SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-QSB




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

                For the quarterly period ended September 30, 2000

                         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 November 10, 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

                  Condensed Consolidated Balance Sheets -
                  September 30, 2000 (Unaudited) and
                  December 31, 1999...................................F-3

                  Condensed Consolidated Statements of Income and
                  Comprehensive Income - Nine and Three Months Ended
                  September 30, 2000
                  and 1999 (Unaudited)................................F-4 - F-5

                  Condensed Consolidated Statements of Cash Flows -
                  Nine Months Ended September 30, 2000 and
                  1999 (Unaudited)....................................F-6

                  Notes to Condensed Consolidated Financial Statements
                  September 30, 2000 (Unaudited)......................F-7 - F-11

         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.  Not Applicable

         Item 5.  Not Applicable

         Item 6.  Exhibits and  Reports on Form 8-K

SIGNATURES





                                       F-2
<PAGE>




                 MENLO ACQUISITION CORPORATION AND SUBSIDIARIES

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

                                       September          December
                                        30, 2000          31, 1999
                                        --------          --------
                                       (Unaudited)
                                          (In thousands of dollars)
                     ASSETS
                     ------
Current assets:
     Cash and cash equivalents         $ 1,774            $  1,182
     Investments in marketable securities  223                 722
     Accounts receivable:
        Trade, net of allowance for doubtful
           accounts of  $568 and $614    3,779               3,880
        Unbilled receivables                56                  65
        Affiliates                           -                 110
     Prepaid expenses and other current
        assets                              89                 100
     Deferred tax assets                    35                  34
                                        ------              ------
              Total current assets       5,956               6,093

Property and equipment,
    net of accumulated depreciation of
    $1,296 and $965                      3,316               1,088
Other assets, net of accumulated amorti-
    zation of $8 and $0                     66                  67
                                        ------              ------

              Totals                    $9,338              $7,248
                                        ======              ======

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

Current liabilities:
     Current portion of long-term debt  $   24              $  106
     Accounts payable                    1,205                 942
     Customer deposits                     401                 445
     Accrued expenses and other
        liabilities                        479                 444
     Income taxes payable                   75                  -
                                         -----               -----
              Total current liabilities  2,184               1,937
     Long-term debt, net of current
       portion                           1,172                 168
                                         -----               -----
              Total liabilities          3,356               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                   1,643                 803
     Accumulated other comprehensive income
         Unrealized holding gains on
            marketable securities           25                  26
                                        ------              ------
              Total stockholders' equity 5,982               5,143
                                        ------              ------

              Totals                    $9,338              $7,248
                                        ======              ======

See Notes to Condensed Consolidated Financial Statements.
                                       F-3

<PAGE>

                 MENLO ACQUISITION CORPORATION AND SUBSIDIARIES

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

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

Gross revenue                              $11,276            $9,959

Direct project costs and other costs
   of operations                             4,245             3,959
                                           -------           -------

Net revenue                                  7,031             6,000
                                           -------           -------

Expenses:
     Labor and related expenses              1,665             1,368
     Selling, general and administrative     4,128             3,724
                                            ------            ------
        Totals                               5,793             5,092
                                            ------            ------

Income from operations                       1,238               908

Other income                                   162                60
                                            ------            ------

Income before income taxes                   1,400               968

Provision for income taxes (See Note 5)        560               388
                                            ------            ------

Net income                                    $840              $580
                                            ======            ======


Basic net income per share
  (See Notes 2 and 5)                         $.16              $.11
                                            ======            ======

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


                              Comprehensive Income
                              --------------------
Net income                                    $840              $580
Other comprehensive (loss) income, net of taxes
   Unrealized holding (losses) gains on marketable
   securities arising during the period:        (1)               22
                                              -----             ----
Comprehensive income                          $839              $602
                                              =====             ====







See Notes to Condensed Consolidated Financial Statements.

                                       F-4
<PAGE>

                 MENLO ACQUISITION CORPORATION AND SUBSIDIARIES

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

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

Gross revenue                                   $4,058                  $3,438
Direct project costs and other costs of
   operations                                    1,725                   1,397
                                                ------                  ------

Net revenue                                      2,333                   2,041
                                               -------                 -------

Expenses:
     Labor and related expenses                    540                     387
     Selling, general and administrative         1,409                   1,352
                                                 -----                   -----
        Totals                                   1,949                   1,739
                                                 -----                  ------

Income from operations                             384                     302

Other income                                        67                      32
                                                 -----                   -----


Income before income taxes                         451                     334

Provision for income taxes (See Note 5)            180                     134
                                                 -----                   -----

Net income                                        $271                   $ 200
                                                 =====                   =====


Basic net income per share
  (See Notes 2 and 5)                            $ .05                    $.04
                                                 =====                   =====

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


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

Net income                                        $271                   $ 200
Other comprehensive income, net of taxes
   Unrealized holding gains on marketable
   securities arising during the period:             -                      22
                                                  -----                   ----

Comprehensive income                              $271                   $ 222
                                                 =====                   =====




See Notes to Condensed Consolidated Financial Statements.




                                       F-5
<PAGE>

                 MENLO ACQUISITION CORPORATION AND SUBSIDIARIES

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

                                                  2000                1999
                                                  ----                ----
                                                  (In thousands of dollars)
Operating activities:
     Net income                                   $840                $580
     Adjustments to reconcile net income to net
        cash provided by operating activities:
        Depreciation                               339                 287
        Provision for bad debts                     35                 100
        Amortization                                 8                   -
        Deferred income taxes                       (1)                  -
        Loss on sale of fixed asset                  1                   -
        Changes in operating assets and liabilities:
           Accounts receivable - trade              66                 945
           Unbilled receivables                      9                 (88)
           Accounts receivable - affiliates        110                 (98)
           Prepaid expenses and other current
            assets                                  11                   7
           Due from affiliate                        -                  27
           Other assets                             (7)                 24
           Accounts payable                        263                  25
           Customer deposits                       (44)                (30)
           Accrued expenses and other liabilities   35                 305
           Income taxes payable                     75                  66
                                                    --               -----
               Net cash provided by operating
                 activities                      1,740               2,150
                                                 -----               -----

Investing activities:
     Purchase of fixed assets                   (1,369)               (351)
     Proceeds from sale of fixed assets              1                   -
     Redemption (purchase) of marketable
       securities, net                             499                (181)
                                                   ---                -----
               Net cash used in investing
                 activities                       (869)               (532)
                                                 ------               -----

Financing activities:
     Repayment of notes payable - bank               -                (400)
     Repayment of long-term debt - bank           (279)                (80)
     Repayment of advances from stockholder          -                 (55)
                                                ------                -----
               Net cash used in
                 financing activities             (279)               (535)
                                                 -----                -----

Net increase in cash and cash equivalents          592               1,083

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

Cash and cash equivalents, end of period         1,774             $ 1,108
                                                 =====             =======

Supplemental disclosure of cash flow data:
     Interest paid                                $  8               $  28
                                                  ====               =====

     Income taxes paid                            $537               $ 322
                                                  ====                ====

Supplemental schedule of noncash investing and financial activities:
     During the nine months ended September 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-6
<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 nine and three month  periods
ended  September  30, 2000 are not  necessarily  indicative 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 nine and three months
ended  September 30, 2000 because the difference to basic earnings per share was
not  material.  For the nine and three months  ended  September  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-7


<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
collateralized  by substantially  all of the Company's assets. At the expiration
date, there were no amounts outstanding under that line of credit.

The  Company  has  replaced  the expired  line-of-credit  with one from  another
financial  institution.  The  new  agreement  includes  a  $1,000,000  revolving
line-of-credit  available to 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. Outstanding borrowings are collateralized by substantially all of the
Company's assets. At September 30, 2000, there were no amounts outstanding under
the new agreement.

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. 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 September 30, 2000, principal repayments are, respectively, $23,508, $25,649,
$27,986,  $30,535  and  $1,088,598.  The  principal  payment  for  year  five is
necessary only if the mortgage is not extended as described  above. The mortgage
is subject to certain financial covenants, as defined, with which the Company is
in compliance at September 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,   accounting   and
administrative)  related directly to Menlo Acquisition  Corporation are reported
under the heading of "Holding"

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

                                                           2000           1999
                                                           ----           ----
                                                      (In Thousands of Dollars)
                    Gross revenue:
                         Consulting - Third Party      $  7,299          $6,861
                         Lab - Third Party                3,977           3,098
                         Lab - Inter-segment                671             598
                         Holding - Inter-segment          1,473             968
                         Inter-segment                   (2,144)         (1,566)
                                                       --------          ------
                             Totals                     $11,276          $9,959
                                                        =======          ======

                    Direct project costs and other costs of operations:
                         Consulting                    $  2,874          $2,790
                         Lab                              2,042           1,767
                         Inter-segment                     (671)           (598)
                                                       --------          ------
                             Totals                    $  4,245          $3,959
                                                       ========          ======

                    Other operating expenses:
                         Consulting                    $  4,348          $3,864
                         Lab                              1,838           1,627
                         Holding                            105               -
                         Inter-segment                     (498)           (399)
                                                       --------         -------
                             Totals                    $  5,793          $5,092
                                                       ========          ======

                                       F-8


<PAGE>



NOTE 4: BUSINESS SEGMENTS (CONTINUED):

                    Income from operations:
                         Consulting                     $77             $   207
                         Lab                            768                 302
                         Holding                      1,368                 968
                         Inter-segment                 (975)               (569)
                                                   ---------            --------
                             Totals                 $ 1,238              $  908
                                                   ========               =====

                    Other income (expense):
                         Consulting                   $ 602              $  445
                         Lab                             26                  14
                         Holding                         32                  -
                         Inter-segment                 (498)               (399)
                                                   --------             --------
                             Totals                  $  162               $  60
                                                    =======               =====

                    Income before taxes:
                         Consulting                $    679            $    652
                         Lab                            794                 316
                         Holding                      1,400                 968
                         Inter-segment               (1,473)               (968)
                                                   --------               -----
                             Totals                $  1,400             $   968
                                                   ========             =======

                    Provision for income taxes:
                         Consulting                  $    -            $      -
                         Lab                              -                   -
                         Holding                        560                 388
                                                        ---                 ---
                             Totals                $    560               $ 388
                                                   ========               =====

                    Net Income:
                         Consulting                $    679            $    652
                         Lab                            794                 316
                         Holding                        840                 580
                         Inter-segment               (1,473)               (968)
                                                   --------               -----
                             Totals                $    840            $    580
                                                   ========            ========

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

                                                       2000                1999
                                                       ----                ----
                                                       (In Thousands of Dollars)
                    Gross revenue:
                         Consulting - Third Party  $  2,620              $2,215
                         Lab - Third Party            1,438               1,223
                         Lab - Inter-segment            187                 153
                         Holding - Inter-segment        460                 334
                         Inter-segment                 (647)               (487)
                                                   --------               -----
                             Totals                  $4,058              $3,438
                                                     ======              ======

                    Direct project costs and other costs of operations:
                         Consulting                  $1,245                $920
                         Lab                            667                 630
                         Inter-segment                 (187)               (153)
                                                   --------            --------
                             Totals                $  1,725              $1,397
                                                   ========              ======
                                      F-9

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

                    Other operating expenses:
                         Consulting                $  1,456              $1,263
                         Lab                            639                 621
                         Holding                         25                   -
                         Inter-segment                 (171)               (145)
                                                   --------             -------
                             Totals                $  1,949              $1,739
                                                   ========              ======

                    Income (loss) from operations:
                         Consulting                $    (81)             $   32
                         Lab                            319                 125
                         Holding                        435                 334
                         Inter-segment                 (289)               (189)
                                                   ---------            -------
                             Totals                $    384              $  302
                                                   ========              ======

                    Other income (expense):
                         Consulting                $    192              $  169
                         Lab                             30                   8
                         Holding                         16                   -
                         Inter-segment                 (171)               (145)
                                                   --------            --------
                             Totals                 $    67               $  32
                                                    =======               =====

                    Income before taxes:
                         Consulting                $    111            $    201
                         Lab                            349                 133
                         Holding                        451                 334
                         Inter-segment                 (460)               (334)
                                                   --------               -----
                             Totals                     451            $    334
                                                   ========             =======

                    Provision for income taxes:
                         Consulting                  $    -             $     -
                         Lab                              -                   -
                         Holding                        180                 134
                                                        ---                 ---
                             Totals                  $  180               $ 134
                                                   ========               =====

                    Net Income:
                         Consulting                $    111             $   201
                         Lab                            349                 133
                         Holding                        271                 200
                         Inter-segment                 (460)               (334)
                                                   --------               -----
                             Totals                $    271              $  200
                                                   ========              ======



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

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

                    Cash and investments in marketable securities:
                         Consulting                   $ 517               $ 876
                         Lab                            222                 450
                         Holding                      1,258                   -
                                                      -----                 ---
                             Totals                $  1,997            $  1,326
                                                   ========            ========
                                      F-10
<PAGE>

NOTE 4: BUSINESS SEGMENTS (CONCLUDED):

                      Accounts receivable, net:
                         Consulting                $  2,739            $  3,210
                         Lab                          1,096               1,156
                         Holding                         -                   -
                         Inter-segment                   -                   -
                                                   --------               -----
                             Totals                 $ 3,835            $  4,366
                                                    =======           =========

                    Equipment and furnishings, net:
                         Consulting                  $  418            $    418
                         Lab                          2,898                 666
                                                   --------                ----
                             Totals                $  3,316            $  1,084
                                                   ========            ========

                     Other assets:
                         Consulting                  $   90             $    72
                         Lab                              9                  17
                         Holding                         91                   -
                                                         --                 ---
                             Totals                 $   190             $    89
                                                    =======              ======

                             Total assets           $ 9,338             $ 6,865
                                                    =======             =======

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,  provision  for  income  tax was
subsequently  recorded for all income  attributable  to these limited  liability
companies for the first nine 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     September      December
                                       Useful Lives     30, 2000      31, 1999
                                       ------------     --------      --------
Land                                        -            $  158         $  -
Building                                 39 Years         1,730            -
Equipment                               3-7 Years         2,198          1,603
Furniture and fixtures                    7 Years           164            164
Vehicles                                  5 Years           207            131
Leasehold improvements                    7 Years           155            155
                                                         ------         ------
                                                          4,612          2,053
Less accumulated depreciation                             1,296            965
                                                         ------         ------
                                   Totals                $3,316         $1,088
                                                         ======         ======











                                      F-11


<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.

Nine Month Comparison for Years 2000 and 1999

                                                                  Percentage
                                                                   Increase
                                                                  (Decrease)
                                                                     Nine
                                                                    Months
                                         Percentage                 Ended
                                      of Gross Revenue              9/30/00
                                      Nine Months Ended                vs.
                                      ----------------                ---
                                   9/30/00          9/30/99         9/30/99
                                   -------          -------         -------

Gross revenue                       100.0%          100.0%            13.2%
Direct project costs and other costs
    of operations                    37.6            39.8              7.2%
                                   ------          ------             ------
       Net revenue                   62.4            60.2             17.2%
                                   ------          ------            ------

Expenses:
    Labor and related expenses       14.8            13.7             21.7%
    Selling, general and
     administrative                  36.6            37.4             10.8%
                                     ----            ----             -----
          Totals                     51.4            51.1             13.8%
                                   ------          ------           -------

Income from operations               11.0             9.1             36.3%

Other income                          1.4             0.6            170.0%
                                   ------           -----           ------

Income before income taxes           12.4             9.7             44.6%
                                     ====            ====            ======

<PAGE>
Gross revenues for the nine months ended  September 30, 2000 were $11,276 versus
$9,959 for the first nine months of 1999,  an increase  of 13.2%.  The  increase
occurred in both operating segments.  Lab revenues increased $879 (not including
inter-segment   billing)  while  Consulting  revenues  increased  by  $438.  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  and  pass-through   billing  of  sub-contractor  costs
associated with client projects.  The Consulting  segment hours billed component
increased  by $427 due to an  increase  in the  number  of  professional  staff.
Additionally,  there was a slight  increase of $11 in the amount of pass-through
billing as compared to the prior nine month period.

Income from operations was $1,238 in the first nine months of 2000 as opposed to
$908  for the same  period  in 1999.  This  represents  an  increase  of  36.3%.
Operating  margins rose to 11.0% for the current  period from 9.1% for the first
nine 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  income  from the Lab  segment  was
partially offset by reduced operating income from the Consulting  segment due to
higher operating expenses in that segment.

Labor and related expenses increased 21.7% compared to the corresponding  period
in the prior year primarily due to increases in the number of professional staff
in the Consulting segment and increases in compensation rates in order to retain
and attract qualified personnel.

Selling,  general and  administrative  expenses  increased 10.8% compared to the
corresponding  period in the prior year primarily due to costs  associated  with
the Colorado office of the Consulting segment, which was opened in January 2000,
and increased  administrative staffing costs in the Lab segment needed to handle
the volume growth.

Other  income  increased  170.0% in the first nine months of 2000 as compared to
the first nine months of 1999.  This was due to increased  interest  income from
invested cash and dividend income from  investments in securities.  Also,  there
was a  corresponding  decrease  in interest  expense due to having  little or no
debt.

Income  before taxes for the period was $1,400  compared  with $968 in the first
nine months of 1999, an increase of 44.6%.  This increase was due to the factors
discussed  above.  Tax provisions  were recorded at an effective rate of 40% for
the first nine  months of 2000 and the Basic net  income per share was $.16.  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 $.11.  The Company
had 5,263,348 shares  outstanding at September 30, 2000 and diluted earnings per
share  would  also be $.16 for the  period  then ended as noted in Note 2 in the
Notes to Condensed Consolidated Financial Statements.  For the nine months ended
September 30, 1999, the Company had no potentially dilutive common shares.



<PAGE>




Third Quarter Comparison for Years 2000 and 1999

                                                                      Percentage
                                                                       Increase
                                                                      (Decrease)
                                                                       Three
                                                                       Months
                                             Percentage                Ended
                                          of Gross Revenue             9/30/00
                                         Three Months Ended               vs.
                                         ------------------               ---
                                      9/30/00          9/30/99         9/30/99
                                      -------          -------         -------

Gross revenue                           100.0%          100.0%            18.0%
Direct project costs and other costs
    of operations                        42.5            40.6             23.5%
                                       ------          ------            ------
       Net revenue                       57.5            59.4             14.3%
                                       ------          ------            ------

Expenses:
    Labor and related expenses           13.3            11.3             39.5%
    Selling, general and administrative  34.7            39.3              4.2%
                                         ----            ----             -----
          Totals                         48.0            50.6             12.1%
                                       ------          ------            ------

Income from operations                    9.5             8.8             27.2%

Other income                              1.7             0.9            109.4%
                                       ------            ----             -----

Income before income taxes               11.2             9.7             35.0%
                                         ====            ====            ======

Gross revenues for the three months ended  September 30, 2000 were $4,058 versus
$3,438 for the same period in 1999,  an increase of 18.0%.  Again,  the increase
occurred  in  both   operating   segments.   Lab  revenues  grew  $215  (net  of
inter-segment billing) while Consulting revenues increased by $405. Lab revenues
continue to grow significantly over prior periods due to the reasons outlined in
the discussion above.  Consulting  professional  staff billing increased by $114
while  there  was a large  increase  of $291 in the  pass-through  component  of
consulting  revenue as compared to the prior year third  quarter.  This increase
occurred  as there  were  several  large  client  projects  which  required  the
significant use of sub-contractor  services (primarily in the transportation and
disposal areas).

Income from  operations was $384 in the third quarter of 2000 as opposed to $302
for the same period in 1999.  This  represents  an increase of 27.2%.  Operating
margins  rose to 9.5% for the  current  period  from 8.8% for the third  quarter
1999.  The change in operating  income and margin was solely due to the increase
in the Lab segment profitability. Reasons for this increase are discussed in the
nine-month  comparison  above.  This was  partially  offset  by a third  quarter
operating loss from the consulting segment as compared to a slight profit in the
prior year third quarter.

Labor and related expenses increased 39.5% compared to the corresponding  period
in the prior year for  reasons  similar  to those  explained  in the  nine-month
comparison.

Selling,  general and administrative  expenses were not significantly  different
from those in the  corresponding  period of the prior year. The overall increase
was 4.2%.


<PAGE>

Other income  increased  109.4% in the third  quarter of 2000 as compared to the
third  quarter of 1999.  Again,  this was due to increased  income from invested
cash and a corresponding reduction in interest expense.

Income  before  taxes for the  period was $451  compared  with $334 in the third
quarter of 1999,  an increase of 35.0%.  This  increase in income was due to the
factors previously discussed above. Tax provisions were recorded at an effective
rate of 40% for the third  quarter  2000 and the Basic net  income per share was
$.05. In the third quarter of 1999, the tax provision was also calculated  using
an  effective  rate of 40% and the Basic  net  income  per  share was $.04.  The
Company had  5,263,348  shares  outstanding  at  September  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  September 30,
1999.

Liquidity and Capital Resources

Net cash provided by operations for the nine months ended September 30, 2000 was
$1,740 as compared  to $2,150 for the first nine  months of the prior year.  The
cash provided in the current  period is primarily a result of an increase in net
income  in  comparison  to  the  prior  year,  collection  of  receivables  from
affiliated  entities,  and an  increase  in the  amount of  accounts  payable at
quarter-end  due to the receipt of large  sub-contractor  invoices  for services
performed as discussed  above.  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.

The Company  made  capital  expenditures for fixed assets of $1,369 in the first
nine months of 2000 compared to capital  expenditures  of $351 in the first nine
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 total
capital expenditures, excluding possible acquisitions and the building purchase,
for the current year will be higher by  approximately  $300 as compared to those
of the prior year. The Company  redeemed a net of $499 of marketable  securities
in the first nine months of 2000 whereas net  purchases of $181 were made in the
first nine 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 September  30,  2000,  the Company had cash and cash  equivalents  on hand of
$1,774 and  working  capital  of  $3,772.  The  Company  has a $1,000  revolving
line-of-credit facility available to its operating segments.  Additionally,  the
Company  has 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 credit lines 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 September 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.  At
September 30, 1999,  there were no amounts  outstanding  on the credit line then
available.  The Company is in compliance  with all  covenants  pertaining to the
credit line agreements.


<PAGE>



The Company  believes that its available  cash, as well as cash  generated  from
operations  and its credit lines,  will be sufficient to meet the Company's cash
requirements  for at least the next  twelve  months.  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


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 September 30, 2000:

         Exhibit No. 27 - Financial Data Schedule

   b.    Reports on Form 8-K

         During the quarter ended  September 30, 2000,  the Company did not file
         any Current Reports on Form 8-K.




                                   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: November 10, 2000                    ---------------------------------
                                              Frank Russomanno
                                              Chief Financial Officer