================================================================================


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB
(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, 1997
                                       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.)

       2300 Computer Avenue (Bldg. G-25), Willow Grove, Pennsylvania 19090
          (Address of principal executive officers, including zip code)

       Registrant's telephone number, including area code: (215) 830-1351

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

           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  X                        No 
                     -----                        ----

         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 incorporation by reference in Part III of this Form 10-KSB or any
amendment to this Form 10KSB [ ].

         As of July 31, 1997, 3,011,930 shares of Common Stock ($.001 par value)
were issued and outstanding and fully paid and non-assessable. The aggregate
market value of the Common Stock held by non-affiliates was approximately
$1,315,593, determined by the closing sale price on that same day based upon
3,007,069 shares owned by non-affiliates.

================================================================================


<PAGE>


                                TABLE OF CONTENTS

Part I

         Item 1.  Description of 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 Stockholder
                  Matters

         Item 6.  Management's Discussion and Analysis

         Item 7.  Financial Statements

         Item 8.  Changes in and Disagreements with Accountants on Accounting
                  and Financial Disclosures

Part III

         Item 9.  Directors and Executive Officers of the Registrant;
                  Compliance with Section 16(a) of the Exchange Act

         Item 10. Executive Compensation

         Item 11. Security Ownership of Certain Beneficial Owners and Management

         Item 12. Certain Relationships and Related Transactions

Part IV

         Item 13. Exhibits 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.

PLAN OF REORGANIZATION

         In April, 1996, because of a demonstrable inability to meet its debts
as they matured, Global, with the assistance of its financial advisors
determined to undertake a comprehensive Plan of Reorganization (the "Plan").
Such Plan included the (a) sale of the four operating subsidiaries for cash
consideration only, (b) liquidation of the debt due to the senior secured
creditor (Meridian Bank), (c) elimination of debt in its entirety, and (d)
reclassification of the issued and outstanding shares of Common Stock. The Plan
also provided for the acquisition by Global of a going business, one that would
permit Global to satisfy the then continuous listing standards of NASDAQ (on
which Small Cap market shares of Global Common Stock were listed). The results
of the implementation of the Plan were as follows:

Sale of Subsidiaries

By June 30, 1997, Global sold the capital stock or the net assets of its then
four operating subsidiaries. An aggregate of $1,200,000 was paid to Meridian
Bank in full and complete satisfaction of secured indebtedness to Meridian Bank
in the principal amount of $1,480,000 (plus accrued interest of $47,000). In
addition, Global was a co-maker and co-guarantor of the Note of a former
subsidiary, in the principal amount of $100,000, issued to Meridian Bank under
date of June 28, 1996. Such note provided for a discount of $50,000 if paid
prior to September 30, 1996. The co-maker paid such $50,000 prior to September
30, 1996; Global repaid $37,500 of such $50,000 to the co-maker prior to
September 30, 1996, and the balance of $12,500 on July 18, 1997. Meridian Bank
satisfied its lien and executed a General Release in favor of Global on June 28,
1996.

(The $50,000 paid by Global to the co-maker is included within the amount of
$1,200,000 mentioned above.)

As a result of the disposition of the above-mentioned subsidiaries, Global
ceased to be an operating company.

                                       1

<PAGE>


Elimination of Debt

In addition to the discharge of all obligations due to Meridian Bank, Global
also undertook the elimination of all other debt. Employment contracts (under
which Global was obligated in the amounts of $1,230,600 for 1996 and $848,000
for 1997, respectively), were terminated, lease obligations were canceled and
general unsecured creditors (other than those owed minimal amounts or those
professionals and firms continuing to provide necessary services for Global),
were settled for 37.5 cents on the dollar.

Giving effect to (a) the satisfaction of the indebtedness due Meridian Bank and
(b) the liabilities assumed by the purchasers of the four operating
subsidiaries, each occurring on June 28, 1996, Global remained, as of June 30,
1996, with accounts payable and accrued expenses totaling $814,000. Commencing
in July 1996, Global, as an alternative to creditor proceedings that would have
involved legal and accounting costs disproportionate to the dollar amount of its
remaining liabilities, commenced a voluntary plan of payment at a discount.
Creditors were offered an immediate settlement equal to 37.5% on the dollar
(except for claims under $100 (which were liquidated in full)). Such offer,
denominated as a common law composition, required that all creditors be treated
equally. Such offer resulted in these claims (including current liabilities)
being settled for the sum of $359,754. As of June 30, 1997, total liabilities of
Global were $148,427 and represented current accounts payable endemic to any
public entity. Such amount does not encompass any sums Global may be forced to
pay as a result of current litigation. (See "Legal Proceedings" hereinafter.)

In addition, amounts due to the former shareholders of Allied Environmental
Services, Inc., one of the subsidiaries sold by the Company, amounting to
$932,727 were also forgiven.

Acquisition and Disposition of Phoenix

Because Global would not, as a result of such Plan, (a) be an operating company,
and (b) remain in compliance with NASDAQ continuous listing requirements,
Global, on June 28, 1996 (the date on which the sales of the operating
subsidiaries was effected), agreed to acquire 100% of the issued and outstanding
shares of capital stock of Phoenix Wrecking Corporation (Phoenix), a New York
corporation which was also engaged in the remediation business. The proposed
acquisition of Phoenix, which was publicly announced on July 1, 1996, was
rescinded nunc pro tunc on November 6, 1996.

Two issues remain unresolved from the association of Phoenix with Global: (a) an
aggregate of 1,135,000 shares of Global Common Stock were caused to be issued by
Phoenix pursuant to two filings on Form S-8 with the Securities and Exchange
Commission. Global was not current in its required filings when such two
Registration Statements were filed. Therefore, no effective Registration
Statement could have been filed on Form S-8. Global has instituted proceedings
to recover all such shares as well as the proceeds derived from the sale
thereof; and (b) Global is a defendant in a lawsuit brought in New York State
Supreme Court to recover the sum of $1.3 million allegedly made available to
Phoenix by plaintiff. Global received none of such proceeds. 


                                       2
<PAGE>


Global is a party defendant because Phoenix utilized Global Debentures to obtain
such funds. A motion for summary judgment against the Phoenix defendants and not
against Global was decided on July 30, 1997, and judgment was entered against
the Phoenix defendants only. Global intends to move to have the matter dismissed
as to Global. At a conference held before the Judge to whom the case has been
assigned on September 11, 1997, Plaintiff was given until October 30, 1997 to
proceed against Global or be marked off the calendar as to Global only.

Common Stock Reconciliation

Excluding the transactions initiated by Phoenix and described hereinabove,
Global has, since June 30, 1996, caused the following shares to be issued:

(616,463 issued and outstanding giving effect to the May 13, 1996, Amendment to
the Articles of Incorporation):

100,000 shares issued on July 5, 1996, accounted for as issued and outstanding
as of June 30, 1996, upon conversion of a Convertible Debenture (in the
principal amount of $50,000) issued in 1992 (plus all accrued interest thereon,
the cancellation of a long-term employment contract having a remaining liability
of $43,750 and the forgiveness of accrued interest of $2,500); and,

750,000 shares (on July 18, 1996), accounted for as issued and outstanding as of
June 30, 1996, 250,000 shares (on August 19, 1996), 800,000 shares (on October
13, 1996), and 500,000 shares (on March 7, 1997) the aggregate having been
issued in exchange for cash value of $1,095,000, plus a commitment to fund the
additional amount of $120,000 (as of September 4, 1997).

As of the date hereof, therefore, Global has an aggregate of 3,011,930 shares of
its Common Stock validly issued and outstanding, fully paid and non-assessable.

Upon the assumption that the 1,197,500 shares of Global still not returned for
cancellation (out of the 6 million shares originally issued on July 10, 1996,
for Phoenix) may be cancelled because the transaction with Phoenix has been
rescinded nunc pro tunc, and upon the further assumption that the aggregate of
1,085,000 shares issued pursuant to the two improperly filed Form S-8 filings
are not validly issued, fully paid and non-assessable because such shares either
were not registered for public sale, or were issued without consideration
(because no services were rendered to Global by the recipients), or were not
authorized to be issued by the Global Board, the result is that Global would
have an aggregate of 3,011,930 shares of its Common Stock validly issued, fully
paid and non-assessable as of the date hereof.

Item 2. Properties

         Since June 28, 1996 (the date on which Global divested itself of all of
its operating subsidiaries), the principal offices of Global have been located
at 2300 Computer Avenue (Bldg. G-25), Willow Grove, Pennsylvania 19090, on a
month-to-month leasehold basis. Such premises had been occupied by Global's
former Chief Financial Officer principally for the purposes of 

                                       3

<PAGE>


completing the June 30, 1996, audited and September 30, 1996, unaudited (first
quarter) financial statements, closing-out the books and accounts of the
subsidiaries disposed of on June 28, 1996, resolving the remaining creditor
claims, and assisting in the preparation of the June 30, 1995, and 1996 tax
returns. Global utilizes such premises today solely for mail and telephone
purposes.

         Global (through a subsidiary) owns a 2,400 square foot office building
and garage (400 feet) located on approximately 10 acres of land (waterfront
property) in Camden, New Jersey. Global intends, upon the resolution of certain
environmental issues, to offer such parcel and building and garage for sale for
cash. Global carries such property at zero value on its books.

Item 3. Legal Proceedings

         Global is a defendant in several lawsuits in which the principal
defendant is the former Global subsidiary that incurred the underlying debt.
Global is vigorously defending all such suits, on the basis that Global is not a
proper party defendant because Global entered into no contractual relationship
with the particular plaintiff and bears no responsibility to such plaintiff.
Global does not deem such litigation to be material.

         Prior to June 30, 1995, Global sold to Corporate Relations Group,
Orlando, Florida (CRG), 1,150,000 shares, of Global's pre-reverse split
authorized and unissued Common Stock. CRG is indebted to Global today in the
amount of $677,000, such amount representing the remaining balance on the
purchase price for such shares. Global believes that all such shares have been
sold by CRG. Global has sued CRG in Federal court for such amount. A motion,
made by CRG to dismiss, was denied on July 24, 1997.

Global was sued by Peter V. White, a former Global Executive Vice President,
Chief Financial Officer and Treasurer. Mr. White has demanded payment to him by
Global of amounts allegedly due pursuant to a termination agreement entered into
between Mr. White and Global upon Mr. White's resignation of all positions with
Global as of June 30, 1995. Global's alleged liability under such termination
amounts to $57,000. Such suit was settled for the sum of $21,375 payable on or
before September 30, 1997.

In November 1996, Global was sued by Alpine Petroleum Company/Raymond Kerwood
(Plaintiff) pursuant to a certain consulting agreement entered into between
Global and Plaintiff on December 1, 1994. Plaintiff claims it is due the amount
of $51,000 through August 1, 1996. Global intends to defend vigorously such
lawsuit upon the basis that such consulting agreement was entered into in
connection with Global's acquisition of Professional Pipe Services Corporation
(Propipe) on December 1, 1994; that such consulting agreement was a disguised
attempt to increase the acquisition cost of Propipe by Global; that Common Stock
of Global was issued to Plaintiff as a shareholder of Propipe (and that
Plaintiff executed a Stock Restriction Agreement) with respect to the shares of
Global Common Stock received by Plaintiff as a shareholder of Propipe; that
Plaintiff performed no services for Global pursuant to such consulting
agreement; that the execution and delivery of the disputed consulting agreement
to Plaintiff was an ultra vires act on the part of Global; that Plaintiff has
been fully compensated by its receipt of shares of 

                                       4

<PAGE>


Global Common Stock in exchange for its interest in Propipe; and that (in any
event) the sale by Global of Propipe to the latter's former principal
shareholder on June 28, 1996, effectively rescinded such alleged consulting
agreement. (See the discussion in Item 7 hereinafter.)

In November, 1996, Global was sued by F.T. Trading Company et al (F.T.) in New
York State Supreme Court (trial court). F.T. alleges that it funded $1.3 million
upon the receipt of Global Debentures executed and delivered to F.T. by the
Phoenix designees. F.T. further alleges that such amount was wire transferred to
a Phoenix account maintained in a Queens County, New York, bank. Global held no
Board meetings between June 28 and September 30, 1996 (the latter being
disputed): and, the minutes prepared for such disputed meeting by Phoenix'
designee as counsel contain no mention of F.T., of the prior issuance of Global
debentures to F.T., or of the receipt by Phoenix of $1.3 million of F.T.
funding. Global intends to defend vigorously such action, on the basis that
Global's Board did not authorize any Reg S transaction or any other funding by
F.T., any Global documents delivered to F.T. were fraudulently executed and
delivered by Phoenix nominees, none of the alleged F.T. funding was received by
Global and the rescission agreement between Global and Phoenix specifically
provides that the liability for any F.T. proceeds rests with Phoenix.
Plaintiff's summary judgment motion against the Phoenix defendants only was
granted on July 30, 1997. (See Item 1 ("Acquisition and Disposition of Phoenix")
hereinabove.)

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

         The following matters were submitted to a vote of the securities
holders:

                                None


                                     PART II

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

         On July 29, 1992, Global's Common Stock commenced quotation on the
NASDAQ Small Cap Market (NASDAQ) under the symbol GSMI. (The symbol was changed
to GEGI coincident with the May 13, 1996, Amendment to the Articles of
Incorporation.) The following table sets forth the reported high and low bid and
high and low asked quotations for Global's Common Stock on NASDAQ for the period
January 1, 1995, to June 30, 1997. (The quarters set forth below are based on
Global's June 30 fiscal year period.) Such quotations reflect inter-dealer
prices, without retail mark-up, mark-down, or commissions and may not represent
actual transactions. No bid or asked quotations are available from November 28,
1996, through April 17, 1997:

                                       5

<PAGE>

<TABLE>
<CAPTION>
                                 High Bid         Low Bid     Closing Bid      High Ask         Low Ask       Closing Ask
                                 --------         -------     -----------      --------         -------       -----------
<S>                               <C>             <C>            <C>            <C>              <C>            <C>   
    1995
Jan 1 - Mar 31                    45.045          19.707         22.523         48.799           20.646         25.337
Apr 1 - Jun 30                    22.523           9.384         10.323         25.338           11.261         12.2
Jul 1 - Sep 30                    24.399           9.584         12.2           28.153           11.261         13.138
Oct 1 - Nov 30                    15.015           7.508          9.384         15.953            8.446         12.2

    1996
Jan 1 - Mar 31                     9.384           5.631          6.569         10.323            6.569          8.446
Apr 1 - Jun 30                     6.569           2.25           4              8.446            3              4.75
Jul 1 - Sep 30                     9               31/32          13/16          9.25             0.75             7/8
Oct 1 - Nov 27                     27/32           0.25             N/A            7/8             5/16            N/A

    1997
Apr 17 - Jun 30                    0.3125          0.1            0.27           0.46875          0.2            0.4375
</TABLE>




(The prices stated for all periods give effect to the 30-1 reverse stock split
  that was effective on May 13, 1996)

         On November 27, 1996, Global's Common Stock was delisted from trading
on NASDAQ. On April 17, 1997, Global's Common Stock commenced listing on the OTC
Electronic Bulletin Board. Such delisting was prompted by Global's inability to
file a timely Form 10-K with audited financials for the fiscal year ended June
30, 1996. (In addition, the NASDAQ hearing held on November 21, 1996, raised
issues relating to the issuance of the aggregate of 1,135,000 S-8 Common Stock
and the Reg S transaction with F.T. See "The Acquisition and Disposition of
Phoenix" hereinabove.) Having been delisted, Global is now required to meet
NASDAQ standards applicable to an initial listing application. Presently, such
criteria include $4 million in total assets, $2 million in capital and surplus,
$1 million market value of the public float and a minimum bid price of $3 per
share. There can be no assurance that Global will be able to meet such initial
listing requirements, that Global's Common Stock will be included on NASDAQ even
if such initial listing requirements are met, or that thereafter the
requirements for continuous listing will continue to be met. In any such event,
Global's Common Stock would continue to be traded on the OTC Electronic Bulletin
Board, in which event a shareholder may find it more difficult to dispose of (or
to obtain accurate quotations as to the price of) Global's Common Stock.

         As of the date hereof there were 3,011,930 shares of Common Stock
validly issued and outstanding, fully paid and non-assessable. (See "Common
Stock Reconciliation" in Part I, Item 1 hereinabove). There were a total of 485
holders of record as of July 15, 1997. Global believes, based upon available
information, that there are in excess of 1,000 beneficial owners of Global
Common Stock. No shares of Global's authorized Preferred Stock have ever been
issued.


                                       6
<PAGE>



DIVIDENDS

         The payment of dividends, if any, by Global rests within the discretion
of its Board of Directors and depends, among other things, upon Global's
earnings, its capital requirements, its financial condition, as well as other
relevant factors. As of the date hereof, Global has not issued or declared any
dividends. Global does not anticipate paying any dividends on its Common Stock
in the foreseeable future.


Item 6. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

GENERAL

As a direct consequence of the implementation of the Plan of Reorganization
described in Part I hereinabove, Global has (as of June 30, 1996) disposed of
all its operations and may today be fairly characterized as a non-operating
"shell" corporation. Therefore, there is no need for discussion herein of prior
results of operations, of year-to-year operating results and comparisons, and of
liquidity and capital resources. As of the date hereof, Global is able to meet
its debts as they mature, which obligations (giving effect to the completion of
the Plan of Reorganization described in Part I hereinabove) consist exclusively
of legal, accounting and miscellaneous expenses endemic to any public company.

Management believes that its principal focus today should be directed toward the
(a) realization of the cash value of Global's remaining assets and (b)
acquisition of a going concern that will provide stability of operation and cash
flow. The Company received $100,000 subsequent to June 30, 1997 as payment on
subscriptions receivable as of that date. The balance of the subscription will
be collected to pay liabilities and expenses of the Company as they become due.
Management expectes ongoing operating expenses to be minimal until and upon
which time an acquisition may occur.


Item 7. Financial Statements

         Consolidated Financial Statements and supplementary financial
information specified by this Item 7 are presented following Item 13 in Part IV
of this report.



                                       7
<PAGE>


Item 8. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosures

        This Item is inapplicable.

                                    PART III

Item 9.  Directors and Executive Officers of the Company;
         Compliance with Section 16(a) of the Exchange Act

         The executive officers, directors and key personnel of Global are as
follows: (the information set forth hereunder is as of June 30, 1997 (the end of
the fiscal period), and gives effect to the resignations of directors whose
services were terminated by Global upon the sale of the subsidiaries occurring
on June 28, 1996.


<TABLE>
<CAPTION>

Name                                Age              Positions held with the Company
----                                ---              -------------------------------
<S>                                 <C>               <C>                            
David R. Stith                      69               Acting President and Director

Herbert S. McDonald                 61               Director

Desiree L. Pierson                  34               Secretary
</TABLE>


Biographies of the directors and executive officers of Global 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 Global
serve at the will of the Board of Directors.

         David R. Stith became Vice Chairman and a Director of Global on
November 1, 1991, and of the Company on November 25, 1991. Mr. Stith founded
Underwater Technics in 1967 and has served as its Chairman and President since
such date. Mr. Stith led the crew 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 crew that dove for sunken treasure on the Spanish Galleon "San Jose"
which sank off Colombia in 1708.

         Herbert S. McDonald became a director of Global on December 27, 1995.
Mr. McDonald has, since January 1993, been the President of The Fulcrum Group, a
management consulting firm specializing in the restructuring and
merger/acquisition of corporate clients. Prior thereto, Mr. McDonald was (since
August 1990) the President (CEO) and principal shareholder of European
Automotive Products, Inc., a major importer of imported cars specializing in
higher end German automotive parts. Prior thereto, Mr. McDonald was the
President (CEO) and principal shareholder of Fulcrum Investments, a firm making
investments in manufacturing, leasing, automobile dealerships and real estate.



                                       8
<PAGE>

         Desiree L. Pierson became Secretary of Global in January, 1996. Ms.
Pierson was an employee of Global from 1991 until June 28, 1996. In her capacity
as Secretary, Ms. Pierson's duties include shareholder relations, matters
involving the Transfer Agent and corporate record keeping and do not include
corporate decision making or substantive matters involving Global.

         No director, officer or affiliate of Global is an adverse party to
Global or any of its subsidiaries in any material proceeding.

         The Company and its directors and executive officers are in compliance
with the requirements of Section 16(a) of the Exchange Act.

Item 10. Executive Compensation

         The following table sets forth the cash compensation earned by each of
Global's executive officers for the fiscal year ended June 30, 1997 (the "named
executive officers"). Global 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 Global not to pay
director's fees or other forms of remuneration to directors who are not officers
of Global, other than reimbursement of expenses incurred in connection with such
service as a director.




                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>

          (a)                            (b)         (c)           (d)                (e)
Name and Principal Position                                                      Other Annual
                                        Year       Salary($)     Bonus($)        Compensation($)
    <S>                                 <C>        <C>          <C>              <C>    
    Thomas D. Lewis, Sr. (1)(2)         1997         --          --               --
    Chairman of the Board,              1996       183,980       --              28,560
                                        1995       178,345       --               --
    Aubrey L. Pettit, Jr. (3)(2)        1997         --          --               --
    President, General Counsel          1996        84,502       --              28,560
    & Secretary                         1995       163,051       --               --
                                        
    David R. Stith                      1997          --         --               --
    Acting President                    1996        74,997       --               --
                                        1995       150,500      10,313            --
                                        
</TABLE>


                                       9
<PAGE>



----------

(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. Mr.
         Lewis' employment contract was terminated on June 28, 1996.
(2)      In August, 1995, Messrs. Lewis and Pettit each received 50,000 shares
         of pre-reverse split Common Stock of Global having a value of $28,075.
         None of the other named executive officers received perquisites or
         other personal benefits.
(3)      Employment terminated on January 3, 1996.

Item 11. Security Ownership of Certain Beneficial Owners and Management

         Prior to June 28, 1996, Global had in effect various plans designed to
benefit senior management. These included a Senior Management Incentive
Compensation Plan, an Equity Incentive Plan, management employment contracts, a
Qualified Profit Sharing Plan and an Employee Stock Purchase Plan. Each and all
of such compensation arrangements was canceled as of June 28, 1996. Aggregate
employment and consulting agreement obligations of Global for the fiscal years
ending June 30, 1997 and 1998, respectively, would have amounted to $848,800 and
$395,500, respectively.

         The following tables set forth the number and percentage of Global'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, 1997 (giving effect to the May 13, 1996, reverse split):


Name and Address(1)(2)             Number of Shares Owned          Percentage
---------------------              ----------------------          ----------
David R. Stith (3)(4)                   4,861                         *
721 St. Davids Avenue
Warminster, PA  18974

Herbert S. McDonald (5)                   --                          --
160 Abraham's Lane
Villanova, PA  19085

Desiree L. Pierson (6)                    --                          --
244 Main Street
Linfield, PA 19468

All Officers and Directors              4,861                         *



as a Group (3 persons)

                                       10

<PAGE>

------------------
*        Less than 1%

(1)      Unless otherwise noted, Global believes that the person named in the
         above table has sole voting and dispositive power with respect to all
         shares of Common Stock beneficially owned by him.
(2)      Based on 3,011,930 shares of Global's Common Stock issued and
         outstanding at June 30, 1997.
(3)      This individual may be deemed a "parent" and/or "promoter" of Global
         under the rules and regulations of the Securities Act by virtue of his
         efforts in the organization of Global. 
(4)      Executive officer and director. 
(5)      Director. 
(6)      Officer.


Item 12. Certain Relationship and Related Transactions

Employment Agreements

         For information regarding former employment agreements for Messrs.
Lewis, Pettit, and Stith, see Item 10 "Executive Compensation" hereinabove.



                                     PART IV

Item 13.          Exhibits and Reports on Form 8-K

         (a)      1.       All financial  statements - see index to Consolidated
                           Financial  Statements on page 14

                  2.       Exhibits - see Exhibits below.

         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)  Form 8-K filed on April 15, 1997.
                  (ii) Form 8-K filed on June 9, 1997.


                                       11
<PAGE>



         (The following Exhibits (filed with Form 10-KSB for the fiscal year
ended June 30, 1996) are applicable to the period commencing July 1, 1995, and
terminating as of the date of the filing of such Form 10-KSB):

A.       Amendment to Articles of Incorporation, filed May 13, 1996.
B.       Amendment to Articles of Incorporation, filed July 3, 1996.
C.       Agreement, dated June 27, 1996, between Registrant and shareholders of
         Phoenix Wrecking Corporation.
D.       Rescission Agreement, dated November 6, 1996, between Registrant and
         shareholders of Phoenix Wrecking Corporation.
E.       Memorandum from counsel to Registrant summarizing subsidiary sales
         effected as of June 28, 1996.
F.       Press Releases issued by Registrant since July 1, 1995.

                  (i) July 1, 1996 
                 (ii) August 29, 1996 
                (iii) September 3, 1996
                 (iv) October 23, 1996 
                  (v) October 25, 1996 (#1) 
                 (vi) October 25, 1996 (#2) 
                (vii) November 7, 1996
G.       Disputed Form S-8 filing under the 1993 Act, dated August 2, 1996, and
         relating to 385,000 shares (incorporated herein by reference).
H.       Disputed Form S-8 filing under the 1933 Act, dated September 19, 1996,
         and relating to 750,000 shares (incorporated herein by reference).
I.       Disputed Form 8-K filed on October 4, 1996 (incorporated herein by
         reference).

(The following Exhibits (incorporated herein by reference) are applicable to the
period subsequent to the filing of Form 10-KSB for the fiscal year ended June
30, 1996, and prior to the filing date hereof):

A. Form 10-KSB, for the fiscal year ended June 30, 1996, filed on February 19,
   1997.
B. Form 10-QSB, for the quarter ended September 30, 1996, filed on March 5, 
   1997.
C. Form 10-QSB, for the quarter ended December 31, 1996, filed on March 5, 1997.
D. Form 10-QSB, for the quarter ended March 31, 1997, filed on May 15, 1997.
E. Form 8-K, filed on April 15, 1997.
F. Form 8-K, filed on June 9, 1997.
G. Press Release, dated June 6, 1997 (filed herewith).
H. Press Release, dated September 17, 1997 (filed herewith).


                                       12
<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 September    , 1997.


                                              GLOBAL SPILL MANAGEMENT, INC.


                                              By: /s/
                                                  -----------------------------
                                                     David R. Stith,
                                                     Acting President & Director
                                                     September    , 1997


         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated, on September     , 1997.



<TABLE>
<CAPTION>

Signatures                                       Title                                Date
----------                                       -----                                ----
<S>                                    <C>                                      <C>



/s/                                    Acting President and Director            September   , 1997
---------------------------
David R. Stith






/s/                                 Acting Principal Financial                  September   , 1997
---------------------------         and Accounting Officer
Allan Esrine                        


</TABLE>

                                       13

<PAGE>



                                                  Global Spill Management, Inc.
                                                               and Subsidiaries

                                                                       Contents

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


Report of Independent Certified Public Accountants                          F-1

Consolidated financial statements
      Balance sheet                                                         F-2
      Statements of operations                                              F-3
      Statements of capital deficit                                         F-4
      Statements of cash flows                                        F-5 - F-6

Summary of significant accounting policies                            F-7 - F-9

Notes to consolidated financial statements                          F-10 - F-16



                                       14


<PAGE>


Report of Independent Certified Public Accountants



Global Spill Management, Inc.
Willow Grove, Pennsylvania

We have audited the accompanying consolidated balance sheet of Global Spill
Management, Inc. and subsidiaries as of June 30, 1997, and the related
consolidated statements of operations, capital deficit, and cash flows for each
of the two years in the period ended June 30, 1997. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Global Spill Management, Inc.
and subsidiaries as of June 30, 1997, and the results of their operations and
their cash flows for each of the two years in the period ended June 30, 1997, in
conformity with generally accepted accounting principles.


                                                                BDO SEIDMAN, LLP


Philadelphia, Pennsylvania
September 4, 1997


                                       F-1

<PAGE>


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


                                                          Spill Management, Inc.
                                                                and Subsidiaries

                                                      Consolidated Balance Sheet

================================================================================

June 30,                                                                   1997
--------------------------------------------------------------------------------

Assets

Current assets
  Cash                                                               $    2,111
  Subscriptions receivable (Note 1)                                     100,000
--------------------------------------------------------------------------------
Total assets                                                         $  102,111
================================================================================

Liabilities and Capital Deficit

Current liabilities
  Note payable, stockholder (Note 5)                                     12,500
  Accounts payable                                                      148,427
--------------------------------------------------------------------------------
Total current liabilities                                               160,927
--------------------------------------------------------------------------------

Commitments and contingencies (Notes 1, 9 and 10)

Capital deficit (Notes 6, 8 and 9)
  Preferred stock, $.001 par value
    Authorized 5,000,000 shares, none issued                                --
  Common stock, $.001 par value,
    Authorized 25,000,000 shares
    Issued and outstanding 3,011,930                                      3,012
  Additional paid-in capital                                         13,225,917
  Deficit                                                           (13,167,745)
  Less:  subscriptions receivable                                      (120,000)
--------------------------------------------------------------------------------
Total capital deficit                                                   (58,816)
--------------------------------------------------------------------------------
Total liabilities and capital deficit                                $  102,111
================================================================================

                    See accompanying notes to consolidated financial statements.


                                       F-2

<PAGE>



                                                   Global Spill Management, Inc.
                                                                and Subsidiaries

                                           Consolidated Statements of Operations

================================================================================

Year ended June 30,                                  1997                 1996
--------------------------------------------------------------------------------


Revenues                                       $      --           $       --
--------------------------------------------------------------------------------


Expenses
  General and administrative expenses             227,136              255,800
  Loss on investment and note receivable             --                 90,000
  Debenture conversion expense (Note 8)              --              2,595,703
  Interest expense                                   --                394,304
--------------------------------------------------------------------------------

Total expenses                                    227,136            3,335,807
--------------------------------------------------------------------------------

(Loss) from continuing operations                (227,136)          (3,335,807)

(Loss) from discontinued operations (Note 2)         --             (6,724,912)
--------------------------------------------------------------------------------

(Loss) before extraordinary item                 (227,136)         (10,060,719)

Extraordinary income - gain
  on forgiveness of indebtedness (Note 11)      1,740,594                  --
--------------------------------------------------------------------------------

Net income (loss)                              $1,513,458         $(10,060,719)
================================================================================

(Loss) per share from continuing operations    $     (.10)        $      (5.47)

(Loss) per share from discontinued operations        --                 (11.02)

Extraordinary income per share                        .73                  --
--------------------------------------------------------------------------------


Net income (loss) per share                    $      .63         $     (16.49)
================================================================================


Weighted average number of shares outstanding   2,387,639              610,044
================================================================================


                    See accompanying notes to consolidated financial statements.


                                       F-3

<PAGE>


                                                   Global Spill Management, Inc.
                                                                and Subsidiaries

                                      Consolidated Statements of Capital Deficit

<TABLE>
<CAPTION>

==================================================================================================================
                                                               Additional
                                             Common              Paid-In                             Subscriptions
                                              Stock              Capital              (Deficit)        Receivable
------------------------------------------------------------------------------------------------------------------
<S>                                       <C>               <C>                  <C>                   <C>
Balance, June 30, 1995                    $  15,974         $   9,282,609        $   (4,620,484)       $ (497,875)

1 for 30 reverse stock split                (15,442)               15,442                    --                --
Shares issued for services                       37                56,213                    --                --
Shares issued for cash                           28               219,972                    --                --
Shares issued as additional
  consideration for acquired
  companies                                      19               296,588                    --                --
Shares issued upon conversion
  of debentures                                 850             2,959,853                    --                --
Payment of subscriptions                         --                    --                    --           108,438
Adjustment to subscriptions resulting
  from decline in market value of
  Common Stock                                   --              (189,437)                   --           189,437
Allowance for subscriptions
  receivable                                     --              (200,000)                   --           200,000
Other adjustments                                --                57,223                    --                --
Net (loss) for the year                          --                    --           (10,060,719)               --
------------------------------------------------------------------------------------------------------------------


Balance, June 30, 1996                        1,466            12,498,463           (14,681,203)               --

Shares issued for cash
  and subscriptions                           1,550               727,450                    --          (250,000)

Shares retired during the year                   (4)                    4                    --                --

Payment of subscriptions                         --                    --                    --            30,000

Reclassification of
  subscriptions receivable                       --                    --                    --           100,000

Net income for the year                          --                    --             1,513,458                --
------------------------------------------------------------------------------------------------------------------


Balance, June 30, 1997                    $   3,012         $  13,225,917        $  (13,167,745)       $ (120,000)
==================================================================================================================
</TABLE>


                    See accompanying notes to consolidated financial statements.


                                       F-4

<PAGE>


                                                   Global Spill Management, Inc.
                                                                and Subsidiaries

                                           Consolidated Statements of Cash FlowS

<TABLE>
<CAPTION>

==================================================================================================================
Years ended June 30,                                                                   1997                  1996
------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>                    <C>
Cash flows from operating activities
  Income (loss) from continuing operations                                     $  1,513,458           $(3,335,807)
  (Loss) from discontinued operations                                                    --            (6,724,912)
  Adjustments to reconcile net (loss) to net
    cash (used) in operating activities
      Extraordinary gain on forgiveness of indebtedness                          (1,740,594)                   --
      Depreciation and amortization                                                      --               376,714
      Issuance of common stock for services                                              --                56,250
      Loss on investment and note receivable                                             --                90,000
      Bond conversion expense                                                            --             2,595,703
      Loss on sale of subsidiaries                                                       --               183,252
      Gain on abandonment of subsidiary                                                  --              (311,058)
      Write-off of goodwill                                                              --             4,697,254
      Other, net                                                                         --               246,925
      Loss on abandonment of assets                                                      --               165,190
      Write-off of other assets                                                          --               179,531
      Decrease in assets
        Accounts receivable                                                              --               977,477
        Inventory                                                                        --                18,090
        Prepaid expenses and other assets                                                --               359,716
      Increase (decrease) in liabilities
        Accounts payable                                                            (45,922)              (56,271)
        Accrued expenses                                                           (165,222)               82,864
------------------------------------------------------------------------------------------------------------------
Net cash (used in) operating activities                                            (438,280)             (399,084)
------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities
  Proceeds from sale of assets                                                      805,000                    --
  Decrease in amounts due to related parties                                             --               169,970
  Proceeds from sale of subsidiaries                                                     --               175,000
------------------------------------------------------------------------------------------------------------------
Net cash provided by investing activities                                           805,000               344,970
------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities
  Borrowings on line of credit, net                                                      --                54,553
  Repayments of stockholder note                                                    (37,500)                   --
  Repayment of note payable, bank                                                  (855,000)                   --
  Repayments of long-term debt                                                      (43,125)             (450,428)
  Issuance of common stock, net of expenses                                         479,000               220,000
  Payments of common stock receivables                                               30,000               108,438
------------------------------------------------------------------------------------------------------------------
Net cash (used in) financing activities                                            (426,625)              (67,437)
-------------------------------------------------------------------------------------------------------------------

</TABLE>

                                       F-5

<PAGE>

                                                   Global Spill Management, Inc.
                                                                and Subsidiaries

                                           Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

==========================================================================================================
Years ended June 30,                                                           1997                1996
----------------------------------------------------------------------------------------------------------
<S>                                                                        <C>               <C>
Net (decrease) in cash                                                     $  (59,905)       $  (121,551)

Cash, at beginning of year                                                     62,016            183,567
----------------------------------------------------------------------------------------------------------


Cash, at end of year                                                       $    2,111        $    62,016
==========================================================================================================

Supplemental disclosures of cash flow information
  Cash paid during the year for
    Interest                                                               $       --        $   354,610
    Taxes                                                                  $       --        $        --
----------------------------------------------------------------------------------------------------------


  Noncash investing and financing activities
    Amounts to be collected upon sale of subsidiaries                      $       --        $   805,000
    Stock issued as additional consideration
      for acquired companies                                                       --            296,607
    Issuance of common stock upon conversion
      of debenture                                                                 --          2,960,703
    Debenture converted to common stock                                            --           (365,000)


</TABLE>


                    See accompanying notes to consolidated financial statements.


                                       F-6

<PAGE>

                                                   Global Spill Management, Inc.
                                                                and Subsidiaries

                                                  Summary of Accounting Policies

================================================================================

Organization       Global Spill Management, Inc. ("Global") was incorporated
and Principles     in June 1991, to acquire, operate and develop environmental
of Consolidation   contracting and consulting companies and related
                   businesses.

                   The accompanying consolidated financial statements include
                   the accounts of Global Spill Management, Inc. and its
                   wholly owned subsidiaries (the "Company"), after
                   elimination of all significant intercompany balances and
                   transactions.

Use of Estimates   The preparation of financial statements in conformity with
                   generally accepted accounting principles requires
                   management to make estimates and assumptions that affect
                   the reported amounts of assets and liabilities and
                   disclosure of contingent assets and liabilities at the date
                   of the financial statements and the reported amounts of
                   revenues and expenses during the reporting period. Actual
                   results could differ from those estimates.

Income Taxes       Income taxes are calculated using the liability method
                   specified by Statement of Accounting Standards No. 109,
                   "Accounting for Income Taxes."

Income (Loss)      The income (loss) per share data are computed by dividing
Per Share          the loss applicable to common stock by the weighted average
                   number of common shares outstanding. For the years ended
                   June 30, 1997 and 1996, outstanding warrants and options
                   were excluded from the computation because their effect
                   would have been antidilutive.


                                       F-7

<PAGE>



                                                   Global Spill Management, Inc.
                                                                and Subsidiaries

                                                  Summary of Accounting Policies

================================================================================

Recent             In March 1997, the Financial Accounting Standards Board
Accounting         issued Statement of Financial Accounting Standards No. 128,
Pronouncements     Earnings Per Share ("SFAS 128"). SFAS 128 provides a
                   different method of calculating earnings per share than is
                   currently called for in Accounting Principle Board Opinion
                   15. SFAS 128 provides for the calculation of basic and
                   diluted earnings per share. Basic earnings per share includes
                   no dilution and is computed by dividing income available to
                   common stockholders by the weighted average number of common
                   shares. Diluted earnings per share reflects the potential
                   dilution of securities that could share in the earnings of an
                   entity, similar to existing fully diluted earnings per share.
                   The Company believes adopting SFAS 128 will not have a
                   material effect on its calculation of earnings per share. The
                   Company will adopt the provisions for computing earnings per
                   share set forth in SFAS 128 for its quarter ending December
                   31, 1997.

                   Statement of Financial Accounting Standards No. 129,
                   Disclosure of Information about Capital Structure ("SFAS
                   129") effective for periods ending after December 15, 1997,
                   establishes standards for disclosing information about an
                   entity's capital structure. SFAS 129 requires disclosure of
                   the pertinent rights and privileges of various securities
                   outstanding (stock, options, warrants, preferred stock, debt
                   and participation rights) including dividend and liquidation
                   preferences, participant rights, call prices and dates,
                   conversion or exercise prices and redemption requirements.

                   Statement of Financial Accounting Standards No. 130,
                   "Reporting Comprehensive Income," ("SFAS 130") establishes
                   standards for reporting and display of comprehensive income,
                   its components and accumulated balances. Comprehensive income
                   is defined to include all changes in equity except those
                   resulting from investments by owners and distributions to
                   owners. Among other disclosures, SFAS No. 130 requires that
                   all items that are required to be recognized under current
                   accounting standards as components of comprehensive income be
                   reported in a financial statement that is displayed with the
                   same prominence as other financial statements.


                                       F-8

<PAGE>



                                                   Global Spill Management, Inc.
                                                                and Subsidiaries

                                                  Summary of Accounting Policies

================================================================================

                   Statement of Accounting Standards No. 131, "Disclosures About
                   Segments of an Enterprise and Related Information," ("SFAS
                   No. 131") which supersedes SFAS No. 14, "Financial Reporting
                   for Segments of a Business Enterprise," establishes standards
                   for the way that public enterprises report information about
                   operating segments in annual financial statements and
                   requires reporting of selected information about operating
                   segments in interim financial statements issued to the
                   public. It also establishes standards for disclosures
                   regarding products and services, geographic areas and major
                   customers. SFAS No. 131 defines operating segments as
                   components of an enterprise about which separate financial
                   information is available that is evaluated regularly by the
                   chief operating decision maker in deciding how to allocate
                   resources and in assessing performance.

                   SFAS 130 and 131 are effective for financial statements for
                   periods beginning after December 15, 1997 and require
                   comparative information for earlier years to be restated.

                   The Company has discontinued their operations. Management
                   does not believe that adoption of any of these pronouncements
                   would materially effect the Company's financial statements.

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

                                       F-9

<PAGE>


                                                        Global Spill Management,
                                                           Inc. and Subsidiaries

                                      Notes to Consolidated Financial Statements

================================================================================


1.  Business       The Company has discontinued its operating activities (see
                   Notes 2 and 3) and has liquidated all of the debts that
                   existed as of June 30, 1996 (see Note 11). It is actively
                   looking to acquire other businesses.

                   Subsequent to June 30, 1997, the Company received $100,000 as
                   payment on subscriptions receivable. The balance of the
                   subscription ($120,000) will be collected to pay liabilities
                   and expenses of the Company as they become due.


2.  Discontinued   During 1996, as a result of significant losses from the
    Operations     Company's operations and an inability to obtain sufficient
                   working capital, the Company discontinued all operating
                   activities of its environmental contracting and consulting
                   companies and related businesses. As discussed in Note 3, the
                   Company sold Land N' Sea Environmental Services, Inc.
                   ("LNS"), GSM Environmental, Inc. ("GSMI") and Global
                   Environmental, Inc. ("GE") and agreed to sell Allied
                   Environmental, Inc., Allied Environmental Services West, Inc.
                   and Professional Pipe Services Corporation ("Propipe"). The
                   Company's other operating subsidiary, Environmental Disposal
                   Options Corporation ("EDOC"), was shut down in March 1996.
                   EDOC was subsequently put into involuntary bankruptcy by its
                   creditors and is currently liquidating its assets in
                   accordance with Chapter 7 of the United States Bankruptcy
                   Code.

                   As a result of the disposal of all its operations, in 1996
                   the Company recorded a charge of $4,816,372 as a loss on
                   disposal of discontinued operations. This amount included,
                   among other things, a write-off of goodwill amounting to
                   $4,697,255, and a charge for $183,250, representing a loss on
                   the sales and abandonment of the Company's subsidiaries.
                   There were no material losses incurred during the phase out
                   period.

                                      F-10

<PAGE>


                                                        Global Spill Management,
                                                           Inc. and Subsidiaries

                                      Notes to Consolidated Financial Statements

================================================================================
The operating results from discontinued operations for 1996 are summarized as
follows:

Year ended June 30,                                                        1996
--------------------------------------------------------------------------------


Total revenues                                                     $ 17,043,156
Gross profit                                                          4,136,242

(Loss) from discontinued operations
  (Loss) from discontinued operations                              $ (1,908,540)
  (Loss) on disposal of discontinued
    operations                                                       (4,816,372)
--------------------------------------------------------------------------------
                                                                   $ (6,724,912)
================================================================================
(Loss) per share amounts from discontinued operations are summarized as follows:

Year ended June 30,                                                        1996
--------------------------------------------------------------------------------
(Loss) from discontinued operations
  (Loss) from discontinued operations                               $     (3.13)
  (Loss) from disposal of discontinued
    operations                                                            (7.89)
--------------------------------------------------------------------------------
                                                                    $    (11.02)
--------------------------------------------------------------------------------


                                      F-11

<PAGE>


                                                        Global Spill Management,
                                                           Inc. and Subsidiaries

                                      Notes to Consolidated Financial Statements

================================================================================

3.  Sale of        On June 28, 1996, the Company sold all of the issued and
    Subsidiaries   outstanding stock of its subsidiaries, Land 'N Sea
                   Environmental Services, Inc. ("LNS"), GSM Environmental, Inc.
                   ("GSMI") and Global Environmental, Inc. ("GE") for $175,000
                   in cash. LNS was purchased by a former employee and
                   stockholder of the Company for $75,000. GSMI and GE were
                   purchased by the Company's former chairman of the board and
                   chief executive officer for $100,000.

                   On June 28, 1996, the Company entered into an agreement to
                   sell the assets net of substantially all of the liabilities
                   of Allied Environmental, Inc. and Allied Environmental
                   Services, West, Inc., in exchange for Common Stock of the
                   purchaser, Eastern Environmental Services, Inc. ("EESI")
                   valued at $700,000. The sale was consummated in July 1996.

                   On June 30, 1996, the Company signed an agreement to sell the
                   assets, net of substantially all of the liabilities, of
                   Professional Pipe Services Corporation ("Propipe") to a
                   former employee and stockholder of the Company for $105,000
                   in cash. The sale was completed in July 1996.

                   All of the proceeds from the sale of the subsidiaries,
                   including $700,000 received upon sale of the EESI shares,
                   which amounted to $980,000, were used to pay down the notes
                   payable, bank (see Note 4).


4.  Notes Payable, The Company had a revolving line of credit, for which the
    Bank           balance payable at June 30, 1996, including accrued interest,
                   was $1,134,556. That obligation was liquidated in full for
                   $855,000 during July, 1996, with a full release being
                   obtained. The gain on that forgiveness is reflected within
                   the statement of operations for the year ended June 30, 1997.

5.  Note Payable,  The note, repaid on July 19, 1997, was payable to the
    Stockholder    Company's former chief executive officer.


6.  Subscriptions  The Company has fully reserved promissory notes receivable
    Receivable     with face amounts totalling $677,000, issued to the Company
                   in 1995 as payment for the purchase price of shares of Common
                   Stock. The Company is pursuing the collection of these notes
                   (see Note 9).

                                      F-12

<PAGE>

                                                        Global Spill Management,
                                                           Inc. and Subsidiaries

                                      Notes to Consolidated Financial Statements

================================================================================

7.  Income Taxes   The Company had deferred tax assets of approximately
                   $2,800,000 as of June 30, 1997, related to net operating loss
                   carryforwards ("NOL"), which have yet to be utilized. As a
                   result of the sale of the Company's operating subsidiaries
                   and the issuance of additional shares of Common Stock, the
                   amount of the NOL of approximately $8,300,000 may be limited.
                   Also, the utilization of these losses, if available, to
                   reduce the future income taxes will depend upon the
                   generation of sufficient taxable income prior to the
                   expiration of the net operating loss carryforwards.
                   Therefore, at June 30, 1997, the Company established a 100%
                   valuation allowance against the deferred tax assets as the
                   likelihood of recognizing this benefit cannot be certain. The
                   net operating losses will expire in various years through
                   June 2011.

8.  Common Stock   In April 1996, the Company borrowed $315,000 from an investor
                   in exchange for a subordinated convertible debenture in the
                   amount of $350,000. Based on the conversion provisions, the
                   debenture was convertible into 119,658 shares of stock. On
                   June 28, 1996, the debentures were converted into 750,000
                   shares of common stock and the amount of $2,284,990 was
                   charged to operations as a debenture bond conversion expense
                   in accordance with Statement of Financial Accounting
                   Standards 84. The remaining original issue discount of
                   $35,000 was also charged to operations.

                   On June 28, 1996, a $50,000 debenture was converted into
                   100,000 shares of common stock. As a result of the
                   conversion, the Company charged operations for $310,713 as a
                   bond conversion expense.

                   On May 13, 1996, the Company effected a 1 for 30 reverse
                   stock split. All references in the accompanying statements to
                   the number of shares and per share amounts have been adjusted
                   to reflect the reverse stock split.

                   On July 2, 1996, the Company amended its Certificate of
                   Incorporation to increase the authorized shares of common
                   stock to 25,000,000 shares.


                                      F-13
<PAGE>


                                                        Global Spill Management,
                                                           Inc. and Subsidiaries

                                      Notes to Consolidated Financial Statements

================================================================================

9.  Litigation     The Company is a defendant in several lawsuits in which the
                   principal defendants are the former subsidiaries that
                   performed allegedly negligent remediation work for a
                   particular plaintiff. The Company is vigorously defending all
                   such suits, on the basis that it is not a proper party
                   defendant because the parent company has no contractual
                   relationship with the respective plaintiffs and bears no
                   responsibility to such plaintiffs. Management has determined
                   that the outcome of these matters will not have a material
                   effect on the financial statements of the Company.

                   Prior to June 30, 1995, the Company (upon the advice of
                   former counsel that sales of Common Stock for promissory
                   notes was legal under Nevada law), sold to Corporate
                   Relations Group, Orlando, Florida ("CRG") 21,667 shares of
                   the Company's authorized and unissued Common Stock, pursuant
                   to two promissory notes in the amounts of $177,000 and
                   $500,000, respectively. CRG is currently indebted to the
                   Company in such original amount of $677,000, such amount
                   representing the remaining balance on the purchase price for
                   such shares. The Company believes that all such shares have
                   been sold by CRG. The Company has instructed counsel to
                   pursue diligently the collection of that amount.

                   Global, on June 28, 1996 (the date on which the sales of the
                   operating subsidiaries was effected), agreed to acquire 100%
                   of the issued and outstanding shares of capital stock of
                   Phoenix Wrecking Corporation ("Phoenix"), a New York
                   corporation which was also engaged in the remediation
                   business. The proposed acquisition of Phoenix, which was
                   publicly announced on July 1, 1996, was rescinded nunc pro
                   tunc on November 6, 1996.

                   Two issues remain unresolved from the association of Phoenix
                   with Global: (a) an aggregate of 1,135,000 shares of Global
                   Common Stock were caused to be issued by Phoenix pursuant to
                   two filings on Form S-8 with the Securities and Exchange
                   Commission. Global was not current in its required filings
                   when such two Registration Statements were filed. Therefore,
                   no effective Registration Statement could have been filed on
                   Form S-8. Global has instituted proceedings to recover all
                   such shares (none of which have been reflected as issued and
                   outstanding in the Company's financial statements) as well as



                                       F-14
<PAGE>

                   the proceeds derived from the sale thereof; and (b) Global is
                   a defendant in a lawsuit brought in New York State Supreme
                   Court to recover the sum of $1.3 million allegedly made
                   available to Phoenix by Plaintiff. Global received none of
                   such proceeds. Global is a party defendant because Phoenix
                   utilized Global Debentures to obtain such funds. A motion for
                   summary judgment against the Phoenix defendants and not
                   against Global was decided on July 30, 1997, and judgment was
                   entered against the Phoenix defendants only. Global intends
                   to move to have the matter dismissed as to Global.

                   The Company is unable to determine the outcome of the two
                   above-mentioned legal matters and has not recorded any
                   adjustments for them in the financial statements.

10. Environmental  The Superfund Act imposes strict joint and several liability
    Risks          upon the generators of hazardous substances and those
                   transporters who have arranged for disposal of hazardous
                   substances or those 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
                   were 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 was 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 did not fail to adhere to such practice and
                   thereby could be potentially liable for claims in connection
                   with the transportation and disposal of such materials.


                                      F-15

<PAGE>



                                                        Global Spill Management,
                                                           Inc. and Subsidiaries

                                      Notes to Consolidated Financial Statements

================================================================================

11. Forgiveness    In fiscal 1997, the Company concluded settlement with its
    of Debt        unsecured creditors to retire all outstanding indebtedness at
                   37.5 cents on the dollar, except for amounts under $100
                   (which were paid in full). In addition, the Company settled
                   outstanding secured debt at less than face value (see Note 4
                   for amounts relating to certain notes payable to bank).
                   Finally, debt payable to the former owners of one of the
                   subsidiaries (which was sold in 1997) was forgiven. The
                   forgiveness of indebtedness was recorded as an extraordinary
                   item in 1997 and consisted of the following:

                   Unsecured creditors                                $  454,181
                   Former owners of a subsidiary                         932,727
                   Secured debt                                          353,686
--------------------------------------------------------------------------------
                                                                      $1,740,594
--------------------------------------------------------------------------------


                                      F-16


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