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

                                   FORM 10-Q/A
                                 AMENDMENT NO. 1

(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 12b-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>


                                EXPLANATORY NOTE

         This Amendment No.1 on Form 10-Q/A amends and restates certain
disclosure items in our Quarterly Report on Form 10-Q for the quarter ended
September 27, 2005, which we originally filed on November 21, 2005, in order to
adjust certain amounts charged to deferred financing costs and credited to
additional paid-in capital in connection with our transaction with Laurus Master
Fund, Ltd. on June 30, 2005. We identified these changes and are filing this
restatement in connection with preparing responses to a comment letter that we
received from the Securities and Exchange Commission in relation to its review
of our registration statement on Form S-1, which we originally filed on October
3, 2005.

         We have included as exhibits to this amendment new certifications of
our principal executive officer and principal financial officer and accounting
officer.

         The remaining items contained within this Amendment No. 1 consist of
all other items originally contained in our Quarterly Report on Form 10-Q for
the quarter ended September 27, 2005 in the form filed with the SEC on November
21, 2005. Therefore, you should read this amendment together with other reports
and documents that we have filed with the SEC subsequent to our filing of the
Form 10-Q on November 21, 2005. Except as expressly stated herein, this report
continues to speak as of the date of the original filing, and we have not
updated the disclosures in this report to speak as of any later date.
Information in those other reports and documents updates and supersedes some of
the information contained in this Amendment. You should not deem the filing of
this amendment to be an admission that our Form 10-Q filed on November 21, 2005,
when made, included any known, untrue statement of material fact or knowingly
omitted to state a material fact necessary to make a statement in such filing
not misleading.

                                       2

<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)       (restated)
                                                                                                   (restated)
<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                                                                          3,210,401                -
   Other                                                                                               191,025          322,046
                                                                                                  -------------    -------------
   Total other assets                                                                                3,401,426          322,046
                                                                                                  -------------    -------------
TOTAL                                                                                             $ 16,215,731     $ 10,056,538
                                                                                                  =============    =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT):

CURRENT LIABILITIES:
   Accounts payable                                                                               $  2,784,638     $  1,174,840
   Liability for repurchased account receivable                                                        189,197                -
   Accrued expenses                                                                                  2,110,676        1,611,256
   Secured note payable to a related party                                                                   -        5,000,000
   Current portion of secured convertible note payable                                                 326,414                -
   Billings in excess of costs and estimated earnings on uncompleted contracts                          96,000           83,316
   Accrued payroll and related fringe benefits                                                         600,771          528,867
   Current maturities of long-term debt                                                                208,224          169,612
   Income taxes payable                                                                                872,437          138,579
   Other current liabilities                                                                           655,993          489,468
                                                                                                  -------------    -------------
   Total current liabilities                                                                         7,844,350        9,195,938
                                                                                                  -------------    -------------
LONG-TERM DEBT:
   Secured convertible note payable                                                                    718,110                -
   Secured note payable                                                                                500,000                -
   Other                                                                                               269,533          197,400
                                                                                                  -------------    -------------
        Total long-term debt                                                                         1,487,643          197,400
                                                                                                  -------------    -------------
COMMITMENTS AND CONTINGENCIES

Redeemable Common Stock                                                                                      -           76,089
                                                                                                  -------------    -------------
SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK, $.01 par value; 1,300,000 shares
   Authorized and 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               3,375            7,794
   Additional paid-in-capital                                                                       41,566,504       33,944,017
   Accumulated deficit                                                                             (35,986,141)     (34,664,700)
                                                                                                  -------------    -------------
        Total stockholders' equity (deficit)                                                         5,583,738         (712,889)
                                                                                                  -------------    -------------
TOTAL                                                                                             $ 16,215,731     $ 10,056,538
                                                                                                  =============    =============
See notes to consolidated financial statements.
</TABLE>

                                       3
<PAGE>

                       WINDSWEPT ENVIRONMENTAL GROUP, INC.
                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                    Thirteen Weeks Ended
                                                                                ------------------------------
                                                                                September 27,      September
                                                                                   2005                28,
                                                                                (restated)            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 expenses related to variable accounting treatment for
      officer options and redeemable common stock                                          -                -
                                                                                -------------    -------------
        Total operating expenses                                                   1,506,404        1,232,034
                                                                                -------------    -------------


(Loss) income from operations                                                       (727,335)        (115,651)
                                                                                -------------    -------------

Other expense (income):
   Interest expense                                                                  563,834          211,104
   Other expense (income), net                                                        22,054             (799)
                                                                                -------------    -------------
        Total other expense (income)                                                 585,888          210,305
                                                                                -------------    -------------

Income (loss) before provision for income taxes                                   (1,313,223)        (325,956)

Provision (benefit) for income taxes                                                   8,218            2,589
                                                                                -------------    -------------

Net income (loss)                                                                 (1,321,441)        (328,545)

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

Net income (loss) attributable to common shareholders                           $ (1,340,941)    $   (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                                                                          34,716,071       77,936,358
                                                                                =============    =============
   Diluted                                                                        34,716,071       77,936,358
                                                                                =============    =============

See notes to consolidated financial statements.
</TABLE>

                                       4

<PAGE>

                       WINDSWEPT ENVIRONMENTAL GROUP, INC.
           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
                                   (RESTATED)
<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   $(34,664,700)      $  (712,889)

Laurus Financing:
                      Allocation of proceeds to
                      warrants and options                                          2,200,927                        2,200,927

                      Allocation of proceeds to
                      beneficial conversion
                      feature                                                       2,200,927                        2,200,927

                      Assumed exercise of
                      shares available for
                      nominal consideration,
                      including partial actual
                      exercise to purchase
                      1,500,000 shares                1,684,405           168             (18)                             150

                      Allocation of proceeds to
                      beneficial conversion
                      feature on second
                      increase of financing                                            38,889                           38,889

                      Allocation of proceeds to
                      beneficial conversion
                      feature on third increase
                      of financing                                                    650,000                          650,000
Spotless Transactions:
                      Cancellation of Spotless
                      shares, net of shares
                      sold to Michael O'Reilly      (45,865,143)       (4,587)          4,587                                -

                      Early extinguishment of
                      Spotless Note, accrued
                      interest and
                      administrative fees (net
                      of tax effect of $731,640)                                    1,230,228                        1,230,228

                      Surrender of Redemption
                      Right with respect to
                      Common Stock                                                     76,089                           76,089

                      Value of Spotless shares
                      sold to Michael O'Reilly
                      less consideration                                            1,195,708                        1,195,708

Options granted to preferred
stockholders for forbearance of
mandatory redemption and dividends                                                     44,650                           44,650

Dividends on Series A preferred stock                                                 (19,500)                         (19,500)

Net income (loss)                                             -             -              -      (1,321,441)        (1,321,441)
                                                    ------------     ---------    ------------  -------------      ------------
Balance at September 27, 2005                        33,755,620      $  3,375     $41,566,504   $(35,986,141)       $5,583,738
                                                    ============     =========    ============  =============      ============

See notes to consolidated financial statements.
</TABLE>

                                       5


<PAGE>


                       WINDSWEPT ENVIRONMENTAL GROUP, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                              Thirteen Weeks Ended
                                                                                        -------------------------------
                                                                                        September 27,     September 28,
                                                                                            2005              2004
                                                                                         (unaudited)       (unaudited)
                                                                                         (restated)
                                                                                        -------------     -------------
<S>                                                                                     <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net (loss) income                                                                    $ (1,321,441)     $   (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                                                292,809                 -
      Amortization of beneficial conversion                                                  135,257                 -
   Changes in operating assets and liabilities:
      Accounts receivable                                                                 (1,465,620)         (999,315)
      Inventory                                                                               (5,288)           10,548
      Costs and estimated earnings in excess of billings on uncompleted contracts           (352,289)          332,075
      Income tax refund                                                                            -           641,795
      Prepaid expenses and other current assets                                             (750,342)          (18,786)
      Other assets                                                                           131,021            (6,000)
      Accounts payable and accrued expenses                                                2,221,087           131,437
      Accrued payroll and related fringe benefits                                             71,904            33,848
      Other current liabilities                                                              102,715           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:                                        (567,253)          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)
   Proceeds from long-term debt                                                              157,063                 -
   Exercise of stock options                                                                     150                 -
   Payments for deferred financing costs                                                  (2,261,510)                -
   Repayment and cancellation of secured note payable to a related party                  (2,761,868)                -
   Proceeds from secured notes payable                                                     6,000,000                 -
                                                                                        -------------     -------------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES                                        1,087,517           (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 ACTIVITIES:
Financing cost related to beneficial  conversion value of secured note                  $  2,889,816      $          -
                                                                                        =============     =============
Capitalized gain on extinguishment of secured note payable - related party              $  1,230,228      $          -
                                                                                        =============     =============
Financing cost related to warrants and options                                          $  2,200,927      $          -
                                                                                        =============     =============
Capitalized cancellation of put right relating to redeemable common stock               $     76,089      $          -
                                                                                        =============     =============
Property and equipment acquired through financing                                       $    157,063      $          -
                                                                                        =============     =============
Financing cost related to guaranties of CEO remunerated through sale of
   discounted shares                                                                    $  1,195,708      $          -
                                                                                        =============     =============
Financing cost related to issuance of options to preferred stockholders                 $     44,650      $          -
                                                                                        =============     =============
Account receivable repurchased in connection with refinancing                           $    189,197      $          -
                                                                                        =============     =============
See notes to consolidated financial statements
</TABLE>

                                       6

<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 subsidiaries, Trade-Winds
         Environmental Restoration, Inc. ("Trade-Winds") and North Atlantic
         Laboratories, Inc.  All intercompany accounts and transactions have
         been eliminated in consolidation. 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, has a stockholders'
         deficit, 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 7. 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 7 in
         accordance with Accounting Principles Board Opinion No. 14 and Emerging
         Issues Task Force (EITF) 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.       RESTATEMENT - The September 27, 2005 interim financial statements have
         been restated to account for additional deferred financing costs and
         additional liabilities forgiven as part of the Company's transactions
         with Spotless, as follows:

            1.    The value of the shares of common stock sold by Spotless to
                  the Company's President and Chief Executive Officer has been
                  increased by $86,597, which resulted in an increase of such
                  amount in deferred financing costs from the amount previously
                  reported.
            2.    An additional $39,391, net of tax effect, which was owed to
                  Spotless which was forgiven by the terms of the transaction,
                  has been recorded as a reduction of accrued expenses and an
                  increase in additional paid in capital.
            3.    The value of the options and the warrant and the beneficial
                  conversion feature of the Laurus Note have been recalculated,
                  resulting in a reduction of $16,774 to the carrying value of
                  the Laurus Note under "secured convertible note payable."

         The result of these restatements was to increase the net loss for the
period by $81,660.

                                       7

<PAGE>

3.       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 amends  the  disclosure  requirements
         of  SFAS  No.  123 to  require  prominent disclosures in both annual
         and interim financial  statements about the method of accounting for
         stock-based  employee  compensation  and the effect of the method
         used on reported results,  regardless of whether,  when, or how an
         entity adopts the preferable, fair value based method of accounting.
         SFAS No. 148 improves 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  until its fiscal quarter ending December 27, 2005,
         when it will adopt SFAS 123R.

         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
                                                              ----------------------------------
                                                              Fiscal Quarter
                                                                  Ended
                                                               September 27,      September 28,
                                                                   2005                2004
                                                              ---------------    ---------------
         <S>                                                  <C>                <C>
         Net (loss) income attributable to
           common shareholders, as reported,
           including stock based
           compensation (benefits) of
           $176,089, ($348,626) and
           ($593,246) in the years ended 2005,
           2004 and 2003, respectively                        $   (1,340,941)    $     (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                                       $   (1,397,141)    $     (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>

                                       8

<PAGE>


4.       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 (loss) income 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                                             $   (1,340,941)    $     (348,045)
                                                                   ===============    ===============
Denominator:
  Share reconciliation:
  Shares used for basic (loss)
   income per share                                                    34,716,071         77,936,358
  Effect of dilutive items:
     Stock options                                                              -                  -
     Convertible securities                                                     -                  -
                                                                   ---------------    ---------------
    Shares used for dilutive (loss)
     income per share                                                  34,716,071         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 the
         exercise of stock options and 67,966,667 shares issuable upon the
         conversion of convertible securities, respectively. These shares are
         excluded due to their antidilutive effect as a result of the Company's
         net loss attributable to common shareholders during this period.

5.       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:

                                                  Thirteen Weeks Ended
                                           ----------------------------------
                                            September 27,       September 28,
                                                 2005               2004
                                           ---------------    ---------------

         Federal - current                      $    -             $    -
         State - current                         8,218              2,589
                                                ------             ------
         Total                                  $8,218             $2,589
                                                ======             ======

         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.

                                       9

<PAGE>


6.       CONTINGENCIES - 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
         in unspecified amounts seeking liquidated damages, reimbursement for
         consultant's fees and breach of contract.  The case is currently in
         pre-trial discovery.  This aggregate amount of $1,255,000 was recorded
         when billed as revenues of $32,561, $726,257 and $496,182 during the
         Company's fiscal years ended July 2, 2002, July 1, 2003 and June 29,
         2004, respectively, and is included in the Company's accounts
         receivable because management believes that the realization of the full
         amount thereof is probable.

         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 June 28, 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
         because the amount thereof is not presently reliably estimable. 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 its claims. The case is currently in pre-trial discovery.

         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. The Company believed it had meritorious defenses and that the
         likelihood of an unfavorable outcome was remote. 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.

         The Company is a plaintiff in approximately 20 lawsuits, including
         those 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 its scope of work. The defendants in these actions
         have asserted counterclaims for an aggregate of approximately $500,000.

         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.

7.       FINANCING AND RELATED PARTY TRANSACTIONS - As of June 28, 2005, the
         Company owed Spotless Plastics (USA) Inc. $5,000,000 under the Spotless
         Loan, in the original principal amount of $1,700,000. The Spotless note
         was collateralized by all of the Company's assets. During the fiscal
         year ended June 29, 2004, the Company borrowed $3,300,000 from Spotless
         for working capital requirements and to fund losses. During the fiscal
         year ended July 1, 2003, the Company borrowed $2,325,000 from Spotless
         for working capital requirements and to fund certain fixed asset
         purchases. The Company repaid $825,000 to Spotless in the fiscal year
         ended July 1, 2003.

                                       10

<PAGE>


         As of June 28, 2005, Spotless was due payment from third parties for
         accounts receivable in the amount of $158,469 purchased 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
         purchase discount of $911,202, for an aggregate purchase price of
         $4,080,050. The aggregate amount of the purchase discounts and monthly
         discount fees under this agreement were $255,585 for the fiscal year
         ending June 28, 2005. Pursuant to the account receivable finance
         agreement, Spotless was able to purchase certain of the Company's
         accounts receivable without recourse for cash, subject to certain terms
         and conditions. Pursuant to an administrative services arrangement,
         Spotless also provided the Company with certain administrative services
         including the services of its former 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 $84,138,
         $131,556 and $101,256, respectively, of which $84,138 remained unpaid
         and included in accrued expenses as of June 28, 2005. On June 30, 2005,
         Spotless agreed to forgive the $84,138 in administrative fees that was
         outstanding.

         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, as amended, 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. The Note bears interest at the prime rate as
                  published in the Wall St. Journal plus 2% (but not to 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
                  $.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     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     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 $.10 per share.

         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. The shares issuable
                  upon conversion of the face value of this amended and restated
                  Note had a beneficial conversion feature valued at $38,889 and
                  was allocated to additional paid-in capital. The remaining
                  $311,111 was added to the carrying value of the Note on the
                  Company's balance sheet.
            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. The shares
                  issuable upon conversion of the additional face value of this
                  amended and restated Note had a beneficial conversion feature
                  amounting to $650,000, which was allocated to additional
                  paid-in capital. As a result, the carrying value thereof was
                  $0.
            o     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. The shares
                  issuable upon conversion of the additional face value of this
                  amended and restated Note had a beneficial conversion feature
                  amounting to $1,350,000, which was allocated to additional
                  paid-in capital. As a result, the carrying value thereof of
                  $0. (unaudited)

         The Note, in the principal amount of $7,350,000 as of December 1, 2005,
         is the only note issued to Laurus by the Company that is currently
         outstanding.

                                       11

<PAGE>


         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, amortized payments of $50,000 per month 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 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 $189,197 and to the
         Company agreed to pay this amount to Spotless no later than June 30,
         2006.

         On June 30, 2005, Messrs. Peter Wilson, John Bongiorno, Ronald Evans
         and Brian Blythe, who were nominees of Spotless, resigned as directors
         of the Company, and Mr. Charles L. Kelly, Jr., also a Spotless nominee,
         resigned as the Company's chief financial officer and as a director. In
         addition, Mr. Joseph Murphy, an employee of Spotless, resigned as the
         Company's vice president of finance and administration and secretary.
         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 its 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 also surrendered its
         remaining 45,865,143 shares to the Company for cancellation, which
         resulted in a credit of $4,587 to additional paid-in capital.

         Mr. O'Reilly issued a personal guaranty to Laurus for $3,250,000 of the
         Note.

         In addition, the Company issued a ten year option exercisable at $.09
         per share to Mr. O'Reilly to purchase 15,469,964 shares of common stock
         in connection with his:

            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 its 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 its
         financing transaction with Laurus.

         The Company recorded the option pursuant to APB No. 25 because it was
         agreed to be issued in connection with Mr. O'Reilly's employment.  No
         portion of this option was allocated to Mr. O'Reilly's guaranty to
         Laurus.

         On May 24, 2005, the Company issued 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 executive officer. The Company recorded
         these options based on the intrinsic value method and recognized an
         expense of $100,000 in connection therewith pursuant to APB No. 25.

                                       12

<PAGE>


         On June 30, 2005, the Company issued ten-year options exercisable at
         $.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 its common stock. The
         Company valued these options using the Black-Scholes valuation method
         and recorded deferred financing costs of $44,650 as a credit to
         additional paid-in capital in connection therewith. The Company also
         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 the aggregate, this was in
         consideration for their agreement to:

            o     propose and vote in favor of an amendment to its certificate
                  of incorporation in order to accommodate the full issuance of
                  the shares of its common stock underlying the Note and the
                  option and warrant the Company issued to Laurus;
            o     postpone their right, upon six months' notice after February
                  2007, to require the Company to redeem their series A
                  convertible preferred stock, until the earlier of six months
                  after the repayment of the Note or June 30, 2010;
            o     defer receipt of dividend payments on the series A convertible
                  preferred stock due after June 30, 2005, until the earlier of
                  six months after the repayment of the Note or June 30, 2010;
                  and
            o     forbear from appointing a second director until the earlier of
                  (a) June 30, 2008 or (b) the repayment in full of the secured
                  convertible term note that the Company has issued to Laurus.

         On June 30, 2005, Michael O'Reilly and the series A convertible
         preferred stock stockholders, including Dr. Kevin 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
         accommodate the full issuance of the shares of its common stock
         underlying the Note, the option and warrant the Company issued to
         Laurus at the Company's next annual shareholders meeting to be held by
         January 31, 2006. In addition, Mr. O'Reilly, the series A convertible
         preferred stock stockholders and Anthony P. Towell, a director, entered
         into lock-up agreements with Laurus that prohibit a disposition of
         their shares of common stock and any and all related derivative
         securities until the earlier of (a) the repayment in full of the note
         the Company issued to Laurus or (b) June 30, 2010. On December 6, 2004,
         the Company issued a ten-year option exercisable at $0.035 per share to
         Dr. Kevin Phillips to purchase 100,000 shares under its 2001 Equity
         Incentive Plan in connection with his service as a director of the
         Company.

         As a result of these transactions, the Company has recorded deferred
financing costs as follows:

                        ITEM                                AMOUNT
              Transactional, insurance costs             $2, 262,852
               and professional fees
              Deemed cost to the Company                  1,195,708
               of the 15,469,964 shares of
               common stock sold by Spotless
               to the Company's president and
               CEO
              Options granted to preferred
               stockholders for forbearance of
               mandatory redemption and other
               rights                                        44,650
                                                         -----------
              Balance                                    $3,503,210
                                                         -----------
              Amortization of deferred                      292,809
               financing cost for the thirteen
               weeks ended
               September 27, 2005
              Total deferred financing costs             $3,210,401
                                                         -----------

                                       13


<PAGE>


         During its 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 and employee-relations 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, we also provided mitigation and
         restoration goods and services to Mr. O'Reilly in connection with
         severe water damage caused by a failed water heater at the condominium
         that he beneficially owned and allowed us to use for marketing and
         employee-relations purposes. In connection with these services, the
         Company's entire direct costs and allocated overhead, without a markup,
         equaled approximately $56,780.

         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 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, except
         its provision of mitigation and restoration services to its president
         and chief executive officer as discussed above, have been on terms no
         less favorable to the Company than those available from unrelated third
         parties.

8.       SUBSEQUENT EVENTS - In conjunction with the Laurus transactions, the
         Company entered into a registration rights agreement, as amended, 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 damages 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.

         Subsequent to June 28, 2005 and in the wake of Hurricane Katrina, the
         Company has 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. In accordance with EITF 98-5, the
         beneficial conversion value recognized is limited to the amount of the
         Note proceeds. Accordingly, the $1,350,000 increased face value of this
         amended and restated Note had a beneficial conversion value of
         $1,350,000, resulting in a carrying value of $0, although the $.21
         two-day average stock price of the Company's common stock would have
         resulted in a beneficial conversion value initially greater than the
         increased value of the Note.

                                       14

<PAGE>

         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. On November 23, 2005, Laurus agreed to (a) waive
         the fee associated with the lack of effectiveness of the Form S-1 by
         November 22, 2005, (b) postpone the date by which the Company must have
         the Form S-1 declared effective until February 10, 2006 and (c)
         postpone the date by which the Company must increase its authorized
         capital from December 31, 2005 until January 31, 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, asbestos and lead abatement,
technical advisory services, restoration and site renovation services.

Our revenues are derived primarily from providing emergency response,
remediation and disaster restoration services to new and repeat customers on
time and materials basis or pursuant to fixed-price contracts, including in
connection with sudden catastrophes, such as in connection with the services
that we are providing in the aftermath of Hurricanes Katrina and Wilma. 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. Our cost of revenues consists
primarily of labor and labor-related costs, insurance, benefits and insurance,
travel and entertainment repairs, maintenance, equipment rental, materials and
supplies, disposal costs and depreciation of capital equipment. Our selling,
general, and administrative expenses primarily consist of expenses related to
provisions for doubtful accounts, legal fees, sales salaries, marketing and
consulting.

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; 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 our 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 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.

                                       15

<PAGE>


In light of the foregoing, we expect to generate sufficient cash flow from
operations to support our working capital needs and to adequately fund our
current operations for at least the next twelve months. However, any further
difficulty collecting our accounts receivable or further significant growth
could adversely affect our liquidity. In the event that we do not generate
sufficient positive cash flow from operations, we may need to seek additional
financing in addition to the financing provided by Laurus. Laurus is under no
obligation to provide any funding to us. Currently, we have no credit facility
for additional borrowing.

         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 December 1, 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.

We currently are engaged on various projects within our customary scope of
services 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 projects in these areas that are still in progress. As of
November 1, 2005 during our fiscal 2006, we have billed an aggregate of over of
$11 million of time and materials projects. Management believes that 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.

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. 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 had a net profit of
$53,066 for our 2005 fiscal year and had positive working capital as of
September 27, 2005, 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 is based upon our audited consolidated financial statements for our
fiscal year ended June 28, 2005, which have been prepared in accordance with
accounting principles generally accepted in the United States of America, and
our unaudited interim consolidated financial statements for our fiscal quarter
ended September 27, 2005. The preparation of these 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 our consolidated financial statements are accounting for stock
based transactions, contracts, allowance for doubtful accounts and the valuation
allowance related to deferred tax assets.

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

We have recognized the value of the equity instruments issued in connection 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 were calculated and the
proportionate values of the resulting debt and equity components have been
recognized as debt discounts with equivalent increases in amounts reflected as
equity. The beneficial conversion feature of the Note, including the effective
values under EITF 00-27, has also been recognized as a debt discount, with an
equivalent increase in the amount reflected as equity. All of these discounts
are being amortized over the three-year life of the debt in accordance with

                                       16

<PAGE>


EITF 00-27. Once the transaction value is determined, we record the transaction
value as an expense with a corresponding increase in paid-in capital.

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 per share and the market price per share
of the common stock on the day the option or warrant is granted, except that
such value is zero if the exercise price is higher than the market price of the
common stock. Once the transaction value is determined, we record the
transaction value as an expense with a corresponding increase in paid-in
capital.

When options or warrants to purchase our common stock 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 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, such as claims relating to
disputed change orders, 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 account and financial information, including public filings
and credit reports, current trends, credit policy, and accounts receivable aging
and may also consult legal counsel when appropriate. A considerable amount of
judgment is required when we assess the likelihood of our realization of
accounts receivables, including assessing the probability of collection and the
current credit worthiness of each customer. If the financial condition of our
customers were to deteriorate, resulting in an impairment of their ability to
make payments, an additional provision for doubtful accounts could be required.
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.

Deferred Tax Asset Valuation Allowance - We record a valuation allowance
to reduce our 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 allowance against our net deferred tax assets as of June 28, 2005 and
September 27, 2005. We currently provide for income taxes only to the extent
that we expect to pay cash taxes on current income. When we are profitable at
levels which cause management to conclude that is more likely than not that we
will realize all or a portion of our deferred tax assets, we record the
estimated net realizable value of our deferred tax assets at that time and
provide for income taxes at our combined federal and state effective rates.

                                       17

<PAGE>

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 $931,003 in our emergency, disaster response and remediation work
(associated primarily with hurricanes in Florida in the fiscal 2004 period) and
a $481,321 decrease in our spill and soil environmental remediation. These
decreases were partially offset by a $762,806 increase in our asbestos, lead and
mold work, and a $302,745 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 increase 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 increases of
$808,084 in payroll, including fringe benefits, $103,559 for travel and
travel-related expenses associated with the mobilization to Louisiana to begin
the cleanup of the damage caused by Hurricane Katrina and $42,577 in leasing
expenses 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 costs in excess of
billings $492,683 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. Our cost of revenues consists
primarily of labor and labor-related costs, payroll taxes, benefits, training,
job-related insurance costs, travel and entertainment costs, repairs,
maintenance and rental of job equipment, materials and supplies, testing and
sampling, transportation, disposal, and depreciation of capital equipment.

Gross Profit
------------

Gross profit decreased by $337,314, or 30.2%, to $779,069, or 15%, of total
revenues for the thirteen weeks ended September 27, 2005 as compared to
$1,116,383, or 20%, of total revenues for the thirteen weeks ended September 28,
2004. This decrease in gross profit was due primarily to the factors described
above in relation to the decrease in our revenue and increase in our cost of
revenues.

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 $26,001, increased accounting and legal fees of $206,398 and
a $25,000 increase in marketing expenses. These were partially offset by a
decrease of $117,483 in consulting fees that were expended in the fiscal 2004
period. Our selling, general, and administrative expenses primarily consist of
expenses related to provisions for doubtful accounts, legal fees, sales,
salaries, marketing and consulting.

Benefit Related to Variable Accounting Treatment for Officer Options
--------------------------------------------------------------------

Under the terms of a previous employment agreement we entered into 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. 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. There was no benefit or expense required to be recorded in the thirteen
weeks ended September 27, 2005 due to the elimination of

                                       18

<PAGE>

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.

Interest Expense
----------------

Interest expense increased by $352,730, or 167%, to $563,834 for the thirteen
weeks ended September 27, 2005 from $211,104 for the thirteen weeks ended
September 28, 2004. This increase was due to an increase of $311,356, of
interest expense incurred to Laurus, $141,141 of which related to the
amortization of discounts, and an increase of $246,595 attributable to the
amortization of deferred financing costs relating to the Laurus transaction,
partially offset by a reduction of $65,258 in interest expense incurred to
Spotless and a decrease of $145,846 in interest expense relating to sales of
accounts receivable to Spotless in the thirteen week period ended September 27,
2005 because there were no such sales in such period.

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 income recognized due
to the cancellation of our secured debt owed to Spotless, our former majority
stockholder and senior secured lender. We have a tax liability of $686,893 in
connection with the cancellation of this secured debt, which has been credited
to additional paid-in capital.

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
--------

We incurred a net loss of ($1,321,441) and a basic net loss attributable to
common stockholders of ($1,340,941) for the thirteen weeks ended September 27,
2005 as compared to a net loss of ($328,545) and a basic net loss attributable
to common stockholders of ($348,045) incurred for the thirteen weeks ended
September 28, 2004. These changes were 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
$1,845,015 and stockholders' equity of ($5,583,738). As of June 28, 2005, we had
a cash balance of $512,711, a working capital deficit of ($1,704,091) and a
stockholders' deficit of ($712,889). As of June 29, 2004, we had cash balances
of $63,562, a working capital deficit of ($2,103,971) and stockholders' deficit
of ($787,955). At July 1, 2003, we had cash balances of $130,096, working
capital of $2,217,290 and stockholders' equity of $2,825,379. We incurred a net
loss of ($1,351,649), a net profit of $82,441 and a net loss of ($3,535,334) for
our fiscal quarter ended September 27, 2005 and our fiscal years ended June 28,
2005 and June 29, 2004, respectively.

Net cash (used in) operating activities was ($567,253) 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 $1,465,620, or 17.7%, as of September 27, 2005 to $8,210,155, from
$6,755,338 as of September 28, 2004, primarily as a result of hurricane-related
work billed toward the end of the 2005 period and difficulties with cash
collections. Accounts receivable decreased by $444,658, or 5.6%, as of September
28, 2004 to $7,492,789, from $7,937,447 as of September 30, 2003, primarily as a
result of decreased sales and aggregate sales of accounts receivable to Spotless
in the amount of $972,000 during the thirteen weeks ended September 28, 2004.
Accounts payable and accrued expenses increased by $1,333,348, or 37.4%, as of
September 27, 2005 to $4,895,314, from $3,561,966 as of September 28, 2004,
primarily as a result of the costs associated with our mobilization efforts in
Louisiana and an increase of $528,000 in insurance premiums.

                                       19

<PAGE>


Net cash provided by operating activities was $818,673 in fiscal year ended
June 28, 2005, as compared to net cash provided by (used in) operating
activities of ($2,343,180) and ($317,504) in our fiscal years ended June 29,
2004 and July 1, 2003, respectively. Accounts receivable increased $921,223, or
12.6%, to $8,263,169 as of June 28, 2005, from $6,652,806 as of June 29, 2004,
reflecting primarily delayed payments by customers. Accounts receivable
increased $1,057,539, or 17%, to $7,341,946 as of June 29, 2004, from
$5,881,603 as of July 1, 2003, reflecting processing delays in our invoicing of
our customers. Accounts payable and accrued expenses decreased by $624,933, or
18.3%, as of June 28, 2005, from $3,411,029 as of June 29, 2004, as a result of
our efforts to pay vendors on a more timely basis, partly offset by an increase
in professional fees resulting from our recent refinancing and change of
control transactions. Accounts payable and accrued expenses increased by
$730,007, or 27.2%, as of June 29, 2004, from $2,681,022 as of July 1, 2003, as
a result of increased revenues and slower payments to vendors. Such slow
payment resulted from delays in invoicing discussed above and the resulting
deterioration of cash receipts.

Net cash provided by financing activities for the thirteen weeks ended September
27, 2005 was $1,087,517, as compared to cash used by financing activities of
$90,531 for the thirteen weeks ended September 28, 2004, primarily as a direct
result of $6,000,000 received in connection with our debt restructuring with
Laurus, which was used to pay related transaction and other expenses in the
amount of $2,594,339 and repayment of indebtedness to Spotless in the amount of
$2,650,000. These transactions resulted in a net increase of $1,500,000 in
borrowings and the cancellation of $1,190,837 of our previous secured note
payable to Spotless. The balance of the proceeds in the amount of $755,661 was
used to fund working capital and our initial Hurricane Katrina mobilization
costs. Financing activities for the thirteen weeks ended September 28, 2004 used
net cash of $90,531 as a result of long-term debt repayment.

Cash used for capital expenditures increased to $885,482, or 1,480.9%, 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 capital
equipment, including 10 trucks, 5 campers, 1 trailer, 1 life raft, blowers,
dehumidifiers and other assets to be utilized in the clean-up efforts relating
to Hurricane Katrina. At this time, we do not have any other material
commitments or plans for capital expenditures. We intend, however, to make
additional capital expenditures, to the extent our financial condition permits,
as may be required in connection with rendering our services in the future.

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. We expect to generate
sufficient cash flow from operations to support our working capital needs and to
adequately fund our current operations for at least the next twelve months.
However, any further difficulty collecting our accounts receivable or further
significant growth could adversely affect our liquidity. In the event that we do
not generate sufficient positive cash flow from operations, or if we experience
changes in our plans or other events that adversely affect our operations or
cash flow, we may need to seek additional financing in addition to the financing
provided by Laurus. Laurus is under no obligation to provide any funding to us.
Currently, we have no credit facility for additional borrowing.

Our future cash requirements are expected to depend on numerous factors,
including, but not limited to our ability to:

        o     Obtain profitable environmental or related construction contracts.
              So long as we have sufficient working capital, we anticipate
              continued revenue growth in new and existing service areas and to
              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 currently are engaged on
              various projects within our customary scope of services for
              private sector commercial and residential customers in the gulf
              coast and Florida regions in connection with the aftermath of
              Hurricanes Katrina and Wilma.  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 projects in these
              areas that are still in progress.  As of November 1, 2005 during
              our fiscal 2006, we have billed an aggregate of over $11 million
              of time and materials projects.  In this connection, we also
              intend to focus on procuring time and materials contracts, which
              have historically generated higher gross margins.  We also intend
              to continue our marketing campaign, including radio and newspaper
              advertising and a public relations program, to inform residents of
              New Orleans and the surrounding gulf areas about our services.
              Our management believes that we will be engaged to perform
              substantial additional projects in this region for the foreseeable
              future, possibly including

                                       20

<PAGE>


              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.
        o     Control our selling, general and administrative expenses, which
              have recently increased in connection with our need to incur
              labor, operating and equipment expenses in relation to our
              operations in the gulf coast and Florida regions. In order to
              control our selling, general and administrative expenses, we have
              or are in the process of optimizing the efficiency of our support
              staff through training and enhanced task allocation while reducing
              unneeded resources and reviewing non-project related expenses in
              an effort to reduce costs where appropriate while preserving the
              quality of our service.
        o     Raise additional capital or obtain additional financing.
              Management has preliminarily explored additional funding sources,
              but has been unable to attract additional debt or equity capital.
              Laurus indicated to us that it did not intend to provide any
              additional financing at the time that it loaned an additional
              $1,350,000 to us in October 2005. In addition, the existence of
              the Laurus and Spotless security interests may impair our ability
              to raise additional debt capital. No assurance can be given that
              we will be able to obtain additional debt or equity capital
              although our management expects to continue seeking any such
              favorable opportunities.
        o     Generate positive cash flow from operations. We seek to obtain
              profitable contracts that generate gross profits more than
              sufficient to pay our expenses. Our plans for our 2006 fiscal year
              include concentrating our efforts in the gulf coast and Florida
              regions in connection with the aftermath of Hurricanes Katrina and
              Wilma and addressing our difficulty with cash collections and slow
              cash flow.

We have experienced difficulties 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; 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 our 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 or mobilization fees 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, 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 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 December 1, 2005, the principal amount of the 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 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, which bears interest at a rate of LIBOR plus
1% per annum and is required to be repaid at a rate of $50,000 per month
commencing July 1, 2007. The existence of these security interests may impair
our ability to raise additional debt capital.

                                       21

<PAGE>


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. The
principal monthly payments due November 1, 2005 and December 1, 2005 in the
aggregate amount of $495,375 have been deferred until June 30, 2008. 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 are required to pay
such amounts in shares of our 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 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 and warrant issued to Laurus
              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 shares of common
              stock does not and would not by virtue thereof exceed 4.99%;
              and
        o     we are not in default of the Note.

If any of these conditions are not satisfied, we will be 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 convert all or a portion of the Note, together with related
interest and fees, into fully paid shares of our 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 $.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 pursuant 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 Laurus elects to pay the exercise price in cash rather than
executing a cashless exercise. Laurus may effect a cashless exercise of the
warrant if the market price of our common stock exceeds the per share exercise
price, and it may effect a cashless exercise of the option if (a) the market
price of our common stock exceeds the per share exercise price and (b) (1) we
have not registered the shares underlying the option pursuant to an effective
registration statement or (2) an event of default under the Note has occurred
and is continuing. Upon a cashless exercise, in lieu of paying the exercise
price in cash, Laurus would receive shares of our common stock with a value
equal to the difference between the market price per share of our common stock
at the time of exercise and the exercise price per share set forth in the option
and the warrant, multiplied by the number of shares with respect to which the
option or warrant is exercised. There would be no proceeds payable to us upon a
cashless exercise of the option or 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. On September 12, 2005, we
issued 1,500,000 shares of our common stock to Laurus in connection with its
partial exercise of the Option at an exercise price of $.0001 per share for an
aggregate exercise price of $150.

                                       22

<PAGE>


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 our 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 common stock. As a result, Laurus could
only acquire up to approximately 184,405 additional shares, which would
constitute a conversion of approximately $16,596 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 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.

In the event we default on the Note, we will be required to pay 120% of the
outstanding principal amount of the Note, plus accrued but unpaid interest. Upon
the occurrence of an event of default, the interest rate changed will be
increased by 2% per month until the default is cured. 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 and general intangibles, including
payment intangibles. The Master Security Agreement, dated June 30, 2005, between
us and Laurus contains no specific financial covenants. The Master Security
Agreement and the Note define the circumstances under which they can be declared
in default and subject to termination, including:

        o     a failure to pay interest and principal payments under the Note
              when due on the first day 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, the continuation of such breach
              without remedy for a period of fifteen or thirty days, as the case
              may be;
        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, if 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 January 31, 2006 sufficient to
              provide for the full conversion of the Note, and full exercise of
              the option and warrant issued by us to Laurus;
        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; and
        o     the departure of Michael O'Reilly from our senior management.

We 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 us. No funds remain in escrow.

                                       23

<PAGE>


Pursuant to the terms of a Registration Rights Agreement, dated June 30, 2005
and amended on November 23, 2005, we were 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 is not declared effective by February 10, 2006 by the Securities and
Exchange Commission, then we will be required to pay to Laurus the following
amounts:

        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 proceeds we received in connection with the financing transaction and
subsequent borrowings from Laurus were used to pay the amounts set forth below
to the persons or for the purposes set forth below:
<TABLE>
<CAPTION>
         <S>                                                                              <C>
        SPOTLESS DEBT

        o     Former majority stockholder and senior secured lender (Spotless),
              consisting of approximately $2,650,000 in settlement of the
              principal and $100,000 in interest                                          $   2,750,000
                                                                                          -------------

        TRANSACTION EXPENSES

        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                                                                 37,500
        o     Legal fees                                                                        146,773
        o     Special committee and advisor fees                                                 61,136
        o     Payments to series A preferred stockholders                                 $      35,000
                                                                                          -------------

              Sub-total                                                                   $   2,295,309
                                                                                          -------------

        OTHER PAYMENTS

        o     Audit fees                                                                         50,000
        o     Insurance premiums                                                                276,711
        o     Initial Hurricane Katrina mobilization costs                                      238,173
        o     Working capital                                                                 1,739,807
                                                                                          -------------

              Sub-total                                                                   $   2,304,691
                                                                                          -------------

        TOTAL                                                                            $    7,350,000
                                                                                          =============
</TABLE>

                                       24

<PAGE>

The table below summarizes contractual obligations and commitments as of October
6, 2005, including principal and interest payments on our debt(1):
<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
   Principal                           7,350,000      1,518,011      5,831,989            -             -

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

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

   Spotless Note
   Interest Expense                       13,828              -         13,828            -              -
                                     -----------     ----------     ----------      -------      ---------
   Total                             $10,590,775     $3,250,759     $7,310,884      $29,132      $       -
                                     ===========     ==========     ==========      =======      =========

------------
<FN>
(1) This table reflects the effectiveness of Laurus' agreement to defer the
initial monthly amortization repayment in the amount of $229,687.50 from
November 1, 2005 until January 1, 2006.
</FN>
</TABLE>

         These amounts are based on assumed interest payments reflecting:

         o   the Laurus Note at a rate of 8.75% per annum;
         o   the Spotless note at a rate of 5.86% per annum; and
         o   an aggregate of $477,733 of other long-term debt with maturities
             ranging from 3 months to 54 months 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 on our balance sheet 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 $5,090,743, resulting in
a carrying amount of $909,257 on our balance sheet, $191,147 of which is
included as a current liability and $718,110 of which is included as long-term
debt.

EFFECT OF INFLATION

Inflation has not had a material impact on our operations during fiscal years
ended June 28, 2005, June 29, 2004 and July 1, 2003, except that 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 fuel prices.

                                       25

<PAGE>


SEASONALITY

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

        o   the timing of large projects in certain of our 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.

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.

                                       26

<PAGE>


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 28, 2005.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Equity Price Risk - Our primary market risk exposure relates to the
shares of common stock issuable upon conversion of the Note, which we originally
issued to Laurus in June 2005. In connection with the issuance of the Note, we
issued to Laurus 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. 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, which is based on the difference between the
exercise price per share and the market price per share of our common stock on
June 30, 2005, the date of issuance at the inception date of the agreement. The
warrant, along with shares of common stock issuable upon exercise thereof have
been recorded at their relative fair value at the June 30, 2005 inception date
of the agreement, 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 Note also exposes us to additional risks also relating to our
own common stock because if Laurus is unable to convert the loan into common
stock due to low price or low trading volume in the market, we then must repay
the loan in cash at a 3% premium.

         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 - Interest rate risk is the risk that
interest rates on our debt is fully dependent upon the volatility of these
rates. We do not use derivative financial instruments to manage interest rate
risk. The Note bears interest at the prime rate as published in the Wall St.
Journal plus 2% (but not to less than 7.25%), decreasing by 2% (but not to less
than 0%) for every 25% increase in the Market Price (as defined therein) of our
common stock above the fixed conversion price of $.09 following the effective
date of the registration statement covering the common stock issuable upon
conversion. Should the price of our common stock maintain a price equal to 125%
of $.09 for a twelve month period and if our registration statement registering
the shares of our common stock underlying the Note and the warrant issued to
Laurus has been decleared effective by the Securities and Exchange Commission,
we would benefit from a reduced interest rate of 2% on the outstanding principal
amount for that twelve-month period. 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%. We also have
various other debt with maturities ranging from 3 months to 54 months
aggregating to $477,733 for financed trucks and vehicles. A hypothetical 1%
increase in the interest rate applicable to the outstanding amounts of the
Laurus and Spotless notes along with the various other debt for financed trucks
and vehicles would increase our interest expense by approximately $70,000
annually. This hypothetical calculation reflects the assumed interest payments
for the:

        o  Note at a rate of 8.75% per annum;
        o  Spotless note at a rate of  5.86% per annum; and
        o  various other debt for financed trucks and vehicles with maturities
           ranging from 3 months to 54 months with interest rates ranging from
           3.95% to 13.99%.

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

                                       27

<PAGE>

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 our 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.

Our chief executive officer and our chief financial officer reviewed with
members of our audit committee whether our need to restate our financial results
for our fiscal quarter ended September 27, 2005 affected their conclusions 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. In
connection with their review, our chief executive officer and chief financial
noted that our decision to restate our financial results did not call into
question whether the relevant information was recorded, processed, summarized or
reported within the time periods specified in the SEC's rules and forms. It also
did not involve any issue about whether information required to be disclosed in
the Form 10-Q we filed under the Securities Exchange Act was accumulated and
communicated to our chief executive officer and chief financial officer, as
appropriate to allow timely decisions regarding required disclosure. Rather, the
restatements resulted from reconsideration in connection with preparing
responses to a comment letter that we received from the Securities and Exchange
Commission in relation to its review of our registration statement on Form S-1
filed on October 3, 2005 of a decision made by management to record certain
amounts charged to deferred financing costs and credited to additional paid-in
capital under generally accepted accounting principles. Our chief executive
officer and chief financial officer did not find that management's subsequent
decisions, that its prior recording of amounts charged to deferred financing
costs and credited to additional paid-in capital were not in accordance with
generally accepted accounting principles, raise any question about whether our
disclosure controls and procedures were effective to ensure that required
information was disclosed to them as appropriate to allow timely decisions
regarding required disclosure. Therefore, based on that review, our chief
executive officer and our chief financial officer determined that their prior
conclusions, that our disclosure controls and procedures were effective as of
September 27, 2005, had not changed.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

In connection with our first quarter fiscal 2006 review, we identified issues
arising in connection with a change in our accounting staff during such period
regarding the timing and related processing of 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 period ending
         dates in order to enhance the accurate and timely processing of our
         cash receipts for each quarterly report. We have also emphasized to our
         accounting staff that they need to record transactions on the dates
         that they occur instead of batching such transactions for processing at
         the end of one of our monthly, quarterly or annual periods.
      o  We are in the process of modifying the way in which we allocate our
         costs to specific projects in an effort to more precisely record our
         project costs.

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.

                                       28

<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. We believed that we had meritorious defenses and that the
likelihood of an unfavorable outcome was remote. 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 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.

                                       29
<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     $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).
         10.10    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).
         10.11    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).
         10.12    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).
         10.13    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).
         10.14    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).
         10.15    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).
         10.16    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).
         10.17    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).

                                       30

<PAGE>

         10.18    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).
         10.19    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).
         10.20    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).
         10.21    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).
         10.22    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).
         10.23    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).
         10.24    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).
         10.25    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).
         10.26    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).
         10.27    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).
         10.28    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).
         10.29    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).
         10.30    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).
         10.31    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).
         10.32    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).
         10.33    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.

                                       31

<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: February 3, 2006           By:  /s/ Michael O'Reilly
                                     -------------------------------------------
                                     MICHAEL O'REILLY
                                     President and Chief Executive Officer
                                     (Principal Executive Officer)



Date: February 3, 2006           By:  /s/ Andrew C. Lunetta
                                     -------------------------------------------
                                     ANDREW C. LUNETTA
                                     Chief Financial Officer
                                     (Principal Financial Officer)