date in connection with a change in control and under
circumstances  entitling  them to severance pay as described  above,  they would
have been entitled to receive a lump sum cash payment of approximately  $468,683
and $781,138, respectively.

Other Agreements

Mr. Seidman,  pursuant to a written agreement with Richard  S.Greenberg,  Ph.D.,
dated June 11, 1998, received, on or about March 10, 1999, 249,500 shares of the
Company's  stock subject to forfeiture if Mr. Seidman  terminates his employment
with the  Company  on or  before  March  10,  2004.  On each  subsequent  annual
anniversary  date,  20% of these 249,500  shares are released from the terms and
conditions of the written agreement in which they are subject to forfeiture.  As
of December 31, 2000, 49,900 shares are no longer subject to forfeiture.


<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT

Voting Securities and Certain Holders Thereof

The  following  table sets forth,  as of March 29, 2001,  information  regarding
beneficial  ownership  of shares of the  Company's  common  stock by:  (i) those
persons or  entities  known by  management  to  beneficially  own more than five
percent of the common  stock;  (ii) all  directors;  and (iii) all directors and
executive officers of the Company as a group. Beneficial ownership is determined
in accordance  with Rule 13d-3 of the Securities  Exchange Act of 1934 and based
upon 5,263,348 shares outstanding as of March 29, 2001.

                                            Shares                   Percent
                                         Beneficially                  of
Beneficial Owner                           Owned                      Class
-------------------------------------------------------------------------------
Rosebud Holding, LLC (1)                    4,191,000                 79.63
100 Misty Lane
Parsippany, New Jersey 07054

Lawrence B. Seidman (2)                       499,000                  9.48
100 Misty Lane
Parsippany, New Jersey 07054
Director,President and General Counsel
of the Company and EWMA INC.
and EWMA LLC

In-Situ Oxidative Technologies, Inc.(3)       300,000                  5.70
51 Everett Drive
Suite A-10
West Windsor, New Jersey 08550

George Greenberg, Director and                 30,500                    *
Secretary of the Company

Richard S. Greenberg, Ph.D.,                4,346,000                 82.57
Chairman and Chief Executive Officer of
the Company, Chairman and
Chief Executive Officer of EWMA
INC. and EWMA LLC (1) (3)

Daniel Lehrhoff, Director                       1,000                    *

Dennis Pollack, Director                        1,000                    *

All Directors and officers as a group       4,909,997 (4)             93.25(4)
(Eight individuals)

* Less than one percent.

(1)   Rosebud  Holding,  LLC is owned 99% by the Greenberg Family Trust of which
      Elaine Greenberg is the sole trustee and 1% by George  Greenberg.  Richard
      S.  Greenberg,  Ph.D.,  the son of Elaine  and  George  Greenberg,  is the
      primary beneficiary of the Greenberg Family Trust.


<PAGE>

(2)  Lawrence B. Seidman owns 83,166 shares directly.  His two adult daughters,
     each own 83,167 shares.  Mr. Seidman  disclaims any beneficial  interest in
     these shares.  In addition,  Mr. Seidman,  pursuant to a written  agreement
     with Richard S.  Greenberg,  Ph.D.,  dated June 11, 1998,  received,  on or
     about March 10, 1999,  249,500  shares of the  Company's  stock  subject to
     forfeiture if Mr. Seidman  terminates his employment with the Company on or
     before March 10, 2004. On each subsequent  annual  anniversary date, 20% of
     these  249,500  shares are released  from the terms and  conditions  of the
     written  agreement in which they are subject to forfeiture.  As of December
     31, 2000, 49,900 shares are no longer subject to forfeiture.

(3)  In-Situ Oxidative Technologies, Inc. is 50% owned by Richard S. Greenberg,
     Ph.D. As such, 50% of the 300,000  shares are included in Dr.  Greenberg's'
     total of shares beneficially owned. Also see ITEM 12. CERTAIN RELATIONSHIPS
     AND  RELATED  TRANSACTIONS  for  further  discussions   concerning  In-Situ
     Oxidative Technologies.

(4)  The total of shares  beneficially owned by all Directors and officers as a
     group  includes  2,000 shares  owned under vested  portions of stock option
     grants held by two executive  officers.  The percentage  calculation  shown
     assumes  that these  additional  2,000 shares were added to and included in
     the total of shares outstanding as of March 29, 2001.

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

RELATED TRANSACTIONS

In-Situ Oxidative Technologies

In-Situ  Oxidative  Technologies  ("ISOTEC")  is  owned  50% by Dr.  Richard  S.
Greenberg,  Ph.D.,  Menlo's Chairman and 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  2000 and 1999,  EWMA and IAL  generated  revenue  directly  from
transactions with ISOTEC of approximately  $251,000 and $183,000,  respectively.
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 agreed to make advances to provide ISOTEC with up to
$250,000 in operating  capital.  An unrelated party also agreed to make advances
to ISOTEC in amounts  equal to any  advances  made by Menlo.  Advances to ISOTEC
bear interest at 6% and are payable on demand. As of the date of this agreement,
Menlo had a receivable of approximately  $195,000 for services it had previously
provided to ISOTEC which ISOTEC agreed to repay in full. In addition,  Menlo was
granted the  opportunity to purchase up to 50% of the equity  interest in ISOTEC
pursuant  to the terms set forth  below.  Selling,  general  and  administrative
expenses  in 1999  include a charge of  $80,000  for the  write-off  of  Menlo's
advances to ISOTEC based on its then deteriorating financial condition. Selling,
general and  administrative  expenses  in 2000  include a credit of $80,000 as a
result of improvements in ISOTEC's financial condition and the full repayment of
the advances.  There were no  outstanding  advances as of December 31, 2000. The
agreement expires on June 30, 2001.


<PAGE>

Under  the  agreement,  Menlo  is  granted  an  option  to  purchase  20% of Dr.
Greenberg's  ownership  interest in ISOTEC  (which is equivalent to a 10% equity
interest in ISOTEC) for each  $50,000 or portion  thereof it advances to ISOTEC.
The  options  are  exercisable  through  June 30,  2001 at a price of $1,000 per
option.  Since Menlo had advanced a total of $80,000 to ISOTEC  during 1999,  it
holds,  as of December 31,  2000,  two options to purchase a total of 40% of Dr.
Greenberg's  interest in ISOTEC (which is equivalent to a 20% equity interest in
ISOTEC) for $2,000.

Parsippany Headquarters Building

EWMA's principal  executive offices are located in Parsippany,  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,  Ph.D.  The lease,  which is at $14 per square foot,  expires in June
2007 and is subject to two five-year renewal options.  In management's  opinion,
the rent being paid at the Parsippany facility is below market rental rates.

Employment and Other Agreements

Please see ITEM 10. EXECUTIVE  COMPENSATION for detailed information  concerning
employment and other agreements of a related transaction nature.

<PAGE>



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. (incorporated by reference to Exhibit 2.1 of the
                    Company's Annual Report on Form 10-KSB filed March 28,
                    2000.)

          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.
                    (incorporated by reference to Exhibit 3.1 of the Company's
                    Annual Report on Form 10-KSB filed March 28, 2000.)

          3.2       Amended and Restated Certificate of Incorporation of Focal
                    Surgery, Inc. (former name of the Company) dated
                    April 27, 1993.(incorporated by reference to Exhibit 3.2 of
                    the Company's Annual Report on Form 10-KSB filed March 28,
                    2000.)

          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.(incorporated by reference
                    to Exhibit 3.3 of the Company's Annual Report on Form 10-KSB
                    filed March 28, 2000.)

          3.4       Certificate of Amendment of Certificate of Incorporation of
                    Focal Surgery, Inc. (former name of the Company) dated
                    June 17, 1994.(incorporated by reference to Exhibit 3.4 of
                    the Company's Annual Report on Form 10-KSB filed March 28,
                    2000.)

          3.5       Certificate of Amendment of Certificate of Incorporation of
                    Focus Surgery, Inc. (former name of the Company) dated
                    February 4,1997.(incorporated by reference to Exhibit 3.5 of
                    the Company's Annual Report on Form 10-KSB filed March 28,
                    2000.)

          3.6       Second Amended and Restated Certificate of Incorporation of
                    Menlo Acquisition Corporation dated March 10,1999.
                    (incorporated by reference to Exhibit 3.6 of the Company's
                    Annual Report on Form 10-KSB filed March 28, 2000.)

          3.7       By-Laws of the Company.
                    (incorporated by reference to Exhibit 3.7 of the Company's
                    Annual Report on Form 10-KSB filed March 28, 2000.)

          4.1       Form of Certificate for Common Stock.
                    (incorporated by reference to Exhibit 4.1 of the Company's
                    Annual Report on Form 10-KSB filed March 28, 2000.)

          4.2       1999 Stock Option Plan of the Registrant.
                    (incorporated by reference to Exhibit 4.2 of the Company's
                    Annual Report on Form 10-KSB filed March 28, 2000.)

          4.3       Form of Nonstatutory Stock Option Agreement under the 1999
                    Stock Option Plan. (incorporated by reference to Exhibit 4.3
                    of the Company's Annual Report on Form 10-KSB filed
                    March 28, 2000.)

          4.4       Form of Incentive Stock Option Agreement under the 1999
                    Stock Option Plan. (incorporated by reference to Exhibit 4.4
                    of the Company'sAnnual Report on Form 10-KSB filed March 28,
                    2000.)

          10.1      Lease  dated  as  of  June 23, 1997 between  Greenberg
                    Property, LLC and the Company.(incorporated by reference to
                    Exhibit 10.1 of the Company's Annual Report on Form 10-KSB
                    filed March 28, 2000.)
<PAGE>

          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.(incorporated by reference to Exhibit
                    10.2 of the Company's Annual Report on Form 10-KSB filed
                    March 28, 2000.)

          10.2.1*   Mortgage Note dated as of June 8, 2000 between Integrated
                    Analytical Realty, LLC and Norcrown Bank.

          10.2.2*   Mortgage and Security  Agreement dated as of June 8, 2000
                    between  Integrated  Analytical  Realty, LLC and Norcrown
                    Bank.

          10.3      Letter Agreement dated August 26, 1997 between PNC Bank,
                    National Association and Integrated Analytical
                    Laboratories, LLC. (incorporated by reference to Exhibit
                    10.3 of the Company's Annual Report on Form 10-KSB filed
                    March 28, 2000.)

          10.4      Letter Agreement dated August 26, 1997 between PNC Bank,
                    National Association and Environmental Waste Management
                    Associates, LLC. (incorporated by reference to Exhibit 10.4
                    of the Company's Annual Report on Form 10-KSB filed March
                    28, 2000.)

          10.5      Letter Agreement dated February 22, 2000 between PNC Bank,
                    National Association and Environmental Waste Management
                    Associates, LLC.(incorporated by reference to Exhibit 10.5
                    of the Company's Annual Report on Form 10-KSB filed March
                    28, 2000.)

          10.6*     Secured Credit Agreement (including Master Advance Notes for
                    the $1,000,000 Credit Line (Facility A) and the $750,000
                    Equipment Line (Facility B)) dated August 14, 2000 between
                    Summit Bank and Environmental Waste Management Associates,
                    LLC; Integrated Analytical Laboratories, LLC; Environmental
                    Waste Management Associates, Inc.and Integrated Analytical
                    Laboratories, Inc.

          10.7*     Security Agreement dated August 14, 2000 between Summit Bank
                    and Environmental Waste Management Associates, LLC;
                    Integrated Analytical Laboratories, LLC; Environmental Waste
                    Management Associates,Inc. and Integrated Analytical
                    Laboratories, Inc.
<PAGE>

          10.8*     Guaranty  Agreement  (including  Resolution  of  Board of
                    Directors)  dated August 14, 2000 between Summit Bank and
                    Menlo Acquisition Corporation.


          10.9      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).

          10.10     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

*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 29, 2001


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 29, 2001
                             Chief Executive Officer
                             and Director (principal
 /s/ Richard S. Greenberg    executive officer)
 ------------------------
 Richard S. Greenberg

                             President, General Counsel    March 29, 2001
/s/ Lawrence B. Seidman      and Director
-------------------------
 Lawrence B. Seidman

                             Chief Financial Officer       March 29, 2001
/s/Frank Russomanno          (principal financial and
-------------------------    accounting officer)
 Frank Russomanno

/s/ George Greenberg         Secretary and Director        March 29, 2001
-------------------------
George Greenberg


/s/ Daniel Lehrhoff          Director and Chairman of the  March 29, 2001
-------------------------    Audit Committee
Daniel Lehrhoff


/s/ Dennis Pollack           Director and Member of the   March 29, 2001
-------------------------    Audit Committee
Dennis Pollack