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 September 27, 2005,

                                       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: 000-17072

                      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 principal 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
                                                          ---     ---

     Indicate by check mark whether the registrant is a shell company (as
     defined in Rule 12-b-2 of the Exchange Act.)
                                                       Yes      No X
                                                          ---     ---

     The number of shares of Common Stock, par value $.0001, outstanding on
     November 3, 2005 was 33,571,215.


<PAGE>


                         PART 1 - FINANCIAL INFORMATION
                         ------------------------------

ITEM 1. FINANCIAL STATEMENTS

                       WINDSWEPT ENVIRONMENTAL GROUP, INC.
                           CONSOLIDATED BALANCE SHEETS
                      SEPTEMBER 27, 2005 AND JUNE 28, 2005
<TABLE>
<CAPTION>
                                                                                                  September 27,        June 28,
                                                                                                      2005               2005
                                                                                                 ---------------    ---------------
                                                                                                  (Unaudited)
<S>                                                                                              <C>                <C>
ASSETS:
CURRENT ASSETS:
   Cash                                                                                           $     147,493      $     512,711
   Accounts receivable, net of allowance for doubtful accounts of $1,707,831 and $1,507,831,
      respectively                                                                                    8,210,155          6,755,338
   Inventory                                                                                            151,367            146,079
   Costs and estimated earnings in excess of billings on uncompleted contracts                          382,755             30,466
   Prepaid expenses and other current assets                                                            797,595             47,253
                                                                                                 ---------------    ---------------
   Total current assets                                                                               9,689,365          7,491,847
                                                                                                 ---------------    ---------------

PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization of $6,546,981
   and $6,386,731, respectively                                                                       3,124,940          2,242,645

OTHER ASSETS:
   Deferred financing costs                                                                           3,109,556                  -
   Other                                                                                                191,025            322,046
                                                                                                 ---------------    ---------------
   Total Other Assets                                                                                 3,300,581            322,046
                                                                                                 ---------------    ---------------

TOTAL                                                                                             $  16,114,886      $  10,056,538
                                                                                                 ===============    ===============

LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
   Accounts payable                                                                               $   2,784,638      $   1,174,840
   Account receivable payable                                                                           189,197                  -
   Secured note payable to a related party                                                                    -          5,000,000
   Secured convertible note payable - current portion                                                   331,656                  -
   Accrued expenses                                                                                   2,069,531          1,597,841
   Billings in excess of cost and estimated earnings on uncompleted contracts                            96,000             83,316
   Accrued payroll and related fringe benefits                                                          600,771            528,867
   Capitalized leases - current portion                                                                 208,224            169,612
   Income taxes payable                                                                                 827,690            138,579
   Other current liabilities                                                                            655,993            489,468
                                                                                                 ---------------    ---------------
   Total current liabilities                                                                          7,763,700          9,182,523
                                                                                                 ---------------    ---------------

LONG-TERM DEBT:
   Secured convertible note payable                                                                     729,642                  -
   Secured note payable                                                                                 500,000                  -
   Capitalized leases                                                                                   269,533            197,400
                                                                                                 ---------------    ---------------
   Total long-term debt                                                                               1,499,175            197,400
                                                                                                 ---------------    ---------------

COMMITMENTS AND CONTINGENCIES

Redeemable Common Stock                                                                                       -             60,129
                                                                                                 ---------------    ---------------

SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK, $.01 par value; 1,300,000 shares
   authorized; 1,300,000 shares outstanding at September 27, 2005 and June 28, 2005                   1,300,000          1,300,000
                                                                                                 ---------------    ---------------

STOCKHOLDERS' EQUITY / (DEFICIT):
   Series B preferred stock, $.01 par value; 50,000 shares authorized; 0 shares outstanding                   -                  -
   Nondesignated preferred stock, no par value; 8,650,000 shares authorized; 0 shares
     outstanding at September 27, 2005 and June 28, 2005                                                      -                  -
   Common stock, $.0001 par value; 150,000,000 shares authorized; 35,255,620 shares
      outstanding at September 27, 2005 and 77,936,358 shares outstanding at June 28, 2005                3,525              7,794
   Additional paid-in-capital                                                                        41,423,592         33,944,017
   Accumulated deficit                                                                              (35,875,106)       (34,635,325)
                                                                                                 ---------------    ---------------
   Total stockholders' equity  (deficit)                                                              5,552,011           (683,514)
                                                                                                 ---------------    ---------------
TOTAL                                                                                             $  16,114,886      $  10,056,538
                                                                                                 ===============     ==============
See notes to consolidated financial statements.
</TABLE>


                                       2


<PAGE>


                       WINDSWEPT ENVIRONMENTAL GROUP, INC.
                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                         Thirteen Weeks Ended
                                                                                                  ----------------------------------
                                                                                                   September 27,      September 28,
                                                                                                       2005               2004
                                                                                                  ---------------    ---------------
<S>                                                                                               <C>                <C>
Revenues                                                                                           $   5,164,339      $   5,478,506

Cost of revenues                                                                                       4,385,270          4,362,123
                                                                                                  ---------------    ---------------

Gross profit                                                                                             779,069          1,116,383
                                                                                                  ---------------    ---------------

Operating expenses (income):
Selling, general and administrative expenses                                                           1,506,404          1,232,034
Benefit related to variable accounting
   treatment for officer options                                                                               -                  -
                                                                                                  ---------------    ---------------
   Total operating expenses                                                                            1,506,404          1,232,034
                                                                                                  ---------------    ---------------


(Loss) income from operations                                                                           (727,335)          (115,651)
                                                                                                  ---------------    ---------------
Other expense (income):
   Interest expense                                                                                      594,042            211,104
   Other, net                                                                                            (89,814)              (799)
                                                                                                  ---------------    ---------------
   Total other expense (income)                                                                          504,228            210,305
                                                                                                  ---------------    ---------------

(Loss) income before provision for income taxes                                                        1,231,563           (325,956)

Provision for income taxes                                                                                 8,218              2,589
                                                                                                  ---------------    ---------------

Net (loss) income                                                                                    (1,239,781)           (328,545)

Dividends on preferred stock                                                                             19,500              19,500
                                                                                                  ---------------    ---------------

Net (loss) income attributable to common shareholders                                              $  (1,259,281)     $    (348,045)
                                                                                                  ===============    ===============

Basic and diluted net (loss) income per common share:
Basic                                                                                                      $(.04)              $.00
                                                                                                           ======              =====
Diluted                                                                                                    $(.04)              $.00
                                                                                                           ======              =====

Weighted average number of common shares outstanding:
Basic                                                                                                 35,039,812         77,936,358
                                                                                                      ==========         ==========
Diluted                                                                                               35,039,812         77,936,358
                                                                                                      ==========         ==========

See notes to consolidated financial statements.
</TABLE>


                                       3


<PAGE>


                       WINDSWEPT ENVIRONMENTAL GROUP, INC.
           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
                                                          Common Stock
                                                          ------------             Additional
                                                     Number of                       Paid-in     Accumulated
                                                       Shares         Par Value      Capital        Deficit            Total
                                                       ------         ---------      -------        -------            -----
<S>                                                 <C>                <C>         <C>           <C>                <C>
Balance at June 28, 2005                             77,936,358        $ 7,794     $33,944,017   $(34,635,325)      $   (683,514)

Laurus Financing:
                      Allocation of proceeds to
                      warrants and options                                         $ 2,198,385                      $  2,198,385
                      Allocation of proceeds to
                      beneficial conversion
                      feature                                                      $ 2,198,395                      $  2,198,395
                      Assumed exercise of
                      shares available for
                      nominal consideration           1,684,405            168            (168)                     $          -
                      Allocation of proceeds to
                      beneficial conversion
                      feature on second tranche
                      of financing                                                 $    52,539                      $     52,539
                      Allocation of proceeds to
                      beneficial conversion
                      feature on third tranche
                      of financing                                                 $   624,650                      $    624,650
                      Partial exercise of             1,500,000        $   150                                      $        150
                      options
Spotless Financing:
                      Cancellation of Spotless
                      shares                        (45,865,143)       $(4,587)    $    4,587                       $         -
                      Early extinguishment of
                      Spotless Note (net of tax
                      effect of $686,893)                                          $ 1,190,837                      $  1,190,837
                      Surrender of Redeemable
                      Common Stock                                                 $    60,129                      $     60,129
                      Value of Spotless shares
                      sold to Michael O'Reilly
                      less consideration                                           $ 1,125,071                      $  1,125,071
Options granted to preferred
stockholders for forbearance of
mandatory redemption                                                               $    44,650                      $     44,650

Dividends - Series A Preferred Stock                                               $   (19,500)                     $    (19,500)

Net income (loss)                                             -              -     $         -  $  (1,239,831)      $ (1,239,831)
                                                    ------------       --------    ------------  -------------      -------------
Balance at September 27, 2005                        35,255,620        $ 3,525     $41,423,592   $(35,875,106)      $  5,552,011
                                                    ============       ========    ============  =============      =============


See notes to consolidated financial statements.
</TABLE>


                                       4


<PAGE>


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

<TABLE>
<CAPTION>
                                                                                                         Thirteen Weeks Ended
                                                                                                 -----------------------------------
                                                                                                  September 27,        September 28,
                                                                                                      2005                 2004
                                                                                                 ---------------     ---------------
<S>                                                                                              <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net (loss) income                                                                              $  (1,239,781)      $    (328,545)
   Adjustments to reconcile net (loss) income to net cash provided by (used in)
      operating activities:
      Depreciation and amortization                                                                     160,250             165,952
      Provision for doubtful accounts, net                                                              200,000             159,332
      Amortization of deferred financing cost                                                            97,478                   -
      Amortization of beneficial conversion value                                                       135,257                   -
                                                                                                 ---------------     ---------------
   Changes in operating assets and liabilities:
      Accounts receivable                                                                            (1,654,817)           (999,315)
      Inventory                                                                                          (5,288)             10,548
      Costs and estimated earnings in excess of billings on uncompleted contracts                      (352,289)            332,075
      Refundable income taxes                                                                                 -             641,795
      Prepaid expenses and other current assets                                                        (750,342)            (18,786)
      Other assets                                                                                     (131,021)             (6,000)
      Payable on account receivable                                                                     189,197                   -
      Accounts payable and accrued expenses                                                           1,994,724             131,437
      Accrued payroll and related fringe benefits                                                        71,904              33,848
      Other current liabilities                                                                         855,636             351,580
      Billings in excess of costs and estimated earnings on uncompleted contracts                        12,684            (186,489)
                                                                                                 ---------------     ---------------

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                                    (416,408)            287,432
                                                                                                 ---------------     ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment                                                                 (885,482)            (56,011)
                                                                                                 ---------------     ---------------
NET CASH USED IN INVESTING ACTIVITIES                                                                  (885,482)            (56,011)
                                                                                                 ---------------     ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Principal payments of long-term debt                                                                 (46,318)            (90,531)
   Exercise of stock options                                                                                150                   -
   Payments for deferred financing costs                                                             (2,267,160)                  -
   Repayment and cancellation of secured note payable to a related party                             (2,750,000)                  -
   Proceeds of secured note payable                                                                   6,000,000                   -
                                                                                                 ---------------     ---------------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES                                                     936,672            (90,531)
                                                                                                 ---------------     ---------------

NET INCREASE/ (DECREASE) IN CASH                                                                       (365,218)            140,890

CASH - BEGINNING OF PERIOD                                                                              512,711              63,562
                                                                                                 ---------------     ---------------

CASH - END OF PERIOD                                                                              $     147,493       $     204,452
                                                                                                 ===============     ===============

Cash paid during the period for:
   Interest                                                                                       $      91,477       $     168,726
                                                                                                 ===============     ===============
   Income taxes                                                                                   $           -       $           -
                                                                                                 ===============     ===============
SUPPLEMENTAL SCHEDULE OF NON-CASH ACTTIVITIES:
Financing cost related to beneficial conversion value of secured note                             $   2,875,284       $           -
                                                                                                 ===============     ===============
Capitalized gain on extinguishment of secured note payable - related party                        $   1,877,730       $           -
                                                                                                 ===============     ===============
Financing cost related to warrants and options                                                    $   2,198,385       $           -
                                                                                                 ===============     ===============
Capitalized cancellation of put right relating to redeemable common stock                         $      60,117       $           -
                                                                                                 ===============     ===============
Property and equipment acquired through financing                                                 $     157,063       $           -

Financing cost related to guarantees of CEO remunerated through sale of discounted shares         $   1,125,083       $           -
                                                                                                 ===============     ===============
Financing cost related to issuance of options to preferred stockholders                           $      44,650       $           -
                                                                                                 ===============     ===============


See notes to consolidated financial statements.
</TABLE>


                                       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,
         Trade-Winds Environmental Restoration, Inc. ("Trade-Winds") and North
         Atlantic Laboratories, Inc.  The unaudited consolidated financial
         statements have been prepared by the Company in accordance with
         accounting principles generally accepted in the United States of
         America ("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 September 27, 2005, the results of operations for the thirteen weeks
         ended September 27, 2005 and September 28, 2004 and cash flows for the
         thirteen weeks ended September 27, 2005 and September 28, 2004, have
         been included.  Certain prior period amounts have been reclassified to
         conform to the September 27, 2005 presentation.

         The results for the thirteen weeks ended September 27, 2005 and
         September 28, 2004 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 June 28, 2005, as amended.

         The accompanying consolidated financial statements have been prepared
         assuming that the Company will continue as a going concern. The Company
         has incurred recurring losses from operations and is experiencing
         difficulty in generating sufficient cash flow to meet its obligations
         and sustain its operations, which raises substantial doubt about the
         Company's ability to continue as a going concern. Management's plans in
         regard to these matters are also described in Note 3. The consolidated
         financial statements do not include any adjustments that might result
         from the outcome of this uncertainty.

         The Company has recognized the value of the equity instruments issued
         in connection with financing transactions described in Note 6 in
         accordance with Accounting Principles Board Opinion No. 14 and Emerging
         Issues Task Force Consensuses 98-5 and 00-27. The intrinsic value of
         the options and the fair value of the warrants are calculated and the
         proportionate values of the resulting debt and equity components
         have been recognized as debt discounts with equivalent credits to
         equity. The beneficial conversion features of the warrants, including
         the effective values under EITF 00-27 have also been recognized. All of
         the discounts are being amortized over the life of the debt in
         accordance with the latter pronouncement.

2.       STOCK-BASED COMPENSATION - In December 2002, the Financial Accounting
         Standards Board ("FASB") issued Statement of Financial Accounting
         Standards ("SFAS)" No. 148, "Accounting for Stock-Based
         Compensation-Transition and Disclosure - an amendment of FASB Statement
         No. 123 "(SFAS 148").  SFAS No. 148 amended SFAS No. 123, "Accounting
         for Stock-Based Compensation" ("SFAS 123"), to provide alternative
         methods of transition for a voluntary change to the fair value based
         method of accounting for stock-based employee compensation and does not
         permit the use of the original SFAS No. 123 prospective method of
         transition in fiscal years beginning after December 15, 2003. In
         addition, SFAS No. 148 amended 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, regardless of whether, when, or how an entity adopts the
         preferable, fair value based method of accounting. SFAS No. 148
         improved the prominence and clarity of the pro forma disclosures
         required by SFAS No. 123 by prescribing a specific tabular format and
         by requiring disclosure in the "Summary of Significant Accounting
         Policies" or its equivalent and improves the timeliness of those
         disclosures by requiring their inclusion in financial reports for
         interim periods. The Company adopted the disclosure requirements of
         SFAS No. 148 for the fiscal year ended July 1, 2003. The Company will
         continue to account for stock-based employee compensation under APB
         Opinion No. 25 and its related interpretations through December 27,
         2005.  During the quarter ended September 27, 2005, the Company has not
         issued any stock-based compensation.


                                       6
<PAGE>

         The following table illustrates the effect on net (loss) income
         attributable to common shareholders and net (loss) income per share if
         the Company had applied the fair value recognition provisions of SFAS
         No. 123, "Accounting for Stock-Based Compensation," to stock-based
         employee compensation for the thirteen weeks ended September 27, 2005
         and September 28, 2004:
<TABLE>
<CAPTION>
                                                                                  Thirteen Weeks Ended
                                                                          ----------------------------------
                                                                           September 27,       September 28,
                                                                                2005                2004
                                                                          ---------------    ---------------
       <S>                                                                <C>                <C>
       Net (loss) income attributable to
         common shareholders, as reported                                  $  (1,259,281)     $    (348,045)
       Less:  Stock-based employee
         compensation cost determined
         under the fair value method, net of
         related tax effects                                                     (56,200)           25,849
                                                                          ---------------    ---------------
       Pro forma net (loss) income
         attributable to common
         shareholders                                                      $ (1,315, 481)     $    (373,894)
                                                                          ===============    ===============

       Net (loss) income per share:
         Basic - as reported                                                       $(.04)              $.00
                                                                                   ======              ====
         Basic - pro forma                                                         $(.04)              $.00
                                                                                   ======              ====

         Diluted - as reported                                                     $(.04)              $.00
                                                                                   ======              ====
         Diluted - pro forma                                                       $(.04)              $.00
                                                                                   ======              ====
</TABLE>

3.       NET (LOSS) INCOME PER COMMON SHARE -The calculation of basic and
         diluted net (loss) 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 (loss) per share for the thirteen weeks ended September 27,
         2005 and September 28, 2004, respectively:
<TABLE>
<CAPTION>

                                                                                Thirteen Weeks Ended
                                                                          ----------------------------------
                                                                           September 27,        September 28,
                                                                               2005                 2004
                                                                          ---------------    ---------------
         <S>                                                              <C>                <C>
         Numerator:
         Net (loss) income attributable to
           common shareholders                                             $  (1,259,281)     $    (348,045)
                                                                          ===============    ===============
         Denominator:
           Share reconciliation:
           Shares used for basic (loss)
            income per share                                                  35,039,812         77,936,358
         Effect of dilutive items:
           Stock options                                                               -                  -
           Convertible securities                                                      -                  -
                                                                          ---------------    ---------------
         Shares used for dilutive (loss)
          income per share                                                    35,039,812         77,936,358
                                                                          ===============    ===============
         Net (loss) income per share:
           Basic                                                                   $(.04)              $.00
           Diluted                                                                 $(.04)              $.00
</TABLE>

         The dilutive net loss per share for the thirteen week period ended
         September 27, 2005 excludes 85,876,663 shares issuable upon exercise of
         stock options and 67,966,667 shares issuable upon the conversion of
         convertible securities, respectively. These shares are excluded from
         diluted earnings per share due to their


                                       7

<PAGE>

         anti-dilutive effect as a result of the Company's net loss attributable
         to common shareholders during this period.

4.       PROVISION FOR INCOME TAXES - The provision for income taxes for the
         thirteen weeks ended September 27, 2005 and September 28, 2004 consists
         of the following:
<TABLE>
<CAPTION>
                                                                                 Thirteen Weeks Ended
                                                                          ----------------------------------
                                                                          September 27,       September 28,
                                                                               2005                2004
                                                                          ---------------    ---------------
<S>                                                                       <C>                <C>
         Federal - current                                                $            -      $           -
         State - current                                                           8,218              2,589
                                                                          ---------------    ---------------

Total                                                                      $       8,218      $       2,589
                                                                          ===============    ===============
</TABLE>

         The effective rate for income taxes differs from the statutory rate
         primarily as a result of the 100% valuation allowance against deferred
         tax assets. 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.

         In addition, the Company has a tax liability of $686,893 in connection
         with the cancellation of a secured note payable to a related party,
         which has been credited to additional paid-in capital, as more fully
         described in Note 6.

5.       CONTINGENCIES - On April 16, 2002, two customers commenced an action
         against the Company and Michael O'Reilly, the Company's CEO, in the
         Supreme Court of the State of New York, County of New York, claiming
         that they are entitled to approximately $4,400,000 of damages relating
         to alleged breaches of a contract for a residential construction
         project. On May 7, 2002, the Company filed an answer denying the
         plaintiffs' claims and seeking approximately $45,418 in a counterclaim
         for uncollected accounts. On November 1, 2005, the Company settled this
         matter by agreeing to pay $60,000 to the plaintiffs in six equal
         monthly installments beginning December 1, 2005.

         In April 2003, the Company commenced a remediation project in New York
         City for a local utility to remove sediment from an oil storage tank.
         During the course of the project, the sediment in the tank was found to
         be substantially different than the sediment that the customer
         represented to be in the tank prior to the inception of the project.
         The Company continued to work on the project so as not to default on
         the terms which it understood to exist with the customer. The
         additional costs incurred to remove this matter were approximately
         $1,600,000. As of September 27, 2005, the Company recognized revenue of
         approximately $1,700,000 with respect to the original scope of this
         project. All amounts due under the original contract have been paid.
         The Company has not recognized the revenue associated with its claim.
         The project has been substantially completed and the customer has
         refused to acknowledge its liability for these additional charges
         billed. On October 22, 2004, the Company commenced an action against a
         local utility company in the New York State Supreme Court, County of
         New York, claiming that it is entitled to approximately $2,000,000 of
         contractual billings and related damages in connection with this
         matter. On December 6, 2004, the local utility company filed an answer,
         denying the Company's claims. The case is currently in pre-trial
         discovery.

         On August 5, 2004, the Company commenced an action in the New York
         State Supreme Court, County of New York, seeking to collect
         approximately $1,255,000 of contractual billings relating to a large
         roof tar removal project. On October 15, 2004, the Economic Development
         Corporation filed an answer, denying the Company's claims. On November
         4, 2004, the Economic Development Corporation filed an amended answer
         denying the Company's claims and asserting counterclaims. The case is
         currently in pre-trial discovery.

         The Company is a plaintiff in approximately 20 lawsuits (including the
         two cases described above) claiming an aggregate of approximately
         $5,000,000 pursuant to which it is seeking to collect amounts it
         believes owed to it by customers that are included in its accounts
         receivable, primarily with respect to changed work orders or other
         modifications to the Company's scope of work. The defendants in these
         actions have asserted counterclaims for an aggregate of approximately
         $500,000.


                                       8


<PAGE>

         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.

6.       FINANCING AND RELATED PARTY TRANSACTIONS - As of June 28, 2005, the
         Company owed Spotless Plastics (USA) Inc. ("Spotless") $5,000,000 under
         a promissory note dated November 16, 2001, in the original principal
         amount of $1,700,000. The Spotless note was collateralized by all of
         the Company's assets.

         As of June 28, 2005, Spotless was due payment from third parties for
         purchased accounts receivable in the amount of $349,985 under its
         account receivable agreement dated February 5, 2004, with the Company.
         As of such date, Spotless had purchased from the Company an aggregate
         amount of its accounts receivable equaling $4,991,252 at an aggregate
         discount of $911,202, for an aggregate purchase price of $4,080,050.
         Pursuant to the account receivable finance agreement, Spotless was able
         to purchase at a discount certain of the Company's accounts receivable
         without recourse for cash, subject to certain terms and conditions.
         This accounts receivable finance agreement has been terminated.
         Pursuant to an administrative services arrangement, Spotless also
         provided the Company with certain administrative services including the
         services of the Company's former chief financial officer and vice
         president of finance and administration. During the Company's fiscal
         years 2005, 2004 and 2003, the Company was charged by Spotless an
         administrative fee of $84,380, $131,556 and $101,256, respectively, the
         remaining unpaid portion of which as of June 28, 2005 was deemed
         satisfied in connection with the transactions described below.

         On June 30, 2005, the Company entered into a financing transaction with
         Laurus Master Fund, Ltd. pursuant to the terms of a securities purchase
         agreement and related documents. Under the terms of the financing
         transaction, the Company issued to Laurus:

            o     pursuant to the terms of a secured convertible term note,
                  dated June 30, 2005, a three-year note in the principal amount
                  of $5,000,000 (as amended and restated, the "Note"). The Note
                  bears interest at the prime rate as published in the Wall St.
                  Journal plus 2% (but not less than 7.25%), decreasing by 2%
                  (but not less than 0%) for every 25% increase in the Market
                  Price (as defined therein) of the Company's common stock above
                  the fixed conversion price of $0.09 following the effective
                  date(s) of the registration statement or registration
                  statements covering the shares of the Company's common stock
                  underlying the Note and the warrant issued to Laurus;
            o     for no separate or additional consideration and pursuant to
                  the terms of an Option Agreement, dated June 30, 2005, a
                  twenty-year option to purchase 30,395,179 shares of the
                  Company's common stock at a purchase price of $0.0001 per
                  share, and
            o     for no separate or additional consideration and pursuant to
                  the terms of a Common Stock Purchase Warrant, dated June 30,
                  2005 a seven-year common stock purchase warrant to purchase
                  13,750,000 shares of the Company's common stock at a purchase
                  price of $0.10 per share.

         The Option Agreement and the Common Stock Purchase Warrant were valued
         at $2,198,385 and allocated to additional paid-in capital. The shares
         issuable upon conversion of the face value of the Note resulted in a
         beneficial conversion feature of $2,198,385, which amount was also
         allocated to additional paid-in capital. The resulting value of the
         Note was $603,230 and bears an effective interest rate of 72.667%.

         After consummating the transaction on June 30, 2005 and prior to
         September 27, 2005, Laurus subsequently provided additional financing
         to the Company on the same terms and conditions as follows:

            o     On July 13, 2005, Laurus loaned the Company an additional
                  $350,000, and the Company amended and restated the Note, to be
                  in the principal amount of $5,350,000 for no separate or
                  additional consideration. The shares issuable upon conversion
                  of the face value of this amended and restated Note resulted
                  in a beneficial conversion feature amounting to $52,539, which
                  was allocated to additional paid-in capital.
            o     On September 9, 2005, Laurus loaned the Company an additional
                  $650,000, and the Company further amended and restated the
                  Note to be in the principal amount of $6,000,000 for no
                  separate


                                       9

<PAGE>


                  or additional consideration. The shares issuable upon
                  conversion of the face value of this amended and restated Note
                  resulted in a beneficial conversion feature of $624,650, which
                  was allocated to additional paid-in capital.

         After taking into account total discounts of $5,021,472, the balance of
         the Note before amortization equaled $926,041.

         On October 6, 2005, Laurus loaned the Company an additional $1,350,000,
         and the Company further amended and restated the Note to be in the
         principal amount of $7,350,000 for no separate or additional
         consideration. The Note, in the principal amount of $7,350,000 as of
         November 21, 2005, is the only note issued to Laurus by the Company
         that is currently outstanding.

         The proceeds received by the Company in connection with the financing
         transaction and subsequent borrowings from Laurus as of September 27,
         2005 were used to pay the amounts set forth below to the persons or for
         the purposes set forth below:
<TABLE>
<CAPTION>
            <S>                                                                         <C>
            o  Company's former majority stockholder and senior secured
               lender, consisting of approximately $2,650,000 in settlement of
               the principal and $100,000 in interest                                   $  2,750,000
            o  Laurus transaction fee                                                      1,750,000
            o  Laurus Capital Management, LLC management and due diligence fees              210,250
            o  Loeb & Loeb escrow fee                                                          2,000
            o  Insurance premiums                                                            419,973
            o  Legal fees                                                                    146,773
            o  Accounting fees                                                                25,000
            o  Special committee and advisor fees                                             61,136
            o  Payments to series A preferred stockholders                                    35,000
            o  Louisiana mobilization costs                                                  238,173
            o  Working capital                                                               361,695
                                                                                        -------------
                  Total                                                                 $  6,000,000
                                                                                        =============
</TABLE>

         As part of the financing transaction, Laurus required by the Company to
         obtain a $3,000,000 key man renewable term life insurance policy for
         the Company's president and chief executive officer. The Company is the
         beneficiary of the policy, which has a current annual premium of
         $24,769 payable by it. Laurus is a contingent beneficiary of this life
         insurance policy.

         Set forth below is a summary of the material terms of the agreements
         governing the Laurus financing transaction.

         Securities Purchase Agreement and Amended and Restated Secured
         Convertible Term Note. The funds borrowed under the Laurus financing
         are governed by, in addition to the Securities Purchase Agreement, the
         terms of the Note, a security agreement, a stock pledge agreement, a
         registration rights agreement and a subsidiary guaranty. Under the
         terms of the Securities Purchase Agreement, Laurus had a right to
         provide the Company with $1,300,000 in additional financing in excess
         of the original $5,000,000 that it provided to the Company. In
         connection with the additional borrowings described above, Laurus has
         provided all of such additional financing.

         Principal Borrowing Terms and Prepayment. Under the terms of the Note,
         as amended through October 6, 2005, which matures on June 30, 2008, the
         Company is required to make monthly repayments of principal, on the
         first of each month, to Laurus in the amount of $229,687.50, commencing
         as of January 1, 2006. Principal repayments were due to commence
         starting November 1, 2005 but, in November 2005, Laurus agreed to defer
         the initial repayment date until January 1, 2006. Interest is payable
         monthly and started to accrue on August 1, 2005. All required interest
         payments as of the date of this report have been made. The Company will
         be able to pay such amounts in shares of its common stock should all of
         the following conditions be satisfied:


                                       10

<PAGE>


            o  the average closing price of the Company's common stock for the
               five (5) trading days immediately  prior each first of the
               month is equal to or greater than $.10;
            o  the amount of the payment then due is not an amount greater
               than thirty percent (30%) of the aggregate dollar trading
               volume of the common stock for the period of twenty-two (22)
               trading days immediately prior to the first of each month;
            o  the common stock underlying the Note has been registered under
               an effective registration statement under the Securities Act
               of 1933 or is otherwise covered by an exemption from
               registration for resale pursuant to Rule 144 of the Securities
               Act of 1933;
            o  Laurus' aggregate beneficial ownership of the Company's shares of
               common stock does not exceed 4.99%; and
            o  the Company is not in default of the Note.

         If any of these conditions are not satisfied, the Company is required
         to make payments in cash in an amount equal to 103% of the principal
         amount, plus accrued interest, then due. Should the Company be required
         to pay cash, this may have an adverse effect on its cash flow and
         liquidity.

         The Note may be redeemed by the Company in cash by paying the holder of
         the Note 120% of the principal amount, plus accrued interest. As
         discussed below, the holder of the Note may require the Company to
         convert all or a portion of the Note, together with related interest
         and fees, into fully paid shares of its common stock at any time. The
         number of shares to be issued shall equal the total amount of the Note
         to be converted, divided by an initial fixed conversion price of $0.09.

         If the Company issues shares of common stock to a third-party for
         consideration below the fixed conversion price of $.09 per share or
         issue derivative securities convertible into or exercisable for shares
         of common stock at prices below the fixed conversion price of $.09 per
         share, then the fixed conversion price of the Note will be reduced to
         such lower issuance or exercise price. In addition, the conversion
         price of the Note may be adjusted subject to customary anti-dilution
         provisions, such as if the Company pays a stock dividend, reclassifies
         its capital stock or subdivides or combines its outstanding shares of
         common stock into a greater or lesser number of shares.

         The Company may receive proceeds from the exercise of the option and
         the warrant described above if Laurus elects to pay the exercise price
         in cash rather executing a cashless exercise. Upon a cashless exercise,
         in lieu of paying the exercise price in cash, the selling stockholder
         would receive shares of the Company's common stock with a value equal
         to the difference between the market price of its common stock at the
         time of exercise and the exercise price set forth in the option and the
         warrant, multiplied by the number of shares so exercised. There would
         be no proceeds to the Company upon a "cashless exercise" of the option
         and the warrant. There can be no assurances that Laurus will exercise
         the option and warrant or that it will elect to pay the exercise price
         in cash in lieu of a "cashless exercise."

         In the event of default, 120% of the outstanding principal amount of
         the Note, plus accrued but unpaid interest, is due. Laurus has
         contractually agreed to restrict its ability to convert the Note and/or
         exercise its warrant and option if such conversion and/or exercise
         would cause its beneficial ownership of shares of the Company's common
         stock to exceed 4.99% of the outstanding shares of its common stock.
         The 4.99% limitation is null and void without notice to the Company
         upon the occurrence and during the continuance of an event of default
         or upon 75 days' prior written notice to the Company. As of November
         10, 2005, Laurus beneficially owns 1,500,000 shares of the Company's
         common stock, or approximately 4.46% of its outstanding capital stock.
         As a result, Laurus could only acquire up to approximately 175,200
         additional shares, which would constitute of a conversion of
         approximately $15,768 of the principal amount of the Note, while
         remaining in compliance with the 4.99% limitation. Because Laurus is
         irrevocably prohibited from waiving this 4.99% limitation, except as
         described above, even if the other conditions allowing the Company to
         pay in shares of common stock have been satisfied, if Laurus cannot or
         does not reduce its ownership of the Company's common stock at a time
         when such reduction would be necessary to allow the Company to make a
         payment in shares of common stock, the Company would be required to pay
         Laurus in cash. This may have an adverse effect on the Company's cash
         flow and liquidity.

         The Note is secured by a lien on substantially all of the Company's
         assets, including the stock of its subsidiaries, all cash, cash
         equivalents, accounts, accounts receivable, deposit accounts,
         inventory,


                                       11

<PAGE>

         equipment, goods, fixtures, documents, instruments, including
         promissory notes, contract rights, general intangibles,
         including payment intangibles. The Master Security Agreement, dated
         June 30, 2005, contains no specific financial covenants. The Master
         Security Agreement and the Note define certain circumstances under
         which they can be declared in default and subject to termination,
         including among others:


                                       11

<PAGE>

            o  a failure to pay interest and principal payments when due on the
               first of the month or prior to the expiration of a three-business
               day grace period, unless agreed otherwise;
            o  a breach by the Company of any material covenant or term or
               condition of the Note or in any agreement made in connection
               therewith and, to the extent subject to cure, such breach
               shall continue without remedy for a period of fifteen or
               thirty days, as the case may be, after any occurrence thereof;
            o  a breach by the Company of any material representation or
               warranty made in the Note or in any agreement made in connection
               therewith;
            o  any form of bankruptcy or insolvency proceeding instituted by or
               against the Company, which is not vacated within 30 days;
            o  any attachment or lien in excess of $75,000 in the aggregate made
               upon the Company's assets or a judgment rendered against
               the Company's property involving a liability of more than
               $75,000 which shall remain unvacated, unbonded or unstayed for
               a period of 30 days;
            o  a failure to timely deliver shares of common stock when due upon
               conversion of the Note or a failure to timely deliver a
               replacement note;
            o  an SEC stop trade order or principal market trading suspension
               of the Company's common stock is in effect for 5 consecutive
               trading days or 5 days during a period of 10 consecutive
               trading days, provided the Company is not able to cure such
               trading suspension within 30 days of receiving notice or are
               not able to list its common stock on another principal market
               within 60 days of such notice;
            o  a failure to have authorized and reserved shares of the
               Company's common stock for issuance on or before December 31,
               2005 sufficient to provide for the full conversion of the
               Note, option and warrant issued by the Company to Laurus; and
            o  an indictment or threatened indictment of the Company or any
               of its executive officers under any criminal statute or
               commencement or threatened commencement of criminal or civil
               proceedings against the Company or any of its executive
               officers pursuant to which statutory or proceeding penalties
               or remedies available include forfeiture of any of the
               Company's property.

         Upon the occurrence of an event of default, the interest rate charged
         will be increased by 2% per month until the default is cured; should
         the default continue beyond any applicable grace period, then Laurus
         could require the Company to repay 120% of any principal and interest
         outstanding under the Note.

         The Company also entered into a Funds Escrow Agreement, dated June 30,
         2005, with Laurus and Loeb & Loeb LLP, as escrow agent, pursuant to the
         requirements of the Security Agreement. Under the terms of the Funds
         Escrow Agreement, the funds from Laurus were placed in escrow pending
         receipt by the escrow agent of fully executed transaction documents and
         disbursement instructions, upon receipt of which such funds were
         released to the Company.

         Pursuant to the terms of a Registration Rights Agreement, dated June
         30, 2005, the Company is obligated to file a registration statement
         with the Securities and Exchange Commission registering the resale of
         shares of the Company's common stock issuable upon a conversion of the
         Note and upon the exercise of the option and warrant issued to Laurus.
         If the registration statement, which was filed on October 3, 2005, is
         not declared effective by November 22, 2005 by the Securities and
         Exchange Commission, then the Company will be subject to the following
         monetary penalties, unless waived:

            o   1.5% of the principal outstanding on the Note, for the first
                thirty days, prorated for partial periods, which equals $3,675
                per day based upon the $7,350,000 principal amount of the Note
                currently outstanding; and
            o   2.0% of the principal outstanding on the Note, for each thirty
                day period, prorated for partial periods, which equals $4,900
                per day.


                                       12

<PAGE>

         The following represents the schedule repayments of the Laurus
         financing along with the accretion of the discounts as of September 27,
         2005:

------------------------- ---------------------------- ------------------------
       Year Ended                   Principal              Accreted Interest
       ----------                   ---------              -----------------
------------------------- ---------------------------- ------------------------
        2006                      $1,239,236                  $  648,382
------------------------- ---------------------------- ------------------------
        2007                       2,276,683                   1,355,743
------------------------- ---------------------------- ------------------------
        2008                       2,484,081                   2,934,578
------------------------- ---------------------------- ------------------------

         The Company also issued a subordinated secured promissory note to
         Spotless in the principal amount of $500,000, bearing interest at LIBOR
         plus 1%. Pursuant to the terms of the note the Company issued to
         Spotless, amortization payments of $50,000 per month, which become due
         and payable beginning July 1, 2007 until all amounts due thereunder are
         fully paid, so long as the Company is not in default on the Laurus
         Note. The note the Company issued to Spotless, together with the
         $2,750,000 payment to Spotless referred to above, fully satisfied all
         of the Company's financial obligations to Spotless. In connection with
         this financing transaction, the Company, along with Spotless,
         terminated the account receivable finance agreement between them,
         except with respect to the Company's obligation to continue to collect
         and remit payment of outstanding accounts receivable that Spotless
         purchased under the agreement. As part of the transactions, Spotless
         assigned to the Company an account receivable with a balance of
         $189,196.82 to the Company agreed to pay this amount to Spotless no
         later than June 30, 2006. Pursuant to a transition services agreement,
         Spotless agreed to provide the services of Mr. Murphy to the Company,
         including in relation to advice in the areas of:

            o  administration;
            o  accounting, finance and risk management; and
            o  assisting in the preparation and review of the Company's reports
               filed with the SEC

         during a six-month transitional process for a fee of $5,000 per month
         and a payment of $25,000 to Mr. Murphy at the end of the transitional
         period.

         On June 30, 2005, Spotless, through one of its wholly owned
         subsidiaries, sold 15,469,964 shares of common stock of the Company to
         Michael O'Reilly, the Company's president and chief executive officer,
         in consideration for a non-recourse ten-year balloon promissory note in
         the principal amount of $120,500 issued by Mr. O'Reilly to Spotless,
         bearing interest at LIBOR plus 1%. Spotless surrendered its remaining
         45,865,143 shares to the Company for cancellation. In addition, the
         Company issued a ten year option exercisable at $0.09 per share to Mr.
         O'Reilly to purchase 15,469,964 shares of common stock in connection
         with his:

            o   issuance of a personal guaranty to Laurus for $3,250,000 of the
                $5,000,000 principal amount of the original Laurus note;
            o   agreement to a new employment agreement, which (a) does not
                include a put right that existed in his old employment agreement
                requiring the Company, under certain circumstances, to buy his
                shares of common stock and shares underlying his options, and
                (b) calls for a base salary of $285,000 per year and a bonus
                equal to 2.5% of the Company's pre-tax income, as defined in
                the employment agreement; and
            o   agreement to personally guarantee the Company's bonding
                obligations, each of which was a condition precedent to the
                consummation of the Company's financing transaction with
                Laurus.

         On June 30, 2005, the Company (a) issued ten-year options exercisable
         at $0.09 per share to its series A convertible stock preferred
         stockholders, including Dr. Kevin Phillips, one of its directors, to
         purchase an aggregate of 500,000 shares of the Company's common stock
         and (b) agreed to pay, out of legally available funds, accrued and
         unpaid dividends in an aggregate of (1) $35,000 to the series A
         convertible preferred stockholders, on each June 30, 2005, September
         30, 2005 and December 30, 2005 and (2) $50,000 to the series A
         convertible preferred stockholders on February 28, 2007 in
         consideration for their agreement to (1) postpone their rights to
         require the Company to redeem, upon six (6) months notice, their series
         A convertible preferred stock from February 2007 until the earlier of
         (a) six months after the repayment of the note issued by the Company to
         Laurus or (b) June 30, 2010; and (2) defer receipt of dividend payments
         on the series A convertible preferred stock due on and after June 30,
         2005. On December 6, 2004, the


                                       13

<PAGE>

         Company issued a ten-year option exercisable at $0.035 per share to
         Dr. Kevin J. Phillips to purchase 100,000 shares under its 2001 Equity
         Incentive Plan in connection with his service as a director of the
         Company.

         On June 30, 2005, Michael O'Reilly and the series A convertible
         preferred stock stockholders, including Dr. Kevin J. Phillips, who is a
         director, agreed, pursuant to a forbearance and deferral agreement to
         which the Company is a party, to propose and vote in favor of an
         amendment to the Company's Certificate of Incorporation in order to
         sufficiently increase the number of authorized shares at the Company's
         next annual shareholders meeting to be held by December 2005. In
         addition, Mr. O'Reilly, the series A

         On May 24, 2005, the Company's board of directors granted a non-plan
         ten-year option exercisable at $0.06 per share to Tony Towell to
         purchase 250,000 shares of common stock in connection with his service
         on its then-existing special committee.  Mr. Towell would only be
         required to pay cash to the Company, if at all, in connection with
         exercising the option prior to expiration.

         On May 24, 2005, the Company's board of directors granted a non-plan
         five-year options exercisable at $01 per share and $0.1875 per share to
         Michael O'Reilly to purchase 2,000,000 and 250,000 shares of common
         stock, respectively, in an effort to continue incentivizing him in his
         capacity as the Company's President and Chief Exectutive Officer.
         Mr. O'Reilly would be required to pay cash to the Company, if at all,
         in connection with exercising the option prior to expiration.

         On December 6, 2004, the Company's board of directors granted a
         ten-year options exercisable at $0.035 per share to each of Tony
         Towell and Dr. Kevin Phillips to purchase 100,000 shares of common
         stock under the Company's 2001 Equity Incentive Plan in connection
         with their service as the Company's directors.  Mr. Towell and
         Dr. Phillips would only be required to pay cash to the Company, if at
         all, in connection with exercising their options prior to expiration.

         During the Company's fiscal year ended July 1, 2003, the Company repaid
         a $100,000 convertible note held by Anthony P. Towell, a director. This
         note was issued in 1997, provided for interest at a rate equal to 12%
         per annum and was convertible at a rate of $.15 per share of common
         stock. On May 24, 2005, the Company issued a non-plan ten-year option
         exercisable at $0.06 per share to Tony Towell to purchase 250,000
         shares in connection with his service on the then-existing special
         committee of the Company. On December 6, 2004, the Company issued a
         ten-year option exercisable at $0.035 per share to Tony Towell under
         its 2001 Equity Incentive Plan in connection with his service as a
         director of the Company.

         On December 16, 1998, the Company entered into an operating lease
         agreement with Michael O'Reilly, its president and chief executive
         officer. Pursuant to the terms of the arrangement that expired in
         December 2002 and has continued on a month-to-month basis thereafter,
         the Company leases a forty-two foot custom Topaz boat for monthly
         rental payments of $5,000. The leasing arrangement was necessitated by
         a marine assistance contract that expired on December 31, 2000,
         although the arrangement continues to provide the Company with its
         largest floating vessel capable of handling specialty equipment and
         facilitating an offshore support crew. The Company is responsible for
         all taxes, insurance and repairs pertaining to this boat.

         The Company had an oral understanding with Michael O'Reilly pursuant to
         which the Company paid the full carrying costs, including mortgage
         payments, of a condominium that he beneficially owned and that the
         Company used for marketing purposes. The full carrying costs during the
         Company's fiscal years ended June 28, 2005 and June 29, 2004 were
         approximately $7,150 and $17,800, respectively. In connection with this
         arrangement, the Company also provided mitigation and restoration
         services to restore the premises in connection with severe water damage
         caused by a failed water heater, valued at approximately $56,780,
         constituting the Company's direct costs, allocated overhead without any
         markup.

         In February 1997, the Company issued 650,000 shares of redeemable
         convertible preferred stock to Dr. Kevin Phillips, a director and an
         additional 650,000 shares of redeemable convertible preferred stock to
         a


                                       14

<PAGE>

         business partner of Dr. Phillips. During fiscal years 2005, 2004 and
         2003, the Company paid an aggregate of $0, $39,000 and $78,000,
         respectively, of dividends and accrued interest to the redeemable
         convertible preferred stockholders.

         The Company paid a former director $24,385 and $46,926 for consulting
         services in its fiscal years 2004 and 2003, respectively.

         The Company believes that all transactions that the Company has entered
         into with its officers, directors and principal stockholders have been
         on terms no less favorable to the Company than those available from
         unrelated third parties.

7.       SUBSEQUENT EVENTS - In conjunction with the Laurus transactions, the
         Company entered into a registration rights agreement, which obligated
         it, among other things, to file its initial registration statement on
         Form S-1 with the SEC on or before September 23, 2005 or be subject to
         a liquidated damage claim. Laurus granted the Company an extension
         during which time no liquidated damage claim was assessed, and the
         Company filed its Form S-1 on October 3, 2005, prior to the expiration
         of the extension.

         In September 2005 and in the wake of Hurricane Katrina, the Company
         established offices in Louisiana and is directing considerable
         resources to generating new business opportunities in that area.

         On October 6, 2005, Laurus loaned the Company an additional $1,350,000,
         and the Company amended and restated the Laurus note to be in the
         principal amount of $7,350,000. The proceeds of this loan were used to
         fund the Company's Louisiana operations. On November 10, 2005, Laurus
         granted the Company a two-month amortization deferral pursuant to which
         the Company's first principal payment under the Laurus note has been
         deferred from November 1, 2005 until January 1, 2006.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

OVERVIEW

We, through our wholly-owned subsidiaries, provide a full array of emergency
response, remediation and disaster restoration services to a broad range of
clients. We have expertise in the areas of hazardous materials remediation,
microbial remediation, testing, toxicology, training, wetlands restoration,
wildlife and natural resources rehabilitation, technical advisory, restoration
and site renovation services.

Our revenues are derived from projects for which we work either on a time and
materials basis or pursuant to a fixed price contract. In the thirteen week
period ended September 27, 2005 and fiscal 2005, substantially all of our
revenues were derived from time and materials contracts. Under our fixed-price
contracts, we assess the scope of work to be done and contract to perform a
specified scope of work for a fixed price, subject to adjustment for work
outside such scope of work, upon prior approval by our customers. Because most
of our projects consist of emergency or disaster responses, which do not permit
a definitive prior assessment of the full scope of work entailed and require
immediate attention in order to mitigate loss and maximize recovery, most of our
projects are performed on a time and materials basis. Under our time and
materials contracts, we charge our customers for labor, equipment usage,
allocated overhead and a markup relating thereto.

We have encountered slow collections of certain of our accounts receivable. We
expect to have sufficient working capital to fund our current operations as long
as we do not encounter further difficulty collecting our accounts receivable.
However, market conditions, including expenses incurred in connection with
hurricanes Katrina and Wilma, and their effect on our liquidity may restrict our
use of cash. In the event that sufficient positive cash flow from operations is
not generated, we may need to seek additional financing in addition to the
financing provided by the financing transactions entered into with Laurus.
Laurus is under no obligation to provide any funding to us. Currently, we have
no credit facility for additional borrowing.

We currently are engaged on various projects for private sector commercial and
residential customers in the gulf coast and Florida regions. Under time and
materials contracts or other arrangements, we have billed in excess of $2.2
million of work that we have completed in connection with these projects. We
have also billed in excess of $7.4 million for these projects that are still in
progress. As of October 31, 2005 during our fiscal 2006, we have billed an
aggregate of over of $11 million of time and materials projects. Management
believes that


                                       15

<PAGE>

we will be engaged to perform substantial additional projects in
this region in the near term, possibly including federally funded projects on
which we have not focused to date; however, no assurance can be given in this
regard until contracts relating to these projects have been executed.

As described above, we have encountered difficulty with cash collections and
slow cash flow due primarily to factors including:

       o  customers refusing to pay prior to receiving insurance reimbursements;
       o  customers' facility managers needing to wait for insurance adjustors
          to approve work before the remission of payment to its customers; and
       o  certain customers refusing to pay in connection with disputed change
          orders.

In an effort to enhance our cash flows from operations, beginning shortly in its
2005 fiscal year, we began implementing improvements in its billing and
invoicing procedures as follows:

       o  we generally do not commence projects until we have a fully executed
          contract;
       o  our service contracts provide that its customers are directly
          obligated for its services; o we require client approval with respect
          to the work performed or to be performed;
       o  we generally seek deposits or mobilization fees for our time and
          materials contracts;
       o  we engage local legal counsel in the areas in which we operate to
          file liens against customers' real property in the event of
          contract disputes; and
       o  all invoices submitted for payment are reviewed for proper
          documentation.

Because some of these are relatively new changes, no assurances can be given
that they will be successful in improving our collections and cash flows.
Further, approximately 5% of our current projects are performed under procedures
that predate these improvements.

On June 30, 2005, we issued to Laurus a three-year secured convertible term note
in the principal amount of $5,000,000. Subsequently, Laurus loaned us an
additional $2,350,000, and we amended and restated the note accordingly. As of
November 21, 2005, the principal amount of the Laurus note outstanding equaled
$7,350,000. On November 10, 2005, Laurus agreed to defer the principal monthly
payments due in November and December 2005 in the aggregate amount of $495,375
until June 30, 2008, the maturity date of the Laurus note, in order to
facilitate financing of our gulf coast and Florida operations.

ABILITY TO CONTINUE AS A GOING CONCERN

         Our independent auditors raised a concern in their report on our
financial statements for our 2005 fiscal year about our ability to continue as a
going concern. Our auditors have stated that due to our recurring losses from
operations, working capital deficit, stockholders' deficit and difficulty in
generating sufficient cash flow to meet our obligations and sustain our
operations, there is "substantial doubt" about our ability to continue as a
going concern. Although we generated a net profit of $82,441 for our 2005 fiscal
year, we have recorded a loss of $(1,239,781) for the quarter ended September
27, 2005 and the uncertainty about our ability to continue as a going concern
may limit our ability to access certain types of financing, or may prevent us
from obtaining financing on acceptable terms.

CRITICAL ACCOUNTING POLICIES

  Management's discussion and analysis of our financial position and results of
operations are based upon our unaudited interim consolidated financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States of America. The preparation of these
audited consolidated 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. We believe that the critical
accounting policies and areas that require the most significant judgments and
estimates to be used in the preparation of the unaudited interim consolidated
financial statements are accounting for stock based transactions, contracts,
allowance for doubtful accounts and the valuation allowance related to deferred
tax assets.


                                       16

<PAGE>

Stock Based Transactions - The Company consummated various transactions where it
paid the consideration primarily in options or warrants to purchase its common
stock. These transactions include financing transactions and providing
incentives to attract, retain and motivate employees, officers and directors.

The Company has recognized the value of the equity instruments issued with
financing transactions in accordance with Accounting Principles Board Opinion
No. 14 and Emerging Issues Task Force Consensuses 98-5 and 00-27. The intrinsic
value of the options and the fair value of the warrants are calculated and the
proportionate values of the resulting debt and equity components have been
recognized as debt discounts with equivalent credits to equity. The beneficial
conversion features of the warrants, including the effective values under
EITF 00-27 have also been recognized. All of the discounts are being amortized
over the life of the debt in accordance with the latter pronouncement.

When options or warrants to purchase our common stock are used as incentives for
employees, officers or directors, we use the intrinsic value method in
accordance with the recognition and measurement principles of Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," as
permitted by Statement of Financial Accounting Standards "SFAS" No. 123. The
intrinsic value method calculates the value of the option or warrant at the
difference between the exercise price and the price of the stock on the day the
option or warrant is granted, except that such value is zero if the exercise
price is higher than the price of the stock.

Once the transaction value is determined, GAAP requires us to record the
transaction value as an expense or asset as determined by the transaction and to
record an increase in paid-in capital.

When options or warrants to purchase our common stocks are used in transactions
with third parties, the transaction is valued using the Black-Scholes valuation
method. The Black-Scholes valuation method is widely accepted as providing the
fair market value of an option or warrant to purchase stock at a fixed price for
a specified period of time. Black-Scholes uses five variables to establish
market value of stock options or warrants:

        o  exercise price (the price to be paid for a share in our stock);
        o  price of our stock on the day the options or warrants are granted;
        o  number of days that the options or warrants can be exercised before
           they expire;
        o  trading volatility of our stock; and
        o  annual interest rate on the day the option or warrant is granted.

The determination of expected volatility requires management to make an estimate
and the actual volatility may vary significantly from that estimate.
Accordingly, the determination of the resulting expense is based on a management
estimate.

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. Revenue from claims is recognized when realization is
probable and the amount can be reliably estimated. 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 - We maintain an allowance for doubtful trade
accounts receivable for estimated losses resulting from the inability of our
customers to make required payments. In determining collectibility, we review
available customer financial information including public filings and credit
reports and may also consult 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 - We record a valuation allowance to
reduce its deferred tax assets to the amount that is more likely than not to be
realized. Due to our history of losses, we have recorded a full valuation


                                       17

<PAGE>


allowance against our net deferred tax assets as of June 28, 2005. We currently
provide for income taxes only to the extent that it expects to pay cash taxes on
current income. Should we 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, we would record the estimated net
realizable value of the deferred tax assets at that time and would then provide
for income taxes at our combined federal and state effective rates.

RESULTS OF OPERATIONS

THIRTEEN WEEKS ENDED SEPTEMBER 27, 2005 AND SEPTEMBER 28, 2004

Revenue

Total revenues for the thirteen weeks ended September 27, 2005 decreased by
$314,167, or 5.7%, to $5,164,339 from $5,478,506 for the thirteen weeks ended
September 28, 2004. This decrease in revenue was primarily attributable to a
decrease of approximately $900,000 in our emergency, disaster response and
remediation work (associated primarily with the hurricanes in Florida in the
fiscal 2004 period) and an approximately $500,000 decrease in our spill and soil
environmental remediation. These decreases were partially offset by an
approximately $900,000 increase in our asbestos, lead and mold work, and a
$300,000 increase in restoration work.

Our revenues in the thirteen weeks ended September 27, 2005 reflect revenues of
approximately $456,000, generated from work relating to hurricanes Katrina and
Wilma, the revenues attributable to which we expect to be reflected primarily in
later periods.

Cost of Revenues

Cost of revenues increased $23,147 or 0.5%, to $4,385,270 for the thirteen weeks
ended September 27, 2005 as compared to $4,362,123 for the thirteen weeks ended
September 28, 2004. This increase was primarily attributable to an increase of
approximately $808,000 in payroll, including fringe benefits, an increase of
approximately $103,000 for travel and travel-related expenses associated with
the mobilization to Louisiana to begin the cleanup of the damage caused by
Hurricane Katrina and an increase in leasing expenses of approximately $42,000
attributed to the rental of three premises, which together serve as a satellite
office, regional command center, training center and housing for our employees
sent to the Gulf Coast, partially offset by the favorable effect of not
recording as a cost of revenue costs in excess of billings approximately
$492,000 of costs relating to Hurricane Katrina work that had not yet been
billed, in addition to a decrease of approximately $396,000 in direct
job-related costs relating to subcontractor expenses, materials, supplies,
equipment rental, and waste disposal costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $274,370, or 22.0%, to
$1,506,404 for the thirteen weeks ended September 27, 2005 from $1,232,034 for
the thirteen weeks ended September 28, 2004 and constituted approximately 29%
and 22.5% of revenues in such periods, respectively. This increase was primarily
attributable to an increase of $50,000 to our bad debt reserve, increases in
insurance costs of approximately $26,000, increased accounting and legal fees of
approximately $206,000 and a $25,000 increase in marketing expenses. These were
partially offset by a decrease of approximately $117,000 in consulting fees that
were expended in the fiscal 2004 period.

Benefit Related to Variable Accounting Treatment for Officer Options

Under the terms of a previous employment agreement with us and a separate
agreement with Spotless, our President and chief executive officer was able to
sell to us, or in certain circumstances to Spotless, all shares of our common
stock held by him and all shares of our common stock underlying vested options
to purchase shares of our common stock held by him upon the occurrence of
certain events. There was no benefit or expense required to be recorded in the
thirteen weeks ended September 27, 2005 due to elimination of this risk on June
30, 2005. There was no benefit or expense required to be recorded in the
thirteen weeks ended September 28, 2004 due to the low market price of our
common stock. Due to the terms of the options, changes in the market price of
our common stock, in either direction, resulted in a corresponding expense or
benefit.

                                       18

<PAGE>

Interest Expense

Interest expense increased by $382,938 to $594,042 for the thirteen weeks ended
September 27, 2005 from $211,104 for the thirteen weeks ended September 28,
2004. This increase was due to approximately $176,000 of interest expense
incurred to Laurus, approximately $135,000 of which related to the amortization
of discounts, and an increase of approximately $283,000 attributable to the
amortization of deferred financing costs relating to the Laurus transaction
partially offset by a reduction of $65,000 in interest expense incurred to
Spotless and a decrease of approximately $146,000 due to the lack of sales of
accounts receivable to Spotless in the thirteen week period ended September 27,
2005.

Provision for Income Taxes

The provision for income taxes for the thirteen weeks ended September 27, 2005
was $8,218 as compared to $2,589 for the thirteen weeks ended September 28,
2004. This increase was the result of higher taxable income for the thirteen
weeks ended September 27, 2005 primarily attributable to the cancellation of
debt owed to our former majority stockholder and senior secured lender.

In addition, we have a tax liability of $686,893 in connection with the
cancellation of a secured note payable to a related party, which has been
credited to additional paid-in capital.

Net Loss

A net loss of $(1,239,781) was incurred for the thirteen weeks ended September
27, 2005 as compared to a net loss of ($328,545) incurred for the thirteen weeks
ended September 28, 2004. The change was the result of the factors discussed
above.

LIQUIDITY AND CAPITAL RESOURCES

As of September 27, 2005, we had a cash balance of $147,493, working capital of
$2,597,138 and stockholders' equity of $5,552,011. As of June 28, 2005, we had a
cash balance of $512,711, working capital deficit of $(1,690,676) and a
stockholders' deficit of $(683,514).

Historically, we have financed our operations primarily through issuance of debt
and equity securities, through short-term borrowings from our former majority
shareholder, and through cash generated from operations. In our opinion, we
expect to have sufficient working capital to fund our current operations as long
as we do not encounter further difficulty collecting our accounts receivable.
However, market conditions, including expenses incurred in connection with
hurricanes Katrina and Wilma, and their effect on our liquidity may restrict our
use of cash. In the event that sufficient positive cash flow from operations is
not generated or is generated slowly in connection with the eight to sixteen
months that it typically takes us to collect on accounts receivables, for
example, we may need to seek additional financing. We currently have no credit
facility for additional borrowing.

As of the quarter ended September 27, 2005, we purchased in excess of $371,000
of additional trucks and vehicles to assist us in responding to the damage
caused by Hurricane Katrina. At this time, we do not have any other material
commitments for capital expenditures. We intend, however, to make additional
capital expenditures, to the extent our financial resources permit, as may be
required in connection with rendering our services in the future.

Our liquidity was adversely affected by its unrecouped costs incurred in
connection with an oil storage tank project in 2003. We believe that we will be
successful in collecting for this project, but no assurance can be given as to
the timing or amount of any such recovery. Management believes that we will
require positive cash flow from operations to meet our working capital needs
over the next twelve months unless we increase our borrowings from Laurus or
obtain debt or equity financing from a third party. Management has preliminarily
explored additional funding sources, but has been unable to attract additional
debt or equity capital. So long as we have sufficient working capital, we
anticipate continued revenue growth in new and existing service areas and
continue to bid on large projects, though there can be no assurance that any of
our bids will be accepted or that we will have sufficient working capital. We
are striving to improve our gross margin and control our selling, general and
administrative expenses, subject to our need to incur labor, capital and
equipment expenses in connection with our operations in hurricane-affected
areas. There can be no assurance, however, that changes in our plans or other
events affecting our operations will not result in accelerated or unexpected
cash requirements, or that we will be successful in



                                       19
<PAGE>

achieving positive cash flow from operations or obtaining additional financing.

As described above, we have encountered difficulty with cash collections and
slow cash flow due primarily to factors including:

        o  customers refusing to pay prior to receiving insurance
           reimbursements;
        o  customers' facility managers needing to wait for insurance adjustors
           to approve work before the remission of payment to its customers;
           and
        o  certain customers refusing to pay in connection with disputed change
           orders.

In an effort to enhance our cash flows from operations, beginning in our 2005
fiscal year, we began implementing improvements in its billing and invoicing
procedures as follows:

        o  we generally do not commence projects until we have a fully executed
           contract;
        o  our service contracts provide that our customers are directly
           obligated for our services;
        o  we require client approval with respect to the work performed or
           to be performed; o we generally seek deposits ranging from 33% to 50%
           for time and materials contracts;
        o  we engage local legal counsel in the areas in which we operate
           to file liens against customers' real property in the event of
           contract disputes; and
        o  all invoices submitted for payment are reviewed for proper
           documentation.

Because some of these are relatively new changes and function only as general
guidelines with ideal success being ultimately dependent on our customers'
behavior, no assurances can be given that they will be successful in improving
our collections and cash flows. Further, approximately 5% of our current
projects are performed under procedures that predate these improvements.


                                       19

<PAGE>

On June 30, 2005, we issued to Laurus Master Fund, Ltd. a three-year secured
convertible term note in the principal amount of $5,000,000. Subsequently,
Laurus loaned us an additional $2,350,000, and we amended and restated the note
accordingly. As of November 21, 2005, the principal amount of the Laurus note
outstanding equaled $7,350,000. On November 10, 2005, Laurus agreed to defer the
principal monthly payments due in November and December 2005 in the aggregate
amount of $495,375 until June 30, 2008, the maturity date of the Laurus note.

Laurus holds a senior security interest in our and our subsidiaries assets
collateralizing the Note, including a pledge of the stock of our subsidiaries.
In addition, Spotless holds a subordinated security interest collateralizing our
$500,000 note issued to Spotless. The existence of these security interests may
impair our ability to raise additional debt capital.

Net cash used in operating activities was $416,408 for the thirteen weeks
ended September 27, 2005 as compared to net cash provided by operations of
$287,432 for the thirteen weeks ended September 28, 2004. Accounts receivable
increased by $1,654,817 for the thirteen weeks ended September 27, 2005
primarily as a result of hurricane-related work billed toward the end of the
period and difficulties with cash collections. Accounts receivable increased by
$999,315 for the thirteen weeks ended September 28, 2004 primarily as a result
of increased sales related to hurricanes in Florida. Accounts payable and
accrued expenses increased by $1,994,724 for the thirteen weeks ended September
27, 2005 primarily as a result of the costs associated with our mobilization
efforts in Louisiana in addition to an increase of $528,000 for insurance
premiums. Accounts payable and accrued expenses increased by $131,437 for the
thirteen weeks ended September 28, 2004 as a result of an increased volume of
remediation activity.

Cash used for capital expenditures increased to $885,482 during the thirteen
weeks ended September 27, 2005 as compared to $56,011 for the thirteen weeks
ended September 28, 2004 due to the purchase of 10 trucks, 5 campers, 1 trailer
and 1 life raft, blowers, dehumidifiers and other assets to be utilized in the
clean-up efforts relating to Hurricane Katrina.

Cash provided by financing activities for the thirteen weeks ended September 27,
2005 was $936,672, primarily as a direct result of $3,329,435 received in
connection with our debt restructuring with Laurus, which included a net
increase of $1,500,000 in borrowings and the cancellation of $686,893 of our
previous secured note payable to Spotless. Financing activities for the thirteen
weeks ended September 28, 2004 used net cash of $157,063 as a result of
long-term debt repayment.


                                       20

<PAGE>

As of June 28, 2005, we owed Spotless Plastics (USA) Inc. ("Spotless")
$5,000,000 under a promissory note dated November 16, 2001, in the original
principal amount of $1,700,000. The Spotless note was collateralized by all of
our assets.

As of June 28, 2005, Spotless was due payment from third parties for purchased
accounts receivable in the amount of $349,985 under our account receivable
agreement dated February 5, 2004, with us. As of such date, Spotless had
purchased from us an aggregate amount of our accounts receivable equaling
$4,991,252 at an aggregate discount of $911,202, for an aggregate purchase price
of $4,080,050. Pursuant to the account receivable finance agreement, Spotless
was able to purchase at a discount certain of our accounts receivable without
recourse for cash, subject to certain terms and conditions. This accounts
receivable finance agreement has been terminated.

On June 30, 2005, we entered into a financing transaction with Laurus Master
Fund, Ltd. pursuant to the terms of a securities purchase agreement and related
documents. Under the terms of the financing transaction, we issued to Laurus:

        o  pursuant to the terms of a secured convertible term note,
           dated June 30, 2005, a three-year note in the principal amount
           of $5,000,000 (as amended and restated, the "Note"). The Note
           bears interest at the prime rate as published in the Wall St.
           Journal plus 2% (but not less than 7.25%), decreasing by 2%
           (but not less than 0%) for every 25% increase in the Market
           Price (as defined therein) of our common stock above the fixed
           conversion price of $0.09 following the effective date(s) of
           the registration statement or registration statements covering
           the shares of our common stock underlying the Note and the
           warrant issued to Laurus;
        o  pursuant to the terms of an Option Agreement, dated June 30,
           2005, a twenty-year option to purchase 30,395,179 shares of
           our common stock at a purchase price of $0.0001 per share, and
        o  pursuant to the terms of a Common Stock Purchase Warrant,
           dated June 30, 2005 a seven-year common stock purchase warrant
           to purchase 13,750,000 shares of our common stock at a
           purchase price of $0.10 per share.

After consummating the transaction on June 30, 2005, Laurus subsequently
provided additional financing to us on the same terms and conditions as follows:

        o  on July 13, 2005, Laurus loaned us an additional $350,000, and we
           amended and restated the Note, to be in the principal
           amount of $5,350,000;
        o  on September 9, 2005, Laurus loaned us an additional $650,000, and
           we further amended and restated the Note to be in the principal
           amount of $6,000,000; and
        o  on October 6, 2005, Laurus loaned us an additional $1,350,000,
           and we further amended and restated the Note to be in the
           principal amount of $7,350,000. This is the only note
           outstanding payable by us to Laurus.

The proceeds received by us in connection with the financing transaction and
subsequent borrowings from Laurus as of November 3, 2005 were used to pay the
amounts set forth below to the persons or for the purposes set forth below:
<TABLE>
<CAPTION>
        <S>                                                                             <C>
        o  Former majority stockholder and senior secured lender,
           consisting of approximately $2,650,000 in settlement of the
           principal and $100,000 in interest                                           $   2,750,000
        o  Laurus transaction fee                                                           1,750,000
        o  Laurus Capital Management, LLC management and due diligence fees                   262,900
        o  Loeb & Loeb escrow fee                                                               2,000
        o  Insurance premiums                                                                 583,459
        o  Legal fees                                                                         166,773
        o  Accounting fees                                                                     45,000
        o  Special committee and advisor fees                                                  61,136
        o  Payments to series A preferred stockholders                                         35,000
        o  Katrina mobilization costs                                                         238,173
        o  Working capital                                                                  1,455,559
                                                                                        -------------
             Total                                                                      $   7,350,000
                                                                                        ==============
</TABLE>


                                       21
<PAGE>

As part of the financing transaction, Laurus required us to obtain a $3,000,000
key man renewable term life insurance policy for our president and chief
executive officer. We are the beneficiary of the policy, which has a current
annual premium of $24,769 payable by us. Laurus is a contingent beneficiary of
this life insurance policy.

Set forth below is a summary of the material terms of the agreements governing
the Laurus financing transaction.

Securities Purchase Agreement and Amended and Restated Secured Convertible Term
Note. The funds borrowed under the Laurus financing are governed by, in addition
to the Securities Purchase Agreement, the terms of the Note, a security
agreement, a stock pledge agreement, a registration rights agreement and a
subsidiary guaranty. Under the terms of the Securities Purchase Agreement,
Laurus had a right to provide us with $1,300,000 in additional financing in
excess of the original $5,000,000 that it provided to us. In connection with the
additional borrowings described above, Laurus has provided all of such
additional financing.

Principal Borrowing Terms and Prepayment. Under the terms of the Note, which
matures on June 30, 2008, we are required to make monthly repayments of
principal, on the first of each month, to Laurus in the amount of $229,687.50,
commencing as of January 1, 2006. Principal repayments were due to commence
starting November 1, 2005 but, in November 2005, Laurus agreed to defer the
initial repayment date until January 1, 2006. Interest is payable monthly and
started to accrue on August 1, 2005. All required interest payments as of the
date of this report have been made. We will be able to pay such amounts in
shares of its common stock should all of the following conditions be satisfied:

        o   the average closing price of our common stock for the five (5)
            trading  days immediately  prior each first of the month is
            equal to or greater than $.10;
        o  the amount of the payment then due is not an amount greater
           than thirty percent (30%) of the aggregate dollar trading
           volume of our common stock for the period of twenty-two (22)
           trading days immediately prior to the first of each month;
        o  our common stock underlying the Note has been registered under
           an effective registration statement under the Securities Act
           of 1933 or is otherwise covered by an exemption from
           registration for resale pursuant to Rule 144 of the Securities
           Act of 1933;
        o  Laurus' aggregate beneficial ownership of our common stock does not
           exceed 4.99%; and
        o  we are not in default of the Note.

If any of these conditions are not satisfied, we are required to make payments
in cash in an amount equal to 103% of the principal amount, plus accrued
interest, then due. Should we be required to pay cash, this may have an adverse
effect on our cash flow and liquidity.

The Note may be redeemed by us in cash by paying the holder of the Note 120% of
the principal amount, plus accrued interest. As discussed below, the holder of
the Note may require us to convert all or a portion of the Note, together with
related interest and fees, into fully paid shares of its common stock at any
time. The number of shares to be issued shall equal the total amount of the Note
to be converted, divided by an initial fixed conversion price of $0.09.

If we issue shares of common stock to a third-party for consideration below the
fixed conversion price of $.09 per share or issue derivative securities
convertible into or exercisable for shares of common stock at prices below the
fixed conversion price of $.09 per share, then the fixed conversion price of the
Note will be reduced to such lower issuance or exercise price. In addition, the
conversion price of the Note may be adjusted subject to customary anti-dilution
provisions, such as if we pay a stock dividend, reclassify our capital stock or
subdivide or combine our outstanding shares of common stock into a greater or
lesser number of shares.

We may receive proceeds from the exercise of the option and the warrant
described above if the selling stockholder elects to pay the exercise price in
cash rather executing a cashless exercise. Upon a cashless exercise, in lieu of
paying the exercise price in cash, the selling stockholder would receive shares
of our common stock with a value equal to the difference between the market
price of its common stock at the time of exercise and the exercise price set
forth in the option and the warrant, multiplied by the number of shares so
exercised. There would be no proceeds to us upon a "cashless exercise" of the
option and the warrant. There can be no assurances that Laurus will exercise the
option and warrant or that we will elect to pay the exercise price in cash in
lieu of a "cashless exercise."


                                       22
<PAGE>

In the event of default, 120% of the outstanding principal amount of the Note,
plus accrued but unpaid interest, is due. Laurus has contractually agreed to
restrict its ability to convert the Note and/or exercise its warrant and option
if such conversion and/or exercise would cause its beneficial ownership of
shares of our common stock to exceed 4.99% of the outstanding shares of its
common stock. The 4.99% limitation is null and void without notice to us upon
the occurrence and during the continuance of an event of default or upon 75
days' prior written notice to us. As of the date of this report, Laurus
beneficially owns 1,500,000 shares of our common stock, or approximately 4.46%
of our outstanding capital stock. As a result, Laurus could only acquire up to
approximately 175,200 additional shares, which would constitute of a conversion
of approximately $15,768 of the principal amount of the Note, while remaining in
compliance with the 4.99% limitation. Because Laurus is irrevocably prohibited
from waiving this 4.99% limitation, even if the other conditions allowing us to
pay in shares of common stock have been satisfied, if Laurus cannot or does not
reduce its ownership of our common stock at a time when such reduction would be
necessary to allow us to make a payment in shares of common stock, we would be
required to pay Laurus in cash. This may have an adverse effect on our cash flow
and liquidity.

The Note is secured by a lien on substantially all of our assets, including the
stock of our subsidiaries, all cash, cash equivalents, accounts, accounts
receivable, deposit accounts, inventory, equipment, goods, fixtures, documents,
instruments, including promissory notes, contract rights, general intangibles,
including payment intangibles. The Master Security Agreement, dated June 30,
2005, contains no specific financial covenants. The Master Security Agreement
and the Note define certain circumstances under which they can be declared in
default and subject to termination, including among others:

        o  a failure to pay interest and principal payments when due on
           the first of the month or prior to the expiration of the
           three-business day grace period unless agreed otherwise;
        o  a breach by us of any material covenant or term or condition
           of the Note or in any agreement made in connection therewith
           and, to the extent subject to cure, such breach shall continue
           without remedy for a period of fifteen or thirty days, as the
           case may be, after any occurrence thereof;
        o  a breach by us of any material representation or warranty made in the
           Note or in any agreement made in connection therewith;
        o  any form of bankruptcy or insolvency proceeding instituted by or
           against us, which is not vacated within 30 days;
        o  any attachment or lien in excess of $75,000 in the aggregate made
           upon our assets or a judgment rendered against our property involving
           a liability of more than $75,000 which shall remain unvacated,
           unbonded or unstayed for a period of 30 days;
        o  a failure to timely deliver shares of common stock when due upon
           conversion of the Note or a failure to timely deliver a
           replacement note;
        o  an SEC stop trade order or principal market trading suspension
           of our common stock is in effect for 5 consecutive trading
           days or 5 days during a period of 10 consecutive trading days,
           provided we are not able to cure such trading suspension
           within 30 days of receiving notice or are not able to list our
           common stock on another principal market within 60 days of
           such notice;
        o  a failure to have authorized and reserved shares of our common
           stock for issuance on or before December 31, 2005 sufficient
           to provide for the full conversion of the Note, option and
           warrant issued by us to Laurus; and
        o  an indictment or threatened indictment of us or any of our
           executive officers under any criminal statute or commencement
           or threatened commencement of criminal or civil proceedings
           against us or any of our executive officers pursuant to which
           statutory or proceeding penalties or remedies available
           include forfeiture of any of our property.

Upon the occurrence of an event of default, the interest rate charged will be
increased by 2% per month until the default is cured; should the default
continue beyond any applicable grace period, then Laurus could require us to
repay 120% of any principal and interest outstanding under the Note.

Pursuant to the terms of a Registration Rights Agreement, dated June 30, 2005,
we are obligated to file a registration statement with the Securities and
Exchange Commission registering the resale of shares of our common stock
issuable upon a conversion of the Note and upon the exercise of the option and
warrant issued to Laurus. If the registration statement, which was filed on
October 3, 2005, is not declared effective by November 22, 2005 by the
Securities and Exchange Commission, then we will be subject to the following
monetary penalties, unless waived:

                                       23

<PAGE>

        o  1.5% of the principal outstanding on the Note, for the first
           thirty days, prorated for partial periods, which equals $3,675
           per day based upon the $7,350,000 principal amount of the Note
           currently outstanding; and
        o  2.0% of the principal outstanding on the Note, for each thirty day
           period, prorated for partial periods, which equals $4,900 per day.

The table below summarizes contractual obligations and commitments as of
November 3, 2005, including interest payments on our debt:
<TABLE>
<CAPTION>

                                       Total         1 Year          2-3 Years     4-5 Years      Thereafter
                                       -----         ------          ---------     ---------      ----------
<S>                                <C>             <C>               <C>             <C>             <C>
Operating Leases                   $ 1,210,128     $  948,410          $261,718      $     -         $-

Capitalized Leases                     477,733        208,180           240,421       29,132          -

Laurus Note                          7,350,000      1,518,011         5,831,989            -          -
Principal

Laurus Note                          1,039,086        576,158           462,928            -          -
Interest Expense -- Cash

Laurus Note                          6,263,786        672,278         5,591,608            -          -
Interest Expense -
Accreted Discount

Spotless Note                          500,000              -           500,000            -          -
Principal

Spotless Note, including
Interest Expense                        20,949              -            20,949            -          -
                                   ------------    -----------      ------------     --------        ---

Total                              $16,861,682     $3,923,037       $12,909,513      $29,132         $-
                                   ============    ===========      ============     ========        ===
</TABLE>

These amounts are based on the assumed interest payments for:

        o   the Laurus Note at a rate of 8.75%;
        o   effective financing rate of the Laurus Note of 72.667%;
        o   the Spotless note at a rate of 8.75%; and
        o   various other long-term debt with maturities ranging from 3
            months to 54 months and aggregating $477,733 for financed
            trucks and vehicles with interest rates ranging from 3.95% to
            13.99%.

OFF-BALANCE SHEET ARRANGEMENTS

Although we do not have any financing arrangements that have not been recorded
in our financial statements, our transaction with Laurus resulted in a
significant discount that reduced the carrying value of our debt obligation to
Laurus.  As of September 27, 2005, the Note had a principal balance of
$6,000,000 with a corresponding discount of $4,938,702, resulting in
a carrying amount of $1,061,298 on our balance sheet.

                                       24

<PAGE>

INFLATION

Inflation has not had a material impact on our operations over the past three
fiscal years or during the thirteen weeks ended September 27, 2005. We
experienced an increase of 11.9% in fuel costs during the first quarter of this
year due to increased oil prices, including the effect of Hurricane Katrina on
the delivery of fuel.

SEASONALITY

Since we and our subsidiaries are able to perform most of our and their services
throughout the year, business is not considered seasonal in nature. However, we
and our subsidiaries are affected by:

        o   the timing of large projects in certain of its and their service
            areas, i.e., asbestos and mold abatement and construction;
        o   the timing of catastrophes; and
        o   inclement weather conditions.

In particular, extended periods of rain, cold weather or other inclement weather
conditions may result in delays in commencing or completing projects, in whole
or in part. Any such delays may adversely affect our operations and financial
results and may adversely affect the performance of other projects due to
scheduling and staffing conflicts.

                           FORWARD-LOOKING STATEMENTS

Statements contained in this Form 10-Q include "forward-looking statements"
within the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934, as amended, that are based on the beliefs and
current expectations of and assumptions made by our management. 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.
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 our best estimates of future results, performance or achievement, based
upon current conditions and the most recent results of operations. Actual
results could differ materially from any expectation, estimate or projection
conveyed by these statements and there can be no assurance that any such
expectation, estimate or projection will be met. Numerous important factors,
risks and uncertainties affect our operating results and could cause actual
results to differ from the results implied by these or any other forward looking
statements. These potential factors, risks and uncertainties include, among
other things, such factors as:

        o   the market acceptance and amount of sales of our services;
        o   our success in increasing revenues and reducing expenses;
        o   the frequency and magnitude of environmental disasters or
            disruptions resulting in the need for the types of services we
            provide;
        o   our ability to service its debt and other financial obligations,
            particularly if required to pay in cash;
        o   the extent of the enactment, enforcement and strict interpretations
            of laws relating to environmental remediation;
        o   our ability to obtain and manage new and large projects;
        o   the competitive environment within the industries in which we
            operate;
        o   our ability to raise or access capital;
        o   our ability to continue as a going concern;
        o   our ability to effectively implement and maintain its internal
            controls and procedures;
        o   our dependence on key personnel;
        o   our ability to timely collect its accounts receivable;
        o   our ability to attract and retain qualified personnel; and
        o   the other factors and information disclosed and discussed in other
            sections of this quarterly report on Form 10-Q and in our
            report on Form 10-K for the fiscal year ended June 28, 2005.


                                       25
<PAGE>

You 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.

Except as may be required, we undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.

The foregoing discussion and analysis provides information which management
believes is relevant to an assessment and understanding of our 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 and with the consolidated financial statements included in
our annual report on Form 10-K for the period ended June 29, 2004.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Equity Price Risk - Our primary market risk exposure relates to the underlying
shares of common stock included in the Note, which we originally entered into
with Laurus in June 2005. In connection with the issuance of the Note, a warrant
to purchase 13,750,000 shares of our common stock and an option to purchase
30,395,175 shares of our common stock were issued to Laurus. On September 12,
2005, we issued 1,500,000 shares of our common stock to Laurus in connection
with its partial exercise of its option. The option issued to Laurus has been
recorded at its intrinsic value and the warrant along with underlying shares of
common stock in the related agreements pursuant to which the Note and the
warrant  were  issued  have been  recorded at their relative fair value at the
inception date of the agreement, June 30, 2005, and will be recorded at fair
value at each subsequent balance sheet date. Any change in value between
reporting periods will be recorded as a non-operating, non-cash charge at each
reporting date. The impact of these non-operating, non-cash charges could have
an adverse effect on our stock price in the future.

The intrinsic value of the option and the fair value of the warrant and the
underlying shares of common stock are tied in a large part to our stock price.
If our stock price increases between reporting periods, the option, warrant and
underlying shares of common stock become more valuable. As such, there is no way
to forecast what the non-operating, non-cash charges will be in the future or
what the future impact will be on our financial statements.

Interest Rate Sensitivity - The Note bears interest at the prime rate as
published in the Wall St. Journal plus 2% (but not less than 7.25%), decreasing
by 2% (but not less than 0%) for every 25% increase in the Market Price (as
defined therein) of our common stock above the fixed conversion price of $0.09
following the effective date of the registration statement covering the Common
Stock issuable upon conversion. Should the price of our common stock increase
and maintain a price equal to 125% of $0.09 for a twelve month period, we would
benefit from a reduced interest rate of 2% on the outstanding principal amount
for that twelve-month period. The Note exposes us to the risk of our own common
stock price because if Laurus is unable to convert the loan into common stock
due to low value in the market, we then must repay the loan in cash at a 3%
premium. On June 30, 2005, we also issued a variable interest rate secured
promissory note in the principal amount of $500,000 to Spotless Plastics (USA),
Inc., bearing interest at LIBOR plus 1%. A hypothetical 1% increase in the
interest rate applicable to the outstanding amounts of the Laurus and Spotless
notes would increase our interest expense by approximately $70,000 annually.
This hypothetical calculation represents the assumed interest payments for:

        o   the Note at a rate of 8.75%;
        o   the Spotless note at a rate of 8.75%; and
        o   various other long-term debt with maturities ranging from 3
            months to 54 months and aggregating $477,733 for financed
            trucks and vehicles with interest rates ranging from 3.95% to
            13.99%.


                                       26


<PAGE>


ITEM 4.  CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and forms, and that such information is accumulated and
communicated to management, including our chief executive officer and chief
financial officer, to allow timely decisions regarding required disclosure. The
design of any system of control is based in part upon certain assumptions about
the likelihood of future events, and there can be no assurance that any design
will succeed in achieving our stated purpose under all potential future
conditions. As required by Rule 13a-15(b) of the Securities Exchange Act of
1934, an evaluation was performed under the supervision and with the
participation of the chief executive officer and the chief financial officer of
the effectiveness of the design and operation of our "disclosure controls and
procedures" (as defined under Rule 13a-15(e) and Rule 15d-15(e)) as of the end
of the period covered by this quarterly report on Form 10-Q filed with the SEC.
Based upon that evaluation and in connection with their determination that the
matters described immediately below relating to changes to our internal control
over financial reporting were not material, our chief executive officer and our
chief financial officer concluded that our disclosure controls and procedures,
as of September 27, 2005, were effective in timely alerting them to material
company information required to be included in our periodic filings with the
Securities and Exchange Commission.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

In connection with our first quarter fiscal 2006 review, we identified issues
regarding the timing and related processing of actual cash receipts and
allocation of costs associated with our contract and billing procedures and have
or are in the process of implementing the following measures:

        o  We have modified our calendar quarterly period end dates in our
            computer system to correspond with our actual quarterly end dates
            in order to enhance the accurate and timely processing of our actual
            cash receipts. We have also emphasized to our accounting staff that
            they need to be mindful of our actual quarterly period end dates
            based on a 52-53 week fiscal year ending on the Tuesday nearest June
            30th when processing transactions.
        o   We are in the process of modifying the way in which we allocate our
            costs to specific projects in an effort to ensure that our project
            costs are properly recorded.

We are assigning a high priority to the short-term and long-term correction of
our internal controls over financial reporting and will continue to evaluate the
effectiveness of such internal controls on an on-going basis and will take
further action as might be appropriate. Other than implementing or beginning to
implement the improvements discussed above, there were no changes in our
internal controls over financial reporting that have materially affected, or are
reasonably likely to materially affect, those controls.


                                       27


<PAGE>


                           PART 2 - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS
         -----------------

On April 16, 2002, Richard S. Fischbein and Mimi Fischbein commenced an action
against us and Michael O'Reilly, our CEO, in the Supreme Court of the State of
New York, County of New York, claiming that they are entitled to approximately
$4,400,000 of damages relating to alleged breaches of a contract for a
residential construction project. On May 7, 2002, we filed an answer denying the
plaintiffs' claims and seeking approximately $45,418 in a counterclaim for
uncollected accounts. On November 1, 2005, we settled this matter by agreeing to
pay $60,000 to the plaintiffs in six equal monthly installments beginning
December 1, 2005.

On August 5, 2004, we commenced an action in the New York State Supreme Court,
County of New York, seeking to collect approximately $1,255,000 of contractual
billings relating to a large roof tar removal project. On October 15, 2004, the
Economic Development Corporation filed an answer, denying our claims. On
November 4, 2004, the Economic Development Corporation filed an amended answer
denying our claims and asserting counterclaims. The case is currently in
pre-trial discovery.

In April 2003, we commenced a remediation project in New York City for a local
utility to remove sediment from an oil storage tank. During the course of the
project, the sediment in the tank was found to be substantially different than
the sediment that the customer represented to be in the tank prior to the
inception of the project. We continued to work on the project so as not to
default on the terms which it understood to exist with the customer. The
additional costs incurred to remove this matter were approximately $1,600,000.
As of June 28, 2005, we recognized revenue of approximately $1,700,000 with
respect to the original scope of this project. All amounts due under the
original contract have been paid. We have not recognized the revenue associated
with its claim. The project has been substantially completed and the customer
has refused to acknowledge its liability for these additional charges billed. On
October 22, 2004, we commenced an action against a local utility company in the
New York State Supreme Court, County of New York, claiming that we are entitled
to approximately $2,000,000 of contractual billings and related damages in
connection with this matter. On December 6, 2004, the local utility company
filed an answer, denying our claims. The case is currently in pre-trial
discovery.

We are a plaintiff in approximately 20 lawsuits (including the two cases
described above) claiming an aggregate of approximately $5,000,000 pursuant to
which we are seeking to collect amounts we believe are owed to us by customers
that are included in our accounts receivable, primarily with respect to changed
work orders or other modifications to our scope of work. The defendants in these
actions have asserted counterclaims for an aggregate of approximately $500,000.

We are 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 our consolidated
financial statements.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
         -----------------------------------------------------------

Not applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
         -------------------------------

Not applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDER
         --------------------------------------------------

Not applicable.

ITEM 5.  OTHER INFORMATION
         -----------------

Not applicable.


                                       28

<PAGE>


ITEM 6.  EXHIBITS
         --------

         The following exhibits are included as part of this report:

         10.1     Employment Agreement, dated June 30, 2005, between Windswept
                  and Michael O'Reilly. (Incorporated by reference to Exhibit
                  10.15 of Windswept's Current Report on Form 8-K (Date of
                  Report: June 30, 2005) filed with the SEC on July 7, 2005).
         10.2     Option to purchase 15,464,964 shares of common stock dated
                  June 30, 2005, issued by Windswept to Michael O'Reilly.
                  (Incorporated by reference to Exhibit 10.6 of Windswept's
                  Current Report on Form 8-K (Date of Report: June 30, 2005)
                  filed with the SEC on July 7, 2005).
         10.3     Amendment No. 1 to the Account Receivable Finance Agreement,
                  dated June 30, 2005, by and among Windswept, Trade-Winds and
                  Spotless. (Incorporated by reference to Exhibit 10.19 of
                  Windswept's Current Report on Form 8-K (Date of Report: June
                  30, 2005) filed with the SEC on July 7, 2005).
         10.4     Securities Purchase Agreement, dated June 30, 2005, by and
                  between Windswept and Laurus. (Incorporated by reference to
                  Exhibit 10.1 of Windswept's Current Report on Form 8-K (Date
                  of Report: June 30, 2005) filed with the SEC on July 7, 2005).
         10.5     Funds Escrow Agreement, dated June 30, 2005, by and among
                  Windswept, Laurus and Loeb & Loeb LLP, as escrow agent.
                  (Incorporated by reference to Exhibit 10.24 of Windswept's
                  Current Report on Form 8-K (Date of Report: June 30, 2005)
                  filed with the SEC on July 7, 2005).
         10.6     $5,000,000 Secured Convertible Term Note, dated June 30, 2005,
                  issued by Windswept to Laurus. (Incorporated by reference to
                  Exhibit 10.2 of Windswept's Current Report on Form 8-K (Date
                  of Report: June 30, 2005) filed with the SEC on July 7, 2005).
         10.7     $5,350,000 Amended and Restated Secured Convertible Term Note,
                  dated July 13, 2005, issued by Windswept to Laurus Master
                  Fund, Ltd. (Incorporated by reference to Exhibit 10.1 of
                  Windswept's Current Report on Form 8-K (Date of Report: July
                  13, 2005) filed with the SEC on July 13, 2005).
         10.8     $6,000,000 Amended and Restated Secured Convertible Term Note,
                  dated September 9, 2005, issued by Windswept to Laurus.
                  (Incorporated by reference to Exhibit 10.01 of Windswept's
                  Current Report on Form 8-K (Date of Report: September 9, 2005)
                  filed with the SEC on September 15, 2005.
         10.9     Option, dated June 30, 2005, issued by Windswept to Laurus.
                  (Incorporated by reference to Exhibit 10.3 of Windswept's
                  Current Report on Form 8-K (Date of Report: June 30, 2005)
                  filed with the SEC on July 7, 2005).
         10.10    Common Stock Purchase Warrant, dated June 30, 2005, issued by
                  Windswept to Laurus. (Incorporated by reference to Exhibit
                  10.4 of Windswept's Current Report on Form 8-K (Date of
                  Report: June 30, 2005) filed with the SEC on July 7, 2005).
         10.11    Master Security Agreement, dated June 30, 2005, by and among
                  Windswept, Trade-Winds Environmental Restoration Inc.
                  ("Trade-Winds"), North Atlantic Laboratories, Inc. ("North
                  Atlantic") and Laurus. (Incorporated by reference to Exhibit
                  10.5 of Windswept's Current Report on Form 8-K (Date of
                  Report: June 30, 2005) filed with the SEC on July 7, 2005).
         10.12    Option to purchase 250,000 shares of common stock, dated June
                  30, 2005, issued by Windswept to Dr. Kevin Phillips.
                  (Incorporated by reference to Exhibit 10.7 of Windswept's
                  Current Report on Form 8-K (Date of Report: June 30, 2005)
                  filed with the SEC on July 7, 2005).
         10.13    Option to purchase 250,000 shares of common stock, dated June
                  30, 2005, issued by Windswept to Gary Molnar. (Incorporated by
                  reference to Exhibit 10.8 of Windswept's Current Report on
                  Form 8-K (Date of Report: June 30, 2005) filed with the SEC on
                  July 7, 2005).
         10.14    Forbearance and Deferral Agreement, dated June 30, 2005, by
                  and among Windswept, Michael O'Reilly, the Series A
                  Convertible Preferred Stockholders and Laurus. (Incorporated
                  by reference to Exhibit 10.9 of Windswept's Current Report on
                  Form 8-K (Date of Report: June 30, 2005) filed with the SEC on
                  July 7, 2005).
         10.15    Transition Services Agreement, dated June 30, 2005, by and
                  between Spotless Plastics (USA) and Windswept. (Incorporated
                  by reference to Exhibit 10.10 of Windswept's Current Report on
                  Form 8-K (Date of Report: June 30, 2005) filed with the SEC on
                  July 7, 2005).
         10.16    Bonding Support Letter from Michael O'Reilly to Windswept and
                  Laurus. (Incorporated by reference to Exhibit 10.11 of
                  Windswept's Current Report on Form 8-K (Date of Report: June
                  30, 2005) filed with the SEC on July 7, 2005).
         10.17    Registration Rights Agreement, dated June 30, 2005, by and
                  between Windswept and Laurus. (Incorporated by reference to
                  Exhibit 10.12 of Windswept's Current Report on Form 8-K (Date
                  of Report: June 30, 2005) filed with the SEC on July 7, 2005).


                                       29

<PAGE>

         10.18    Stock Pledge Agreement, dated June 30, 2005, by and among
                  Windswept, Trade-Winds, North Atlantic and Laurus.
                  (Incorporated by reference to Exhibit 10.13 of Windswept's
                  Current Report on Form 8-K (Date of Report: June 30, 2005)
                  filed with the SEC on July 7, 2005).
         10.19    Subsidiary Guaranty, dated the June 30, 2005, from Trade-Winds
                  and North Atlantic to Laurus Registration Rights Agreement,
                  dated June 30, 2005, by and between Windswept and Laurus.
                  (Incorporated by reference to Exhibit 10.14 of Windswept's
                  Current Report on Form 8-K (Date of Report: June 30, 2005)
                  filed with the SEC on July 7, 2005).
         10.20    Secured Promissory Note, dated June 30, 2005, issued by
                  Windswept to Spotless in the principal amount of $500,000.
                  (Incorporated by reference to Exhibit 10.25 of Windswept's
                  Current Report on Form 8-K (Date of Report: June 30, 2005)
                  filed with the SEC on July 7, 2005).
         10.21    Security Agreement, dated June 30, 2005, between North
                  Atlantic and Spotless. (Incorporated by reference to Exhibit
                  10.18 of Windswept's Current Report on Form 8-K (Date of
                  Report: June 30, 2005) filed with the SEC on July 7, 2005).
         10.22    Security Agreement, dated June 30, 2005, between Windswept and
                  Spotless Plastics (USA) Inc. (Incorporated by reference to
                  Exhibit 10.16 of Windswept's Current Report on Form 8-K (Date
                  of Report: June 30, 2005) filed with the SEC on July 7, 2005).
         10.23    Security Agreement, dated June 30, 2005, between Trade-Winds
                  and Spotless. (Incorporated by reference to Exhibit 10.17 of
                  Windswept's Current Report on Form 8-K (Date of Report: June
                  30, 2005) filed with the SEC on July 7, 2005).
         10.24    Subordination Agreement, dated June 30, 2005, by and between
                  Spotless and Laurus, acknowledged by Windswept. (Incorporated
                  by reference to Exhibit 10.26 of Windswept's Current Report on
                  Form 8-K (Date of Report: June 30, 2005) filed with the SEC on
                  July 7, 2005).
         10.25    Account Receivable Sale Agreement, dated June 30, 2005, by and
                  among Spotless, Windswept and TradeWinds. (Incorporated by
                  reference to Exhibit 10.27 of Windswept's Current Report on
                  Form 8-K (Date of Report: June 30, 2005) filed with the SEC on
                  July 7, 2005).
         10.26    Termination Agreement, dated June 30, 2005, by and between
                  Trade-Winds and Spotless. (Incorporated by reference to
                  Exhibit 10.20 of Windswept's Current Report on Form 8-K (Date
                  of Report: June 30, 2005) filed with the SEC on July 7, 2005).
         10.27    Termination Agreement, dated June 30, 2005, by and between
                  North Atlantic and Spotless. (Incorporated by reference to
                  Exhibit 10.21 of Windswept's Current Report on Form 8-K (Date
                  of Report: June 30, 2005) filed with the SEC on July 7, 2005).
         10.28    Termination Agreement, dated June 30, 2005, by and between
                  Windswept and Spotless. (Incorporated by reference to Exhibit
                  10.22 of Windswept's Current Report on Form 8-K (Date of
                  Report: June 30, 2005) filed with the SEC on July 7, 2005).
         10.29    Release, dated June 30, 2005, by and among Windswept,
                  Spotless, Peter Wilson, John Bongiorno, Ronald Evans, Charles
                  L. Kelly, Jr., Brian Blythe and Joseph Murphy. (Incorporated
                  by reference to Exhibit 10.23 of Windswept's Current Report on
                  Form 8-K (Date of Report: June 30, 2005) filed with the SEC on
                  July 7, 2005).
         10.30    Lease Agreement dated September 2, 2005 between Trade-Winds
                  and Alberta Bentily. (Incorporated by reference to Exhibit
                  10.01 of Windswept's Current Report on Form 8-K (Date of
                  Report: September 1, 2005) filed with the SEC on September 8,
                  2005).
         10.31    Lease Agreement dated September 8, 2005 between Trade-Winds
                  and Mark J. Anderson (Incorporated by reference to Exhibit
                  10.48 of Windswept's Annual Report Form 10-K for the fiscal
                  year ended June 28, 2005, filed with the SEC on October 3,
                  2005).
         10.32    $7,350,000 Amended and Restated Secured Convertible Term Note,
                  dated October 6, 2005, issued by Windswept to Laurus.
                  (Incorporated by reference to Exhibit 10.1 of Windswept's
                  Current Report on Form 8-K (Date of Report: October 6, 2005)
                  filed with the SEC on October 6, 2005).
         10.33    Amendment and Deferral Agreement, dated November 10, 2005, by
                  and between Windswept and Laurus (Incorporated by reference to
                  Exhibit 10.1 of Windswept's Current Report on Form 8-K (Date
                  of Report: November 10, 2005) filed with the SEC on November
                  14, 2005).
         31.1     Certification of Chief Executive Officer pursuant to
                  Sarbanes-Oxley Section 302(a)
         31.2     Certification of Chief Financial Officer pursuant to Section
                  302(a)
         32.1     Certification of Chief Executive Officer and Chief Financial
                  Officer pursuant to 18 U.S.C. Section 1350.


                                       30


<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.


                                   WINDSWEPT ENVIRONMENTAL GROUP, INC.



Date: November 21, 2005         By:   /s/ Michael O'Reilly
                                   ------------------------------------------
                                   MICHAEL O'REILLY
                                   President and Chief Executive Officer
                                   (Principal Executive Officer)



Date: November 21, 2005        By:   /s/ Andrew C. Lunetta
                                  --------------------------------------------
                                  ANDREW C. LUNETTA
                                  Chief Financial Officer
                                  (Principal Financial Officer)


                                       31