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 DECEMBER 31, 2002, 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
                                                  ---      ---

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act)     Yes      No X
                                                  ---     ---

The number of shares of Common Stock, par value $.0001, outstanding on
January 31, 2003 was 77,936,358.


<PAGE>


                         PART 1 - FINANCIAL INFORMATION
  Item 1. Financial Statements

                       WINDSWEPT ENVIRONMENTAL GROUP, INC.
                           CONSOLIDATED BALANCE SHEETS
                       DECEMBER 31, 2002 AND JULY 2, 2002
<TABLE>
<CAPTION>
                                                                                                   December 31,         July 2,
                                                                                                       2002              2002
                                                                                                   (Unaudited)
                                                                                                 ---------------    ---------------
  <S>                                                                                            <C>                <C>
  ASSETS:

  CURRENT ASSETS:
     Cash                                                                                        $     271,823      $     399,679
     Accounts receivable, net of allowance for doubtful accounts of $1,014,058 and $909,029,         7,175,301          7,519,203
        respectively
     Inventories                                                                                       227,327            296,474
     Costs and estimated earnings in excess of billings on uncompleted contracts                       498,165            501,424
     Prepaid expenses and other current assets                                                         504,382            144,274
                                                                                                 --------------     --------------
     Total current assets                                                                            8,676,998          8,861,054

  PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization of $4,819,696
     and $4,550,006, respectively                                                                    1,902,550          1,144,369

  OTHER ASSETS                                                                                         235,128            207,115
                                                                                                 --------------     --------------

  TOTAL                                                                                          $  10,814,676      $  10,212,538
                                                                                                 ==============     ==============

  LIABILITIES AND STOCKHOLDERS' EQUITY:

  CURRENT LIABILITIES:
     Accounts payable                                                                            $   1,540,914      $   1,060,074
     Accrued expenses                                                                                1,201,588          1,740,093
     Short-term notes payable to related party                                                       1,202,043            200,000
     Billings in excess of cost and estimated earnings on uncompleted contracts                         47,527            193,251
     Accrued payroll and related fringes                                                               563,138            551,091
     Convertible notes payable to related party                                                        -                  100,000
     Current portion of long-term debt                                                                 177,653             71,265
     Income taxes payable                                                                              -                  450,820
     Other current liabilities                                                                         462,205            167,987
                                                                                                 --------------     --------------
     Total current liabilities                                                                       5,195,068          4,534,581
                                                                                                 --------------     --------------

  LONG-TERM DEBT                                                                                       286,123             63,703
                                                                                                 --------------     --------------

  COMMITMENTS AND CONTINGENCIES

  REDEEMABLE COMMON STOCK                                                                              779,306            941,871
                                                                                                 --------------     --------------

  SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK, $.01 par value; 1,300,000 shares
     authorized; 1,300,000 shares outstanding at December 31, 2002 and July 2, 2001                  1,300,000          1,300,000
                                                                                                 --------------     --------------

  STOCKHOLDERS' EQUITY :
     Series B convertible preferred stock, $.01 par value; 50,000 shares authorized; 0 shares
        outstanding at December 31, 2002 and July 2, 2002                                               -                 -
     Nondesignated preferred stock, no par value; 8,650,000 shares authorized; 0 shares                 -                 -
        outstanding
     Common stock, $.0001 par value; 150,000,000 shares authorized; 77,936,358 shares
        outstanding at December 31, 2002 and July 2, 2002.                                               7,794              7,794
     Additional paid-in-capital                                                                     34,039,017         34,078,017
     Accumulated deficit                                                                           (30,792,632)       (30,713,428)
                                                                                                 --------------     --------------
     Total stockholders' equity                                                                      3,254,179          3,372,383
                                                                                                 --------------     --------------

  TOTAL                                                                                          $  10,814,676      $  10,212,538
                                                                                                 ==============     ==============
</TABLE>

  See notes to consolidated financial statements.


                                       2

<PAGE>


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

                                                                 Thirteen Weeks Ended                 Twenty-Six Weeks Ended
                                                           ---------------------------------    ---------------------------------
                                                            December 31,        January 1,       December 31,        January 1,
                                                                2002               2002              2002               2002
                                                           --------------     --------------    --------------     --------------
<S>                                                        <C>                <C>               <C>                <C>
    Revenues                                               $   5,864,047      $  13,000,553     $  10,457,023      $  20,735,627

    Cost of revenues                                           4,575,194          7,676,358         8,109,670         12,996,891
                                                           --------------     --------------    --------------     --------------

    Gross profit                                               1,288,853          5,324,195         2,347,353          7,738,736
                                                           --------------     --------------    --------------     --------------

    Operating expenses:
    Selling, general and administrative expenses               1,562,774          1,356,966         2,586,558          2,331,116
    (Benefit) expense related to variable accounting
       treatment for officer options                             (81,344)         1,127,575          (162,565)         1,368,020
                                                           --------------     --------------    --------------     --------------
       Total operating expenses                                1,481,430          2,484,541         2,423,993          3,699,136
                                                           --------------     --------------    --------------     --------------

    (Loss) income from operations                               (192,577)         2,839,654           (76,640)         4,039,600
                                                           --------------     --------------    --------------     --------------

    Other expense (income):
       Interest expense                                           27,021            120,807            35,190            195,282
       Other, net                                                (19,130)              (660)          (23,309)           (10,004)
                                                           --------------     --------------    --------------     --------------
       Total other expense                                         7,891            120,147            11,881            185,278
                                                           --------------     --------------    --------------     --------------

    (Loss) income before (benefit) provision for income
    taxes                                                       (200,468)         2,719,507           (88,521)         3,854,322

    (Benefit) provision for income taxes                         (17,317)         1,710,403            (9,317)         2,082,065
                                                           --------------     --------------    --------------     --------------

    Net (loss) income                                           (183,151)         1,009,104           (79,204)         1,772,257

    Dividends on preferred stock                                 (19,500)          (410,219)          (39,000)          (429,719)
                                                           --------------     --------------    --------------     --------------

    Net (loss) income attributable to common shareholders
                                                           $    (202,651)     $     598,885     $    (118,204)     $   1,342,538
                                                           ==============     ==============    ==============     ==============

    Basic and diluted net (loss) income per common share:
    Basic                                                          ($.00)              $.01             ($.00)              $.03
                                                           ==============     ==============    ==============     ==============
    Diluted                                                        ($.00)              $.01             ($.00)              $.02
                                                           ==============     ==============    ==============     ==============

    Weighted average number of common shares outstanding:
    Basic                                                     77,936,358         58,653,415        77,936,358         48,511,610
                                                           ==============     ==============    ==============     ==============
    Diluted                                                   77,936,358         86,759,104        77,936,358         85,736,529
                                                           ==============     ==============    ==============     ==============
</TABLE>

    See notes to consolidated financial statements.


                                       3

<PAGE>


                       WINDSWEPT ENVIRONMENTAL GROUP, INC.
           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
<TABLE>
<CAPTION>



                                              Common Stock              Additional
                                          Number of       Par            Paid-in           Accumulated
                                           Shares        Value           Capital             Deficit               Total
                                           ------        -----           -------             -------               -----
<S>                                      <C>             <C>           <C>                <C>                    <C>
Balance at July 3, 2002                  77,936,358      $7,794        $34,078,017        $(30,713,428)          $3,372,383

Dividends on Series A preferred stock             -           -            (39,000)                  -              (39,000)
Net loss                                          -           -                  -             (79,204)             (79,204)
                                         ----------      -------       ------------       -------------          -----------

Balance at December 31, 2002             77,936,358      $7,794        $34,039,017        $(30,792,632)          $3,254,179
                                         ==========      ======        ============       =============          ===========
</TABLE>


See notes to consolidated financial statements.


                                       4

<PAGE>


                       WINDSWEPT ENVIRONMENTAL GROUP, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                   Twenty-Six Weeks Ended
                                                                                              --------------------------------
                                                                                               December 31,        January 1,
                                                                                                   2002              2002
                                                                                              --------------    --------------
<S>                                                                                           <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss) income                                                                           $     (79,204)    $   1,772,257
  Adjustments to reconcile net (loss) income to net cash (used in) provided by operating
    activities:
    Depreciation and amortization                                                                   269,690           342,801
    Provision for doubtful accounts                                                                 105,029           154,100
  Compensation (benefit) expense related to officer options and redeemable common
     Stock                                                                                         (162,565)        1,368,020
  Changes in operating assets and liabilities:
    Accounts receivable                                                                             238,873        (2,490,475)
    Inventories                                                                                      69,147           (70,605)
    Costs and estimated earnings in excess of billings on uncompleted contracts                       3,259           231,448
    Prepaid and other current assets                                                               (360,108)         (216,790)
    Other assets                                                                                    (28,013)           39,039
    Accounts payable and accrued expenses                                                           (57,665)          619,095
    Accrued payroll and related fringes                                                              12,047           616,838
    Income taxes payable                                                                           (450,820)          988,664
    Other current liabilities                                                                       294,218            57,301
    Billings in excess of costs and estimated earnings on uncompleted contracts                    (145,724)         (348,302)
                                                                                              --------------    --------------
  NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                                              (291,836)        3,063,391
                                                                                              --------------    --------------

  CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of fixed assets                                                                    (1,027,871)         (399,144)
                                                                                              --------------    --------------
  NET CASH USED IN INVESTING ACTIVITIES                                                          (1,027,871)         (399,144)
                                                                                              --------------    --------------

  CASH FLOWS FROM FINANCING ACTIVITIES:
    Principal payments of long-term debt                                                            (63,022)          (43,363)
    Proceeds from long-term debt                                                                    391,830            89,294
    Proceeds from exercise of stock options                                                            -               74,296
    Repayment of convertible note to related party                                                 (100,000)             -
    Payment of preferred stock dividends                                                            (39,000)             -
    Proceeds from short-term notes payable                                                        1,425,000         1,750,000
    Repayments of short-term notes payable                                                         (422,957)       (2,750,000)
                                                                                              --------------    --------------
  NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                             1,191,851          (879,773)
                                                                                              --------------    --------------

  NET (DECREASE) INCREASE IN CASH                                                                  (127,856)        1,784,474

  CASH - BEGINNING OF PERIOD                                                                        399,679           323,732
                                                                                              --------------    --------------

  CASH - END OF PERIOD                                                                        $     271,823     $   2,108,206
                                                                                              ==============    ==============

  Cash paid during the period for:
    Interest                                                                                  $      24,506     $      62,355
                                                                                              ==============    ==============
    Taxes                                                                                     $     651,621     $   1,054,620
                                                                                              ==============    ==============

  Non cash financing activities:
    Issuance of preferred stock dividend                                                      $        -        $     429,719
                                                                                              ==============    ==============
    Conversion of accrued and unpaid interest to common stock                                 $        -        $     331,951
                                                                                              ==============    ==============
</TABLE>

  See notes to consolidated financial statements.


                                       5

<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  on a consolidated basis as of December 31, 2002, the results
     of operations for the thirteen and twenty-six weeks ended December 31, 2002
     and January 1, 2002 and cash flows for the twenty-six  weeks ended December
     31, 2002 and January 1, 2002, have been included.  Certain  prior  period
     amounts  have  been  reclassified  to  conform  to the  December  31,  2002
     presentation.

     The  results for the  thirteen  and  twenty-six  weeks ended December 31,
     2002 and January 1, 2002 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 consolidated
     financial statements  and  notes  thereto  included  in  the Company's Form
     10-K for the fiscal year ended July 2, 2002.

2.   LIQUIDITY AND BUSINESS RISKS - As of December 31, 2002, the Company had a
     cash balance of $271,823,  working capital of $3,481,930 and stockholders'
     equity of $3,254,179. Historically, the Company has financed its operations
     primarily  through  issuance  of  debt  and equity  securities, through
     short-term  borrowings  from its majority  shareholder, Spotless, and
     through cash generated from operations. Based on the Company's experience
     and for the reasons set forth below, in the opinion of management, the
     Company expects to have sufficient  working capital to fund its operations
     on an ongoing basis, including for at least the next twelve months.
     However,  economic, market and other conditions may affect the Company's
     cash flows and liquidity. In the event that the Company is unable to
     generate sufficient positive cash flow from operations, the Company may
     seek additioanl financing from Spotless, although Spotless is under no
     legal obligation to provide such funds.  The Company currently has no
     credit facility for additional borrowing.

     During the twenty-six  weeks ended December 31, 2002, in order to address
     the Company's cash flow and  operational  concerns,  including  funding the
     payment  of  income  taxes  and start up costs  relating  to a large  mold
     remediation  project  in  Hawaii, the Company  borrowed $1,425,000  from
     Spotless.  During the twenty-six weeks ended December 31, 2002, the Company
     repaid $422,957 to Spotless.  All borrowings from Spotless bear interest at
     the London  Interbank Offering Rate  ("LIBOR") plus 1 percent and are
     secured by all of the Company's assets and are payable on demand.  As of
     December  31, 2002, the Company  owed  Spotless $1,202,043 on such
     short-term loans to fund working capital.  Subsequent to December 31, 2002,
     the Company has repaid $402,043 to Spotless, leaving an $800,000 balance
     owed to Spotless as of February 14, 2003.

     During the twenty-six weeks ended December 31, 2002, the Company repaid
     $100,000 principal amount of 12% convertible notes to a director of the
     Company.

     The Company's future cash requirements are expected to depend on numerous
     factors, including, but not limited to: (i) its ability to obtain
     environmental or related construction contracts, (ii) its ability to
     generate positive cash flow from operations, and the extent thereof, (iii)
     its ability to raise additional capital or obtain additional financing
     to the extent necessary, and (iv) economic and industry conditions.
     The Company  anticipates  revenue growth in new and existing  service areas
     and  continues to bid on large  projects,  though there can be no assurance
     that any of the Company's bids will be accepted. The Company expects to
     generate positive cash flow from operations to meet its working capital
     needs on an ongoing basis, including for at least the next twelve months.
     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 to the extent necessary.  The Company has taken several steps to
     improve its operating results and cash flows,

                                       6

<PAGE>

     including: (a) increasing its collection efforts with insurance companies
     to accelerate the flow of payments to the Company on reconstruction
     projects; (b) applying for advance payments to fund the purchase of
     materials and the payment of subcontractors and large staffs of employees
     on larger projects; (c) expanding its marketing efforts and staff to
     increase the Company's industry prominence, attract more bidding
     opportunities and projects and broaden the Company's customer base; (d)
     attempting to improve its gross margins and control its selling, general
     and administrative expenses.  Management expects these efforts to improve
     its results of operaitons, including by producing a more steady flow of
     small to medium size projects and by increasing the Company's exposure to
     those customers that control larger, generally higher gross margin
     projects, though no assurance can be given that these actions will be
     successful.  In the event these efforts do not result in sufficient
     positive cash flow from operations, the Company may be required to seek
     additional financing to meet its working capital needs, including possibly
     from Spotless.  Management also continues to pursue additional funding
     sources, including possible equipment financing that would be expected to
     reduce the amount of cash expended on equipment purchases, which could
     then be used for other purposes.


3.   (BENEFIT) PROVISION FOR INCOME TAXES - The (benefit) provision for
     income taxes for the thirteen and twenty-six  weeks ended December 31, 2002
     and January 1, 2002 consists of the following:
<TABLE>
<CAPTION>
                                     Thirteen Weeks Ended             Twenty-Six Weeks Ended
                                     --------------------             ----------------------
                                December 31,       January 1,      December 31,      January 1,
                                    2002             2002             2002              2002
                                    ----             ----             ----              ----
     <S>                        <C>               <C>              <C>              <C>
     Federal - current          $  (21,413)       $1,207,259       $ (15,413)       $1,469,590
     State - current                 4,096           503,144           6,096           612,475
                                -----------       -----------      ----------       -----------
     Total                      $  (17,317)       $1,710,403       $ ( 9,317)       $2,082,065
                                ===========       ===========      ==========       ===========
</TABLE>

     The effective rate for income taxes differs from the statutory rates
     primarily as a result of the utilization of federal and state net operating
     loss carryforwards of approximately $500,000 in the twenty-six weeks ending
     January  1, 2002 and the  nondeductible nature of the expense (benefit)
     related to the variable  accounting  treatment of officer options for which
     there is a 100% valuation  allowance.  The  Company  has a 100%  valuation
     allowance against deferred tax assets because  management  believes that it
     is more likely than not that such deferred tax assets will not be realized.
     At December 31, 2002,  the Company had  approximately  $1,124,000  in net
     operating loss  carryforwards for tax purposes that expire at various dates
     through 2020. Due to Spotless' acquisition of greater than 50% ownership in
     October 1999, the Company is limited to utilizing $68,000 of net operating
     loss carryforwards per annum.

                                       7

<PAGE>

4.   INCOME PER COMMON SHARE - The calculation of basic and diluted income 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 following table sets forth the computation of the basic and diluted net
     income per share for the thirteen and twenty-six  weeks ended December 31,
     2002 and January 1, 2002, respectively:

<TABLE>
<CAPTION>
                                                           Thirteen Weeks Ended               Twenty-Six Weeks Ended
                                                     --------------------------------     -------------------------------
                                                      December 31,       January 1,       December 31,       January 1,
                                                         2002              2002               2002             2002
                                                         ----              ----               ----             ----
<S>                                                  <C>               <C>                <C>              <C>
     Numerator:
       Net income (loss) attributable to
         common shareholders                             ($202,651)        $ 598,885          ($118,204)   $   1,342,538
       Add interest on convertible notes                      -               81,512                  -           93,124
                                                     --------------    --------------     --------------   --------------
                                                         ($202,651)         $680,397          ($118,204)   $   1,435,662
                                                     ==============    ==============     ==============   ==============

     Denominator:
       Share reconciliation:
         Shares used for basic income
           per share                                    77,936,358        58,653,415         77,936,358       48,511,610
         Effect of dilutive items:
           Stock options                                      -            7,684,798                  -        3,796,317
           Convertible securitie                              -           20,420,891                  -       30,428,602
                                                     --------------    --------------     --------------   --------------
         Shares used for dilutive income
           per share                                    77,936,358        86,759,104         77,936,358       85,736,529
                                                     ==============    ==============     ==============    =============

         Net income per share:
           Basic                                             ($.00)             $.01              ($.00)            $.03
           Diluted                                           ($.00)             $.01              ($.00)            $.02
</TABLE>

     The dilutive  loss per share computation  for the thirteen and  twenty-six
     week periods ended December 31, 2002 excludes approximately 4,805,000 and
     4,874,000  shares,  respectively,  related to  employee  stock  options and
     approximately  260,000  and  418,000 shares, respectively, related  to
     convertible   notes   because  the effect  of  including   them  would  be
     anti-dilutive.  For all periods presented, 1,300,000 shares
     of common stock issuable  upon the  exercise  of the Series A  Redeemable
     Convertible Preferred  Stock was excluded from diluted  earnings per share
     because the effect of including them would be anti-dilutive.

5.   CONTINGENCIES  -  On  October  12,  2001,   Trade-Winds   Environmental
     Restoration, Inc. ("Trade-Winds"), a  wholly-owned  subsidiary  of  the
     Company, commenced an action in the New York State Supreme Court, County of
     New York, claiming that Trade-Winds is entitled to approximately $1,060,000
     of contractual billings relating to a large mold remediation project.  In
     addition to denying an obligation to pay the amount claimed, the defendants
     asserted a counterclaim  against  Trade-Winds  for $389,439.  On January 7,
     2003, Trade-Winds received $550,000 in full settlement of this action. The
     court has ordered that the record of this action be sealed.

     In November 1997,  Trade-Winds  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  will not have a material adverse effect on the Company's
     consolidated financial statements.

     The  Company is a party to other  litigation  matters  and claims  that 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 statements.

                                       8

<PAGE>


6.   RELATED PARTY TRANSACTIONS - On November 16, 2001, the Company exchanged
     $1,700,000 of short-term notes payable for a demand promissory note payable
     to Spotless that is secured by the Company's assets and the assets of its
     subsidiaries,  pursuant  to  amendments  to  existing  security  agreements
     between  each  of the  Company and its subsidiaries  and  Spotless.  The
     promissory note had an original principal amount of $1,700,000 and accrues
     interest  at the rate of LIBOR plus one  percent  (1%) per annum.  Spotless
     may, but is under no obligation to, lend additional  amounts to the Company
     under this secured  promissory note. As of December 31, 2002, the Company
     owed Spotless $1,202,043 under this promissory note. Subsequent to December
     31, 2002, the Company repaid $402,043 to Spotless.

     In the  twenty-six  weeks ended  December  31,  2002,  the  Company  repaid
     $100,000  principal  amount of 12% convertible notes to a director of the
     Company.

7.   RECENT ACCOUNTING PRONOUNCEMENTS - In June 2001, the Financial Accounting
     Standards Board ("FASB") issued Statement of Financial Accounting Standards
     ("SFAS") No. 142,  "Goodwill  and Other  Intangible  Assets".  SFAS No. 142
     addresses financial accounting and reporting for acquired  goodwill and
     other intangible  assets.  Under SFAS No. 142, goodwill and some intangible
     assets will no longer be amortized, but rather reviewed for impairment on a
     periodic  basis. This Statement was required to be adopted by the Company
     for the fiscal year  beginning July 2, 2002 and applied to all goodwill and
     other intangible assets recognized in its  financial  statements at that
     date.  Impairment  losses for goodwill and certain  intangible  assets that
     arose due to the initial application of this Statement  should be reported
     as resulting  from a change in accounting  principle.  The adoption of SFAS
     No.  142 did not have a material  impact  on the  Company's  consolidated
     financial statements.

     In  August 2001, the FASB  issued  SFAS No.  143,  "Accounting  for Asset
     Retirement Obligations".  The standard requires entities to record the fair
     value of a liability  for an asset  retirement  obligation in the period in
     which it is incurred.  When the liability is initially recorded, the entity
     capitalizes a cost  by  increasing  the  carrying  amount of the  related
     long-lived asset. Over time, the liability is accreted to its present value
     each period, and the capitalized  cost is depreciated over the useful life
     of the related asset.  Upon  settlement of the liability, an entity either
     settles the  obligation for its recorded  amount or incurs a gain or loss
     upon settlement. The standard is effective for fiscal years beginning after
     June 15, 2002.  The adoption of SFAS 143 did not have a material  impact on
     the Company's consolidated financial statements.


     In  October 2001, the FASB issued  SFAS  No.  144,  "Accounting  for the
     Impairment or Disposal of Long-Lived  Assets".  SFAS No. 144 replaces SFAS
     No.  121,  "Accounting  for the  Impairment  of  Long-Lived  Assets and for
     Long-Lived Assets to Be Disposed Of." SFAS No. 144 requires that long-lived
     assets be measured at the lower of carrying  amount or fair value less cost
     to sell, whether reported in  continuing  operations  or in  discontinued
     operations.  Therefore, discontinued operations will no longer be measured
     at net realizable value or include amounts for operating  losses that have
     not yet occurred.  SFAS No. 144 also broadens the reporting of discontinued
     operations to include all components of an entity with  operations that can
     be  distinguished  from the rest of the entity and that will be  eliminated
     from the ongoing  operations of the entity in a disposal  transaction.  The
     provisions of SFAS No. 144 are effective  for financial  statements  issued
     for fiscal years beginning after December 15, 2001. The adoption of SFAS
     144 did not have a material impact on the Company's consolidated financial
     statements.

     In April 2002, the FASB issued SFAS No. 145, "Recission of FASB Statements
     No. 4, 44, and 64, Amendment of FASB  Statement  No. 13, and  Technical
     Corrections"  ("SFAS 145").  SFAS 145 rescinds SFAS 4, "Reporting Gains and
     Losses from  Extinguishment of Debt",  and an amendment of that Statement,
     SFAS  64,   "Extinguishments of  Debt Made  to Satisfy   Sinking-Fund
     Requirements".  SFAS 145 also rescinds SFAS 44, "Accounting for Intangible
     Assets  of Motor  Carriers".  SFAS 145  amends  SFAS  13,  "Accounting  for
     Leases", to eliminate an inconsistency  between the required accounting for
     sale-leaseback  transactions and the required accounting for certain lease
     modifications that have economic effects that are similar to sale-leaseback
     transactions.   SFAS  145  also  amends other   existing   authoritative
     pronouncements to make various technical corrections,  clarify meanings, or
     describe their applicability under changed conditions.  Certain provisions
     of this statement  related to


                                       9

<PAGE>


     the  classification  of gains and losses from the  extinguishment of debt
     are required  to be  adopted  by the  Company beginning  with the year
     ended July 1, 2003.  All other  provisions  are required  to be  adopted
     after  May 15,  2002  and  early  application  is encouraged. The adoption
     of SFAS No. 145 is not expected to have a material impact on the Company's
     consolidated financial statements.

     In July  2002, the FASB issued  SFAS  No.  146,  "Accounting  for  Costs
     Associated with  Exit or  Disposal  Activities"  ("SFAS  146").  SFAS  146
     addresses financial accounting and reporting for costs associated with exit
     or disposal activities  and  nullifies  EITF Issue No. 94-3, "Liability
     Recognition for Certain  Employee  Termination  Benefits and Other Costs to
     Exit an Activity  (Including  Certain Costs Incurred in a Restructuring").
     SFAS 146 requires  recognition of a liability for a cost associated with an
     exit or disposal  activity  when the liability is incurred, as opposed to
     when the entity commits to an exit plan under EITF 94-3.  This statement is
     effective  for exit or disposal activities initiated after December 31,
     2002. The adoption of SFAS 146 is not expected to have a material impact on
     the Company's consolidated financial statements.


     In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
     Compensation  - Transition  and Disclosure - an amendment of FASB Statement
     No. 123" ("SFAS 148").  SFAS No. 148 amends SFAS No. 123, "Accounting  for
     Stock-Based Compensation," to provide alternative methods of transition for
     a  voluntary change to the fair value based method of accounting  for
     stock-based employee compensation.  In addition,  SFAS No.  148 amends
     the disclosure requirements of SFAS No. 123 to require prominent
     disclosures in both annual and interim financial statements about the
     method of accounting for stock-based employee  compensation and the effect
     of the method used on reported results. The transition guidance and annual
     disclosure  provisions of SFAS No. 148 are effective for financial
     statements issued for fiscal years ending after December 15, 2002. The
     interim disclosure provisions are effective for financial reports
     containing financial statements for interim periods  beginning  after
     December 15,  2002.  The  Company is  currently evaluating  the  impact
     of the adoption of SFAS 148 on its consolidated financial statements.


     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 Report on Form 10-K for the fiscal
                     year ended July 2, 2002.

     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

                                       10

<PAGE>


     publicly update or revise any forward-looking statements, whether as a
     result of new information, future events or otherwise.

     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.

     CRITICAL ACCOUNTING POLICIES

     Management's discussion and analysis of its financial position and results
     of operations are based upon the Company's unaudited consolidated financial
     statements, which have been prepared in accordance with accounting
     principles generally accepted in the United States of America. The
     preparation of these unaudited financial statements requires management to
     make estimates and judgments that affect the reported amounts of assets,
     liabilities, revenues and expenses and related disclosure of contingent
     assets and liabilities. Actual results could differ from those estimates.
     Management believes that the critical accounting policies and areas that
     require the most significant judgments and estimates to be used in the
     preparation of the unaudited financial statements are accounting for
     contracts, allowance for doubtful accounts and the valuation allowance
     against deferred tax assets.

     Contract Accounting - Revenue derived from services provided to customers
     over periods of less than one month is recognized at the completion of the
     related contracts. Revenue from firm fixed price contracts that extend over
     periods of one month or more is recognized using the
     percentage-of-completion method, measured by the percentage of costs
     incurred to date compared to estimated total costs for each contract.
     Provisions for estimated losses on uncompleted contracts are made in the
     period in which such losses are determined. Changes in job performance, job
     conditions, estimated profitability, the effect of contract penalty
     provisions and final contract settlements may result in revisions to
     estimates of costs and income and are recognized in the period in which the
     revisions are determined. Revenues from time and material contracts that
     extend over a period of more than one month are recognized as services are
     performed.

     Allowance for Doubtful Accounts - The Company maintains an allowance for
     doubtful trade accounts receivable for estimated losses resulting from the
     inability of its customers to make required payments. In determining
     collectibility, the Company reviews available customer financial
     information including public filings and credit reports and also consults
     legal counsel to assist in determining collectibility. When it is deemed
     probable that a specific customer account is uncollectible, that balance is
     included in the reserve calculation. Actual results could differ from these
     estimates under different assumptions.

     Deferred Tax Asset Valuation Allowance - The Company records a valuation
     allowance to reduce its deferred tax assets to the amount that is more
     likely than not to be realized. Due to the Company's prior history of
     losses, the Company has recorded a full valuation allowance against its net
     deferred tax assets as of December 31, 2002. The Company currently provides
     for income taxes only to the extent that it expects to pay cash taxes for
     current income. Should the Company be profitable in the future at levels
     which cause management to conclude that is more likely than not that it
     will realize all or a portion of the deferred tax assets, the Company would
     record the estimated net realizable value of the deferred tax assets at
     that time and would then provide for income taxes at its combined federal
     and state effective rates.


     RESULTS OF OPERATIONS

     THIRTEEN WEEKS ENDED DECEMBER 31, 2002 AND JANUARY 1, 2002

     Revenue

     Total revenues for the thirteen weeks ended December 31, 2002 decreased by
     $7,136,506, or approximately 55%, to $5,864,047 from $13,000,553 for the
     thirteen weeks ended January 1, 2002. The decrease in revenues of
     $7,136,506 was primarily attributable to approximately $9,900,000 related
     to non-recurring remediation work performed in the thirteen weeks ended
     January 1, 2002 in the vicinity of the World Trade Center as a result of
     the terrorist attack on September 11, 2001 partially offset by revenue from
     a mold remediation project in Hawaii of $2,000,000 and an increase in
     insurance reconstruction revenues of approximately $800,000 in the thirteen
     weeks ended December 31, 2002.

                                       11

<PAGE>


     Cost of Revenues

     Cost of revenues decreased $3,101,164 to $4,575,194 for the thirteen weeks
     ended December 31, 2002 as compared to $7,676,358 for the thirteen weeks
     ended January 1, 2002. This 40% decrease was primarily attributable to the
     labor costs which were required for the thirteen weeks ended January 1,
     2002 period associated with non-recurring remediation work performed in the
     vicinity of the World Trade Center. Gross profit decreased $4,035,342 to
     $1,288,853 or 22% of total revenue, for the thirteen weeks ended December
     31, 2002 from $5,324,195, or 40% of total revenue, for the thirteen weeks
     ended January 1, 2002. The decrease in gross profit was primarily
     attributable to the absence of World Trade Center related work, which
     produced higher margins for the thirteen weeks ended January 1, 2002. 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 increased by $205,808 to
     $1,562,774 for the thirteen weeks ended December 31, 2002 from $1,356,966
     for the thirteen weeks ended January 1, 2002 and constituted approximately
     27% and 10% of revenues, respectively. The increase of $205,808 was
     primarily attributable to increases in sales and marketing expenses of
     $125,000 and the provision for doubtful accounts of $99,000 as a result of
     the settlement of litigation.

     (Benefit) Expense Related to Variable Accounting Treatment for Officer
     Options

     Under the terms of an employment agreement with the Company and a separate
     agreement with Spotless, the Company's President and Chief Executive
     Officer may sell to the Company, or in certain circumstances to Spotless,
     all shares of common stock of the Company held by him and all shares of
     common stock underlying vested options to purchase shares of common stock
     of the Company held by  him upon the occurrence of certain events. The
     benefit related to variable accounting treatment for officer options was
     $81,334 for the thirteen weeks  ended December 31, 2002 compared to an
     expense of $1,127,575 for the thirteen weeks ended January 1, 2002. This
     was due to a decrease in the  market price of the Company's common stock
     that was partially offset by an increase in the number of vested options
     outstanding. Due to the terms of  the options, changes in the market price
     of the Company's common stock, in either direction, result in a
     corresponding expense or benefit.

     Interest Expense

     Interest expense decreased by $93,786, or 78%, to $27,021 for the thirteen
     weeks ended December 31, 2002 from $120,807 for the thirteen weeks ended
     January 1, 2002. The decrease in interest expense was primarily
     attributable to reductions in convertible debt of $2,780,000, of which
     $2,000,000 was converted by Spotless in November 2001, offset by increased
     short-term borrowings from Spotless of $1,000,000, to fund a mold
     remediation project in Hawaii.

     (Benefit) Provision for Income Taxes

     The (benefit) provision for income taxes decreased by $1,727,720 to a
     benefit of $17,317 for the thirteen weeks ended December 31, 2002 from
     $1,710,403 for the thirteen weeks ended January 1, 2002. The decrease was
     primarily attributable to the net loss for the thirteen weeks ended
     December 31, 2002.

     Net Income (Loss)

     Net income decreased by $1,192,255 to a net loss of $183,151 for the
     thirteen weeks ended December 31, 2002 from net income of $1,009,104 for
     the thirteen weeks ended January 1, 2002. The decrease was the result of
     the factors discussed above.

                                       12

<PAGE>

     TWENTY-SIX WEEKS ENDED DECEMBER 31, 2002 AND JANUARY 1, 2002

     Revenue

     Total revenues for the twenty-six weeks ended December 31, 2002 decreased
     by $10,278,604, or approximately 50%, to $10,457,023 from $20,735,627 for
     the twenty-six weeks ended January 1, 2002. The decrease in revenues of
     $10,276,509 was primarily attributable to approximately $12,400,000 related
     to non-recurring remediation work performed in the twenty-six weeks ended
     January 1, 2002 in the vicinity of the World Trade Center as a result of
     the terrorist attack on September 11, 2001 and a decrease in the Company's
     North Atlantic Laboratories subsidiary of approximately $200,000 partially
     offset by increases in mold remediation of approximately $1,300,000 and
     insurance reconstruction revenues of approximately $1,300,000 for the
     twenty-six weeks ended December 31, 2002.

     Cost of Revenues

     Cost of revenues decreased $4,887,221 to $8,109,670 for the twenty-six
     weeks ended December 31, 2002 as compared to $12,996,891 for the twenty-six
     weeks ended January 1, 2002. This 38% decrease was primarily attributable
     to the labor and subcontractor costs which were required for the twenty-six
     weeks ended January 1, 2002 period associated with non-recurring
     remediation work performed in the vicinity of the World Trade Center. Gross
     profit decreased $5,391,383 to $2,347,353 or 22% of total revenue, for the
     twenty-six weeks ended December 31, 2002 from $7,738,736, or 37% of total
     revenue, for the twenty-six weeks ended January 1, 2002. The decrease in
     gross profit was primarily attributable to the absence of World Trade
     Center related work, which produced higher margins for the twenty-six weeks
     ended January 1, 2002. 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 increased by $255,442 to
     $2,586,558 for the twenty-six weeks ended December 31, 2002 from $2,331,116
     for the twenty-six weeks ended January 1, 2002 and constituted
     approximately 25% and 11% of revenues, respectively. The increase of
     $255,442 was primarily attributable to increases in sales and marketing
     expenses of approximately $265,000.

     (Benefit) Expense Related to Variable Accounting Treatment for Officer
     Options

     Under the terms of an employment agreement with the Company and a separate
     agreement with Spotless, the Company's President and Chief Executive
     Officer may sell to the Company, or in certain circumstances to Spotless,
     all shares of common stock of the Company held by him and all shares of
     common stock underlying vested options to purchase shares of common stock
     of the Company held by him upon the occurrence of certain events. The
     benefit related to variable accounting treatment for officer options was
     $162,565 for the twenty-six weeks ended December 31, 2002 compared to an
     expense of $1,368,020 for the twenty-six weeks ended January 1, 2002. This
     was due to a decrease in the market price of the Company's common stock
     that was partially offset by an increase in the number of vested options
     outstanding. Due to the terms of the options, changes in the market price
     of the Company's common stock, in either direction, result in a
     corresponding expense or benefit.

     Interest Expense

     Interest expense decreased by $160,092, or 82%, to $35,190 for the
     twenty-six weeks ended December 31, 2002 from $195,282 for the twenty-six
     weeks ended January 1, 2002. The decrease in interest expense was primarily
     attributable to reductions in convertible debt of $2,780,000, of which
     $2,000,000 was converted by Spotless in November 2001, offset by increased
     short-term borrowings from Spotless of $1,000,000, to fund a mold
     remediation project in Hawaii.

                                       13

<PAGE>


     (Benefit) Provision for Income Taxes

     The (benefit) provision for income taxes decreased by $2,091,382 to a
     benefit of $9,317 for the twenty-six weeks ended December 31, 2002 from
     $2,082,065 for the twenty-six weeks ended January 1, 2002. The decrease was
     primarily attributable to the net loss for the twenty-six weeks ended
     December 31, 2002.

     Net Income (Loss)

     Net income decreased by $1,851,461 to a net loss of $79,204 for the
     twenty-six weeks ended December 31, 2002 from net income of $1,772,257 for
     the twenty-six weeks ended January 1, 2002. The decrease was the result of
     the factors discussed above.

     LIQUIDITY AND CAPITAL RESOURCES

     As of December 31, 2002, the Company had a cash balance of $271,823,
     working capital of $3,481,930 and stockholders' equity of $3,254,179.
     Historically, the Company has financed its operations primarily through
     issuance of debt and equity securities, through short-term borrowings from
     its majority shareholder, Spotless and through cash generated from
     operations. Based on the Company's experience and for the reasons set
     forth below, in the opinion of management, the Company expects to have
     sufficient working capital to fund its operations on an ongoing basis,
     including for at least the next twelve months. However, economic, market
     and other conditions may affect the Company's cash flows and liquidity.
     In the event that the Company is unable to generate sufficient positive
     cash flow from operations, the Company may seek additional financing from
     Spotless, although Spotless is under no legal obligation to provide such
     funds. The Company currently has no credit facility for additional
     borrowing.

     During the twenty-six weeks ended December 31, 2002, in order to address
     the Company's cash flow and operational concerns, including funding the
     payment of income taxes and start up costs relating to a large mold
     remediation project in Hawaii, the Company borrowed $1,425,000 from
     Spotless. During the twenty-six weeks ended December 31, 2002, the Company
     repaid $422,957 to Spotless. All borrowings from Spotless bear interest at
     the London Interbank Offering Rate ("LIBOR") plus 1 percent and are secured
     by all of the Company's assets and are payable on demand. As of December
     31, 2002, the Company owed Spotless $1,202,043 on such short-term loans to
     fund working capital. Subsequent to December 31, 2002, the Company repaid
     $402,043 to Spotless, leaving an $800,000 balance owned to Spotless as of
     February 14, 2003.

     During the twenty-six weeks ended December 31, 2002, the Company repaid
     $100,000 principal amount of 12% convertible notes to a director of the
     Company.

     The Company's future cash requirements are expected to depend on numerous
     factors, including, but not limited to: (i) its ability to obtain
     environmental or related construction contracts, (ii) its ability to
     generate positive cash flow from operations, and the extent thereof, (iii)
     its ability to raise additional capital or obtain additional financing
     to the extent necessary, and (iv) economic and industry conditions.  The
     Company anticipates revenue growth in new and existing service areas
     and continues to bid on large projects, though there can be no assurance
     that any of the Company's bids will be accepted.  The Company expects to
     generate positive cash flow from operations to meet its working capital
     needs on an ongoing basis, including for at least the next twelve months.
     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 sufficient positive cash flow from operations or obtaining
     additional financing to the extent necessary.  The Company has taken
     several steps to improve its operating results and cash flows, including:
     (a) increasing its collection efforts with insurance companies to
     accelerate the flow of payments to the Company on reconstruction projects;
     (b) applying for advance payments to fund the purchase of materials and the
     payment of subcontractors and large staffs of employees on larger projects;
     (c) expanding its marketing efforts and staff to increase the Company's
     industry prominence, attract more bidding opportunities and projects and
     broaden the Company's customer base; (d) attempting to improve its gross
     margins and control its selling, general and administrative expenses.
     Management expects these efforts to improve its results of operations,
     including by producing a more steady flow of small to medium size projects
     and by increasing the Company's exposure to those customers that control
     larger, generally higher gross margin projects, though no assuarnce can be
     given that these actions will be successful.  In the event these efforts
     do not result in sufficient positive cash flow from operations, the Company
     may be required to seek additional


                                       14

<PAGE>

     financing to meet its working capital needs, including possibly from
     Spotless.  Managment also continues to pursue additional funding sources,
     including possible equipment financing that would be expected to reduce
     the amount of cash expended on equipment purchases, which could then be
     used for other purposes.

     The table below summarizes aggregate maturities of future minimum lease
     payments under noncancelable operating leases as of December 31, 2002:

                        Total         1 Year        2-3 Years      4-5 Years

    Operating Leases  $1,622,000     $352,000       $745,000       $525,000

     CASH FLOW

     Net cash used by operating activities was $291,836 for the twenty-six weeks
     ended December 31, 2002. Accounts receivable decreased by $238,873.
     Accounts payable and accrued expenses and accrued payroll decreased
     $45,618. Income taxes payable decreased $450,820 as a result of the
     decrease in taxable income from that in the prior year ended July 2, 2002
     and the filing of the appropriate tax returns and making the prescribed
     payments. Cash used for capital expenditures was $1,027,871during the
     twenty-six weeks ended December 31, 2002, primarily to fund the purchase of
     commercial drying equipment.

     During the twenty-six weeks ended December 31, 2002, in order to fund the
     mold remediation project in Hawaii, the Company borrowed $1,425,000 from
     Spotless and then repaid $422,957 of such amount. In addition, the Company
     repaid an additional $402,043 to Spotless subsequent to December 31, 2002.
     All current borrowings from Spotless bear interest at LIBOR plus 1 percent
     (3.07% at December 31, 2002) and are secured by all of the Company's
     assets.

     INFLATION

     Inflation has not had a material impact on the Company's operations over
     the past three fiscal years or during the twenty-six weeks ended December
     31, 2002.

     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, it is affected by the timing of large contracts in certain of its
     service areas, i.e., asbestos and mold abatement and construction, as well
     as the timing of catastrophes.

     Item 3. Quantitative and Qualitative Disclosures about Market Risk

     The Company is exposed to potential loss from market risks that may occur
     as a result of changes in the market price of the Company's common stock
     (with respect to the variable accounting treatment of a put option for
     shares of common stock and common stock options held by an officer of the
     Company) and as a result of changes in interest rates (primarily with
     respect to its debt obligations to Spotless). There have been no material
     changes to the Company's market risk as reported in the Company's Annual
     Report on Form 10-K for the period ended July 2, 2002.

     Item 4.  Controls and Procedures

     Our principal executive and financial officers have concluded, based on
     their evaluation as of a date within 90 days before the filing of this
     10-Q, that our disclosure controls and procedures under Rule 13a-14 of the
     Securities Exchange Act of 1934 are effective to ensure that information we
     are required to disclose in the reports we file or submit under the
     Exchange Act is recorded, processed, summarized and reported within the
     time periods specified in the SEC's rules and forms, and include controls
     and procedures designed to ensure that information we are required to
     disclose in such reports is accumulated and communicated to management,
     including our principal executive and officers, as appropriate to allow
     timely decisions regarding required disclosure. Subsequent to our
     evaluation, there were no significant changes in internal controls or other
     factors that could significantly affect these internal controls.

                                       15

<PAGE>

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

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

                  Reference is hereby made to Note 5 to the Consolidated
                  Financial Statements in Part I - Item 1 above and to Item 3 of
                  the Company's Annual Report on Form 10-K for the year ended
                  July 2, 2002 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
                  -------------------------------

                  Not applicable

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

                  The 2002 Annual Meeting of Stockholders of the Company was
                  held on December 16, 2002, at which the following matter was
                  voted upon and adopted by the votes indicated:

                  To elect nine directors to the Board of Directors to serve
                  until the next annual meeting of stockholders, unless any such
                  director shall resign, become disqualified, disabled or
                  otherwise removed from office. The names of the directors and
                  votes cast in favor of their election and votes withheld are
                  as follows:

                     Nominee                     For               Withheld
                     -------                     ---               --------

                     Michael O'Reilly            72,365,767        12,600
                     Charles L. Kelly, Jr.       72,359,207        19,160
                     Peter A. Wilson             72,362,267        16,100
                     Brian S. Blythe             72,364,517        13,850
                     John J. Bongiorno           72,364,517        13,850
                     Ronald B. Evans             72,364,517        13,850
                     Samuel Sadove               72,376,157        2,210
                     Anthony Towell              72,374,157        4,210
                     Dr. Kevin Phillips          72,376,157        2,210


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

                  Audit Fees.  Deloitte & Touche LLP provided audit services to
                  to the Company consisting of the audit of the Company's
                  consolidated financial statements for the fiscal year ended
                  July 2, 2002 and reviews of the financial statements included
                  in the Company's Forms 10-Q for the fiscal year ended July 2,
                  2002.  The fees billed by Deloitte & Touche LLP for these
                  services totaled $132,000.

                  Financial Information System Designed and Implementation Fees;
                  All Other Fees. Except as noted in the preceding paragraph,
                  Deloitte & Touche LLP did not perform any services for the
                  Company during the fiscal year ended July 2, 2002.


                                       16
<PAGE>

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

                  (a)    Exhibits:
                  99.1   Certification of Chief Executive Officer pursuant to
                         18 U.S.C. Section 1350
                  99.2   Certification of Chief Financial Officer pursuant to
                         18 U.S.C. Section 1350

                  (b)    Reports on Form 8-K

                         There were no reports on Form 8-K filed during the
                         thirteen week period ended December 31, 2002

                                       17

<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: February 14, 2003
                                         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)

                                       18

<PAGE>


                                  CERTIFICATION
                                  -------------


     I, Michael O'Reilly, certify that:

     1. I have reviewed this quarterly report on Form 10-Q of Windswept
     Environmental Group, Inc.;

     2. Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

     3. Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

     4. The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a) designed such disclosure controls and procedures to ensure that material
     information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this quarterly report is being
     prepared;

     b) evaluated the effectiveness of the registrant's disclosure controls and
     procedures as of a date within 90 days prior to the filing date of this
     quarterly report (the "Evaluation Date"); and

     c) presented in this quarterly report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

     5. The registrant's other certifying officer and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and

     b) any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     controls; and

     6. The registrant's other certifying officer and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.





     Date: February 14, 2003                         /s/ Michael O'Reilly
                                           -------------------------------------
                                                       Michael O'Reilly
                                           President and Chief Executive Officer

                                       19
<PAGE>


                                  CERTIFICATION
                                  -------------


     I, Charles L. Kelly Jr., certify that:

     1. I have reviewed this quarterly report on Form 10-Q of Windswept
     Environmental Group, Inc.;

     2. Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

     3. Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

     4. The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a) designed such disclosure controls and procedures to ensure that material
     information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this quarterly report is being
     prepared;

     b) evaluated the effectiveness of the registrant's disclosure controls and
     procedures as of a date within 90 days prior to the filing date of this
     quarterly report (the "Evaluation Date"); and

     c) presented in this quarterly report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

     5. The registrant's other certifying officer and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and

     b) any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     controls; and

     6. The registrant's other certifying officer and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.



     Date:  February 14, 2003                         /s/ Charles L. Kelly, Jr.
                                                   -----------------------------
                                                       Charles L. Kelly Jr.
                                                     Chief Financial Officer

                                       20