SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                FORM 10- QSB/A-2


(X)  Quarterly  report  pursuant  to  Section  13 or 15 (d)  of  the  Securities
     Exchange Act of 1934.

     For the quarterly period ended January 31, 1997 or

(  ) Transition  report  pursuant  to Section 13 or 15 (d) of the  Securities
     Exchange Act of 1934.

     For the Transition period from __________ to __________.

     Commission File Number: 0-17072

                       WINDSWEPT ENVIRONMENTAL GROUP, INC.
              (Formerly Comprehensive Environmental Systems, Inc.)

          Delaware                                              11-2844247
(State of other jurisdiction of                               (IRS Employer
 incorporation or organization)                           Identification Number)

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

                                 (516) 694-7060
              (Registrant's telephone number, including area code)

                    Comprehensive Environmental Systems Inc.
                    72B Cabot Street West Babylon, NY 11704
              (Former name, former address and former fiscal year,
                          if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports)  and (2) has been  subject to such  filing
requirements for the past 90 days.

                      YES    _X_        NO ___

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
Common Stock, as of the latest practicable date.

Common Stock, Par Value $.0001                             10,062,349
   (Title of Each Class)                        (Outstanding at August 31, 1997)

Transitional Small Business Disclosure Format (check one):   Yes ___     No  _X_


<PAGE>


Part I - FINANCIAL INFORMATION
Item 1.  Financial Statements
THE FOLLOWING AMENDS IN ITS ENTIRETY FORM 10-QSB FOR THE QUARTER ENDED
JANUARY 31, 1997 AS PREVIOUSLY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ON MARCH 21, 1997 AND JULY 14, 1997.

              WINDSWEPT ENVIRONMENTAL GROUP, INC. AND SUBSIDIARIES
              (Formerly Comprehensive Environmental Systems, Inc.)
                     CONSOLIDATED BALANCE SHEETS (RESTATED)
                                  (Unaudited )

<TABLE>
<CAPTION>
                                                                    January 31,      April 30,
                                                                       1997            1996
                                                                   ------------    ------------
<S>                                                                <C>             <C>         
ASSETS
CURRENT ASSETS
   Cash                                                            $    673,571    $    282,933
   Accounts receivable, net of allowance for doubtful
       accounts of $168,000 at January 31, 1997 and
       $75,000 at April 30, 1996                                      2,320,736       2,043,740
   Current portion of note receivable                                    27,000            --
   Inventories and prepaid supplies                                     265,065         265,065
   Prepaid expenses                                                     165,026            --
   Other current assets                                                 209,952         148,557
                                                                   ------------    ------------
         Total Current Assets                                         3,661,350       2,740,295
                                                                   ------------    ------------

PROPERTY AND EQUIPMENT, net of
   accumulated depreciation and amortization                          3,486,941       3,143,477
                                                                   ------------    ------------

OTHER ASSETS
   Note receivable                                                      288,000            --
   Investment in non-marketable securities, net of
     valuation allowance of $5,993,841 at April 30, 1996                   --           628,000
   Goodwill, net of accumulated amortization                            122,821         131,170
   Other assets                                                          39,795          62,447
                                                                   ------------    ------------

   TOTAL ASSETS                                                    $  7,598,907    $  6,705,389
                                                                   ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Current portion of long-term debt                               $    373,052    $    260,952
   Accounts payable and accrued expenses                              1,919,771       1,335,287
   Note payable                                                         100,000            --
   Deposit                                                                 --           150,000
   Income taxes payable                                                  34,603          59,080
   Other current liabilities                                             40,157         228,591
    Obligations of unconsolidated subsidiary, net                       145,055            --
                                                                   ------------    ------------
         Total Current Liabilities                                    2,612,638       2,033,910

OTHER LIABILITIES
   Long-term debt, net of current portion                               558,981         382,324
                                                                   ------------    ------------
         Total Liabilities                                            3,171,619       2,416,234
                                                                   ------------    ------------

STOCKHOLDERS' EQUITY
   Preferred stock, $.01 par value,10,000,000 shares authorized,
   no shares issued or outstanding                                         --              --
   Common stock, $.0001 par value,50,000,000 shares  authorized,
   9,151,488 issued less 20,000 treasury shares                             915             617
   Additional paid-in capital                                        26,667,449      25,159,377
   Treasury stock                                                       (10,000)        (58,000)
   Stock subscription receivable                                           --           (46,988)
   Accumulated deficit                                              (22,231,076)    (20,765,851)
                                                                   ------------    ------------
   Total Stockholders' Equity                                         4,427,288       4,289,155
                                                                   ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $  7,598,907    $  6,705,389
                                                                   ============    ============
</TABLE>


          See Accompanying Notes to Consolidated Financial Statements.

                                        1


<PAGE>


              WINDSWEPT ENVIRONMENTAL GROUP, INC. AND SUBSIDIARIES
              (Formerly Comprehensive Environmental Systems, Inc.)
                CONSOLIDATED STATEMENTS OF OPERATIONS (RESTATED)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                    Three Months Ended              Nine Months Ended
                                                    ------------------              -----------------
                                                        January 31,                    January 31,
                                                   1997            1996           1997             1996
                                               ------------    ------------    ------------    ------------
<S>                                            <C>             <C>             <C>             <C>         
Revenues                                       $  4,016,481    $  1,621,411    $ 12,268,023    $  7,993,072

Cost of revenues                                  3,420,747       1,019,425       9,383,515       4,912,644
                                               ------------    ------------    ------------    ------------

    Gross profit                                    595,734         601,986       2,884,508       3,080,428

Selling, general and administrative expenses        974,627       1,145,485       3,181,305       3,226,675
Management restructuring costs                      150,000            --         1,343,000            --
                                               ------------    ------------    ------------    ------------

Income (loss) from operations before
   other income (expense)                          (528,893)       (543,499)     (1,639,797)       (146,247)
                                               ------------    ------------    ------------    ------------

Other income (expense):
Settlement of legal claims, net                        --              --           296,654         (17,500)
Losses on investments                                  --              --          (295,071)           --
Income from join venture                               --              --              --            22,512
Gain on sale of marketable security                    --              --              --            63,999
Gain on sale of assets, net                            --              --           221,710            --
Realized gain on sale of building                      --              --              --           188,624
Interest expense                                    (21,568)           --           (50,699)           --
Interest and dividend income                            430          36,876           1,978          76,608
                                               ------------    ------------    ------------    ------------
     Total other income (expense)                   (21,138)         36,876         174,572         334,243
                                               ------------    ------------    ------------    ------------

      Income (loss) before income taxes            (550,031)       (506,623)     (1,465,225)        187,996

Provision (credit) for income taxes                    --          (112,200)           --            39,600
                                               ------------    ------------    ------------    ------------

      Net income (loss)                        $   (550,031)   $   (394,423)   $ (1,465,225)   $    148,396
                                               ============    ============    ============    ============

Earnings per common share                      $       (.06)   $       (.05)   $       (.16)   $        .02
                                               ============    ============    ============    ============

Weighted average number of
    common shares outstanding                     9,727,371       8,723,971       9,125,444       7,537,387
                                               ============    ============    ============    ============
</TABLE>


           See Accompanying Notes to Consolidated Financial Statements

                                        2


<PAGE>


              WINDSWEPT ENVIRONMENTAL GROUP INC., AND SUBSIDIARIES
              (Formerly Comprehensive Environmental Systems, Inc.)
           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (RESTATED)
                   FOR THE NINE MONTHS ENDED JANUARY 31, 1997
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                     Common Stock      Additional                    
                                       Number of          Par           Paid-in         Treasury     
                                         Shares          Value          Capital           Stock      
                                      ------------    ------------    ----------      ------------   
<S>                                     <C>          <C>             <C>             <C>             
Balance at April  30, 1996              6,097,366    $        617    $ 25,159,377    $    (58,000)   

  Private placements of
     common stock                       2,600,000             260       1,232,165       

   Issuance of common
     stock for services                   309,122              31         240,914         

   Issuance of treasury stock
     to settle legal obligations           70,000                                          58,000

 Return of common stock as
     part of legal settlement             (20,000)                                        (10,000)

  Collection of stock subscription
     receivable                          

  Issuance of common stock for
     partial payment of management
     restructuring costs                   75,000               7          34,993          

  Net loss                            
                                     ------------    ------------    ------------    ------------    
                                                                                                     

Balance at January  31, 1997            9,131,488    $        915    $ 26,667,449    $    (10,000)      
                                     ============    ============    ============    ============    
<CAPTION>

                                              Stock
                                           Subscription      Accumulated
                                            Receivable          Deficit         Total
                                           ------------      ------------    ------------
<S>                                          <C>             <C>             <C>         
Balance at April  30, 1996                   $    (46,988)   $(20,765,851)   $  4,289,155

  Private placements of
     common stock                                                               1,232,425

   Issuance of common
     stock for services                                                           240,945

   Issuance of treasury stock
     to settle legal obligations                                                   58,000 
                                                                                          
 Return of common stock as                                                                
     part of legal settlement                                                    (10,000)
                                                                                          
  Collection of stock subscription                                                        
     receivable                                    46,988                          46,988 
                                                
  Issuance of common stock for
     partial payment of management
     restructuring costs                                       (1,465,225)     (1,465,225)

  Net loss                                 ------------      ------------    ------------

Balance at January  31, 1997             $           --      $(22,231,076)   $  4,427,288
                                           ============      ============    ============
</TABLE>


           See Accompanying Notes to Consolidated Financial Statements

                                        3


<PAGE>


              WINDSWEPT ENVIRONMENTAL GROUP, INC. AND SUBSIDIARIES
              (Formerly Comprehensive Environmental Systems, Inc.)
                CONSOLIDATED STATEMENTS OF CASH FLOWS (RESTATED)
                            FOR THE NINE MONTHS ENDED
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                        January 31,   January 31,
                                                           1997          1996
                                                       -----------    -----------
<S>                                                    <C>            <C>        
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income (loss)                                   $(1,465,225)   $   148,396
   Adjustments to reconcile net income to net cash
   flows from operating activities:
     Deferred income taxes                                    --           39,600
     Depreciation and amortization                         529,125        230,838
     Gain on sale of building                                 --         (188,624)
     Issuance of common stock for services                 240,945        108,500
      Losses on investments                                295,071           --
     Transfer of investment as partial consideration
        for termination agreement                          330,000           --
      Income from joint venture                               --          (22,512)
     Management restructuring costs                        251,000           --
      Gain on sale of assets, net                         (221,710)          --
     Settlement of legal claims, net                      (305,000)          --
   Changes in operating assets and liabilities:
     Accounts receivable                                  (276,996)      (751,117)
     Inventories and prepaid supplies                         --         (250,000)
     Prepaid expenses                                     (165,026)          --
     Other current assets                                  (61,395)       (51,845)
     Other assets                                           22,652        (44,928)
     Accounts payable and accrued expenses                 584,484        174,108
     Current Income taxes                                  (24,477)          --
     Other current liabilities                            (188,434)        16,078
                                                       -----------    -----------

NET CASH FLOWS FROM OPERATING ACTIVITIES                  (454,986)      (591,497)
                                                       -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
   Payment for investment in subsidiary                       --          (10,000)
   Reserve for contingencies                                  --         (367,309)
   Investment in joint venture                                --           57,815
   Deposits advanced                                          --          397,943
   Equity in unconsolidated subsidiary                     145,055           --
   Note receivable, net of current receipts               (265,000)        50,000
   Proceeds from the sale of assets                        221,710           --
   Acquisition of fixed assets                            (774,311)    (2,237,169)
   Deferred acquisition costs, net                            --         (102,025)
   Investment in non-marketable security                      --          (88,000)
                                                       -----------    -----------

NET CASH FLOWS FROM INVESTING ACTIVITIES                  (672,546)    (2,298,745)
                                                       -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from note payable                              100,000           --
   Proceeds from long-term debt                            566,419           --
   Principal payments of long-term debt                   (277,662)      (100,016)
   Payment of note payable                                    --          (75,000)
   Proceeds from issuance of common stock, net
      of advance deposits                                1,082,425      3,024,905
   Stock subscription receivable                            46,988           --
                                                       -----------    -----------

NET CASH FLOWS FROM FINANCING ACTIVITIES                 1,518,170      2,849,889
                                                       -----------    -----------

NET CHANGE IN CASH AND CASH EQUIVALENTS                    390,638        (40,353)

CASH AND EQUIVALENTS-BEGINNING                             282,933        648,023
                                                       -----------    -----------
CASH AND EQUIVALENTS-ENDING                            $   673,571    $   607,670
                                                       ===========    ===========
</TABLE>


          See Accompanying Notes to Consolidated Financial Statements.

                                        4


<PAGE>


              WINDSWEPT ENVIRONMENTAL GROUP, INC. AND SUBSIDIARIES
              (Formerly Comprehensive Environmental Systems, Inc.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE QUARTER ENDED JANUARY 31, 1997
                                   (Unaudited)


(1)  Consolidated Financial Statements The consolidated balance sheet at the end
     of the preceding fiscal year has been derived from the audited consolidated
     balance sheet  contained in the Company's  Form 10-KSB and is presented for
     comparative  purposes.  All other financial  statements are unaudited.  All
     unaudited  amounts are subject to year-end  adjustments and audit,  but the
     Company believes all  adjustments,  consisting only of normal and recurring
     adjustments, necessary to present fairly the financial position, results of
     operations and changes in cash flows for all interim periods presented have
     been  made.  The  results  of  operations  for  interim   periods  are  not
     necessarily indicative of the operating results for the full year.

     Footnote  disclosures normally included in financial statements prepared in
     accordance with generally accepted accounting  principles have been omitted
     in accordance  with the published  rules and  regulations of the Securities
     and Exchange Commission.  These consolidated financial statements should be
     read in  conjunction  with  the  financial  statements  and  notes  thereto
     included in the Company's Form 10-KSB for the most recent fiscal year.

(2)  Statement of Cash Flows

     NON-CASH INVESTING AND FINANCING ACTIVITIES

<TABLE>
<S>                                                                                       <C>                <C>     
     Issuance of restricted common shares for
     the investment in New York Testing Laboratories, Inc.,
     and Subsidiaries                                                                     $   --             $ 67,500
                                                                                          ========           ========

     Step-up in basis of property and equipment resulting from the allocated
     purchase price in excess of net assets acquired from New York
     Testing Laboratories, Inc. and Subsidiaries                                          $   --             $328,681
                                                                                          ========           ========

     Issuance of 261,111 and 297,333 common shares,
      respectively, in exchange for services rendered                                     $240,945           $108,500
                                                                                          ========           ========

     Transfer of non-marketable security as partial
      consideration for termination agreement                                             $528,000           $   --
                                                                                          ========           ========

     Note receivable and return of common stock accepted
      as partial consideration in settlement of a
      legal claim                                                                         $285,000           $   --
                                                                                          ========           ========

     Issuance of long-term debt in connection with the partial
      settlement of a legal claim and separate consulting
      agreement                                                                           $ 30,000           $   --
                                                                                          ========           ========

     SUPPLEMENTAL INFORMATION

     Interest Paid                                                                        $ 50,699           $ 31,878
                                                                                          ========           ========

     Taxes Paid                                                                           $    346           $    224
                                                                                          ========           ========
</TABLE>

(3)  Restatement of Consolidated  Financial Statements The 10-QSB for the period
     ended  January 31, 1997 is being  restated to reflect a charge for $792,000
     of previously  deferred  restructuring  costs in the second fiscal  quarter
     ended  October  31,  1996  as  well  as  include  those  costs,  previously
     categorized as other expenses,  $551,000,  as costs included in determining
     income  from  operations.  The  restatement  resulted  in a decrease in net
     income and  accumulated  deficit of $792,000,  or a loss of $.09 per share.
     The Company originally reported,  $625,775, or $.07 earnings per share, for
     the nine month period ended  January 31, 1997.  These numbers were restated
     to a net loss of  $(166,225),  or (.02) loss per  share.for  the nine month
     period then ended


                                        5



<PAGE>



              WINDSWEPT ENVIRONMENTAL GROUP, INC. AND SUBSIDIARIES
              (Formerly Comprehensive Environmental Systems, Inc.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE QUARTER ENDED JANUARY 31, 1997
                                   (Unaudited)


(3)  Restatement of  Consolidated  Financial  Statements  (cont'd) In connection
     with the April 30, 1997 year end accounting closing and subsequent analysis
     performed,  it was determined that errors had been made with respect to the
     determination  of the carrying value of the deferred income tax asset as of
     April 30, 1996 and April 30, 1995.  In addition,  $432,000 of  compensation
     paid to a  former  officer  of the  Company  had  been  accounted  for as a
     reduction  of  additional  paid-in  capital  during  the year  ended  April
     30,1996.  The  effect  of these  changes  resulted  in an  increase  to the
     Company's  Accumulated  Deficit of  $3,016,000,  a decrease in the Deferred
     income tax asset of  $2,584,000,  and an increase of $432,000 in additional
     paid-in capital as of April 30, 1996. The Company  further  determined that
     the January 31, 1997  10-QSB/A-1  included  additional  misstatements.  The
     accompanying  consolidated  financial  statements  have  been  restated  to
     correct the  errors,  resulting  in the  following  changes to  accumulated
     deficit as of January 31, 1997 and the related consolidated  statements for
     the nine month period then ended.

<TABLE>
<CAPTION>
                                                                                                               
                                                                           Net Loss,           Net Loss,       Loss         Loss    
                                                                            Quarter           Nine months       Per      Per Share, 
                                                        Accumulated          ended               ended         share,    Nine months
                                                          Deficit           1/31/97             1/31/97        Quarter      ended   
                                                          -------           -------             -------        -------      -----   
<S>                                                    <C>                <C>                <C>                <C>         <C>   
As previously reported and restated                    $(17,916,076)      $     30,969       $   (166,225)      $ .00       $(.02)

Overstatement of deferred income tax
asset as of April 30, 1995                               (1,782,533)              --                 --          --          --

Overstatement of deferred income tax
asset as of and for the year ended April
30, 1996                                                   (801,467)              --                 --          --          --

Overstatement of additional paid-in capital
and understatement of compensation
expense as of and for the year ended
April 30, 1996                                             (432,000)              --                 --          --          --

Compensation expense previously
charged to additional paid-in capital                      (148,000)              --             (148,000)       --          (.02)

Inventory book to physical adjustments                     (205,000)          (100,000)          (205,000)       (.01)       (.02)

Provision for doubtful accounts                             (93,000)           (31,000)           (93,000)      (.005)       (.01)

Accrual of other selling, general, and
administrative expenses                                    (110,000)           (30,000)          (110,000)       --          (.01)

Write-down of investments                                  (100,000)              --             (100,000)       --          (.01)

Accrual of special charges                                 (198,000)              --             (198,000)       --          (.03)

Reversal of revenue recognized                             (120,000)          (120,000)          (120,000)       (.01)       (.01)

Depreciation of fixed assets                               (100,000)          (100,000)          (100,000)       (.01)       (.01)

Accrual of insurance expenses and
losses on contracts                                        (200,000)          (200,000)          (200,000)       (.02)       (.02)

Other                                                       (25,000)              --              (25,000)      (.005)       --
                                                       ------------       ------------       ------------       -----       -----
As adjusted, January 31, 1997                          $(22,231,076)      $   (550,031)      $ (1,465,225)      $(.06)      $(.16)
                                                       ============       ============       ============       =====       =====
</TABLE>

     In addition to the above, the Company reclassified certain income statement
     and balance  sheet amounts to account for an  unconsolidated  subsidiary in
     the process of  liquidation,  Laboratory  Testing  Services,  Inc.,  on the
     equity basis, which had previously been consolidated.  Reclassifications of
     $108,000  for the each of the  quarters  ended July 31,  1996,  October 31,
     1996,  and  January  31,  1997,  were made  decreasing  selling and general
     administrative  expenses and increasing cost of sales to reflect the proper
     classification of certain accounts.

(4)  Subsequent  Event On February 24, 1997, the Company acquired North Atlantic
     Laboratories,   Inc.  ("NAL")  in  a  merger   transaction  for  restricted
     convertible preferred stock and cash totaling approximately  $1,300,000 and
     $200,000, respectively. The transaction will be accounted for as a purchase
     and,  as  such,  will  include  the  financial  condition  and  results  of
     operations of NAL in the Company's  consolidated  financial statements from
     the date of acquisition.  NAL provides  certified  environmental  training,
     laboratory testing and consulting  services to its customer base throughout
     the New York Metropolitan area.


                                        6


<PAGE>



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

The following discussion of the fiscal quarters ended January 31, 1997 and 1996,
is being updated as of September 29, 1997 and should be read in conjunction with
the Consolidated Financial Statements contained herein.

RESULTS OF OPERATIONS

Results  from  operations  for the nine months  showed  revenues and net loss of
$12,268,000  and  $(1,465,000)  versus  revenues of $7,993,000 and net income of
$148,000  for the same period last year.  The results for the three months ended
January 31, 1997 showed  revenues  of  $4,016,000  and a net loss of  $(550,000)
versus  revenues of $1,621,000  and a net loss of $(394,000)  for the comparable
period in fiscal 1996.  Revenues  for the nine and three  months  ended  January
31,1996 increased by $4,275,000,  or 53%, and $2,395,000, or 148%, respectively,
when  compared to the same periods in fiscal  1996.  The growth in revenues is a
direct result of the Company's continued expansion of environmental  services as
well as the customer  base to which it provides  such  services.  The nine month
loss results from non-recurring  charges for management  restructuring  costs of
$1,343,000.  The three month loss  results  from the  non-recurring  charges for
management  restructuring  costs of  $150,000  as well as  depressed  margins on
certain large projects, specifically the 60 Broad Street Asbestos project in New
York City.

Gross  profit  decreased  to 24%  compared  to 39% for the first nine  months of
fiscal 1996.  Gross profit  decreased from 37% to 15% when comparing the quarter
ended last year to this year.  The decrease in gross profit  percentage  results
from a change in the mix of work compared to last year as well as certain larger
contracts that normally carry a slightly lower gross profit margin.

Selling,  general and administrative expenses decreased slightly by $45,000 from
the first nine  months of last year  compared  to the first nine  months of this
year. As a percentage of revenues, these expenses were approximately 26% and 40%
for the nine  months  ended  January 31,  1997 and 1996,  respectively.  For the
quarter ended January 31, 1997,  selling,  general and  administrative  expenses
decreased  $171,000  compared to the same period last year.  These expenses were
approximately  24% and 71% of revenues for the three  months  ended  January 31,
1997 and 1996, respectively.  This decrease is the direct result of management's
continuing  efforts  to  streamline  overhead  and  build a more  efficient  and
profitable operation.

Management  restructuring  costs for the nine  months  ended  January  31,  1997
includes  non-recurring  charges for the  termination  agreements  of the former
Chief  Operating  Officer ("COO),  Chief  Executive  Officer ("CEO") and Special
Securities  Counsel to the Company  ("SCC") for $594,000,  $216,000 and $35,000,
respectively.  In  addition,   non-recurring  legal  and  professional  fees  of
approximately $498,000 have resulted from matters related to NASDAQ, the SEC and
federal  government  issues  subsequent to the  indictment of the former COO and
SSC.  Management  believes these costs should become  significantly  less in the
future.

LIQUIDITY AND CAPITAL RESOURCES

Working  capital at January 31, 1997 including  cash, was $1,049,000 an increase
of $343,000 or 49% from April 30, 1996. Cash and accounts  receivable  increased
by $391,000 and  $277,000,  respectively  from April 30, 1996. As of January 31,
1997, the current ratio was 1.4:1.  This  represents an improvement in liquidity
from April 30, 1996 where such ratio was 1.35:1. However, management is actively
seeking a working  capital credit facility to finance  accounts  receivable that
will enhance cash flow and business growth.

The Company  believes that the current  levels of working  capital and liquidity
will not be sufficient to support the continued increase in its revenue base and
scope of operations.  In this regard,  management will be seeking new sources of
permanent capital through domestic private  placements of equity and convertible
debt as well as establishing a working capital credit facility with a local bank
to finance accounts receivable to enhance cash flow and business growth.


                                        7


<PAGE>


PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

Pending Litigation

In November,  1994,  the Company  commenced an action in New York State  Supreme
Court to recover $250,000 previously advanced to Mohave Shores Development, Inc.
("Mohave"). Management intends to continue aggressively pursuing this matter.

In a civil action which was commenced in August 1995 in United  States  District
Court,  the Company,  various current and prior officers and directors have been
named in a lawsuit with various  shareholders  from Seattle,  Washington who had
purchased  shares  through  the  same  broker.   The  lawsuit  contains  various
allegations  asserting  misrepresentations  to the broker and  non-disclosure in
public filings of various Reg-S and S-8 stock issuances made by the Company from
August  through  October  1994.  The officers and  directors  named in the civil
action were Messrs. Mangan (Chief Operating Officer), Varsi (President),  Lehrer
(Chairman & CEO), Mazzella (Director) and O'Reilly (Director). Management denies
any  wrongdoing,  asserts  that the  complaint  is without  merit and intends to
vigorously defend these claims. The Company settled this lawsuit in May 1997 for
approximately  $120,000,  net of insurance  proceeds,  with monthly  payments of
$6,250.


Item 2.  Changes in Securities

         None

Item 3.  Defaults Upon Senior Securities

         None

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

         None

Item 5.  Other Information

         None

Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits:
               27 - Financial Data Schedule

         (b)  Reports on Form 8-K: None


SIGNATURES

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

Dated:   September 29, 1997


                                        WINDSWEPT ENVIRONMENTAL GROUP, INC.



                                              By: /s/ Michael O'Reilly
                                                ---------------------------
                                           MICHAEL O'REILLY, Chairman and
                                              Chief Executive Officer



                                             By: /s/ Alan W. Schoenbart
                                                ---------------------------
                                              ALAN W. SCHOENBART, CPA
                                              Chief Financial Officer



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