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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K
(Mark One)
      [X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 1996
                                          OR
      [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________________ to ______________________

                         Commission File Number 0-20317
                               ------------------
                          GLOBAL SPILL MANAGEMENT, INC.
             (Exact name of registrant as specified in its charter)
                Nevada                                      88-0270266
     (State or other jurisdiction                      (I.R.S. Employer
   of incorporation or organization                    identification No.)

              37-61 39th Street, Long Island City, New York, 11101
          (Address of principal executive offices, including zip code)

        Registrant's telephone number, including area code: (718)482-7878
                               ------------------
           Securities registered pursuant to Section 12(b) of the Act:
                                      None

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

                         Common Stock ($.001 Par Value)

      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
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.
                       Yes                                No   X
                           ---                                --- 
      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ].

      As of October 14,  1996,  11,215,462.17  Shares of Common Stock ($.001 par
value) were  outstanding and the aggregate market value of the Common Stock held
by non-affiliates was approximately  $3,256,834.48  determined at the average of
the closing bid and asked prices on that same day based upon 5,210,935.17 shares
owned by non-affiliates.

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<PAGE>



                                   Table of Contents


Part I

      Item 1.   Business

      Item 2.   Properties

      Item 3.   Legal Proceedings

      Item 4.   Submission of Matters to a Vote of Security Holders

Part II

      Item 5.   Market for Registrant's Common Equity and Related
                Stockholders Matters

      Item 6.   Selected Financial Data

      Item 7.   Management's Discussion and Financial Analysis

Part III

      Item 8.   Financial Statements and Supplementary Data

      Item 9.   Changes in and Disagreements with Accountants on Accounting
                And Financial Disclosures

Part IV

      Item 10.  Directors and Officers of Registrant

      Item 11.  Executive Compensation

      Item 12.  Security Ownership of Certain Beneficial Owners and Management

      Item 13.  Certain Relationships and Related Transactions

      Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K




<PAGE>
                                     PART I

Item 1.     Description of Business.
            -----------------------
      Global Spill Management,  Inc., a Nevada corporation (hereinafter referred
to as Global),  was organized under the laws of the State of Nevada on September
26, 1990 under the name Happy Mergers,  Inc. ("Happy Mergers").  On November 25,
1991, Global Spill Management,  Inc., a Delaware  Corporation  organized on June
12, 1991, was merged with and into Happy Mergers.  Happy Mergers,  which was the
surviving corporation,  changed its name to Global Spill Management,  Inc. As of
June 28,  1996,  the Company  entered  into a reverse  acquisition  with Phoenix
Wrecking Corp.  (Phoenix),  a corporation  organized and incorporated  under the
laws of the  state  of New  York on  April  2,  1986.  In this  acquisition  the
shareholders of Phoenix gained voting control of Global. As a result, Phoenix is
deemed to have  acquired  Global and  Phoenix,  is thus,  operating  as Global (
hereinafter referred to as the Company).

      As a result of the June 28, 1996 reverse acquisition with Phoenix, certain
changes have occurred in the services offered and operations of the Company. The
Company has sold its four operating subsidiaries. (See Acquisitions-Subsidiaries
and Business Operating  Subsidiaries).  The Company  anticipates  increasing and
expanding its services to include  industrial  demolition.  Mainly,  the Company
intends to phase out the Spill  Response and Recovery  portion of its  services.
The  Company   maintains  its  involvement  in  the   diversified   business  of
environmental  clean up and  related  businesses.  The  Company  carries  on its
business as a solid waste  management,  environmental  abatement  and  specialty
contracting  company  focusing  on, site and facility  remediation.  The Company
continues  to provide its  services  and sells its  products to a broad range of
public and private customers. The Company's fiscal year ends on June 30.

Industry Background.
--------------------
      The  Environmental  Protection  Agency (the "EPA")  estimates that it will
cost $30 billion to clean up the first 1,200, and most highly contaminated sites
on its  Superfund  priority  list,  and another $30 billion to clean up the next
1,200  priority  sites.  Such sites are  increasing in number because of the 250
million  metric tons of  "nonhazardous"  waste and 10.4 billion  pounds of toxic
materials  pumped  annually into the U.S.  environment  by industry,  utilities,
municipalities and individuals and the 2.7 billion gallons of waste water poured
into the same environment.

      Federal  and state laws now  require  the  removal of leaking or  corroded
underground storage tanks and the remediation of the soil at the tank site. More
than  750,000  tanks may be involved in this  process,  with costs  ranging from
$3,000 to up to $100,000 in certain  industrial  areas.  It costs a homeowner or
business  an average of $15,000 to remove a corroded  tank,  dispose of the tank
and remediate the contaminated soil.

      Federal legislation also covers the handling and disposal of hazardous and
solid waste and applies to more than 100,000 companies.  When fully implemented,
the laws  applicable to solid and hazardous waste  transportation  and disposal,
are   expected   to  cost   American   industry   around  $20  billion  a  year.
Polychlorinated  byphenyls  ("PCBs"),  lead and asbestos removal are expected to
cost American  businesses,  municipalities  and individuals  billions of dollars
each year as  regulations  regarding  PCBs,  lead  paint and  asbestos  are more
strictly enforced.  Federal and state environmental  regulations and enforcement
efforts have increased in recent years.

Market Factors.
---------------
      The Company  believes that  environmental  laws and  regulations are still
evolving  and  that,  while  there can be no  assurance,  the  enactment  of new
environmental laws and regulations in the future, the more stringent enforcement
of existing environmental laws and regulations, and the emphasis on the remedial
or restorative phase of environmental  problems will increase the demand for the
Company's  services  and  products.  Compliance  with such laws and  regulations
requires or will  require the  Company's  customers  to respond  immediately  to
industrial and  environmental  emergencies,  to remove hazardous  materials from
structures  and  equipment,  to remove  corroded  underground  and above  ground
storage tanks, and to remediate contaminated areas.

                                       1

<PAGE>

Business Strategy.
------------------
      The  Company  believes  that  the   environmental   services  industry  is
consolidating  while  the  need  for its  services  expands.  The  environmental
services industry has grown and matured over the past 20 years and has now begun
to  consolidate,  following  the trend of many other  service  industries in the
1980's.  For example,  in the early 1980's,  there were more than 3,000 asbestos
removal firms in the United States, most of them small "mom and pop" operations.
By 1992, many of the firms had been merged or consolidated  into larger firms or
ceased operations,  unable to compete with larger companies.  Paradoxically,  at
the same time that such  consolidation  is  beginning  to take hold,  management
believes that the need for environmental  services is increasing due to evolving
new laws and regulations, stricter enforcement of existing laws and regulations,
and  greater   emphasis  on  remediation   and   restoration  of   environmental
degradation.

      The Company intends to pursue its growth and acquisition  strategy on both
a  national  and  regional  level.  On a national  level,  it intends to acquire
companies in industrial  areas and  transportation  hubs. The Company intends to
acquire  companies  in  regional  clusters  which  integrate a number of related
services.  See "Business  Acquisitions." Such regional companies will be able to
share the capabilities of related companies,  and, therefore,  should be able to
increase and improve  their  services to  customers,  as well as increase  their
market  penetration.  The  regional  companies  will also be able to draw on the
operational and management expertise of the national company. While there can be
no assurance that the Company will succeed in implementing  its strategy or that
its strategy will be successful,  the Company  continues to actively  pursue its
growth strategy.

Acquisitions.
-------------
      The Company as of June 28, 1996, pursuant to a unanimous vote of the Board
of Directors,  acquired,  in exchange for 6,000,000  shares of its Common Stock,
all of the issued and  outstanding  Common  Shares of Phoenix  from the existing
Shareholders  of  Phoenix.  While  Phoenix  had  more  than  five  shareholders,
two-thirds of the shares were owned by Begonia  Corp.,  a  corporation  in which
Karl Schwab is the principal  shareholder  and sole director.  None of the other
shareholders  of Phoenix were affiliated with Begonia and/or Mr. Schwab nor were
any one of them officers,  directors or employees of Phoenix.  Moreover, none of
the ten other Shareholders became, as a result of the aforementioned exchange of
stock,  owners of record or beneficially  owning of 5% or more of the issued and
outstanding  capital  Shares  of the  registrant.  In  order to  consummate  the
transaction,  the  Registrant,  pursuant  to  Shareholder  consent,  amended its
Certificate of Incorporation so as to increase its authorized common shares from
1,333,333 to 25,000,000.

      Phoenix  has been  engaged as a  privately  held  company in business as a
diversified  waste  management  company  providing  services  similar to that of
Global.  The  principal  services of Phoenix  include  solid  waste  management,
industrial demolition, dismantling and abatement, and hazardous waste services.

      The Company  intends to grow by acquisition  and to expand its markets and
capabilities  by acquiring  environmental  companies and related,  complementary
businesses  primarily in transportation hubs, and industrial areas which tend to
experience a high incidence of other environmental problems need remediation. By
acquiring  companies in diverse markets,  management  believes that the revenues
and business of the Company  will be  geographically  diversified  and should be
less subject to economic  fluctuations in the service economy,  or to variations
in the weather,  which may curtail  contracting  work performed  outdoors during
inclement weather.

      Management  believes that the fragmentation in the environmental  services
industry  will  contribute to the Company's  ability to  effectively  pursue its
acquisition  program.  In addition,  many small and medium-sized  companies have
reached the limits of their  ability to grow due to lack of access to  necessary
capital, management,  marketing, systems infrastructure,  the cost and burden of
increasingly  stringent  regulatory  compliance,  and  lack  of  access  to  new
technology  in  the  industry.  Management  believes  that  it can  provide  the


                                       2

<PAGE>

companies it acquires the strategic  direction,  management and resources needed
to grow and allow the former owners of such companies the ability, over time, to
realize the value of their work and  investment,  while at the same time helping
the Company build a regional and national presence in the environmental services
industry.

      The Company has both a regional and national  acquisition  strategy.  On a
national  level,  it  intends  to  acquire  companies  in  industrial  areas and
transportation hubs. With respect to its regional strategy,  the Company intends
to create regional clusters of environmental  contracting companies to service a
broad geographic market area, gain greater market penetration,  and increase the
scope of services  provided.  In addition,  within such regional  clusters,  the
Company  intends to  acquire  companies  complementary  to each  other,  such as
thermal soil treatment  facilities,  contaminated  water  treatment  facilities,
transfer stations, and laboratory and testing facilities, and to integrate those
services with its contracting business. For example, the Company, in the process
of removing a corroded tank,  excavates the  contaminated  soil, then transports
the contaminated  soil to a thermal soil treatment  facility,  which, for a fee,
incinerates  the soil and then sells the soil for its own  account  for fill and
other purposes. If the Company owned a thermal soil treatment facility, it would
remove the tank,  incinerate the soil for a fee and use the decontaminated  soil
for other purposes for a fee charged by the Company.

      The  Company   also   intends  to  acquire   businesses   related  to  the
environmental  services industry which has more predictable and recurring levels
of business  and income  streams  than  certain  segments  of the  environmental
services  industry.  For example,  spill response and recovery,  although highly
profitable  and less  sensitive  to the  economy,  is also  opportunistic.  Tank
removal,  soil  remediation  and  other  such  environmental  services  are more
susceptible  to marketing and sales  efforts,  but are also more  susceptible to
economic  conditions and climate and may be delayed or deferred.  Therefore,  by
acquiring companies in related businesses, such as manufacturers of equipment or
instruments used in environmental contracting,  the Company could have a certain
core portion of its  business  with more  predictable  and  recurring  levels of
business income.  There can be no assurance,  however,  that the Company will be
able to acquire  such  companies  or that,  if  acquired,  such  companies  will
continue to have predictable and recurring levels of business and income.

      Although  the  Company  seeks  to  comply  with  environmental  and  other
governmental  regulations,  there is no certainty that the companies it acquires
will have so complied.  The Company could be subject to liabilities arising from
an acquired  company's  failure to comply with such regulations in the event the
Company  assumes  unknown  or  contingent  liabilities  or  in  the  event  such
liabilities  are imposed on the Company under  theories of successor  liability.
Prior to making  acquisitions,  the Company  typically  conducts a due diligence
investigation  and an environmental  assessment of the facilities of acquisition
candidates.  In  addition,  the Company may seek to avoid  assuming or incurring
liabilities by purchasing only specific assets of an acquisition candidate.  The
Company  may also  seek to  obtain  indemnification  from the  selling  parties.
However,  if the  Company  became  subject  to such a  liability  of  sufficient
magnitude  and was unable to enforce its rights of  indemnification  against the
acquired companies or selling stockholders, such liability could have a material
adverse effect on the Company's financial condition and results of operations.

Operations.
-----------
      Management  intends to integrate  the  companies it acquires on a national
and regional level, to bring controls,  efficiencies and  standardized  policies
and procedures to such  companies,  and to centralize a number of functions that
are performed on an individual basis. The Company intends to centralize finance,
cash  management,   accounting,   insurance,  industry  compliance,   marketing,
purchasing and human resource  functions.  To the extent  possible,  the Company
intends  to  standardize  policies  and  procedures,  environmental  and  safety
compliance  programs and employee benefits for the individual  companies.  There
can be no assurance that management  will be able to successfully  integrate the
companies  it acquires or to  successfully  centralize  or  standardize  certain
functions or policies or that such centralization or standardization will result
in cost reductions or better service.


                                       3

<PAGE>


Services and Products.
----------------------
      The Company provides a number of Environmental Services. The Company plans
to expand these services thorough the Continental Untied States.

Industrial Demolition, Dismantling and Abatement Services.
----------------------------------------------------------
      The  demolition   department  combines  several  generations  of  topnotch
operators and engineers  experienced  in all phases of commercial and industrial
wrecking,  including  plants,  paper mills,  factories,  holding  tanks,  office
buildings,  hotels  stacks,  bridges  and  structures  precariously  damaged  by
explosion or fire.  Demolition and dismantling  projects result from a myriad of
reasons including obsolescence of facility,  retooling,  fire,  consolidation of
operations and relocation.  The environmental  abatement  department consists of
licensed  professionals  specifically trained and skilled in removal of asbestos
and hazardous  wastes in strict  accordance  with applicable  regulations.  (See
discussion below of Regulation).  The Company uses the most up-to-date equipment
to ensure  the  safety  of its  personnel  and the  protection  of the site.  In
addition,   site  remediation  ,  particularly  in  the  case  of  environmental
contamination  of a site,  frequently  requires  demolition or  dismantling of a
contaminated facility.

      Dismantling  is a precise  disassembly  of a  manufacturing  or production
facility on a  piece-by-piece  basis in order to recover  equipment  as complete
operating  units in order to  recover  equipment  as  complete  operating  units
capable of  reinstallation.  Demolition is the precise science of destruction of
facilities  in defined  areas.  The  Company's  engineers  are  pioneers  in the
advanced  technology of implosion-the  inward burst of an exploding substance to
demolish a structure.  Certain  demolition  products also require the removal of
asbestos and other hazardous wastes as well as cleanup and removal.

Tank Removal and Installation.
------------------------------
      Certain states and  municipalities,  such as Pennsylvania,  New Jersey and
the City of Philadelphia,  require  companies and/or employees to be licensed or
qualified to remove or install  storage tanks.  The Company and where  required,
its employees,  has been able to obtain the necessary qualifications or licenses
to  conduct  such  activities  in those  locations  in which  the  Company  does
business.  The Company  removes and disposes of, and installs,  underground  and
above  ground  storage  tanks in the  Company's  service  area.  Tanks are often
required by federal and state law to be removed  because of  deterioration  from
age,  condensation,   oxidation  and/or  metal  fatigue.  Due  to  environmental
concerns,  tanks are increasingly  removed when real property and facilities are
sold,  leased or  financed.  The  Company not only  removes and  disposes of the
tanks, but tests the soil for contamination due to leakage, removes,  remediates
and  disposes  of the  soil,  and  provides  the  owner  with  the  required  or
appropriate  certification  of removal and disposal of the tank.  The  Company's
tank removal and installation  services are, in general,  utilized by individual
residential customers,  commercial and industrial customers, government agencies
and public and private institutions.

Tank Cleaning.
--------------
      Underground  and above ground storage  tanks,  even though not corroded or
oxidized,  must be cleaned from time to time. The Company  removes any substance
in the tank, and transports and disposes,  or arranges for the disposal of, such
substance, then cleans the tank with water or a particular solvent, depending on
the substance which was in the tank. For example,  petroleum  products require a
citric-based solvent for cleaning;  sulfur hydrochloride might be used to adjust
the Ph  level  in an  acidic  tank.  Tank  cleaning  services  are  utilized  by
commercial and industrial  customers such as manufacturers,  chemical plants and
pharmaceutical companies.






                                       4

<PAGE>

Soil Remediation.
-----------------
      On-site   remediation   involves  treating  hazardous   materials  at  the
customer's  site or the  excavation  and removal  thereof.  Soil and other solid
materials which have become contaminated from petroleum, chemical or PCB leakage
or spills or improper  dumping of toxic  materials are almost always required by
federal,  state or local  authorities to be  remediated.  Excavation and removal
involve the  excavation  of  contaminated  materials  for  containment,  on-site
treatment or off-site  disposal.  Much of the  contamination  is historical  and
occurred  prior to the  enactment  of  current  environmental  laws,  rules  and
regulations.  In  performing  soil  remediation,  the  Company  tests  the soil,
excavates the  contaminated  soil and disposes of such soil, at the direction of
the customer,  through thermal  destruction  (incineration)  at a state licensed
facility or deposits  the soil in a  state-approved  landfill.  The Company then
tests and  certifies  the site and also obtains and  provides the customer  with
certification as to the proper disposition of the soil and other solid or liquid
waste. As part of its quality control,  the Company regularly monitors excavated
materials to verify consistency with contaminants  identified in the remediation
plan.  Employees  that  work  with  contaminated  soil  and  other  contaminated
substances  must have a minimum of 40 hours of OSHA  training,  meet  continuing
education  requirements,  and be subject to periodic drug testing. The Company's
soil remediation  services are, in general,  utilized by individual  residential
customers,  commercial and industrial customers,  property managers,  government
agencies, and public and private institutions.

Infrastructure Maintenance, Rehabilitation and Cleaning.
--------------------------------------------------------
      The Company inspects,  through closed circuit  television,  infrastructure
systems such as sanitary sewers,  storm sewers,  wells and manholes,  identifies
breaks and/or weaknesses therein,  and either repairs the defects through bypass
plumbing,  polyethylene  slip lining and/or chemical  grouting or installs a new
system.

Industrial Environmental Maintenance.
-------------------------------------
      The Company  provides  on-site  industrial  environmental  maintenance  to
industrial  customers  in New Jersey,  Pennsylvania  and  Delaware.  The Company
supplies labor, equipment, materials and/or supervision, thereby supplementing a
plant's normal  maintenance  resource and increasing the efficiency of a plant's
resources.  Such  maintenance  includes,   without  limitation,   on-site  spill
response, tank cleaning and decontamination activity.

Subsidiaries.
-------------
      Coincident  with the reverse  acquisition  of June 28,  1996,  the Company
disposed  of  its  four   operating   subsidiaries.   These  were  Land  N'  Sea
Environmental  Services,  Inc., Allied Environmental  Services,  Inc. And Allied
Environmental  Services,  West Inc. and  Professional  Pipe Services,  Inc. Such
sales  resulted  in  all  such  operating  subsidiaries  being  assumed  by  the
respective purchaser of each operating subsidiary.

      The Company received an aggregate of $980,000 in cash from the sale of the
operating  subsidiaries  and the  Company  eliminated  $971,000  of  acquisition
indebtedness which was outstanding to one such subsidiary. Global used such cash
proceeds,  in part to satisfy  and  liquidate  in full  approximately  $1517,000
including  $40,000 in accrued  interest of senior  secured bank debt,  which was
secured  by  the  assets  of  the  former  operating  subsidiaries.   The  total
obligations  of Global on a  consolidated  basis were  $6,746,000 as of June 30,
1995.  After the sale of the  operating  subsidiaries,  the  obligations  of the
Company  were  approximately   $253,436.   This  figure  does  not  include  the
obligations of Phoenix.

      The Company currently has one operating  subsidiary,  Iroquois  Industries
Inc.,  (Iroquois)  which was  incorporated  and organized  under the laws of the
State of New York in April of 1992.  Iroquois  holds  the  leases  to  Company's
principal offices.  Iroquois is utilized by the Company for non-union work.


                                       5

<PAGE>

Insurance.
----------
      The Company carries a broad range of insurance  coverage which  management
considers adequate for the protection of its assets and operations. The coverage
includes general liability, comprehensive property damage, workers' compensation
and other coverage customary in the industry up to $10,000,000,  per occurrence.
The  insurance  covers  incidents  on a "claims  made"  basis.  The Company also
carries  environmental  impairment liability insurance of up to $5,000,000,  per
occurrence,  on a "claims  made" basis.  The Company  does not  maintain  funded
reserves to provide for payment of partially or completely uninsured claims.

Marketing.
----------
      The Company markets its services principally through the direct efforts of
its sales  personnel,  its field  supervisors  and foremen and its operating and
executive management,  all of whom call upon existing and prospective customers.
The Company also uses direct advertising and promotional  material to market and
sell its services and products.

      The Company has centralized its marketing  strategy for its  environmental
contracting  in the  Mid-Atlantic  region,  but  customizes  each its  marketing
program to its local service area and the specific  capabilities  of the Company
in each area of its operations.

Customers.
----------
      The  Company's  environmental  contracting  business  has a broad  base of
public and private sector customers, including individual residential customers,
federal, state, and local governmental agencies, public and private institutions
such as hospitals,  colleges and airports,  public utilities, and commercial and
industrial  customers,  ranging from sole  entrepreneurs,  to small and mid-size
firms, to Fortune 500 companies.

      The Company's marketing and sales efforts are directed toward establishing
and  maintaining   business   relations  with  customers  that  have  repetitive
requirements  or needs for one or more of the  Company's  services or  products.
Although a  significant  portion of the  Company's  business for its services or
products is derived from customers for whom the Company had previously  provided
services or products,  the work  performed  for such  customers is generally for
specific  projects  when the need arises and the Company has very few  long-term
written  agreements  with any such  customer.  During  fiscal year 1996,  no one
customer accounted for 10% or more of the Company's  revenues.  The Company does
not believe that the loss of any single  customer would have a material  adverse
effect on the financial condition or results of operations of the Company or any
of its operating subsidiaries.

Backlog of Orders.
------------------
      The Company  provides  its  services  and sells its  products  pursuant to
proposals,  purchase orders or retainer  letters.  It is the Company's policy to
perform  all  services  pursuant to a detailed  written  proposal,  which,  when
accepted, serves as a contract with respect to the services to be performed, the
cost  thereof  and the terms of the  payment  therefor.  In the  event  that the
nature,  scope or magnitude of the  services to be provided  changes  materially
from the original proposal,  it is Company policy to amend the original proposal
by  executing a change  order in writing to cover the changes in the services to
be provided, the cost thereof and the payment therefor. Certain agreements allow
for the  Company  to bill  for  work-in-progress,  other  bills  are  paid  upon
presentation, and others have payment terms of 10 to 30 days after completion of
the  services to be  performed,  or products  sold,  depending on the nature and
scope  of such  service  or the  nature  or  quantity  of the  product,  and the
creditworthiness of the customer.



                                       6

<PAGE>

Competition.
------------
      The  environmental   contracting   business  is  highly   competitive  and
fragmented.  The Company is engaged in highly competitive  markets in all of its
service  areas.  The  Company  competes  with both  large  and small  companies.
Management  does not  believe  that any single  firm is  dominant  in any of the
Company's primary service areas. Many of the Company's  competitors have greater
financial resources and longer operating  histories.  The Company's revenues and
results of operations could be adversely affected by these competitive forces.

      The Company believes that its environmental  contracting business competes
in terms of price, service, quality and responsiveness. The Company further does
not  have  geographic  limitations  within  the  United  States  as  many of its
competitors do. The Company  maintains a trained and qualified work force,  with
the  majority  of  its  personnel  employed  in  the  environmental  contracting
operations  being  OSHA-trained  and qualified.  The Company  believes it brings
business  discipline,   professional   standards  and  financial  and  marketing
expertise to the companies it acquires.  Because of the need for certain permits
and licenses, specialized equipment,  OSHA-trained employees, and the need to be
knowledgeable of and to comply with federal, state and local environmental laws,
regulations  and  requirements,  the  Company  believes  that there are  certain
barriers to becoming a  full-service  environmental  contracting  and consulting
company.

      The Company believes it attracts and retains  customers  primarily because
of its  reputation in its service areas for quality work, its ability to respond
effectively to customers'  needs, and the broad range of services it can provide
to a customer.

Employees.
----------
      As of August 31, 1996, the Company employed 60 full-time people. From time
to time,  the Company also  utilizes  qualified  temporary  personnel  with OSHA
training.  The Company has not  experienced  any work  stoppages and the Company
believes that its relationship with all its employees is good.

Regulation.
-----------
      The Company and, in particular,  its  customers,  are subject to extensive
and evolving environmental laws and regulations.  These laws and regulations are
directly  related to the demand for many of the services  offered by the Company
and often  subject the  Company to  stringent  regulation  in the conduct of its
operations.  The principal  environmental  legislation affecting the Company and
its customers is described below.

      Resource  Conservation  and Recovery Act of 1976 ("RCRA").  RCRA regulates
the  treatment,  storage and disposal of hazardous  and solid  wastes.  RCRA has
therefore created a need generally for some of the types of services provided by
the Company.  The 1984  Hazardous  and Solid Waste  Amendments  to RCRA ("HSWA")
expanded  RCRA's  scope by  providing  for the listing of  additional  wastes as
"hazardous" and lowering the quantity threshold of wastes subject to regulation.
HSWA also imposes  restrictions on land disposal of certain  wastes,  prescribes
more stringent  management  standards for hazardous waste disposal  sites,  sets
standards for  underground  storage tanks and provides for  "corrective"  action
procedures.  Both SM Environmental and Land N Sea are RCRA permit holders. Under
RCRA,  liability and stringent  management standards are imposed on a person who
is an RCRA permit holder,  namely,  a "generator" or  "transporter" of hazardous
waste or an "owner" or  "operator"  of a waste  treatment,  storage or  disposal
facility.  Both the EPA and states with authorized  hazardous waste programs can
bring several types of enforcement actions under RCRA, including  administrative
orders and actions seeking civil and criminal penalties.  RCRA also provides for
citizens suits as an additional enforcement tool.

      Comprehensive  Environmental  Response,  Compensation and Liability Act of
1980 ("Superfund  Act").  The Superfund Act addresses  cleanup of sites at which
there has been or may be a release of hazardous substances into the environment.
The Superfund  Act assigns  liability for costs of cleanup and damage to natural
resources to any person who, currently or at the time of disposal of a hazardous
substance,  owned or operated any facility at which  hazardous  substances  were

                                       7

<PAGE>

deposited,  to any person who by agreement or otherwise arranged for disposal or
treatment,  or arranged with a transporter for transport of hazardous substances
owned or possessed by such person for disposal or  treatment,  and to any person
who  accepted  hazardous  substances  for  transport  to disposal  or  treatment
facilities  or sites from  which  there is a release  or  threatened  release of
hazardous substances. The Superfund Act authorizes the federal government either
to clean up these sites itself or to order persons responsible for the situation
to do so. The Superfund Act created a fund to be used by the federal  government
to pay for the cleanup efforts.  Where the federal  government expends money for
remedial activities, it must seek reimbursement from the potentially responsible
parties.  Where the EPA  performs  remedial  work  with  Superfund  dollars,  it
frequently sues  potentially  responsible  parties for  reimbursement  under the
"cost recovery"  authority of Section 107 of the Superfund Act. The EPA may also
issue an administrative order seeking to compel potentially  responsible parties
to perform remedial work with their own funds under the "abatement" authority of
Section 106 of the Superfund Act. In lieu of instigating  such actions,  the EPA
may also seek through  negotiations  to persuade such parties to perform  and/or
pay for any and all stages of remedial  action at a site in  discharge  of their
liabilities under the Superfund Act.

      While the Superfund Act provides that  transporters of hazardous waste may
be jointly and severally  liable for the costs of remedial action at the site to
which the  hazardous  waste is taken,  the Company  attempts  to  minimize  such
exposure by having the  generator  select the  disposal  site and method.  Under
Section  101(20)(B)  of the  Superfund  Act,  when a common or contract  carrier
delivers a hazardous substance to a site selected by the shipper, the carrier is
not  considered  to have caused or  contributed  to any release at such disposal
facility resulting from circumstances or conditions beyond its control.

      Superfund Amendments and Reauthorization Act ("SARA"). SARA was enacted in
1986 and authorizes  increased  federal  expenditures and imposes more stringent
cleanup  standards and  accelerated  timetables.  SARA also contains  provisions
which expand the enforcement powers of the EPA.

      While there can be no assurance, management believes that, even apart from
funding  authorized by RCRA and the  Superfund  Act,  industry and  governmental
entities will continue to try to resolve  hazardous  waste problems due to their
need to comply with other  statutory  requirements  and to avoid  liabilities to
private parties.  Although the liabilities imposed by the Superfund Act are more
directly  related  to  the  Company's   customers,   they  could  under  certain
circumstances  apply to some of the broad range of  activities  of the  Company,
including failure to properly design or implement a cleanup, removal or remedial
action plan or to achieve required cleanup  standards and activities  related to
the transport of hazardous substances. Such liabilities can be joint and several
where other parties are involved.

      Clean Air Act and 1990 Amendments (the "1990  Amendments").  The Clean Air
Act requires  compliance with ambient air quality standards and empowers the EPA
to  establish  and enforce  limits on the  emission of various  pollutants  from
specific types of facilities.  The 1990 Amendments modify the Clean Air Act in a
number of  significant  areas.  Among other  things,  they  establish  emissions
allowances for sulfur and nitrogen  oxides,  establish  strict new  requirements
applicable to ozone emissions and other air toxins,  establish a national permit
program  for  all  major  sources  of  pollutants  and  create  significant  new
penalties, both civil and criminal, for violations of the Clean Air Act.

      Other Federal and State Environmental Regulations.  The Company's services
are also used by its customers in complying  with,  among others,  the following
federal laws:  the Toxic  Substances  Control Act, the Clean Water Act, the Safe
Drinking  Water Act,  the  Occupational  Safety and Health  Act,  the  Hazardous
Materials   Transportation   Act.   In   addition,   many   states  have  passed
Superfund-type  legislation  and other  regulations  and  policies to cover more
detailed aspects of environmental  impairment and the remediation thereof.  This
legislation  addresses such topics as air pollution,  underground storage tanks,
water quality,  solid waste,  hazardous materials,  surface  impoundments,  site
cleanup and wastewater  discharge.  Most states also regulate the transportation
of  hazardous  wastes and certain  flammable  liquids  within  their  borders by
requiring  that special  permits be obtained in advance of such  transportation.

                                       8

<PAGE>

These  statutes  and  regulations   impact  upon  the  liquid  and  solid  waste
transportation and disposal business conducted by the Company.

      The foregoing discussions identify the principal environmental legislation
currently  affecting  the  Company  and its  customers.  To the extent  that the
Company acquires thermal soil treatment facilities, contaminated water treatment
facilities, transfer stations and laboratory and testing facilities, the Company
would be primarily subject to and impacted by RCRA and the Superfund Act. To the
extent that such  facilities,  particularly  waste water  treatment  facilities,
would engage in the discharge of treated  wastewater,  compliance with the Clean
Water Act of 1972 would be required.

      Clean Water Act of 1972 ("CWA").  Originally  enacted as the Federal Water
Pollution Control Act, but renamed as the Clean Water Act in 1977, CWA regulates
the discharge of pollutants  into the surface waters of the United  States.  CWA
established   a  system  of  minimum   national   efficiency   standards  on  an
industry-by-industry  basis,  water quality  standards,  and a discharge  permit
program.   It  also  contains  special  provisions   addressing   accidental  or
unintentional spills of oil and hazardous substances into waterways.

Revenue.
--------
Through June 30, 1996,  the Company's had a net  operating  loss of  approximate
$1,668,000. In addition, through June 28, 1996, prior to the reverse acquisition
of June 28, 1996 between Global and Phoenix,  Phoenix's estimated  $9,371,801.00
(unaudited) in revenue derived from operations.

Patents, Trademarks, Franchises, and Concessions.
-------------------------------------------------
Patents,  Trademarks,  Franchises and Concessions are of little or no importance
to the Company.

Seasonal Nature of Business.
----------------------------
The Company is not engaged in a seasonal business.

Government Contracts.
---------------------
      The  Company  during  its  last  fiscal  year has had  contracts  with two
governmental  entities.  These are the City of New York and Staten  Island.  The
Company was hired by the City of New York to rehabilitate the train platforms in
Grand Central Station.  The city of Staten Island hired the Company for asbestos
removal from a demolished structure in Fresh Kills in Staten Island, New York.

Item 2.  Properties.
         -----------
      The principal offices of the Company were located at 2550 Boulevard of the
Generals,  Norristown,  Pennsylvania,  until the reverse acquisition of June 28,
1996 with  Phoenix.  The  National  Railroad  Passenger  Association,  (AMTRAK),
entered into an agreement  with  Iroquois  Inc., a subsidiary  of the Phoenix in
October 1993, wherein they agreed to exchange remedial services for prepaid rent
credit through  October 1, 1999. The Authority  valued this rent at $404,000 per
year.  The principal  offices of the Company are located on this property  which
comprises 8 acres  located at 37-61 39th  Street,  Long Island  City,  New York,
11101.  The  property  is at the  foot  of the  59th  Street  Bridge  and  has a
6,000-foot office building on the premises.  Phoenix . Management  believes that
the  Company's   facilities  are  adequate  to  support  the  Company's  current
operations.


      Phoenix  acquired a property in Hamtramck,  Michigan,  previously owned by
"Cook Family Foods,  Ltd.". The Property consists of 124,146 square feet or 2.85
acres +. The  improvements on the property  include two buildings,  one built in
1948 of 72,000  square feet,  and one built in 1991 of 18,800  square feet.  The
property  is paved and  fenced by chain link  fencing.  The zoning is "M H Heavy
Manufacturing",  City of Hamtramck,  Michigan,  48212,  located at 8800 Conant &
3827 Oliver,  and is located in close  proximity to I-75 and I-94.  The property



                                       9

<PAGE>

was  acquired  by  "Phoenix"  on March 3,  1994 in  exchange  for the  company's
providing  remedial  services to Cook Family  Foods,  Ltd.,  which costs Phoenix
$40,000.

Item 3.  Litigation.
         ----------
      From  time to time,  the  Company  and its  subsidiaries  are  subject  to
lawsuits arising in the ordinary course of business.  While management  believes
that no  pending  lawsuit  is likely to have a  material  adverse  effect on the
financial condition or results of operations of the Company or its subsidiaries,
the  outcome  of  any  such  litigation  cannot  be  predicted  with  certainty.
Currently, the Company is involved in a suit in the with a Contractor located in
Fort Brag,  North  Carolina.  This dispute  involves a breach of contract action
whereby,  the  Contractor  is  attempting  to obtain  damages  in the  amount of
$100,000.00. The Company intends to vigorously defend against this lawsuit.

Item 4.  Submission of Matters to a Vote of Securities Holders.
         -----------------------------------------------------
      The following matters were submitted to a vote of the securities holders:

      1.    Election of Directors.
      2.    Increase of authorized shares from twenty five million  (25,000,000)
            to forty million  (40,000,000)  shares of common stock (prior to the
            30-1 split).

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters.
         ---------------------------------------------------------------------
      On July 29, 1992, the Company's  Common Stock  commenced  quotation on the
NASDAQ Small Cap Market ("NASDAQ") under the symbol "GSMI".  The following table
sets forth the reported high and low bid and asked  quotations  for the Compan's
Common Stock.

      The Company's  Common Stock on NASDAQ for the period September 30, 1994 to
June 30, 1996.  The  "Quarters"  set forth below are based on the Company's June
30th fiscal year. Such quotations reflect  inter-dealer  prices,  without retail
mark-up, mark-down or commission and may not represent actual transactions.

                                Bid                            Asked
                        ---------------------           --------------------- 
Quarter Ended            High         Low               High          Low
-------------            ----         ---               ----          ---
September 30, 1994      $ 2         $ 1 13/16           $ 2 1/8     $ 2
December 31, 1994         1 9/16      1 1/2               1 5/8       1 5/8
March 31, 1995              3/4         3/4                27/32        13/16
June 30, 1995               11/32       5/6                13/32        3/8

September 30, 1995      $20 11/16     9 15/16            28 3/10     11 3/8
December 30, 1995        13 15/16     7 1/2              15 7/8       9 15/16
March 31, 1996            8 3/8       5 11/16            10 13/16     6 5/8
June 30, 1996             6 5/8       2 1/4               8 7/16      2 7/8

      The closing bid and asked prices on September  3,1996 for the Common Stock
were 2 13/16 and 3 3/16, respectively. On May 13, 1996 the Company effected a 30
to 1 reverse  split of its  common  stock.  On the date of the split  there were
23,768,846 shares issued and outstanding. After the split, the shares issued and
outstanding was 792,295.  The Company  canceled and retired  5,274,818 shares of
its common stock (pre-split).  This reduced the issued and outstanding number of
Common Shares of the Company to 616,466.  On July 5, 1996, the Company increased
the number of authorized Shares of Common Stock to 25,000,000.

      As of October 14, 1996,  there were  11,215,462.17  shares of Common Stock
outstanding and  approximately  11,518 holders of record of the Company's Common
Stock. The Company believes,  based upon security positions listing,  that there
are beneficial  owners of the Company's  Common Stock. Of the Preferred Stock no
Shares have been issued.



                                       10

<PAGE>


Exempt Transactions.
--------------------
      In September 1996, the Company entered into a transaction with an offshore
purchaser pursuant to Rule 903 of the Securities Act of 1933, as amended for the
sale of Series I Debentures  of the Company for a total of  $2,000,000.  Of this
amount  1,200,000 has been  delivered.  The sale price of these  debentures  was
discounted  from market by thirty (30) percent.  The initial funds in the amount
of  $1,200,000  has been used for  operating  expenses and to expand and develop
Company's operations.


Dividends.
----------
      As of the date hereof, the Company has not paid or declared any dividends.
The Company does not anticipate  paying any dividends on its Common Stock in the
foreseeable future. The Company currently intends to reinvest earnings,  if any,
in the development and expansion of its business.  The payment of dividends,  if
any, by the Company  rests within the  discretion  of its Board of Directors and
depends,   among  other  things,  upon  the  Company's  earnings,   its  capital
requirements and its financial position, as well as other pertinent factors.

Item 6.  Selected Consolidated Financial Data.
         ------------------------------------
      The  following  selected  combined  financial  data  should be reviewed in
conjunction  with Item 7 -  Management's  Discussion  and  Analysis of Financial
Condition and Results of Operations and the  Consolidated  Financial  Statements
and Notes thereto in Part IV of this report.

            THE FINANCIAL DATA CONTAINED BELOW HAS NOT BEEN AUDITED.






































                                       11


<PAGE>
                 GLOBAL SPILL MANAGEMENT, INC. AND SUBSIDIARIES
                                    UNAUDITED
                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                              Year Ended June 30
-------------------------------------------------------------------------------------------
                                                    1996            1995            1994
                                               ------------    ------------    ------------
<S>                                            <C>             <C>             <C>  
REVENUES:
    Service                                    $       --      $ 18,267,164    $  8,417,642
    Product                                            --           950,031       2,347,405
                                               ------------    ------------    ------------
                                                       --        19,217,195      10,765,047
                                               ------------    ------------    ------------
COST OR REVENUES:
    Service                                            --        13,805,189       6,182,680
    Product                                            --           728,234       1,613,339
                                               ------------    ------------    ------------
                                                       --        14,533,423       7,769,019
                                               ------------    ------------    ------------
    Gross profit                                       --         4,683,772       2,969,028

SELLING, GENERAL AND
    ADMINISTRATIVE EXPENSES                       1,668,000       5,578,054       4,303,750
                                               ------------    ------------    ------------
Operating (loss)                                 (1,668,000)       (894,282)     (1,334,722)

OTHER INCOME (EXPENSE):
    Interest Expense                                   --          (287,726)       (148,946)
    Other net                                          --              (615)        167,843
    Gain (loss) on Sale of Subsidiaries          (5,666,000)           --           202,259
    (Loss) on Investment and Note Receivable           --          (260,000)           --
                                               ------------    ------------    ------------
    (Loss) from continuing operations
       before income taxes and cumulative
    effect of change in accounting principle     (7,334,000)     (1,442,623)     (1,113,566)

(Loss) from Discontinued Operations
    (Loss) from Operations                         (325,000)           --              --
    Writedown of Goodwill                        (1,328,000)           --              --

INCOME TAX BENEFIT (EXPENSE)                           --            15,516         (16,612)
                                               ------------    ------------    ------------
(Loss) before cumulative effect of change in
    in accounting principle                      (9,047,000)     (1,427,107)     (1,130,178)

CUMULATIVE EFFECT OF CHANGE IN
    ACCOUNTING PRINCIPLE                               --              --           169,596
                                               ------------    ------------    ------------
NET (LOSS)                                     $ (9,047,000)   $ (1,427,107)   $   (960,582)
                                               ============    ============    ============
INCOME (LOSS PER SHARE BEFORE
    CUMULATIVE EFFECT OF CHANGE
    IN ACCOUNTING PRINCIPLE                    $     (15.03)   $       (.12)   $       (.14)
                                               ------------    ------------    ------------
CUMULATIVE EFFECT OF CHANGE IN
   ACCOUNTING PRINCIPLE                                --      $       --      $        .02
                                               ------------    ------------    ------------
NET (LOSS) PER SHARE - CONTINUING
    OPERATIONS                                 $     (12.18)   $       (.12)   $       (.12)
                                               ============    ============    ============
NET (LOSS) PER SHARE -
    DISCONTINUED OPERATIONS                    $      (2.85)           --              --
                                               ============    ============    ============
SHARES USED IN COMPUTING NET LOSS
    PER SHARE                                       602,009      11,654,137       8,170,145
                                               ============    ============    ============
</TABLE>
        The accompanying notes are an integral part of these statements
                                       12

<PAGE>
Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         -----------------------------------------------------------------------
         of Operation.
         ------------
General.
--------
      The  Company  strategy  has  been  to  grow  through  acquisitions  and by
developing the necessary  programs and  infrastructure to stimulate the internal
growth of the acquired companies.  The Company's acquisition strategy is focused
on the need to (I) expand the Company both regionally and nationally in order to
lessen the effects of local  economics  and weather;  (ii) acquire  companies in
industrial  areas and  transportation  hubs where there is a high probability of
spills and other  environmental  problems in need of remediation,  (iii) broaden
the  Company's  revenue  base  by  acquiring  companies   complementary  to  the
environmental  contracting and consulting  business,  such as  manufacturing  of
equipment or  instruments  used in  environmental  contracting  and  consulting,
environmental  testing  laboratories,   and  liquid  waste  treatment  and  soil
remediation facilities, in order to lessen the impact of the unpredictability of
spill  activity;  and (iv) acquire  several  companies  in a specific  region to
increase  the  already  existing  local  capabilities,  which  should  result in
increased  production and higher profit margins.  These and future  acquisitions
may affect the  relative  contribution  of service and  product  revenues to the
Company's total revenues. The Company's ability to integrate acquired businesses
will also affect the Company's financial condition and results of operations.

      During Fiscal 1995 the Company acquired Land N Sea Environmental Services,
Inc. ("LNS"),  Professional Pipe Services  Corporation  ("Propipe"),  and Allied
Environmental Services, Inc. ("Allied") in July 1994, October 1994, and December
1994,  respectively.  In December 1994 the Company spun-off its Acme Containment
Group,  Inc.  ("Acme")  subsidiary.  The  acquisitions  of LNS and  Allied  were
accounted  for  as a  purchase  and  consequently  only  the  results  of  their
operations  subsequent to acquisition are included in the financial  statements.
Propipe  was  accounted  for as a pooling of  interests  and,  accordingly,  the
Company's  results of operations  have been restated to include those of Propipe
for the year ended June 30,  1994.  Management  has not  restated its results of
operations  for the year  ended  June 30,  1993 to  account  for the  pooling of
interests  of  Propipe  since  the  effect  of  the  restatement  is  considered
immaterial.

      In addition to  acquisitions,  the Company's  operations are affected by a
number of factors, including,  without limitation, the enactment of new, and the
enforcement  of  existing,  Federal,  State  and  Local  environmental  laws and
regulations;   general  economic  conditions;  weather  conditions  in  specific
locations; and the unpredictability of significant spill activity. These factors
are beyond the control of the Company  and will  continue to have a  significant
effect on the  future  financial  condition  and  results of  operations  of the
Company.

      The Company has incurred significant operating losses for the past several
years.  These  losses  have  hindered  the  Company's  ability  to  finance  its
operations.  In October 1995, the Company received a binding  commitment for new
financing from CKN Holdings ("CKN") which would have provided 1.5 million of new
common equity and  convertible  loan amounting to 1.5 million.  Proceeds of $2.0
million were applied to the acquisition of American Marine Inc. and $1.0 million
was to be used for  general  working  capital  purposes.  CKN  defaulted  on its
obligations  to the Company in November  1995 and the Company  filed a complaint
against CKN as a result.  In February 1996, the Court entered a default judgment
against CKN and awarded a judgment in favor of the Company.
Collection of the judgment is unlikely.

      In January 1996,  as a result of the shortage of working  capital and high
expense of operations,  the Company  undertook a restructuring  and consultation
program to reduce expenses.  The consolidation  and restructuring  plan entailed
replacing the Company's President, and eliminating the Chief Operating Officer's
position by merging his responsibilities into the workforce and other members of
management.  The Company also suspended  payments  under certain  consulting and
employment  agreements  and relocated its  corporate  headquarters  into another
existing operating facility.

      During this period the Company  renegotiated a forbearance  agreement with
its primary  lender,  in which the  collateral  was the aggregate  assets of the
                                       13

<PAGE>

Company.  These forbearance agreements required the Company to find a new lender
to  replace  its  primary  lender.  In  January  1996,  the  Company  obtained a
commitment from another lender for a $3.0 million revolving  collateralized line
of  credit.  Borrowings  under  this new line were  limited  to 80% of  eligible
accounts receivable, as defined, up to $30,000,000. Due to an unexpected drop in
business  and  therefore,  eligible  accounts  receivable,  the  Company  lacked
sufficient collateral to repay the $1,350,000 owed to this lender.

      On April 25, 1996, the Company negotiated a forbearance agreement with its
the  commercial  bank, its primary  lender,  extending the line to May 31, 1996.
Under the  terms of this  forbearance  agreement,  the  Company  agreed to remit
collections of the accounts  receivable of its  Environmental  Disposal  Options
Corporation  ("EDOC")  subsidiary as a permanent  reduction of the line.  EDOC's
operations were discontinued by the Company on March 28, 1996 due to the lack of
profitability  and the lack of working  capital to operate this  subsidiary.  An
involuntary  Chapter 7 Bankruptcy was filed against EDOC on June 28, 1996. Since
EDOC's liabilities are greater than its assets,  which are pledged as collateral
to the primary lender, the Company has not contested this filing.

      The Board  explored its options and strategies in dealing with its primary
lender  whose loan the  Company  was now in default.  The  alternative  reviewed
included sales of all or part of the Company and seeking Bankruptcy protection.

      On June 28, 1996,  the Company sold its remaining  operating  subsidiaries
GSM  Environmental  Inc.,  LNS,  Allied and Propipe,  utilizing  the proceeds to
satisfy the loans to the  primary  lender.  At this time the Company  obtained a
commitment from an investment group for financing  totaling  $250,000 to be used
to satisfy the  remaining  creditors of the Parent  corporation.  The Board also
converted a fourth  quarter  1996  $315,000  convertible  debenture  into 750,00
Shares of the Company's  Common  Stock.  In  conjunction  with the sale of these
subsidiaries  came the termination of burdensome  employment  contracts and debt
service that made it difficult to obtain  profitability  without large increases
in  revenues.  It  became  extremely  difficult  to  grow  the  Company  through
acquisition or internal growth because of the difficulty in obtaining financing.

      After the wholly owned  Subsidiaries  were sold, and  substantially all of
the debts were  satisfied,  all that  remained was sundry  accounts  payable and
office equipment leases totaling approximately 650,000 repaid, on June 28, 1996.
It was the  Board's  belief  that the  sale of the  operating  subsidiaries  was
necessary to repay the primary lender or Bankruptcy  would have been inevitable.
It  is  felt  that  though  the  acquisitions  were  Dilutive  to  the  existing
shareholders  that  shareholder  value will be better served through the profits
now  provided  by the  new  organization.  Of  course  future  profitability  is
dependant on many factors including general economic and regulatory  conditions,
the  additional  expenses  incurred by the Phoenix  organization  as a result of
being a public entity.

      The Company acquired Phoenix Wrecking  Corporation for 6,000,000 Shares of
the Company's Common Stock valued $21,750,000. Phoenix Wrecking is a solid waste
management,  environmental  abatement and specialty  contractor focusing on site
and facility  remediation.  The Phoenix  purchase price is subject to adjustment
based on the  financial  statement of Phoenix when they become  available.  As a
result of the Phoenix  acquisition by the Company  management of the Company was
replaced with  representatives of Phoenix. The new management did not retain any
employees of Global Spill Management or any of its former subsidiaries.

      Unaudited  financial  statements  of  Phoenix as of March 31,  1996,  show
revenues of $8.2 million, a pre-tax profit of $797,000, and a profit after taxes
of $534,000.  The Company through  Global's  previous  activity,  has over $10.0
million in net operating loss carry forward (NOL). A change in controls,  as has
taken place, may limit the annual utilization of NOL carry forward.

      In  September  1996 the Company  announced  the  acquisition  of Recycling
Unlimited of Queens, New York. Recycling Unlimited is the operator of a transfer
and crushing plant of construction debris. Their annual revenues are expected to
be between $6.0 and $8.0 million.



                                       14

<PAGE>

      On October 6, 1996, the Board of Global approved the  renegotiation of the
terms of the  acquisition  of  Phoenix.  The six million  (6,000,000)  shares of
common stock of Global are to be returned to Global for cancellation. In return,
the former shareholders of Phoenix will receive a number of shares of previously
authorized  preferred  stock at a dollar  value and with  conversion  and voting
rights to be determined.  The holders of preferred  stock will have a preference
in the event the Company becomes insolvent or declares  bankruptcy and they will
be entitled to the stock of Phoenix Wrecking Corporation upon any dissolution or
liquidation of the parent company, Global Spill Management, Inc.

      The Company has  equipment  valued at  approximately  two million  dollars
($2,000,000)  consisting  of  excavators,   track  loaders,  cranes,  rubbertire
loaders, dozers,  skid-steer,  trucks, hydraulic boom man-lift trucks, and other
miscellaneous equipment.

YEAR ENDED JUNE 30, 1995 COMPARED TO YEAR ENDED JUNE 30, 1994

      All representations and statements  contained herein regarding Fiscal Year
1996 is based upon unaudited financial  statements.  Revenues of $19,217,195 for
the year ended June 30, 1995 ("Fiscal 1995")  increased  $8,452,148 or 78.5%, as
compared to Fiscal 1994.  Approximately  $11,840,738  of the total  revenues for
Fiscal 1995 were  attributable to  Environmental  Disposal  Options  Corporation
("EDOC"),  Land N Sea and Allied, which were acquired by the Company as of April
28, 1994, July 15, 1994 and December 1, 1994, respectively.  American Industrial
Marine  Services,  Inc.  ("AIMS"),  which was sold by the Company as of April 4,
1994 contributed $2,529,245 to Fiscal 1994 revenues.  Acme which was spun off by
the Company as of December 22, 1994  contributed  $1,446,138  and $2,677,907 for
Fiscal 1995 and 1994, respectively.  Excluding revenues from these subsidiaries,
revenues would have increased  $1,007,656 or 20%. This increase is  attributable
to the emergency spill activity in the early months of Fiscal 1995. Revenues and
Operating   Income  (Loss)  for  Fiscal  1995  would  have  been   approximately
$23,707,500  and  $(886,000)  compared  to  Revenues  and  Operating  Income  of
$23,210,700 and $472,500 in Fiscal 1994 had the Company owned Allied, Land N Sea
and EDOC and disposed of Acme and AIMS as of July 1, 1993.

      Product  revenues of  $950,031  for Fiscal 1995  decreased  $1,397,374  or
59.5%, as compared to Fiscal 1994. Almost all product revenues were attributable
to Acme, which was spun off as of December 22, 1994.

      Gross profit of $4,683,772 for Fiscal 1995 increased  $1,714,744 or 57.8%,
as compared to Fiscal 1994. Of the gross profit for Fiscal 1995,  $3,094,679 was
attributable  to EDOC, Land N Sea, Allied and Acme, and $333,898 of gross profit
for the same period in 1994 was attributable to AIMS. Excluding the gross profit
attributable to EDOC, Land N Sea, Allied and Acme for Fiscal 1995 and EDOC, Acme
and AIMS for Fiscal 1994,  gross profit  would have  increased  $136,180 or 9.4%
from Fiscal 1994 to 1995,  primarily due to the emergency spill activity in July
and August 1994. The gross profit percentage  declined from 27.6% in Fiscal 1994
to 24.4% in Fiscal 1995 due to the  disposition of Acme.  Acme is a manufacturer
whose gross margin  historically is higher than the Company's other subsidiaries
that are service companies.

      Selling,  general and administrative  expenses ("SG&A") for Fiscal 1995 of
$5,578,054,  which  includes  $177,500 of  amortization  of goodwill,  increased
$1,274,304,  as  compared to the same period in 1994.  SG&A as a  percentage  of
revenues  was 29.0% of revenues in 1995 versus  40.0% of revenues in Fiscal 1994
due mainly to an increase in revenue without a  proportionate  increase in SG&A.
Due to  management's  continuing  focus on the company's  cost  containment  and
reduction  programs  (which have  reduced  salaries and both general and medical
insurance),  SG&A excluding goodwill  amortization and expenses  attributable to
EDOC, Land N Sea, Allied and Acme for Fiscal 1995 and AIMS and EDOC for the same
period in 1994, would have decreased by $240,624 or 7.5%.

      Interest  expense for Fiscal 1995 increased  $138,780 from the same period
in 1994.  Higher  interest  rates,  greater  borrows under the Company's Line of
Credit  and debt  issued to  finance  the  purchase  of Allied  resulted  in the
increase in interest expense.

      SG&A for Fiscal 1994 of $4,303,750 (40.0% of revenues)  decreased $735,000
or 14.6% as compared to Fiscal  1993.  The  decrease  was  offset,  in part,  by

                                       15

<PAGE>
$74,100 of additional SG&A  attributable to EDO which the Company acquired as of
April 28, 1994.  SG&A includes  $790,600 and $832,200 for Fiscal 1994 and Fiscal
1993, respectively, attributable to AIMS. Excluding EDO for Fiscal 1994 and AIMS
for  Fiscal  1994 and 1993,  SG&A  would  have  decreased  $905,717  or 26.3% as
compared to Fiscal  1993.  The  decrease  was  attributed  to (I) a reduction of
$360,000 in salaries and  consulting  costs and related  costs,  (ii) a $356,500
decrease in  professional  fees,  other expenses  associated  with the Company's
acquisition programs and the costs associated with being a public company, (iii)
a decrease in advertising  of $20,000,  (iv) a reduction of $31,000 in insurance
costs,  and (v)  $206,000  of cost  related to bad debts,  relocation  and other
employee costs incurred in Fiscal 1993 which were not incurred in Fiscal 1994.

      Interest expense for Fiscal 1994 of $148,900 decreased $46,700 from Fiscal
1993. Approximately $80,300 and $81,200,  respectively,  of interest expense for
Fiscal 1994 and Fiscal 1993,  respectively,  was attributable to AIMS. Excluding
AIMS for Fiscal 1994 and Fiscal  1993,  interest  expense  would have  decreased
$45,800 due primarily to decreases in interest  rates and average  borrowing for
the year.

      Other  income  - net for  Fiscal  1994  decreased  $24,400.  Approximately
$70,900  and  $102,300 of other  income - net for Fiscal  1994 and Fiscal  1993,
respectively, was attributable to AIMS. Excluding AIMS, other income - net would
have decreased $1,300.

Liquidity and Capital Resources.
--------------------------------
      Cash and cash  equivalents as of June 30, 1995 were $183,567,  compared to
$166,105  as of June 30,  1994.  The Company  had a working  capital  deficit of
$433,522 as of June 30, 1995 compared to positive  working capital of $1,320,455
as of June 30, 1994.

      Cash  used in  operations  of  $(561,036)  for  Fiscal  1995  compared  to
$(781,220) used in Fiscal 1994.

      The proceeds of Common Stock sales and short term debt were used primarily
to fund  $578,615 in operating  losses,  $337,718 in capital  expenditures,  and
$1,967,502 for the acquisitions of Allied.

      The Company has a $1,150,000 line of credit which expires in October 1995.
Under  the  terms of the line of credit  the  Company  can  borrow  against  its
eligible accounts receivable,  as defined, up to $1,150,000. As of June 30, 1995
eligible accounts receivable were approximately $2,195,000. The Company has been
in  technical  default  of its line of credit  from  time to time.  The bank has
waived  these  defaults  and has agreed to forebear  any action under the credit
agreement until October 31, 1995.

      The Company has incurred significant operating losses in each of the three
years in the period  ended June 30, 1995,  has a  consolidated  working  capital
deficit of approximately $434,000, and has a consolidated accumulated deficit of
$4,620,000.

      Management  has received a firm  commitment  for new financing  which will
provide $1,500,000 of new common equity, a one-year,  convertible loan amounting
to  $1,500,000  bearing  interest  at  11.5%,  and a new line of credit of up to
$3,000,000.  The number of shares of Company  Common Stock to be issued for cash
or upon  conversion  will be based  upon 65% of the bid price on the date of the
transaction.

      The Note  Payable - Allied as of June 30,  1995 was  $1,105,058,  of which
$166,568 is current, and payable in cash or in Common Stock.

      During Fiscal 1995, the Company sold  6,764,000  shares of Common Stock to
various  investment  groups  in  private  placements.   The  proceeds  of  these
transactions net of related costs were $2,563,799. In addition, the Company also
collected $408,333 of Common Stock sale receivables in Fiscal 1995.

      As of June 30, 1995, the Company has $497,875 of subscriptions  receivable
from various investment groups.

      In Fiscal 1994, the Company (I) restructured its employee health coverage,
capping the monthly premiums and adopted employee co-payments, which resulted in
                                       16

<PAGE>

a savings of  $129,000  annually;  (ii)  consolidated  its  liability  insurance
throughout the Company,  resulting in approximately  $100,000 in annual savings;
and (iii)  consolidated  certain corporate staff functions,  resulting in annual
savings of $100,000.

      During  Fiscal 1996,  the Company  expects to continue its  organizational
efficiency and cost reduction programs. Cost savings are expected to be obtained
primarily  through  consolidation  of facilities  which will result in occupancy
cost savings of approximately  $60,000 per year.  Further reduction in liability
insurance  through  consolidation  will yield  savings of $80,000 next year.  In
addition,  the Company expects to consolidate  certain sales and  administrative
departments that will result in payroll savings of $100,000.

      Management  believes  the  availability  under the new  financing  package
detailed above, the collection of stock subscriptions receivable, cost reduction
programs and organizational  efficiencies,  will provide sufficient cash to meet
its working capital and capital expenditure requirements through June 30, 1996.

      In order to implement its  acquisition and growth strategy over the longer
term,  the  Company  will have  significant  capital  requirements.  The Company
anticipates  the future issuance of shares of its capital stock to fund portions
of the purchase  price for  acquisitions.  In addition,  the Company may seek to
raise additional capital through public or private debt or equity financing. The
availability  of these  capital  sources  will  depend  upon  prevailing  market
conditions,  interest rates and the then existing financial position and results
of  operations  of the  Company.  In the  event  that a  public  market  for the
Company's Common Stock does not continue with sufficient strength and liquidity,
potential acquisition candidates may be unwilling to accept the Company's Common
Stock as part of the  consideration  for the sale of their  businesses.  In such
circumstances,  the  Company  would  be  required  to use  more  of its  capital
resources in order to continue its acquisition program. As a result, the timing,
number and  character  of  acquisitions  over the longer term could be adversely
affected.

Item 8.  Financial Statements and Supplementary Data.
         -------------------------------------------
      Consolidated Financial Statements and supplementary  financial information
specified  by this Item 8. are  presented  following  Item 14 in Part IV of this
report.

Item 9. Changes  in  and   Disagreements  with  Accountants  or  Accounting  and
        ------------------------------------------------------------------------
        Financial Disclosure.
        --------------------
      The Company is in the process of engaging SEC qualified  Certified  Public
Accountants  to audit  the  Company's  Fiscal  1996  financial  statements.  The
decision to change accountants was approved by the Company's Board of Directors.
Management prepared the unaudited financial  statements attached to this report.
At no time were there any disagreements with the prior accountants, BDO Seidman,
LLP, on any matter of accounting  principles or practices,  financial  statement
disclosures or auditing scope or procedures.
















                                       17

<PAGE>
                                    PART III

Item 10.  Directors and Executive Officers of the Company.
          -----------------------------------------------

      As a result  of the  reverse  acquisition  of June 28,  1996  between  the
Company and Phoenix,  the Prior  members of the Board of  Directors,  other than
David R. Stith, resigned and the following new members were elected.

      The executive officers,  directors and key personnel of the Company are as
follows:

      Name                    Age         Positions held with the Company
      ----                    ---         -------------------------------
Karl Schwab                   31          Chairman, President and Director
Roger Imperial                57          Director
David R. Stith                69          Director
George Weast                  63          Chief Financial Officer, Assistant
                                            Secretary And Director
Charles C. Chillingworth      53          Director and General Counsel

      Biographies of the directors, executive officers, and key personnel of the
Company are set forth  below.  All  directors  hold office until the next annual
stockholders' meeting and until their successors have been elected and qualified
or until their  death,  resignation,  retirement,  removal or  disqualification.
Vacancies in the  existing  Board are filled by majority  vote of the  remaining
directors.  Officers of the Company serve at the will of the Board of Directors.
current  executive  officers of the Company have employment  contracts ending in
1996.

      No Director,  Officer or  affiliate of the Company is an adverse  party to
the Company or any of its subsidiaries in any material proceeding.

      Section  16(a)  of the  Securities  Exchange  Act  of  1934  requires  the
Company's officers and directors, and persons who own more than ten percent of a
registered  class  of the  Company's  equity  securities,  to  file  reports  of
ownership and changes in ownership of equity  securities of the Company with the
Securities  and  Exchange  Commission  and  NASDAQ.   Officers,   directors  and
greater-than-ten-percent  shareholders are required by SEC regulation to furnish
the Company with copies of all Section 16(a) forms that they file.

      KARL SCHWAB has been Chairman, President and Director of the Company since
June 28,  1996.  In  addition,  from 1986 to the  present,  Mr.  Schwab has been
President  and  founder  of  Phoenix  Wrecking  Corporation.   Phoenix  Wrecking
Corporation,  a company  specializing  in the demolition of large  buildings and
factories  throughout  the United States,  expects  revenue in excess of fifteen
million dollars during the fiscal year 1996.  Major clients of Phoenix  Wrecking
Corporation  include Cargill,  Con Edison and U.S. Steel.  During 1985 and 1986,
Mr.  Schwab  served as Vice  President of Cuyahoga  Wrecking and was the Project
Manager  responsible  for  overseeing  numerous  demolition  sites.  Mr.  Schwab
received  his B.S.  degree in  Finance  from Iona  College in 1986.  Mr.  Schwab
receives a salary of $75,000 from the Company.

      ROGER A. IMPERIAL has been a Director since June 28, 1996. Mr. Imperial is
Vice  Chairman of Acordia  Northeast/New  York Region and  Chairman of Arordia's
National Construction  Committee.  Acordia produces,  manages and oversees large
commercial  accounts.  Mr.  Imperial's areas of expertise are in development and
implementation of national  property/casualty  programs. Mr. Imperial received a
B.A.  degree from St. John's  University  and an LLB from St. John's  University
School of Law.  He is a licensed  insurance  broker in the State of New York and
has served on the Board of Trustees of the New Jersey Highway  Authority and was
appointed  by  the  Governor  of New  York  as  special  counsel  to  the  Joint
Legislative  Committee on Rates and  Regulations.  He has appeared before panels
studying tort reform liability as it applies to the insurance  industry and is a
member of the Board of Trustees  of  Catholic  Charities  of NYC,  Nursing  Home
Division. Mr. Imperial receives no salary from the Company.

      DAVID R. STITH became a Director of Global on November 1, 1991, and of the
Company on November 25, 1991. Mr. Stith founded Underwsater Technics in 1967 and
has served as its Chairman and President  since such date. Mr. Sith led the crew

                                       18

<PAGE>

that cleaned up the major oil spills from the tankers the "Elias", the "Mellon",
and the  "Athos".  Mr.  Stith was also  involved in  underwater  testing for the
National  Aeronautics and Space  Administration,  and led the cred that dove for
sunken  treasure  on the Spanish  Gallon  "San Jose" which sank off  Columbia in
1708.

      GEORGE  E.  WEAST is Chief  Financial  Officer,  Assistant  Secretary  and
Director.  Mr. Weast has been  President and  Co-Founder  of Washington  Capital
Corporation,   formerly  Washington   Financial  Services,   Inc.,  since  1990.
Washington  Capital provides  investment banking and commercial lending services
to  corporations  and  institutional   clients.   The  company  has  established
relationships  with major banks,  insurance  companies,  venture  capital firms,
trust funds,  pension funds,  finance companies and private lending groups.  Mr.
Weast has successfully  syndicatd real estate and equipment  leasing programs to
the investment banking community.  Additionally, Mr. Weast serves as a financial
consultant to several banks, a major  investment  banking house and fixed income
money manager. Mr. Weast receives a salary of $75,000 from the Company.

      CHARLES C. CHILLINGWORTH, General Counsel. Mr. Chillingworth has practiced
law in Palm Beach County, Florida, for 24 years,  specializing in litigation. He
is a member of the Trial Bar of the U.S.  Court  for the  Southern  District  of
Florida,  and the Bars of the U.S.  Courts of  Appeal of the Fifth and  Eleventh
Circuits.  He has been  Certified by The Florida Bar as a Civil Trial Lawyer for
thirteen years,  and served on the Continuing  Legal Education  Committee of The
Florida  Bar for three  years.  He is a member of the  Academy of Florida  Trial
Lawyers  and the  Attorneys'  Title  Insurance  Fund.  He has  served as General
Counsel to the South Indian River Water Control  District for  seventeen  years,
and has been  general and  special  counsel to several  other water  control and
community  development districts in Florida, and, as such, has been instrumental
in the  issuance  of many  millions  of  dollars  of  improvement  bonds.  He is
President  and  General  Counsel  of a number of  investment  companies  holding
shopping  centers and pasture  land in Florida.  He received  his B.A.  and J.D.
degrees from the  University  of Florida.  He served in the U.S. Army as a Field
Artillery  Battery  Commander  and in the  Florida  Army  National  Guard  as an
Infantry  Company  Commander.  He will be paid fees for his  services as General
Counsel, but will receive no salary from the Company.

Item 11.  Executive Compensation.
          ----------------------
 
      The  following  table sets forth the cash  compensation  earned during the
last  fiscal  year by the  Company's  chief  executive  officer  and each of the
Company's  executive  officers whose aggregate  annual salary and bonus exceeded
$100,000  for the  fiscal  year  ended  June 30,  1996.  (the  "named  executive
officers").  Of those  individuals  listed below only Karl Schwab remains on the
Board of Directors of the Company.  The Company became a reporting company under
the Securities  Exchange Act of 1934 on July 29, 1992, the effective date of its
Registration Statement on Form 8-A.

      Directors who are also officers of the Company receive no remuneration for
their services as Directors,  other than  reimbursement of expenses  incurred in
connection with such service. It is the current policy of the Company not to pay
Director's fees or other forms of remuneration to Directors who are not officers
of the Company, other than reimbursement of expenses incurred in connection with
such service as a Director.














                                       19

<PAGE>
                                   SUMMARY COMPENSATION TABLE
                                   --------------------------
<TABLE>
<CAPTION>
                                                              | Long-Term Compensation
                                                              |  ---------------------------------- 
                                   Annual Compensation        |     Awards               |   Payouts |
                              ------------------------------- | ------------------------ |  -------- |
         (a)            (b)      (c)      (d)       (e)       |    (f)          (g)      |    (h)    |   (I)
                                                              |                          |           |
                                                   Other      |                          |           |
       Name and                                    Annual     | Restricted    Securities |           |   All
       Principal                                  Compensa-   |   Stock       underlying |    LTIP   |  Other
       Position         Year  Salary($)   Bonus($) tion($)(3) | Award(s)($)   Options/   | Payouts($)| Compen-
                                                              |                 SARs(#)  |           | sation($)(3) 
<S>                     <C>    <C>        <C>     <C>           <C>           <C>          <C>         <C> 
      Karl Schwab       1996   $75,000

 Thomas D. Lewis, Sr.   1996
Chairman of the Board,  1995   178,345                                        100,000
   Chief Executive      1994   29,920                                         135,000
      Officer(1)                                                         
                                                                         
Aubrey L. Pettit, Jr.   1996                                             
  President, General    1995   163,081                                        100,000
Counsel and Secretary   1994   155,110                                        64,000
                                                                         
    Peter V. White      1996                                             
    Executive Vice      1995   163,081                                           0
      President,        1994   167,938                                        67,500
   Chief Financial                                                       
       Officer,                                                          
   and Treasurer(2)                                                      
                                                                         
    David R. Stith      1996                                             
    Vice Chairman;      1995   150,500    10,313                                 0
President, Underwater   1994   150,000                                           0
    Technics, Inc.                                                       
</TABLE>
------------------
(1) From July 1, 1992 to April 20, 1994, Mr. Lewis served as a consultant to the
Company,  at an annual  consulting  fee of $175,000 per annum.
(2) From June 1, 1992 to April 20,  1994,  Mr. White also served as Chairman and
Chief  Executive  Officer of the Company.  Mr. White resigned all positions with
the Company as of June 30, 1995.
(3) For the fiscal year ended June 30, 1995, no bonuses, long term compensation,
stock grants or other  compensation  were awarded,  paid or accrued on behalf of
the named  executive  officers.  None of the named executive  officers  received
perquisites and other personal  benefits in excess of the lesser of (I) $50,000,
or (ii) ten percent of their total  salaries  and bonuses.  In Fiscal 1995,  Mr.
Lewis and Mr. Pettit each received stock options for 100,000 shares at an option
price of $.34 per share.
(4) All of the above  Officers  and  Directors  othar than Karl Schwab and David
Stith have resigned as result of the June 28, 19986,  reverse  acquisition  with
Phoenix.

The Company has discontinued the Senior Management  Incentive  Compensation Plan
and an Equity  Incentive  Plan described  below as of June 28, 1996.  During the
Company's  fiscal year ended June 30, 1996, no awards were made or accrued under
the  Incentive  Compensation  Plan;  and no options were issued under the Equity
Incentive Plan.

      The  following  table sets forth  information  concerning  grants of stock
options  during the fiscal  year ended  June 30,  1996,  to the named  executive
officers.









                                       20

<PAGE>



                      OPTION/SAR/GRANTS IN LAST FISCAL YEAR
                 ----------------------------------------------

      1,152,660 Options were granted, canceled or forfeited.

      The  following  table sets forth  information  concerning  the exercise of
options to purchase the Company's  Common Stock by the named executive  officers
during the fiscal year ended June 30,  1996 as well as the number of  securities
underlying  unexercised options and potential value of unexercised options as of
June 30, 1996.

                    AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                          AND FISCAL YEAR-END OPTION/SAR VALUES(1)

<TABLE>
<CAPTION>
                                                   Number of           Value of
                                                   Securities      Unexercised In-
                                                   Underlying         the-Money
                                                Options/SARs at    Options/SARs at
                          Shares                  Fiscal Year-       Fiscal Year-
                     Acquired on     Value          End(#)             End($)
                     Exercise(#)   Realized($)    Exercisable/       Exercisable/
                                                Unexercisable(2)   Unexercisable(3)
                     -----------   ----------   ----------------   ----------------  
<S>                     <C>           <C>          <C>                  <C>   
Thomas D. Lewis, Sr.    0             0            235,000/0            $1,500
Aubrey L. Pettit, Jr.   0             0            164,000/0            $1,500
Peter V. White          0             0             67,500/0             0/0
</TABLE>
------------------
(1)All amounts  represent stock options.  No SARs or SARs granted in tandem with
stock options were granted in Fiscal 1996.
(2)All options were exercisable as of the date of grant.
(3)At June 30,  1996,  the Closing Bid and Asked price of the  Company's  Common
Stock was $11/32 and $13/32, respectively.


Item 12.  Security Ownership of Certain Beneficial Owners and Management.
          -------------------------------------------------------------- 

      The following  table sets forth the number and percentage of the Company's
shares of Common  Stock owned of record and  beneficially  by (a) each person or
entity owning more than five percent of such shares,  (b) each executive officer
and  director,  and (c) all executive  officers and directors as a group,  as of
June 30, 1996.

Name and Address(1)(2)              Number of Shares Owned          Percentage
----------------------              ----------------------          ----------
Northeast Surety Service Inc.             3,415,000                       30%
37-61 39th Street,
Long Island City,
New York, 11101

      On July 3, 1996,  as a direct  result of the  transactions  referred to in
Item 1 above Karl Schwab,  principal  Shareholder  of Northeast  Surety  Service
Inc., became a "control Person" of the Registrant as that term is defined in the
Securities  Act of 1933, as amended.  Mr.  Schwab's  status as a control  person
arises from the issuance of 4,000,000  shares of the  Registrant's  common stock
(approximately  565 of the  total  issued  and  outstanding  Common  Shares)  to
Northeast  Surety  Service  Inc.  Additionally  with  the  consummation  of  the
transaction  referred  to in Item 1,  all  prior  directors  and  Board  Members
resigned as directors of the Registrant.

Item 13.  Certain Relationships.
          ---------------------  
Not Applicable.

                                       21

<PAGE>




                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.
          ---------------------------------------------------------------
 
      (a)   1.    All financial statements - see index to Consolidated Financial
                  Statements and Schedule on page 23.
            2.    Financial  statement  schedule -  see  index  to  Consolidated
                  Financial Statements and Schedule on page 23.
            3.    Exhibits - see exhibit on page 44.

      Schedules not included are omitted because they are not applicable, or are
not  required,  or  the  information  is  shown  in the  Consolidated  Financial
Statements or the Notes thereto.

      (b) The  following  Current  Reports on Form 8-K were filed by the Company
with the  Securities  and  Exchange  Commission  during the last  quarter of the
period covered by this Annual Report on Form 10-K:

            (i)Current Report on Form 8-K dated June 30, 1995.
            (ii)Current Report on Form 8-K dated July 11, 1996.
            (iii)Current Report on Form 8-K dated July 18, 1996.






























                                       22

<PAGE>



                 GLOBAL SPILL MANAGEMENT, INC. AND SUBSIDIARIES
                 ----------------------------------------------


             INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE
             -------------------------------------------------------


                                                                           Page
                                                                           ----

Consolidated Balance Sheets (Unaudited)                                      24

Consolidated Statements of Operations (Unaudited)                            25

Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited)        26

Consolidated Statements of Cash Flows (Unaudited)                            27

Notes to Consolidated Financial Statements                                   28

Supplemental Schedule                                                        --
































                                       23

<PAGE>
                 GLOBAL SPILL MANAGEMENT, INC. AND SUBSIDIARIES
                                      UNAUDITED
                             CONSOLIDATED BALANCE SHEETS
                             -------------------------
                                                               JUNE 30
                                                              -------
                                                        1996            1995   
                                                    -----------     ----------
ASSETS  
------
CURRENT ASSETS:
  Cash and cash equivalents                        $     62,000    $   183,567
  Accounts receivable, net of allowance
   for  doubtful accounts of $0 in 1996                    --        3,961,615
   and $301,532 in 1995
  Inventories                                              --          114,230
  Notes receivable                                       90,000         90,000
  Other current assets                                    4,000        451,417
                                                    -----------     ----------
   Total current assets                                 156,000      4,800,829

PROPERTY AND EQUIPMENT:  net of
  accumulated depreciation of $24,000 in
  1996 and $1,025,620 in 1995                            38,000      1,195,097
GOODWILL - Net of accumulated amortization
  of $177,500 in 1995                                      --        4,581,122

INVESTMENT IN UNCONSOLIDATED                         21,750,000           --   
SUBSIDIARY

OTHER ASSETS                                             51,000        179,531

NOTE RECEIVABLE - RELATED PARTIES                          --          169,970
                                                    -----------     ----------
       Total Assets                                $ 21,995,000    $10,926,549
                                                    ===========     ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
  Line of credit                                   $     50,000    $ 1,080,000
  Advances from Stockholders                             94,000           --   
  Current portion of long-term debt                      27,000        234,919
  Accounts payable                                      519,000      3,381,881
  Accrued income taxes                                     --            3,217
  Accrued payroll and bonuses                              --           67,410
  Other accrued expenses                                162,000        300,356
  Current portion of notes payable                         --          166,568
   -related parties
                                                    -----------     ----------
       Total current liabilities                        852,000      5,234,351

 LONG-TERM DEBT                                         100,000        509,287

 DEFERRED TAXES                                            --           14,197

 NOTES PAYABLE - RELATED PARTIES                           --          988,490

 COMMITMENTS AND CONTINGENCIES

 STOCKHOLDERS' EQUITY
   Preferred stock, $.001 par value, authorized
    5,0000,000 shares, none issued                         --             --   
   Common Stock, $.001 par value, authorized
    25,000,000 shares, issued and outstanding -
    7,366,468 shares in 1996 and 532,463 shares
    in 1995                                              25,000         15,974

   Additional paid-in capital                        34,885,000      9,282,609
   Accumulated deficit                              (13,667,000)   ( 4,620,484)
                                                    -----------     ----------
                                                     21,243,000      4,678,099
    Subscriptions Receivable                        (   200,000)   (   497,875)
                                                    -----------     ----------
    Total stockholders' equity                       21,043,000      4,180,224
                                                    -----------     ----------
      Total Liabilities and Stockholders' Equity   $ 21,995,000    $10,926,549
                                                    ===========     ==========
        The Accompanying Notes are an Integral Part of These Statements
                                      24

<PAGE>
                 GLOBAL SPILL MANAGEMENT, INC. AND SUBSIDIARIES
                                    UNAUDITED
                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                              Year Ended June 30
-------------------------------------------------------------------------------------------
                                                    1996            1995            1994
                                               ------------    ------------    ------------
<S>                                            <C>             <C>             <C>  
REVENUES:
    Service                                    $       --      $ 18,267,164    $  8,417,642
    Product                                            --           950,031       2,347,405
                                               ------------    ------------    ------------
                                                       --        19,217,195      10,765,047
                                               ------------    ------------    ------------
COST OR REVENUES:
    Service                                            --        13,805,189       6,182,680
    Product                                            --           728,234       1,613,339
                                               ------------    ------------    ------------
                                                       --        14,533,423       7,769,019
                                               ------------    ------------    ------------
    Gross profit                                       --         4,683,772       2,969,028

SELLING, GENERAL AND
    ADMINISTRATIVE EXPENSES                       1,668,000       5,578,054       4,303,750
                                               ------------    ------------    ------------
Operating (loss)                                 (1,668,000)       (894,282)     (1,334,722)

OTHER INCOME (EXPENSE):
    Interest Expense                                   --          (287,726)       (148,946)
    Other net                                          --              (615)        167,843
    Gain (loss) on Sale of Subsidiaries          (5,666,000)           --           202,259
    (Loss) on Investment and Note Receivable           --          (260,000)           --
                                               ------------    ------------    ------------
    (Loss) from continuing operations
       before income taxes and cumulative
    effect of change in accounting principle     (7,334,000)     (1,442,623)     (1,113,566)

(Loss) from Discontinued Operations
    (Loss) from Operations                         (325,000)           --              --
    Writedown of Goodwill                        (1,328,000)           --              --

INCOME TAX BENEFIT (EXPENSE)                           --            15,516         (16,612)
                                               ------------    ------------    ------------
(Loss) before cumulative effect of change in
    in accounting principle                      (9,047,000)     (1,427,107)     (1,130,178)

CUMULATIVE EFFECT OF CHANGE IN
    ACCOUNTING PRINCIPLE                               --              --           169,596
                                               ------------    ------------    ------------
NET (LOSS)                                     $ (9,047,000)   $ (1,427,107)   $   (960,582)
                                               ============    ============    ============
INCOME (LOSS PER SHARE BEFORE
    CUMULATIVE EFFECT OF CHANGE
    IN ACCOUNTING PRINCIPLE                    $     (15.03)   $       (.12)   $       (.14)
                                               ------------    ------------    ------------
CUMULATIVE EFFECT OF CHANGE IN
   ACCOUNTING PRINCIPLE                                --      $       --      $        .02
                                               ------------    ------------    ------------
NET (LOSS) PER SHARE - CONTINUING
    OPERATIONS                                 $     (12.18)   $       (.12)   $       (.12)
                                               ============    ============    ============
NET (LOSS) PER SHARE -
    DISCONTINUED OPERATIONS                    $      (2.85)           --              --
                                               ============    ============    ============
SHARES USED IN COMPUTING NET LOSS
    PER SHARE                                       602,009      11,654,137       8,170,145
                                               ============    ============    ============
</TABLE>
        The accompanying notes are an integral part of these statements.
                                            25

<PAGE> 
                GLOBAL SPILL MANAGEMENT, INC. AND SUBSIDIARIES
                 ----------------------------------------------

                                    UNAUDITED
                                    ---------

            CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)
            --------------------------------------------------------
<TABLE>
<CAPTION>
                                                           Additional       Retained   Receivables for
                                              Common          Paid in       Earnings      Common Stock
                                               Stock          Capital       (Deficit)        Sold
                                         ------------    ------------    ------------    ------------
<S>                                      <C>             <C>             <C>             <C>       
BALANCE, JUNE 30, 1994                   $      9,000    $  6,865,000    $ (3,193,000)   $       --

Spin-off of Acme                               (1,000)     (1,263,000)           --              --
Acquisition of Land N Sea                         400          50,000            --              --
Exercise of Options                               100          50,000            --              --
Exercise of Warrants                              100          50,000            --              --
Issuances for Payment of Services                 600         125,000            --              --
Common Stock issued through
   Private Placements                           6,800       2,954,000            --          (448,000)
Common Stock issued to employees
  through employee stock purchase plan           --             2,000            --              --
Net Loss                                         --              --        (1,427,000)
                                         ------------    ------------    ------------    ------------
BALANCE, JUNE 30, 1995                   $     16,000    $  9,283,000    $ (4,620,000    $   (498,000)
                                         ============    ============    ============    ============

Persuant to Earnouts of Environmental             500         232,000            --              --
   Disposal Options Corporation
Persuant to Earnout of Land N Sea                 100          64,000            --              --
Common Stock Issued Through Senior                100          56,000            --              --
   Management Incentive Compensation
   Plan
Sales of Subsidiaries                            --         3,111,000            --              --
Acquisition of Phoenix Wrecking                 6,000      21,774,000
   Corporation

Common Stock issued through Private             2,300         365,000            --          (298,000)

Net Loss                                         --              --        (9,047,000)           --
                                         ------------    ------------    ------------    ------------

BALANCE, JUNE 30, 1996                   $     25,000    $ 34,885,000    $(13,667,000)   $   (200,000)
                                         ============    ============    ============    ============

</TABLE>









        The accompanying notes are an integral part of these statements.

                                       26

<PAGE>
                 GLOBAL SPILL MANAGEMENT, INC. AND SUBSIDIARIES
                                   UNAUDITED
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                 Year Ended June 30
                                                                                 ------------------
                                                                        1996              1995           1994
                                                                  --------------     ------------    ------------
<S>                                                               <C>                <C>             <C>   
CASH FLOW'S FROM OPERATING ACTIVITIES:
  Net (loss)                                                      $ (9,047,000)      $ (1,427,107)   $ (  960,582)
  Adjustments to reconcile net (loss) to net cash provided by
  (used in) operating activities -
     Depreciation and amortization                                     688,000            495,157         415,426
     Write down of Goodwill                                          1,601,000               -               -
     Loss on sale of subsidiaries                                    5,666,000               -               -
     Issuance of common stock for services rendered                   ( 56,000)           125,063            -
     Gain on sale of AIMS                                                 -                  -          (  202,259)
     Loss on investment and note receivable                               -               260,000             -
     Cumulative effect of change in accounting principle                  -                  -          (  169,596)
     (Gain) loss on sale of assets, net                                   -                13,394       (   72,785)
     Provision for doubtful accounts                                 ( 301,000)            42,226             -
     (Increase) decrease in assets-
       Accounts receivable                                           4,263,000             17,339          568,833
       Inventories                                                     114,000             39,481           78,086
       Prepaid expenses and other assets                               473,000         (    4,646)      (   47,926)
     Increase (decrease) in liabilities-
       Accounts payable                                             (2,850,000)        (   47,412)      (    9,875)
       Accrued expenses and other current liabilities               (  209,000)        (   74,591)      (  380,542)
                                                                  ------------       ------------     ------------
          Net cash from (used in) operating activities                 342,000         (  561,036)      (  781,220)
                                                                  ------------       ------------     ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of equipment                                             (   16,000)        (  337,718)       ( 319,300)
  Proceeds from sale and disposal of equipment                         859,000             86,132           75,720
  Decrease in amount due from related parties                             -                11,898           80,000
  (Increase) decrease in amount due to related parties                    -                  -           ( 144,042)
  (Increase) decrease in other assets                                     -                  -           (  30,644)
  Cash balance of subsidiary at date of sale                              -            (  232,961)       ( 235,366)
  Acquisitions                                                      (   25,000)        (2,275,583)          37,913
                                                                  ------------      -------------     ------------
          Net cash from (used in) investing activities)                818,000        ( 2,748,232)      (  535,719)
                                                                  ------------       -------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments of deferred equity financing costs                             -           (    20,477)      (  118,157)
  Borrowings (repayments) on line of credit, net                   ( 1,030,000)           502,792       (  393,986)
  Borrowings (repayments) from related parties                          47,000               -              30,588
  Proceeds from long-term debt                                         128,000            321,404             -
  Repayments of long-term debt                                     (   758,000)       (   449,121)      (  156,104)
  Issuance of common stock, net of expenses                            175,000        ( 2,563,799)      (  519,714
  Payments on common stock receivable, net of expenses                 156,000            408,333             -
                                                                  ------------       ------------      -----------
          Net cash provided by (used in) financing activities      ( 1,282,000)         3,362,730       (  117,945)
                                                                  ------------        -----------      -----------

NET INCREASE (DECREASE) IN CASH                                    (   122,000)            17,462       (1,434,884)
                                                                  ------------       -------------     ------------
CASH AND CASH  EQUIVALENTS, BEGINNING OF YEAR                          184,000            166,105        1,600,989
                                                                  ------------        ------------     ------------
CASH AND CASH EQUIVALENTS, END OF YEAR                            $     62,000        $   183,567      $   166,105
                                                                  ============        ===========      ============


                The accompanying notes are an integral part of these   statements

</TABLE>








                                       27

<PAGE>
                 GLOBAL SPILL MANAGEMENT, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------

1.    ORGANIZATION AND BASIS OF PRESENTATION:
      --------------------------------------  
Background
----------
      Global Spill Management, Inc. ("Global") was incorporated in June 1991, to
acquire, operate and develop environmental  contracting and consulting companies
and  related  businesses.  Global  merged  into Happy  Mergers,  Inc.,  a Nevada
corporation ("Happy Mergers"),  on November 25, 1991 and the name was changed to
Global.  (Hereinafter,  the  "Company"  shall refer to Global Spill  Management,
Inc., a Nevada corporation, the surviving entity after the merger of Global into
Happy Mergers).

      Thereafter,  on June 28, 1996, the Company,  in order to repay the primary
lender  to  which  the  Company  had  defaulted,   sold  all  of  its  operating
subsidiaries:  Specifically,  Land N Sea  Environmental  Services,  Inc., Allied
Environmental  Services,  Inc., Allied Environmental  Services,  West, Inc., GSM
Environmental,  Inc., Global Environmental, Inc., and Professional Pipe Services
Corporation. All proceeds were utilized to pay existing debt held by the primary
lender.

      Simultaneously,  on June 28, 1996,  the  Company,  pursuant to a unanimous
vote of the Board of Directors,  acquired,  in exchange for 6,000,000  Shares of
its Common  Stock,  all of the issued and  outstanding  Common Shares of Phoenix
Wrecking  Corporation from Phoenix's existing  Shareholders.  Phoenix is a solid
waste  management,  environmental  abatement and specialty  contracting  company
focusing on, site and facility  remediation.  The 6,000,000  Shares  represented
approximately  90% of the total issued and  outstanding  Common Shares of Global
issued on July 10, 1996.  Concurrent with the acquisition of Phoenix, two of the
five directors and the President  (CEO) of Global  resigned and were replaced by
the directors and the President of Phoenix.

Acquisitions and Sales of Subsidiaries Prior to June 28, 1996
-------------------------------------------------------------
      Global  acquired Acme  Containment  Group,  Inc. on November 15, 1991, and
Underwater  Technics,  Inc. on December 11,  1991.  The  acquisition  agreements
contained  certain  provisions  that would have  allowed each  subsidiary  to be
reacquired  by their  respective  former  stockholders.  Accordingly,  the total
stockholders'  equity of these  two  companies  was  classified  as "Net  Assets
Subject to Unwind"  through July 1992, when the former  stockholders  terminated
their respective unwind provisions.

      The  Company  acquired  all of the  outstanding  Common  Stock of American
Industrial  Marine  Services,  Inc.  ("AIMS") for 60,000 shares of the Company's
Common  Stock on  February  9,  1993,  effective  as of  February  1,  1993.  In
connection  with  the  transaction,  the  Company  entered  into  an  employment
agreement  with AIMS' sole  stockholder  and  president,  which was  terminated,
effective August 16, 1993.

      The acquisition of AIMS has been accounted for as a combination of related
party companies at historical cost in accordance with Staff Accounting  Bulletin
No. 48,  Topic 5:G,  since the  largest  shareholder  of the  Company was also a
significant shareholder of AIMS until he sold his shares in AIMS to another AIMS
shareholder in December 1992. Accordingly, as of February 1, 1993, the effective
date of the acquisition of AIMS, the consolidated  financial  statements include
the accounts of the Company and AIMS.

                                       28

<PAGE>
      On April 4, 1994, the Company sold all of the outstanding capital stock of
AIMS to Omnicorp  Limited  ("Omni") for a $200,000 note  receivable  and 600,000
shares of Omni common stock valued by the Company at $150,000  which is included
in other assets in the consolidated  balance sheet at June 30, 1994. The Company
was required to make a capital contribution of $200,000 in cash to AIMS prior to
the  consummation  of the  sale.  The  note  receivable  was  originally  due on
September 30, 1994,  bears an interest rate of prime plus 2.0% and is secured by
a security  interest in substantially all of the assets of AIMS. The Company has
demand  registration  rights to register all such 600,000  shares of Omni Common
Stock in a registration statement on Form S-3.
The sale of AIMS resulted in a gain of $202,259.

      In October 1994, the Company agreed,  under certain conditions,  to reduce
the Omni note  receivable from $200,000 to $110,000 and extend the maturity date
from September 30, 1994 to April 30, 1995. In consideration for the reduction of
the Omni note and extending the maturity date, Omni agreed,  among other things,
to convey to the  Company a certain  parcel of land on which the  Company  has a
first mortgage. Omni was, as of June 30, 1995, and continues to be in default of
the  extended  note,  and  Omni  appears  to not have  the  ability  to meet the
financial terms of that agreement.  Also, its common stock has lost considerable
value and it appears the Company  may not be able to realize any  proceeds  from
its investment. Accordingly, the Company has written off the balance of its note
receivable and its investment in Omni common stock  realizing a loss of $260,000
in the year ended June 30, 1995.

      Effective  April 28,  1994 the  Company  acquired  all of the  outstanding
common stock of Environmental  Disposal Options Corporation ("EDOC") in exchange
for 479,717 shares of the Company's Common Stock, valued at $1,137,239,  plus an
earnout.  The  earnout,  payable in common  stock,  is equal to 2.5 times EDOC's
earnings  before  income taxes for the calendar  year ending  December 31, 1994,
divided by the market  price of the  Company's  Common  Stock at such time.  The
transaction  was accounted for as a purchase  and,  accordingly,  the results of
operations  of  EDOC  have  been  included  in  the  Consolidated  Statement  of
Operations,  prospectively  from the date of  acquisition.  The  purchase  price
exceeded  the fair  value of  EDOC's  net  assets by  $1,175,100  which has been
assigned to goodwill. EDOC specializes in laboratory chemical disposal,  solvent
recovery, and identification of unknown chemicals. On March 28, 1996, due to the
lack  of  profitability   and  a  shortage  of  working  capital,   the  Company
discontinued the operations of EDOCC. All of the assets of EDOCC were pledged as
collateral to the Company's primary lender. Subsequently, on June 28, 1996, EDOC
was  forced  into  involuntary  Chapter  7  Bankruptcy.  As of  that  date,  the
investment  in EDOCC of $934,592 was recorded in  discontinued  operations  as a
loss by the Company.  The associated goodwill of $1,175,100 was also written off
net of any amortization previously taken.

      Effective July 15, 1994 the Company acquired all of the outstanding Common
Stock of Land N Sea Environmental  Services, Inc. ("Land N Sea") in exchange for
423,729  shares  of  the  Company's  Common  Stock,  valued  at  $500,000.   The
transaction was accounted for as a purchase and, accordingly, the results of the
operations  of  Land  N Sea  are  included  in  the  Consolidated  Statement  of
Operations,  prospectively  from the date of  acquisition.  The  purchase  price
exceeded  the fair  value of Land N Sea's  net  assets  by  $598,800  which  was
assigned  to  goodwill.  Land  N Sea  is an  environmental  contracting  company
specializing  in  emergency  spill  response  and  recovery,  residential  spill
clean-up,  tank removals and  environmental  remediation.  On June 28, 1996, the
Company sold all of the issued and  outstanding  stock it owned of Land N Sea to
the  original  founder for the sum of $75,000.  This sum was paid to the primary
lender  which held a first  lien in and to the assets of Land N Sea.  As of that
date,  the  Investment  in Land N Sea of $911,562 was  recorded in  discontinued
operations  as a loss by the Company.  The  associated  goodwill of $598,800 was
also written off net of any amortization previously taken.
                                       29

<PAGE>

      On October 1, 1994, the Company issued 650,000 of its Common Stock for all
of the  outstanding  Common  Stock of  Professional  Pipe  Services  Corporation
("Propipe").  Propipe inspects and repairs  infrastructures  including  sanitary
sewers,  storm sewers and  manholes.  The  transaction  was  accounted  for as a
pooling of interests and,  accordingly,  the Company's financial statements have
been restated to include those of Propipe for the year ended June 30, 1994.

      On June 30,  1996,  the Company sold the assets of Propipe to the original
founder for $105,000 and the  assumption  of Propipe's  liabilities.  As of that
date,  the  investment  in Propipe of  $679,039  was  recorded  in  discontinued
operations as a loss by the Company. The proceeds from the sale were remitted to
the Company's primary lender.

      On December 1, 1994 the Company acquired all of the issued and outstanding
Common Stock of Allied Environmental Services, Inc., Allied Mid- Atlantic, Inc.,
Allied Waste  Management,  Inc. and Allied  Environmental  Services  West,  Inc.
(hereinafter  collectively  referred  to as  "Allied")  for  $3,072,560  payable
$43,750 in cash,  $1,956,250 in short term notes,  bearing  interest at 8.5%, of
which  $1,923,752 was paid prior to June 30, 1995 with the remaining  balance of
$32,498 paid in July 1995 and $1,072,560 in an eight year note bearing  interest
at a rate of 2% above the WSJ published prime rate,  payable, at the election of
the Company,  in either cash or shares of its Common Stock. This transaction was
accounted  for as a purchase  and,  accordingly,  the results of  operations  of
Allied are included in the Consolidated  Statement of Operations,  prospectively
from the date of  acquisition.  The  purchase  price  exceeded the fair value of
Allied's  net  assets by  $2,984,800  which was  assigned  to  goodwill.  Allied
arranges for the  transportation  and disposal of contaminated soil. On June 28,
1996,  the  Company  effected  the  sale  of all  of the  assets  of  Allied  in
consideration  for the assumption by the purchaser of  substantially  all of the
liabilities  of  Allied,  as  well  as  the  payment  of  $700,00  worth  of the
purchaser's Stock. This Stock was sold contemporaneously at closing at a private
sale with the cash proceeds  utilized to pay the Company's  primary lender which
held a first lien in and to the assets of the Allied  Companies.  As of June 30,
1996,  the  investment  in Allied of $940,133  net of proceeds  was  recorded in
discontinued  operations as a loss by the Company.  The  associated  goodwill of
$2,984,800 was also written off net of any amortization previously taken.

      On December 22, 1994,  the Company  spun-off its wholly owned  subsidiary,
Acme   Containment   Group,   Inc.   ("Acme")  to  its   original   stockholders
("Stockholders"),  pursuant to an Agreement and Plan of  Corporation  Separation
("Agreement").  Pursuant  to the  Agreement,  Stockholders  exchanged  1,100,000
shares of the Company's Common Stock for all of the issued and outstanding stock
of Acme. The  transaction was accounted for as a tax free spin-off under Section
355 of the  Internal  Revenue  Code of 1986.  On  December  22, 1994 the Company
canceled the 1,100,000  shares of its Common Stock it exchanged  pursuant to the
agreement.  The Company  accounted for this  transaction as an acquisition,  and
concurrent  retirement of treasury  shares,  and recorded the transaction at the
book value of the net assets transferred.

      On June 28,  1996,  the  Company  sold all of its issued  and  outstanding
Shares of Stock of GSM Environmental, Inc. and Global Environmental, Inc. to its
outgoing Chairman of the Board. As part of this transaction,  the Purchaser paid
$100,000 to the Company's  primary lender which maintained a first priority lien
in and to the assets of GSM Environmental, Inc. and Global Environmental,  Inc.,
and additionally  executed a note in favor of the same lien holder for $100,000,
which note can be  discounted  to $50,000 if such payment is made within  ninety
days of June 28, 1996.  Such payment was made prior to September  30, 1996,  and
the $100,000 note was canceled.

                                       30

<PAGE>



Acquisition of Subsidiaries Subsequent to June 30, 1996
-------------------------------------------------------

      On June 28, 1996,  the Company,  pursuant to a unanimous vote of the Board
of Directors,  acquired,  in exchange for  6,000,000  Shares of its Common Stock
issued on July 10,  1996,  all of the issued and  outstanding  Common  Shares of
Phoenix Wrecking Corporation from Phoenix's existing Shareholders.  A summary of
Phoenix's  Financial  condition as of June 30, 1996, and statement of operations
for the year then ended is indicated in the chart below.

15.   Subsequent Events:
      -----------------  
      On July 15,  1996,  the  Company,  in exchange for $500,000 and a note for
$2,700,000,  acquired all of the issued and outstanding of Recycling  Unlimited,
Inc., a company whose primary line of business is the recycling of  demolitioned
concrete  matter and  subsequent  sale to the  construction  industry for use in
foundations of roads,  buildings and other structures.  The note, payable by the
Company,  includes  monthly  payments  of  principle  and  interest  of $30,000.
Interest is at 10%. The note carries a balloon payment due July 15, 2001.
































                                       31


<PAGE>
                          Phoenix Wrecking Corporation
                             Unaudited Balance Sheet
                        For the Year Ended June 30, 1996

ASSETS

   Current Assets:
     Cash                                                     $    36,768
     Marketable Commodities                                     2,383,000
     Accounts receivable, net allowance
       For doubtful accounts of $108,624                        2,063,872
     Unbilled Receivables (see note)                              513,000

   Total Current Assets                                       $ 4,996,640

   Fixed Assets:
     Land & Building                                              540,000
     Machinery & Equipment (Net of Depreciation)                1,031,452
     Equipment under capital leases                               295,457
     Small Tools                                                  165,325
                                                              -----------

   Total Fixed Assets                                           2,032,234

   Notes Receivable (see note)                                  1,920,000
   Prepaid Rent (see note)                                      1,413,999
                                                              -----------

TOTAL ASSETS                                                  $10,362,873
                                                              ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

   Liabilities:

     Current Liabilities:

       Accounts Payable - Trade                               $   457,750
       Notes Payable                                              328,620
       Leases Payable                                             185,762
       Corporate Income Tax Payable                               262,454
       Payroll Taxes                                              527,650
                                                              -----------
     Total Current Liabilities                                $ 1,762,236

     Subordinate Debt/Begonia Corp. (See Note)                  1,128,362

     Total Liabilities                                        $ 2,890,598

   Shareholders' Equity
     Capital Stock                                                350,000
     Retained Earnings                                          7,122,275

   Total Shareholders' Equity                                 $ 7,472,275
                                                              -----------

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY                      $10,362,873
                                                              ===========

                                       32

<PAGE>
                         Phoenix Wrecking Corporation
                                  Unaudited
                  Statement of Income and Retained Earnings
                       For the Year Ended June 30, 1996


REVENUE                                                        $ 9,247,631
LESS:
Cost of Revenue                                                  6,324,638
                                                               -----------
GROSS PROFIT                                                     2,922,993

General & Administrative Expense                                 1,126,392
                                                               -----------
INCOME BEFORE TAXES                                              1,796,601
Provision For Income Taxes                                        -262,454
                                                               -----------
NET INCOME                                                       1,534,147

Retained Earnings 6/30/95                                        5,588,128
                                                               -----------
Retained Earnings 6/30/96                                        7,122,275
                                                               ===========
NOTES TO FINANCIAL STATEMENTS

NOTE 1.  MARKETABLE COMMODITIES:

Marketable  Commodities consists primarily of scrap steel recorded at its listed
value as per the Wall Street Journal as of the date received.

NOTE 2.  UNBILLED RECEIVABLES:

Company  incurs  payroll and  related  expenses  on  contracts  prior to billing
customers. Management estimates this to be $513,000.

NOTE 3.  NOTES RECEIVABLE:

The Company  has lent or taken for work  performed,  notes from three  companies
that  management  is confident of  collection.  The notes mature in 3 years from
January  1,  1996 and bear an  interest  rate of 10% per  annum.  The  notes are
interest only during the term,  paid  semi-annually,  but can be paid earlier at
the debtors option.

NOTE 4.  PREPAID RENT:

The National Railroad Passenger Association, (AMTRAK), entered into an agreement
with the  Company in October  1993  wherein  they  agreed to  exchange  remedial
services for prepaid rent credit through  October 1, 1999. The Authority  valued
this rent at $404,000 per year.  The property is comprised of 8 acres located at
37-61 39th Street,  Long Island City,  New York,  11101.  The property is at the
foot of the 59th  Street  Bridge and has a  6,000-foot  office  building  on the
premises.

NOTE 5.  SUBORDINATED DEBT - BEGONIA CORP.

The Begonia Corporation has loaned Phoenix Wrecking Corporation  $1,128,362 on a
subordinated basis as of March 31, 1996.

The 3 year note is payable interest-only in arrears annually.  The note is dated
August 10, 1995. The entire principal is due in August 1998.

                                       33

<PAGE>
2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
      ------------------------------------------
Investment in Subsidiaries
--------------------------
      The accompanying Financial Statements include the accounts of Global Spill
Management,  Inc. at June 30, 1996. At June 30, 1995, and June 30,  1994,and for
the years then ended,  the accounts of Global  Spill  Management,  Inc.,  giving
effect to the  divestiture  of  operating  subsidiaries  on the  acquisition  of
Phoenix  Wrecking  Corp.,  on July 10, 1996 (See  footnote  hereto) and its then
wholly owned  subsidiaries,  after  elimination of all significant  intercompany
balances and transactions, have been presented on a consolidated basis.

Income Taxes
------------
      In 1994, the Company adopted Statement of Financial Standards ("SFAS") No.
109,  "Accounting  for Income  Taxes," which requires a change form the deferred
method to the asset and liability  method of accounting for income taxes.  Under
the asset and liability method, deferred income taxes are recognized for the tax
consequences of "temporary  differences" by applying enacted statutory tax rates
applicable  to future  years to  differences  between  the  financial  statement
carrying amounts and the tax bases of existing assets and liabilities. Under the
SFAS  No.  109,  the  effect  on  deferred  taxes of a  change  in tax  rates is
recognized in income in the period that includes the enactment  date.  Under the
deferred method, deferred taxes were recognized using the tax rate applicable to
the year of the calculation and were not adjusted for subsequent  changes in tax
rates.  Corporate  tax returns for the years ending June 30, 1996,  and June 30,
1995, have not been filed to date.

Environmental Expenditures
--------------------------
      Environmental  expenditures that relate to an existing condition caused by
past operations, and which do not contribute to current or future revenues, were
charged to expense.  Liabilities  were recorded when  environmental  assessments
and/or  cleanups  are  probable,   and  the  costs  were  reasonably  estimated.
Generally,  the timing of these accruals coincides with the Company's commitment
to a formal plan of action.

Revenue Recognition
-------------------
      Service  revenues were  recognized as the services  were  performed.  Such
revenues also include the cost of services  subcontracted  to third parties that
are reimbursed to the Company by its customers.  Product revenues are recognized
when the products are shipped.

Net Income (Loss) Per Share
---------------------------
      The Loss Per Common Share is computed by dividing the loss  applicable  to
Common Stock by the weighted  average  number of common shares  outstanding  and
common stock equivalents,  if dilutive.  For the years ended June 30, 1996, 1995
and 1994, the outstanding  warrants and options and the  subordinated  debenture
were excluded from the computation because their effect was antidilutive.

3.    NOTES RECEIVABLE:
      ----------------
On April 4, 1994, the Company sold all of the outstanding capital stock of
AIMS to Omni for a $200,000 note  receivable  and 600,000  shares of Omni stock.
The note receivable was due on September 30, 1994,  bears interest at prime plus
2.0% and is secured by a security interest in substantially all of the assets of
AIMS. As discussed in Note 1 to the consolidated  financial statements,  Omni is
in default of the note and the Company  accordingly has taken a loss of $110,000
in the year ended June 30, 1995.
                                       34

<PAGE>

      As of June 30,  1996,  the Note  remains  unpaid.  The  Company  is in the
process of foreclosing on the real estate, established as security for the Note.
The real  estate has a fair market  value  substantially  greater  than the loan
balance  and,  therefore,  no  allowance  for  uncollectible  amounts  has  been
established at June 30, 1996.

4.    PROPERTY, PLANT AND EQUIPMENT

                                          June 30, 1996           June 30, 1995
                                          -------------           -------------
Land                                         $        -              $   26,794
Building and Improvements                             -                 443,354
Machinery and Equipment                          41,000               1,675,824
Furniture and Fixtures                           21,000                  74,745
                                             ----------             ----------
                                                 62,000               2,220,717

Less Accumulated
 Depreciation
                                               (24,000)             (1,025,620)
                                             ----------             -----------
Property, Plant and Equipment,
Net                                          $   38,000             $1,195,097
                                             ==========             ==========

        Property  and  equipment  are stated at cost.  Depreciation  is computed
primarily on a straight-line basis using the following estimated useful lives:

Building and improvements       10 to 30 years
Machinery and equipment          5 to  7 years
Furniture and fixtures           5 years

        Assets under capital lease are amortized over the shorter of the life of
the lease or the useful life of the asset.

        Depreciation  expense  for  fiscal  1996,  1995 and  1994  was  $30,100,
$317,700, and $389,900, respectively.

        Expenditures  for  repairs  and  maintenance  are  charged to expense as
incurred and were $450,  $105,200,  and $148,000 in fiscal 1996,  1995 and 1994,
respectively.













                                       35

<PAGE>
5.      LINES OF CREDIT:

        The Company had a $1,150,000  line of credit with a commercial bank that
expired on October 31, 1995.

        On December 29, 1995, the Company negotiated an increase in this line of
credit to  $1,350,000  and  extended  the  maturity  date to January 31, 1996. A
condition  to  extending  the line of credit  required  the Company to obtain by
January 15, 1996, a commitment  letter from another lender  sufficient to payoff
the bank(such  commitment  was not  obtainable).  Due to an  unexpected  drop in
business  and,  therefore,  eligible  accounts  receivable,  the Company  lacked
sufficient  collateral to repay the $1,350,000 owed to the lender.  On April 25,
1996, the Company entered into a forbearance agreement with the commercial bank,
extending the line of credit to May 31, 1996.

        Subsequently,  the  Company  was  unable  to  fulfill  the  terms of the
forbearance  agreement and  consequently  negotiated  with the primary  lender a
workout arrangement  whereby the Company would sell its subsidiaries,  utilizing
any proceeds  received to reduce the line of credit.  At June 30, 1996, the line
of  credit  had been  satisfied  with  proceeds  received  from the sales of the
subsidiaries. (See Footnote 1 hereto).

        The interest rate on the line of credit balance  outstanding at June 30,
1995 and 1994 was 11.00% and 8.50%,  respectively.  Based on month end  balances
during fiscal 1996,  1995 and 1994,  amounts  borrowed under the lines of credit
averaged $939,881, $707,700, and $377,200, respectively, with maximum borrowings
of $1,172,063,  $1,080,000,  and $670,000,  respectively.  The weighted  average
interest rate on these  borrowings was 9.5%,  10.74%,  and 7.48%,  during fiscal
years 1996,  1995,  and 1994  respectively  (computed by dividing the applicable
interest expense by the average borrowings).


















                                       36

<PAGE>
6.      LONG-TERM DEBT:
        --------------
                                                             June 30
                                               -------------------------------
                                                   1996                   1995
                                                   ----                   ----
Equipment term loans, payable monthly         $         -          $   303,134
with interest rates of 7% to 11% until
January 1996.  Collateralized by
specific equipment with a net book
value of $254,304 as of June 30, 1995
 .

Mortgage loans payable, payable                         -              163,741
monthly until November 2002 and
November 2003, with interest rates of
12% and 7.8%, respectively.
Collateralized by buildings with a net
book value of $255,007 as of June 30,
1995.

Capitalized lease obligations,                     27,000              276,331
implicit rates of 6% to 18%, payable
monthly until May 2000.
Collateralized by equipment with a net
book value of $313,970 as of June 30,
1995.

Subordinated convertible debenture                100,000                    -
payable monthly until November  1,
1998, with interest at 13.75% per
annum, convertible into Common Stock
of the Company after August 31, 1996,
at the rate of $.35 per share.
                                              $   127,000          $   744,206
Less current portion Long-Term Debt                27,000             (234,919)
                                              -----------         ------------

                                             $    100,000          $   509,287
                                             ============          ===========

7.      GLOBAL SPILL MANAGEMENT EQUITY INCENTIVE PLAN:
        ---------------------------------------------
 
        In  September  1991,  the Company  adopted the Global  Spill  Management
Equity Incentive Plan (the "Plan"), in order to provide directors,  officers and
certain key  employees  with stock  options and  awards.  Initially,  there were
255,800  shares of Common Stock reserved for issuance under the Plan; on January
26, 1994 the  stockholders  voted to increase the number of shares to 1,500,000.
Options granted may be either incentive or nonqualified  stock options,  with an
exercise  price  equal to or more than the fair market  value of the  underlying
Common Stock at grant date. The options will be exercisable  over ten years from
the grant  date and will  have  vesting  terms  determined  by the  Compensation
Committee of the Board of Directors.

        Under the Plan,  each  non-employee  director is granted in June of each
year a  nonqualified  option  to  purchase  2,000  shares of  Common  Stock.  In
addition,  the Plan allows the Company to make Common Stock awards to employees,
without  payment,  based on  performance  milestones  determined by the Board of
Directors.  Also, the Plan allows for the granting of stock appreciation rights,
as defined.
                                       37

<PAGE>
        8.    COMMON STOCK
              ------------
Pursuant to Amendments to the Articles of  Incorporation  filed on
May 13 and July 12, 1996, the issued and outstanding  and the authorized  shares
of Common Stock were changed as follows:  (a) 25 million  shares of Common Stock
were  authorized  for issuance and 18,493,980  shares of issued and  outstanding
Common Stock were changed into 616,466 shares of Common Stock (on a 30-1 basis).
All Common Stock numbers mentioned hereinafter in this footnote 8 give effect to
such 30-1 change.

        In  September,  1995,  the Company sold 27,500 shares of Common Stock to
Fondo de  Adquisiciones  E Inversiones  ("Fondo") for the sum of $220,000.  (See
Footnote 15 hereinafter)

        On April 26,  1996,  the Company sold a  Convertible  Debenture to Cedar
Internationa  S.A.  (Panama) in the  principal  amount of  $250,000.  Subsequent
hereto, the Company has received an additional $355,000 and a commitment to fund
an  additional  maximum of $200,000.  The  aggregate of $905,000 in such funding
resulted in the issuance of 750,000  shares on July 18, 1996.  (See  Footnote 15
hereinafter.)

        On July 5, 1996,  the Company  issued 100,000 shares of its Common Stock
upon  conversion of a Debenture (in the principal  amount of $50,000)  issued in
1992,the  cancellation of a longterm  employment contract and the forgiveness of
certain accrued expenses. (See Footnote 13 hereinafter)

        9.    SUBSCRIPTIONS RECEIVABLE
              ------------------------
In December 1994,  the Company issued  Warrants to ITI Glendale to
purchase up to 500,000 Shares of Common Stock at a price of $1.00 per share. The
Warrants were  subsequently  exercised in consideration of $500,000 as evidenced
by a promissory  note. The promissory note carried  interest at a rate of 4% per
annum (8% in the event of  default)  and was due after the  effective  date of a
registration  statement in respect of such shares,  but, in any event,  no later
than June 15, 1995 which was subsequently  extended to October 31, 1995. In June
1995, the Company agreed, due to market conditions, to reduce the share price to
$.25 per share (which reduced the principal  amount of the note from $500,000 to
$125,000).  As of June 30, 1995, $25,000 had been paid on this note. The balance
of $100,000 was remitted during the year ended June 30, 1996.

              In  December  1994,  the  Company  issued  Warrants  to  Corporate
Relations  Group to purchase  500,000 shares of Common Stock at a price of $1.00
per share. The Warrants were subsequently exercised in consideration of $500,000
as evidenced by a promissory  note.  The promissory  note carried  interest at a
rate of 4% per annum (8% in the event of default) and is due after the effective
date of a registration statement in respect to such shares but, in any event, no
later than June 30, 1995 (which was  subsequently  been  extended to October 31,
1995). In April 1995, the Company agreed,  due to market  conditions,  to reduce
the share price to $.40 per share which reduced the principal amount of the note
from  $500,000 to $200,000.  As of June 30,  1996,  and 1995,  $125,000  remains
unpaid on the note.

              In January of 1995 the Company issued  Warrants to Financial Asset
Management  ("FAM") to  purchase  300,000  shares of Common  Stock at a price of
$1.00 per share.  The Warrants were  subsequently  exercised in consideration of
$300,000 as evidenced by a promissory note. The promissory note carried interest
at 4% per annum (8% in the event of default) and is due after the effective date
of a  registration  statement in respect to such shares,  but, in any event,  no
later than June 30, 1995 (which has  subsequently  been  extended to October 31,


                                      38

<PAGE>

1995) In April 1995, the Company agreed, due to market conditions, to reduce the
share price to $.625 per share which  reduced the  principal  amount of the note
from $300,000 to $187,500.  As of June 30, 1996,  $175,000 remains unpaid on the
note.
              In May 1995,  the  Company  issued  Warrants  to ITI  Glendale  to
purchase  350,000  shares  of  Common  Stock at a price of $.50 per  share.  The
Warrants were  subsequently  exercised in consideration of $175,000 as evidenced
by a promissory  note. The promissory note carried  interest at a rate of 4% per
annum (8% in the event of  default)  and is due  after the  effective  date of a
registration  statement  in respect to such shares  but, in any event,  no later
than June 15,  1995 which has  subsequently  been  extended.  In June 1996,  the
Company agreed, due to market conditions,  to reduce the principal amount of the
note to $32,000 at which time the balance of the note was paid in full.

        10.   RELATED-PARTY TRANSACTIONS:
              --------------------------
        Notes Receivable
        ----------------
              The Company has a note receivable,  amounting to $169,000 from the
Co- Chairman of the Board of Directors and the former principal  stockholder and
president of  Underwater  Technics,  Inc.,  a subsidiary  of the Company that is
secured by the assignment of the proceeds from that individual's $1,000,000 life
insurance  policy, up to the aggregate amount of the note receivable and accrued
interest. The note is payable upon the earlier of November 30, 2011, or the 91st
day after the death of the stockholder. The note bears interest at 7%, which had
been  accrued  through  June 30,  1992 and is  payable  on  November  30,  1996.
Thereafter,  interest  is  payable  annually  until  the  note is paid in  full.
Interest through June 30, 1995 has been forgiven.  In December 1995, the Company
discontinued  payment under the employment  contract of the Co-Chairman,  and in
June, 1996, the Board of Directors  agreed to offset the remaining  liability of
the employment contract with the outstanding balance of the note receivable,  of
approximately equivalent value.

        Long-Term Debt Related Parties:
        ------------------------------ 
                                                          June 30
                                              ---------------------------------
                                                    1996                   1995
                                                    -----                  ----
11% Subordinated Convertible Debenture
due January 31, 1998.  Convertible
into 14,286 shares of Common Stock.
Due to an executive officer.                  $         -           $    50,000

Notes payable - Allied, balance due on                  -                32,498
short-term notes (see Note 1).
Balance paid in full in July 1995.

Note Payable - Allied payable in eight
annual installments each December 1,
plus interest at prime plus 2%.
Payments may be made in cash or in
Common Stock.  Due to former
shareholders of Allied.                                 -             1,072,560
                                              -----------            ----------
                                                        -             1,155,058
      Less current portion                              -             (166,568)
                                                                    -----------
                                              $         -            $  988,490
                                              ===========            ==========
                                       39

<PAGE>

11    OTHER INCOME, NET:
                                                  Year Ended June 30,
                                            ---------------------------------   

                                              1996          1995         1994
                                            --------      --------     ------

Forgiveness of Debt                          $34,100     $       -   $       -
Interest and other investment income,
  net                                              -        16,373      17,390
Recovery of receivables  written off in
  prior years                                      -             -      33,355
Gain (loss) on sale of equipment                   -      (13,394)      72,785
Other                                              -         3,594      44,313
                                            --------     ---------   ---------
                                            $ 34,100     $   (615)   $ 167,843
                                            ========     =========   =========

12.   INCOME TAXES:
      ------------
      As discussed  in Note 2, the Company  adopted SFAS 109 as of July 1, 1993,
and the cumulative effect of this accounting  change, a tax benefit of $169,600,
or $.02 per share, is reported in the  consolidated  statement of operations for
the year ended June 30, 1994.  Prior years'  financial  statements have not been
restated to apply the provisions of SFAS 109.

      Temporary  differences and carry forwards which give rise to a significant
portion of the  deferred  tax assets  and  liabilities  for 1996 and 1995 are as
follows:
                                                      June 30, 1996
                                            --------------------------------- 
                                            Deferred Tax         Deferred Tax
                                                Assets           Liabilities
                                                ------           -----------
Federal Net Operating Loss Carryforward     $ 10,759,418          $        -
Capital Loss Carryforward                         49,264                   -
Accounts Receivable                                    -                   -
Miscellaneous                                          -                   -
Property, Plant and Equipment                      9,231                   -
                                             -----------          -----------
  Subtotal                                    10,817,913                   -

Valuation Allowance                         (10,817,913)                   -
                                            ------------          -----------
  Total Deferred Taxes                      $         -           $        -
                                            ============          ===========

Federal Net Operating Loss Carryforward     $  1,712,418         $         -
Capital Loss Carryforward                         49,264                   -
Accounts Receivable                              120,613                   -
Miscellaneous                                          -              14,197
Property, Plant and Equipment                      9,231                   -
                                            ------------         -----------
  Subtotal                                     1,891,526              14,197

Valuation Allowance                           (1,891,526)                  -
                                            ------------          ----------
  Total Deferred Taxes                      $          -          $   14,197
                                            ============          ==========
                                       40

<PAGE>

        A reconciliation setting forth the differences between the effective tax
rate of the Company and the U.S. Federal statutory rate is as follows:

                                                    1996        1995       1994
                                                    ----        ----       ----
Federal Statutory Rate                             34.0 %     34.0 %      34.0 %
State Income Taxes net of Federal Tax Benefits      0.0 %      1.1 %       1.5 %
Loss Producing No Current Tax Benefits            (34.0)%     (34.0)%    (34.0)%
                                                    ----        ----       ----
Effective Tax Rate                                  0.0 %      1.1 %       1.5 %
                                                    ===        ===         ===  

The income tax provisions (benefits) consist of:

                                                   1996        1995        1994
                                                    ----        ----        ----
                                           
Federal Taxes                                   $      -    $      -   $ (7,327)
State Taxes                                            -      15,516     (2,737)
Deferred Income Taxes                                  -           -     (6,548)
                                                --------   ---------   ---------
                                                       -   $ 15,516    $(16,612)
                                                ========   =========   =========

        At June 30,  1995,  the  Company  had net  operating  loss  (NOL)  carry
forwards for  federal,  income tax purposes of  approximately  $10,817,900  that
begins to expire in 2006. The change in control  (discussed in Note 1) may limit
the annual,  utilization of the NOL Carry  forward.  As of this report date, the
Company  has not filed its  corporate  tax  returns for the years ended June 30,
1996 and June 30, 1995.

13.     COMMITMENTS AND CONTINGENCIES:
        -----------------------------
 
Operating Leases
----------------

        No operating  leases  existed at June 30, 1996 Rent expense was $42,483,
$137,400, and $74,000 in fiscal 1996, 1995, and 1994, respectively.

Employment and Consulting Agreements
------------------------------------

        The Company had employment contracts with various officers and employees
with  remaining  terms  of  up  to  five  years  at  approximately   their  past
compensation.  The remaining  commitments at June 30, 1995, under such contracts
for fiscal 1996, 1997, 1998, 1999 and 2000 were $1,230,600,  $848,800, $395,500,
$328,200  and $127,100  respectively.  At June 30, 1996,  these  contracts  were
terminated and the Company  believes it has no ongoing  obligations  with any of
these three individuals. Specifically, (a) the Chairman voluntarily resigned his
position upon the consumption of the sale of the  subsidiaries and the resulting
change of control, (b) the Vice Chairman's  contractual obligation was offset by
the Company against the Vice Chairman's  obligation to the Company approximating
same (see Note 10), and (C) the President's  contract was terminated as a result
of just cause. All other employment contracts were terminated as a result of the
sale of the subsidiaries.


                                       41

<PAGE>

  14.   ENVIRONMENTAL RISKS:
        -------------------
  
        The Comprehensive Environmental Response, Compensation and Liability Act
of 1980,  as amended in 1986 (also known as the  Superfund  Act) imposes  strict
joint and several  liability  upon the  generators of hazardous  substances  and
those transporters who have arranged for disposal of hazardous substances or who
have  selected the disposal  site for such  substances.  All such persons may be
liable for waste site  investigation,  waste site  cleanup and natural  resource
damages,  regardless  of whether they  exercised  due care and complied with all
relevant laws and  regulations.  Such costs can be  substantial.  Certain of the
Company's subsidiaries are transporters of hazardous waste materials, but should
not be  liable  therefore,  unless  they are  deemed to have  arranged  for such
disposal or the selected disposal sites. The Company's policy and practice is to
refrain  from  arranging  for the disposal of  hazardous  substances,  including
waste,  and/or the selection of disposal sites, and to have the generator do so.
However,  there can be no assurance that the Company and its  subsidiaries  will
not fail to adhere to such practice and thereby be potentially liable for claims
in connection with the transportation and disposal of such materials.

  15.      SUBSEQUENT EVENTS:
           -----------------
      On July 15,  1996,  the  Company,  in exchange for $500,000 and a note for
$2,700,000,  acquired  all  of the  issued  and  outstanding  Capital  Stock  of
Recycling  Unlimited,  Inc.,  a company  whose  primary  line of business is the
recycling of  demolitioned  concrete  matter and subsequent  sale thereof to the
construction  industry  for use in  foundations  of roads,  buildings  and other
structures.  The note,  payable by the  Company,  includes  monthly  payments of
principle  and  interest of  $30,000.  Interest  is at 10%.  The note  carries a
balloon payment due July 15, 2001.

      On July 31, 1996, the Company offered its vendors, on an individual basis,
a sum equal to 37.5% of the total  payables  due. As of the date of this report,
all vendors except four which represent  $139,365 in payables,  agreed to accept
such offer,  resulting in savings  through  debt  forgiveness  of $122,615.  The
remaining four vendors are still in negotiations with the Company.

      Subsequent to June 30, 1996, all capital  leases have been  terminated and
all property and equipment transferred to the former subsidiaries as part of the
negotiated sales of the subsidiaries by the Company (See Footnote 1 above).

      The  Completion of the  transactions  described in footnote 1 above (i.e.,
the sale of the operating  subsidiaries),  the funding of $905,000  described in
footnote 8 above,  and the liquidation of amounts due vendors  described in this
footnote 15,  cumulatively  resulted in the Company having total  obligations of
approximately  $254,000 as of  September  30, 1996.  (As of June 30,  1995,  the
Company  had total  obligations  of  approximately  $6.6  million)  (None of the
members  mentioned in this  paragraph  includes  Phoenix  Wrecking  Corporation,
acquired by the Company on July 10, 1996.)

      The Company is owed funds for Common Stock  subscription  receivables from
each of Corporate  Relations  Group (CRG) and Financial  Asset  Management.  The
amounts due the Company are,  respectively,  $302,000 and $175,000.  The Company
has instructed Counsel to pursue collection of such amounts. CRG is an affiliate
of Fondo (See footnote 8 above); therefore, the Company will not permit the sale
by Fondo of the  27,500  shares of Common  Stock  issued to Fondo for the sum of
$220,000 unless and until CRG liquidates its promissory  notes or returns to the
Company the 33,333 new shares represented by such promissory notes.

                                       42

<PAGE>

16.  Litigation
     ----------

      In  October  1995  the  Company  received  a  binding  commitment  for new
financing from CKN Holdings Corporation ("CKN") which would provide $1.5 million
of new common equity and a one year  convertible  loan amounting to $1.5 million
bearing  interest at 11.5%.  Proceeds of $2.0  million were to be applied to the
acquisition  of  American  Marine,  Inc.  And $1.0  million  were to be used for
general  working  capital  purposes.  On November 14, 1995,  the Company and CKN
executed a Stock  Subscription  Agreement,  which  would be  completed  upon the
transfer of $3.0 million to the Company.  On November 15, 1995, CKN defaulted on
its commitment under the Stock Subscription Agreement. On December 28, 1995, the
Company filed two separate  complaints  against CKN due to CKN's failure to fund
its commitment under the Stock Subscription  Agreement.  In the first Complaint,
the Company sought an immediate  return of the stock and  promissory  note which
had  been  previously  delivered  to CKN  pursuant  to the  terms  of the  Stock
Subscription  Agreement.   In  the  second  Complaint,   the  Company  sought  a
declaration  that it held  title to the stock and  promissory  note and  further
sought damages against CKN for violation of the Stock Subscription Agreement.

      As a result of the litigation,  CKN returned the stock and promissory note
to the Company. CKN failed to answer or otherwise plead in response to either of
the Complaints. On February 4, 1996, the Company filed a Motion for the Entry of
Default Judgment with respect to the second  Complaint.  The Court has entered a
default  judgment as to  liability in favor of the  Company.  Collection  of the
judgment is highly doubtful.

      As a result of CKN's  failure  to fund,  the  Company is in default of its
purchase agreement for American Marine, Inc. ("AMI").  Accordingly,  the Company
has written-off  $315,000 of costs related to the AMI acquisition.  In addition,
as a result  of CKN's  failure  to fund,  the  Company  had to  discontinue  the
operations  of it's  EDOC  subsidiary  as a result  of the  lack of the  working
capital needed to expand its business to attain profitability.

            The Company is party to certain claims and litigation arising in the
ordinary course of business.  In the opinion of management,  the outcome of such
claims  will not have a  material  adverse  effect  on the  Company's  financial
position.


                                       43



<PAGE>

                                  EXHIBIT INDEX


Exhibit
Number        Item

1.1      Underwriting  Agreement between Happy Mergers, Inc. and Grady and Hatch
         &  Company,  Inc,  filed  as an  exhibit  to the  Company's  Form  S-18
         Registration  Statement  (File  No.  33-48276-NY)  on June 9,  1992 and
         incorporated herein by reference.

1.2      Form of Selected Dealer Agreement,  filed as Exhibit 2 to the Company's
         Form S-18 Registration  Statement (File No. 33-37546-NY) on November 6,
         1990 and incorporated herein by reference.

1.3      Underwriting  Agreement  between Global Spill  Management,  Inc. and J.
         Gregory & Company,  Inc.,  dated July 31, 1992, filed as Exhibit 1.3 to
         Post-Effective  Amendment No. 2 to the Company's Registration Statement
         on Form S-18 (File No. 33-37546-NY) on August 7, 1992, and incorporated
         herein by reference.

1.4      Form  of  Selected  Dealers  Agreement,  filed  as an  exhibit  to  the
         Company's Form S-18 Registration  Statement (File No. 33-48276-NY),  on
         July 16, 1992 and incorporated herein by reference.

3.1      Articles of Incorporation of Happy Mergers, Inc., a Nevada corporation,
         filed as Exhibit 8 to the Company's  Form S-18  Registration  Statement
         (File No.  33-37546-NY) on November 6, 1990 and incorporated  herein by
         reference.

3.2      By-laws of Happy Mergers, Inc., a Nevada corporation,  filed as Exhibit
         9  to  the  Company's  Form  S-18  Registration   Statement  (File  No.
         33-37546-NY) on November 6, 1990 and incorporated herein by reference.

3.2.1    Restated By-laws of Global Spill Management,  Inc., filed as an Exhibit
         to the  Company's  Quarterly  Report on Form 10-Q for the period  ended
         December 31, 1993, and incorporated herein by reference.

3.3      Certificate  of Merger of Global  Spill  Management,  Inc.  into  Happy
         Mergers,  Inc.,  dated  November  7,  1991  in the  State  of  Delaware
         effective  March 15, 1992,  filed as an exhibit to the  Company's  Form
         S-18 Registration  Statement (File No. 33-48276-NY) on June 9, 1992 and
         incorporated herein by reference.






















                                       44

<PAGE>


3.4      Agreement  of Merger of  Global  Spill  Management,  Inc.,  into  Happy
         Mergers, Inc. in the State of Nevada effective November 25, 1991, filed
         as an exhibit to the Company's Form S-18  Registration  Statement (File
         No.   33-37546-NY)  on  March  16,  1992  and  incorporated  herein  by
         reference.

3.41     Certificate of  Incorporation  of Global Spill  Management of Delaware,
         Inc.  (Delaware),  filed as an exhibit to the Company's  Post-Effective
         Amendment  No. 1 to its Form  SB-2  Registration  Statement  (File  No.
         33-56910) and incorporated herein by reference.

3.5      Amended  Certificate of Incorporation of Acme Containment  Group,  Inc.
         (Oklahoma) filed January 13, 1992, filed as an exhibit to the Company's
         Form S-18 Registration Statement (File No. 33-48276-NY) on June 9, 1992
         and incorporated herein by reference.

3.6      Amendment to Article Fourth of the Company's Articles of Incorporation,
         filed  with the State of  Nevada  on  November  30,  1992,  filed as an
         exhibit to the Company's  Form SB-2  Registration  Statement  (File No.
         33-56910) on March 1, 1993 and incorporated herein by reference.

4.1      Warrant  Agreement  dated  as of  September  10,  1991,  between  Happy
         Mergers, Inc. and American Stock Transfer & Trust Company,  filed as an
         exhibit to the Company's  Form S-18  Registration  Statement  (File No.
         33-37546-NY) on March 16, 1992 and incorporated herein by reference.

4.2      Specimen Class A Warrant  Certificate of Happy Mergers,  Inc., filed as
         Exhibit 6 to the Company's Form S-18  Registration  Statement (File No.
         33-37546-NY) on November 6, 1990 and incorporated herein by reference.

4.3      Specimen Class B Warrant  Certificate of Happy Mergers,  Inc., filed as
         Exhibit 7 to the Company's Form S-18  Registration  Statement (File No.
         33-37546-NY) on November 6, 1990 and incorporated herein by reference.

4.4      Specimen  Common Stock  Certificate  of Happy Mergers,  Inc.,  filed as
         Exhibit 5 to the Company's Form S-18  Registration  Statement (File No.
         33-37546-NY) on November 6, 1990 and incorporated herein by reference.

4.5      Specimen Common Stock Certificate of Global Spill  Management,  Inc., a
         Nevada  Corporation,  filed as an  exhibit to the  Company's  Form S-18
         Registration  Statement  (File No.  33-37546-NY)  on March 16, 1992 and
         incorporated herein by reference.

4.6      Underwriter's  Purchase Warrant Agreement and Certificate between Happy
         Mergers,  Inc., and Grady and Hatch & Company, Inc, dated September 10,
         1991  filed as an  exhibit  to the  Company's  Form  S-18  Registration
         Statement  (File  No.  33-48276-NY)  on June 9,  1992 and  incorporated
         herein by reference.

4.7      Underwriter's  Warrant Certificate between the Company and J. Gregory &
         Company,   Inc.,  dated  August  5,  1992,  filed  as  Exhibit  4.7  to
         Post-Effective  Amendment No. 2 to the Company's Registration Statement
         on Form S-18 (File No. 33-37546-NY) on August 7, 1992, and incorporated
         herein by reference.

4.8      Specimen Class "A" Warrant Certificate of Company,  filed as an exhibit
         to  the  Company's   Form  S-18   Registration   Statement   (File  No.
         33-48276-NY) on June 24, 1992 and incorporated herein by reference.

4.9      Specimen Class "B" Warrant Certificate of Company,  filed as an exhibit
         to  the  Company's   Form  S-18   Registration   Statement   (File  No.
         33-48276-NY) on June 24, 1992 and incorporated herein by reference.

4.10     Underwriter's Warrant Certificate between the Company and James Mongno,
         dated August 5, 1992, filed as Exhibit 4.8 to Post-Effective  Amendment
         No. 2 to the  Company's  Registration  Statement on Form S-18 (File No.
         33-37546-NY) on August 7, 1992, and incorporated herein by reference.


                                       45

<PAGE>


10.1     Employment  Agreements  between the Company and each of Messrs.  Iorio,
         White,  Pettit,  Stanfield  and Stith,  ending at various dates between
         June 30,  1996 and  November  30,  1996,  filed  as an  exhibit  to the
         Company's Form S-18  Registration  Statement (File No.  33-37546-NY) on
         March 16, 1992 and incorporated herein by reference.

10.2     Consulting Agreement dated as of July 1, 1991 between GSM Environmental
         and Thomas D. Lewis,  Sr.,  filed as an exhibit to the  Company's  Form
         S-18  Registration  Statement (File No.  33-37546-NY) on March 16, 1992
         and incorporated herein by reference.

10.3     Non-Negotiable  Promissory  Note dated as of  November  27, 1991 in the
         principal amount of $169,000 by David R. Stith to Underwater  Technics,
         Inc.,  filed as an  exhibit  to the  Company's  Form S-18  Registration
         Statement  (File No.  33-37546-NY)  on March 16, 1992 and  incorporated
         herein by reference.

10.33    Stock Purchase Agreement dated as of March 31, 1994 between the Company
         and Omnicorp  Limited,  filed as an Exhibit to the Company's  Quarterly
         Report on Form 10-Q  dated  April 4,  1994 and  incorporated  herein by
         reference.

10.34    Promissory Note from Omnicorp Limited dated as of March 31, 1994 in the
         principal  amount of  $200,000,  filed as an Exhibit  to the  Company's
         Quarterly  Report on Form  10-Q  dated  April 4, 1994 and  incorporated
         herein by reference.

10.4     Subordinated  Note  dated  March 31,  1991 in the  principal  amount of
         $125,000 by FH  Acquisition  Corporation  (now  "Global  Environmental,
         Inc.") (Maker) to Total Recovery, Inc. (Holder), filed as an exhibit to
         the Company's Form S-18 Registration  Statement (File No.  33-37546-NY)
         on March 16, 1992 and incorporated herein by reference.

10.5     Subordinated  Promissory  Note  dated  June 15,  1991 in the  principal
         amount  of  $72,418.63  by GSM  Environmental,  Inc.  (Maker)  to Total
         Recovery, Inc. (Holder), filed as an exhibit to the Company's Form S-18
         Registration  Statement  (File No.  33-37546-NY)  on March 16, 1992 and
         incorporated herein by reference.

10.6     Non-Negotiable  Promissory  Note dated January 1, 1992 in the principal
         amount of $35,000 by the Company (Maker) to Underwater  Technics,  Inc.
         (Holder),  filed as an exhibit to the Company's Form S-18  Registration
         Statement  (File No.  33-37546-NY)  on March 16, 1992 and  incorporated
         herein by reference.

10.7     Non-Negotiable Promissory Note dated November 27, 1991 in the principal
         amount  of  $100,000  by  the  Company  to  Underwater  Technics,  Inc.
         (Holder),  filed as an exhibit to the Company's Form S-18  Registration
         Statement  (File No.  33-37546-NY)  on March 16, 1992 and  incorporated
         herein by reference.

10.8     Non-Negotiable  Promissory  Note dated June 30, 1991,  in the principal
         amount of $700,000 by Acme Containment Group, Inc. (Maker) to Leslie H.
         Stanfield  (Holder),  filed as an  exhibit to the  Company's  Form S-18
         Registration  Statement  (File No.  33-37546-NY)  on March 16, 1992 and
         incorporated herein by reference.

10.9     8.5%  Subordinated  Convertible  Debenture  Due  July  1,  2001  in the
         principal  amount of $100,000  issued by the Company as of July 1, 1991
         to Thomas D.  Lewis,  filed as an  exhibit to the  Company's  Form S-18
         Registration  Statement  (File No.  33-37546-NY)  on March 16, 1992 and
         incorporated herein by reference.

10.10    Amendment  dated  March  6,  1992  to  8.5%  Subordinated   Convertible
         Debenture Due July 1, 2001 in the principal  amount of $100,000,  filed
         as an exhibit to the Company's Form S- 18 Registration  Statement (File
         No.   33-37546-NY)  on  March  16,  1992  and  incorporated  herein  by
         reference.

                                       46

<PAGE>

10.11    11%  Subordinated  Convertible  Debenture Due December 12, 1998, in the
         principal  amount of  $50,000  issued by the  Company to Ernst Pick and
         Marcelle  Pick,  filed  as  an  exhibit  to  the  Company's  Form  S-18
         Registration  Statement  (File  No.  33-48276-NY)  on June 9,  1992 and
         incorporated herein by reference.

10.12    Series C 11% Subordinated  Convertible  Debenture Due January 31, 1998,
         in the principal amount of $50,000 issued by the Company to Dorothea L.
         Lewis and/or Anne L. Kutzer,  filed as an exhibit to the Company's Form
         S-18  Registration  Statement (File No.  33-37546-NY) on March 16, 1992
         and incorporated herein by reference.

10.13    Surety Agreement  between GSM  Environmental,  Inc.,  Meridian Bank and
         Global  Environmental,  Inc.,  dated  December  17,  1991,  filed as an
         exhibit to the Company's  Form S-18  Registration  Statement  (File No.
         33-37546-NY) on March 16, 1992 and incorporated herein by reference.

10.14    Promissory  Note in the  principal  amount of $300,000 by Meridian Bank
         (Holder) and GSM  Environmental,  Inc. (Maker),  filed as an exhibit to
         the Company's Form S-18 Registration  Statement (File No.  33-37546-NY)
         on March 16, 1992 and incorporated herein by reference.

10.15    Surety Agreement  between GSM  Environmental,  Inc.,  Meridian Bank and
         Global Spill  Management,  Inc, dated  December 17, 1991.,  filed as an
         exhibit to the Company's  Form S-18  Registration  Statement  (File No.
         33-37546-NY) on March 16, 1992 and incorporated herein by reference.

10.16    Security  Agreement  dated December 2, 1991 between GSM  Environmental,
         Inc. and Meridian Bank,  filed as an exhibit to the Company's Form S-18
         Registration  Statement  (File No.  33-37546-NY)  on March 16, 1992 and
         incorporated herein by reference.

10.17    Guaranty Agreements dated December 2, 1991 by each of William E. Iorio,
         Peter V.  White and  Aubrey L.  Pettit to  Meridian  Bank,  filed as an
         exhibit to the Company's  Form S-18  Registration  Statement  (File No.
         33-37546-NY) on March 16, 1992 and incorporated herein by reference.

10.18    Stock Purchase Agreement of Total Recovery,  Inc. dated as of March 31,
         1991 by and between Thomas D. Lewis Sr. and Private Capital Advisors, a
         General  Partnership,  filed as an exhibit to the  Company's  Form S-18
         Registration  Statement  (File  No.  33-48276-NY)  on June 9,  1992 and
         incorporated herein by reference.

10.19    Assignment  of Contract  dated June 15, 1991  between  Private  Capital
         Advisors and Total Recovery, Inc., filed as an exhibit to the Company's
         Form S-18  Registration  Statement (File No.  33-37546-NY) on March 16,
         1992 and incorporated herein by reference.

10.20    Letter  Agreement  dated  August 28, 1991 by and between  Global  Spill
         Management,  Inc.  and  Thomas D.  Lewis,  filed as an  exhibit  to the
         Company's Form S-18  Registration  Statement (File No.  33-37546-NY) on
         March 16, 1992 and incorporated herein by reference.

10.21    Asset  Acquisition  Agreement dated as of March 31, 1991 by and between
         FH Acquisition Corporation (now "Global Environmental, Inc.") and Total
         Recovery,  Inc.,  filed  as an  exhibit  to  the  Company's  Form  S-18
         Registration  Statement  (File No.  33-37546-NY)  on March 16, 1992 and
         incorporated herein by reference.

10.22    Stock Contribution Agreement dated October 2, 1991 by and among William
         E.  Iorio,  Peter V.  White,  Aubrey L.  Pettit,  Jr. and Global  Spill
         Management,  Inc.,  filed as an  exhibit  to the  Company's  Form  S-18
         Registration  Statement  (File No.  33-37546-NY)  on March 16, 1992 and
         incorporated herein by reference.

10.23    Agreement  and Plan of  Merger by and among  Global  Spill  Management,
         Inc., Acme Spill  Management,  Inc. and Acme  Containment  Group,  Inc.
         dated as of October 31, 1991 (the "Acme Merger Agreement"), filed as an
         exhibit to the Company's  Form S-18  Registration  Statement  (File No.
         33-37546-NY) on March 16, 1992 and incorporated herein by reference.
                                       47

<PAGE>

10.24    Amendment to the Acme Merger  Agreement,  dated as of November 1, 1991,
         filed as an exhibit to the Company's Form S-18  Registration  Statement
         (File No.  33-37546-NY)  on March 16, 1992 and  incorporated  herein by
         reference.

10.25    Stock  Valuation  Agreement dated as of October 31, 1991 by and between
         Global Spill  Management,  Inc. and Leslie H. and Suzanne H. Stanfield,
         filed as an exhibit to the Company's Form S-18  Registration  Statement
         (File No.  33-37546-NY)  on March 16, 1992 and  incorporated  herein by
         reference.

10.26    Escrow Agreement dated as of October 31, 1991 by and among Global Spill
         Management,  Inc.,  James S. Boese (Escrow Agent),  Leslie H. Stanfield
         and Suzanne H.  Stanfield  (the "Acme Escrow  Agreement"),  filed as an
         exhibit to the Company's  Form S-18  Registration  Statement  (File No.
         33-37546-NY) on March 16, 1992 and incorporated herein by
         reference.

10.27    Amendment  to the Acme Escrow  Agreement  dated as of November 1, 1991,
         filed as an exhibit to the Company's Form S-18  Registration  Statement
         (File No.  33-37546-NY)  on March 16, 1992 and  incorporated  herein by
         reference.

10.28    Certificate  of Merger  between  Acme Spill  Management,  Inc. and Acme
         Containment Group,  Inc., in the State of Oklahoma,  effective November
         15, 1991,  filed as an exhibit to the Company's Form S-18  Registration
         Statement  (File  No.  33-48276-NY)  on June 9,  1992 and  incorporated
         herein by reference.

10.29    Agreement and Plan of Merger dated as of November 27, 1991 by and among
         Global Spill Management,  Inc., U.T. Spill Management, Inc., Underwater
         Technics,  Inc., and the  stockholders  of Underwater  Technics,  Inc.,
         filed as an exhibit to the Company's Form S-18  Registration  Statement
         (File No.  33-37546-NY)  on March 16, 1992 and  incorporated  herein by
         reference.

10.30    Stock  Valuation  Agreement  dated as of November 27, 1991 by and among
         Global  Spill  Management,  Inc.  and the  stockholders  of  Underwater
         Technics,  Inc.,  filed  as an  exhibit  to  the  Company's  Form  S-18
         Registration  Statement  (File No.  33-37546-NY)  on March 16, 1992 and
         incorporated herein by reference.

10.31    Escrow  Agreement  dated as of November 27, 1991 by and among Brandeis,
         Bernstein and Wasserman (Escrow Agent),  Global Spill Management,  Inc.
         and the stockholders of Underwater Technics,  Inc., filed as an exhibit
         to  the  Company's   Form  S-18   Registration   Statement   (File  No.
         33-48276-NY) on June 9, 1992 and incorporated herein by reference.

10.32    Articles of Merger between U.T. Spill  Management,  Inc. and Underwater
         Technics, Inc. in the Commonwealth of Pennsylvania,  effective December
         11, 1991.,  filed as an exhibit to the Company's Form S-18 Registration
         Statement  (File  No.  33-48276-NY)  on June 9,  1992 and  incorporated
         herein by reference.

10.33    Stock Purchase Agreement dated as of March 31, 1994 between the Company
         and  Omnicorp  Limited,  filed as an Exhibit to the  Company's  Current
         Report  on Form 8-K  dated  April 4,  1994 and  incorporated  herein by
         reference.

10.34    Promissory Note from Omnicorp Limited dated as of March 31, 1994 in the
         principal  amount of  $200,000,  filed as an Exhibit  to the  Company's
         Current Report on Form 8-K dated April 4, 1994 and incorporated  herein
         by reference.

10.35    Mortgage dated October 9, 1987 by Total,  Inc.  ("Borrower")  to Daniel
         and  Patricia  Lieberman  (Lender),  and Report of Title.,  filed as an
         exhibit to the Company's Form S- 18  Registration  Statement  (File No.
         33-37546-NY) on March 16, 1992 and incorporated herein by reference.


                                       48

<PAGE>

10.36    Global Spill Management Equity Incentive Plan.,  filed as an exhibit to
         the Company's Form S-18 Registration  Statement (File No.  33-37546-NY)
         on March 16, 1992 and incorporated herein by reference.

10.37    Global Spill Management Senior Management Incentive Compensation Plan.,
         filed as an exhibit to the Company's Form S-18  Registration  Statement
         (File No.  33-37546-NY)  on March 16, 1992 and  incorporated  herein by
         reference.

10.38    Consulting  Agreement  between the  Company  and Mr.  William E. Iorio,
         filed as an exhibit to the Company's Form S-18  Registration  Statement
         (File  No.  33-48276-NY)  on June 9,  1992 and  incorporated  herein by
         reference.

10.39    Settlement  Agreement  between the  Company  and Mr.  William E. Iorio,
         filed as an exhibit to the Company's Form S-18  Registration  Statement
         (File  No.  33-48276-NY)  on June 9,  1992 and  incorporated  herein by
         reference.

10.40    Amendment  dated June 1, 1992 to the Escrow  Agreement filed as Exhibit
         10.26  to this  Registration  Statement,  filed  as an  exhibit  to the
         Company's Form S-18  Registration  Statement (File No.  33-48276-NY) on
         June 9, 1992 and incorporated herein by reference.

10.41    Amendment  dated June 1, 1992 to the Escrow  Agreement filed as Exhibit
         10.31  to this  Registration  Statement,  filed  as an  exhibit  to the
         Company's Form S-18  Registration  Statement (File No.  33-48276-NY) on
         June 9, 1992 and incorporated herein by reference.

10.42    Supplemental Agreement dated June 1, 1992 by and among Company,  Leslie
         H. Stanfield, Suzanne Stanfield and Acme Containment Group, filed as an
         exhibit to the Company's  Form S-18  Registration  Statement  (File No.
         33-48276-NY) on June 9, 1992 and incorporated herein by reference.

10.43    8%  Subordinated  Convertible  Debenture  Due  January 1, 1996,  in the
         principal  amount of  $125,000  issued by GSM  Environmental,  Inc.  to
         Rudolph Henley and Janice Henley,  filed as an exhibit to the Company's
         Form S-18 Registration Statement (File No. 33-48276-NY) on June 9, 1992
         and incorporated herein by reference.

10.44    Consulting  Agreement  between the  Company  and J.  Gregory & Company,
         Inc.,   dated   August  5,  1992,   filed  as  Exhibit   10.42  to  the
         Post-Effective  Amendment No. 2 to the Company's Registration Statement
         on Form S-18 (File No. 33-37546-NY) on August 7, 1992, and incorporated
         herein by reference.

10.45    Termination  Agreement  dated July 10, 1992,  by and among the Company,
         Leslie H.  Stanfield and Suzanne H.  Stanfield,  filed as an exhibit to
         the Company's Form S-18 Registration  Statement (File No.  33-48276-NY)
         on July 16, 1992 and incorporated herein by reference.

10.46    Letter Agreement dated July 13, 1992, by and among the Company,  Leslie
         H.  Stanfield  and  Suzanne  H.  Stanfield,  filed as an exhibit to the
         Company's Form S-18  Registration  Statement (File No.  33-48276-NY) on
         July 16, 1992 and incorporated herein by reference.

10.47    Registration  Rights  Agreement  dated July 13, 1992,  by and among the
         Company,  Leslie H.  Stanfield  and Suzanne H.  Stanfield,  filed as an
         exhibit to the Company's  Form S-18  Registration  Statement  (File No.
         33-48276-NY) on July 16, 1992 and incorporated herein by reference.

10.48    Termination  Agreement  dated July 10, 1992,  by and among the Company,
         David R. Stith,  J. Welles  Henderson,  Ruth Dugan,  Richard W. Palmer,
         David J. Stith, Susan L. Stith, Carol Hoffmeier and Barbara Hess, filed
         as an exhibit to the Company's Form S-18  Registration  Statement (File
         No. 33-48276-NY) on July 16, 1992 and incorporated herein by reference.



                                       49

<PAGE>

10.49    Letter  Agreement dated July 10, 1992, by and among the Company,  David
         R. Stith, J. Welles Henderson,  Ruth Dugan, Richard W. Palmer, David J.
         Stith,  Susan L. Stith,  Carol Hoffmeier and Barbara Hess,  filed as an
         exhibit to the Company's  Form S-18  Registration  Statement  (File No.
         33-48276-NY) on July 16, 1992 and incorporated herein by reference.


10.50    Registration  Rights  Agreement  dated July 9,  1992,  by and among the
         Company,  David R. Stith, J. Welles Henderson,  Ruth Dugan,  Richard W.
         Palmer,  David J. Stith,  Susan L. Stith,  Carol  Hoffmeier and Barbara
         Hess,  filed as an  exhibit  to the  Company's  Form S-18  Registration
         Statement  (File No.  33-48276-NY)  on July 16,  1992 and  incorporated
         herein by reference.

10.51    Registration  Rights  Agreement dated July 15, 1992, by and between the
         Company and E.E. Corporation, filed as an exhibit to the Company's Form
         S-18 Registration Statement (File No. 33-48276-NY) on July 16, 1992 and
         incorporated herein by reference.

10.52    Global Spill  Management  Amended and Restated  Equity  Incentive Plan,
         filed as Exhibit 10.35 to the Company's  Annual Report on Form 10-K for
         the fiscal  year ended  June 30,  1992 (File No.  0-2317) on October 6,
         1992, and incorporated herein by reference.

10.53    Resolutions of the Board of Directors of the Company,  dated  September
         30, 1992,  adopting the Company's  Acquisition Bonus Program,  filed as
         Exhibit  10.37 to the  Company's  Annual  Report  on Form  10-K for the
         fiscal year ended June 30,  1992 (File No.  0-2317) on October 6, 1992,
         and incorporated herein by reference.

10.54    Letter of Commitment,  dated August 4, 1992, from Meridian Bank,  filed
         as an exhibit to the Company's Form SB-2  Registration  Statement (File
         No. 33-53374-NY), and incorporated herein by reference.

10.55    Surety  Agreement,  dated  August 6, 1992,  between  Meridian  Bank and
         Underwater  Technics,  Inc.,  filed as an exhibit to the Company's Form
         SB-2 Registration  Statement (File No.  33-53374-NY),  and incorporated
         herein by reference.

10.56    Surety Agreement,  dated August 6, 1992, between Meridian Bank and Acme
         Containment Group, Inc., filed as an exhibit to the Company's Form SB-2
         Registration Statement (File No. 33-53374-NY),  and incorporated herein
         by reference.

10.57    Undertaking  dated October 14, 1992 of EE Corporation to the Securities
         and Exchange  Commission  and the  Company,  filed as an exhibit to the
         Company's Form SB-2 Registration  Statement (File No.  33-53374-NY) and
         incorporated herein by reference.

10.58    Undertaking  dated  October  14, 1992 of IDIICO to the  Securities  and
         Exchange  Commission  and  the  Company,  filed  as an  exhibit  to the
         Company's Form SB-2 Registration  Statement (File No.  33-53374-NY) and
         incorporated herein by reference.

10.59    Undertaking dated October 14, 1992 of Alan Esrine to the Securities and
         Exchange  Commission  and  the  Company,  filed  as an  exhibit  to the
         Company's Form SB-2 Registration  Statement (File No.  33-53374-NY) and
         incorporated herein by reference.

10.60    Undertaking  dated  October  14,  1992 of  Pamela J.  Wilkinson  to the
         Securities and Exchange Commission and the Company, filed as an exhibit
         to  the  Company's   Form  SB-2   Registration   Statement   (File  No.
         33-53374-NY) and incorporated herein by reference.

10.61    Undertaking dated October 14, 1992 of Monar, N.V. to the Securities and
         Exchange  Commission  and  the  Company,  filed  as an  exhibit  to the
         Company's Form SB-2 Registration  Statement (File No.  33-53374-NY) and
         incorporated herein by reference.


                                       50

<PAGE>

10.62    Loan Agreement  dated  December 23, 1992 between  Meridian Bank and GSM
         Environmental,  Inc., Global Environmental,  Inc., Underwater Technics,
         Inc.  and Acme  Containment  Group,  Inc.,  filed as an  exhibit to the
         Company's  Form SB-2  Registration  Statement  (File No.  33-56910) and
         incorporated herein by reference.

10.63    Line of Credit Note in the principal  amount of $750,000 dated December
         23, 1992 in favor of Meridian Bank by GSM  Environmental,  Inc., Global
         Environmental,  Inc.,  Underwater  Technics,  Inc. and Acme Containment
         Group,   Inc.,   filed  as  an  exhibit  to  the  Company's  Form  SB-2
         Registration  Statement (File No. 33-56910) and incorporated  herein by
         reference.

10.64    Term Loan Note in the principal  amount of $165,000  dated December 23,
         1992 in favor  of  Meridian  Bank by GSM  Environmental,  Inc.,  Global
         Environmental,  Inc.,  Underwater  Technics,  Inc. and Acme Containment
         Group,   Inc.,   filed  as  an  exhibit  to  the  Company's  Form  SB-2
         Registration  Statement (File No. 33-56910) and incorporated  herein by
         reference.

10.65    Equipment Loan Note in the principal  amount of $350,000 dated December
         23, 1992 in favor of Meridian Bank by GSM  Environmental,  Inc., Global
         Environmental,  Inc.,  Underwater  Technics,  Inc. and Acme Containment
         Group,   Inc.,   filed  as  an  exhibit  to  the  Company's  Form  SB-2
         Registration  Statement (File No. 33-56910) and incorporated  herein by
         reference.

10.66    Security  Agreement  dated December 23, 1992 between  Meridian Bank and
         GSM  Environmental,   Inc.,  Global  Environmental,   Inc.,  Underwater
         Technics, Inc. and Acme Containment Group, Inc., filed as an exhibit to
         the Company's Form SB-2 Registration  Statement (File No. 33-56910) and
         incorporated herein by reference.

10.67    Equipment  Loan  Security  Agreement  dated  December  23, 1992 between
         Meridian Bank and GSM Environmental,  Inc., Global Environmental, Inc.,
         Underwater Technics, Inc. and Acme Containment Group, Inc., filed as an
         exhibit to the Company's  Form SB-2  Registration  Statement  (File No.
         33-56910) and incorporated herein by reference.

10.68    Guaranty  dated  December 23, 1992 in favor of Meridian  Bank by Global
         Spill Management,  Inc., filed as an exhibit to the Company's Form SB-2
         Registration  Statement (File No. 33-56910) and incorporated  herein by
         reference.

10.69    Warrant  Agreement  dated  December 23, 1992 between  Meridian Bank and
         Global Spill  Management,  Inc.,  filed as an exhibit to the  Company's
         Form SB-2  Registration  Statement (File No. 33-56910) and incorporated
         herein by reference.

10.70    Common Stock Purchase  Warrant dated December 23, 1992 issued by Global
         Spill  Management,  Inc. to Meridian  Bank,  filed as an exhibit to the
         Company's  Form SB-2  Registration  Statement  (File No.  33-56910) and
         incorporated herein by reference.

10.71    Stock  Purchase  Agreement  dated as of February 1, 1993 between Global
         Spill  Management,  Inc. and Sergio  Germinario,  sole  stockholder  of
         American  Industrial  Marine Services,  Inc, filed as an exhibit to the
         Company's  Form  SB-2  (File  No.   33-56910)  on  March  1,  1993  and
         incorporated herein by reference.

10.72    Employment  Agreement dated as of February 9, 1993 between Global Spill
         Management,  Inc., American Industrial Marine Services, Inc. and Sergio
         Germinario,  filed as an exhibit to the  Company's  Form SB-2 (File No.
         33-56910) on March 1, 1993 and incorporated herein by reference.

10.73    Promissory  Note  in the  principal  amount  of  $250,000  by  American
         Industrial  Marine Services,  Inc. dated February 10, 1993, filed as an
         exhibit to the Company's Form SB-2 (File No. 33-56910) on March 1, 1993
         and incorporated herein by reference.

                                       51

<PAGE>

10.74    Commitment  Letter dated June 20, 1990 and Master Promissory Note dated
         as of June 21, 1990 between American  Industrial Marine Services,  Inc.
         and United National Bank of Plainfield, New Jersey, filed as an exhibit
         to the  Company's  Form SB-2  (File No. 33- 56910) on March 1, 1993 and
         incorporated herein by reference.

10.75    Security   Agreement  dated  as  of  June  21,  1990  between  American
         Industrial   Marine   Services,   Inc.  and  United  National  Bank  of
         Plainfield,  New Jersey, filed as an exhibit to the Company's Form SB-2
         (File  No.  33-56910)  on March  1,  1993 and  incorporated  herein  by
         reference.

10.76    Commitment  Letters of United  National Bank of Plainfield,  New Jersey
         dated February 23, 1993 and March 6, 1992 re:  continuation  of line of
         credit,  filed as an  exhibit  to the  Company's  Form  SB-2  (File No.
         33-56910) on March 1, 1993 and incorporated herein by reference.

10.77    Union Agreement dated March 1, 1991 between American  Industrial Marine
         Services,  Inc.  and Local No. 11,  affiliated  with the  International
         Brotherhood of Teamsters,  et al., filed as an exhibit to the Company's
         Form SB-2 (File No. 33-56910) on March 1, 1993 and incorporated  herein
         by reference.

10.78    Lease  Agreement  dated  October 16, 1990 between  American  Industrial
         Marine Services,  Inc. at GG&S Investments,  filed as an exhibit to the
         Company's  Form  SB-2  (File  No.  33-  56910)  on  March  1,  1993 and
         incorporated herein by reference.

10.79    Lease  Agreement  dated  January 5, 1990  between  American  Industrial
         Marine  Services,  Inc.  and Paul Laubner and  corresponding  Letter of
         Continuation  dated  November  19,  1991,  filed as an  exhibit  to the
         Company's  Form  SB-2  (File  No.   33-56910)  on  March  1,  1993  and
         incorporated herein by reference.

10.80    Global Spill Management,  Inc. Employee Stock Purchase Plan,  effective
         as of December 1, 1992,  filed as an exhibit to the Company's Form SB-2
         Registration  Statement  (File  No.  33-56910)  on  March  1,  1993 and
         incorporated herein by reference.

10.81    Global Spill  Management,  Inc.  401(k)  Deferred  Profit  Sharing Plan
         effective as of January 1, 1993,  filed as an exhibit to the  Company's
         Form SB-2  Registration  Statement (File No. 33-56910) on March 1, 1993
         and incorporated herein by reference.

10.82    Lease Agreement dated June 12, 1993 between Global Spill  Management of
         Delaware,  Inc.  and HOC,  Inc.,  filed as an exhibit to the  Company's
         Post-Effective  Amendment No. 1 to its Form SB-2 Registration Statement
         (File No. 33-56910) and incorporated herein by reference.

10.82A   Lease  Agreement dated July 1, 1993 between Jan and Ellen Valeriano and
         Environmental Disposal Options Corporation.

10.82B   Lease  Agreement  dated  January  14, 1994  between  Vincent and Marion
         Falabella and Land N Sea Environmental Services, Inc.

10.83    Consulting  Agreement  dated as of August 1, 1993 between  Global Spill
         Management, Inc. and Luke P. LaValle, Jr., filed as Exhibit 10.3 to the
         Company's  Annual Report on Form 10-K for the year ended June 30, 1993,
         and incorporated herein by reference.

10.84    Union  Agreement  dated  January  1, 1991  between  AIMS and Local 575,
         affiliated with the International  Brotherhood of Teamsters,  Automatic
         Sales,  Servicemen  and Allied  Workers,  filed as Exhibit 10.77 to the
         Company's  Annual Report on Form 10-K for the year ended June 30, 1993,
         and incorporated herein by reference.

10.85    Promissory Note dated October 6, 1993, from (ITI) Glendale, Inc. in the
         principal  amount of  $800,000  filed as an  exhibit  to the  Company's
         Registration Statement on Form S-3 (File No. 33-70344) and incorporated
         herein by reference.
                                       52

<PAGE>

10.86    Letter  Agreement dated April 22, 1994 to that certain  Promissory Note
         dated April 15, 1994 from (ITI) Glendale, Inc.

10.87    Promissory Note dated April 15, 1994 from (ITI)  Glendale,  Inc. in the
         principal amount of $800,000.

10.88    Stock  Purchase  Agreement  dated as of March 31, 1994  between  Global
         Spill Management, Inc. and Omnicorp Limited, filed as an exhibit to the
         Company's   Current  Report  on  Form  8-K  dated  April  4,  1994  and
         incorporated herein by reference.

10.89    Promissory  Note from  Omnicorp  Limited  (Maker) dated as of March 31,
         1994, in the principal  amount of $200,000,  filed as an exhibit to the
         Company's   Current  Report  on  Form  8-K  dated  April  4,  1994  and
         incorporated herein by reference.

10.90    Stock  Purchase  Agreement  dated as of April 28, 1994 by and among the
         Company,  Jan A. Valeriano and Anthony  Thomas,  filed as an exhibit to
         the  Company's  Current  Report  on Form 8-K  dated  April 4,  1994 and
         incorporated herein by reference.

10.91    Stock Restriction  Agreement dated as of May 9, 1994 by and between the
         Company  and Jan A.  Valeriano,  filed as an exhibit  to the  Company's
         Current Report on Form 8-K dated April 4, 1994 and incorporated  herein
         by reference.

10.92    Stock Restriction  Agreement dated as of May 9, 1994 by and between the
         Company  and  Anthony  Thomas,  filed as an  exhibit  to the  Company's
         Current Report on Form 8-K dated April 4, 1994 and incorporated  herein
         by reference.

10.93    Employment  Agreement  dated  as of May 9,  1994  by  and  between  the
         Company, Environmental Disposal Options Corporation and Anthony Thomas,
         filed as an exhibit to the Company's  Current  Report on Form 8-K dated
         April 4, 1994 and incorporated herein by reference.

10.94    Settlement   Agreement   dated  May  9,  1994   between  the   Company,
         Environmental Disposal Options Corporation and Jan A. Valeriano,  filed
         as an exhibit to the Company's  Current  Report on Form 8-K dated April
         4, 1994 and incorporated herein by reference.

10.95    Agreement   between   Corporate   Relations  Group,   Inc.,  a  Florida
         corporation, and the Company, dated as of May 31, 1994.

10.96    Amendatory Agreement between the Company and Corporate Relations Group,
         Inc. dated July 29, 1994.

10.97    Stock  Restriction  Agreement  dated as of July 15,  1994 by and  among
         Global  Spill  Management,  Inc.  and  Michael G.  Thibodeau,  Edgar J.
         Thibodeau  and William  Brewster,  filed as an exhibit to the Company's
         Current Report on Form 8-K dated July 27, 1994 and incorporated  herein
         by reference.

10.98    Employment  Agreement  dated as of July 15, 1994 by and between  Global
         Spill  Management,  Inc., Land N Sea Environmental  Services,  Inc. and
         Michael G.  Thibodeau,  filed as an exhibit  to the  Company's  Current
         Report  on Form 8-K  dated  July 27,  1994 and  incorporated  herein by
         reference.

10.99    Promissory Note dated July 15, 1994 in the principal amount of $56,092,
         payable to Edgar J.  Thibodeau,  filed as an  exhibit to the  Company's
         Current Report on Form 8-K dated July 27, 1994 and incorporated  herein
         by reference.

11.1     Security and Surety  Agreement dated July 15, 1994 in favor of Edgar J.
         Thibodeau,  filed as an exhibit to the Company's Current Report on Form
         8-K dated July 27, 1994 and incorporated herein by reference.


                                       53

<PAGE>

11.2     Non-Negotiable  Promissory  Note dated October 1, 1994 in the principal
         amount of  $1,050,000,  from (ITI)  Glendale,  Inc.,  as maker,  to the
         Company, as payee.

11.3     Non-Negotiable  Promissory  Note dated October 1, 1994 in the principal
         amount of $177,000, from Corporate Relations Group, Inc., as maker, and
         the Company, as payee.

11.4     Lease  Agreement dated July 1, 1993 between Jan and Ellen Valeriano and
         Environmental Disposal Options Corporation.

11.5     Lease  Agreement  dated  January  14, 1994  between  Vincent and Marion
         Falabella and Land N Sea Environmental Services, Inc.

11.6     Lease   Agreement   dated   November   11,  1993   between   Thomas  W.
         Morellit/Marchwood Shopping Center and Professional Pipe Services, Inc.

11.7     Plan and Agreement of Reorganization as of October 1, 1994 by and among
         Global Spill Management,  Inc. and Ray K. Kerwood,  Thomas V. D'Angelo,
         Penelope  Kearns-Miller,  Dennis C. Fry, and Michael T. Kelly, filed as
         an Exhibit to the Company's Current Report on Form 8-K dated October 1,
         1994, and incorporated herein by reference.

11.8     Stock  Restriction  Agreement  dated as of October 1, 1994 by and among
         Global Spill Management,  Inc. and Ray K. Kerwood,  Thomas V. D'Angelo,
         Penelope  Kearns-Miller,  Dennis C. Fry, and Michael T. Kelly, filed as
         an Exhibit to the Company's Current Report on Form 8-K dated October 1,
         1994, and incorporated herein by reference.

11.9     Employment  Agreement dated as of October 1, 1994 by and between Global
         Spill Management,  Inc., Professional Pipe Services, Inc. and Thomas V.
         D'Angelo,  filed as an Exhibit to the Company's  Current Report on Form
         8-K dated October 1, 1994, and incorporated herein by reference.

11.91    Mortgage  dated  October 4, 1993 between Ray K. and Donna  Kerwood,  as
         Mortgagors and Professional Pipe Services, Inc., as Mortgagee.

16.1     Resignation of Jody M. Weber as auditor for Happy Mergers,  Inc., dated
         January  6,  1992,  filed as an  exhibit  to the  Company's  Form  S-18
         Registration  Statement  (File No.  33-37546-NY)  on March 16, 1992 and
         incorporated herein by reference.

22.1     Updated List of Subsidiaries of Company as of October 1, 1994.

27.1     Financial Data Schedule (Electronic filing only)























                                       54

<PAGE>





                                   SIGNATURES

      Pursuant  to the  requirements  of 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 hereunto duly authorized on October 13, 1995.

                                    GLOBAL SPILL MANAGEMENT, INC.

                                    By:  /s/ Karl Schwab  
                                       -------------------------------- 
                                           Karl Schwab, Chairman of
                                           the Board, President and Director


      Pursuant to the  requirements  of the Securities Act of 1934,  this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities  indicated,  on October 13, 1995,  including a majority of the
Board of Directors of the Company.

Signatures                          Title                               Date

/s/ Karl Schwab         
--------------------------
Karl Schwab                 Chairman of the Board, President    October 15, 1996
                            and Director                        ----------------


/s/ Roger Imperial
--------------------------
Roger Imperial              Director                            October 15, 1996
                                                                ----------------


/s/ George Weast
--------------------------  Chief Financial Officer,            October 15, 1996
George Weast                And Assistant Secretary             ----------------
                            Secretary and Director


/s/ Charles Chillingworth   
-------------------------   Director and General Counsel        October 15, 1996
                                                                ----------------
   


















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