--------------------------------------------------------------------------------

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                  FORM 10-QSB

      (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 30, 1996

         [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
              SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                        Commission File Number 0-16322

                               ECOS GROUP, INC.
                    F/K/A EVANS ENVIRONMENTAL CORPORATION
          (Name of small business issuer as specified in its charter)

                COLORADO                                  84-1061207
      (State or other jurisdiction of                 (I.R.S. Employer
       incorporation or organization)                 Identification No.)

      1000 SOUTHERN BOULEVARD, SUITE 200,
      WEST PALM BEACH, FLORIDA                               33405
      (Address of principal executive offices)            (Zip Code)

                  Issuer's telephone number: (561) 835-0990

Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [ ]

As of October 11, 1996, the Company had a total of 17,585,126 shares of common
stock, $.012 par value, outstanding.

Transitional Small Business Disclosure format (check one): Yes [ ]  No [X]

--------------------------------------------------------------------------------

<PAGE>

                               ECOS GROUP, INC.

                                     INDEX

                                                                          PAGE
                                                                          ----
PART I.     FINANCIAL INFORMATION

Item 1.     Financial statements:

            Consolidated balance sheets
             - September 30, 1996 and March 31, 1996                         3

            Consolidated statements of operations
             - Three months and six months ended September 30, 1996           
             and 1995                                                        4

            Consolidated statements of cash flows
             - Six months ended September 30, 1996 and 1995                5-6

            Notes to financial statements                                 7-13

Item 2.     Management's discussion and analysis
            of financial condition and results of operations             14-20

PART II.    OTHER INFORMATION

Item 6.     Exhibits and reports on Form 8-K                                21

SIGNATURES                                                                  22

                                   2 of 22

<PAGE>

<TABLE>
<CAPTION>
                                  ECOS GROUP, INC.

                            CONSOLIDATED BALANCE SHEETS

                                                    SEPTEMBER 30,1996  MARCH 31, 1995
                                                    -----------------  --------------
                                                       (UNAUDITED)
<S>                                                 <C>                <C>
                                       ASSETS
Current assets:
   Cash                                                $   265,143      $   178,121
   Restricted cash                                          31,560          154,749
   Marketable securities                                    30,000           75,000
   Accounts receivable, net                              1,237,983          792,929
   Note receivable                                         500,000             -
   Net assets of discontinued operations                      -           1,037,971
   Prepaid expenses & other                                487,054          354,974
                                                       -----------      -----------
       Total current assets                              2,551,740        2,593,744

Amounts due under state reimbursement
 program                                                   908,878          832,922
Property & equipment, net                                2,759,446          573,813
Goodwill, net                                            6,772,779          946,554
Prepaid public relations services                          400,337             -
Deferred costs, net                                        346,559             -
Other assets                                               375,028          298,859
                                                       -----------      -----------
       Total assets                                    $14,114,767      $ 5,245,892
                                                       ===========      ===========

                    LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
   Accounts payable                                    $ 1,361,959      $ 1,861,425
   Accrued expenses                                        626,808          604,459
   Payroll taxes                                              -           1,051,688
   Note payable, bank                                      500,000             -
   Related party note payable                              251,220           85,000
   Current portion of capital lease
    obligations & notes payable                            611,593        1,197,262
                                                       -----------      -----------
       Total current liabilities                         3,351,580        4,799,834

Notes payable, net of current portion                    1,012,647          873,113
Commitments & contingencies                                   -                -

Stockholders' equity (deficit):
   Preferred stock:
     Series A, $.001 par value 5,000,000
     authorized, none issued and outstanding                  -                -
     Series B convertible, $.01 par value
     1,000,000 authorized, issued and outstanding             -                -
   Common stock:
     $.012 par value, 25,000,000 authorized,
     issued and outstanding:
     September 30, 1996  - 17,585,126                      211,022
     March 31, 1996 - 4,590,126                                              55,082
   Additional paid in capital                           16,111,721        6,635,498
   Net unrealized loss on marketable
    securities                                             (45,000)            -
   Retained earnings (deficiency)                       (6,527,203)      (7,117,635)
                                                       -----------      -----------
       Total stockholders' equity (deficit)              9,750,540         (427,055)
                                                       -----------      -----------
       Total liabilities &
        stockholders' equity (deficit)                 $14,114,767      $ 5,245,892
                                                       ===========      ===========
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                      3 of 22

<PAGE>
<TABLE>
<CAPTION>
                                  ECOS GROUP, INC.

                       CONSOLIDATED STATEMENTS OF OPERATIONS
               THREE AND SIX MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                                     (UNAUDITED)

                                  THREE MONTHS ENDED            SIX MONTHS ENDED
                              --------------------------   -------------------------
                                 1996           1995           1996          1995
                              -----------    -----------   -----------   -----------
<S>                           <C>            <C>           <C>           <C>
Revenue:
   Environmental Consulting   $ 1,262,490    $ 1,474,739   $ 2,527,535   $ 3,265,550
   Soil Remediation               928,546            -         928,546           -
                              -----------    -----------   -----------   -----------
     Total Revenue              2,191,036      1,474,739     3,456,081     3,265,550
                              -----------    -----------   -----------   -----------
Cost of Environmental
 Services:
   Direct Labor & Benefits        496,337        256,810     1,001,887       864,746
   Other Direct Costs             209,638        292,555       488,633       681,487
                              -----------    -----------   -----------   -----------
                                  705,975        549,365     1,490,520     1,546,233

Cost of Soil Remediation          910,292            -         910,292           -
                              -----------    -----------   -----------   -----------
     Total Direct Costs         1,616,267        549,365     2,400,812     1,546,233
                              -----------    -----------   -----------   -----------

     Gross Profit                 574,769        925,374     1,055,269     1,719,317
                              -----------    -----------   -----------   -----------

General, Administrative
 & Other
     Operating Costs            1,104,155      1,085,061     1,810,551     2,090,288
Reserve for Restructuring             -               -        350,000           -
Other Offering Costs                  -               -            -         151,766
                              -----------    -----------   -----------   -----------
     Total Operating Costs      1,104,155      1,085,061     2,160,551     2,242,054
                              -----------    -----------   -----------   -----------

Operating Loss                   (529,386)      (159,687)   (1,105,282)     (522,737)
                              -----------    -----------   -----------   -----------
Other Income (Expense):
   Interest, Net                  (19,421)       (46,804)      (42,525)      (90,482)
   Other Income, Net              (13,131)           300        14,131           300
                              -----------    -----------   -----------   -----------
                                   (6,290)       (46,504)      (28,394)      (90,182)
                              -----------    -----------   -----------   -----------
Net Income (loss)
   before Taxes                  (535,676)      (206,191)   (1,133,676)     (612,919)
Provision for
   Income Taxes                       -              -             -             -
                              -----------    -----------   -----------   -----------
Loss from Continuing
   Operations                    (535,676)      (206,191)   (1,133,676)     (612,919)

Discontinued Operations:
   Income - Discontinued
     Operations                       -          136,928           -         222,428
   Gain on Disposal                   -              -         509,036           -
                              -----------    -----------   -----------   -----------
Income (loss) before
   extraordinary items           (535,676)       (69,263)     (624,640)     (390,491)

Extraordinary Items:
   Net Gain on Vendor
     Settlements                      -              -         280,981
   Net Gain on Payroll
     Tax Settlement                   -              -         934,091            -
                              -----------    -----------   -----------   -----------
Net Income (Loss)             $  (535,676)   $   (69,263)  $   590,432   $  (390,491)
                              ===========    ===========   ===========   ===========
Income (loss) Per
 Share from:
   Continuing Operations      $      (.03)   $      (.01)  $      (.09)  $      (.05)
   Discontinued Operations            -              .01           .05           .02
   Extraordinary Items                -              -             .10           -
                              -----------    -----------   -----------   -----------
                              $      (.03)   $       -     $       .06   $      (.03)
                              ===========    ===========   ===========   ===========
</TABLE>
    The accompanying notes are an integral part of these financial statements

                                     4 of 22

<PAGE>

<TABLE>
<CAPTION>
                                  ECOS GROUP, INC.

                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                    SIX MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                                     (UNAUDITED)

                                                 1996                     1995
                                              ----------              -----------
<S>                                           <C>                    <C>
Operating activities:
   Net income (loss)                           $ 590,432              $ (390,491)
                                              ----------              ----------
   Adjustments to reconcile net income
    (loss) to net cash used in
    in operating activities:
     Depreciation & amortization                 330,761                 158,930
     Gain on sale of equipment                    (1,000)                   (300)
     Other                                        20,626                  42,608
     Discontinued operations                    (509,036)               (222,428)
     Extraordinary items                      (1,228,203)                   -
     Changes in operating assets &
       liabilities, net of effects from
       purchase of American Remedial
       Technologies, Inc.:
     Decrease in accounts receivable             140,737                  66,949
     (Increase) decrease in prepaid expenses
       and other assets                          195,155                 (21,363)
     Decrease in amounts due from state
       reimbursement program                     (75,956)                (40,795)
     (Increase) in other non-current assets       41,418                     613
     Increase (decrease) in accounts payable    (737,262)                 47,948
     Increase (decrease) in accrued liabilities  102,679               (312, 859)
     (Decrease) in payroll taxes                (446,547)                (24,197)
                                              ----------              ----------
                                              (2,166,628)               (304,894)
                                              ----------              ----------
Net cash used by operating activities of:
     Continued operations                     (1,576,196)               (695,385)
     Discontinued operations                          -                  (15,164)
                                              ----------              ----------
                                              (1,576,196)               (710,549)
                                              ----------              ----------

Investing activities:
     Restricted cash                             123,189                    -
     Payments for purchase of American
      Remedial Technologies, Inc., net
        of cash acquired                      (5,983,677)                   -
     Proceeds from disposal of discontinued
      operations, net of expenses              1,047,007                    -
     Purchases of equipment                     (169,809)                (18,944)
     Proceeds from disposal of equipment           1,000                 103,354
                                              ----------              ----------
   Net cash provided (used)
    by investing activities                   (4,982,290)                 84,410
                                              ----------              ----------
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                     5 of 22

<PAGE>

<TABLE>
<CAPTION>
                                  ECOS GROUP, INC.

                 CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                    SIX MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                                     (UNAUDITED)

                                                  1996                   1995
                                              -----------            -----------
<S>                                           <C>                    <C>
Financing activities:
   Proceeds from original issuance of stock   $ 8,100,000            $   477,013
   Proceeds from warrant exercise                 337,500                    -
   Costs associated with issuance of stock      (805,758)               (126,059)
   Proceeds from notes payable                    562,800                217,233
   Payments on capital lease obligations
    and notes payable                         (1,220,254)                (81,420)
   Payments on related party notes payable      (328,780)                    -
                                              ----------             -----------

Net cash provided by financing activities      6,645,508                 486,767
                                              ----------             -----------

Net increase (decrease) in cash                   87,022                (139,372)

Cash, beginning of period                        178,121                 300,743
                                              ----------             -----------

Cash, end of period                           $  265,143             $   161,371
                                              ==========             ===========

Cash paid during the period for interest      $  135,805             $   114,674
                                              ==========             ===========

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING:

On July 8, 1996 the Company acquired 100%
of the outstanding stock of American
Remedial Technologies, Inc.
Details of the acquisition are:
   Common stock issued                       $ 1,500,000
   Convertible preferred stock issued                -
   Book value of assets acquired               3,106,127
   Liabilities assumed                         1,466,844

   Cash paid for acquisition                 $ 6,000,000
   Cost of acquisition                            46,836
   Less cash acquired                             63,159
                                             -----------
     Net cash paid                           $ 5,983,677
                                             -----------

On August 20, 1996 the Company issued
545,000 shares of common stock for
services to be performed in connection
with a public relations
consulting agreement. The stock and
related cost of issuance was valued at:      $   493,881
                                             -----------
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                     6 of 22

<PAGE>

                                  ECOS GROUP, INC.

                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                     (UNAUDITED)

1. BUSINESS

      ECOS Group, Inc. (formerly known as Evans Environmental Corporation) (the
      "Company") is engaged, through its wholly-owned subsidiaries, in
      environmental consulting and other environmental related services (the
      "Consulting Division") and soil remediation (the "Remediation Division").
      Until April 3, 1996, the Company was also engaged in the production and
      sale of cable products (the "Cable Products Division"). The Company
      changed its name to ECOS Group, Inc. effective October 25, 1996 pursuant
      to a majority vote at its annual meeting of shareholders held on October
      18, 1996. The name change was made because of the Company's expanded
      activities in remediation since the acquisition of American Remedial
      Technologies, Inc. ("American Remedial") in July, 1996, as further
      discussed below.

2. SIGNIFICANT ACCOUNTING POLICIES

      INTERIM FINANCIAL STATEMENTS: The accompanying unaudited financial
      statements have been prepared in accordance with the instructions to Form
      10-QSB and do not include all of the information and footnotes required by
      generally accepted accounting principles for complete financial
      statements. The consolidated balance sheet as of March 31, 1996 has been
      derived from the audited financial statements as of the period ended March
      31, 1996, but does not include all disclosures required by generally
      accepted accounting principles. In the opinion of management, these
      statements reflect all adjustments, consisting of normal recurring
      adjustments, considered necessary for a fair presentation for the periods
      presented. Operating results for the three and six months ended September
      30, 1996 are not necessarily indicative of the results that may be
      expected for the year ending March 31, 1997. These statements should be
      read in conjunction with the financial statements and notes thereto
      included in the Company's Annual Report on Form 10-KSB for the period
      ended March 31, 1996.

      PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include
      the accounts of the Company and its wholly-owned subsidiaries. All
      intercompany balances and transactions have been eliminated.

      PER SHARE DATA: Per share data is based on the weighted average number of
      shares of common stock, 17,925,919 and 15,164,148 for the quarters ended
      September 30, 1996 and 1995, respectively, and 12,134,054 and 13,024,292
      for the six months ended September 30, 1996 and 1995, respectively. For
      the 96 Quarter and six months ended September 30, 1996, 4,840,001 common
      stock options and warrants which are common stock equivalents were assumed
      to be exercised for computation of earnings per share under the treasury
      stock method. For the 95 Quarter and six month period ended September 30,
      1995, common stock equivalents have not been included in the weighted
      average number of shares as they are anti-dilutive.

                                      7 of 22

<PAGE>


                                  ECOS GROUP, INC.

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                    (UNAUDITED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      DISCONTINUED OPERATIONS: During April 1996, ABC Cable Products, Inc., a
      wholly-owned subsidiary, ceased operations and disposed of all of its
      operating assets. As such, the Company has treated the Cable Products
      Division as discontinued operations for all periods presented.

      PRESENTATION: Certain amounts previously reported have been reclassified
      to conform to the Fiscal 1997 financial statement presentation.

3.  ACQUISITION

      On July 8, 1996, the Company acquired all the outstanding stock of
      American Remedial. American Remedial operates a soil remediation facility
      in Lynwood, California. The acquisition of American Remedial will involve
      the Company in thermal soil remediation, a natural outgrowth of its
      current environmental consulting and remediation activities. The
      acquisition was accounted for as a purchase and, accordingly, the purchase
      price was allocated to the acquired assets and assumed liabilities, based
      on their respective fair values. The excess (approximately $5,900,000) of
      the purchase price over the fair values of assets acquired was recorded as
      a goodwill and is being amortized over 15 years on a straight line basis.

      The purchase price of American Remedial consisted of a cash payment of
      $6,000,000, the issuance of 3,000,000 shares of unregistered Common Stock
      of which 272,277 shares were subsequently registered and the issuance of
      1,000,000 shares of Series B Preferred Stock. The Series B Preferred Stock
      is convertible, subject to an earn-out formula, up to a maximum of
      10,000,000 shares of Common Stock. Furthermore, Mr. Enrique A. Tomeu, the
      current American Remedial's President, has become the Chief Executive
      Officer of the Company. The Series B Convertible Preferred Stock, $.001
      par value per share (the "Series B"), is not entitled to receive any
      dividends and has a liquidation value of $.75 per share. The holders of
      the Series B are entitled to elect six members to the Company's Board of
      Directors.

      The purchase price was principally funded from a contemporaneous
      Regulation S stock offering by the Company as herein discussed.

      The pro-forma results of operations, which follow, assume that the
      acquisition had occurred at the beginning of each period presented. In
      addition to combining the historical results of operations of the two
      companies, the pro-forma calculations include adjustments for the
      estimated effect on the Company's historical results of operations for
      amortization of goodwill.

                                     8 of 22

<PAGE>

                                ECOS GROUP, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)

3.  ACQUISITION (CONTINUED)

                                         SIX MONTHS ENDED    SIX MONTHS ENDED
                                        SEPTEMBER 30, 1995  SEPTEMBER 30, 1996
                                        ------------------  ------------------

   Revenues                             $       3,673,703   $       4,361,176
                                        =================   =================
   Net earnings (losses)                $        (741,483)  $         392,321
                                        =================   =================

The following is a summary of the financial position of American Remedial at
date of acquisition, July 8, 1996:

                                                   JULY 8, 1996
                                                   ------------
   Current assets                                  $    836,326
   Property & equipment, net                          1,663,053
   Other assets                                         484,147
                                                   ------------

      Total assets                                 $  2,983,526
                                                   ============

   Current liabilities                             $    839,057
   Long-term debt                                       132,299
   Related party debt                                   495,000
   Stockholders equity                                1,517,160
                                                   ------------

      Total liabilities and equity                 $  2,983,526
                                                   =============

                                     9 of 22

<PAGE>

                                  ECOS GROUP, INC.

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                     (UNAUDITED)

4. NOTE PAYABLE, BANK

      On August 23, 1996 PTV Corporation (f/k/a ABC Cable Products, Inc.), a
      wholly-owned subsidiary, borrowed $500,000 from a bank pursuant to a
      Promissory Note collateralized by reassignment to the bank of the letters
      of credit received from the sale of its cable product division and is also
      guaranteed by the Company. The bank note is due on the same payment dates
      of the letters of credit, which are March 5, 1997 ($250,000) and September
      5, 1997 ($250,000). The bank note bears interest at prime plus 1.75%.

5. STOCKHOLDERS' EQUITY

      On July 8, 1996, the Company completed a Regulation S stock offering. The
      offering involved a sale of 9,000,000 shares of Common Stock at an
      offering price of $.90 per share generating gross proceeds to the Company
      of $8,100,000. The offshore placement agent (the "Placement Agent")
      handling the offering entered into an agency agreement which provided for
      a cash management and selling fee aggregating $607,500, or 7.5% of the
      gross proceeds. In addition, the Placement Agent received broker warrants
      to purchase 630,000 shares of Common Stock, exercisable at $1.00 per share
      until July 8, 1998 and was reimbursed for out-of-pocket expenses of
      approximately $140,000. Thus, net cash proceeds of the Company including
      other offering cost of approximately $58,000 in connection with this
      offering were approximately $7,294,500. The majority of the net proceeds
      received from this offering were utilized for the acquisition of American
      Remedial and payment of debt under the Strategica line of credit.

      During the six month period ended September 30, 1996, warrants were
      exercised for 450,000 shares of Common Stock for total proceeds of
      $337,500.

      On August 13, 1996, the Company entered into a five year Lead
      Generation/Corporate Relations Agreement with a public relations company,
      which was retained to provide certain corporate relations services. As
      payment for these corporate relations services, the Company issued to the
      public relations company, 545,000 shares of Common Stock valued at
      approximately $494,000 inclusive of related cost. Additionally, the
      Company has issued warrants to purchase Common Stock as follows: (i)
      300,000 shares at the exercise price of $2.00 per share, exercisable
      within one year from August 13, 1996, (ii) 150,000 shares at $2.50 per
      share, exercisable within two years from August 13, 1996; and (iii)
      150,000 shares at $2.70 per share, exercisable three years from August 13,
      1996. The Company agreed to register all of the above shares for resale by
      the public relations company. Notwithstanding the above, the public
      relations company has agreed to return 47,000 shares to the Company if by
      the end of the five year term of the agreement the price of the Company's
      shares as traded on NASDAQ has not traded at or above $4.50 per share for
      any period of ten consecutive days.

                                      10 of 22

<PAGE>

                                ECOS GROUP, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)

6. RESERVE FOR RESTRUCTURING

      During the first quarter of Fiscal 1997, the Company recorded a special
      charge of $350,000 for the restructuring of its operations and integration
      with American Remedial, which was acquired on July 8, 1996. These costs
      include accruals for severance pay, real and personal property lease
      terminations, relocation costs for certain offices and other costs
      associated with a streamlining of operations and administrative functions.
      These costs are expected to be paid or settled during the 1997 fiscal
      year.

7. EXTRAORDINARY ITEMS

   VENDOR SETTLEMENTS

      During April 1996, the Company executed a Composition Agreement with
      certain of its trade creditors. The Company, due to its limited cash flow
      situation, began negotiating with these creditors in September 1995. These
      creditors formed an Informal Creditors Committee, who hired both legal and
      accounting professionals. Negotiations were finalized in April 1996 with
      over 75% of the creditors accepting a payout of $.20 for each $1.00 of
      their allowed claim. The payout was made in April 1996 from funds that the
      Company had previously put into escrow. The Company continues to negotiate
      with the creditors who rejected the Company's offer. In the three months
      ended June 30, 1996, the Company recorded a benefit, net of expenses, of
      approximately $281,000 related to completed vendor settlements.

   SETTLEMENT OF DELINQUENT PAYROLL TAXES

      On June 28, 1996, certain subsidiaries of the Company and the IRS
      completed an Offer in Compromise agreement settling all outstanding issues
      and disputes. In connection with the settlement these subsidiaries paid
      the IRS an aggregate of $350,000 and agreed to waive certain net operating
      tax loss carryforwards. The net operating loss carryforwards waived would
      have been available to offset future taxable income. As a direct result of
      this settlement, in June 1996, the Company recorded a gain of
      approximately $934,000, net of professional fees and costs. The Company,
      including its subsidiaries, has no other outstanding disputes with the IRS
      or delinquent payroll taxes.

                                    11 of 22

<PAGE>

                                ECOS GROUP, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)

8. SALE OF CABLE PRODUCTS DIVISION

      On April 3, 1996, ABC Cable Products, Inc. ("ABC"), a wholly-owned
      subsidiary, ceased operations and sold all of its operating assets for an
      aggregate of $550,000 in cash and a promissory note in the amount of
      $1,000,000. In addition, at closing, the purchaser assumed certain
      liabilities of ABC aggregating $595,049. The promissory note, which is
      fully collateralized by certain irrevocable letters of credit, has payment
      dates of July 1, 1996 ($500,000), March 5, 1997 ($250,000) and September
      5, 1997 ($250,000). The September 5, 1997 payment will automatically
      accelerate if certain of the underlying letters of credit are not renewed.
      The July 1996 payment was received in a timely manner. ABC subsequently
      changed it's name to PTV Corporation.

      In April 1996, the Company recorded a gain of $509,036, net of costs
      associated with the transaction, on the sale of its Cable Products
      Division.

9. SUBSEQUENT EVENTS

      In October 1996, the Company's subsidiary, American Remedial entered into
      a joint venture agreement with a closely held Florida corporation for the
      design, construction and operation of a metal recycling operation in West
      Virginia, to be known as ECOS Briquetting, Incorporated. American Remedial
      will provide the construction capital (not to exceed $2.2 million) and the
      other partner will provide the raw materials to be recycled and will be
      responsible for the sales and marketing for the material.

      The joint venture agreement provides for among other terms for (i) profits
      and losses, as defined, to be allocated 50% between the two partners; (ii)
      losses shall accrue to the account of American Remedial and in
      consideration for this arrangement, the other joint venture partner agreed
      to split the commission on it's marketing of materials; (iii) 20% of
      distributions from the venture on a pro-rata basis for recovery of each
      partners initial contributions and; (iv) formation of a four person
      committee consisting of two representatives from each partner, with the
      responsibility of managing the business and affairs of the new venture.

      The Company's principal officer and majority shareholder is the
      brother-in-law of one of the principal owners of the other joint venture
      partners. As of October 11, 1996, the operations of this new venture were
      still in the design, development and financing status.

                                    12 of 22

<PAGE>

                                  ECOS GROUP, INC.

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                     (UNAUDITED)

10. GOING CONCERN

      The accompanying consolidated financial statements have been prepared
      assuming that the Company will continue as a going concern. The Company
      has suffered significant net losses for the years ended March 31, 1996 and
      1995 and, at March 31, 1996 and September 30, 1996, its current
      liabilities exceeded its current assets. These conditions raise
      substantial doubt about the Company's ability to continue as a going
      concern.

      Management has taken measures to address the Company's going concern
      issue. As discussed above, subsequent to March 31, 1996, management sold
      the operating assets of the Cable Products Division, executed a
      Composition Agreement with certain of its trade creditors and settled its
      delinquent payroll tax matter with the IRS. In addition, management
      completed a regulation S stock offering on July 8, 1996 and secured a bank
      loan in August 1996. A substantial portion of the net proceeds from the
      stock offering were used by the Company to acquire all of the outstanding
      stock of American Remedial and repay the outstanding balance of the
      Strategica Capital Corporation line of credit. The acquisition of American
      Remedial will involve the Company in thermal remediation, a natural
      outgrowth of its current environmental consulting and remediation
      activities. Management is also continuing to evaluate the need for future
      cost savings measures.

      In the absence of obtaining profitable operations or obtaining additional
      debt or equity financing the Company may not have sufficient funds to
      continue operations in 1997.

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                                  ECOS GROUP, INC.

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

   SIGNIFICANT CHANGES IN MANAGEMENT

      Beginning in July 1996, the Company began a renewed process of
      reorganization, restructuring and changing its direction. A significant
      part of these changes was the appointment of a new President and Chief
      Executive Officer, Mr. Enrique A. Tomeu, as a condition of the acquisition
      of American Remedial Technologies, Inc. ("American Remedial"). Mr. Tomeu
      replaced Mr. John C. Reynolds, who guided the Company from April 1995
      until July 1996 as Interim President. Mr. Tomeu has implemented an agenda
      for changes in management, operations, and corporate structure. Since
      coming on board, changes in management have included the appointment of a
      new Chief Financial Officer, two new Vice Presidents of Operations for the
      west and east coast divisions, and a Director of the Company's
      Environmental Consulting Division.

      During the quarter ended September 30, 1996, there have been significant
      changes in operations including: (i) directing the Company into
      remediation and resource recovery; (ii) restructuring its existing
      environmental consulting division; and (iii) reducing corporate overhead.
      On July 8, 1996, the Company purchased American Remedial Technologies,
      Inc. ("American Remedial"), which launched its efforts in the remediation
      and resource recovery arenas. Subsequent to this purchase, American
      Remedial has announced the formation of a joint venture with a private
      company in the recovery and beneficial re-use of steel making by-products
      and announced the development of a system for the treatment of bio-solids
      at its existing thermal remediation facility in Los Angeles, California.

      The environmental division has been restructured through closing
      non-profitable offices and labor reductions in order to improve and
      generate a consistently profitable operation. In September 1996, the
      environmental division announced the commencement of a major project in
      the clean-up and remediation of damage associated with Hurricane "Fran" in
      North Carolina. During the quarter ended September 1996, these changes
      showed a demonstrable improvement in the environmental division's
      profitability.

      In connection with the operational changes discussed above, the Company
      began an aggressive program in the change of the corporate structure aimed
      at reduction of corporate overhead. The reduction of corporate overhead is
      based on management's view that the Company's existing operating
      subsidiaries could not generate sufficient, sustained, operating profits
      to cover the corporate overhead. Management believes that the reductions
      made to date are an important component of the Company's efforts to return
      to profitability with its current operating capacities, although further
      changes may be made as the Company moves out of this restructuring mode,
      which is expected to be concluded by the end of Fiscal 1997.

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                                  ECOS GROUP, INC.

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

   RESULTS OF OPERATIONS

      During the fiscal year ended March 31, 1996 ("Fiscal 96"), the Company
      incurred a net loss of $2,051,365. These losses from operations which
      began in prior years and continued through most of the first and second
      quarter of Fiscal 1997, are attributable to the Company's lack of
      sustained revenue growth, inability to balance associated labor costs and
      other operational costs. The Company took certain significant cost savings
      actions during Fiscal 96 and continues to do so, including significant
      labor reductions, restructuring of underperforming offices, closing of
      unprofitable offices, reductions of corporate overhead and other cost
      saving measures. Although these cost saving measures have not returned the
      Company to profitability, management believes that the Company can return
      to sustained and profitable revenue growth, although no assurances can be
      given. Management will continue to evaluate any additional cost savings
      measures and focus on new marketing efforts to increase revenues from its
      existing offices.

      On April 3, 1996, the Company sold all the operating assets and ceased
      operations of ABC Cable Products, Inc. ("Cable Products Division"), a
      wholly-owned subsidiary, for an aggregate of $550,000 in cash and a
      promissory note in the amount of $1,000,000. In addition, the purchaser
      assumed certain liabilities of ABC aggregating $595,049. From this sale
      the Company recorded a net gain of $509,036.

      In connection with the Company's focus to increase its revenue base, it
      broadened its service base with the July 1996 acquisition of American
      Remedial Technologies, Inc. ("American Remedial"). American Remedial (the
      "Remediation Division") operates a multiple technology soil recycling
      operation located in Lynwood, California, which is designed to treat
      non-hazardous petroleum hydrocarbon contaminated soil.

      QUARTER ENDED SEPTEMBER 30, 1996 COMPARED TO QUARTER ENDED SEPTEMBER 30,
      1995

      Revenues for the quarter ended September 30, 1996 (the "96 Quarter") were
      $2,191,036, up 49 percent from $1,474,739 in the second quarter of 1995
      (the "95 Quarter"). This increase in revenue of approximately $716,000 is
      primarily attributed to the addition of soil remediation revenues of
      $929,000 from the Company's new subsidiary acquisition in July 1996,
      American Remedial. Revenues for the Consulting Division declined 14
      percent ($212,000) from the corresponding quarter of the prior year
      predominantly caused by the closing of the New York office in Fiscal 96
      and the loss of certain contracts and recurring work from certain
      municipal and government customers.

      Direct costs of environmental services were $705,975, a 28 percent
      increase from $549,365 of the corresponding 95 Quarter. This increase in
      direct cost resulted from the loss of the aforementioned contracts not
      renewed in Fiscal 97, which contracts required less utilization of
      subcontracting cost combined with the additional cost incurred in the
      hiring of new senior professionals for the purpose

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<PAGE>

                                  ECOS GROUP, INC.

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

      of generating new business. Cost of soil remediation of $910,292 was 98
      percent of soil revenues, a substantially high cost of operation caused
      primarily from several periods of abnormal thermal plant shutdowns during
      the quarter for major repairs and maintenance. Modifications and
      improvements have been made to the thermal plant to avoid further
      shutdowns.

      Total gross margin was 26 and 63 percent for the 96 and 95 quarter,
      respectively, a decrease of 38 percent due primarily from the abnormal
      high cost of operations of the Remediation Division and loss of recurring
      consulting revenues from the Consulting Division. Additionally, the soil
      remediation market served by American Remedial continues to be highly
      competitive causing a suppressed average selling price and accordingly,
      lower amounts of revenue.

      General, administrative and other costs were $1,104,155, a 2 percent
      increase from $1,085,061 of the corresponding prior quarter. This modest
      increase is primarily related to the addition of the Remediation Division.

      Loss from continuing operations of $535,676 in the 96 Quarter was a
      $329,485 increase over the $206,191 loss in the 95 Quarter. This loss, for
      the 96 Quarter, results primarily from the approximate operating loss of
      $248,000 from the Remediation Division, corporate expenses of $453,000 and
      offset by a profit from the Consulting Division of $164,000, which is the
      result of new management's restructuring efforts. The 95 Quarter loss of
      $206,191 consisted of a Consulting Division loss of $106,000 and corporate
      expenses of $100,000.

      Net loss for the 96 Quarter was $535,676 compared to a loss of $69,263 for
      the 95 Quarter.

      SIX MONTHS ENDED SEPTEMBER 30, 1996 AND SEPTEMBER 20, 1995

      For the six months ended September 30, 1996 (the "96 Period"), the Company
      reported revenues of $3,456,081, up 6 percent from $3,265,550 in the
      comparable period last year (the "95 Period"). This increase in revenue
      resulted primarily from the new acquisition of the Remediation Division
      ($928,546), offset by a 23 percent decline in revenues from the Company's
      Consulting Division from $3,265,550 in the 95 Period compared to
      $2,527,535 in the 96 Period. The decline in revenues for the Consulting
      Division were primarily from the closing of its New York Office and loss
      of certain contracts and recurring work from certain municipal and
      governmental customers.

                                    16 of 22

<PAGE>

                                  ECOS GROUP, INC.

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

      The Company's total direct cost and expenses were 69 percent and 47
      percent for the 96 and 95 Periods, respectively, as a percentage of total
      revenues, representing a 55 percent increase in costs caused substantially
      from the addition of cost of soil remediation. Direct cost for the
      Environmental Division as a percentage of total consulting revenues was 59
      and 47 percent for the 96 and 95 Periods, respectively, an increase of 12
      percent. This increase in cost results from the loss of more profitable
      contracts and new senior professionals hired to generate new business.

      Gross margin as a percentage of revenue was 31 percent of the 96 Period
      compared to 53 percent for the corresponding 95 Period. This decrease in
      gross margin of 38 percent was due mainly to the high cost of operations
      of the Remediation Division and underutilization of direct personnel cost
      from the Consulting Division because of reduced business.

      General, administrative and other operating cost were $2,160,551 for the
      96 period, a decrease of $81,503 or 4 percent from the 95 Period. The
      decrease is primarily related to 95 Period costs which included
      approximately $150,000 of expenses for the New York Office which was
      closed during Fiscal 96 and the realignment and termination of certain
      personnel and reduction of office costs in the 96 Period. In the first
      quarter of Fiscal 97 the Company recorded a restructuring charge of
      $350,000 in anticipation of additional costs associated with an overall
      reorganization and implementation of a new management structure. As of
      September 30, 1996, approximately $185,000 of the provision for
      restructure remains for the execution of managements' plans.

      The operating loss of the 96 Period was $1,133,676, an increase in the
      operating loss of $520,757 from the 95 Period. The operating loss was
      comprised of a Remedial Division loss of $247,203, a Consulting Division
      profit of $4,214 and corporate expenses of $882,259.

      The 96 Period also includes several non-occurring operating transactions
      and extraordinary items totaling a net gain of approximately $865,000. One
      of these non-recurring transactions was a charge to earnings of $350,000
      for the Company's restructuring plans initiated in the First Quarter ended
      June 30, 1996 for the streamlining of operations and administrative
      functions and integration with American Remedial. During the 96 Period the
      Company reached a settlement with certain of its trade creditors who
      accepted a payout of $.20 for each $1.00 of their allowed claim. This
      settlement resulted in a net gain of $280,981 for the Company. In
      addition, on June 28, 1996, the Consulting Division completed an Offer in
      Compromise Agreement with the IRS settling all outstanding issues and
      disputes related to delinquent payroll taxes. As a direct result of this
      settlement, the Company reported a net gain of $934,091, net of
      professional fees and costs.

      In the 95 Period, the Company paid a $151,766 finder's fee in connection
      with the unsuccessful Regulation S offering and accordingly, the Company
      expensed the full amount of the finder's fee.

      The net income of $590,432 for the 96 period is approximately $980,000 or
      251% improvement over the $390,491 loss for the 95 period, due primarily
      to the extraordinary items discussed above.

                                    17 of 22

<PAGE>

                                  ECOS GROUP, INC.

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

   LIQUIDITY AND CAPITAL RESOURCES

      The Company has operated with a working capital deficiency during a
      majority of the periods presented in the accompanying financial
      statements. For the six month period ended September 30, 1996, the
      Company's primary source of liquidity was generated from cash provided
      from investing and financing activities. This included proceeds from the
      sale and its Cable Products Division, issuance of new equity, exercise of
      warrants and bank borrowing.

      The Company's working capital ratio increased to .76 at September 30, 1996
      from .54 at March 31, 1996. As of September 30, 1996, the Company had a
      working capital deficit of $799,840, representing a reduction of
      approximately $1,400,000 from the September 30, 1995 working capital
      deficit of $2,206,090. The decrease in the working capital deficit is
      primarily attributable to the sale of its Cable Products Division, the IRS
      settlement and payoff of the Strategica Capital Corporation ("Strategica")
      line of credit.

      On July 8, 1996 the Company completed a Regulation S stock offering. The
      offering involved the sale of 9,000,000 shares of Common Stock at an
      offering price of $.90 per share generating gross proceeds to the Company
      of $8,100,000. The offshore placement agent handling the offering entered
      into an agency agreement which provided for a cash management and selling
      fee aggregating $607,500, or 7.5% of the gross proceeds and broker
      warrants to purchase 630,000 shares of Common Stock, exercisable at $1.00
      per share until July 8, 1998. Net cash proceeds to the Company in
      connection with this offering were approximately $7,294,500, net of broker
      fees and offering cost, of which a substantial portion was used for the
      ART acquisition and reduction of outstanding debt.

      On July 8, 1996, the Company acquired all the outstanding stock of
      American Remedial Technologies, Inc. ("American Remedial"). American
      Remedial operates a soil remediation facility in Lynwood, California. This
      facility is the only currently licensed fixed base facility for thermal
      soil remediation in Los Angeles County, California. The acquisition of
      American Remedial will involve the Company in thermal remediation, a
      natural outgrowth of its current environmental consulting and remediation
      activities. The purchase price of American Remedial consisted of a cash
      payment of $6,000,000, the issuance of 3,000,000 shares of unregistered
      Common Stock and the issuance of 1,000,000 shares of Series B Preferred
      Stock. The Series B Preferred Stock is convertible, commencing after March
      31, 1997, subject to an earn-out formula, up to a maximum of 10,000,000
      shares of Common Stock.

      In July 1994 the Company established a $2,500,000 subordinated line
      of credit with Strategica. This line of credit bore interest at 15% and
      was secured by a first lien on all the assets of the Company, including
      its subsidiaries. At March 31, 1996, the

                                    18 of 22

<PAGE>

                                  ECOS GROUP, INC.

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

      Company was not in compliance with certain of the covenants of the
      Strategica line of credit. The covenants contained provisions regarding
      certain operating ratios, solvency ratios, material adverse changes and
      other matters. On July 12, 1996, the Company repaid the outstanding loan
      balance under the Strategica line of credit of approximately $1,400,000.

      In April 1996, ABC Cable Products, Inc., a wholly-owned subsidiary, ceased
      operations and disposed of all of its operating assets for an aggregate of
      $1,500,000 in cash and a promissory note and the assumption by the buyer
      of $595,049 of ABC's liability. ABC received, at closing, $550,000 cash
      and a promissory note in the amount of $1,000,000. The note, which is
      fully collateralized by certain irrevocable letters of credit, has payment
      dates of July 1, 1996 ($500,000), March 5, 1997 ($250,000) and September
      5, 1997 ($250,000). The July 1, 1996 payment was received on time and was
      used to reduce the then outstanding balance of the Strategica line of
      credit.

      In April 1996, the Company executed a Composition Agreement with certain
      of its trade creditors. The Company, due to its limited cash flow
      situation, began negotiating with these creditors in September 1995.
      Negotiations were finalized in April 1996, with over 75% of the creditors
      accepting a pay out of $.20 for each $1.00 of their allowed claim. The
      payout was made in April 1996 from funds that the Company had previously
      put into escrow. In April 1996, the Company recorded a benefit, net of
      expenses, of approximately $281,000 related to these completed vendor
      settlements.

      In October 1996, the Company's subsidiary, American Remedial, entered into
      a joint venture agreement with a closely held Florida corporation for the
      design, construction and operation of a metal recycling operation in West
      Virginia. American Remedial is expected to provide the construction
      capital not to exceed $2,200,000. As of October 11, 1996, the operations
      of this new venture are still in the design, development and financing
      stages.

      American Remedial is in the process of expanding its Lynwood facility to
      treat and recycle bio-solids generated from local water treatment plants
      and produce a fertilizer by-product for resale. This expansion will
      require equipment modifications at its existing Lynwood Thermal Plant,
      which have been estimated to cost approximately $500,000. The equipment
      has been ordered for estimated installation in December 1997 and is
      expected to be financed under an operating lease structure.

      From time to time over the last 15 months, the Company has been involved
      in discussions with a private lender to the Company. The purpose of these
      discussions has been to settle all outstanding differences between the
      former lender and the Company regarding a variety of matters, including,
      without limitation, the exercise price of the former lender's outstanding
      warrants, amounts claimed to be owed to the former lender for legal fees,
      shares claimed to be owned to the former lender for the loan of funds and
      services rendered, and claimed rights to additional shares

                                    19 of 22

<PAGE>

                                  ECOS GROUP, INC.

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

      of the Company's stock. Although all cash amounts owed to the former
      lender for principal and interest were paid in full in July 1996, the
      former lender has continued to make further demands on the Company.
      Although the Company has rejected the validity of all such claims it has
      agreed to reach an accommodation with the former lender on some of these
      claims solely for the purpose of reaching a definitive settlement of all
      outstanding differences. To date the former lender has not agreed to any
      settlement. The Company is unable to foresee the ultimate outcome of this
      matter.

      Although working capital for the six months period showed an improvement,
      because of the continued losses and its interest burden, the Company could
      continue to experience a cash shortage that, if not remedied, could
      adversely affect the Company's operations. The Company's proposed plans
      for expansion, as discussed above, could also be delayed. The Company is
      presently seeking various methods of raising sources of capital, either
      through a private equity placement or debt arrangement to fund its current
      operations and plans for expansion. No assurance can be given that such
      capital or debt raising will be available or on terms acceptable to the
      Company. The Company is continuing its restructuring plans for cost
      savings, which have involved the relocation of its corporate offices,
      reduction of line personnel, closing of underperforming offices and
      continued negotiations of rental obligations. The Company presently has no
      arrangements in place for alternative sources of financing, except for the
      $500,000 revolving bank loan, which has been fully utilized.

                                    20 of 22

<PAGE>

PART II.  Other information

   Item 6.         Exhibits and Reports on Form 8-K

          (a)(i)   Audited financial statements of American Remedial
                   Technologies, Inc. for the Fiscal periods ended March 31,
                   1996 and 1995 incorporated by reference as filed with Form
                   10-QSB/A for the quarterly period ended June 30, 1996.

          (a)(ii)  Corporate Relations Agreement dated August 13, 1996 between
                   the Company and Corporate Relations Group, Inc. incorporated
                   by reference as filed under exhibit No. 10.2 of Registration
                   Statement on Form S-3 dated October 9, 1996.

          (a)(iii) Joint Venture agreement dated October 10, 1996 between
                   American Remedial Technologies, Inc. and Marbi, Inc.

          (a)(iv)  The Company's 1996 Stock Option Plan incorporated by
                   reference as filed under Exhibit 10.3 of Registration
                   Statement on Form S-3 dated October 9, 1996.
  
          (b)(i)   Form 8-K dated April 17, 1996 incorporated by reference,
                   reporting the sale and disposal of substantially all
                   operating assets of ABC Cable Products, Inc. a wholly owned
                   subsidiary, on April 3, 1996.

          (b)(ii)  Form 8-K dated July 22, 1996 incorporated by reference,
                   reporting the acquisition of all the outstanding stock of
                   American Remedial Technologies, Inc. on July 8, 1996. The
                   unaudited financial and Pro Forma financial information of
                   the acquisition were filed with Form 10QSB/A for the
                   quarterly period ended June 30, 1996.

                                    21 of 22

<PAGE>

                                     SIGNATURES

   In accordance with the requirements of the Exchange Act, the Registrant
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                       EVANS  ENVIRONMENTAL
                                       CORPORATION

November 12, 1996                      By: /s/ DAVID C. LANGLE
                                           -------------------
                                       David C. Langle
                                       Chief Financial Officer
                                       on behalf of the Registrant and as
                                       Principal Accounting Officer

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