SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


(Mark one)

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

                  For the quarterly period ended March 31, 1997

                                       OR

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


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


                           Commission File No. 0-23900


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


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


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


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


 --------------------------------------------------------------------------
 (Former name, former address and formal fiscal year, if changed since last
 report)

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.  Yes X  No
                                                                       ----  ---

     As of May 1, 1997,  9,602,730  shares of Common  Stock of the  issuer  were
outstanding.
<PAGE>
                    IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES

                                      INDEX



                                                                        Page
                                                                       Number
                                                                       ------

PART I - FINANCIAL INFORMATION

     Item 1. Financial Statements

          Consolidated  Balance Sheets - March 31, 1997 and
          December  31, 1996............................................   1

          Consolidated Statements of Operations - For the three
          months ended March 31, 1997 and March 31, 1996................   2

          Consolidated Statements of Cash Flows - For the three 
          months ended March 31, 1997 and March 31, 1996................   3

          Notes to Consolidated Financial Statements....................   4

     Item 2.  Management's Discussion and Analysis of Financial
              Condition and Results of Operations.......................   5

PART II - OTHER INFORMATION

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

SIGNATURES..............................................................   9

<PAGE>
PART I - FINANCIAL INFORMATION

ITEM I - FINANCIAL STATEMENTS

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


                                           March 31,                December 31,
ASSETS                                       1997                       1996
                               =========================    ====================

Current Assets:
  Cash and cash equivalents                  $2,402,260              $1,001,254
  Accounts receivable, net of
   allowance for doubtful accounts
   of $200,000                                4,405,475               5,626,208
  Stock subscription receivable                 784,483                 775,862
  Notes receivable - current                  5,311,660               1,274,773
  Inventory                                     917,125               1,182,517
  Costs and estimated earnings in
   excess of billings                         2,790,863               1,655,754
  Bonding deposits                                8,998                  55,472
  Deferred income taxes                       2,309,000               2,609,000
  Due from officers                             255,477                 208,676
  Prepaid expenses and other
   current assets                               805,872               1,884,977
                                           ------------    --------------------
     Total Current Assets                    19,991,213              16,274,493

Investment in Affiliate, at cost              1,300,000               1,300,000
Notes Receivable - long term                  2,929,958               1,572,238
Deferred Issuance Costs, net                    210,833                       -
Property, Plant and Equipment, net            2,627,746               2,742,650
Other Assets                                    486,393                 313,246
                                           ------------    --------------------
                                           $ 27,546,143             $22,202,627
                                           ============    ====================
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Current portion of long-term debt            $364,647                $351,127
  Accounts payable and accrued
   expenses                                   8,106,196               7,105,827
  Billings in excess of costs and
   estimated earnings                           157,846                  86,496
                                           ------------    --------------------
     Total Current Liabilities                8,628,689               7,543,450

Long-Term Debt                                                          164,034

Minority Interest                             1,034,483               1,034,483
                                           ------------    --------------------
      Total Liabilities                       9,663,172               8,741,967
                                           ------------    --------------------
Commitments and Contingencies

Stockholders' Equity:
  Preferred stock, authorized 
   1,000,000 shares $1.00 par 
   value, issued and outstanding
   300 shares in 1997                               300
  Common stock, authorized 20,000,000
   shares $.001 par value, issued
   and outstanding 9,602,370                      9,603                   9,603
  Additional paid-in capital                 28,359,165              25,359,465
  Retained earnings (deficit)               (10,486,097)            (11,908,408)
                                           ------------    --------------------
                                             17,882,971              13,460,660
                                           ------------    --------------------
                                           $ 27,546,143             $22,202,627
                                           ============    ====================


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


                                        1
<PAGE>
                    IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                 Three Months Ended March 31,
                                                 1997                    1996
                                              ----------              ----------
Revenue:
  Contract income                             $4,733,164              $7,481,845
  Sale of equipment                            3,531,800                       -
                                              ----------              ----------
                                               8,264,964               7,481,845
                                              ----------              ----------
Cost of Sales:
  Direct job costs                             3,989,508               4,564,141
  Cost of equipment sales                        286,676                       -
                                               4,276,184               4,564,141
                                              ----------              ----------

Gross Profit                                   3,988,780               2,917,704
                                              ----------              ----------
Operating Expenses:
  General and administrative expenses          2,167,654               1,652,783
  Depreciation and amortization                  156,059                 211,161
                                               2,323,713               1,863,944
                                              ----------              ----------

 Income from Operations                        1,665,067               1,053,760

Other Income (Expense):
  Interest income(expense)                        57,244                   2,825
                                              ----------              ----------

Income before Provision for Income Taxes       1,722,311               1,056,585

Provision for Income Taxes                       300,000                 210,000
                                              ----------              ----------

Net Income                                    $1,422,311              $  846,585
                                              ==========              ==========
Earnings per Share:
  Primary earning  per share                  $     0.15              $     0.13
                                              ==========              ==========

  Fully diluted earnings  per share           $     0.15              $     0.13
                                              ==========              ==========

  Primary common shares outstanding            9,602,730               6,640,934
                                              ==========              ==========

  Fully diluted common shares outstanding      9,602,730               6,640,934
                                              ==========              ==========


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


                                        2
<PAGE>
                    IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                            For the Three months Ended March 31,
                                                1997                    1996
                                             ----------             -----------
Cash Flows from Operating Activities:
  Net Income                                 $1,422,311             $   846,585
  Adjustments to reconcile net income
   to net cash provided by (used in) 
   operating activities:
     Deferred Taxes                             300,000                 210,000
     Depreciation and amortization              138,351                 211,161
     Write-down of surplus inventory
     Decrease (Increase) In:
       Accounts receivable                    1,220,733              (1,397,106)
       Inventory                                265,392                       -
       Notes receivable                      (5,403,228)                 68,080
       Costs and estimated earnings 
        in excess of billings                (1,135,109)                203,972
       Bonding deposits                          46,474                  50,000
       Recoverable income taxes                       -                  19,275
       Prepaid expenses and other
        current assets                        1,079,105                 238,850

     Increase (Decrease) In:
       Accounts payable and accrued
        expenses                              1,000,369                (113,318)
       Billings in excess of costs and
        estimated earnings                       71,350                 352,670
                                             ----------             -----------
        Net cash provided by (used in)
          operating activities                 (994,252)                690,169
                                             ----------             -----------
Cash Flows from Investing Activities:
  Acquisition of property, plant and
   equipment                                    (31,987)               (476,101)
  Proceeds from disposal of property,
   plant and equipment                           17,707                       -
  Aquisition of other assets                   (173,147)                      -
  Loans and advances to officers                (46,801)               (122,092)
                                             ----------             ------------
         Net cash (used in) investing
          activities                           (234,228)               (598,193)
                                             ----------             ------------
Cash Flows from Financing Activities:

  Net proceeds from convertible preferred
   stock issuance                             2,780,000                 (85,880)
  Principal payments on long-term debt         (150,514)                      -
  Issuance of common stock upon exercise
   of stock options                                   -                  14,659
                                             ----------             -----------
         Net cash provided by (used in)
          financing activities                2,629,486                 (71,221)
                                             ----------             -----------
Increase (Decrease) in Cash and Cash
 Equivalents                                  1,401,006                  20,755

Cash and Cash Equivalents, beginning of
 period                                       1,001,254                  83,286
                                             ----------             -----------

Cash and Cash Equivalents, end of period     $2,402,260             $   104,041
                                             ==========             ===========
Supplementary Disclosures of Cash Flow
 Information:

Cash paid during the period for:
  Interest expense                           $   47,118             $     8,909
                                             ==========             ===========
  Income taxes                                        -                       -
                                             ==========             ===========
Supplemental Disclosure of Noncash
 Investing and Financing Activities:

 Conversion of convertible promissory
  notes to common stock                      $2,828,037             $ 1,668,628
                                             ==========             ===========

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

                                        3
<PAGE>
                    IDM ENVIRONMENTAL CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.   INTERIM PRESENTATION

     The interim consolidated  financial statements are prepared pursuant to the
     requirements  for  reporting  on Form 10- Q. These  statements  include the
     accounts  of IDM  Environmental  Corp.  and  all of its  wholly  owned  and
     majority owned  subsidiary  companies.  The December 31, 1996 balance sheet
     data was derived from audited financial statements but does not include all
     disclosures  required by  generally  accepted  accounting  principles.  The
     interim   financial   statements  and  notes  thereto  should  be  read  in
     conjunction  with  the  financial  statements  and  notes  included  in the
     Company's Form 10-K for the year ended December 31, 1996. In the opinion of
     management,  the interim financial  statements reflect all adjustments of a
     normal  recurring  nature necessary for a fair statement of the results for
     the interim periods presented. The current period results of operations are
     not necessarily indicative of results which ultimately will be reported for
     the full year ending December 31, 1997.

2.   NOTES RECEIVABLE

     The Company entered into a sale agreement with a German company dated as of
     March 28,  1997 for the sale of certain  power  generating  equipment  (the
     "equipment")  for a  total  purchase  price  of  six  million  ($6,000,000)
     dollars. The payment terms of the sale agreement require an initial payment
     of $600,000 and four installment  payments of $1,350,000 each plus interest
     at 5.6246 % payable on  September 28 and December 28, 1997 and March 28 and
     June 28, 1998.  The debt is  collateralized  by a security  interest in the
     equipment.  Prior to the  sale,  the  equipment  was owned  jointly  by the
     Company  and its joint  venture  partner,  UPE.  The  Company has agreed to
     purchase  UPE's  ownership  interest in the  equipment for two million five
     hundred thousand ($2,500,000) dollars.

3.   CONTINGENCIES

     On August 15, 1996, the U.S.  Department of Labor,  Occupational Safety and
     Health  Administration  ("OSHA") issued a willful citation and notification
     of penalty in the amount of $147,000 on the Company in connection  with the
     accidental death of an employee of one of the Company's  subcontractors  on
     the  United  Illuminating  Steel  Point  Project  job  site in  Bridgeport,
     Connecticut.  A complaint was filed against the Company by the Secretary of
     Labor, United States Department of Labor on September 30, 1996. The Company
     is contesting the Citations and Notification of Penalty.

     In November of 1996, a shareholder filed a class action lawsuit against the
     Company and certain directors and officers of the Company.  The suit, filed
     in the Superior  Court of New Jersey,  Middlesex  County,  alleges that the
     Company  disseminated  false and  misleading  financial  information to the
     investing  public  between  March 27, 1996 and  November 18, 1996 and seeks
     damages in an unspecified amount to compensate  investors who purchased the
     Company's  common  stock  between  the  indicated  dates  as  well  as  the
     disgorgement  of profits  allegedly  received by the individual  defendants
     from sales of common stock during that period.  The Company  believes  this
     action is without merit and intends to vigorously contest this matter.

     On February  11,  1997 the  Company  was served  with a lawsuit  naming the
     Company as a  co-defendant  in a wrongful death cause of action arising out
     of the accidental death of an employee of a subcontractor.  The suit, filed
     in the Federal  District  Court for the  Northern  District of Indiana,  is
     based on the same facts as gave rise to the  aforementioned  administrative
     proceeding  instituted  by OSHA.  Management  believes that the suit, as it
     relates to the Company, is without merit, and intends to vigorously contest
     this claim.  In addition  the  Company  has  insurance  in place to protect
     against such events.

     On April 1, 1997  Continental  Waste  Conversion,  Inc.  ("CWC")  commenced
     litigation against the Company and two of its subsidiaries,  Global Waste &
     Energy, Inc.,  Delaware,  and Global Waste & Energy, Inc., Alberta, and the
     two principal  officers of Global Alberta.  CWC alleges that the agreements
     entered into whereby CWC granted to Global  Delaware  the  exclusive  world
     wide rights (excluding Canada) to the proprietary Kocee Gas Generator waste
     treatment  technology  in exchange  for a 10%  interest in Global  Delaware
     should be voided  because  amongst  other claims CWC did not obtain  proper
     approvals and the  transaction was not consummated on an arms length basis.
     Their claim alleges the loss of revenues estimated at $30 million. Prior to
     the closing,  the Company  obtained the legal opinion of CWC's counsel that
     states "CWC has full power,  without  limitation  in any way, to enter into
     the agreements, and all necessary corporate steps and proceedings have been
     taken  so that  the  agreements  are  properly  granted  and  executed  and
     delivered as binding  obligations of CWC". The Company  believes this claim
     is without merit and intends to vigorously contest this claim.


                                        4
<PAGE>
Item 2. Management's  Discussion and Analysis Of Financial Condition And Results
        Of Operations.

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

Material Changes in Results Of Operations

The Company's total revenues  increased by  approximately  10.5% from $7,482,000
for the quarter ended March 31, 1996 to  $8,265,000  for the quarter ended March
31, 1997.  Contract  service income  decreased  during the quarter by 36.7% from
$7,482,000  in 1996 to  $4,733,000  in 1997.  The  decrease in contract  service
income is  attributable  to  expected  revenues  being  delayed  into the second
quarter  at our  Oak  Ridge  and  Boston  offices.  Surplus  equipment  revenues
increased  from zero in 1996 to  $3,532,000  in 1997.  The  increase  in surplus
equipment  revenues was  attributable to the sale of four generators to a German
company.

Direct  job costs  decreased  by  approximately  12.6% from  $4,564,000  for the
quarter  ended March 31,  1996 to  $3,990,000  for the same period in 1997.  The
primary  elements of such  decrease in job costs were job  salaries and material
and  supplies.  The  decrease in job costs was  attributable  to the decrease in
contract service revenues during the quarter.  The reason why contract  revenues
decreased  36.7% and direct job costs decreased only 12.6% during the quarter is
primarily  attributable  to one contract  where the direct job costs equaled the
contract revenues of $1,144,000.  Cost of equipment sales increased from zero in
1996  to  $287,000  in  1997.  The  increase  in  cost of  equipment  sales  was
attributable to the sale mentioned above.

While  total  revenues   increased  by  10.5%  for  the  quarter,   general  and
administrative  expenses  increased  31.2 % from  $1,653,000  during the quarter
ended March 31, 1996 to $2,168,000  during the same period in 1997. The increase
in general and  administrative  expense was attributable to $144,000 in expenses
recorded by the Company's 90% owned  subsidiary,  Global Waste & Energy Inc. and
increases in professional fees and insurance expense (due to additional  premium
as a result of an audit on the prior year  premium)  of  $242,000  and  $98,000,
respectively.

In addition to its  operating  income and  expenses,  the Company  reported  net
interest  income of $57,000 for the quarter  ended March 31, 1997 as compared to
net interest  income of $3,000 for the same period in 1996.  The increase in net
interest  income/expense  was  attributable to $40,000 in interest expense which
accrued on indebtedness  which remained  outstanding during the first quarter of
1996 out of the $5,000,000 of  convertible  notes issued in the third quarter of
1995 versus no  corresponding  expense in the first  quarter of 1997, as all the
notes had been converted as of December 31, 1996.

As a result of the  foregoing,  the  Company  reported  income  before  taxes of
$1,722,000  and net income of $1,422,000 for the quarter ended March 31, 1997 as
compared to income before taxes of $1,057,000 and net income of $847,000 for the
same quarter in 1996.


Material Changes in Financial Condition, Liquidity and Capital Resources.

At March 31, 1997, the Company had a backlog totaling  approximately $47 million
compared  to a backlog  of  approximately  $50  million at March 31,  1996.  The
largest component of the Company's backlog at March 31, 1997 was $15 million for
the East Dam project.

In addition to its existing  backlog,  the Company is presently  bidding on, and
intends to bid on numerous projects to replace revenues from projects which will
be completed  during 1997 and to increase  the total  dollar  volume of projects
under contract.  Management anticipates that the Company's efforts to bid on and
secure new contracts will focus on projects  which can be readily  serviced from
the three  regional  offices  opened by the  Company  during  1994 and 1995.  In
addition,  the Company has submitted  proposals on several  large  international
plant relocation projects. The Company's regional offices,  particularly the Oak
Ridge, Tennessee, Los Alamos, New Mexico, and Boston,  Massachusetts offices are
strategically located in areas having a high concentration of prospective public
and private  remediation  sites. While bidding to perform services at such sites
is expected to be highly  competitive,  management  believes  that the Company's
existing  presence  on  projects  at these  locations  combined  with its proven
expertise  and  resources  will enhance the  Company's  chances of  successfully
bidding on substantial new projects.


                                        5
<PAGE>
The  Company  had  working  capital  of $  11,362,000,  including  cash and cash
equivalents  balances of $2,402,000 at March 31, 1997.  This compares to working
capital of $8,731,000 and a cash balance of $1,001,000 at December 31, 1996. The
increase in working  capital and cash is primarily  attributable  to the sale in
February of 1997 of $3 million of Series B Convertible Preferred Stock.

Quarter-end  receivables  as a percentage of first  quarter  income was 53.6% in
1997  compared  to 107% in the same  period of 1996.  The  percentage  excluding
equipment  sales (which is a note  receivable)  would be a more  comparable 92%.
Year-end  receivables  as  a  percentage  of  fourth  quarter  income  increased
substantially  from 53.0% in 1994 to 103.5% in 1995 and 157% in 1996. This ratio
was 82% at December  31,  1993.  The ratio  dropped to 53% at December  31, 1994
because the Company  received a $4,184,000  payment a major contract on December
23, 1994. If this payment had been received after year end, the ratio would have
been a more comparable 98.4%.

Unbilled revenue as a percentage of quarterly contract income has increased from
0% at December  31, 1993,  to 31% at December  31, 1994,  to 56% at December 31,
1995, and to 44% at December 31, 1996 and 56% at March 31, 1997. Also,  accounts
payable have constantly  decreased  since 1994 where as accounts  receivable and
unbilled revenues have increased substantially during this period.

Prior to going  public  in  April  1994,  most of the  Company's  revenues  were
generated in the private sector. Many of these contracts had substantial initial
mobilization  payments and  generated  positive cash flow during the life of the
contract. Since then the company has been successful,  as a result of its growth
strategy,  in obtaining a number of government  contracts at major Department of
Energy and  Department  of Defense  sites.  This work was  obtained  as a direct
result  of  opening  three new  regional  offices.  The  experience  with  these
contracts has been negative cash flows until we near contract  completion.  This
is due to the requirement  that we submit a schedule and a schedule of values at
the beginning of the job and bill according to the percent complete of each item
in the schedule of values - not the costs we have incurred. Our jobs of any size
are at a risk of being front end cost  loaded  when there is little  progress to
report (i.e., we cannot bill until the structure is demolished).  The Company is
aware of this  problem  and is trying to  remedy it by  maximizing  mobilization
costs in the schedule of values,  requiring  subcontractors  to bill on the same
basis and aggressively  negotiating better (less front end cost loaded) schedule
of values.

Initially the Company tried to increase  payment terms to vendors by paying them
after the Company  received  our  payment.  This method was  unsuccessful.  Many
vendors put the Company on a COD basis and its D&B rating weakened because D&B's
file showed  "increased  slowness in the company's  payment  record." This lower
rating  hurt the  Company in attempts  to  establish  credit  with new  vendors.
Because IDM is a growing company and trying to establish good relationships with
its vendors,  the company is now paying its vendors within terms to fifteen days
late and attempting to improve its D&B "paydex  rating." The paydex rating of 60
is much worse than the  average of the lower  quartile  for the  industry  of 68
(median for the industry is 75).

Inventory  of $917,000 at March 31,  1997  decreased  as a result of the sale of
four  generators  during the quarter.  This  inventory  consists of fifteen (15)
generator sets with a total  electrical  capacity of 212,500  kilowatts per hour
(KWH).  The estimated market price of the Company's  generator  inventory is ten
million  dollars.  Twelve (12) of the  generators  are steam driven and range in
size from 12,500 kilowatts to 33,000 kilowatts (KW). Three (3) of the generators
are diesel driven and range in size from 1,000 to 9,000  kilowatts  (KW).  These
generator sets should not be considered as obsolete or outdated  inventory since
its design and  technology  has not changed  much over the years.  They are very
long lead items (15-18 months), experience and project specific and as such they
are not to be compared with disposable items.

It is the  Company's  intent to  incorporate  two (2) 15,000 KW  generator  sets
(steam driven) in the Company's pending El Salvador waste to energy project.  In
future  projects,  the  Company  will try to use the  balance  of the  15,000 KW
generator sets and the 12,500 KW and 33,000 KW sets.

At March 31, 1997, the Company had no long term debt. Long term debt at December
31,  1996  totaled  $164,034,  consisting  of  installment  debt  secured by job
equipment.

The Company  entered into a sale  agreement  with a German  company  dated as of
March  28,  1997  for the  sale  of  certain  power  generating  equipment  (the
"equipment") for a total purchase price of six million ($6,000,000) dollars. The
payment terms of the sale agreement  require an initial  payment of $600,000 and
four  installment  payments of $1,350,000 each plus interest at 5.6246 % payable
on September  28 and December 28, 1997 and March 28 and June 28, 1998.  The debt
is collateralized  by a security  interest in the equipment.  Prior to the sale,
the equipment  was owned  jointly by the Company and its joint venture  partner,
UPE.  The  Company  has  agreed to  purchase  UPE's  ownership  interest  in the
equipment for two million five hundred thousand ($2,500,000) dollars


                                                         6
<PAGE>
During the quarter ended March 31, 1997,  the Company made  additional  loans of
$325,000  repayable  upon  demand with  interest at 9.25% to its ninety  percent
owned subsidiary,  Global Waste & Energy, Inc. ("Global Delaware"). In addition,
IDM,  through a  wholly-owned  subsidiary  of Global  Delaware  loaned  $160,000
(Canadian)  to  Continental  Waste  Conversion,  Inc.  ("CWC")  repayable  in 18
consecutive  installments  commencing  January 1, 1997 with interest at 7.5% per
annum.  As of the date of this  report CWC has made no  payment  and the loan is
delinquent.  On April 1, 1997, CWC commenced  litigation against the Company and
two of its  subsidiaries,  Global  Delaware  and  Global  Alberta,  and  the two
principal  officers of Global Alberta.  CWC alleges that the agreements  entered
into  whereby CWC granted to Global  Delaware  the  exclusive  world wide rights
(excluding  Canada)  to the  proprietary  Kocee Gas  Generator  waste  treatment
technology  in exchange for a 10% interest in Global  Delaware  should be voided
because  amongst  other  claims  CWC did not  obtain  proper  approvals  and the
transaction was not consummated on an arms length basis. Their claim alleges the
loss of revenues  estimated  at $30 million.  Prior to the closing,  the Company
obtained  the legal  opinion of CWC's  counsel  that states "CWC has full power,
without  limitation in any way, to enter into the agreements,  and all necessary
corporate  steps and  proceedings  have been  taken so that the  agreements  are
properly granted and executed and delivered as binding  obligations of CWC". The
Company  believes this claim is without merit and intends to vigorously  contest
this claim.

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

Since 1994 the Company has consistently generated negative operating cash flows.
The primary  reason for this the Company's  policy of  successfully  bidding new
work at lower  than  normal  margins  in order to  penetrate  strategic  markets
serviced by the Company's newly opened regional offices. Now that the Company is
established  in these  markets,  the  Company  has been  bidding  work at normal
margins.  Management of the Company  believes,  based on the current  backlog of
work and  expected  work to be awarded  based on bids  outstanding,  that future
operating cash flows will be positive.

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


                                        7
<PAGE>
                           PART II - OTHER INFORMATION


Item 6. Exhibits and Reports on Form 8-K

     (a)  Exhibits

          10.1   Sale Agreement with CAG Technologie

          10.2   Security Agreement with CAG Technologie

          10.3   Promissory Note with CAG Technologie

          27     Financial Data Schedule

     (b)  Reports on Form 8-K

          None


                                        8
<PAGE>
                                   SIGNATURES


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


                                           IDM ENVIRONMENTAL CORP.


Dated:   May 16, 1997                      By:  /s/ Joel Freedman
                                              ----------------------------------
                                               Joel Freedman, President


Dated:   May 16, 1997                      By:  /s/ Michael B. Killeen
                                              ----------------------------------
                                                Michael B. Killeen, Principal
                                                Financial and Accounting Officer


                                        9