<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                    FORM 10-Q

|X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES 
     EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 1995
                                -----------------

|_|  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES 
     EXCHANGE ACT OF 1934

For the transition from ___________________ to ________________________

                          Commission file number 0-4979
                                                 ------
                             SQUARE INDUSTRIES, INC.
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its Charter)

         NEW YORK                                             13-2610905
-------------------------------                             -------------------
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                             Identification No.)

 921 Bergen Avenue, Jersey City, New Jersey                       07306
-------------------------------------------                   --------------
 (Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code (201) 798-0090
                                                   --------------
                                 Not Applicable
--------------------------------------------------------------------------------
               Former name, former address and former fiscal year,
                          if changed since last report

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed 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 issuer was
required to file such reports), and (2) has been subject to filing requirements
for the past 90 days. Yes ___X___ No ______

Shares of Common Stock outstanding at September 30, 1995: 1,166,356


<PAGE>

                    SQUARE INDUSTRIES, INC. AND SUBSIDIARIES

                                      INDEX

PART I.                                                   Page No.
                                                          --------

Consolidated Balance Sheets -
September 30, 1995 (unaudited) and December 31,
1994 (audited)                                                3

Consolidated Statements of Operations - for
the nine and three months ended September 30, 1995
and 1994 (unaudited)                                          5

Consolidated Statements of Cash Flows for
the nine months ended September 30, 1995 and 1994
(unaudited)                                                   6

Notes to Consolidated Financial Statements                    8

Management's Discussion and Analysis of Results of
Operations and Financial Condition                           13

PART II.

Other Information                                            17

SIGNATURES                                                   18


                                       2

<PAGE>


SQUARE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>


                                               September 30, 1995           December 31, 1994
                                                   (Unaudited)                  (Audited)
                                                   -----------                  ---------

ASSETS
Current Assets:
<S>                                                 <C>                          <C>        
     Cash                                           $ 1,793,000                 $ 1,226,000
     Trade and other receivables                        786,000                     781,000
     Prepaid expenses                                 1,582,000                   1,660,000
     Other current assets                               549,000                     555,000
     Prepaid and refundable income taxes                292,000                     353,000
                                                    -----------                 -----------
         Total current assets                         5,002,000                   4,575,000
                                                    -----------                 -----------

Property, Equipment and Improvements,  net           24,766,000                  25,067,000
                                                    -----------                 -----------

Other Assets:
     Deferred expenses (net of amortization)          2,295,000                     890,000
     Security deposits and other assets               2,410,000                   1,932,000
                                                    -----------                 -----------

                                                      4,705,000                   2,822,000
                                                    -----------                 -----------

                                                    $34,473,000                 $32,464,000
                                                    ===========                 ===========


</TABLE>








                 See notes to consolidated financial statements






                                       3
<PAGE>


SQUARE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>


                                                        September 30, 1995            December 31, 1994
                                                            (Unaudited)                   (Audited)
                                                            -----------                   ---------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
<S>                                                          <C>                         <C>      
     Accounts payable                                        $ 1,159,000                 $ 830,000
     Accrued expenses                                          4,523,000                 4,400,000
     Accrued local rent tax (Note 4)                           1,232,000                 1,189,000
     Current portion of long-term debt (Note 2)                  652,000                 1,210,000
     Other liabilities                                           231,000                   479,000
                                                              ----------                ----------
         Total current liabilities                             7,797,000                 8,108,000
                                                              ----------                ----------

Deferred Rent                                                  2,856,000                 2,433,000
                                                              ----------                ----------

Long-Term Debt - less current portion (Note 2)                18,692,000                17,059,000
                                                              ----------                ----------

Deferred Taxes                                                   174,000                   174,000
                                                              ----------                ----------

Security Deposits - Customers                                    292,000                   257,000
                                                              ----------                ----------


Stockholders' Equity:
     Common stock, $.01 par value;
       authorized 2,000,000 shares;
       issued, 1,218,389 shares and 1,205,689 shares              12,000                    12,000
     Common stock, subscribed 12,500 shares as
       of December 31, 1994                                      -0-                       119,000
     Additional paid-in capital                                3,278,000                 3,158,000
     Retained earnings                                         1,825,000                 1,529,000

Less:
     Treasury stock at cost, 52,033 shares as of
       September 30, 1995 and 12,837 shares as of
       December 31, 1994                                        (236,000)                  (59,000)
     Notes receivable for common stock subscribed                -0-                      (119,000)
     Cumulative translation adjustment                          (217,000)                 (207,000)
                                                             -----------                -----------
                                                               4,662,000                 4,433,000
                                                             -----------                -----------

                                                             $34,473,000               $32,464,000
                                                             ===========                ===========


</TABLE>


                 See notes to consolidated financial statements




                                       4
<PAGE>

SQUARE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

<TABLE>
<CAPTION>
                                                         For The Nine Months Ended             For The Three Months Ended
                                                               September 30,                            September 30,
                                                         -------------------------             ---------------------------
                                                          1995                1994            1995                 1994
                                                         ------              ------          ------               -----
<S>                                                    <C>                <C>                <C>                <C>        
Parking service revenue                                $45,328,000        $44,093,000        $14,624,000        $14,768,000
Service station revenue                                  3,071,000          2,984,000          1,100,000          1,041,000
                                                        ----------         ----------        -----------        -----------
     Total revenues                                     48,399,000         47,077,000         15,724,000         15,809,000
                                                        ----------         ----------        -----------        -----------

Costs and expenses:
     Cost of parking services                           37,103,000         38,702,000         11,799,000         12,653,000
     Operating costs - service station                   3,112,000          3,029,000          1,086,000          1,057,000
     General and administrative expenses                 5,455,000          5,244,000          1,894,000          1,754,000
     Provision for local rent tax (Note 4)                  45,000             45,000             15,000             15,000
     Interest                                            1,518,000          1,317,000            498,000            470,000
     Write-off of assets                                   316,000            478,000            316,000               -0-
                                                        ----------         ----------         ----------         ----------
     Total costs and expenses                           47,549,000         48,815,000         15,608,000         15,949,000
                                                        ----------         ----------         ----------         ----------

Earnings (Loss) from Parking and
   Service Station Operations                              850,000         (1,738,000)           116,000           (140,000)

Provision (Benefit) For Income Taxes    
   (Note 6)                                                554,000           (587,000)           174,000            (47,000)
                                                         ---------          ----------          --------          ---------

Net Earnings (Loss)                                      $ 296,000       $ (1,151,000)         $ (58,000)         $ (93,000)
                                                         =========       =============         ==========         ==========
Earnings (Loss) Per Share (Note 5)                       $    0.23       $      (0.96)         $   (0.05)         $   (0.08)
                                                         =========       =============         ==========         ==========
Computation of Shares -
Weighted average of common stock
outstanding and subscribed (Note 5)                      1,262,474          1,192,809          1,166,356          1,192,852
                                                         =========          =========          =========          =========



</TABLE>




                 See notes to consolidated financial statements




                                       5

<PAGE>


SQUARE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>


                                                                                            For The Nine  Months Ended
                                                                                                  September  30,
                                                                                            --------------------------
                                                                                             1995             1994
                                                                                            ---------       ---------
<S>                                                                                            <C>               <C>   
Cash Flows From Operating Activities:
         Net earnings (loss)                                                                $ 296,000       $(1,151,000)

         Adjustments to reconcile net earnings (loss) to net cash provided by
          (used in) operating activities:
            Amortization of:
              Deferred expenses                                                                31,000            26,000
              Lease acquisition costs                                                          13,000            76,000
              Excess of cost over fair market value
                 of net assets acquired                                                          -0-            103,000
            Depreciation and amortization                                                   1,159,000         1,264,000
            Write-off of assets                                                               316,000           478,000
            Equity adjustment for foreign currency translations                               (10,000)          (19,000)
            Increase (decrease) in cash from
             changes in assets and liabilities:
                 Trade and other receivables                                                   (5,000)          120,000
                 Prepaid expenses and other current assets                                     20,000           (97,000)
                 Prepaid and refundable income taxes                                           61,000          (486,000)
                 Deferred expenses, net                                                    (1,439,000)          (32,000)
                 Security deposits and other assets                                          (491,000)         (216,000)
                 Accounts payable, accrued expenses,
                  accrued local rent tax and other liabilities                                247,000           684,000
                 Deferred rent                                                                423,000          (221,000)
                 Security deposits - customers                                                 35,000            31,000
                                                                                            ---------         ---------
                 Net cash provided by (used in) operating activities                          656,000           560,000
                                                                                            ---------         ---------

</TABLE>

                 See notes to consolidated financial statements



                                       6

<PAGE>


SQUARE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>

                                                                                           For The Nine  Months Ended
                                                                                                 September  30,
                                                                                          -----------------------------
 
                                                                                             1995              1994
                                                                                          -----------        ----------
<S>                                                                                       <C>                     <C>

Cash Flows From Investing Activities:
         Additions to land, buildings, equipment
           and improvements                                                               $(1,165,000)        $(774,000)
                                                                                          -----------        ---------- 
            Net cash used in investing activities                                          (1,165,000)         (774,000)
                                                                                          -----------        ---------- 
Cash Flows From Financing Activities:
         Proceeds from borrowings                                                           2,223,000         4,015,000
         Payments and current maturities on long-term debt                                 (1,148,000)       (3,370,000)
         Proceeds from exercise of stock options and warrants                                   1,000             1,000
                                                                                          -----------        ---------- 
                 Net cash provided by financing activities                                  1,076,000           646,000
                                                                                          -----------        ----------
Net Increase in Cash                                                                          567,000           432,000

Cash, Beginning of Period                                                                   1,226,000           623,000
                                                                                          -----------        ----------
Cash, End of Period                                                                        $1,793,000        $1,055,000
                                                                                          ===========        ==========

Supplemental Disclosures of Cash Flow Information:
         Cash paid during the period for:
          Interest                                                                         $1,181,000        $1,131,000
          Income taxes, net of refunds received                                              $819,000         $(108,000)


</TABLE>

Supplemental Schedule of Noncash Financing Activities:

An officer/stockholder satisfied the balance of his note receivable to the
Company, including accrued interest of $57,637, which note had been issued in
connection with the exercise of a warrant to purchase shares of common stock by
transferring 39,196 shares of common stock to the Company. The market value of
the stock at the date of the transfer was $176,382. As a result, the Company
issued to the officer/stockholder 12,500 shares of common stock.

                        See notes to financial statements



                                       7
<PAGE>


SQUARE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995

NOTE 1 -  The accompanying consolidated balance sheet as of September 30,
          1995 and the consolidated statements of operations for the nine and
          three months ended September 30, 1995 and 1994 and the consolidated
          statements of cash flows for the nine months ended September 30, 1995
          and 1994, respectively, are unaudited, but in the opinion of the
          Company, all adjustments (consisting of normal recurring accruals)
          necessary to present fairly the results of operations for such periods
          have been made. The financial statements should be read in conjunction
          with the Annual Report on Form 10K of the Company, for the period
          ended December 31, 1994.

          The Company changed, effective December 31, 1994, its fiscal year end
          from the last day in February to December 31st. As a result, the
          comparative 1994 financial statements have been restated to conform to
          current period presentation.

          The accompanying consolidated financial statements include the
          accounts of a foreign subsidiary and all domestic subsidiaries. All
          significant intercompany accounts and transactions have been
          eliminated.

          The results of operations for the nine and three months ended
          September 30, 1995 are not necessarily indicative of the results to be
          expected for the full year.

NOTE 2 -  Long-term debt consisted of the following:

<TABLE>


                                                           Interest Rate                September 30, 1995
                                                           -------------                ------------------
<S>                                                               <C>                            <C>      
              Bank Loan:
               Facility I                                 Prime + 2%                            11,753,000
               Facility II                                Prime + 2%                             1,688,000
              Notes Payable to Officers                      10.25%                                500,000
              Notes Payable                               7.25% - 10%                          $ 1,221,000
              Mortgages Payable                           7% - 11%                               4,182,000
                                                                                                ----------

                                                                                                19,344,000
              Less current portion                                                                 652,000
                                                                                                ----------

                                                                                               $18,692,000
                                                                                               ===========
</TABLE>




                                       8

<PAGE>


NOTE 2 - (continued)

          Facility I provides for a line of credit of $12,800,000, and is
          subject to the aggregate face amount of outstanding letters of credit
          plus unpaid drawings not exceeding $1,500,000. Facility II is a term
          loan that was payable in consecutive quarterly payments of $225,425.
          On October 31, 1995, Amendment No. 10 to the Company's bank loan
          agreement was executed. The amendment provides for an extension of the
          maturity dates of the Facility I principal to June 30, 1998 with
          respect to $61,900, to September 30, 1998 with respect to $150,000 and
          to December 31, 1998 with respect to $11,541,100 and extends the
          quarterly installment payment dates for Facility II to calendar
          quarters ending in the period June 30, 1996 to June 30, 1998. The
          amendment provides for prepayment of principal to the extent of 50% of
          the Company's cash flow above designated levels. The amendment also
          provides that commencing November 1, 1995 interest is to be paid at
          the rate of 4% per annum with the balance of the interest rate (the
          Bank's prime plus 2% per annum) to be accrued and deferred. The
          portion deferred will be paid or forgiven depending on the Company
          achieving reductions in its operating expenses from those for the year
          ended December 31, 1994 as follows: if the amount of the reduction as
          of December 31, 1995 is at least $500,000, the amounts deferred during
          November and December 1995 will be forgiven; if the amount of the
          reduction as of December 31, 1996 is at least $600,000, the amounts
          deferred during 1996 will be forgiven; and if the amount of the
          reduction as of December 31, 1997 is at least $700,000, the amounts
          deferred during 1997 and 1998 will be forgiven. The failure to achieve
          the designated level of reduction for any period will result in the
          obligation to pay the amount deferred during the applicable period.

          Debt covenants under the Credit Agreement as amended, include a
          limitation on indebtedness under mortgage obligations and financial
          covenants as to maintenance of minimum net worth, total liabilities to
          net worth and operating cash flow ratios.

          On June 28, 1995 two principal officers loaned $500,000 to the Company
          with interest payable at the same rate as the Facility I loan. As a
          condition of Amendment No. 10, the officers agreed to a revision of
          their loans, changing the terms from demand loans to loans to be
          repaid following the payment of the Facility loans with provisions for
          prepayment to the extent of 50% of the principal payments paid to the
          Bank under the credit agreement after the Bank has received post -
          October 31, 1995 principal payments of at least $1,000,000 and for the
          deferral of the interest in excess of 3.99% per annum (the loan
          interest rate to December 31, 1995 is 10.25% and prime plus 2%
          thereafter) until the Facility loans have been paid in full.


                                       9


<PAGE>


          Under their amended loan agreement, they surrendered their rights to
          collateral which was to be provided under the original loan agreement
          and subordinated their loans to the Company's obligations under the
          Credit Agreement. In consideration of the original extension of the
          loans and the foregoing amendment, the Company issued to each of the
          officers a five year non-transferable Warrant to purchase 75,000
          shares of the Company's Common Stock at a price of $6.40 per share,
          the average of the closing sales prices of the Common Stock on NASDAQ
          for June 28, 1995, and the two immediately prior days in which trades
          were effected in the stock.

          The consolidated Balance Sheet as of September 30, 1995 gives
          retroactive effect to Amendment No. 10 to the Company's credit
          facility agreement and the amendment of the loan agreement with two
          principal officers of the Company.

          Certain subsidiaries of the Company periodically acquire land/or
          buildings with a view to their future use in whole or in part as
          parking facilities. The properties are generally purchased subject to
          long-term mortgages. The mortgages vary in their payment terms and
          interest rates, some requiring only the payment of interest during the
          first five years.

          The mortgages payable are collateralized by the underlying assets
          which have a book value of $6,076,200. The two facility loans are
          collateralized by the stock of subsidiaries of the Company, except
          those whose stock may not be pledged because of prohibitions in leases
          and mortgages.

          Aggregate maturities on long-term debt are as follows:

          Year Ending September 30,
          -------------------------

               1996                                         $  652,000
               1997                                          1,002,000
               1998                                            920,000
               1999                                         12,654,000
               2000                                          3,838,000
               Remainder                                       278,000
                                                             ---------
                                                           $19,344,000
                                                           ===========








                                       10
<PAGE>

NOTE 3 - FOREIGN OPERATIONS (CANADA)

          Summarized information relating to the Canadian operation is as
          follows:


<TABLE>
<CAPTION>

                                                   September 30, 1995                  December 31, 1994
                                                   ------------------                  -----------------
<S>                                                      <C>                                <C>     
          Total assets                                   $634,000                           $589,000
          Total liabilities                             1,456,000                          1,231,000
          Deficiency in assets                           (822,000)                          (642,000)
</TABLE>

          For the nine month periods ended September 30, 1995 and September 30,
          1994, net loss for the Canadian operation was $178,000 and $220,000,
          respectively.

NOTE 4 -  The Company received notices of determination from a municipal local
          authority for commercial rent tax which relate to the period June 1,
          1978 through May 31, 1987 assessing the Company, net of payments, an
          aggregate of $907,005. The Company believes that the provision, which
          covers these assessments, possible future assessments, and related
          expenses through September 30, 1995, is adequate.

NOTE 5 -  EARNINGS PER SHARE

          Earnings (loss) per share has been computed using the weighted average
          number of shares of common stock outstanding and subscribed and the
          dilutive effect, if any, of common stock equivalents outstanding.
          Common stock equivalents were not included in the computation of loss
          per share for the nine months ended September 30, 1994 and for the
          three months ended September 30, 1995 and 1994 since their effect was
          anti-dilutive.

NOTE 6 -  INCOME TAXES

          The provision for income taxes of $554,000 for the nine month period
          ended September 30, 1995 is based on the effective tax rate expected
          for the year and includes (i) federal income taxes, (ii) income taxes
          of state and local jurisdictions for which the Company's operations
          were profitable and for which no net operating loss benefit is
          available, (iii) minimum corporate taxes for certain subsidiaries and
          (iv) an adjustment during the three-months ended September 30, 1995
          for under-accruals in prior periods for federal and state income taxes
          for prior periods. No changes have been made to the deferred tax asset
          valuation allowances since Management is not able to conclude that
          realization of these deferred tax assets is more likely than not as a
          result of the Company's earnings history. Reductions to the valuation
          allowance will be recorded when, in the opinion of management, the






                                       11
<PAGE>

          Company's ability to generate taxable income for a period of time is 
          more certain.

          The income tax benefit of $587,000 for the nine month period ended
          September 30, 1994 reflects the benefit applicable to the loss for the
          period less minimum corporate taxes for certain subsidiaries.

NOTE 7 -  CONTINGENCIES

          Litigation:

          Various lawsuits against the Company have arisen in the course of the
          Company's business. In certain of these matters, large and/or
          indeterminate amounts are sought. In the opinion of the Company, any
          uninsured ultimate liability which could result from such litigation
          would not have a material adverse effect on the Company's financial
          position or the results of its operations.

          Letters of Credit:

          As of September 30, 1995, the Company's contingent debt amounted to
          approximately $1,025,500 under standby Letters of Credit issued
          pursuant to terms of its line of credit (Facility I).

NOTE 8    WRITE-OFF OF ASSETS

          During the nine months ended September 30, 1995 and 1994, the Company
          wrote off leasehold acquisition costs, deferred expenses, fixed
          assets, and other miscellaneous charges relating to certain locations.





                                       12
<PAGE>


                    SQUARE INDUSTRIES, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                            OF RESULTS OF OPERATIONS
                             AND FINANCIAL CONDITION


Results of Operations

         The improved operating results recorded for the 1994 fiscal year (the
10 months ended December 31, 1994) continued into the current year. Parking
service revenues for the nine months ended September 30, 1995 (the "1995
Nine-Month Period") were greater by $1,235,000 (2.8%) than those for the
nine-months ended September 30, 1994 (the "1994 Nine-Month Period"). For the
three months ended September 30, 1995 (the "1995 Three-Month Period") parking
service revenues which were $144,000 (1.0%) less than those for the three months
ended September 30, 1994 (the "1994 Three-Month Period") would also have been
higher but for a $562,000 payment made to the Company during 1994 in settlement
of a dispute as to a parking location. The principal reason for the continued
improvement was a net increase in parking capacity of approximately 2,400 cars
which was effected during the nine months ended September 30, 1995 and increased
patronage largely due to mild winter weather in the regions in which the Company
operates as compared with one of the most severe winters in the Company's
history in 1994 which caused a sharp curtailment of traffic near the Company's
parking locations.

         The Company achieved a reduction of parking operating costs of
$1,599,000 (4.1%) between the nine-month comparative periods and $854,000 (6.7%)
between the three-month comparative periods, which resulted in reductions as
percentages of parking revenues from 87.8% to 81.9% between the nine-month
comparative periods and from 85.7% to 80.7% between the three-month comparative
periods. The lower costs were principally due to economies in operations,
primarily staff reductions, and a net reduction of two in the number of parking
locations operated by the Company, including termination of unprofitable
locations which were responsible in part for the $478,000 of asset write-offs in
the 1994 Nine-Month Period, partially offset by a modest increase in labor costs
resulting from two labor agreements the Company executed during nine months
ended September 30, 1995. Two additional labor agreements are expected to be
executed by December 31, 1995 and to result in a further modest increase in
labor costs.

         The Company's gasoline station operation remained marginal due to the
intense competition which adversely affects the industry and the area in which
the Company's station is located. Revenues increased, primarily as a result of
increased gasoline prices, by $87,000 (2.9%) between the comparative nine-months
periods and $59,000 (5.7%) between the comparative three-month periods.
Operation of the station produced losses for the 1995 and 1994 Nine- Month
Periods of ($41,000) and ($45,000), respectively, and a slight operating profit






                                       13
<PAGE>



of $14,000 for the three months ended September 30, 1995 as compared to an
operating loss of ($16,000), for the three months ended September 30, 1994.

         General and administrative expenses increased by $211,000 (4.0%)
between the nine- month comparative periods and $140,000 (8.0%) between the
three-month comparative periods. The increases reflect principally modest
increases in salaries and travel expenses and the cost incurred with respect to
a proposed real estate transaction which was terminated, partially offset by
reductions due to the fewer locations under supervision and operating economies.
As a result, such costs as a percentage of parking revenues (gasoline station
operations require insignificant amounts of such expenses) increased from 11.9%
to 12.0% between the nine-month periods and from 11.9% to 13.0% between the
three-month periods.

         The increases in interest expense of $201,000 (15.3%) and $28,000
(6.0%), respectively, between the nine-month and three-month comparative periods
were primarily the result of the higher interest rates caused by increases in
the rate provided by amendments effected in June and October 1994 to the
Company's credit facility, increases in the prime rate, and, with respect to the
three-month comparative periods, increased borrowings.

         For the three months ended September 30, 1995, the Company effected a
write-off of unamortized assets of $316,000 related to certain unprofitable
locations as compared to asset write-offs of $478,000 taken during January and
February, 1994.

          The 65.2% provision for income taxes for the 1995 Nine Month Period,
and the provision of $174,000 despite pre-tax earnings of $116,000 for the 1995
Three Month Period are due principally to (i) minimum corporate income taxes
imposed by the state and City of New York and the states of Pennsylvania and New
Jersey, (ii) the non-deductibility for income tax purposes of the loss suffered
by the Company's Canadian operations ($178,000 and $73,000, respectively for the
nine and three- month periods), (iii) income taxes in jurisdictions in which the
Company's operations were profitable and for which no net operating loss was
available and (iv) an adjustment during the three-months ended September 30,
1995 for under-accruals in prior periods for federal and state income taxes for
prior periods.

Liquidity and Capital Resources 

         As of September 30, 1995, the Company had a decrease of $738,000 in its
working capital deficit ($2,795,000) from the working capital deficit
($3,533,000) as of December 31,1994, principally as a result of the extension of
the maturity dates of the Company's Facility II loan installments provided by
the amendment to the credit agreement discussed below.

         Operating activities provided net cash of $656,000 for the 1995
Nine-Month Period as compared to $560,000 for the 1994 Nine-Month Period; the
difference principally the result of the materially better operating results,
partially offset by a material increase in deferred expenses, principally due to
adjustments of rents.

                                       

  

                                     14
<PAGE>

         Additions to land, buildings, equipment and improvements amounted to
$1,165,000 net for the 1995 Nine-Month Period, a $391,000 increase in the net
amount expended or accrued during the 1994 Nine-Month Period for this purpose.
The Company anticipates capital expenditures of not more than $1,500,000 for
the full year ending December 31, 1995, to be financed from the Company's
operations, borrowings and joint ventures with equity co-venturers.

         The Company derived net cash from financing activities of $1,076,000
and $646,000 respectively, during the 1995 Nine-Month Period and the 1994
Nine-Month Period, with the difference principally resulting from loans of
$500,000 from its officers in July 1995 and lower loan payments during the 1995
Nine-Month Period.

         As a result of the foregoing, the Company increased its cash balances
by $567,000 as compared with an increase of $432,000 for the 1994 Nine-Month
Period.

         On October 31, 1995 the Company's credit agreement with its Bank lender
was amended to provide more favorable terms with respect to principal payments,
interest payments and the financial covenants. The maturity dates of the
Facility I credit loan principal were extended to June 30, 1998 with respect to
$61,900, September 30, 1998 with respect to $150,000 and December 31, 1998 with
respect to the balance, which as of September 30, 1995, amounted to $11,540,753,
and the quarterly installment payment dates for the Facility II term loan in the
aggregate principal amount of $1,688,100 were deferred to the calendar quarters
ending in the period June 30, 1996 to June 30, 1998. The amendment provides for
prepayment of principal to the extent of 50% of the Company's cash flow above
designated levels. The amendment also provides that commencing November 1, 1995
interest is to be paid at the rate of 4% per annum, with the balance of the
interest rate (the Bank's prime plus 2% per annum) to be accrued but deferred.
The portion deferred will be paid or forgiven depending on the Company achieving
reductions in its operating expenses from those for the year ended December 31,
1994 as follows: if the amount of the reduction as of December 31, 1995 is at
least $500,000, the amounts deferred during November and December 1995 will be
forgiven; if the amount of the reduction as of December 31, 1996 is at least
$600,000 the amounts deferred during 1996 will be forgiven; and if the amount of
the reduction as of December 31, 1997 is at least $700,000, the amounts deferred
during 1997 and 1998 will be forgiven. The failure to achieve the designated
level of reduction for any period will result in the obligation to pay the
amount deferred during the applicable period at the end of such period.

          As a condition of the amendment to the credit agreement, Messrs.
Lowell Harwood and Sanford Harwood, respectively Chairman and Assistant
Chairman, entered into an amendment of their loan agreement with the Company
relating to loans by them in the aggregate amount of $500,000, changing them
from demand loans to loans to be repaid following the payment of the Facility
loans with provisions for prepayment to the extent of 50% of the principal
payments paid to the Bank under the credit agreement after the Bank has received
post - October 31, 1995 principal payments of at least $1,000,000 and for the
deferral of the interest in excess of 3.99% per annum (the loan interest rate
after December 31, 1995 is the Bank's prime rate plus 2%) until the Facility


                                        

  
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<PAGE>



loans have been paid in full. Under their amended loan agreement, they
surrendered their rights to collateral which was to be provided under the
original loan agreement and subordinated their loans to the Company's
obligations under the credit agreement.

         The Company believes that funds generated from its operations and
additional mortgage loans with respect to properties acquired or developed will
be sufficient to finance its capital and operational requirements for the 12
months ended September 30, 1996.



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<PAGE>



                           Part II - Other Information

Item 5. Other Information

          See "Management's Discussion and Analysis of Results of Operations and
Financial Condition" for information with respect to (i) Amendment No. 10
executed on October 31, 1995 to the Company's Credit Agreement with NatWest Bank
N.A. (the "Bank") extending the maturity dates of the Company's Facility I and
Facility II loans, providing for a deferral and possible forgiveness of the loan
interest in excess of 4% per annum and modifying the financial covenants; and
(ii) an amendment to the loan agreement between the Company and Messrs. Lowell
Harwood, Chairman, and Sanford Harwood, Assistant Chairman, Secretary and
Director, making their demand loans in the aggregate amount of $500,000 payable
after the Facility loans have been paid in full, subject to prepayments of 50%
of the loan principal payments to the Bank after the Bank has received after
October 31, 1995 principal loan payments in the amount of $1,000,000, deferring
that portion of the loan interest in excess of 3.99% per annum to the date the
Facility Loans have been paid in full (the interest rate after December 31, 1995
is the Bank's prime rate plus 2%), subordinating the loans to the Company's
obligations to the Bank and eliminating the Company's obligation to collaterize
the loan.

         In consideration of the original extension of the loans and the
foregoing amendment, the Company issued to each of Messrs. Lowell and Sanford
Harwood a five year non-transferable Warrant to purchase 75,000 shares of the
Company's Common Stock at a price of $6.40 per share, the average of the closing
sales prices of the Common Stock on NASDAQ for June 28, 1995, the date of the
original loan agreement and the two immediately prior days in which trades were
effected in the stock.

Item 6. Exhibits and Reports on Form 8-K

        a) Exhibits 

          10(a) Copy of Amendment No. 10, dated October 31, 1995 to the Credit
                Agreement between the Company and NatWest Bank N.A..

          10(b) Copy of Amendment, dated October 31, 1995, to the Loan Agreement
                between the Company and Lowell Harwood and Sanford Harwood.

          10(c) Form of Warrant, dated October 31, 1995, issued to each of
                Lowell Harwood and Sanford Harwood.

          27.   Financial Data Schedule

        b) No reports on Form 8-K have been filed during the quarter ended
           September 30, 1995.





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<PAGE>

                                   SIGNATURES

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

                               SQUARE INDUSTRIES, INC. 


                               s/ Sanford Harwood
                               --------------------------------------   
                               Sanford Harwood 
                               Assistant Chairman 


                               s/ John Kowal           
                               --------------------------------------   
                               John Kowal 
                               Controller and Chief Financial Officer 


















Dated: November 13, 1995 




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