SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


   
                                   FORM 10-Q/A
                                 Amendment No. 1
    

(Mark one)

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

                  For the quarterly period ended June 30, 1996

                                       OR

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


               For the transition period from ________to________.


                           Commission File No. 0-23900


                             IDM ENVIRONMENTAL CORP.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


           New Jersey                                      22-2194790
---------------------------------              ---------------------------------
(State or other  jurisdiction of               (IRS Employer Identification No.)
incorporation  or  organization)


               396 Whitehead Avenue, South River, New Jersey 08882
               ---------------------------------------------------
                    (Address of principal executive offices)


                                 (908) 390-9550
              ----------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)


--------------------------------------------------------------------------------
(Former  name,  former  address and formal  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
   -----  -----

     As of August 12, 1996,  8,968,067 shares of Common Stock of the issuer were
outstanding.
<PAGE>
                    IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES

                                      INDEX



                                                                           Page
                                                                          Number
                                                                         -------

PART I - FINANCIAL INFORMATION

     Item 1. Financial Statements

          Consolidated Balance Sheets - June 30, 1996 and
          December 31, 1995................................................  3

          Consolidated Statements of Operations - For the six months
          ended June 30, 1996 and June 30, 1995............................  4

          Consolidated Statements of Operations - For the three months
          ended June 30, 1996 and June 30, 1995............................  5

          Consolidated Statements of Cash Flows - For the six months
          ended June 30, 1996 and June 30, 1995............................  6

          Notes to Consolidated Financial Statements.......................  7

     Item 2.  Management's  Discussion  and Analysis of Financial
              Condition and Results of Operations..........................  9

PART II - OTHER INFORMATION

    Item 6.  Exhibits and Reports on Form 8-K.............................. 12

SIGNATURES................................................................. 13

<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM I - FINANCIAL STATEMENTS

                    IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

                                             June 30,      December 31,
                                              1996             1995
                                           -----------     ------------
ASSETS
Current Assets:
  Cash and cash equivalents                $ 2,920,814      $    83,286
  Accounts receivable, net of
   allowance for doubtful
   accounts of $200,000                      7,777,938        6,616,130
  Notes receivable - current                 1,804,113        1,596,559
  Inventory                                  1,482,517        1,482,517
  Costs and estimated earnings
   in excess of billings                       669,851        3,634,052
  Prepaid expenses                             628,812          710,706
  Bonding deposits                             500,000          883,163
  Deferred income taxes                      1,326,992          652,600
  Recoverable income taxes                   1,095,167        1,114,442
  Due from officers                             57,263          548,488
  Other current assets                          52,916           55,238
                                           -----------     ------------
     Total Current Assets                   18,316,383       17,377,181
                                           -----------     ------------

Notes Receivable - long term                 1,596,559        1,596,559
Deferred Issuance Costs, net                    49,237          506,586
Property, Plant and Equipment, net           2,943,696        2,547,406
                                           -----------      -----------
                                           $22,905,875      $22,027,732
                                           ===========      ===========
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Current portion of long-term debt        $   354,905      $   327,974
  Accounts payable and accrued expenses      5,017,295        5,836,510
  Billings in excess of costs and
   estimated earnings                          194,032          919,575
                                           -----------      -----------
     Total Current Liabilities               5,566,232        7,084,059
                                           -----------      -----------
Long-Term Debt                                 801,628        4,004,142
                                           -----------      -----------
Commitments and Contingencies

Stockholders' Equity:
  Common stock, authorized 20,000,000
   shares $.001 par value, issued
   and outstanding 8,660,317 in 1996
   and 5,783,334 in 1995                         8,660            6,200
  Additional paid-in capital                22,762,280       13,693,895
  Retained earnings (deficit)               (6,232,925)      (2,760,564)
                                           -----------      -----------
                                            16,538,015       10,939,531
                                           -----------      -----------
                                           $22,905,875      $22,027,732
                                           ===========      ===========


   The accompanying notes are an integral part of theses financial statements


                                        3
<PAGE>
                    IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)

                                                Six Months Ended June 30,
                                              -----------------------------
                                                 1996               1995
                                              -----------       -----------
Revenue:
  Sale of equipment                           $   152,800       $   979,548
  Contract income                              10,750,245        17,435,204
  Sale of scrap                                   328,746           170,185
                                              -----------       -----------
                                               11,231,791        18,584,937
                                              -----------       -----------
Cost of Sales:
  Cost of equipment sales                          72,844           388,054
  Direct job costs                             11,374,924        15,648,259
                                              -----------       -----------
                                               11,447,768        16,036,313
                                              -----------       -----------

Gross Profit (loss)                              (215,977)        2,548,624
                                              -----------       -----------
Operating Expenses:
  General and administrative expenses           3,590,010         3,736,485
  Depreciation and amortization                   382,245           225,924
                                              -----------       -----------
                                                3,972,255         3,962,409
                                              -----------       -----------

Income (Loss) from Operations                  (4,188,232)       (1,413,785)

Other Income (Expense):
  Interest income(expense)                         15,871           178,249
                                              -----------       -----------
Income (Loss) before Provision
 (Credit) for Income Taxes                     (4,172,361)       (1,235,536)

Provision (Credit) for Income Taxes              (700,000)         (490,000)
                                              -----------       -----------

Net Income (Loss)                             $(3,472,361)      $  (745,536)
                                              ===========       ===========
Earnings (Loss) per Share:
  Primary earnings (loss) per share           $     (0.50)      $     (0.13)
                                              ===========       ===========

  Fully diluted earnings (loss) per share     $     (0.50)      $     (0.13)
                                              ===========       ===========

  Primary common shares outstanding             7,006,780         5,783,334
                                              ===========       ===========

  Fully diluted common shares outstanding       7,006,780         5,783,334
                                              ===========       ===========


   The accompanying notes are an integral part of theses financial statements


                                        4
<PAGE>
                    IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)


                                            Three Months Ended June 30,
                                            ---------------------------
                                                1996            1995
                                            -----------      ----------
Revenue:
  Sale of equipment                         $   152,800     $   465,757
  Contract income                             5,348,496      12,002,006
  Sale of scrap                                 263,699         107,945
                                            -----------     -----------
                                              5,764,995      12,575,708
                                            -----------     -----------
Cost of Sales:
  Cost of equipment sales                        72,844         167,767
  Direct job costs                            5,127,419      10,106,087
                                            -----------     -----------
                                              5,200,263      10,273,854
                                            -----------     -----------

Gross Profit                                    564,732       2,301,854
                                            -----------     -----------
Operating Expenses:
  General and administrative expenses         1,937,227       1,832,834
  Depreciation and amortization                 171,084         129,297
                                            -----------     -----------
                                              2,108,311       1,962,131
                                            -----------     -----------

Income (Loss) from Operations                (1,543,579)        339,723

Other Income (Expense):
  Interest income(expense)                       13,046          81,303
                                            -----------     -----------

Income (Loss) before Provision (Credit)
 for Income Taxes                            (1,530,533)        421,026

Provision (Credit) for Income Taxes            (260,000)        170,000
                                            -----------     -----------

Net Income (Loss)                            (1,270,533)    $   251,026
                                            ===========     ===========

Earnings (Loss) per Share:
  Primary earnings (loss) per share         $     (0.17)    $      0.04
                                            ===========     ===========

  Fully diluted earnings (loss) per share   $     (0.17)    $      0.04
                                            ===========     ===========

  Primary common shares outstanding           7,372,627       5,783,334
                                            ===========     ===========

  Fully diluted common shares outstanding     7,372,627       5,783,334
                                            ===========     ===========


   The accompanying notes are an integral part of theses financial statements


                                        5
<PAGE>
                    IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

                                               For the Six Months Ended June 30,
                                               ---------------------------------
                                                   1996                 1995
                                               ------------         ------------
Cash Flows from Operating Activities:
  Net income (loss)                            $(3,472,361)         $  (745,536)
  Adjustments  to reconcile  net income
   (loss) to net cash (used in)  operating
   activities:
      Deferred Taxes                              (674,392)                   -
      Depreciation and amortization                382,245              225,924

      Decrease (Increase) In:
        Accounts receivable                     (1,161,808)             402,971
        Inventory                                        -              318,590
        Notes receivable                          (207,554)                   -
        Costs and estimated earnings in
         excess of billings                      2,964,201           (2,691,985)
        Prepaid expenses and other
         current assets                             81,894             (233,358)
        Bonding deposits                           383,163              529,682
        Recoverable income taxes                    19,275               14,037
        Due from officers                         (179,355)                   -
        Other current assets                         2,322                    -

      Increase (Decrease) In:
        Accounts payable and accrued
          expenses                                (751,903)          (1,643,561)
        Billings in excess of costs and
         estimated earnings                       (725,543)             611,572
        Income taxes payable                             -             (477,600)
                                               -----------          -----------
          Net cash (used in) operating
           activities                           (3,339,816)          (3,689,264)
                                               -----------          -----------
Cash Flows from Investing Activities:
  Acquisition of property, plant
   and equipment                                  (538,523)            (474,361)
  Increase (decrease) of officers loans                  -             (129,048)
                                               -----------          -----------
      Net cash (used in) investing
       activities                                 (538,523)            (603,409)
                                               -----------          -----------
Cash Flows from Financing Activities:
  Principal payments and current
   maturities of long-term debt                   (197,521)             (85,826)
  Issuance of common stock upon exercise
   of stock options and warrants                 6,913,388                    -
                                               -----------          -----------
      Net cash provided by (used in)
       financing activities                      6,715,867              (85,826)
                                               -----------          -----------
Increase (Decrease) in Cash and Cash
 Equivalents                                     2,837,528           (4,378,499)
Cash and Cash Equivalents, beginning
 of period                                          83,286            5,068,325
                                               -----------          -----------
Cash and Cash Equivalents, end of year         $ 2,920,814          $   689,826
                                               ===========          ===========
Supplementary Disclosures of Cash
 Flow Information:
Cash paid during the year for:
  Interest expense                             $    24,833          $    11,676
                                               ===========          ===========
Supplemental Disclosure of Noncash
 Investing and Financing Activities:
  Property, plant and equipment financing      $   163,605          $    16,421
                                               ===========          ===========
  Conversion of convertible promissory
   notes to common stock                       $ 2,157,457                    -
                                               ===========          ===========

   The accompanying notes are an integral part of theses financial statements
                                        6
<PAGE>
                    IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   The interim consolidated  financial statements are prepared pursuant to the
     requirements  for  reporting  on Form 10-Q.  These  statements  include the
     accounts of IDM  Environmental  Corp.  and its  majority  owned  subsidiary
     companies.  The  December  31, 1995  balance  sheet data was  derived  from
     audited financial  statements but does not include all disclosures required
     by  generally  accepted  accounting   principles.   The  interim  financial
     statements  and  notes  thereto  should  be read in  conjunction  with  the
     financial  statements and notes included in the Company's Form 10-K for the
     year ended  December 31, 1995.  In the opinion of  management,  the interim
     financial  statements  reflect all adjustments of a normal recurring nature
     necessary  for a fair  statement  of the results  for the  interim  periods
     presented.  The current period  results of operations  are not  necessarily
     indicative of results which  ultimately  will be reported for the full year
     ending December 31, 1996.

2.   On June 28, 1996 IDM granted to Arle L. Pierro a non  qualified  option for
     50,000  shares of its Common  Stock at  $3.23125  per share  pursuant  to a
     consulting agreement that expires on June 30, 1997.

3.   On July 11, 1996,  effective  June 30, 1996,  IDM entered into an exclusive
     license agreement with LIFE INTERNATIONAL PRODUCTS (Life) pursuant to which
     IDM shall  market  and employ  Life's  patented  environmental  remediation
     technology  for  long  term  bioremediation  of  contaminated   groundwater
     throughout North America.  IDM also acquired a ten percent interest in Life
     for $1,250,000.

4.   On July 19,  1996,  IDM,  through  a newly  formed  90%  owned  subsidiary,
     Continental Waste Conversion International, Inc. ("International"), entered
     into an agreement with Continental Waste Conversion,  Inc. ("CWC") pursuant
     to  which  International  acquired,  in  exchange  for  a 10%  interest  in
     International,  the exclusive  worldwide rights  (excluding  Canada) to the
     proprietary  Kocee Gas Generator waste  treatment  technology that converts
     municipal  solid  waste,  including  tires and  plastics,  into  electrical
     energy. IDM has committed to loan up to $1,350,000 over a four month period
     to International to carry on its waste-to-energy  business. At closing, IDM
     made an initial  loan of $600,000 to  International  repayable  upon demand
     with interest at 9.25%. In addition, IDM, through a wholly-owned subsidiary
     of  International  loaned  $160,000  (Canadian)  to  CWC  repayable  in  18
     consecutive  installments  commencing  January 1, 1997 with interst at 7.5%
     per annum.


                                        7
<PAGE>
   
5.

     The  consolidated  financial  statements have been prepared on the basis of
     the  percentage  of  completion  method of  accounting.  Under this  method
     contract revenue is determined by applying to the total estimated income on
     each contract,  a percentage  which is equal to the ratio of contract costs
     incurred to date to the most recent estimate of total costs which will have
     been  incurred upon the  completion  of the  contract.  Costs and estimated
     earnings  in  excess  of  billings  represents   additional  earnings  over
     billings,  based upon percentage completed,  as outlined above.  Similarly,
     billings  in excess of costs and  estimated  earnings  represent  excess of
     amounts billed over income  recognized.  Actual results can differ from the
     estimates  especially on government  contracts because of the uncertainties
     inherent in the  estimation  process as it relates to long term  contracts.
     Losses  anticipated  on  government  contracts  and  commercial  contracts,
     excluding period costs, should be charged to operations as soon as they are
     evident.  Starting  in the first  quarter  of 1996 the  Company  recognized
     revenues  equivalent to its costs incurred on two  government  contracts in
     Los Alamos, New Mexico and Oak Ridge, Tennessee, based on unapproved change
     orders. In the case of the Los Alamos contract with the Los Alamos National
     Laboratory,  the Company  submitted 28 individual change orders (of which 7
     were  subsequently  approved).  A final  comprehensive  change order in the
     amount of  $2,798,000  was  submitted  in November of 1996.  Lab  personnel
     informally rejected our request and the Company reversed all revenues based
     on the unapproved  change orders in the fourth quarter of 1996. The Company
     is  aggressively  pursuing its claims.  Future  revenues will be recognized
     when  these  claims are  finally  settled.  The  Company  also  experienced
     significant  cost  overruns  on several  contracts  which  were  originally
     recognized  in the  third  and  fourth  quarters  based on a  change  in an
     accounting estimate principal.  Based on the Company's discussions with the
     SEC  accounting  staff,  the Company  has agreed to restate  its  quarterly
     financial  statements  for the year "because  recognizing  change orders as
     revenues  was  tantamount  to  recognizing  gain  contingencies   which  is
     expressly  prohibited by SFAS 5"; and,  "because the cost  overruns  should
     have been  foreseeable  and accrued in prior  quarters." The amount for the
     year has not changed,  just the allocation to each quarter.  The disclosure
     requirements of the APB opinion number 20 of earnings (loss) per share, net
     income (loss), and income tax (credit) are as follows:
    
<TABLE>
<CAPTION>
                                                                   1996
                                   ------------------------------------------------------------------------
                                      First         Second         Third          Fourth  
                                     Quarter        Quarter       Quarter        Quarter           Year
                                   -----------    -----------    ----------     -----------    ------------
<S>                                <C>            <C>            <C>            <C>            <C>
Income (Loss) before Provision
 (Credit) for Income Taxes          1,056,585          9,324     (4,370,625)    (7,693,128)    (10,997,844)
Change                             (3,698,413)    (1,539,857)     1,461,925      3,776,345               -
                                   ----------     ----------     ----------     ----------     -----------
Amount Restated                    (2,641,828)    (1,530,533)    (2,908,700)    (3,916,783)    (10,997,844)
                                        
Provision (Credit) for Income
 Taxes                                210,000          2,000       (772,000)    (1,290,000)     (1,850,000)
Change                               (650,000)      (262,000)       282,000        630,000               -
                                   ----------     ----------     ----------     ----------     -----------
Amount Restated                      (440,000)      (260,000)      (490,000)      (660,000)     (1,850,000)
                                        
Net Income (Loss)                     846,585          7,324     (3,598,625)    (6,403,128)     (9,147,844)
Change                             (3,048,413)    (1,277,857)     1,179,925      3,146,345               -
                                   ----------     ----------     ----------     ----------     -----------
Amount Restated                    (2,201,828)    (1,270,533)    (2,418,700)    (3,256,783)     (9,147,844)
                                        
Earning (Loss) Per Share                 0.13              -          (0.41)         (0.85)          (1.13)
Change                                  (0.46)         (0.17)          0.14           0.49               -
                                   ----------     ----------     ----------     ----------     -----------
Amount Restated                         (0.33)         (0.17)         (0.27)         (0.36)          (1.13)
                                        
</TABLE>

                                        8
<PAGE>
Item 2. Management's  Discussion and Analysis Of Financial Condition And Results
        Of Operations.

Material Changes in Results Of Operations

This report contains  forward-looking  statements  within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of Securities  Exchange Act of
1934.  Actual  results  could  differ  materially  from those  projected  in the
forward-looking  statements  as a result of the risk  factors  set forth in this
report.

Second Quarter of 1996 Compared with Second Quarter of 1995

   
The Company's total revenues  decreased by approximately  54.2% from $12,576,000
for the quarter ended June 30, 1995 to $5,765,000 for the quarter ended June 30,
1996.  Contract  service  income  decreased  during  the  quarter  by 55.5% from
$12,002,000  in 1995 to  $5,675,000  in 1996.  The decrease in contract  service
income and total  revenues is  attributable  to the  completion of the Company's
services  during  the  quarter  in  connection  with the  FFC-Jordan  Fertilizer
Project.  The relative  work load in  connection  with the  commencement  of the
FFC-Jordan  Fertilizer  Project  during  the  second  quarter  of  1995  and the
subsequent completion of such project during the second quarter of 1996 resulted
in  substantially  higher  revenues being reported during the early phase of the
project.  The Surplus equipment and scrap sales revenues decreased by 27.6% from
$574,000 in 1995 to  $416,000 in 1996.  The  decrease in surplus  equipment  and
scrap sales revenues was attributable to varying product mix and lower volume in
1996.

Direct job costs  decreased  by  approximately  49.3% from  $10,106,000  for the
quarter  ended June 30,  1995 to  $5,127,000  for the same  period in 1996.  The
primary  elements of such  decrease in job costs were job  salaries and material
and  supplies.  The  decrease in job costs was  attributable  to the decrease in
contract service revenues during the quarter.  Cost of equipment sales decreased
from  $168,000 in 1995 to $73,000 in 1996.  The  decrease  in cost of  equipment
sales was attributable to varying product mix and lower volume in 1996.

While  total  revenues   decreased  by  54.2%  for  the  quarter,   general  and
administrative  expenses increased from $1,833,000 during the quarter ended June
30, 1995 to $1,937,000  during the same period in 1995.  The increase in general
and administrative expense was primarily attributable to an increase in salaries
due to hiring additional personnel.
    

In addition to its  operating  income and  expenses,  the Company  reported  net
interest  income of $13,000 for the  quarter  ended June 30, 1996 as compared to
net interest  income of $81,000 for the same period in 1995. The decrease in net
interest  income/expense  was  attributable to $25,000 in interest expense which
accrued on $1,750,000 of indebtedness which remained  outstanding during most of
the quarter  out of the  $5,000,000  of  convertible  notes  issued in the third
quarter  of 1995 and an  increase  in  interest  expense  due to the  additional
$450,000 in equipment financing compared to the same period last year.

   
As a result of the  foregoing,  the  Company  reported  a loss  before  taxes of
$1,531,000  and net loss of  $1,271,000  for the quarter  ended June 30, 1996 as
compared to a income before taxes of $421,000 and net income of $251,000 for the
same quarter in 1995.
    

Six Months Ended June 30, 1996 Compared with Six Months Ended June 30, 1995

   
Total revenues  decreased by  approximately  59.6% from  $18,585,000 for the six
months ended June 30, 1995 to $11,232,000 for the same period in 1996.  Contract
service income  decreased during the period by 58.4% from $17,435,000 in 1995 to
$10,750,000 in 1996.  Surplus equipment and scrap sales revenues decreased 58.1%
from  $1,150,000 in 1995 to $482,000 in 1996.  See the quarterly  comparison for
discussion of the factors contributing to the decrease in revenues.
    

Direct job costs decreased by  approximately  27.3% from $15,648,000 for the six
months ended June 30, 1995 to  $11,375,000  for the same period in 1996. See the
quarterly  comparison  for a  discussion  of  the  factors  contributing  to the
decrease in direct job costs.

                                        9
<PAGE>
Cost of equipment  sales decreased from $388,000 in 1995 to $73,000 in 1996. The
decrease in cost of equipment sales was  attributable to varying product mix and
lower volume.

General and  administrative  expenses  decreased 3.9% from $3,736,000 during the
six months ended June 30, 1995 to $3,590,000 during the same period in 1996. The
decrease  was  primarily  attributable  to two  refunds in the first  quarter of
insurance  refunds  totaling  $90,000  as a result  of  audits  on  prior  years
premiums.

The Company reported a decrease in net interest  income/(expense)  from $178,000
for the six months  ended June 30,  1995 to $16,000 for the same period in 1995.
See the quarterly comparison for a discussion of the factors contributing to the
increase in net interest income/(expense).

   
As a  result  of the  foregoing,  the  Company  reported  loss  before  taxes of
$4,172,000  and net loss after tax of  $3,472,000  for the six months ended June
30, 1996 as compared to a loss before taxes of  $1,236,000  and a net loss after
taxes of $746,000 for the same period in 1995.
    

Material Changes in Financial Condition, Liquidity and Capital Resources.

At June 30, 1996, the Company had a backlog totaling  approximately  $52 million
compared to a backlog of approximately $58 million at June 30, 1995. The largest
component of the Company's  backlog at June 30, 1996 was $25 million for a paper
plant relocation to the People's Republic of China.

In addition to its existing  backlog,  the Company is presently  bidding on, and
intends to bid on numerous projects to replace revenues from projects which will
be completed  during 1996 and to increase  the total  dollar  volume of projects
under contract.  Management anticipates that the Company's efforts to bid on and
secure new contracts will focus on projects  which can be readily  serviced from
the three  regional  offices  opened by the  Company  during  1994 and 1995.  In
addition,  the Company has submitted  proposals on several  large  international
plant relocation projects. The Company's regional offices,  particularly the Oak
Ridge, Tennessee and Los Alamos, New Mexico offices are strategically located in
areas having a high concentration of prospective public and private  remediation
sites.  While bidding to perform services at such sites is expected to be highly
competitive,  management  believes  that  the  Company's  existing  presence  on
projects at these  locations  combined  with its proven  expertise and resources
will enhance the Company's  chances of  successfully  bidding on substantial new
projects.

   
The  Company  had  working  capital  of  $12,750,000,  including  cash  and cash
equivalents  balances of $2,921,000  at June 30, 1996.  This compares to working
capital of  $10,293,000  and a cash balance of $83,000 at December 31, 1995. The
increase in working capital and cash is attributable to the exercise of warrants
and options totaling  $6,913,000  during the period less the $3,472,000 loss for
the six months.
    

Approximately  $500,000  of the  Company's  working  capital  at June  30,  1996
consisted of a cash  performance bond which the Company had posted in connection
with the  performance  of a project  which is  expected  to be  released  during
August.

Additionally,  $1,483,000  of the  Company's  working  capital at June 30,  1996
consisted of surplus equipment  inventory.  Such inventory level compares to the
same amount at December 31, 1995.

The Company has  available  at December  31, 1995  approximately  $2,350,000  in
operating loss carry-forwards that may be applied against future taxable income.
They expire in the year 2010.  Based on the  reported  loss to date it will take
approximately  $3.9  million  dollars in future  taxable  income to recover  the
reported deferred tax asset.

At June 30, 1996, the Company's  only long term debt other than the  convertible
notes was $657,000 in installment debt secured by job equipment.

On  July  11,  1996  the  company  acquired  a  ten  percent  interest  in  Life
International  Products (Life) for  $1,187,500.  The Company also entered into a
licensed agreement with Life whereby IDM shall market and employ Life's patented
environmental   remediation   technology   for  long  term   bioremediation   of
contaminated groundwater throughout North America.


                                       10
<PAGE>
On July 19, 1996, IDM, through a newly formed 90% owned subsidiary,  Continental
Waste  Conversion  International,   Inc.  ("International"),   entered  into  an
agreement with  Continental  Waste  Conversion,  Inc.  ("CWC") pursuant to which
International  acquired,  in exchange for a 10% interest in  International,  the
exclusive  worldwide  rights  (excluding  Canada) to the  proprietary  Kocee Gas
Generator  waste  treatment  technology  that  converts  municipal  solid waste,
including tires and plastics,  into electrical energy. IDM has committed to loan
up to  $1,350,000  over a four  month  period to  International  to carry on its
waste-to-energy  business.  At closing,  IDM made an initial loan of $600,000 to
International  repayable upon demand with interest at 9.25%.  In addition,  IDM,
through a wholly-owned subsidiary of International loaned $160,000 (Canadian) to
CWC repayable in 18  consecutive  installments  commencing  January 1, 1997 with
interst at 7.5% per annum.

Other than  funding the  Company's  bonding and other job costs the Company does
not anticipate any substantial  demands on the liquidity or capital resources of
the Company during the following twelve months.

Management believes that the Company's working capital is sufficient to meet the
Company's anticipated needs for at least the following twelve months,  including
the  performance  of all  existing  contracts of the  Company.  However,  as the
Company is presently  pursuing bids on multiple large projects,  the Company may
be  required  to seek new bank  lines of credit or other  financing  in order to
facilitate  the  performance  of jobs if the volume and size of  projects  being
performed  by  the  Company  increases  substantially.   While  the  Company  is
conducting  ongoing  discussions with various  potential  lenders with a view to
establishing available bank lines of credit if and when needed to support future
growth,  the Company  presently has no commitments from any bank or other lender
to provide financing if such financing becomes necessary to support growth.


                                       11
<PAGE>
                           PART II - OTHER INFORMATION


Item 6. Exhibits and Reports on Form 8-K

     (a)  Exhibits

         *10.1 License  Agreement  dated June 30,  1996 with Life  International
               Products, Inc.

         *10.2 Agreement dated July 19, 1996 with Continental  Waste Conversion,
               Inc.

         *10.3 License  Agreement dated July 18, 1996 between  Continental Waste
               Conversion,  Inc. and Continental Waste Conversion International,
               Inc.

         *10.4 Promissory note in the amount of $160,000  (Canadian)  dated July
               22, 1996 from Continental Waste  Conversion,  Inc. to Continental
               Waste Conversion International, Inc.

         *10.5 Pledge  and  Security  Agreement  dated  July  19,  1996  between
               Continental   Waste   Conversion,   Inc.  and  Continental  Waste
               Conversion International, Inc.

     (b)  Reports on Form 8-K

          Form  8-K  dated  April  1,  1996  - Item 5  Reporting  Adoption  of a
          Shareholder's Rights Plan.

------------------------
*    Previously filed.


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<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.


                                         IDM ENVIRONMENTAL CORP.


Dated: September 30, 1997                By:  /s/  Joel Freedman
                                         ---------------------------------------
                                             Joel Freedman, President


Dated: September 30, 1997                By:  /s/  Michael B. Killeen
                                         ---------------------------------------
                                              Michael B. Killeen, Principal
                                              Financial and Accounting Officer


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