SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-QSB


(Mark One)

X                 Quarterly Report Pursuant to Section 13 or 15(d) of the
                  Securities Exchange Act of 1934

                  For the quarterly period ended June 30, 2000 or

                  Transition Report Pursuant to Section 13 or 15(d) of the
                  Securities Exchange Act of 1934

                  For the transition period from -------------to --------------

                         Commission file number 0-22136

                          MENLO ACQUISITION CORPORATION
             (Exact name of registrant as specified in its charter)

              Delaware                                         77-0332937
(State or other jurisdiction of                                 (IRS Employer
 incorporation or organization)                            Identification No.)

                                 100 Misty Lane
                              Parsippany, NJ 07054
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (973) 560-1400

Indicate by check mark whether the registrant (1) has filed all reports required
by  Section  13 or 15(d)  of the  Securities  Exchange  Act of 1934  during  the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days. Yes X No

At August 2, 2000 the  registrant  had issued and  outstanding  an aggregate of
5,263,348 shares of its common stock.
<PAGE>

INDEX

                          MENLO ACQUISITION CORPORATION
                                AND SUBSIDIARIES

                                                                      Page

PART I.  FINANCIAL INFORMATION

         Item 1.  Financial Statements

                  Report of Independent Public Accountants............F-3

                  Condensed Consolidated Balance Sheets -
                  June 30, 2000 (Unaudited) and
                  December 31, 1999...................................F-4

                  Condensed Consolidated Statements of Income -
                  Six and Three Months Ended June 30, 2000 and
                  1999 (Unaudited)....................................F-5 - F-6

                  Condensed Consolidated Statements of Cash Flows -
                  Six Months Ended June 30, 2000 and
                  1999 (Unaudited)....................................F-7

                  Notes to Condensed Consolidated Financial Statements
                  June 30, 2000 (Unaudited)...........................F-8 - F-12

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

PART II. OTHER INFORMATION

         Item 1.  Not Applicable

         Item 2.  Not Applicable

         Item 3.  Not Applicable

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

         Item 5.  Not Applicable

         Item 6.  Exhibits and  Reports on Form 8-K

SIGNATURES





                                       F-2
<PAGE>



                     REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


                  To the Board of Directors and Stockholders
                  Menlo Acquisition Corporation


                  We have  reviewed the  accompanying  condensed  consolidated
                  balance   sheet  of  Menlo   Acquisition   Corporation   and
                  Subsidiaries  as of June 30, 2000 and the related  condensed
                  consolidated  statements of income and comprehensive  income
                  for the  three  and  six month  periods  then  ended and the
                  related condensed  consolidated  statement of cash flows for
                  the six month period then ended. These financial  statements
                  are the responsibility of the Company's management.

                  We  conducted  our  reviews  in  accordance  with  standards
                  established  by the American  Institute of Certified  Public
                  Accountants.  A  review  of  interim  financial  information
                  consists  principally of applying  analytical  procedures to
                  financial data and making  inquiries of persons  responsible
                  for financial and accounting  matters.  It is  substantially
                  less in scope than an audit  conducted  in  accordance  with
                  generally  accepted  auditing  standards,  the  objective of
                  which  is  the  expression  of  an  opinion   regarding  the
                  financial  statements taken as a whole.  Accordingly,  we do
                  not express such an opinion.

                  Based on our reviews of the condensed consolidated financial
                  statements  referred  to  above,  we are  not  aware  of any
                  material   modifications   that   should   be  made  to  the
                  accompanying   condensed   consolidated   interim  financial
                  statements  for  them  to be in  conformity  with  generally
                  accepted accounting principles.

                  We have  previously  audited,  in accordance  with generally
                  accepted auditing standards,  the consolidated balance sheet
                  of  Menlo  Acquisition  Corporation  and  Subsidiaries as of
                  December 31, 1999, and the related  consolidated  statements
                  of  income,   statements  of  comprehensive  income  (loss),
                  retained  earnings,  and cash  flows for the year then ended
                  which are not  presented  herein;  and in our  report  dated
                  February 11, 2000,  we expressed an  unqualified  opinion on
                  those consolidated financial statements. In our opinion, the
                  information   set  forth  in  the   accompanying   condensed
                  consolidated  balance  sheet as of  December  31,  1999,  is
                  fairly stated, in all material respects,  in relation to the
                  consolidated balance sheet from which it has been derived.

                  The accompanying condensed consolidated statements of income
                  and comprehensive income for the three and six month periods
                  ended June 30, 1999 and the  statement of cash flows for the
                  six month  period  ended June 30,  1999 were not  audited or
                  reviewed  by us  and,  accordingly,  we do not  express  an
                  opinion or any other form of assurance on them.

                                                       J.H. Cohn LLP

                  Roseland, New Jersey
                  July 28, 2000










                                       F-3
<PAGE>


                 MENLO ACQUISITION CORPORATION AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                       JUNE 30, 2000 AND DECEMBER 31, 1999

                                          June            December
                                        30, 2000          31, 1999
                                        --------          --------
                                       (Unaudited)
                                          (In thousands of dollars)
                     ASSETS
                     ------
Current assets:
     Cash and cash equivalents         $ 1,193            $  1,182
     Investments in marketable securities  222                 722
     Accounts receivable:
        Trade, net of allowance for doubtful
           accounts of  $540 and $614    3,516               3,880
        Unbilled receivables                79                  65
        Affiliates                         120                 110
     Prepaid expenses and other current
        assets                              79                 100
     Deferred tax assets                    35                  34
                                        ------              ------
              Total current assets       5,244               6,093

Property and equipment,
    net of accumulated depreciation of
    $1,169 and $965                      3,298               1,088
Other assets, net of accumulated amorti-
    zation of $7 and $0                     68                  67
                                        ------              ------

              Totals                    $8,610              $7,248
                                        ======              ======

   LIABILITIES AND STOCKHOLDERS' EQUITY
   ------------------------------------

Current liabilities:
     Current portion of long-term debt  $   23              $  106
     Accounts payable                      861                 942
     Customer deposits                     429                 445
     Accrued expenses and other liabilies  354                 444
     Income taxes payable                   55                  -
                                         -----               -----
              Total current liabilities  1,722               1,937
     Long-term debt, net of current
       portion -                         1,177                 168
                                         -----               -----
              Total liabilities          2,899               2,105
                                         -----               -----
Commitments and contingencies

Stockholders' equity:
     Preferred stock, $.0001 par value;
        2,000,000 shares authorized;
        none issued.                         -                   -
     Common stock, $.0001 par value;
        40,000,000 shares authorized;
        5,263,348 issued and outstanding     1                   1
     Additional paid-in capital          4,313               4,313
     Retained earnings                   1,372                 803
     Accumulated other comprehensive income
         Unrealized holding gains on
            marketable securities           25                  26
                                        ------              ------
              Total stockholders' equity 5,711               5,143
                                        ------              ------

              Totals                    $8,610              $7,248
                                        ======              ======

See Notes to Condensed Consolidated Financial Statements.
                                       F-4

<PAGE>

                 MENLO ACQUISITION CORPORATION AND SUBSIDIARIES

      CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                     SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                                   (Unaudited)

                                     Income
                                     ------
                                            2000                1999
                                            ----                ----
                                             (In thousands of dollars,
                                                except share data)

Gross revenue                               $7,218            $6,521

Direct project costs and other costs
   of operations                             2,520             2,562
                                           -------           -------

Net revenue                                  4,698             3,959
                                           -------           -------

Expenses:
     Labor and related expenses              1,125               981
     Selling, general and administrative     2,719             2,372
                                            ------            ------
        Totals                               3,844             3,353
                                            ------            ------

Income from operations                         854               606

Other income                                    95                28
                                            ------            ------

Income before income taxes                     949               634

Provision for income taxes (See Note 5)        380               254
                                            ------            ------

Net income                                    $569              $380
                                            ======            ======


Basic net income per share
  (See Notes 2 and 5)                         $.11              $.07
                                            ======            ======

Basic weighted average common shares
   outstanding                           5,263,348         5,263,348
                                         =========         =========


                              Comprehensive Income
                              --------------------
Net income                                    $569              $380
Other comprehensive income (loss), net of taxes
      Unrealized holding losses on marketable
        securities arising during the period:   (1)                -
                                              -----             ----
Comprehensive income                          $568              $380
                                              =====             ====







See Notes to Condensed Consolidated Financial Statements.

                                       F-5
<PAGE>

                 MENLO ACQUISITION CORPORATION AND SUBSIDIARIES

      CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                    THREE MONTHS ENDED JUNE 30, 2000 AND 1999
                                   (Unaudited)

                                     Income
                                     ------
                                                2000                     1999
                                                ----                     ----
                                                   (In thousands of dollars,
                                                       except share data)

Gross revenue                                   $3,651                  $3,274
Direct project costs and other costs of
   operations                                    1,323                   1,259
                                                ------                  ------

Net revenue                                      2,328                   2,015
                                               -------                 -------

Expenses:
     Labor and related expenses                    548                     483
     Selling, general and administrative         1,379                   1,228
                                                 -----                   -----
        Totals                                   1,927                   1,711
                                                 -----                  ------

Income from operations                             401                     304

Other income                                        41                      30
                                                 -----                   -----


Income before income taxes                         442                     334

Provision for income taxes (See Note 5)            177                     254
                                                 -----                   -----

Net income                                        $265                   $  80
                                                 =====                   =====


Basic net income per share
  (See Notes 2 and 5)                            $ .05                    $.01
                                                 =====                   =====

Basic weighted average common shares
   outstanding                               5,263,348               5,263,348
                                             =========               =========


                   Comprehensive Income
                   --------------------

Net income                                        $265                   $  80
Other comprehensive income (loss), net of taxes
      Unrealized holding losses on marketable
        securities arising during the period:       (1)                      -
                                                  -----                   ----

Comprehensive income                              $264                   $  80
                                                 =====                   =====




See Notes to Condensed Consolidated Financial Statements.




                                       F-6
<PAGE>

                 MENLO ACQUISITION CORPORATION AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                     SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                                   (Unaudited)

                                                  2000              1999
                                                  ----              ----
                                                  (In thousands of dollars)
Operating activities:
     Net income                                   $569                $380
     Adjustments to reconcile net income to net
        cash provided by operating activities:
        Depreciation                               211                 182
        Provision for bad debts                      -                 100
        Amortization                                 7                   -
        Deferred income taxes                       (1)                  -
        Loss on sale of fixed asset                  1                   -
        Changes in operating assets and liabilities:
           Accounts receivable - trade             364                 896
           Unbilled receivables                    (14)                (68)
           Accounts receivable - affiliates        (10)                 (7)
           Prepaid expenses and other current
            assets                                  21                  12
           Due from affiliate                        -                  27
           Other assets                             (8)                 21
           Accounts payable                        (81)                208
           Customer deposits                       (16)                (87)
           Accrued expenses and other liabilities  (90)                310
           Income taxes payable                     55                 254
                                                    --               -----
               Net cash provided by operating
                 activities                      1,008               2,228
                                                 -----               -----

Investing activities:
     Purchase of fixed assets                   (1,223)               (306)
     Proceeds from sale of fixed assets              1                   -
     Redemption (purchase) of marketable
       securities, net                             499                (181)
                                                   ---                -----
               Net cash used in investing
                 activities                       (723)               (487)
                                                 ------               -----

Financing activities:
     Repayment of notes payable - bank               -                (400)
     Repayment of long-term debt - bank           (274)                (54)
     Repayment of advances from stockholder          -                 (55)
                                                ------                -----
               Net cash used in
                 financing activities             (274)               (509)
                                                 -----                -----

Net increase in cash and cash equivalents           11               1,232

Cash and cash equivalents, beginning of period   1,182                  25
                                                 -----              ------

Cash and cash equivalents, end of period         1,193             $ 1,257
                                                 =====             =======

Supplemental disclosure of cash flow data:
     Interest paid                                $  8               $  21
                                                  ====               =====

     Income taxes paid                            $377                $  1
                                                  ====                ====

Supplemental schedule of noncash investing and financial activities:

     During the six months ended June 30, 2000, the Company completed an
     acquisition of a building for $1,850, in part with the proceeds of a $1,200
     mortgage.

See Notes to Condensed Consolidated Financial Statements.
                                       F-7
<PAGE>


                          MENLO ACQUISTION CORPORATION
                                AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION

The accompanying  condensed consolidated financial statements have been prepared
without audit by Menlo  Acquisition  Corporation,  ("Menlo") in accordance  with
generally accepted  accounting  principles for interim financial  statements and
pursuant to the rules of the Securities and Exchange  Commission (the "SEC") for
Form  10-QSB.  Accordingly,   certain  information  and  footnotes  required  by
generally accepted accounting  principles for complete financial statements have
been  omitted.  As used  herein,  "Company"  refers to Menlo  and its  operating
subsidiaries.  It is the opinion of management that all  adjustments  considered
necessary  for a fair  presentation  have  been  included,  and  that  all  such
adjustments are of a normal and recurring nature.

Certain  amounts in the 1999  Financial  Statements  have been  reclassified  to
conform with the current presentation.

The consolidated results of operations for the six and three month periods ended
June 30, 2000 are not  necessarily  of the  results to be expected  for the full
year. The unaudited condensed  consolidated  financial statements should be read
in  conjunction  with the  consolidated  financial  statements and related notes
included  in  the  Company's  Annual  Report on  Form 10-KSB  for the year ended
December 31, 1999.

The  Company  has  two  operating   subsidiaries.   One  provides  environmental
consulting,  remedial and disposal  services with offices in Parsippany and West
Windsor, New Jersey and in Englewood, Colorado (Consulting).  The other conducts
testing of soil and water for environmental  hazards with an office in Randolph,
New Jersey (Lab). The subsidiaries  operate primarily throughout New Jersey, New
York, Connecticut, Pennsylvania and Colorado.

NOTE 2: EARNINGS PER SHARE

The Company presents "basic" and, if appropriate,  "diluted" earnings (loss) per
common share  pursuant to the  provisions  of Statement of Financial  Accounting
Standards No. 128, Earnings per Share ("FAS 128").

Basic  earnings  (loss) per common share is calculated by dividing net income or
loss by the weighted  average  number of common  shares  outstanding  during the
period.  The calculation of diluted  earnings (loss) per common share is similar
to that of basic earnings  (loss) per common share,  except that the denominator
is increased to include the number of  additional  common shares that would have
been outstanding if all potentially  dilutive common shares,  principally  those
issuable  upon the  exercise of stock  options,  were issued  during the period.
Diluted  earnings per share have not been presented for the six and three months
ended June 30, 2000 because the  difference to basic  earnings per share was not
material.  For the six and three months ended June 30, 1999,  the Company had no
potentially dilutive common shares.

NOTE 3: COMMITMENTS AND CONTINGENCIES

The Company is currently  subject to certain claims and lawsuits  arising in the
ordinary  course  of  its  business.  In the  opinion  of  management,  adequate
provision has been made for all known liabilities that are currently expected to
result from these claims and lawsuits,  and in the aggregate such claims are not
expected to have a material effect on the financial position of the Company. The
estimates  used in  establishing  these  provisions  could  differ  from  actual
results. Should these provisions change significantly,  the effect on operations
for any quarterly or annual reporting period could be material.


                                       F-8


<PAGE>



The Company had a $750,000  revolving  line-of-credit  facility  utilized by its
consulting segment that expired on April 30, 2000.  Outstanding  borrowings were
secured by substantially  all of the Company's  assets.  At the expiration date,
there were no amounts outstanding under this line of credit.

The Company has received a  commitment  from another  financial  institution  to
replace its expired line-of-credit. The commitment is for a $1,000,000 revolving
line-of-credit  to be used by its  operating  segments and a $750,000 line to be
utilized by the  Company's  Lab segment for either the purchase or re-finance of
equipment. The Company anticipates the completion of this refinancing will occur
during the third quarter of 2000.

In addition, the Company, through its Lab segment, has purchased the facility in
which the Lab operates from an unaffiliated  third party.  The purchase price of
the building was $1,850,000. The Company financed this purchase, in part, with a
mortgage from a financial  institution in the amount of $1,200,000.  The balance
of the purchase was financed with operating  capital of the Company.  Commencing
August 1, 2000,  the  mortgage  is payable  in monthly  installments  of $10,605
(based on a twenty year amortization)  including interest at 8.75% until July 1,
2005  at  which  time  the  outstanding  balance  is  due.  Subject  to  certain
conditions,  the  mortgage may be extended  for an  additional  five years at an
interest rate of 250 basis points above the Current Index Rate, as defined.  For
each of the five years  subsequent to June 30, 2000,  principal  repayments are,
respectively,  $23,169,  $25,279,  $27,582,  $30,095 and $32,836. The mortage is
subject to certain financial covenants, as defined, with which the Company is in
compliance at June 30, 2000. It is  anticipated  that this facility will support
future growth of the Lab segment for at least the next five years.

NOTE 4: BUSINESS SEGMENTS

The Company is reporting  segment revenue and income from operations in the same
format reviewed by the Company's  management (the  "management  approach").  The
Company  has  two  reportable  segments  as  described  previously  in  Note  1.
Additionally,  revenue and expenses  (primarily  legal and  accounting)  related
directly to Menlo  Acquisition  Corporation  are  reported  under the heading of
"Holding"

          Revenue, income from operations and other related segment information
for the six months ended June 30, 2000 and 1999 follows:
                                                           2000           1999
                                                           ----           ----
                                                      (In Thousands of Dollars)
                    Gross revenue:
                         Consulting - Third Party      $  4,679          $4,646
                         Lab - Third Party                2,539           1,875
                         Lab - Inter-segment                484             445
                         Holding - Inter-segment          1,013             634
                         Inter-segment                   (1,497)          (1079)
                                                       --------          ------
                             Totals                      $7,218          $6,521
                                                         ======          ======

                    Direct project costs and other costs of operations:
                         Consulting                    $  1,629          $1,870
                         Lab                              1,375           1,137
                         Inter-segment                     (484)           (445)
                                                       --------          ------
                             Totals                    $  2,520          $2,562
                                                       ========          ======

                    Other operating expenses:
                         Consulting                    $  2,892          $2,601
                         Lab                              1,199           1,006
                         Holding                             80               -
                         Inter-segment                     (327)           (254)
                                                       --------         -------
                             Totals                    $  3,844          $3,353
                                                       ========          ======

                                       F-9


<PAGE>



NOTE 4: BUSINESS SEGMENTS (CONTINUED):

                    Income from operations:
                         Consulting                    $158             $   175
                         Lab                            449                 177
                         Holding                        933                 634
                         Inter-segment                 (686)               (380)
                                                   ---------           --------
                             Totals                   $ 854               $ 606
                                                   ========               =====

                    Other income (expense):
                         Consulting                   $ 410              $  276
                         Lab                             (4)                  6
                         Holding                         16                   -
                         Inter-segment                 (327)               (254)
                                                   --------            --------
                             Totals                 $    95               $  28
                                                    =======               =====

                      Income before taxes:
                         Consulting                $    568            $    451
                         Lab                            445                 183
                         Holding                        949                 634
                         Inter-segment               (1,013)               (634)
                                                   --------               -----
                             Totals                $    949             $   634
                                                   ========             =======

                      Provision for income taxes:
                         Consulting                  $    -            $      -
                         Lab                              -                   -
                         Holding                        380                 254
                                                        ---                 ---
                             Totals                $    380               $ 254
                                                   ========               =====

                      Net Income:
                         Consulting                $    568            $    451
                         Lab                            445                 183
                         Holding                        569                 380
                         Inter-segment               (1,013)               (634)
                                                   --------               -----
                             Totals                $    569             $   380
                                                   ========             =======

                Revenue, income from  operations and other related segment
information for the the three months ended June 30, 2000 and 1999 follows:

                                                       2000                1999
                                                       ----                ----
                                                       (In Thousands of Dollars)
                    Gross revenue:
                         Consulting - Third Party  $  2,317              $2,233
                         Lab - Third Party            1,334               1,041
                         Lab - Inter-segment            241                 194
                         Holding - Inter-segment        480                 334
                         Inter-segment                 (721)               (528)
                                                   --------               -----
                             Totals                  $3,651              $3,274
                                                     ======              ======

                    Direct project costs and other costs of operations:
                         Consulting                  $  890                $847
                         Lab                            674                 606
                         Inter-segment                 (241)               (194)
                                                   --------            --------
                             Totals                $  1,323              $1,259
                                                   ========              ======
                                      F-10

<PAGE>
NOTE 4: BUSINESS SEGMENTS (CONTINUED):

                    Other operating expenses:
                         Consulting                $  1,421              $1,305
                         Lab                            625                 539
                         Holding                         51                   -
                         Inter-segment                 (170)               (133)
                                                   --------             -------
                             Totals                $  1,927              $1,711
                                                   ========              ======

                    Income from operations:
                         Consulting                $      6              $   81
                         Lab                            276                  90
                         Holding                        429                 334
                         Inter-segment                 (310)               (201)
                                                   ---------            -------
                             Totals                $    401              $  304
                                                   ========              ======

                    Other income (expense):
                         Consulting                $    201              $  151
                         Lab                             (3)                 12
                         Holding                         13                   -
                         Inter-segment                 (170)               (133)
                                                   --------            --------
                             Totals                 $    41               $  30
                                                    =======               =====

                      Income before taxes:
                         Consulting                $    207            $    232
                         Lab                            273                 102
                         Holding                        442                 334
                         Inter-segment                 (480)               (334)
                                                   --------               -----
                             Totals                     442             $   334
                                                   ========             =======

                      Provision for income taxes:
                         Consulting                  $    -             $     -
                         Lab                              -                   -
                         Holding                        177                 254
                                                        ---                 ---
                             Totals                  $  177               $ 254
                                                   ========               =====

                                  Net Income:
                         Consulting                $    207             $   232
                         Lab                            273                 102
                         Holding                        265                  80
                         Inter-segment                 (480)               (334)
                                                   --------               -----
                             Totals                $    265              $   80
                                                   ========              ======



                Assets by segment as of  June 30, 2000 and 1999 follow:

                                                       2000               1999
                                                       -----              ----
                                                       (In Thousands of Dollars)

                    Cash and investments in marketable securities:
                         Consulting                   $ 162             $ 1,246
                         Lab                             81                 192
                         Holding                      1,172                   -
                                                      -----                 ---
                             Totals                $  1,415            $  1,438
                                                   ========            ========
                                      F-11
<PAGE>

NOTE 4: BUSINESS SEGMENTS (CONCLUDED):

                      Accounts receivable, net:
                         Consulting                $  2,719            $  3,346
                         Lab                            956               1,153
                         Holding                         40                   -
                         Inter-segment                  -                  (195)
                                                   --------                -----
                             Totals                 $ 3,715            $  4,304
                                                    =======           =========

                    Equipment and furnishings, net:
                         Consulting                  $  438            $    443
                         Lab                          2,860                 701
                                                   --------                ----
                             Totals                $  3,298            $  1,144
                                                   ========            ========

                     Other assets:
                         Consulting                  $   97             $    72
                         Lab                              3                  15
                         Holding                         82                   -
                                                         --                 ---
                             Totals                 $   182             $    87
                                                    =======              ======

                             Total assets           $ 8,610             $ 6,973
                                                    =======             =======



NOTE 5: INCOME TAXES:

Prior to the  acquisition  of the two operating  subsidiaries  by the Company on
March 10, 1999, the subsidiaries were Limited Liability  Companies and, as such,
were  treated as  partnerships  for Federal  and State  income tax  purposes.  A
partnership is not a tax paying entity for Federal or State income tax purposes.
Income or loss of a limited  liability  company is  reported  in the  individual
member's  income tax returns and  accordingly,  no provision  for income tax had
been recorded in the accompanying  condensed  consolidated  statements of income
and comprehensive  income  attributable to these limited liability companies for
the quarter  ended March 31, 1999.  However,  during the quarter  ended June 30,
1999, a provision  for income tax was recorded  for all income  attributable  to
these limited liability  companies for the first six months of 1999.  Therefore,
the net income  and basic net  income  per share data shown in the  accompanying
condensed consolidated statements of income and comprehensive income is computed
as if the Company  acquired the subsidiaries  effective  January 1, 1999 and was
subject to Corporate Income Tax.


NOTE 6: PROPERTY AND EQUIPMENT:

Property and equipment consist of the following (In thousands of dollars):

                                          Range of
                                         Estimated        June        December
                                       Useful Lives     30, 2000      31, 1999
                                       ------------     --------      --------
Land                                        -            $  158         $  -
Building                                 39 Years         1,722            -
Equipment                               3-7 Years         2,066          1,603
Furniture and fixtures                    7 Years           164            164
Vehicles                                  5 Years           202            131
Leasehold improvements                    7 Years           155            155
                                                         ------         ------
                                                          4,467          2,053
Less accumulated depreciation                             1,169            965
                                                         ------         ------
                                   Totals                $3,298         $1,088
                                                         ======         ======

















                                      F-12


<PAGE>






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

Cautionary Statement Regarding Forward Looking Statements

The  statements  in this  report that are  forward-looking  are based on current
expectations,  and actual  results may differ  materially.  The  forward-looking
statements  include  those  regarding  the  level of future  purchases  of fixed
assets,  the possible  impact of current and future  claims  against the Company
based upon negligence and other theories of liability and the possibility of the
Company  making  acquisitions  during the next 12 to 18 months.  Forward-looking
statements  involve  numerous  risks and  uncertainties  that could cause actual
results to differ materially,  including,  but not limited to, the possibilities
that the demand for the  Company's  services may decline as a result of possible
changes in general and industry specific economic  conditions and the effects of
competitive  services  and pricing;  one or more  current or future  claims made
against the Company may result in substantial liabilities;  and such other risks
and  uncertainties  as are described in reports and other documents filed by the
Company from time to time with the Securities and Exchange Commission.

Results of Operations
(In thousands of dollars, except share data)

The following  table sets forth,  for the periods  indicated:  i) the percentage
that  certain  items in the  condensed  consolidated  statements  of income  and
comprehensive  income  of the  Company  bear  to  gross  revenues,  and  ii) the
percentage  increase  (decrease) in dollar  amounts of such items from period to
period.

Six Month Comparison for Years 2000 and 1999

                                                                  Percentage
                                                                   Increase
                                                                  (Decrease)
                                                                     Six
                                                                    Months
                                         Percentage                 Ended
                                      of Gross Revenue              6/30/00
                                      Six Months Ended                vs.
                                      ----------------                ---
                                   6/30/00          6/30/99         6/30/99
                                   -------          -------         -------

Gross revenue                       100.0%          100.0%            10.7%
Direct project costs and other costs
    of operations                    34.9            39.3             (1.6)%
                                   ------          ------             ------
       Net revenue                   65.1            60.7             18.7%
                                   ------          ------            ------

Expenses:
    Labor and related expenses       15.6            15.0             14.7%
    Selling, general and
     administrative                  37.7            36.4             14.6%
                                     ----            ----             -----
          Totals                     53.3            51.4             14.6%
                                   ------          ------           -------

Income from operations               11.8             9.3             40.9%

Other income                          1.5             0.4            239.3%
                                   ------           -----           ------

Income before income taxes           13.3             9.7             49.7%
                                     ====            ====            ======

<PAGE>




Gross  revenues for the six months ended June 30, 2000 were $7,218 versus $6,521
for the first six months of 1999,  an increase of 10.7%.  The increase  occurred
primarily  in the Lab  segment.  Lab  revenues  increased  $664  (not  including
inter-segment  billing) while Consulting revenues increased slightly by $33. The
significant  increase in the revenue of the Lab segment was a continuing  result
of effective  direct sales efforts,  strong demand for analytical  services from
the environmental sector, higher utilization of equipment used in performing Lab
services and increased  sales from the  broadening of the customer base into the
pharmaceutical industry.  Consulting revenue is composed of both hours billed by
the professional staff (the more profitable  component) and pass-through billing
of  sub-contractor   costs  associated  with  client  projects.   While  overall
consulting revenue only increased slightly, the hours billed component increased
by $313. A decrease of $280 occurred in the  pass-through  component due to less
reliance on sub-contractors in performing client services.

Income  from  operations  was $854 in the first six months of 2000 as opposed to
$606  for the same  period  in 1999.  This  represents  an  increase  of  40.9%.
Operating  margins rose to 11.8% for the current  period from 9.3% for the first
six months of 1999.  The increase in operating  income and margin was due to the
significant  increase  in the Lab  segment  profitability.  This  was due to the
increased sales volume,  which resulted in a higher profit percentage due to the
relatively low marginal costs associated with additional  analytical  testing as
equipment usage  approaches  capacity.  Related lab segment  operating  expenses
remained  relatively  constant.  The higher lab income was  partially  offset by
slightly  reduced  operating  income from the  consulting  segment due to higher
expenses in that segment.

Labor and related expenses increased 14.7% compared to the corresponding  period
in the prior year primarily due to increases in the number of technical staff in
the Consulting  segment and increases in  compensation  rates in order to retain
and attract qualified personnel.

Selling,  general and  administrative  expenses  increased 14.6% compared to the
corresponding  period  in the  prior  year  primarily  due to  additional  costs
associated  with the  Colorado  office,  which was opened in January  2000,  and
increased  administrative staffing costs in the Lab segment needed to handle the
volume growth.

Other income increased 239.3% in the first six months of 2000 as compared to the
first  six  months  of 1999.  This was due to  increased  interest  income  from
invested  cash and a  corresponding  decrease in interest  expense due to having
little or no debt.

Income  before taxes for the period was $949 compared with $634 in the first six
months of 1999,  an  increase  of 49.7%.  This  increase  was due to the factors
discussed  above.  Tax provisions  were recorded at an effective rate of 40% for
the first six months of 2000 and the Basic net income per share was $.11. In the
corresponding  period of 1999,  the tax provision was also  calculated  using an
effective  rate of 40% and the Basic net income per share was $.07.  The Company
had 5,263,348 shares outstanding at June 30, 2000 and diluted earnings per share
would also be $.11 for the quarter then ended as noted in Note 2 in the Notes to
Condensed Consolidated  Financial Statements.  For the six months ended June 30,
1999, the Company had no potentially dilutive common shares.



<PAGE>




Second Quarter Comparison for Years 2000 and 1999

                                                                      Percentage
                                                                       Increase
                                                                      (Decrease)
                                                                       Three
                                                                       Months
                                             Percentage                Ended
                                          of Gross Revenue             6/30/00
                                         Three Months Ended               vs.
                                         ------------------               ---
                                      6/30/00          6/30/99         6/30/99
                                      -------          -------         -------

Gross revenue                           100.0%          100.0%            11.5%
Direct project costs and other costs
    of operations                        36.2            38.5              5.1%
                                       ------          ------            ------
       Net revenue                       63.8            61.5             15.5%
                                       ------          ------            ------

Expenses:
    Labor and related expenses           15.0            14.8             13.5%
    Selling, general and administrative  37.8            37.5             12.3%
                                         ----            ----             -----
          Totals                         52.8            52.3             12.6%
                                       ------          ------            ------

Income from operations                   11.0             9.2             31.9%

Other income                              1.1             1.0             36.7%
                                       ------            ----             -----

Income before income taxes               12.1            10.2             32.3%
                                         ====            ====            ======


Gross  revenues  for the three  months  ended June 30, 2000 were  $3,651  versus
$3,274 for the same period in 1999,  an increase of 11.5%.  Again,  the increase
occurred  primarily  in  the  Lab  segment.  Lab  revenues  grew  $293  (net  of
inter-segment  billing) while Consulting revenues increased by $84. Lab revenues
continue to grow significantly over prior periods due to the reasons outlined in
the discussion  above.  Consulting  professional  staff billing increased by $88
while there was a decrease of $4 in the  pass-through  component  of  consulting
revenue.

Income from operations was $401 in the second quarter of 2000 as opposed to $304
for the same period in 1999.  This  represents  an increase of 31.9%.  Operating
margins  rose to 11.0% for the current  period from 9.2% for the second  quarter
1999. The change in operating income and margin was again due to the increase in
the Lab segment  profitability.  Reasons for this  increase are discussed in the
six-month  comparison  above.  This was also partially  offset by reduced second
quarter  operating  income from the consulting  segment as compared to the prior
year six-month period.

Labor and related expenses increased 13.5% compared to the corresponding  period
in the prior year due to the reasons explained in the six-month comparison.

Selling,  general and  administrative  expenses  increased 12.3% compared to the
corresponding period in the prior year due to additional costs in the consulting
segment associated with the Colorado office, which was opened in January 2000.

Other income  increased  36.7% in the second three months of 2000 as compared to
the second three months of 1999.  Again,  this was due to increased  income from
invested cash and a corresponding  reduction in interest expense compared to the
prior year period.
<PAGE>


Income  before  taxes for the period was $442  compared  with $334 in the second
quarter of 1999,  an increase  of 32.3%.  This  increase  was due to the factors
discussed  above.  Tax provisions  were recorded at an effective rate of 40% for
the second quarter 2000 and the Basic net income per share was $.05. Although no
tax provision was recorded in the first quarter of 1999 (see Note 5 in the Notes
to Condensed Consolidated  Financial  Statements),  the second quarter provision
was made for income related to the first six months of 1999, not just the second
quarter. This resulted in an effective rate of 76% of second quarter 1999 income
and the  corresponding  Basic net income  per share was $.01.  The  Company  had
5,263,348  shares  outstanding  at June 30, 2000 and diluted  earnings per share
would also be $.05 for the quarter  then ended.  The Company had no  potentially
dilutive  common  shares for the  quarter  ended June 30,  1999.

Liquidity and Capital Resources

Net cash  provided  by  operations  for the six months  ended June 30,  2000 was
$1,008 as  compared  to $2,228 for the first six months of the prior  year.  The
amount of cash  provided by  operations in the prior period was due primarily to
faster  collection of accounts  receivable as the effects of a newly implemented
billing system were being  realized.  Additionally,  a  concentrated  effort was
successfully  made to improve the  turnover of  accounts  receivable  and reduce
their overall level. In comparison, during the 2000 period, the Company utilized
its  increased  cash flow from accounts  receivable  to more timely  satisfy its
operating  liabilities.  The cash provided in the current  period is a result of
continued  success  in  the  reduction  of  accounts  receivable  levels  and  a
significant increase in net income in comparison to the prior year.

The Company made capital expenditures on fixed assets of $1,223 in the first six
months of 2000 compared to capital  expenditures of $306 in the first six months
of the prior year. The most significant  expenditure was the purchase of the Lab
segment's  operating  facility  for  approximately  $1,850.  This  purchase  was
financed with a $1,200 mortgage loan and  approximately  $650 of Company working
capital.  Additionally,  expenditures  were made to  maintain  and  enhance  the
technology  within the Lab  segment.  The Company  anticipates  that its capital
expenditures, excluding possible acquisitions and the building purchase, for the
current year will be higher by approximately $200 to those incurred in the prior
year. The Company  redeemed a net of $499 of marketable  securities in the first
six  months of 2000  whereas  net  purchases  of $181 were made in the first six
months of 1999.

The Company, in the normal course of business,  encounters  potential liability,
including claims for errors and omissions, resulting from the performance of its
services.  The Company is party to lawsuits and is aware of  potential  exposure
related to certain claims. In the opinion of management,  adequate provision has
been made for all known  liabilities that are currently  expected to result from
these  matters,  and in the  aggregate,  such claims are not  expected to have a
material  impact  on the  financial  position  and  liquidity  of  the  Company.
Currently,  the  Company is provided a $5 million  per  occurrence,  $10 million
aggregate  professional  services  insurance policy through an unrelated,  rated
carrier. The Company also maintains a general liability insurance policy with an
unrelated, rated carrier.

At June 30, 2000,  the Company had cash and cash  equivalents  on hand of $1,193
and  working  capital of  $3,522.  The  Company  has a  commitment  for a $1,000
revolving  line-of-credit  facility to be utilized  by its  operating  segments.
Additionally,  the Company has a commitment for a $750 line that can be utilized
for purchase or re-finance of equipment used by its Lab segment.  Any portion of
the $750  equipment  line,  if  utilized,  will  convert into a term loan with a
maximum  five-year  amortization.  These  commitments  replaced a previous  $750
revolving  credit line  agreement that expired on April 30, 2000. In conjunction
with that  expiration,  the Company paid off, in full, its long-term debt in the
amount of $248, the outstanding balance on April 30, 2000. This transaction left
the  Company  with no  remaining  bank debt,  exclusive  of the $1,200  mortgage
discussed above. At June 30, 2000,  there were no other  borrowings  outstanding
leaving the full amounts of both the revolving  line-of-credit and the equipment
line available to the Company as soon as the  commitment is finalized  (expected
to be  completed in the third  quarter  2000).  At June 30, 1999,  there were no
amounts  outstanding  on the  credit  line then  available.  The  Company  is in
compliance with all covenants pertaining to the future credit line agreements.


<PAGE>



The Company  believes that its available  cash, as well as cash  generated  from
operations  and its  committed  credit  lines,  will be  sufficient  to meet the
Company's cash  requirements  for the balance of the fiscal year.  Additionally,
the Company  intends to continue to actively  search for  acquisitions to expand
its  geographical  representation  and enhance its technical  capabilities.  The
Company  expects to utilize a portion  of its  liquidity  over the next 12 to 18
months for capital  expenditures,  including  acquisitions  and  investments  in
aligned  businesses.  Other  than  previously  disclosed,  there  is no  present
agreement, understanding or other arrangement with respect to any acquisition or
investment.  However,  future agreements concerning acquisitions may require the
Company to obtain additional financing.

Inflation  has not had a material  effect on the  revenues  or the  income  from
operations  of the Company for the past two years.  Inflation is not expected to
have a material future effect.


<PAGE>




                                     PART II

                                OTHER INFORMATION

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

a.       Meeting

         The annual meeting of shareholders was held on June 7, 2000:

b.       Directors Elected

         The following individuals were elected directors at the annual meeting:

                    Richard S. Greenberg, Ph.D
                    Lawrence B. Seidman
                    George Greenberg

   c.    Matters Voted

      I.  Election of Directors:
          Richard S. Greenberg, Ph.D  For:  5,221,049  Withheld: 2,964
          Lawrence B. Seidman         For:  5,221,049  Withheld: 2,964
          George Greenberg            For:  5,221,049  Withheld: 2,964

     II.  Approval of  the Menlo Acquisition Corporation 1999 Stock Option Plan:
          For:  5,055,558  Against: 3,227   Abstain: 1,281  Not Voted: 163,947

    III.  Appointment of J.H. Cohn LLP as  independent  auditors for
          the fiscal year ending December 31, 2000:
          For:  5,220,733  Against: 2,063   Abstain: 1,217


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

   a.    Exhibits

         The  following  exhibits  are  furnished  along  with this
         Form  10-QSB Quarterly Report for the period ended June 30, 2000:

         Exhibit No. 27 - Financial Data Schedule

   b.    Reports on Form 8-K

         During the quarter  ended June 30,  2000,  the Company  filed a Current
         Report  on  Form  8-K,  dated  June  13,  2000  providing   information
         concerning  the  purchase  of the  facility  in which  the Lab  segment
         operates.



<PAGE>




                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange act of 1934,
         the  registrant  has duly caused this report to be signed on its behalf
         by the undersigned thereunto duly authorized.


                                              MENLO ACQUISITION CORPORATION

                                              /ss/Frank Russomanno
  Date: August 2,  2000                      ---------------------------------
                                              Frank Russomanno
                                              Chief Financial Officer