SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB


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


     For the quarterly period ended October 31, 1996 or

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

     For  the Transition period from __________ to __________.

     Commission File Number: 0-17072

                    COMPREHENSIVE ENVIRONMENTAL SYSTEMS, INC.
             (Exact Name of Registrant as Specified in its Charter)

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

72B Cabot Street, West Babylon, New York      11704
(Address of principle executive offices)      (Zip Code)

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

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

                  YES     [X]                          NO [ ]

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

Common Stock, Par Value $.0001                9,103,477
(Title of Each Class)                        (Outstanding at December 20, 1996)


<PAGE>


Part I - Financial Information

Item 1.  Financial Statements


           COMPREHENSIVE ENVIRONMENTAL SYSTEMS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                    UNAUDITED
                                                                    ---------

                                           ASSETS

                                                            October 31,      April 30,
                                                               1996            1996
                                                            -----------   -----------
<S>                                                         <C>           <C>
CURRENT ASSETS

   Cash                                                     $   516,085   $   282,933
   Contracts receivable, net of allowance for
       doubtful contracts of $195,000 at
        October 31, 1996 and April 30, 1996                   2,777,597     2,043,740
   Current portion of note receivable                            20,940          --
   Inventories and prepaid supplies                             370,065       265,065
   Prepaid expenses                                             185,617          --
   Deferred income taxes                                        680,000       680,000
   Other current assets                                         190,046       148,557
                                                            -----------   -----------


         Total Current Assets                                 4,740,350     3,420,295
                                                            -----------   -----------

PROPERTY AND EQUIPMENT, net of
   accumulated depreciation and amortization                  3,262,552     3,143,477
                                                            -----------   -----------

OTHER ASSETS

   Note Receivable                                              254,060          --
   Investment in non-marketable securities, net of
     valuation allowance of $3,936,000 and $5,993,841
     at October 31, 1996 and April 30, 1996, respectively       100,000       628,000
   Goodwill, net of accumulated amortization                     28,594        30,590
   Deferred acquisition costs, net of
      accumulated amortization                                   97,010       100,580
    Deferred income taxes                                     1,904,000     1,904,000
   Deferred restructuring costs                                 792,000          --
   Other assets                                                  95,630        62,447
                                                            -----------   -----------


         Total Other Assets                                   3,271,294     2,725,617
                                                            -----------   -----------


   TOTAL ASSETS                                             $11,274,196   $ 9,289,389
                                                            ===========   ===========
</TABLE>

                                   (Continued)
                                        1


<PAGE>




           COMPREHENSIVE ENVIRONMENTAL SYSTEMS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>

                                                                    UNAUDITED
                                                                    ---------


                                 LIABILITIES AND STOCKHOLDERS' EQUITY


                                                           October 31,      April 30,
                                                              1996            1996
                                                            -----------   -----------
<S>                                                         <C>           <C>
CURRENT LIABILITIES

   Current portion of long-term debt                        $   312,898   $   260,952
   Accounts payable and accrued expenses                      1,233,372     1,335,287
   Note payable                                                 100,000          --
   Deposit                                                         --         150,000
   Income taxes payable                                          34,603        59,080
   Other current liabilities                                    235,602       228,591
                                                            -----------   -----------

         Total Current Liabilities                            1,916,475     2,033,910

OTHER LIABILITIES

   Long-term debt, net of current portion                       469,347       382,324
                                                            -----------   -----------

         Total Liabilities                                    2,385,822     2,416,234
                                                            -----------   -----------

STOCKHOLDERS' EQUITY

   Preferred stock, $.01 par value,
    10,000,000 shares authorized,
     No shares issued or outstanding                               --            --
   Common stock, $.0001 par value,
     50,000,000 shares authorized,
     9,103,477 issued less 20,000
      treasury shares                                               910           617
   Additional paid-in capital                                26,052,509    24,727,377
   Treasury stock                                               (10,000)      (58,000)
   Stock subscription receivable                                              (46,988)
   Deficit                                                  (17,155,045)  (17,749,851)
                                                            -----------   -----------

         Total Stockholders' Equity                           8,888,374     6,873,155
                                                            -----------   -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                  $11,274,196   $ 9,289,389
                                                            ===========   ===========
</TABLE>


           See Accompanying Notes to Consolidated Financial Statements
                                        2


<PAGE>



           COMPREHENSIVE ENVIRONMENTAL SYSTEMS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME


<TABLE>
<CAPTION>
                                     UNAUDITED
                                     ---------

                                                             SIX MONTHS ENDED
                                                             ----------------


                                                           October 31,    October 31,
                                                              1996             1995
                                                            -----------   -----------
<S>                                                         <C>           <C>

Revenues                                                    $ 8,254,724   $ 6,371,661

Cost of revenues                                              5,566,768     3,893,219
                                                            -----------   -----------

      Gross profit                                            2,687,956     2,478,442

Selling, general and administrative expenses                  2,132,931     2,474,940
                                                            -----------   -----------

      Income (loss) before other income (expense)               555,025         3,502
                                                            -----------   -----------

Other income (expense):

  Management restructuring costs                               (401,000)         --
  Settlement of legal claims, net                               246,654       (17,500)
  Income from joint venture                                        --          22,512
  Gain on sale of marketable security                              --          63,999
  Gain on sale of assets, net                                   221,710          --
  Realized gain on sale of building                                           188,624
  Interest expense                                              (29,131)         --
  Interest and dividend income                                    1,548        39,732
                                                            -----------   -----------

      Total other income (expense)                               39,781       297,367
                                                            -----------   -----------


      Income before income taxes                                594,806       300,869

Income taxes                                                       --            --
                                                            -----------   -----------

      Net income                                            $   594,806   $   300,869
                                                            ===========   ===========

Earnings per common share                                   $       .07   $       .07
                                                            ===========   ===========

Weighted average number of
  common shares outstanding                                   8,331,449     4,419,095
                                                            ===========   ===========
</TABLE>


           See Accompanying Notes to Consolidated Financial Statements
                                        3


<PAGE>



           COMPREHENSIVE ENVIRONMENTAL SYSTEMS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                  UNAUDITED
                                                                  ---------

                                                              THREE MONTHS ENDED
                                                              ------------------


                                                            October 31,   October 31,
                                                               1996          1995
                                                            -----------   -----------
<S>                                                         <C>           <C>
Revenues                                                    $ 3,181,322   $ 2,601,913

Cost of revenues                                              2,131,412     1,675,792
                                                            -----------   -----------

      Gross profit                                            1,049,910       926,121

Selling, general and administrative expenses                    965,422       998,295
                                                            -----------   -----------

Income (loss) before other income(expense)                       84,488       (72,174)
                                                            -----------   -----------

Other income (expense):

  Management restructuring costs                               (401,000)         --
  Settlement of legal claims, net                               246,654          --
  Income from joint venture                                        --          22,512
  Gain on sale of marketable security                              --          63,999
  Gain on sales of assets, net                                  221,710          --
  Interest Expense                                              (13,236)         --
  Interest and dividend income                                      709        39,732
                                                            -----------   -----------

      Total other income (expense)                               54,837       126,243
                                                            -----------   -----------
      Income before income taxes                                139,325        54,069

Income taxes                                                       --            --
                                                            -----------   -----------

      Net income                                            $   139,325   $    54,069
                                                            ===========   ===========

Earnings per common share                                   $       .02   $       .01
                                                            ===========   ===========

Weighted average number of
  common shares outstanding                                   9,065,977     5,427,366
                                                            ===========   ===========
</TABLE>


           See Accompanying Notes to Consolidated Financial Statements
                                        4


<PAGE>




           COMPREHENSIVE ENVIRONMENTAL SYSTEMS, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                    FOR THE SIX MONTHS ENDED OCTOBER 31, 1996

<TABLE>
<CAPTION>
                                                              UNAUDITED
                                                              ---------

                                         Common Stock
                                         ------------           Additional                 Stock
                                    Number of        Par         Paid-in      Treasury  Subscription     Accumulated
                                     Shares         Value        Capital       Stock     Receivable        Deficit          Total
                                     -----------  -----------   -----------   -----------  -----------    -----------    -----------
<S>                                   <C>            <C>        <C>             <C>        <C>          <C>             <C>
Balance - April  30, 1996             6,097,366      $ 617      $24,727,377     $(58,000)  $(46,988)    $(17,749,851)   $ 6,873,155

  Private placements of
     common stock                     2,600,000        260        1,084,165                                               1,084,425

   Issuance of common
      stock for services                261,111         26          205,974                                                 206,000

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

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

  Collection of stock subscription
     receivable                                                                                46,988                        46,988

  Issuance of common stock for
     partial payment of management
     restructuring charges               75,000          7          34,993                                                  35,000

  Net Income                                                                                                 594,806        594,806
                                      ---------      -----      -----------     --------     --------  -------------    -----------
Balance - October  31, 1996           9,083,477      $ 910      $26,052,509     $(10,000)    $   --    $ (17,155,045)   $ 8,888,374
                                      =========      =====      ===========     ========     ========  =============    ===========

</TABLE>


           See Accompanying Notes to Consolidated Financial Statements
                                        5


<PAGE>



           COMPREHENSIVE ENVIRONMENTAL SYSTEMS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            FOR THE SIX MONTHS ENDED

<TABLE>
<CAPTION>
                                                                     UNAUDITED
                                                                     ---------

                                                            October 31,    October 31
                                                               1996           1995
                                                            -----------   -----------
<S>                                                         <C>           <C>

CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                               $   594,806   $   300,869
   Adjustments to reconcile net income to net cash
   flows from operating activities:
     Depreciation and amortization                              321,329       121,033
     Gain on sale of building                                      --        (188,624)
     Issuance of common stock for services                      206,000       442,250
     Income from joint venture                                     --         (22,512)
     Management restructuring costs                             211,000          --
      Gain on sale of assets, net                              (221,710)         --
     Settlement of legal claims, net                           (255,000)         --
   Changes in operating assets and liabilities:
     Accounts receivable                                       (733,857)     (540,593)
     Inventories and prepaid supplies                          (105,000)     (274,667)
     Prepaid expenses                                          (185,617)         --
     Note receivable                                               --          50,000
     Other current assets                                       (41,489)     (214,535)
     Other assets                                               (33,183)      (48,405)
     Accounts payable and accrued expenses                     (101,915)      696,533
     Current Income taxes                                       (24,477)        5,636
     Other current liabilities                                    7,011        33,105
     Deferred income taxes                                         --          42,000
                                                            -----------   -----------


NET CASH FLOWS FROM OPERATING ACTIVITIES                       (362,102)      402,090
                                                            -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES
   Payment for investment in subsidiary                            --         (10,000)
   Reserve for contingencies                                       --        (367,309)
   Deposits advanced                                               --         397,943
   Proceeds from the sale of assets                                --         221,710
   Deferred restructuring costs                                (792,000)         --
   Investment on non-marketable securities                      528,000          --
   Acquisition of fixed assets                                 (434,838)   (1,528,552)
   Deferred acquisition costs, net                                 --        (103,938)
                                                            -----------   -----------


NET CASH FLOWS FROM INVESTING ACTIVITIES                       (477,128)   (1,611,856)
                                                            -----------   -----------
</TABLE>

                                   (Continued)
                                        6


<PAGE>


           COMPREHENSIVE ENVIRONMENTAL SYSTEMS, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT.)
                            FOR THE SIX MONTHS ENDED


<TABLE>
<CAPTION>

                                                                     UNAUDITED
                                                                     ---------

                                                             October 31,  October 31,
                                                               1996          1995
                                                            -----------   -----------
<S>                                                         <C>           <C>
CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from note payable                                   100,000          --
   Proceeds from long-term debt                                 223,000          --
   Principal payments of long-term debt                        (232,031)      (99,407)
   Payment of note payable                                         --         (75,000)
   Proceeds from issuance of common stock, net
       Of advance deposits                                      934,425     3,137,784
   Stock subscription receivable                                 46,988      (534,920)
                                                            -----------   -----------

NET CASH FLOWS FROM FINANCING ACTIVITIES                      1,072,382     2,428,457
                                                            -----------   -----------

NET CHANGE IN CASH AND CASH EQUIVALENTS                         233,152     1,218,691

CASH AND EQUIVALENTS-BEGINNING                                  282,933       648,023
                                                            -----------   -----------

CASH AND EQUIVALENTS-ENDING                                 $   516,085   $ 1,866,714
                                                            ===========   ===========

NON-CASH INVESTING AND FINANCING ACTIVITIES

Issuance of restricted common shares for
the investment in New York Testing Laboratories, Inc.,
and Subsidiaries                                            $      --     $    67,500
                                                            ===========   ===========
Step-up in basis of property and equipment resulting from
the allocated purchase price in excess of net assets
acquired from New York Testing Laboratories, Inc.
and Subsidiaries                                            $      --     $   328,681
                                                            ===========   ===========
Issuance of common shares in exchanged for
services                                                    $   206,000   $   442,250
                                                            ===========   ===========
Note receivable and return of common stock accepted
   as partial consideration in settlement of a
   legal claim                                              $   285,000   $      --
                                                            ===========   ===========
Issuance of long-term debt in connection with the partial
   settlement of a legal claim and separate consulting
   agreement                                                $   155,000   $      --
                                                            ===========   ===========
SUPPLEMENTAL INFORMATION
 Interest Paid                                              $    29,131   $    24,256
                                                            ===========   ===========
 Taxes Paid                                                 $       346   $       224
                                                            ===========   ===========

</TABLE>


           See Accompanying Notes to Consolidated Financial Statements
                                        7


<PAGE>




           COMPREHENSIVE ENVIRONMENTAL SYSTEMS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE QUARTER ENDED OCTOBER 31, 1996
                                    UNAUDITED

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

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

     (2)  As part of the management  restructuring  during  September  1996, the
          Company entered into separate  termination  agreements with the former
          Chief Executive  Officer("CEO"),  Chief Operating  Officer("COO")  and
          Special  Securities  Counsel("SSC")  to the Company.  These agreements
          call  for  pay-outs  of  existing   compensation   arrangements   plus
          additional  benefits  in the form of  transferring  an  investment  in
          non-marketable securities of $528,000, issuing stock options and other
          miscellaneous benefits.  Included in Management Restructuring Costs on
          the Consolidated Statements of Income are the accrued costs related to
          the former CEO and SSC for $216,000 and  $35,000,  respectively.  As a
          result of the  indictment  in October  1996 against the former COO and
          SSC, the Company has not accrued for the  termination  agreement  with
          the former COO  totaling  approximately  $1,450,000.  Included  on the
          Consolidated  Balance  Sheet under  Deferred  Restructuring  Costs are
          amounts actually paid and the value of the  non-marketable  securities
          transferred  at closing of the  termination  agreement with the former
          COO totaling  $792,000.  Even if the  indictments  and the allegations
          contained therein are proven not to be true, there was still a lack of
          fiduciary  responsibility  to the  Company  by both the former COO and
          SSC. In light of the facts and circumstances,  the Company has already
          made  formal  demands  to the  COO  and  SSC  for  the  return  of all
          consideration paid and assets transferred  pursuant to the termination
          agreements  through  the  date  of the  indictment  and is  vigorously
          pursuing  this matter.  The Company has also  formally  cancelled  all
          option   certificates   previously   issued  in  connection  with  the
          termination agreements.  In addition,  Management  Restructuring Costs
          include approximately $150,000 of legal and professional fees incurred
          in  connection  with  these  agreements  and  the  subsequent  matters
          resulting from the indictment.


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


RESULTS OF OPERATIONS

Core  operations for the six months showed revenues and net income of $8,255,000
and $595,000, respectively, versus $6,372,000 and $301,000 respectively, for the
same period last year. This represents an increase of 30% and 98%, respectively,
from the prior year.

Cost of revenues increased $1,674,000 or 43% from the first six months last year
but, as a percentage of revenues, increased from 61% to 67% when compared to the
first six months of last year to this year.

Gross profit  increased  $210,000 or 8% from the first six months of fiscal 1996
to 1997. As a percentage of revenues, the gross profit decreased to 32% compared
to 39% for the first six months of fiscal  1996.  This  decrease  results from a
change  in the  mix of work  compared  to last  year as well as  certain  larger
contracts that normally carry a slightly lower gross profit margin.

Selling,  general and administrative  expenses decreased  approximately  342,000
from the first six months of last year  compared to the first six months of this
year. As a percentage of revenues, these expenses were approximately 39% and 26%
for the six months ended  October 31, 1995 and 1996,  respectively.  This is the
direct  result of management  is continued  efforts to  streamline  overhead and
build a more efficient operation.


                                        8


<PAGE>


A provision for taxes was not required for the current  fiscal  quarter  because
sufficient  reserves  exist against the deferred tax assets  recognized in prior
periods to off-set such provision. Management believes that the reversal of such
reserves is  appropriate in light of the current growth in revenues and earnings
from core operations.

LIQUIDITY AND CAPITAL RESOURCES

Working  capital at October 31, 1996 including  cash, was $2,824,000 an increase
of  $1,438,000  or 104%  from  April  30,  1996.  Cash and  accounts  receivable
increased  by $233,000 and  $734,000,  respectively  from April 30, 1996.  As of
October 31, 996, the current  ratio was 2:47:1.  This  represents a  substantial
improvement in liquidity from April 30, 1996 where such ratio was 1:68:1.  It is
managements  continued goal to maintain low levels of long-term debt  financing.
However,  management is actively  seeking a working  capital credit  facility to
finance accounts receivable that will enhance cash flow and business growth.

The Company  believes that the current  levels of working  capital and liquidity
will not be sufficient to support the continued increase in its revenue base and
scope of operations.


PART II - OTHER INFORMATION


Item 1.  Legal Proceedings


Pending Litigation

In November,  1994,  the Company  commenced an action in New York State  Supreme
Court to recover monies advanced to Mohave Shores  Development,  Inc. ("Mohave")
in  anticipation  of developing  land on an Indian  reservation in Arizona.  The
Company  seeks the return of its  $250,000  deposit plus legal fees and punitive
damages.  In  addition,  it is  hopeful  that a  declaratory  judgement  will be
obtained  for all water rights  contained  in the ground  lease  entered into by
Mohave  with  the  reservation.  Management  intends  to  continue  aggressively
pursuing this matter.

In an action that commenced in August 1995 in United States District Court,  the
Company and various  current and prior officers and directors have been named in
a  lawsuit  with  certain   shareholders  which  contains  various  allegations.
Management  denies any wrong doing,  asserts that the complaint is without merit
and continues to vigorously defend these claims.


Item 2.  Changes in Securities

         None

Item 3.  Defaults Upon Senior Securities

         None

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

         None

Item 5.  Other Information

         None


                                        9


<PAGE>


Item 6.  Exhibits and Reports on Form 8-K

         (a)      Exhibits: None
         (b)      Reports on Form 8-K

                  Reports  filed  on Form  8-K  dated  September  12,  1996  and
         September 26, 1996 are hereby incorporated by reference.


SIGNATURES




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

Dated:   December 20, 1996


                                     COMPREHENSIVE ENVIRONMENTAL SYSTEMS, INC.


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


                                     By /s/ David R. Behanna
                                        ----------------------------------
                                            DAVID R. BEHANNA, CPA
                                          Chief Financial Officer


                                       10