UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

     (x)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
          EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 2000,
          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: 0-17072

                       WINDSWEPT ENVIRONMENTAL GROUP, INC.
             (Exact name of registrant as specified in its charter)

     Delaware                                           11-2844247
     (State or other jurisdiction of                    (I.R.S. Employer
     incorporation or organization)                     Identification No.)

     100 Sweeneydale Avenue, Bay Shore, New York            11706
     (Address of principle executive offices)               (Zip Code)

                                 (631) 434-1300
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) 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
                                          ----

The number of shares of Common Stock, par value $.0001,  outstanding on December
11, 2000 was 38,456,254.

<PAGE>

                                                  PART I -FINANCIAL INFORMATION
Item 1. Financial Statements

                                             WINDSWEPT ENVIRONMENTAL GROUP, INC.
                                                 CONSOLIDATED BALANCE SHEETS
                                             OCTOBER 31, 2000 AND APRIL 30, 2000


<TABLE>
<CAPTION>
                                                                                                         October 31,    April 30,
                                                                                                            2000          2000
                                                                                                         (Unaudited)
                                                                                                         -----------   -----------
<S>                                                                                                      <C>           <C>
ASSETS:
CURRENT ASSETS:
    Cash                                                                                                 $   200,875   $   816,560
    Accounts receivable, net of allowance for doubtful accounts of $315,042 and $266,042, respectively     3,135,892     3,422,469
    Inventories                                                                                              108,360       168,151
    Costs and estimated earnings in excess of billings on uncompleted contracts                              681,171       150,829
    Prepaid expenses and other current assets                                                                 51,606       135,384
                                                                                                         ------------  ------------
    Total current assets                                                                                   4,177,904     4,693,393

PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization of $ 4,078,047
    and $3,657,682, respectively                                                                           1,531,870     1,749,928

GOODWILL, net of accumulated amortization of $60,121 and $55,387, respectively                                61,905        66,639

OTHER ASSETS                                                                                                 171,822       189,244
                                                                                                         ------------  ------------
TOTAL                                                                                                    $ 5,943,501   $ 6,699,204
                                                                                                         ------------  ------------

LIABILITIES AND STOCKHOLDERS' DEFICIT:
CURRENT LIABILITIES:
    Accounts payable                                                                                     $ 1,375,479   $ 1,735,529
    Accrued expenses                                                                                       1,555,143     1,252,853
    Short-term notes payable                                                                               1,000,000       500,000
    Billings in excess of cost and estimated earnings on uncompleted contracts                               200,692       302,854
    Accrued payroll and related fringes                                                                      355,531       475,931
    Sales tax payable                                                                                        123,509       269,518
    Current portion of long-term debt                                                                        119,079       136,153
    Obligations of unconsolidated subsidiary, net                                                            210,007       210,007
    Income taxes payable                                                                                     183,223       194,684
    Other current liabilities                                                                                 38,857        89,483
                                                                                                         ------------  ------------
    Total current liabilities                                                                              5,161,520     5,167,012
                                                                                                         ------------  ------------

LONG-TERM DEBT                                                                                                51,875        95,005
                                                                                                         ------------  ------------

CONVERTIBLE NOTES                                                                                          2,780,000     2,780,000
                                                                                                         ------------  ------------

COMMITMENTS AND CONTINGENCIES

REDEEMABLE COMMON STOCK                                                                                       74,083       102,167
                                                                                                         ------------  ------------

SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK, $.01 par value; 1,300,000 shares
    authorized; 1,300,000 shares outstanding at October 31, 2000 and April 30, 2000                        1,300,000     1,300,000
                                                                                                         ------------  ------------

STOCKHOLDERS' DEFICIT:
    Series B preferred stock, $.01 par value;  50,000 shares  authorized;  9,346 shares outstanding
    at October 31, 2000 and April 30, 2000                                                                        93            93
    Nondesignated preferred stock, no par value; 8,650,000 shares authorized; 0 shares outstanding                 -             -
    Common stock, $.0001 par value; 100,000,000 shares authorized; 38,456,254 shares outstanding at
    October 31, 2000 and April 30, 2000                                                                        3,846         3,846
    Additional paid-in-capital                                                                            31,765,949    31,804,950
    Accumulated deficit                                                                                  (35,193,865)  (34,553,869)
                                                                                                         ------------  ------------
    Total stockholders' deficit                                                                           (3,423,977)   (2,744,980)
                                                                                                         ------------  ------------

TOTAL                                                                                                    $ 5,943,501   $ 6,699,204
                                                                                                         ============  ============
</TABLE>
See notes to consolidated financial statements.

                                                        2

<PAGE>

                                       WINDSWEPT ENVIRONMENTAL GROUP, INC.
                               CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>

                                                              Three Months Ended                    Six Months Ended
                                                                  October 31,                          October 31,
                                                             2000             1999                2000            1999
                                                         ------------     ------------        ------------    ------------
<S>                                                      <C>              <C>                 <C>             <C>
Revenues                                                 $  3,500,952     $  3,420,785        $  6,319,754    $  5,981,795

Cost of revenues                                            2,751,873        2,915,169           4,968,641       4,682,361
                                                         -------------    -------------       -------------   -------------

Gross profit                                                  749,079          505,616           1,351,113       1,299,434

Selling, general and administrative expenses                  708,452        1,702,586           1,859,551       2,353,928
                                                         -------------    -------------       -------------   -------------

Income (loss) from operations                                  40,627       (1,196,970)           (508,438)     (1,054,494)
                                                         -------------    -------------       -------------   -------------

Other (expense) income:
Interest expense                                              (87,145)        (364,760)           (171,004)       (547,213)
Other, net                                                      3,925           10,690              39,446          10,871
                                                         -------------    -------------       -------------   -------------
Total other expense                                           (83,220)        (354,070)           (131,558)       (536,342)
                                                         -------------    -------------       -------------   -------------

Loss before provision for income taxes and
    extraordinary item                                        (42,593)      (1,551,040)           (639,996)     (1,590,836)
                                                         -------------    -------------       -------------   -------------

Provision for income taxes                                          -                -                   -               -
                                                         -------------    -------------       -------------   -------------

Net loss before extraordinary item                            (45,593)      (1,551,040)           (639,996)     (1,590,836)

Extraordinary item - loss on extinguishment of debt                 -         (100,000)                  -        (100,000)
                                                         -------------    -------------       -------------   -------------

Net loss                                                      (42,593)      (1,651,040)           (639,996)     (1,690,836)

Dividends on Series A Redeemable Preferred Stock              (19,500)         (19,500)            (39,000)        (39,000)
                                                         -------------    -------------       -------------   -------------

Net loss attributable to common
    shareholders                                         $    (62,093)    $ (1,670,540)       $   (678,996)   $ (1,729,836)
                                                         =============    =============       =============   =============

Basic and diluted net loss per common share:
Before extraordinary item                                $        .00     $       (.09)       $       (.02)   $       (.10)
Extraordinary item                                                  -             (.01)                  -            (.01)
                                                         -------------    -------------       -------------   -------------
Basic and diluted net loss                               $        .00     $       (.10)       $       (.02)   $       (.11)
                                                         =============    =============       =============   =============

Weighted average number of common shares
    outstanding: basic and diluted                         38,456,254       16,453,166          38,456,254      15,558,485
                                                         =============    =============       =============   =============
</TABLE>

See notes to consolidated financial statements.

                                                      3

<PAGE>


                                        WINDSWEPT ENVIRONMENTAL GROUP, INC.
                               CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                                  Six Months ended
                                                                                                      October 31,
                                                                                              2000               1999
                                                                                          ------------       ------------
<S>                                                                                       <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                                                              $  (639,996)       $(1,690,836)
    Adjustments to reconcile net loss to net cash used in operating activities:
      Depreciation and amortization                                                           425,099            473,998
      Provision for doubtful accounts                                                          49,000            110,000
      Issuance of common stock and stock options for director compensation                          -              5,078
      Compensation related to officer options and redeemable common stock                     (28,084)           152,096
      Issuance of common stock and stock options for services                                       -            201,809
      Issuance of common stock for dividends and related interest on redeemable preferred
          stock                                                                                     -             70,536
    Changes in operating assets and liabilities:
      Accounts receivable                                                                     237,577           (825,994)
      Due from officer                                                                              -            100,000
      Inventories                                                                              59,791            (23,573)
      Costs and estimated earnings in excess of billings on uncompleted contracts            (530,342)            63,411
      Prepaid and other current assets                                                         83,778            (74,997)
      Other assets                                                                             17,422            (43,085)
      Accounts payable and accrued expenses                                                   (96,761)           612,601
      Payroll and sales tax payable                                                          (266,409)           118,733
      Income tax payable                                                                      (11,461)                 -
      Other current liabilities                                                               (50,626)                 -
      Obligations of unconsolidated subsidiary                                                      -             13,895
      Billings in excess of costs and estimated earnings on uncompleted contracts            (102,162)           (49,540)
                                                                                          ------------       ------------

NET CASH USED IN OPERATING ACTIVITIES                                                        (853,174)          (785,868)
                                                                                          ------------       ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of fixed assets                                                                (202,307)           (82,475)
    Collection of notes receivable                                                                  -             26,443
                                                                                          ------------       ------------
NET CASH USED IN INVESTING ACTIVITIES                                                        (202,307)           (56,032)
                                                                                          ------------       ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Principal payments of long-term debt and factor advances                                  (60,204)          (788,691)
    Payments of revolving bank line, net                                                            -         (1,200,596)
    Proceeds from loans payable                                                               500,000            229,725
    Proceeds from notes due affiliate                                                               -          2,100,000
    Dividends paid on redeemable preferred stock                                                    -            (39,000)
    Proceeds from issuance of common stock                                                          -              2,625
    Proceeds from private placement of stock                                                        -          2,642,350
                                                                                          ------------       ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                                     439,796          2,946,413
                                                                                          ------------       ------------

NET (DECREASE) INCREASE IN CASH                                                              (615,685)         2,104,513

CASH - BEGINNING OF PERIOD                                                                    816,560             46,336
                                                                                          ------------       ------------

CASH - END OF PERIOD                                                                      $   200,875        $ 2,150,849
                                                                                          ============       ============

Cash paid during the period for:
    Interest                                                                              $    42,987        $   566,797
                                                                                          ============       ============
    Taxes                                                                                 $    10,825        $         -
                                                                                          ============       ============

Non cash financing activities:
    Issuance of redeemable preferred stock dividend                                       $    39,000        $         -
                                                                                          ============       ============
</TABLE>

See notes to consolidated financial statements.

                                                        4


<PAGE>

                       WINDSWEPT ENVIRONMENTAL GROUP, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.   BASIS FOR  PRESENTATION - The  accompanying  unaudited  consolidated
     financial statements include the accounts of Windswept Environmental Group,
     Inc. (the "Company") and its wholly owned  subsidiaries.  The  unaudited
     consolidated  financial statements  have been  prepared  by the Company in
     accordance  with  generally  accepted  accounting  principles  for  interim
     financial  statements and with the instructions to Form 10-Q and Article 10
     of Regulation S-X. Accordingly, they do not include all of the information
     and footnotes  required by generally  accepted  accounting  principles  for
     complete  financial  statements.  In  the opinion  of  the Company,  all
     adjustments  (consisting of only normal and recurring accruals) considered
     necessary to present  fairly the financial  position of the Company and its
     subsidiaries  as of October 31,  2000, the results of operations for the
     three and six months ended October 31, 2000 and 1999 and cash flows for the
     six months ended  October 31, 2000 and 1999, have been  included. Certain
     prior  period  amounts have been  reclassified to conform with the October
     2000 presentation.

     The  results for the three and six months  ended  October 31, 2000 and 1999
     are not necessarily indicative  of the results for an entire year.  These
     unaudited  consolidated financial statements should be read in conjunction
     with the Company's audited financial  statements and notes thereto included
     in the Company's Form 10-KSB for the fiscal year ended April 30, 2000.

2.   LIQUIDITY AND BUSINESS RISKS - As of October 31,  2000,  the Company had a
     stockholders' deficiency of $3,423,977 and an  accumulated  deficit  of
     $35,193,865.  The Company has financed its  operations  to date  primarily
     through  issuances of debt and equity securities.  As of October 31, 2000,
     the Company had $200,875 in cash and a working capital deficit of $983,616.
     In  addition,  as of October 31, 2000, the Company  was in arrears  with
     respect to certain sales tax obligations of  approximately  $47,000 as well
     as preferred stock dividends plus interest of approximately  $88,000.  The
     Company is also in arrears with many of its vendors.  These  factors  raise
     substantial  doubt  as to the  Company's  ability to continue  as a going
     concern.  The Company's  financial  statements have been prepared  assuming
     that the Company will continue as a going concern. The financial statements
     do not contain any adjustments that might result from the outcome of this
     uncertainty.

     On October 29, 1999,  the Company  consummated an equity and debt financing
     transaction  with  Spotless Plastics (USA), Inc. ("Spotless") that
     significantly  improved the  Company's liquidity and cash  position.  The
     Company  received  $2,500,000 in exchange for equity and $2,000,000 of debt
     financing in the transaction (the "Spotless Transaction").  These proceeds
     were used to repay in full the Company's outstanding balance under a credit
     facility and reduce certain  outstanding vendor  balances.  The Spotless
     Transaction significantly reduced the Company's cost of capital.  However,
     management  believes  the  Company  will  require  positive  cash flow from
     operations to meet its working  capital needs over the next twelve months.
     In the event that positive cash flow from operations is not generated,  the
     Company may be required to seek additional financing  to meet its working
     capital needs. The Company has no credit facility for additional borrowing,
     other than with  respect to its recent arrangement  to secure a $1,000,000
     credit facility with Spotless, as discussed below.  Management continues to
     pursue additional funding sources and is discussing the  availability of
     credit facilities with various lenders.  The Company expects revenue growth
     in new and existing service  areas.  The Company  continues to strive for
     improvement in its gross margin and containment of its selling, general and
     administrative expenses.  There can be no assurance,  however, that changes
     in the Company's plans or other events  affecting the Company's  operations
     will not result in accelerated or unexpected cash requirements,  or that it
     will be successful  in achieving  positive  cash flow from  operations  or
     obtaining additional financing.  The Company's future cash requirements are
     expected to depend on numerous factors, including, but not limited to: (i)
     the ability to obtain environmental or related construction contracts, (ii)
     the ability to generate positive cash flow from  operations,  (iii) the
     ability to raise additional capital or obtain additional financing and (iv)
     economic conditions.

                                        5
<PAGE>

     In March and April 2000, the Company borrowed an aggregate of $500,000 from
     Spotless for working capital requirements.  In September 2000, the Company
     borrowed  an additional $500,000  from  Spotless  for  working   capital
     requirements.  These borrowings bear interest at a rate equal to the London
     Interbank Offering Rate ("LIBOR") plus an additional 1%.

     As of November 3, 2000, the Company's wholly owned subsidiary,  Trade-Winds
     Environmental  Restoration, Inc. ("Trade-Winds")  entered into a time and
     materials contract with a customer to provide mold remediation  services on
     a building under construction.  This contract was amended as of November
     30, 2000.  The Company anticipates it will derive revenues of approximately
     $6,000,000 under the contract. In order to finance the additional outlay of
     payroll  required to perform this  contract,  the Company  entered into an
     agreement  with Spotless, dated November 4, 2000, to borrow an additional
     amount of up to $1,000,000  under a secured  line of  credit  agreement.
     Amounts  borrowed under this loan facility bear interest at the rate of 10%
     per annum.  All loans thereunder are evidenced by a promissory note and are
     secured  by the accounts receivables of the  Company  arising  from  the
     contract and all equipment  purchased by the Company or Trade-Winds for use
     under the contract as set forth in the Security  Agreement,  dated November
     4, 2000, between the Company and  Spotless.  As of December 11, 2000,  the
     Company has borrowed $625,000 under this secured line of credit.

3.   PROVISION FOR INCOME TAXES - No  provision  or benefit for income taxes was
     recorded for the three and six months ended October 31, 2000 due to a net
     loss being incurred.  Any deferred tax assets that may have arisen  during
     the period would have a full valuation  allowance  provided  against such
     asset.

4.   LOSS PER COMMON SHARE - The  calculation  of  basic  and  diluted  loss per
     common  share  was  calculated for  all  periods  in  accordance  with the
     requirements  of Statement of Financial  Accounting  Standards  No. 128,
     "Earnings per Share". The number  of  shares  used  in  computing basic and
     diluted loss per share was 38,456,254 and 16,453,166 shares for  the three
     and six months ended October 31, 2000 and 1999, respectively.

5.   REVENUE  RECOGNITION - In December  1999,  the  Securities and Exchange
     Commission ("SEC") issued Staff Accounting  Bulletin No. 101 ("SAB 101"),
     "Revenue Recognition in Financial Statements." SAB 101 summarizes certain
     of the SEC's views in applying generally accepted accounting  principles to
     revenue recognition in financial statements.  The Company is required to
     adopt SAB 101 no later than the fourth  quarter of fiscal 2001. The Company
     believes that SAB 101 will not affect its results of operations  and
     financial position.

6.   CONTINGENCIES  - On November 22, 1999,  the SEC accepted the  Company's
     settlement offer in its "Order Instituting   Public   Administrative
     Proceedings,  Making  Findings,  Imposing  Remedial  Sanctions  and Issuing
     Cease-and-Desist Order" (the "Order").  Under the terms of the Order, the
     Company neither admitted nor denied any allegations and did not incur any
     monetary fines in connection  with an  investigation of the Company by the
     SEC which stemmed from the prior convictions of two of the Company's former
     officers for  violations of, among other things, the federal  securities
     laws.  The Order required the Company to develop and institute certain
     policies,  procedures and manuals that improved its corporate  governance,
     including the adoption of an audit committee charter, a formal conflict of
     interest policy and a formal employee handbook. The Order also required the
     Company to obtain a secure off site storage facility  to store its backup
     data files and system software and to make certain reporting  disclosures.
     The Company has implemented such policies, procedures and manuals, obtained
     an off site storage facility and made such disclosures.

     In April 1999, an action was commenced in the New York State Supreme Court,
     County of  Suffolk,  under the caption EDWARD TARNAWSKI V. TRADE-WINDS
     ENVIRONMENTAL RESTORATION, INC., COMPREHENSIVE ENVIRONMENTAL SYSTEMS, INC.,
     WINDSWEPT ENVIRONMENTAL GROUP, INC. AND MICHAEL O'REILLY. This is an action
     for an alleged breach of employment contract in which the plaintiff claims
     damages  of

                                        6
<PAGE>

     approximately $150,000 for lost wages and commissions. The Company believes
     that the action is without  merit and that any  verdict  in favor of the
     plaintiff would  not  have a  material  adverse  effect  on the  Company's
     financial condition, results of operations or cash flows.

     In November 1997, the Company's Trade-Winds subsidiary was named as a third
     party defendant in an action commenced in the New York State Supreme Court,
     County of New York, under the caption NICOLAI GRIB AND VLADISLAV KAZAROV V.
     TRADE-WINDS ENVIRONMENTAL RESTORATION, INC. AND GULF INSURANCE COMPANY, by
     a class of plaintiffs claiming to be entitled to additional  wages while
     working for a  subcontractor of Trade-Winds.  The Company  believes that a
     verdict in favor of the plaintiff would not have a material  adverse effect
     on the Company's financial condition, results of operations or cash flows.

     The Company is a party to other  litigation matters and claims which are
     normal in the  course of its operations, and  while the  results  of such
     litigation  and claims  cannot be  predicted  with  certainty,  management
     believes  that the final outcome of such matters will not have a materially
     adverse effect on the Company's consolidated financial position, results of
     operations and cash flows.

     In January 1996, Laboratory Testing Services,  Inc. ("LTS"), a wholly-owned
     subsidiary of the Company, filed a Chapter 11 petition in United  States
     Bankruptcy Court in the Eastern District of New York.  Subsequently,  this
     case was  converted  to a Chapter 7  Bankruptcy  proceeding.  LTS is in the
     process of liquidation through these bankruptcy proceedings.  Management
     believes that the Company's financial condition,  results of operations and
     cash flows will not be materially affected by this proceeding.

Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

Forward-looking statements - Statements contained in this Quarterly Report on
Form 10-Q include "forward-looking statements" within the meaning of Section 27A
of the  Securities  Act and Section 21E of the Exchange  Act.  Forward-looking
statements  involve  known and unknown risks,  uncertainties  and other factors
which could cause the actual results, performance and achievements,  whether
expressed  or implied  by such  forward-looking statements,  not to occur or be
realized. Such forward-looking statements generally are based upon the Company's
best estimates of future results, performance or achievement, based upon current
conditions and the most recent results of operations. Forward-looking statements
may be  identified  by the use of  forward-looking terminology  such as  "may,"
"will," "expect,"  "believe," "estimate," "anticipate," "continue" or similar
terms, variations of those terms or the negative of those terms. Potential risks
and uncertainties include, among other things, such factors as:

     -   the market  acceptance and amount of sales of the Company's  services,
     -   the Company's success in increasing  revenues and reducing expenses,
     -   the frequency and magnitude of environmental disasters or disruptions
         resulting in the need for the types of services the Company provides,
     -   the extent of the enactment, enforcement and strict interpretations of
         laws relating to environmental remediation,
     -   the competitive environment within the industries in which the Company
         operates,
     -   the Company's ability to raise additional  capital,
     -   the  Company's ability to attract and retain qualified personnel, and
     -   the other factors and information disclosed and discussed in other
         sections of this  Quarterly  Report on Form 10-Q and in the  Company's
         Annual Report on Form 10-KSB for the fiscal year ended April 30, 2000.

Investors  should  carefully  consider such risks,  uncertainties and other
information, disclosures and discussions which contain  cautionary  statements
identifying important  factors  that  could  cause  actual  results  to  differ
materially from those provided in the  forward-looking  statements.  The Company
undertakes no obligation  to  publicly update or revise  any  forward-looking
statements, whether as a result of new information, future events or otherwise.

                                        7
<PAGE>


The following  discussion and analysis provides  information  which  management
believes is relevant to an assessment and understanding of the Company's results
of  operations  and financial condition.  This  discussion  should  be read in
conjunction with the Consolidated  Financial  Statements  and  notes  thereto
appearing in Item 1.

RESULTS OF OPERATIONS

THREE MONTHS ENDED OCTOBER 31, 2000 AND 1999

Revenue

Total revenues for the three months ended  October 31, 2000 ("the 2000 period")
increased by $80,167, or approximately 2%, to $3,500,952 from $3,420,785 for the
three months  ended  October 31, 1999 ("the 1999  period").  Revenues  in the
Company's  Trade-Winds subsidiary  increased  $48,267 to $3,086,200 in the 2000
period from $3,037,933 in the 1999 period.  The increase in Trade-Winds  revenue
of  $48,267  was  primarily  attributable  to  increases  in  revenues   from
environmental remediation/compliance projects  of  approximately   $92,000,
construction  projects  of approximately  $167,000  and  asbestos  projects  of
approximately $310,000, which were partially  offset by decreases in emergency
spill response projects of approximately  $218,000, fire  proofing projects  of
approximately  $231,000 and  oil tank  compliance  projects  of  approximately
$41,000. Revenues in the Company's North Atlantic Laboratories, Inc. ("NAL") and
New York Testing Laboratories, Inc. ("NYT") subsidiaries  increased $18,155 and
$13,745 to $210,638 and $204,114, respectively, in the 2000 period from $192,483
and $190,369, respectively, in the 1999 period.

Cost of Revenues

Cost of revenues decreased to $2,751,873 in the 2000 period as compared to
$2,915,169 in the 1999 period. The decrease of $163,296, or 6%, was primarily
attributable to higher labor costs during the 1999 period resulting from a
change in the composition of a contract performed in that period, $100,000 from
the reversal of a previously provided reserve which was no longer necessary in
the 2000 period and $120,000 from the net estimated profitability on contracts
which were at or near completion at the end of the 2000 period. The Company's
cost of revenues consists primarily of labor and labor related costs, insurance,
benefits, bonding and job related insurance, repairs, maintenance, equipment
rental, materials and supplies, disposal costs and depreciation of capital
equipment.

Selling, General and Administrative Expenses

Selling,  general and administrative expenses decreased by $994,134, or 58%, to
$708,452 in the 2000 period from $1,702,586 in the 1999 period,  and constituted
approximately  20% and  50% of  revenues  in  the  2000  and  1999   periods,
respectively.  The decrease of $994,134  was primarily a result of decreases in
each of the  following  items: bad debt expense of $110,000,  a provision  for
litigated and disputed items of $160,000,  state and local taxes,  penalties and
interest  of  approximately  $230,000, accounting  fees of  $26,000,  legal and
consulting fees related to the Spotless Transaction of approximately $182,000,
the  reduction of  compensation  expense  related  to the treatment of
a put option for shares of common  stock  and  stock   options  held  by  an
officer of the Company  of approximately  $339,000,  and compensation to an
officer  of the  Company  of $100,000.  These decreases were partially offset by
increases in marketing costs of approximately $17,000 and sales salaries of
approximately $82,000.

Interest Expense

Interest  expense decreased by $277,615, or 76%, in the 2000 period to $87,145
from $364,760 in the  1999  period.  The decrease  in  interest  expense  was
attributable to replacing a secured credit facility with a lending  institution
with  proceeds  from the Spotless  Transaction.  The current debt  facility with
Spotless carries a significantly lower interest rate.

                                        8
<PAGE>


SIX MONTHS ENDED OCTOBER 31, 2000 AND 1999

Revenue

Total revenues for the six months ended October 31, 2000 ("the year to date
2000 period") increased by $337,959, or approximately 6%, to $6,319,754 from
$5,981,795 for the six months ended October 31, 1999 ("the year to date 1999
period"). Revenues in the Company's Trade-Winds subsidiary increased $111,236 to
$5,407,793 in the year to date 2000 period from $5,296,557 in the year to date
1999 period. The increase in Trade-Winds revenue of $111,236 was primarily
attributable to increases in revenues from environmental remediation/compliance
projects of approximately $666,000, construction projects of approximately
$511,000 and asbestos projects of approximately $105,000, which were partially
offset by decreases in emergency spill response projects of approximately
$734,000, fire proofing projects of approximately $231,000 and oil tank
compliance projects of approximately $263,000. Revenues in the Company's NAL and
NYT subsidiaries increased $174,336 and $52,387 to $487,315 and $424,646,
respectively, in the year to date 2000 period from $312,979 and $372,259,
respectively, in the year to date 1999 period.

Cost of Revenues

Cost of  revenues  increased to $4,968,641 in the year to date 2000 period as
compared  to  $4,682,361 in the  year to date  1999  period.  The  increase  of
$286,280, or 6%, was primarily attributable to the increase in sales volume.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased by $494,377, or 21%,
to $1,859,551 in the year to date 2000 period from $2,353,928 in the year to
date 1999 period, and constituted approximately 29% and 39% of revenues in the
year to date 2000 and year to date 1999 periods, respectively. The decrease of
$494,377 was primarily a result of decreases in each of the following items: bad
debt expense of approximately $79,000, a provision for litigated and disputed
items of $160,000, state and local taxes, penalties and interest of
approximately $230,000, legal and consulting fees related to the Spotless
Transaction of approximately $182,000, the rduction of compensation expense
related to the treatment of a put option for shares of common stock
and stock options held by an officer of the Company of approximately $180,000,
and compensation to an officer of the Company of $100,000. These decreases were
partially offset by increases in marketing costs of approximately $158,000,
administrative salaries of approximately $107,000 and sales salaries of
approximately $51,000.

Interest Expense

Interest expense decreased by $376,209, or 69%, in the year to date 2000 period
to $171,004 from $547,213  in the year to date 1999 period.  The decrease in
interest  expense was attributable to replacing a secured credit facility with a
lending  institution with proceeds from the Spotless  Transaction.  The current
debt facility with Spotless carries a significantly lower interest rate.

LIQUIDITY AND CAPITAL RESOURCES

As of October 31, 2000, the Company had a stockholders' deficiency of $3,423,977
and an  accumulated  deficit  of  $35,193,865.  The  Company has financed  its
operations to date primarily through issuances of debt and equity securities. As
of October 31,  2000,  the Company  had  $200,875 in cash and a working  capital
deficit of $983,616.  In addition, as of October 31, 2000, the Company was in
arrears with respect to certain sales tax obligations of  approximately  $47,000
as well as preferred stock dividends plus interest of approximately $88,000. The
Company  is also in  arrears  with  many of its  vendors.  These  factors  raise
substantial doubt as to the Company's  ability to continue as a going  concern.
The Company's financial  statements have been prepared assuming that the Company
will continue as a going  concern.  The financial  statements do not contain any
adjustments that might result from the outcome of this uncertainty.

                                        9
<PAGE>


On October  29,  1999,  the  Company consummated  an equity and debt  financing
transaction with Spotless that significantly  improved the Company's liquidity
and cash position.  The Company received  $2,500,000 in exchange for equity and
$2,000,000 of debt  financing in the Spotless  Transaction.  These proceeds were
used to repay in full the Company's  outstanding balance under a credit facility
and  reduce  certain  outstanding vendor balances.  The Spotless Transaction
significantly  reduced  the Company's  cost  of  capital.  However,  management
believes the Company will require positive cash flow from operations to meet its
working  capital needs over the next twelve  months.  In the event that positive
cash flow from operations is not generated, the Company may be required to seek
additional  financing  to meet its  working  capital  needs.  The Company has no
credit facility for additional borrowing, other than with respect to its recent
arrangement to secure a $1,000,000  credit facility with Spotless,  as discussed
below.  Management  continues  to  pursue additional  funding  sources  and  is
discussing the  availability of credit facilities  with various  lenders.  The
Company  expects revenue growth in new and existing  service areas.  The Company
continues to strive for  improvement in its gross margin and  containment of its
selling, general and administrative  expenses.  There  can  be no  assurance,
however, that  changes in the  Company's  plans or other events  affecting  the
Company's operations  will  not  result  in  accelerated  or  unexpected  cash
requirements, or that it will be successful in achieving positive cash flow from
operations or  obtaining  additional  financing.   The Company's future  cash
requirements are  expected to depend on numerous  factors,  including,  but not
limited  to: (i) the  ability to obtain  environmental  or related  construction
contracts, (ii) the ability to generate positive  cash flow from  operations,
(iii) the ability to raise additional capital or obtain additional financing and
(iv) economic conditions.

In March and April 2000,  the Company borrowed an  aggregate  of $500,000  from
Spotless for working capital  requirements.  In  September  2000,  the Company
borrowed an additional $500,000 from Spotless for working capital  requirements.
These borrowings bear interest at a rate equal to LIBOR plus an additional 1%.

As of November 3, 2000, the Company's Trade-Winds subsidiary entered into a time
and materials contract with a customer to provide mold remediation services on a
building under construction. This contract was amended as of November 30, 2000.
The Company anticipates it will derive revenues of approximately $6,000,000
under the contract.  In order to finance the additional  outlay of payroll
required to perform this  contract,  the Company  entered into an agreement with
Spotless, dated November 4, 2000, to borrow an additional amount of up to
$1,000,000 under a secured line of credit agreement.  Amounts borrowed under
this loan facility bear interest at the rate of 10% per annum.  All loans
thereunder are evidenced by a promissory note and are secured by the accounts
receivables of the Company arising from the contract  and all  equipment
purchased  by the  Company  or Trade-Winds  for use under the contract as set
forth in the Security  Agreement, dated November 4, 2000,  between the Company
and  Spotless.  As of December 11, 2000, the Company has borrowed $625,000
under this secured line of credit.

CASH FLOW

Cash  decreased  by  $615,685  to  $200,875  during the year to date 2000 period
primarily  as a result of the net loss  incurred  after adjusting  for non-cash
items,  reductions in  outstanding vendor obligations, and purchases of fixed
assets of approximately $202,000.

INFLATION

The Company  believes that inflation has generally not had a material  impact on
its operations.

SEASONALITY

Since the  Company  and its  subsidiaries are able to  perform  their  services
throughout the year, the business is not considered seasonal in nature. However,
business is affected by the timing of large contracts in certain of its service
areas, such as asbestos abatement and  construction,  as well as the timing of
catastrophes.

                                       10

<PAGE>

                            PART 2 - OTHER INFORMATION
                            --------------------------

Item 1.  Legal Proceedings
         -----------------

         Reference is hereby  made  to  Note 6 to the  Consolidated  Financial
         Statements  in  Part I - Item 1 above  and to  Item 3 of the  Company's
         Annual Report on Form  10-KSB for the fiscal year ended April 30, 2000
         and to the references therein, for a discussion of all material pending
         legal proceedings to which the Company or any of its  subsidiaries  is
         party.

Item 2.  Changes in Securities
         ---------------------

         Not applicable.

Item 3.  Defaults Upon Senior Securities
         -------------------------------

         The Company is  required to pay  quarterly  dividends  on its Series A
         Convertible  Preferred  Stock,  par value $.01 per share (the "Series A
         Preferred"), which dividends accrue from the initial date of issuance
         of the Series A Preferred,  are  cumulative  and, if not paid when due,
         bear interest on the unpaid amount of the past due  dividends  at the
         prime  rate  published  in The  Wall  Street  Journal  on the  date the
         dividend was payable,  plus 3%. The Company believes, however, that it
         was legally  prohibited from paying  dividends on its capital stock due
         to the  provisions of Section 170 of the Delaware General Corporation
         Law ("Delaware  Law"),  which require a company to pay dividends on its
         capital stock only out of its capital surplus or net profits in one of
         the last two years. The Company is currently in arrears on its Series A
         Preferred  dividend  payments  and interest  thereon in the  aggregate
         amount of approximately $105,000. If the Company fails to make any four
         consecutive quarterly dividend payments on the Series A Preferred,  the
         majority in interest of the holders of the Series A Preferred have the
         right  to  elect  an  additional  director  to the  Company's  Board of
         Directors,  to  serve as a  director  until  such accrued and unpaid
         dividends  have been paid in full.  The Company,  as per Delaware  Law,
         failed to pay its  fourth  consecutive  quarterly dividend  payment on
         September 15, 2000 to the holders of the Series A Preferred.  There can
         be no assurance when or if the Company will make any Series A Preferred
         dividend payments.

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

         On October 29, 1999,  the  Company's  Board of Directors and Windswept
         Acquisition  Corporation,  a  Delaware  corporation  and  wholly  owned
         subsidiary of Spotless Plastics (USA), Inc. ("Spotless"), the majority
         stockholder of the Company,  approved an amendment (the "Amendment") to
         the Company's  Certificate of Incorporation  increasing the number of
         authorized  shares of common stock from 50,000,000 to 100,000,000.  The
         Amendment became effective upon its  filing  with the  Office of the
         Secretary of the State of Delaware on September 18, 2000, following the
         distribution of  an  Information  Statement  by  the  Company  to  its
         stockholders  on August 29, 2000, in compliance with the proxy rules of
         the Securities and Exchange Act of 1934, as amended.

         On October 26, 1999,  as a result of the  Spotless  Transaction,  the
         Company's  Board of Directors,  pursuant to the By-laws of the Company,
         increased the size of the Board of  Directors  from five  directors to
         nine  directors and accepted,  with effect as of October 26, 1999,  the
         resignation of JoAnn O'Reilly as a director of the Company.  The Board
         of Directors  appointed  four  nominees of  Spotless,  Brian S. Blythe,
         Ronald B. Evans, Peter A.  Wilson and  Charles L.  Kelly,  Jr. as new
         directors.  A fifth nominee of Spotless,  John J.  Bongiorno,  has been
         nominated to the Board of Directors of the Company, effective upon the
         election of the Board of Directors at the Company's next annual meeting
         of stockholders.  The continuing directors are Michael O'Reilly, Kevin
         Phillips, Anthony Towell and Samuel Sadove.

                                       11

<PAGE>

Item 5.  Other Information
         -----------------

         On September 11, 2000,  the Company's  Board of Directors, pursuant to
         the Bylaws of the Company, increased the size of the Board of Directors
         from nine directors to eleven directors.

Item 6.  Exhibits and Reports on Form 8-K
         --------------------------------

(a)      Exhibits:

         10.1   Agreement, dated as of November 3, 2000, by and between Turner
                Construction Company and Trade-Winds Environmental Restoration
                Inc., as amended.
         10.2   Loan  Agreement,  dated  November  4, 2000,  by and  between the
                Company and Spotless Plastics (USA), Inc.
         10.3   Line of Credit  Note,  dated  November  4, 2000,  by and
                between the Company and Spotless Plastics (USA), Inc.
         10.4   Security  Agreement,  dated November 4, 2000, by and between the
                Company and Spotless Plastics (USA), Inc.
         27.    Financial Data Schedule

(b)      Reports on Form 8-K

         There  were no reports on Form 8-K filed  during the  six-month  period
         ended October 31, 2000.



                                       12


<PAGE>

                                   SIGNATURES

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

Dated: December 15, 2000
                              WINDSWEPT ENVIRONMENTAL GROUP, INC.




                              By:   /s/ Michael O'Reilly
                                  ----------------------------------------
                                   MICHAEL O'REILLY,
                                   President and Chief Executive Officer
                                   (Principal Executive Officer)


                              By:  /s/ Charles L. Kelly, Jr.
                                  ----------------------------------------
                                   CHARLES L. KELLY, JR.
                                   Chief Financial Officer
                                   (Principal Financial Officer)

                                       13

<PAGE>

                                  EXHIBIT INDEX


Exhibit
Number       Description
------       -----------
10.1         Agreement, dated as of November 3, 2000, by and between Turner
             Construction Company and Trade-Winds Environmental Restoration
             Inc., as amended.
10.2         Loan Agreement,  dated November 4, 2000, by and between the Company
             and Spotless Plastics (USA), Inc.
10.3         Line of Credit Note, dated November 4, 2000, by and between
             the Company and Spotless Plastics (USA), Inc.
10.4         Security  Agreement,  dated  November  4, 2000,  by and between the
             Company and Spotless Plastics (USA), Inc.
27.          Financial Data Schedule

                                       14