SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-QSB


(Mark One)

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

                  For the quarterly period ended June 30, 1999 or

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

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

                         Commission file number 0-22136

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

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

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

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

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

At August 3, 1999 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 -
                  June 30, 1999 (Unaudited) and
                  December 31, 1998........................................ F-3

                  Condensed Consolidated Statements of Income -
                  Six and Three Months Ended June 30, 1999 and
                  June 30, 1998 (Unaudited)...........................F-4 - F-5

                  Condensed Consolidated Statements of Cash Flows -
                  Six Months Ended June 30, 1999 and
                  June 30, 1998 (Unaudited)................................ F-6

                  Notes to Condensed Consolidated Financial Statements
                  June 30, 1999 (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


<PAGE>


                 MENLO ACQUISITION CORPORATION AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      JUNE 30, 1999 AND DECEMBER 31, 1998


                                                 June             December
                                               30, 1999           31, 1998
                                               --------            --------
                                             (Unaudited)         (See Note 1)
                          ASSETS                (In thousands of dollars)

Current assets:
     Cash                                          $ 1,257            $     25
     Marketable securities, at market                  181                   -
     Accounts receivable:
        Trade, net of allowance for doubtful
           accounts of $626 and $566                 3,837               4,833
        Unbilled receivables                           175                 107
        Affiliates                                     292                 285
     Prepaid expenses and other current assets          70                  82
     Due from affiliate                                  -                  27
                                               -----------           ---------
               Total current assets                  5,812               5,359

Equipment and furnishings, net of accumulated
     depreciation of $732 and $550                   1,144               1,020
Other assets                                            17                  38
                                                 ---------           ---------

               Totals                               $6,973              $6,417
                                                    ======              ======

        LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Notes payable - bank                          $     -             $   400
     Current portion of long-term debt                 106                 106
     Accounts payable                                  818                 610
     Customer deposits                                 436                 523
     Accrued expenses and other liabilities            553                 243
     Income taxes payable                              254                   -
     Due stockholder                                     -                  55
                                                 ---------           ---------
               Total current liabilities             2,167               1,937
Long-term debt, net of current portion                 221                 275
                                                  --------            --------
               Total liabilities                     2,388              2,212
                                                   -------             -------

Stockholders' equity:
     Common stock, $.0001 par value; 40,000,000
       shares authorized; 5,263,348 issued and
       outstanding                                       1                   1
     Additional paid-in capital                      4,204               4,204
     Retained earnings                                 380                   -
                                                  --------           ---------
               Total stockholders' equity            4,585               4,205
                                                   -------             -------

               Totals                               $6,973              $6,417
                                                    ======              ======


See Notes to Condensed Consolidated Financial Statements.


                                       F-3
<PAGE>


                 MENLO ACQUISITION CORPORATION AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                   SIX MONTHS ENDED JUNE 30, 1999 AND 1998
                                   (Unaudited)



                                               1999                1998
                                              ------              ------
                                               (In thousands of dollars,
                                                  except share data)

Gross revenue                                 $6,521              $4,703
Direct project costs and other costs of
 operations                                    2,562               1,962
                                             -------             -------

Net revenue                                    3,959               2,741
                                             -------             -------

Expenses:
     Labor and related expenses                  981                 901
     Selling, general and administrative       2,372               2,115
     Interest                                     21                  42
                                             -------             -------
        Totals                                 3,374               3,058
                                             -------             -------

Income(loss)from operations                      585                (317)

Other income                                      49                  49
                                             -------             -------

Income(loss) before income taxes                 634                (268)

Provision (credit) for income taxes              254                (107)
(See Note 5)                                  ------             -------


Net income (loss)                            $   380             $  (161)
                                             =======             =======

Basic net income (loss) per share              $.07                $(.03)
                                               ====                =====

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



















See Notes to Condensed Consolidated Financial Statements.

                                       F-4



<PAGE>

                 MENLO ACQUISITION CORPORATION AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                     THREE MONTHS ENDED JUNE 30, 1999 AND 1998
                                   (Unaudited)



                                               1999                1998
                                              ------              ------
                                               (In thousands of dollars,
                                                  except share data)

Gross revenue                                 $3,274              $2,395
Direct project costs and other costs of
 operations                                    1,259               1,124
                                             -------             -------

Net revenue                                    2,015               1,271
                                             -------             -------

Expenses:
     Labor and related expenses                  483                 469
     Selling, general and administrative       1,228               1,175
     Interest                                      7                  18
                                             -------             -------
        Totals                                 1,718               1,662
                                             -------             -------

Income(loss)from operations                      297               (391)

Other income                                      37                  23
                                             -------             -------

Income(loss) before income taxes                 334                (368)

Provision (credit) for income taxes              254                (147)
(See Note 5)                                  ------             -------


Net income (loss)                            $    80             $  (221)
                                             =======             =======

Basic net income (loss) per share              $.01                $(.05)
                                               ====                =====

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



















See Notes to Condensed Consolidated Financial Statements.

                                       F-5



<PAGE>



                 MENLO ACQUISITION CORPORATION AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                   SIX MONTHS ENDED JUNE 30, 1999 AND 1998
                                   (Unaudited)



                                                       1999                1998
                                                       ----                ----
                                                       (In thousands of dollars)
Operating activities:
     Net income (loss)                                  $380              $(161)
     Adjustments to reconcile net income (loss) to net
        cash provided by operating activities:
        Depreciation                                     182                158
        Provision for bad debts                          100                 60
        Changes in operating assets and liabilities:
           Accounts receivable - trade                   896                 36
           Unbilled receivables                          (68)              (139)
           Accounts receivable - affiliates               (7)              (199)
           Prepaid expenses and other current assets      12                 40
           Due from affiliate                             27                122
           Other assets                                   21               (288)
           Accounts payable                              208                478
           Customer deposits                             (87)               144
           Accrued expenses and other liabilities        310                195
           Taxes payable                                 254                  -
                                                      ------             ------
            Net cash provided by operating activities  2,228                446
                                                      ------             ------

Investing activities:
     Purchase of equipment                              (306)              (340)
     Purchase of marketable securities                  (181)                 -
                                                      ------             ------
            Net cash used in investing activities       (487)              (340)
                                                      ------             ------

Financing activities:
     Repayment of notes payable - bank                  (400)              (366)
     Repayment of long-term debt - bank                  (54)               (50)
     Advances from (repayment to) stockholder            (55)               689
                                                      ------              -----
           Net cash (used in) provided by
            financing activities                        (509)               273
                                                       -----             ------

Net increase in cash                                   1,232                379

Cash, beginning of period                                 25                  4
                                                      ------             ------

Cash, end of period                                   $1,257              $ 383
                                                      ======             ======


Supplemental disclosure of cash flow data:
     Interest paid                                     $  21              $  42
                                                       =====              =====

     Income taxes paid                                 $   1              $  61
                                                       =====              =====




See Notes to Condensed Consolidated Financial Statements.

                                       F-6
<PAGE>




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

June 30, 1999

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.  As used  herein,  "Company"  refers  to Menlo  and its  operating
subsidiaries.  Certain  information and footnotes required by generally accepted
accounting principles for complete financial statements have been omitted. 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.  Further  information can be obtained by referring to the
Company's  Form 8-K  filed  with the SEC on March  10,  1999 and to the  audited
financial  statements  and footnotes  included in the Company's Form 8-K/A filed
May 10, 1999.

Certain  amounts in the 1998  Financial  Statements  have been  reclassified  to
conform with the current presentation.

The  consolidated  results of operations  for the six months ended June 30, 1999
are not necessarily indicative of the results to be expected for the full year.

The  Company  has  two  operating   subsidiaries.   One  provides  environmental
consulting,  remedial and disposal  services with offices in Parsippany and West
Windsor, New Jersey  (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 and
eastern Pennsylvania.


NOTE 2: EARNINGS PER SHARE

Effective  January 1, 1999,  the Company  adopted the provisions of Statement of
Financial  Accounting  Standards  No. 128,  Earnings per Share ("FAS 128") which
requires the  presentation  of "basic" and, if appropriate,  "diluted"  earnings
(loss) per common  share.  The  calculation  of the basic net income  (loss) per
share and the basic  weighted  average  common shares  outstanding  shown in the
accompanying unaudited Condensed  Consolidated  Statements of Income for the six
and  three  months  ended  June 30,  1998 have been  computed  as if the  shares
outstanding as of June 30, 1999 had been  effectively  outstanding at January 1,
1998.

For the six and three  months  ended June 30, 1999 and 1998,  the Company had no
common stock  equivalents and,  accordingly,  diluted earnings per share amounts
have not been presented in the  accompanying  unaudited  Condensed  Consolidated
Statements of Income.

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 has a $750,000  revolving  line-of-credit  facility  utilized by its
consulting segment.  Outstanding  borrowings are secured by substantially all of
the Company's assets.  The line of credit contains certain  covenants,  the most
restrictive of which includes the  maintenance of a maximum capital funds ratio,
as  defined.  As of June  30,  1999,  the  Company  was in  compliance  with all
covenants and there were no amounts outstanding under the line of credit.

NOTE 4: BUSINESS SEGMENTS

The Company adopted Statement of Financial  Accounting  Standards No. 131 ("SFAS
131"), "Disclosures about Segments of an Enterprise and Related Information," at
the  beginning  of 1998.  Following  the  provision  of SFAS 131, 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 in Note 1 above.

     Revenue,  income from operations and other related segment  information for
the six months ended June 30, 1999 and 1998 follows:
                                            1999                 1998
                                            -----                -----
                                             (In Thousands of Dollars)
  Gross revenue:
       Consulting                          $  4,646              $3,195
       Lab                                    2,320               1,745
       Inter-segment                           (445)               (237)
                                           --------             -------

           Totals                          $  6,521              $4,703
                                           ========             =======

  Direct project costs and other costs
     of operations:
       Consulting                          $  1,871              $1,277
       Lab                                    1,136                 922
       Inter-segment                           (445)               (237)
                                           --------             -------

           Totals                          $  2,562              $1,962
                                           ========             =======

  Other operating expenses:
       Consulting                          $  2,608              $2,389
       Lab                                    1,020                 731
       Inter-segment                           (254)                (62)
                                           --------             -------

           Totals                          $  3,374              $3,058
                                           ========             =======

  Income (loss) from operations:
       Consulting                          $    167              $ (471)
       Lab                                      164                  92
       Inter-segment                            254                  62
                                           --------             -------

           Totals                          $    585              $ (317)
                                           ========             =======

  Other income (expense):
       Consulting                          $    283              $  110
       Lab                                       20                   1
       Inter-segment                           (254)                (62)
                                           --------             -------

           Totals                          $     49              $   49
                                           ========             =======

                                                F-8
<PAGE>

NOTE 4: BUSINESS SEGMENTS (CONTINUED):

  Income (loss) before taxes:
       Consulting                          $    450             $  (361)
       Lab                                      184                  93
                                           --------            --------

           Totals                          $    634             $  (268)
                                           ========            ========

  Provision (credit) for income taxes:
       Consulting                          $    181             $  (144)
       Lab                                       73                  37
                                           --------            --------

           Totals                          $    254             $  (107)
                                           ========            ========

  Net Income (loss):
       Consulting                          $    269             $  (217)
       Lab                                      111                  56
                                           --------            --------

          Totals                           $    380             $  (161)
                                           ========            ========

     Revenue,  income from operations and other related segment  information for
the three months ended June 30, 1999 and 1998 follows:

                                             1999                 1998
                                            -----                -----

                                           (In Thousands of Dollars)
  Gross revenue:
       Consulting                          $  2,233             $ 1,564
       Lab                                    1,235                 945
       Inter-segment                           (194)               (114)
                                           --------            --------

          Totals                           $  3,274             $ 2,395
                                           ========            ========

  Direct project costs and other
   costs of operations:
       Consulting                          $    847             $   731
       Lab                                      606                 507
       Inter-segment                           (194)               (114)
                                           --------            --------

          Totals                           $  1,259             $ 1,124
                                           ========             =======

 Other operating expenses:
       Consulting                          $  1,305             $ 1,274
       Lab                                      546                 420
       Inter-segment                           (133)                (32)
                                           --------             -------

           Totals                          $  1,718             $ 1,662
                                           ========             =======

   Income (loss) from operations:
        Consulting                         $     81             $  (441)
        Lab                                      83                  18
        Inter-segment                           133                  32
                                            -------             -------

           Totals                          $    297             $  (391)
                                           ========             =======

                                       F-9

<PAGE>


NOTE 4: BUSINESS SEGMENTS (CONTINUED):

    Other income (expense):
         Consulting                        $    151             $    55
         Lab                                     19                   -
         Inter-segment                         (133)                (32)
                                           --------             -------

             Totals                        $     37             $    23
                                           ========             =======

    Income (loss) before taxes:
         Consulting                        $    232             $  (386)
         Lab                                    102                  18
                                           --------             -------

             Totals                        $    334             $  (368)
                                           ========             =======

    Provision (credit) for income taxes:
         Consulting                        $    181             $  (154)
         Lab                                     73                   7
                                           --------             -------

             Totals                        $    254             $  (147)
                                           ========             ========

    Net Income (loss):
         Consulting                        $     51             $  (232)
         Lab                                     29                  11
                                           --------             -------

             Totals                        $     80             $  (221)
                                           ========             =======


  Assets by segment as of June 30, 1999
    and 1998 follow:
                                               1999                1998
                                               -----               ----
                                              (In Thousands of  Dollars)

    Cash and marketable securities,
     at market:
         Consulting                        $  1,246             $   285
         Lab                                    192                  98
                                           --------             -------

             Totals                        $  1,438             $   383
                                           ========             =======

    Accounts receivable, net:
         Consulting                        $  3,346             $ 4,024
         Lab                                  1,153               1,681
         Inter-segment                         (195)               (624)
                                           --------             -------

             Totals                        $  4,304             $ 5,081
                                           ========             =======

    Equipment and furnishings, net:
         Consulting                        $    443             $   491
         Lab                                    701                 603
                                           --------             -------

             Totals                        $  1,144             $ 1,094
                                           ========             =======


                                   F-10

<PAGE>

NOTE 4: BUSINESS SEGMENTS (CONTINUED):


    Other assets:
         Consulting                        $     72             $   714
         Lab                                     15                  72
                                           --------             -------

             Totals                        $     87             $   786
                                           ========             =======

             Total assets                  $  6,973             $ 7,344
                                           ========            ========

NOTE 5: INCOME TAXES:

Prior to the acquisition of the two operating subsidiaries by the Company (Refer
to the Form 8-K/A),  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  historical  condensed  consolidated  financial  statements
attributable to these limited liability  companies included with the Form 8-K/A.
The  unaudited  basic net income (loss) per share data as shown on the Condensed
Consolidated  Statements  of Income for the six and three  months ended June 30,
1998 is computed as if the Company acquired the subsidiaries  effective  January
1, 1998 and was subject to Corporate Income Tax.

NOTE 6: MARKETABLE SECURITES:

The Company  purchased  marketable  securities  on June 28, 1999. As of June 30,
1999,  the  cost of these  securities  approximated  market  and,  as  such,  no
comprehensive income has been recorded.


























                                      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,  the  possibility of the
Company  making  acquisitions  during the next 12 to 18 months and the impact of
becoming Year 2000 compliant.  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  tables set forth,  for the periods  indicated:  i) the percentage
that certain  items in the  condensed  consolidated  statements of income of the
Company bear to gross revenues,  and ii) the percentage  increase  (decrease) in
dollar amounts of such items from year to year.

Six Month Comparison for Years 1999 and 1998

                                                                      Percentage
                                                                       Increase
                                                                      (Decrease)
                                                                         Six
                                                                        Months
                                             Percentage                 Ended
                                          of Gross Revenue             6/30/99
                                         Six Months Ended                 vs.
                                         ----------------                 --
                                     6/30/99          6/30/98          6/30/98
                                     ------           -------          -------

Gross revenue                           100.0%          100.0%            38.7%
Direct project costs and other costs
    of operations                        39.3            41.7             30.6%
                                       ------          ------             -----
       Net revenue                       60.7            58.3             44.4%
                                       ------          ------             -----

Expenses:
    Labor and related expenses           15.0            19.2              8.9%
    Selling, general and
     administrative                      36.4            45.0             12.2%
    Interest                              0.3             0.9            (50.0)%
                                       ------          ------            ------
       Totals                            51.7            65.1             10.3%
                                       ------          ------            ------

Income (loss) from operations             9.0            -6.8            284.5%

Other income                              0.7             1.1              0.0%
                                       ------          ------            ------

Income (loss) before income taxes         9.7            -5.7            336.6%
                                       ======          ======            ======

<PAGE>




         Gross  revenues  for the six  months  ended June 30,  1999 were  $6,521
versus  $4,703  for the  first  six  months  of  1998,  an  increase  of  38.7%.
Significant  increases  occurred in both the  Consulting  and Lab segments.  Lab
revenues increased $367 (net of inter-segment  billing) and Consulting increased
$1,451.  Consulting  revenue  increased  due to  continued  strength in the real
estate  sector,   increased  hours  billed  from  the  professional   staff  and
improvement in the accounting systems ability to capture job related expenses in
a timely manner. In 1998, the initial attempt to implement a new computer system
in the billing  (Consulting) and accounting areas caused job related costs to be
expensed  without these  expenditures  being assigned to specific jobs and thus,
not being recorded as revenue in a timely manner.  This problem was rectified in
the third  quarter  1998.  Lab revenue  increases  were a result of direct sales
efforts from a larger sales force and higher  utilization  of equipment  used in
performing Lab services.

         Income  from  operations  was $585 in the first  six  months of 1999 as
opposed  to a loss of $317  for the same  period  in 1998.  This  represents  an
increase of 284.5%. Operating margins rose to 9.0% for the current period from a
negative 6.8% for the first six months of 1998. The increase in operating income
and margin was due to the higher gross revenue  mentioned above offset by slight
increases in operating expenses.  The loss and margin shown for the prior period
were a result of the computer system  implementation  problem that was discussed
above.

         Labor and related expenses increased 8.9% compared to the corresponding
period  in the  prior  year  due to  increases  in the  size  of the  Consulting
segments' technical staff and increases in compensation rates.

         Selling,  general and administrative  expenses increased 12.2% compared
to the  corresponding  period in the prior year primarily due to the increase in
the Lab segment direct sales force and their associated direct selling expenses.

         Interest  expense  decreased  50.0% in the first six  months of 1999 as
compared to the first six months of 1998. This decrease was due to the reduction
in the amount outstanding on the revolving  line-of-credit from $500 at June 30,
1998 to $0 at June 30, 1999.

         Income  before  taxes for the period was $634  compared  with a loss of
$268 in the six months of 1998, an increase of 336.6%. Tax provisions  (credits)
were recorded at an effective  rate of 40% for both 1999 and 1998 (see Note 5 in
the Notes to Condensed Consolidated Financial Statements).  Basic net income per
share  was  $.07 in 1999  versus  a loss of  $(.03)  in 1998.  The  Company  had
5,263,348  shares  outstanding  at June 30, 1999 and the June 30, 1998 per share
amount was calculated  assuming the same number of shares were also  effectively
outstanding  at that date.  The Company had no common stock  equivalents at June
30,  1999 or June 30,  1998,  therefore  no  dilutive  earnings  per share  were
calculated.


Second Quarter Comparison for Years 1999 and 1998

                                                                      Percentage
                                                                       Increase
                                                                      (Decrease)
                                                                        Three
                                                                       Months
                                          Percentage                   Ended
                                       of Gross Revenue                6/30/99
                                     Three Months Ended                 vs.
                                     ------------------                 --
                                     6/30/99          6/30/98         6/30/98
                                     -------          -------         -------
Gross revenue                          100.0%          100.0%            36.7%
Direct project costs and other costs
    of operations                       38.5            46.9             12.0%
                                      ------          ------             -----
       Net revenue                      61.5            53.1             58.5%
                                      ------          ------             -----
<PAGE>

Expenses:
    Labor and related expenses          14.8            19.6              3.0%
    Selling, general and
     administrative                     37.5            49.1              4.4%
    Interest                             0.2             0.7            (58.8)%
                                      ------          ------            ------
       Totals                           52.5            69.4              3.4%
                                      ------          ------            ------

Income (loss) from operations            9.0           -16.3            176.0%
                                                                        ------

Other income                             1.2             0.9             60.9%
                                      ------          ------            ------
Income (loss) before income taxes       10.2           -15.4            190.8%
                                      ======          ======            ======


         Gross  revenue for the quarter ended June 30, 1999 totaled  $3,274,  an
increase of 36.7% from gross  revenue of $2,395 for the second  quarter of 1998.
There were revenue increases in both the Consulting and Lab segments. Net of the
rise in  inter-segment  billing,  Lab  revenues  increased  $210 and  Consulting
increased  $669.  The  increases  were  primarily   attributable  to  the  items
previously discussed in the six-month comparison.

         Income from operations was $297 in the second quarter of 1999, compared
with a loss of $391 for the same period in 1998.  The  operating  margin rose to
9.0% in the current  quarter from a negative  16.3% in the second  quarter 1998.
The computer  system  implementation,  which was completed in the fourth quarter
1998, caused the most severe problems in the second quarter 1998. Therefore, the
majority of the unassigned  expenses were included in the expenses of the second
quarter 1998 causing the unusually  poor operating  margin.  These expenses were
subsequently  reviewed and assigned to specific jobs and included in the revenue
of the third quarter 1998.

         Labor and related  expenses  and  selling,  general and  administrative
expenses  were not  substantially  different in comparing the results of the two
quarters.

         Interest expense decreased 58.8% in the second quarter 1999 as compared
to the second  quarter 1998.  This decrease was due to the fact that the Company
had no amounts  outstanding  on the revolving  line-of-credit  during the entire
second quarter of 1999, while outstanding  amounts in the second quarter of 1998
averaged approximately $550.

         Income  before taxes for the current  quarter was $334  compared with a
loss of $368 in the  second  quarter  of 1998.  Tax  provisions  (credits)  were
recorded at an  effective  rate of 40% for both 1999 and 1998 (see Note 5 in the
Notes to  Condensed  Consolidated  Financial  Statements).  Basic net income per
share was $.01 in 1999  versus a loss of $(.05)  in 1998 and was  calculated  as
described previously. Again, the Company had no common stock equivalents at June
30,  1999 or June 30,  1998,  therefore  no  dilutive  earnings  per share  were
calculated.


Liquidity and Capital Resources

         Net cash provided by operations  for the six months ended June 30, 1999
was $2,228 as compared  to $446 for the first six months of the prior year.  The
increase in cash provided by operations  was primarily due to a decrease in days
sales  outstanding  in the  Company's  receivables  in the  current  year period
compared to the prior year period.  The decrease in days sales  outstanding  was
due to the full  implementation of a new project  accounting  software system in
the Consulting  segment,  enabling more timely billing of the Company's services
and  resulting  in  improved  monitoring  of  accounts  receivable  and  quicker
conversion to cash.  Additionally,  net income increased  substantially from the
prior year and more stringent cash management policies have been implemented.

         The  Company  made net  capital  expenditures  of $306 in the first six
months of 1999  compared  to net capital  expenditures  of $340 in the first six
<PAGE>

months of the prior year. The Company anticipates that its capital expenditures,
excluding  acquisitions,  for the current year will be approximately the same as
those incurred in the prior year.

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

         At June 30, 1999,  the Company had cash on hand of $1,257.  The Company
has a $750  revolving  credit  line  agreement  that  expired on July 31,  1999.
Management  is in  the  process  of  renewing  this  agreement  and  forsees  no
difficulties in the renewal. The lender has informed management that the current
agreement  will be extended  and remain in effect until such time as the renewal
agreement  is  finalized.  At June 30, 1999,  borrowings  under the line were $0
leaving $750 available to the Company  compared to $500  outstanding at June 30,
1998.  Borrowings  were available to the Company at an interest rate of 8.75% at
both June 30,  1999 and June 30,  1998.  The Company is in  compliance  with all
covenants pertaining to the credit line agreement.

         The Company believes that its available cash, as well as cash generated
from  operations and its available  credit line,  will be sufficient to meet the
Company's  cash  requirements  for the balance of the fiscal  year.  The Company
intends  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.
There are no  present  agreements,  understandings  or other  arrangements  with
respect to any acquisition or investment.



Year 2000 Compliance

Overview

Computer  systems and software have  historically  been coded to accept only two
digit  entries  for the year.  Consequently,  on January 1, 2000,  as well as on
other  significant  dates,  errors  may  occur.  If  computers  cannot  properly
distinguish  between the years 1900 and 2000,  computers may shutdown or perform
incorrect calculations.

Scope & Status

The Company has taken  seriously the potential  risks of the Year 2000 issue and
has devoted  resources to address the issue.  The Company has established a Year
2000  oversight  committee.  The committee was assigned to address the following
key components related to the Year 2000 issue:

   - Information  applications,  including the Company's project  management and
     accounting  systems
   - Computer  hardware,  software,  operating  systems  and
     network infrastructure including telecommunications systems
   - Facility and administrative systems
   - Major suppliers and customers' systems

During the fourth  quarter of 1998,  the Company  implemented a new  information
technology system (a project management and accounting  system).  This system is
warranted as Year 2000 compliant.  The Company has performed  specific Year 2000
compliance  testing of this system as well as others in use during the first six
months of 1999.
<PAGE>

The Company has also  conducted an inventory and  assessment of its hardware and
software  for Year 2000  compliance.  Any  non-compliant  components  identified
(hardware  or software)  have been made  compliant  or replaced  with  compliant
versions.  Facility and administrative systems that support the Company (such as
telephone,  security  systems,  etc.)  have  also  been  assessed  for Year 2000
compliance  and  required  upgrades  to such  hardware  and  software  have been
completed.

The Company has undertaken an analysis of its vendors and suppliers to determine
potential  areas of risk  with  regard to their  failure  to  achieve  Year 2000
compliance.  Contingency  plans will be developed as  appropriate to address any
potential problems that may be identified.

Costs

The costs  associated  with  Year 2000  compliance  have not been  material  and
generally fall within normally anticipated  operating and capital spending.  The
costs of becoming  Year 2000  compliant  have not been material to the financial
position of the Company.  Although the Company has not currently found the costs
of Year 2000 compliance to be material, it cannot ensure Year 2000 compliance by
third parties.

Risks

The conversion of the Company's project  management and accounting  systems to a
Year 2000 compliant  system  mitigates the risk that the Company would be unable
to maintain accurate client records and billings.

The Company  cannot  predict  with  accuracy the extent to which its vendors and
clients will become compliant.  The resulting effects on the Company's financial
position could be adversely  affected if major vendors or clients do not operate
into and beyond the change in the  millennium.  The  Company  believes  that the
completion of its Year 2000 Project  significantly  reduces the  possibility  of
major  interruptions to its normal business  operations;  however, no assurances
can be given.


<PAGE>




                                     PART II

                                OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

a.       Exhibits

         The  following  exhibits  are  furnished  along  with this Form  10-QSB
         Quarterly Report for the period ended June 30, 1999:

         Exhibit No. 27 - Financial Data Schedule

b.       Reports on Form 8-K

         During the quarter  ended June 30,  1999,  the Company  filed a Current
         Report on Form  8-K/A,  dated May 10,  1999  providing  historical  and
         pro-forma  financial  information of the entities acquired on March 10,
         1999 (Environmental Waste Management Associates,  L.L.C., Environmental
         Waste Management Associates,  Inc., Integrated Analytical Laboratories,
         L.L.C., and Integrated Analytical Laboratories, Inc.).




                                   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



Date: August 3, 1999                              /ss/Frank Russomanno
                                                  --------------------------
                                                  Frank Russomanno
                                                  Chief Financial Officer