<PAGE>

                      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 JUNE 30, 2000

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transaction period from ________________ to __________________

                          Commission File No. 0-28117

                                 Eco-Rx, Inc.
                                 ------------

       (Exact name of Small Business Issuer as Specified in its charter)


      Florida                                                 65-0569329
      -------                                                 ----------

  (State or other jurisdiction or               (IRS employer Identification No)
             organization)


                           2051 Northeast 191 Drive
                          North Miami Beach, FL 33179
                          ---------------------------
                   (Address of Principal Executive Offices)

                                (305) 937 1862
                                ---------------

                        (Registrant's Telephone Number)

                                Not applicable
                                --------------
   (Former name, former address and former fiscal year, if changed since last
                                    report)

Check whether the issuer (1) 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___
                                                               ---

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.

Common Stock,$0.001 par value            At August 1, 2000         5,842,939
Preferred Stock, $0.001 par value        At August 1, 2000         None

Transitional Small Business Disclosure Format: Yes [_]  No [x]

<PAGE>

PART I.    FINANCIAL INFORMATION

Item 1.    Consolidated Financial Statements

                                       2
<PAGE>

ECO-RX, INC. F/K/A ECO-AIRE COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2000 AND 1999
(UNAUDITED)
===============================================================================

<TABLE>
<CAPTION>
                                                                   June 30,
                                                            2000            1999
                                                            ----            ----
<S>                                                    <C>            <C>
 CURRENT ASSETS
  Cash                                                  $       767   $     2,532
  Inventory                                                       -         5,307
                                                        -----------   -----------

      TOTAL CURRENT ASSETS                                      767         7,839

FURNITURE AND EQUIPMENT, NET                                 10,784         9,385

OTHER ASSETS                                                 13,687         2,755
                                                        -----------   -----------
       TOTAL ASSETS                                     $    25,238   $    19,979
                                                        ===========   ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
 Current portion of lease obligation                    $    13,888   $    10,416
 Accounts payable and accrued expenses                      389,226       204,262
 Notes payable to stockholders                              506,600       350,000
                                                        -----------   -----------

      TOTAL CURRENT LIABILITIES                             909,714       564,678

LEASE OBLIGATION                                              6,090        18,958
                                                        -----------   -----------
       TOTAL LIABILITIES                                    915,804       583,636
                                                        -----------   -----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT
 Preferred stock - $.001 par value, 5,000,000 shares
  authorized; none issued and outstanding
 Common stock - $.001 par value, 10,000,000 shares
  authorized; 5,842,939 shares issued
  and outstanding                                             5,843         5,836
 Additional paid-in capital                               1,247,376     1,217,334
 Deficit accumulated during the development stage        (2,143,785)   (1,786,827)
                                                        -----------   -----------
      TOTAL STOCKHOLDERS' DEFICIT                          (890,566)     (563,657)
                                                        -----------   -----------

      TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT       $    25,238   $    19,979
                                                        ===========   ===========
 </TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

                                       3
<PAGE>

ECO-RX, INC. F/K/A ECO-AIRE COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
JUNE 30, 2000 AND 1999
================================================================================
(UNAUDITED)

<TABLE>
<CAPTION>
                                                                                             For the Period
                                                                                            February 27, 199
                                                                                                (Inception)
                                                 Quarter Ended        Quarter Ended             thru June
                                                    June 30,             June 30,                30, 2000
                                                     2000                 1999                 (Unaudited)
                                                --------------        ------------            ------------
<S>                                             <C>                   <C>                   <C>
REVENUES                                        $           -         $         -             $         -
                                                -------------         -----------             -----------
COSTS AND EXPENSES
   General and administrative                         166,100              56,246               1,521,698
   Depreciation and amortization                        4,160               4,542                  59,374
   Interest                                            38,349              20,581                 166,271
   Research and development                             3,855               4,441                  68,710
   Abandonment of property                                  -                   -                 384,917
                                                -------------         -----------             -----------

    TOTAL EXPENSES                                   (212,464)            (85,810)             (2,200,970)

INTEREST INCOME                                             -                   -                   8,227

OTHER INCOME                                                -                                      50,000
                                                -------------         -----------             -----------
LOSS BEFORE CUMULATIVE EFFECT OF
 CHANGE IN ACCOUNTING PRINCIPLE                      (212,464)            (85,810)             (2,142,743)

CUMULATIVE EFFECT OF CHANGE IN
 ACCOUNTING PRINCIPLE                                       -                   -                  (1,042)
                                                -------------         -----------             -----------

      NET LOSS                                  $    (212,464)        $   (85,810)            $(2,143,785)
                                                =============         ===========             ===========

BASIC AND DILUTED NET LOSS PER
SHARE OF COMMON STOCK:

 Loss before cumulative effect of change in
  accounting principle                          $        (.04)        $      (.01)            $      (,37)

 Cumulative effect of change in accounting
  principle                                                 -                   -                       -
                                                -------------         -----------             -----------

BASIC AND DILUTED NET LOSS PER SHARE            $       (0.04)        $     (0.01)            $     (0.37)
                                                =============         ===========             ===========

SHARES USED IN THE CALCULATION
OF BASIC AND DILUTED NET LOSS PER SHARE             5,842,939           5,836,439               5,842,939
                                                =============         ===========             ===========
</TABLE>

 The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       4
<PAGE>

ECO-RX, INC. F/K/A ECO-AIRE COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
JUNE 30, 2000 AND 1999
(UNAUDITED)
================================================================================

<TABLE>
<CAPTION>
                                                                               Accumulated
                                                                       Additional           During the
                                               Common Stock              paid-in            Development
                                            -------------------
                                            Shares       Par Value       Capital               Stage             Total
                                         ------------   -------------  -----------        -------------     -------------
<S>                                        <C>       <C>               <C>                  <C>               <C>
Balances at February 27, 1995
(inception) (unaudited)                           -      $       -       $        -         $         -       $        -

Common stock issued for cash
 (unaudited)                              3,700,497          3,700           89,015                   -           92,715
                                         ----------     ----------     ------------         -----------       ----------

Balances at December 31, 1995
 (unaudited)                              3,700,497          3,700           89,015                   -           92,715

Common stock issued for cash
 (unaudited)                                 94,228             94           59,906                   -           60,000

Net loss (unaudited)                              -              -                -            (168,096)        (168,096)
                                         ----------     ----------     ------------         -----------       ----------

Balances at December 31, 1996
 (unaudited)                              3,794,725          3,794          148,921            (168,096)         (15,381)

Common stock issued for cash                946,727            947          758,803                   -          759,750

Less:  Cost of services related
To registration                                                             (60,595)                             (60,595)

Common stock issued in
 connection with loan payable                10,000             10              (10)                  -                -

Net loss                                          -              -                -            (801,109)        (801,109)
                                         ----------     ----------     ------------         -----------       ----------

Balances at December 31,
1997                                      4,751,452          4,751          847,119            (969,205)        (117,335)
</TABLE>

                                       5
<PAGE>

ECO-RX, INC. F/K/A ECO-AIRE COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (CONTINUED)
JUNE 30, 2000 AND 1999
(UNAUDITED)
================================================================================

<TABLE>
<CAPTION>
                                                                                                 Deficit

                                                Common Stock                                   Accumulated
                                             -----------------
                                                                        Additional              During the
                                                                          paid-in               Development
                                            Shares        Par Value       Capital                  Stage               Total
                                            ------        ---------     -----------             -----------            -----
<S>                                       <C>             <C>           <C>                    <C>                  <C>
Common stock issued for cash
 and stock subscription
 receivable                                 112,000             112            213,888                    -            214,000

Conversion of loan payable to
 common stock                                75,000              75            149,925                    -            150,000

Common stock issued
 for services                               897,987             898             85,632                    -             86,530

    Less: Cost of services (paid
     with common stock
     above) related to issuing
     common stock                                 -               -            (70,480)                   -            (70,480)

Net loss                                          -               -                  -             (731,814)          (731,814)
                                          ---------       ---------     --------------         ------------         ----------

Balances at December 31, 1998             5,836,439           5,836          1,226,084           (1,701,019)          (469,099)

Common stock issued for cash                  6,500               7             32,493                                  32,500

Less: Cost of services related
to registration                                                                (11,201)                                (11,201)

Net Loss                                          -               -                  -             (230,302)          (230,302)
                                          ---------       ---------     --------------         ------------         ----------

Balances at December 31, 1999             5,842,939       $   5,843     $    1,247,376         $ (1,931,321)        $ (678,102)

Net Loss for the Six Month
Period ending June 30, 2000                       -               -                  -             (212,464)          (212,464)
                                          ---------       ---------     --------------         ------------         ----------

Balances at June 30, 2000                 5,842,939       $   5,843     $    1,247,376         $ (2,143,785)        $ (890,566)
                                          ---------       ---------     --------------         ------------         ----------
</TABLE>

                                       6
<PAGE>

ECO-RX, INC. F/K/A ECO-AIRE COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
JUNE 30, 2000 AND 1999
(UNAUDITED)
================================================================================

<TABLE>
<CAPTION>
                                                                                For the Period
                                                                               February 27, 1995
                                                                                  (Inception)
                                                  Six Months   Six Months            thru
                                                     Ended        Ended            June 30,
                                                    June 30,    June 30,             2000
                                                      2000        1999            (Unaudited)
                                                   ---------    ---------         -----------
<S>                                                <C>          <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

 Net loss                                          $(212,464)   $ (85,810)        $(2,143,785)
                                                   ---------    ---------         -----------
 Adjustments to reconcile net loss to net cash
  used in operating activities:
  Depreciation and amortization                        4,160        4,542              59,374
  Abandonment of property                                  -            -             384,917
  Adjustment to inventory for impairment                                               35,384
  Services received in exchange for stock                  -                           16,050
  Consulting fee paid by reclassifying
   advances to stockholders                                -                          205,587
  Cumulative effect of change in
   accounting principle                                    -                            1,042
  Changes in operating assets and liabilities:
   Inventory                                               -            -            (120,791)
   Advances to stockholders                                -            -            (205,587)
   Other assets                                      (10,912)                         (88,490)
   Accounts payable and accrued expenses             114,759      (29,670)            389,226
                                                   ---------    ---------         -----------

      TOTAL ADJUSTMENTS                              108,007      (25,128)            676,712
                                                   ---------    ---------         -----------

      NET CASH USED IN OPERATING
      ACTIVITIES                                    (104,457)    (110,938)         (1,467,073)
                                                   ---------    ---------         -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Proceeds from sale of fixed assets                        -                           16,000
 Capital expenditures                                 (6,169)      (3,617)           (259,799)
                                                   ---------    ---------         -----------

      NET CASH PROVIDED BY (USED IN)
      INVESTING ACTIVITIES                            (6,169)      (3,617)           (243,799)
                                                   ---------    ---------         -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from stockholder loans                     139,300      110,000             723,400
 Proceeds from issuance of common stock                             6,292           1,098,370
 Expense related to registration                                        -             (11,201)
 Repayment of stockholder loan                       (50,000)           -             (66,800)
 Payment of lease obligation                          (4,648)      (3,617)            (32,110)
                                                   ---------    ---------         -----------

      NET CASH PROVIDED BY
       FINANCING ACTIVITIES                           84,652      116,251           1,711,659
                                                   ---------    ---------         -----------
 </TABLE>

                                       7
<PAGE>

ECO-RX, INC. F/K/A ECO-AIRE COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
JUNE 30, 2000 AND 1999
(UNAUDITED)

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

                                                                       For the Period
                                                                      February 27, 1995
                                                                         (Inception)
                                              Six Months  Six Months       through
                                                Ended       Ended         June 30,
                                               June 30,    June 30,         2000
                                                 2000        1999        (Unaudited)
                                              ----------  ----------    -------------
<S>                                           <C>         <C>           <C>
NET INCREASE (DECREASE) IN CASH                   25,974       1,696              767

CASH AT BEGINNING OF YEAR                         26,761         836                -
                                              ----------  ----------    -------------

CASH AT END OF PERIOD                            $   767      $2,532         $    767
                                              ==========  ==========    =============

SUPPLEMENTAL DISCLOSURE OF
 CASH FLOW INFORMATION:

 Cash paid for interest                          $23,404      $    -         $ 56,994
                                              ==========  ==========    =============

 Cash paid for income taxes                      $     -      $    -         $      -
                                              ==========  ==========    =============

SUPPLEMENTAL SCHEDULE OF NON-CASH
 INVESTING AND FINANCING ACTIVITIES:

 Leased equipment                                $     -      $    -         $ 52,088
                                              ==========  ==========    =============

 75,000 shares of common stock issued in
 exchange for settlement of outstanding
 note to a stockholder                           $     -      $    -         $150,000
                                              ==========  ==========    =============

 897,987 shares of common stock issued
 in exchange for services received (net of
 $70,480 charged to additional-paid-in
 capital as expenses of placing common
 stock)                                          $     -      $    -         $ 16,050
                                              ==========  ==========    =============
</TABLE>

                                       8
<PAGE>

ECO-RX, INC. F/K/A ECO-AIRE COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)


NOTE 1 -  NATURE OF BUSINESS

          ECO-Rx, Inc. f/k/a Eco-Aire Company, Inc. has been in the development
          stage since its incorporation in the State of Florida on February 27,
          1995. The Company's mission is to pioneer the technology, design and
          manufacturing of air purification equipment for the destruction of
          pathogens and for the efficient and effective removal of odors,
          allergy and asthma causing agents, pollutants and certain gases from
          indoor air environments.

          The consolidated financial statements include the accounts of ECO-Rx,
          Inc. f/k/a Eco-Aire Company, Inc. and its wholly owned subsidiary,
          Eco-Aire Marketing, Inc., collectively referred to as the "Company".
          Eco-Aire Marketing, Inc. is inactive and ECO-Rx, Inc. f/k/a Eco-Aire
          Company, Inc.'s investment in said company has been eliminated in
          consolidation.

NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          (A)  INVENTORIES

               Inventories are stated at the lower of cost (first-in, first-out)
               or market and consist primarily of metal, bulbs, ballasts,
               machines in process and miscellaneous supplies. In the third
               quarter of 1999, the Company wrote off $5,307 of items previously
               included in inventory, as they believed that these items may not
               have any value in future operations.

          (B)  FURNITURE AND EQUIPMENT

               The Company's furniture and equipment is stated at cost.
               Depreciation is computed on the straight line method over the
               estimated useful lives of the assets, which range from 3 to 5
               years.

          (C)  ASSET IMPAIRMENT

               Assets are considered impaired when, based upon current
               information and events, it is probable that the Company will not
               realize an economic benefit on the recorded assets. Impairment is
               measured on an asset specific basis based upon the fair value of
               the assets or the discounted expected future cash flows. During
               1998, the Company wrote-off approximately $40,000 due to
               impairment, relating to patents and prepaid royalties.

                                       9
<PAGE>

ECO-RX, INC. F/K/A ECO-AIRE COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)


NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

          (D)  ORGANIZATIONAL COSTS

               Organizational costs have been expensed in accordance with
               Statement of Position 98-5, "Reporting on the Costs of Start-up
               Activities" ("SOP 98-5"). SOP 98-5 provides guidance on the
               financial reporting of start-up costs and organization costs. It
               requires costs of start-up activities and organization costs to
               be expensed as incurred. During 1998, the Company expensed $1,042
               of organization costs, as a result of SOP 98-5, which is
               reflected as a cumulative effect of change in accounting
               principle in the consolidated statement of operations

          (E)  INCOME TAX

               Effective January 1, 1996, the Company, with the consent of its
               stockholders, elected to be treated as an "S" Corporation for
               income tax purposes. Under this election, federal and state
               income taxes are payable by the individual stockholders rather
               than the Company. Accordingly, no provision or liability for
               income taxes had been included in the consolidated financial
               statements through December 31, 1997.

               On September 30, 1998, the Company terminated its election to be
               treated as an S Corporation. The Company now accounts for income
               taxes in accordance with Statement of Financial Accounting
               Standards No. 109, "Accounting for Income Taxes" ("SFAS No.
               109"). SFAS No. 109 requires recognition of deferred tax
               liabilities and assets for the expected future tax consequences
               of events that have been included in the financial statements or
               tax returns. Deferred tax liabilities and assets are determined
               based on temporary differences between the financial statement
               and tax bases of assets and liabilities using enacted tax rates
               in effect for the year in which the differences are expected to
               reverse. The effect on deferred tax liabilities and assets of a
               change in tax rates is recognized in income in the period that
               includes the enactment date.

          (F)  EARNINGS PER SHARE

               Earnings per share is determined in accordance with Statement of
               Financial Accounting Standards No. 128, "Earnings Per Share".
               This statement establishes standards for computing and presenting
               earnings per share ("EPS"). It replaces the presentation of
               primary EPS with a presentation of basic EPS. This statement
               requires restatement of all prior-period EPS data presented.

                                       10
<PAGE>

ECO-RX, INC. F/K/A ECO-AIRE COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)


NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

          The net loss per share is computed by dividing the net loss for the
          period by the weighted average number of shares outstanding (as
          adjusted retroactively for the dilutive effect of common stock
          options) for the period plus the dilutive effect of outstanding common
          stock options and warrants considered to be common stock equivalents.
          Stock options and other common stock equivalents are excluded from the
          calculations as their effect would be anti-dilutive. Common stock
          issued for nominal consideration is deemed outstanding for all
          historical periods.

          Basic and diluted earnings per share amounts are equal because the
          Company has a net loss and consideration of the outstanding options,
          warrants and their equivalents would result in anti-dilutive effects
          to earnings per share.

          The number of shares used to compute EPS was 5,842,939 and 5,836,439
          for the period ended June 30, 2000 and 1999, respectively.

          (G)  USE OF ESTIMATES

               The preparation of financial statements in conformity with
               generally accepted accounting principles requires management to
               make estimates and assumptions that affect the reported amounts
               of assets and liabilities and disclosures of contingent assets
               and liabilities at the date of the financial statements and the
               related reported amounts of revenues and expenses during the
               reporting period. Actual results could differ from those
               estimates made in preparation of the financial statements.

          (H)  CONCENTRATIONS OF CREDIT RISK

               A major portion of the Company's business is expected to be
               conducted using its patented technology. Consequently, the
               Company's profitability may be subjected to changes in technology
               and its use in commerce, as well as, the enforceability of its
               patent.

          (I)  READINESS FOR YEAR 2000

               The Year 2000 issue is the result of computer programs being
               written using two digits rather than four to define the
               applicable year. As a result, those computer programs having
               time-sensitive software would recognize a date using "00" as the
               year 1900 rather than the year 2000. The Company is in its
               development stage and does not have sophisticated computer
               equipment that may cause the Year 2000 issue to adversely affect
               its operations.

                                       11
<PAGE>

ECO-RX, INC. F/K/A ECO-AIRE COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)


NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


          (J)  NEW ACCOUNTING PRONOUNCEMENTS

               The Company has adopted Statement of Financial Accounting
               Standards No. 130, "Reporting Comprehensive Income" ("SFAS No.
               130") effective for the period ending December 31, 1998. SFAS No.
               130 requires companies to report by major components and in
               total, the change of its net assets during the period from non-
               owner sources. The adoption of SFAS No. 130 did not have a
               significant effect on the Company's financial position, results
               of operations, or cash flow, since the Company does not have any
               components of comprehensive income, other than net income/(loss)
               from operations.

               During 1998, the Company adopted Statement of Financial
               Accounting Standards No. 131, "Disclosures about Segments of an
               Enterprise and Related Information" ("SFAS No. 131"). SFAS No.
               131 establishes standards for the way companies report
               information about operating segments in annual financial
               statements and establishes standards for related disclosures
               about products and services, geographic areas and major
               customers. The Company's air purification business is currently
               the only segment reportable under SFAS No. 131.

          (K)  PATENTS

               The Company has applied for several patents in connection with
               its technology. There are no assurances that the patents will be
               granted.

          (L)  OTHER INCOME

               The Company received $50,000 as part of a letter of intent to
               enter into an agreement with a third-party to produce air
               purification machines to be sold by the third-party. The letter
               of intent expired in 90 days, without the consummation of the
               contract. The $50,000 is reflected as other income in the
               cumulative column in the consolidated statement of operations.

NOTE 3 -  DEVELOPMENT STAGE OPERATIONS AND GOING CONCERN

          Since formation, the Company's operations have been devoted primarily
          to:

          .  Raising capital
          .  Developing its product
          .  Obtaining financing
          .  Developing its marketing plan

          Accordingly, the Company is considered to be in the development stage,
          as its planned production and sales have not yet commenced.

                                       12
<PAGE>

ECO-RX, INC. F/K/A ECO-AIRE COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)


NOTE 3 -  DEVELOPMENT STAGE OPERATIONS AND GOING CONCERN (CONTINUED)

          Management's plans include the following:

          .  Commencement of production and development of new products
          .  Implementation of sales and leasing of commercial units
          .  Pursuing licensing agreements for the technology

          The Company has made progress expanding the patent coverage and
          marketing strategy. The Company has adopted a plan to implement
          certain courses of action for raising capital and marketing. The
          Company has also held presentations for major companies to license the
          technology and sell or distribute its products.

          The Company has been in the development stage since its inception on
          February 27, 1995. These statements are presented on the basis that
          the Company will continue as a going concern. This contemplates the
          realization of assets and the satisfaction of liabilities in the
          normal course of business over a reasonable length of time. As shown
          in the accompanying consolidated financial statements, the Company has
          incurred net losses since its inception and no revenues. As of
          December 31, 1999, current liabilities exceeded current assets by
          approximately $678,000.

          These factors, as well as the Company's ability to obtain additional
          long-term financing, adequate stockholder capital contributions,
          future equity funding and achieve and maintain profitable operations,
          raise substantial doubt about the Company's ability to continue as a
          going concern. The consolidated financial statements do not include
          any adjustments that might result from the outcome of these
          uncertainties.


NOTE 4 -  FURNITURE AND EQUIPMENT, NET

          These accounts consist of the following as of June 30, 2000:

          Furniture and equipment                                       $ 43,703
          Less accumulated depreciation                                   32,919
                                                                        --------

                                                                        $ 10,784
                                                                        ========

          Depreciation expense for the six months ended June 30, 2000 and 1999
          was $4,160 and $4,542, respectively.

                                       13
<PAGE>

ECO-RX, INC. F/K/A ECO-AIRE COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)


NOTE 5 -  ACCOUNTS PAYABLE AND ACCRUED EXPENSES

          These accounts consist of the following as of June 30, 2000:

          Accounts payable                                             $ 296,698
          Accrued interest                                                92,528
                                                                       ---------

                                                                       $ 389,226
                                                                       =========

NOTE 6 -  NOTES PAYABLE TO STOCKHOLDERS

          The notes payable to stockholders as of June 30, 2000 is comprised of
          the following:


          Note accruing interest at 10%; all unpaid interest and
          principal became due June, 1998, and is personally
          guaranteed by three of the Company's stockholders. As
          of December 31, 1999 this note was payable on demand
          and was accruing interest at the default rate of 18%.        $ 100,000

          Note accruing interest at 12%; maturing the earlier of:
          (a) the infusing of gross proceeds of $300,000 in
          additional debt or equity capital, (b) the closing of an
          initial public offering or "reverse merger" of the
          Company into a publicly traded entity, or (c) December
          31, 1999. Subsequent to December 31, 1999 the Company
          repaid $50,000 of this note. The balance is due on demand
          and is accruing interest at the default rate of 18%.            50,000

          Unsecured loan, interest accruing at 8.75% payable
          annually commencing December, 1996. Loan matured December,
          1998 at which time all principal and unpaid interest
          was due. As of December 31, 1999 this note was payable
          on demand and was accruing interest at the default rate
          of 18%.                                                         80,000

          Various unsecured loans, interest accruing at 15%, with
          original maturity dates ranging from January, 1999 to
          March, 1999. These notes were renewed and now have
          maturity dates in the year 2000.                               194,300

          Various unsecured loans, interest accruing at 12%, with
          maturities through August 2000.                                 82,300
                                                                       ---------

                                                                       $ 506,600
                                                                       =========

          The Company has committed to issue certain shares of common stock to
          certain lenders. The amounts and ratios of shares are to be
          determined.

                                       14
<PAGE>

ECO-RX, INC. F/K/A ECO-AIRE COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)


NOTE 7 -  COMMITMENTS AND CONTINGENCIES

          GOVERNMENTAL REGULATIONS

          The Company's operations may be subject to supervision and regulation
          by governmental regulatory agencies, which could impact and have a
          material adverse effect on the Company's business, financial condition
          or results of operations.

          LITIGATION

          The Company, from time to time, is a defendant in legal actions
          arising from normal business activities. Management does not believe
          any potential or pending litigation currently exists.

          LEASE OBLIGATION

          In March, 1997, the Company entered into a noncancelable equipment
          lease totaling $52,088. The factory in which this equipment was
          located was abandoned during 1997. The Company, however, could not
          cancel this lease and therefore, continues to make monthly payments.

          Future minimum lease payments under this lease as of June 30, 2000
          consisted of the following:

               Twelve months ending June 30,

                                      2001                  $ 13,888
                                      2002                     6,090
                                                            --------
                                                            $ 19,978
                                                            ========

          Rental expense for all operating leases amounted to approximately
          $4,700 during the first six months of 2000. There was no rental
          expense during 1999.

          In April, 2000, the Company executed a five year lease for space in
          Hollywood, Florida to house the administrative office, product
          assembly and shipping operations. The lease also contains an option to
          renew for an additional five years.

                                       15
<PAGE>

ECO-RX, INC. F/K/A ECO-AIRE COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)


          Future minimum lease payments under this lease consisted of the
          following:

             Twelve months ending June 30,

                         2000                     $  31,038
                         2001                        53,208
                         2002                        54,279
                         2003                        55,863
                         2004                        57,764
                         Thereafter                  24,460
                                                  ---------

                                                  $ 276,612
                                                  =========


          DESIGN AND CONSULTING AGREEMENT

          During 1997, the Company entered into a design and consulting service
          agreement with a third party in which it shall pay a royalty of $1 for
          each unit sold for a period of five years, commencing on the date of
          first sale. The Company will pay the same $1 royalty for an additional
          45 years with respect to sales of the original product made by the
          Company to customers introduced to the Company by this firm.

          FINANCIAL CONSULTING SERVICES AGREEMENT

          During 1999, the Company entered into a financial consulting services
          agreement with a third party in which the third party consultant will
          receive 50,000 shares of the Company's common stock in exchange for
          services. The consultant has not performed the services as of December
          31, 1999 and therefore, the shares have not been issued.

                                       16
<PAGE>

ECO-RX, INC. F/K/A ECO-AIRE COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)


NOTE 8 -  STOCKHOLDERS' DEFICIT

          LOSS PER SHARE

          Loss per share is computed by dividing net loss by the number of
          outstanding shares of common stock. Net loss per share for the periods
          presented does not include the effects of stock options and warrants
          because their effects would be anti-dilutive.

          The following table sets forth the computation of net loss per share:

<TABLE>
<CAPTION>
                                                                                             For the Period
                                                                                              February 27,
                                                                                                  1995
                                                                                               (inception)
                                                             Ended             Ended             through
                                                           June 30,           June 30,          June 30,
                                                             2000               1999              2000
                                                          ----------        -----------       ------------
          <S>                                             <C>               <C>               <C>
          Net loss                                        $ (212,464)       $   (85,810)      $ (2,143,785)
                                                          ==========        ===========       ============

               Weighted average common shares
                outstanding used in computing basic
                net loss per share                         5,842,939          5,838,939          5,842,939
                                                          ==========        ===========       ============

          Net loss per share of common stock              $    (0.04)       $     (0.01)      $      (0.37)
                                                          ==========        ===========       ============
</TABLE>

          During 1997, the Company amended its articles of incorporation and
          changed the capital structure from common stock authorized of 1,000
          shares with a par value of $1, to 10,000,000 shares of common stock
          authorized with a par value of $.001 and authorized preferred stock of
          5,000,000 shares with a par value of $.001. During 1997, the Company
          also effectuated two stock splits, a 2,000 for 1 stock split and a
          3.60266 for 1 stock split, for its common stock. The statement of
          stockholder's deficit reflects the effect of these stock splits and
          change in par value retroactively.

          During 1995, the Company issued 3,700,497 shares of common stock for
          $92,715.

                                       17
<PAGE>

ECO-RX, INC. F/K/A ECO-AIRE COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)


NOTE 8 -  STOCKHOLDERS' DEFICIT (CONTINUED)


          During 1996, the Company issued 94,228 shares of common stock for
          $60,000. An additional 46,727 shares of common stock was issued during
          1997 for $759,750. The Company incurred $60,595 of expenses related to
          this issuance. Also during 1997, 10,000 shares of common stock were
          issued to an individual who loaned money to the Company.

          During 1998, the Company issued 112,000 shares of common stock for a
          stock subscription receivable of $15,000 and $199,000 in cash. Also in
          1998, the Company issued 75,000 shares of common stock in repayment of
          a previously outstanding $150,000 loan.

          During 1998, 897,987 shares of common stock were issued in exchange
          for services provided to the Company. These shares were issued and
          recorded at $86,530, the market value of the services received. This
          amount includes 737,487 shares issued for services related to costs of
          fees for placing the common stock. The market value of the placement
          fees totaled $70,480 and are reflected as a direct reduction of
          additional paid-in capital in the consolidated statements of
          stockholders' deficit.

          During 1999, the Company issued 6,500 shares of common stock for
          $32,500. Costs related to the registration of the Company were charged
          against additional paid-in-capital in the amount of $11,201.

          None of these shares were sold through the National Association of
          Securities Dealers, Inc. (NASD) Broker/Dealers, nor were any
          commissions paid for these shares. None of the shares issued for
          services have been issued for future sales of stock.

NOTE 9 -  FAIR VALUE

     The Company has estimated the fair value of its financial instruments as of
December 31, 1999, as required by Statement of Financial Accounting Standards
No. 107, "Disclosure

                                       18
<PAGE>

ECO-RX, INC. F/K/A ECO-AIRE COMPANY, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)


        about Fair Value of Financial Instruments." The carrying values of cash,
        accounts payable and accrued expenses, lease obligations and debt are
        reasonable estimates of their fair values.

NOTE 10 - INCOME TAXES

          The Company has federal and state net operating loss carryforwards as
          follows:

             Period Ending         Federal       State    Years of Expiration
           --------------------  -----------   ---------  -------------------
           December 31, 1999      $737,845      $737,845       2018-2019
                                  ========      ========       =========
           June 30, 2000          $212,464      $212,464        2020

          The deferred tax asset arises from the net operating loss reflected
          above.

          The Company's total deferred tax liabilities, deferred tax assets and
          deferred tax asset valuation allowances at June 30, 2000 are as
          follows:

          Total Deferred Tax Asset                     $333,290
          Less Valuation Allowance                      333,290
                                                        -------

          Net Deferred Tax Asset                       $     -0-


          The Company provides a 100 percent valuation allowance for any
          deferred tax asset which is attributable to unused net operating loss
          carryforwards. Generally accepted accounting principles require a
          valuation reserve only if it is more likely than not that some portion
          or all of a deferred tax asset will not be realized.

                                       19
<PAGE>

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

The following discussion and analysis should be read in conjunction with the
unaudited Condensed Financial Statements and Notes thereto appearing elsewhere
in this report.


(a)   Eco-Rx's plan of operation for the next twelve months

     .  Complete the process of filing a Form 10-SB with the Securities And
        Exchange Commission.

     .  Complete the design of five air purification units; two room units, as
        well as three for medium and larger rooms, and have them tested at an
        independent laboratory to insure that they meet the Company's
        requirements;

     .  Have the production molds for manufacturing the units designed and
        built;

     .  Commence the work necessary to submit the finished unit for a 510-K
        medical device rating from the Food and Drug Administration;

     .  Ascertain that the Company's patent applications comply with the final
        design criteria;

     .  Finalize the list of suppliers;

     .  Acquire and inventory the component parts that the Company does not
        intend to manufacture;

     .  Design and print sales materials and packaging materials;

     .  Sell and ship finished products;

     .  Fill in product line with additional air purification products;

     .  Begin development and design of new products; and
        Pursue licensing agreements for the Company's technology.



b)    Product Research and Development for the Next 12 Months

     Over the next 12 months, the Company anticipates its product research and
     development will be for (a) air purification products for automobiles and
     trucks and home central air conditioning systems, and (b) water
     purification applications utilizing the technology.

                                       20
<PAGE>

    Expenditures for the Next 12 Months

     The Company anticipates that its cash requirements over the next 12 months
     will total approximately $ 3,500,000, including the cost of production of
     plastic injection molds for the products, the return of loans and the
     payment of the old accounts payable.

(d) The Company will hire a new chief executive officer and a new chief
    financial officer, a secretary/receptionist, and others to supervise the
    assembly of the machines.

                                       21
<PAGE>

                          Part II - OTHER INFORMATION

Item 1. Legal Proceedings.

The Company is not a party to any material pending legal proceedings and, to the
best of its knowledge, no such action by or against the Company has been
threatened.

Item 2. Changes in Securities

None

Item 3. Defaults Upon Senior Securities

The Company is in default on three notes payable. In February 2000, the Company
paid $5,000 in interest to extend two of the notes, one for $100,000 and one for
$80,000. They are now due on demand, accruing interest at the default rate of
18%. The third note for $100,000 was due at the end of 1999. It has been reduced
to $50,000. The note holder has demanded rapid payment.

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

None

Item 5. Other Information

During the quarter ended June 30, 2000, the Company (a) on June 30, 2000 filed a
Form 10-KSB for the year ended December 31, 2000, and will be filing an amended
Form 10-KSB for such period on or about August 18, 2000; and (b) on May 15, 2000
filed a Form 10-QSB for the quarter ended March 31, 2000, and will be filing an
amended Form 10-QSB for such period on or about August 18, 2000.

Item 6. Exhibits and Reports on Form 8-K.

   (a) See the Index to Exhibits on page 24 hereof.

   (b) Reports were filed on Form 8-K on May 5, 2000 and May 10, 2000. The Form
       8-K filed on May 5, 2000 reported the dismissal on May 1, 2000 of
       Morrison, Brown, Argiz & Company as the Company's certifying accountant.
       The form 8-K filed on May 10, 2000 reported the Company's engagement on
       May 3, 2000 of Perez-Abreu, Aguerrebere, Sueiro LLC as the Company's
       principal accountant to audit the Company's financial statements.

                                       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.



                                     ECO-Rx, Inc.
                                     (Registrant)

                                     By: /s/ Joseph M. Peiken
                                         ----------------------------
                                             Joseph M. Peiken
                                             Vice President and Chief Financial
                                             Officer

Date: August 15, 2000

                                       23
<PAGE>

                                   PART III



Item 1.   Index to Exhibits

          Exhibit No.           Description                           Page No.
          -----------           -----------                           --------

          3.1            Articles of Incorporation of Registrant,
                         as originally filed and amended              (1)

          3.2            Bylaws of Registrant                         (1)

          4.1            Form of Common Stock Certificate             (1)

         10.1            Consulting Agreement with Fitch,
                         Inc. dated January 17, 1997                  (1)

         10.2            Office Lease                                 (2)

         16              Copy of Letter dated May 5, 2000
                         from Morrison, Brown, Argiz &
                         Company on change in certifying
                         Accountant                                   (3)

         21.1            Subsidiary of Registrant                     (3)

         23.1            Consent of Perez-Abreu, Aguerrebere,
                         Sueiro LLC                                   (1)

         27              Financial Data Schedule

(1)       Previously filed as an Exhibit to Registrant's Form 10-SB (file 0-
           28117) and incorporated herein by this reference.

(2)       Previously filed as an Exhibit to Registrant's Form 10-KSB for the
           year ended December 31, 1999, and incorporated herein by this
           reference.

(3)       Previously filed as an Exhibit to Registrant's Form 8-K filed by the
           Registrant on May 10, 2000 and incorporated herein by this reference.


Item 2.   Description of Exhibits

           None

                                       24