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 JULY 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 Identification No.)
     incorporation or organization)

     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 September
11, 2000 was 38,456,254.


<PAGE>


PART 1 - FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements
        --------------------

                       WINDSWEPT ENVIRONMENTAL GROUP, INC.
                           CONSOLIDATED BALANCE SHEETS
                        JULY 31, 2000 AND APRIL 30, 2000
<TABLE>
<CAPTION>
                                                                             July 31,           April 30,
                                                                               2000               2000
                                                                           (Unaudited)
                                                                           -----------         -----------
<S>                                                                      <C>                   <C>
ASSETS:
CURRENT ASSETS:
  Cash                                                                   $    243,758          $   816,560
  Accounts receivable, net of allowance for doubtful accounts
    of $300,042 and $266,042, respectively                                  2,665,747            3,422,469
  Inventories                                                                 126,952              168,151
  Costs and estimated earnings in excess of billings on uncompleted
    contracts                                                                 354,780              150,829
  Prepaid expenses and other current assets                                   149,033              135,384
                                                                         ------------          -----------
  Total current assets                                                      3,540,270            4,693,393

PROPERTY AND EQUIPMENT, net of accumulated depreciation
  and amortization of $3,871,476 and $3,657,682, respectively               1,728,690            1,749,928
GOODWILL, net of accumulated amortization of $57,754 and $55,387,              64,272               66,639
  respectively
OTHER ASSETS                                                                  179,086              189,244
                                                                         ------------          -----------
TOTAL                                                                    $  5,512,318          $ 6,699,204
                                                                         ============          ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT:
CURRENT LIABILITIES:
  Accounts payable                                                       $  1,395,166          $ 1,735,529
  Accrued expenses                                                          1,399,334            1,252,853
  Short-term notes payable                                                    500,000              500,000
  Billings in excess of cost and estimated on uncompleted contracts           106,898              302,854
  Accrued payroll and related fringes                                         339,936              475,931
  Sales tax payable                                                           172,000              269,518
  Current portion of long-term debt                                           123,762              136,153
  Obligations of unconsolidated subsidiary, net                               210,007              210,007
  Income taxes payable                                                        176,484              194,684
  Other current liabilities                                                    38,829               89,483
                                                                         ------------           ----------
  Total current liabilities                                                 4,462,416            5,167,012
                                                                         ------------           ----------

LONG-TERM DEBT                                                                 71,013               95,005
                                                                         ------------           ----------

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

COMMITMENTS AND CONTINGENCIES

REDEEMABLE COMMON STOCK                                                       260,772              102,167
                                                                         ------------           ----------

SERIES A  REDEEMABLE  CONVERTIBLE  PREFERRED  STOCK,
  $.01 par value;  1,300,000 shares authorized; 1,300,000 shares
  outstanding at July 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 July 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; 50,000,000 shares authorized;
    38,456,254 shares outstanding at July 31, 2000 and April 30, 2000           3,846                3,846
  Additional paid-in-capital                                               31,785,450           31,804,950
  Accumulated deficit                                                     (35,151,272)         (34,553,869)
                                                                         ------------          -----------
  Total stockholders' deficit                                              (3,361,883)          (2,744,980)
                                                                         ------------          -----------
TOTAL                                                                    $  5,512,318          $ 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
                                                                            July 31,
                                                                  2000                     1999
                                                              ------------             ------------

<S>                                                           <C>                      <C>
Revenues                                                      $  2,818,802             $ 2,561,010

Cost of revenues                                                 2,216,769               1,767,191
                                                              -------------            ------------

Gross profit                                                       602,033                 793,819

Selling, general and administrative expenses                     1,151,097                 651,341
                                                              -------------            ------------

(Loss) income from operations                                     (549,064)                142,478
                                                              -------------            ------------

Other (expense) income:
  Interest expense                                                 (83,859)               (182,454)
  Other, net                                                        35,520                     181
                                                              -------------            ------------
  Total other expense                                              (48,339)               (182,273)
                                                              -------------            ------------

Loss before provision for income taxes                            (597,403)                (39,795)
                                                              -------------            ------------

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

Net loss                                                          (597,403)                (39,795)

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

Net loss attributable to common shareholders                  $   (616,903)            $   (59,295)
                                                              =============            ============

Basic and diluted net loss per common share                   $       (.02)            $      (.00)
                                                              =============            ============

Weighted average number of common shares outstanding:
  basic and diluted                                             38,456,254              14,663,804
                                                              =============            ============
</TABLE>

See notes to consolidated financial statements.

                                       3
<PAGE>


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

<TABLE>
<CAPTION>
                                                                       Three Months Ended
                                                                            July 31,
                                                                  2000                     1999
                                                              ------------             ------------

<S>                                                           <C>                      <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                    $  (597,403)             $   (39,795)
  Adjustment to reconcile net loss to net cash used in
    operating activities:
      Depreciation and amortization                               226,319                  227,863
      Provision for doubtful accounts                              34,000                     -
      Issuance of common stock and stock options for
        director compensation                                       -                        5,078
      Compensation related to officer options and
        redeemable common stock                                   158,605                     -
      Issuance of common stock and stock options for
        services                                                    -                      171,810
  Changes in operating assets and liabilities:
      Accounts receivable                                         722,722                  (85,868)
      Inventories                                                  41,199                   (4,715)
      Costs and estimated earnings in excess of billings
        on uncompleted contracts                                 (203,951)                 157,000
      Prepaid and other current assets                            (13,649)                (146,775)
      Accounts payable and accrued expenses                      (213,382)                (291,141)
      Payroll and sales tax payable                              (233,513)                 122,469
      Income tax payable                                          (18,200)                    -
      Other current liabilities                                   (50,654)                    -
      Billings in excess of costs and estimated earnings
        on uncompleted contracts                                 (195,956)                (156,774)
                                                              ------------             ------------
NET CASH USED IN OPERATING ACTIVITIES                            (343,863)                 (40,848)
                                                              ------------             ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of fixed assets                                        (192,556)                  (6,968)
Collection of notes receivable                                       -                      10,365
                                                              ------------             ------------

NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES              (192,556)                   3,397
                                                              ------------             ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Principal payments of long-term debt and factor
        advances                                                  (36,383)                (222,744)
      Proceeds of revolving bank line, net                           -                      98,436
      Proceeds from private placement of stock                       -                     138,975
                                                              ------------             ------------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES               (36,383)                  14,667
                                                              ------------             ------------

NET DECREASE IN CASH                                             (572,802)                 (22,784)

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

CASH-END OF PERIOD                                            $   243,758              $    23,552
                                                              ============             ============

Cash paid during the period for:
      Interest                                                $     8,805              $   174,577
                                                              ============             ============
      Taxes                                                   $    18,200              $      -
                                                              ============             ============

Non cash financing activities:
      Issuance of redeemable preferred stock dividend         $    19,500              $    19,500
                                                              ============             ============
</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 July 31,
   2000 and the results of operations and cash flows for the three months ended
   July 31, 2000 and 1999, have been included. Certain prior period amounts have
   been reclassified to conform with the July 2000 presentation.

   The results for the three months ended July 31, 2000 and 1999 are not
   necessarily  indicative  of the results for an entire year. It is suggested
   that these  unaudited   consolidated   financial  statements  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 July 31,  2000,  the Company had a
   stockholders' deficiency  of  $3,361,883  and an  accumulated  deficit  of
   $35,151,272.  The Company has financed its operations to date  primarily
   through issuances of debt and equity securities.  As of July 31, 2000, the
   Company had $243,758 in cash and a working capital deficit of $922,146.  In
   addition, as of July 31, 2000, the Company was in arrears with respect to
   certain sales tax obligations  of  approximately  $115,000  as  well  as
   preferred stock dividends plus interest of approximately $71,000.  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 currently has no credit facility for additional
   borrowing. Management continues to pursue additional funding sources and is
   discussing the availability of credit facilities with various lenders.
   Revenue growth is expected 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.  On September 8, 2000, the
   Company  borrowed an additional  $300,000 from Spotless

                                       5
<PAGE>

   for working capital requirements.  These  borrowings bear  interest at a rate
   equal to the London Interbank Offering Rate ("LIBOR") plus an additional 1%.

3. PROVISION FOR INCOME TAXES - No provision or benefit for income taxes was
   recorded for the three months ended July 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 were 38,456,254 and 14,663,804 shares for the three
   months ended July 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 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, Trade-Winds Environmental Restoration, Inc.
   ("Trade-Winds"), a wholly owned subsidiary of the Company, 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 or cash flows.

                                       6

<PAGE>

   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.

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

Revenue

Total revenues increased by $257,792 or 10% for the three months ended July 31,
2000 ("the 2000 period") to $2,818,802 from $2,561,010 for the three months
ended July 31, 1999 ("the 1999 period"). Revenues in the Company's Trade-Winds
subsidiary increased $62,970 to $2,321,593 in the 2000 period from $2,258,623 in
the 1999 period. The increase in Trade-Winds revenue was primarily attributable
to increases in revenues from environmental remediation/compliance projects of
approximately $760,000 and an increase in construction projects of approximately
$341,000 which were partially offset by decreases in asbestos abatement
projects, emergency spill response and oil tank compliance projects of
approximately $204,000, $515,000 and $222,000, respectively. Revenues in the
Company's North Atlantic Laboratories, Inc. ("NAL") subsidiary increased by
$156,181 to $276,677 in the 2000 period from $120,496 in the 1999 period. The
increase in NAL revenue was primarily

                                       7
<PAGE>

attributable  to NAL being awarded a new contract that resulted in sales of
approximately  $50,000  and an  increase in NAL's  direct  marketing  efforts to
potential customers.

Cost of Revenues

Cost of revenues increased to $2,216,769 in the 2000 period as compared to
$1,767,191 in the 1999 period. The increase of $449,578, or 25%, was
attributable to the increase in sales volume and the increase in employee costs
in anticipation of increased volume which management believes will be
achieved in future periods, primarily with respect to emergency response
projects, although no assurances can be given in that regard. 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 $499,756, or 77%, to
$1,151,097 in the 2000 period from $651,341 in the 1999 period, and constituted
approximately 41% and 25% of revenues in the 2000 and 1999 period, respectively.
The increase of $499,756 was primarily a result of increases in marketing and
other advertising costs of approximately $167,000, compensation expense related
to a put option for shares of common stock and stock options held by an officer
of the Company of approximately $158,000, administrative salaries of
approximately $64,000 and bad debt expense of approximately $30,000.

Interest Expense

Interest expense decreased by $98,595, or 54%, in the 2000 period to $83,859
from $182,454 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 resultant debt facility with
Spotless carries a significantly lower interest rate.

Other Income

Other income increased $35,339 to $35,520 in the 2000 period from $181 in the
1999 period. The increase is attributable to savings realized through
negotiations with vendors to reduce trade payable balances.

LIQUIDITY AND CAPITAL RESOURCES

As of July 31, 2000, the Company had a stockholders' deficiency of $3,361,883
and an accumulated deficit of $35,151,272. The Company has financed its
operations to date primarily through issuances of debt and equity securities. As
of July 31, 2000, the Company has $243,758 in cash and a working capital deficit
of $922,146. In addition, as of July 31, 2000, the Company was in arrears with
respect to certain sales tax obligations of approximately $115,000 as well as
preferred stock dividends plus interest of approximately $71,000. 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 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 currently
has no credit facility for additional borrowing. Management continues to pursue
additional funding sources and is discussing the availability of credit

                                       8
<PAGE>


facilities with various lenders. Revenue growth is expected 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. On September 8, 2000, the Company
borrowed an additional $300,000 from Spotless for working capital requirements.
These borrowings bear interest at a rate equal to LIBOR plus an additional 1%.

The Company believes that an increase in its market share through focused sales
efforts and strategic acquisitions may result in revenue growth and
profitability. In accordance with this strategy, the Company has engaged in
preliminary discussions with several acquisition targets. As of yet, none of
such potential transactions are probable.

CASH FLOW

Cash decreased by $572,802 during the 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 $193,000.

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.

                                       9
<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
          $71,000.  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  anticipates  that, under  Delaware
          law,  it will be  unable  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  shall become effective  upon its filing with the Office
          of the Secretary of the State of Delaware.  Such  filing  shall be
          made not less than twenty (20) days after August  29,  2000,  the
          date  on  which  the  Company  transmitted  to its stockholders  an
          Information  Statement,  filed with the SEC on August 23, 2000, in
          compliance with the proxy rules of the Securities  Exchange Act of
          1934, as amended (the "Exchange Act"), describing the Amendment.

          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  appointed  to the  Board  of Directors of the
          Company,  effective as of the date which is ten (10) days after the
          filing with the SEC and  transmission to the  stockholders of the
          Company  of an  Information  Statement  pursuant  to  Section  14(f)
          of the Exchange  Act,  and  Rule  14f-1  promulgated  thereunder.  The
          continuing directors are Michael O'Reilly,  Kevin Phillips,  Anthony
          Towell and Samuel Sadove.

                                       10
<PAGE>

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

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

          Not applicable.

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

(a)       Exhibits:

          27.  Financial Data Schedule

(b)       Reports on Form 8-K:

          There were no reports on Form 8-K filed during the  quarterly  period
          ended July 31, 2000.

                                       11

<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: September 14, 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)

                                       12
<PAGE>


                                  EXHIBIT INDEX

Exhibit
Number      Description
-------     -----------

27          Financial Data Schedule




                                       13