<PAGE>                                           

                        UNITED STATES
             Securities and Exchange Commission
                    Washington, DC 20549
                              
                          FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
                              
For the Quarterly Period Ended: July 31, 1998
                              
                             Or

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


For the transition period from          to 


                             0-3255
                  (Commission File Number)
                              
                         JAYARK CORPORATION
   (Exact name of registrant as specified in its charter)
                              
          DELAWARE                                        13-1864519
(State or other jurisdiction of incorporation) (IRS Employer Identification No.)

        Post Office Box 741528, Houston, Texas 77274
     (Address of principal executive offices) (Zip Code)
                              
                        (713) 783-9184
    (Registrant's telephone number, including area code)

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

      Indicate by check mark whether the registrant (1)  has filed all reports
to be filed 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 [ ]

      Indicate the number of shares outstanding of  each  of the  issuer's
      classes of common stock,  as  of  the  latest practicable date:

          Class                        Outstanding at July 31, 1998
Common Stock $0.01 Par Value                  9,221,199
                              

<PAGE>

                           Part I.
                           Item I.
Jayark Corporation And Subsidiaries
Consolidated Balance Sheets
<TABLE>
<CAPTION>

                                                       Unaudited       Audited
                                                        07/31/98      04/30/98
                                                      ------------   -----------
<S>                                                        <C>            <C>
Assets
Current Assets
  Cash and Cash Equivalents                             $140,374       $238,858
  Accounts Receivable-Trade, Less Allowance For        1,800,772      1,723,833
Doubtful Accounts of $63,000 at 07/31/98 and
$38,000 at 04/30/98
  Other Accounts Receivable                               63,757          2,277
  Inventories                                            506,869        271,564
  Other Current Assets                                    53,157         35,046
                                                      ------------   -----------
Total Current Assets                                   2,564,929      2,271,578

Non Current Assets
 Property & Equipment, Less Accumulated                  849,153         94,644
 Depreciation and Amortization
  Excess of Cost Over Net Assets of Businesses           263,402        268,742
Acquired, Less Accum Amortization of $469,000 at
07/31/98 and $448,000 at 04/30/98
                                                      ------------   -----------
Total Non Current Assets                               1,112,555        363,386
                                                               
Total Assets                                          $3,677,484     $2,634,964
                                                      ============   ===========          


Liabilities                                                              
Current Liabilities
  Notes Payable & Line of Credit                        $950,000       $300,000
  Current Maturities of Long Term Debt                     3,929          5,899
  Accounts Payable                                     1,104,344        881,266
  Accrued Salaries and Deferred Compensation             289,230        298,734
  Accrual Related to Loss on Discontinued                 81,520         84,124
Operations - Rosalco
  Accrual Related to LCL Investment                      113,068        113,068
  Other Current Liabilities                              508,995        431,418
                                                      ------------   -----------
Total Current Liabilities                              3,051,086      2,114,511
                                                               
Non Current Liabilities                                                              
  Long Term Debt, Excluding Current Maturities           144,925          -
  Notes Payable to Related Parties                     2,033,883      2,046,021
  Subordinated Debentures                              1,400,000      1,400,000
                                                      ------------   -----------
Total Non Current Liabilities                          3,578,808      3,446,021
                                                               
Total Liabilities                                     $6,629,894     $5,560,530
                                                               
Stockholders' Equity (Deficit)
  Common Stock of $.01 Par Value.  Authorized          2,766,359      2,766,359
30,000,000 Shares; Issued 9,221,199 Shares at
07/31/98 and 04/30/98
  Additional Paid-In Capital                           8,066,122      8,066,122
  Deficit                                            (13,784,891)   (13,758,047)
                                                     ------------   ------------                           
Total Stockholders' Equity (Deficit)                 $(2,952,410)   $(2,925,566)
                                                               
Total Liabilities & Stockholders' Equity (Deficit)    $3,677,484     $2,634,964
                                                     ============   ============

See accompanying notes to consolidated financial statements

</TABLE>
<PAGE>

      Jayark Corporation and Subsidiaries
     Consolidated Statements of Operations
                  (Unaudited)

<TABLE>
<CAPTION>

                                                          Three Months Ended
Continuing Operations:                                  07/31/98      07/31/97
                                                       ----------    ----------

<S>                                                        <C>            <C>
Net Revenues                                          $4,047,269     $4,172,844
                                               
Costs & Expenses                                               
 Cost of Revenues                                      3,499,261      3,628,614
 Selling, General and Administrative                     481,176        436,329
 Interest                                                 93,675         89,189
                                                       ----------    ----------
Total Costs & Expenses                                 4,074,112      4,154,132
                                               
Pre-Tax Earnings (Losses) from Continuing Operations     (26,843)        18,712
                                               
Provision for Income Taxes (Benefit From)                   --              --
                                                       ----------    ----------                                               

Net Income (Loss)                                       $(26,843)       $18,712
                                                       ===========   ===========

Basic and Diluted Earnings (Loss) per Common Share       ($0.00)          $0.00
                                                       ===========   ===========                                               
Weighted Average Common Shares:
 Basic and Diluted                                     9,221,199      9,221,199
                                                       ===========   ===========
See accompanying notes to consolidated financial statements

</TABLE>
<PAGE>


Jayark Corporation and Subsidiaries
Consolidated Statement of Cash Flows
For the Three Months Ended
(Unaudited)

<TABLE>
<CAPTION>

                                                        07/31/98      07/31/97
                                                       ----------    ----------
<S>                                                        <C>             <C>
Cash Flows from Operating Activities:
  Net Income (loss)                                     $(26,843)       $18,712

Adjustments to Reconcile Earnings (Loss) to Cash From Operating Activities:
 Depreciation and Amortization of Property and Equipment  23,885         (8,999)
 Amortization of Excess of Cost Over Net Assets of         5,340          5,340
Businesses Acquired
Change in Assets and Liabilities Net of Effects From Acquisition of Subs:  
  (Increase) Decrease in Accounts Receivable Net        (138,419)        59,994
  (Increase) Decrease in Inventories                    (235,305)        67,861
  (Increase) Decrease in Other Current Assets            (18,111)        (6,111)
  Increase (Decrease) in Accounts Payable                223,078         33,895
  Increase (Decrease) in Accrued Salaries and             (9,504)        77,218
Deferred Compensation
  Increase (Decrease) in Accrual for                      (2,604)        47,000
Discontinued Operations - Rosalco
  Increase (Decrease) in Other Liabilities                75,606        (65,541)
                                                       ----------    ----------
     Net Cash Provided By (Used In) Operating Activities(102,877)       229,369
                                                               
Cash Flows From Investing Activities:                                        
  Capital Expenditures for Property and Equipment       (778,395)           --
                                                       ----------    ----------
     Net Cash Provided By (Used In) Investing Activities(778,395)           --
                                                               
Cash Flows From Financing Activities:                                        
  Proceeds (Payment) of Long Term Debt                   144,925         (2,310)
  Proceeds From Issuance of Notes Payable                650,000            --
  Principal Payments on Notes Payable                    (12,137)           --
                                                       ----------    ----------
     Net Cash Provided By (Used In) Financing Activities 782,788         (2,310)

     Net Increase (Decrease) in Cash and Cash Equivalents(98,484)       227,059
Cash & Cash Equivalents at Beginning of Year             238,858         67,140
                                                       ----------    ----------
Cash & Cash Equivalents at End of Year                   140,374        294,199
                                                       ===========   ===========
                                                            
Supplemental Disclosures of Cash Flow Information:
  Cash Paid For:                                                
     Interest                                             24,535         19,689
                                                       ===========   ===========
     Income Taxes                                           --              --
                                                       ===========   ===========
                                                              
See accompanying notes to consolidated financial statements
                              
</TABLE>
<PAGE>


         Notes to Consolidated Financial Statements
                         (Unaudited)

1.    Jayark  Corporation  ("Jayark" or "the  Company")  conducts its
  operations  through  two wholly owned  subsidiaries,  AVES Audiovisual
  Systems,  Inc. ("AVES")  and  MED  Services  Corp. ("Med").  The consolidated
  balance   sheet   of Jayark Corporation  and subsidiaries (the "Company"), as
  of  July  31, 1998,  and  the  related consolidated statements of  operations
  and  cash flows for the periods ended July 31, 1998  and  1997 are  unaudited.
  The consolidated balance  sheet  as  of  April 30,  1998 has been derived from
  audited financial  statements.  The consolidated financial statements  should
  be  read   in conjunction   with   the  audited  financial   statements   and
  footnotes for the year ended April 30, 1998, included  in  the Company's
  report on Form 10-K.

2.    The  interim financial statements  reflect all  adjustments (consisting of
  only normal and recurring accruals and adjustments) which are, in the opinion
  of management, necessary to a  fair statement of the results for the interim
  periods presented.  The Company's operating results for any  particular
  interim  period may not be indicative of results for  the  full year.

3.    Certain reclassifications have been made in the 1997 financial statements
  to  conform  them  to  and  make   them consistent  with  the presentation
  used in the  1998  financial statements.

<PAGE>                              
                           Item 2.
Management's Discussion & Analysis of Results of Operations
                              
  Three Months Ended July 31, 1998 as compared to July 31, 1997
                              
                        NET REVENUES
                              
      Consolidated  Revenues of $4,047,000  for  the  period ended July 31, 1998
decreased $126,000, or 3%, as  compared to the same period in 1997. The decrease
is the result of  a $82,000  decrease  in  direct sales, a $27,000  decrease in
contract sales and  a $20,000 decrease  in  rental  sales, despite the addition
of $40,000 in rental sales from the new subsidiary, MED Services Corp.

                              
                      COST OF REVENUES
                              
      Consolidated Cost of Revenues of $3,499,000  decreased $129,000, or 3.6%,
as compared to the same period last year.  The decrease is a direct result
of lower revenues.
                              
                        GROSS MARGIN
                              
     Consolidated Gross Margin of $548,000 was 13.5% of revenues, as compared to
$544,000, or 13.0%, for the same period last year.  This increase is due to
Med's gross margin of $15,372 (38.43%) on $40,000 in sales.  AVES gross
margin came in at 13.3% versus 13.0% for last year.
                              
        SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
                              
      Consolidated Expenses of $481,000 increased $45,000 or 10.3%  as  compared
to the same period last  year.   Jayark Corporate  recognized  increases in
legal  and  professional fees  of  $42,000,  partially due  to  increased
legal  and accounting representation required for the formation of the new
subsidiary, combined with lower than normal audit and accounting fees
incurred in the first  quarter  of  Fiscal 1998.   Corporate also recognized
decreases  of  $23,000  in other  miscellaneous expense accounts as a result
of the Company's overall cost reduction  plan.  AVES  recognized increased
spending  as a result of a  $24,000  increase  in advertising and exhibit
expenses and a decrease  of  $26,000 in  miscellaneous  income.
These increases  were  partially offset   by  decreases  in  depreciation
($7,000),  freight ($9,000)  and  payroll  expenses ($29,000).   The
remaining increase of $21,000 in consolidated expenses is due to expenses
in the new subsidiary MED Services Corp.

<PAGE>                              
                      INTEREST EXPENSE
                              
      Consolidated  Interest Expense  of  $94,000  increased $4,000,  or  5.0%.
      This increase is due to an  increase  in borrowing.
                              
                      NET INCOME (LOSS)
                              
       Consolidated  Net  Loss  of  ($27,000)  decreased  as compared  to a net
income of $19,000 during the same  period last  year.   The $46,000 decrease is
a result of  increased selling, general and administrative costs.

<PAGE>                              
               LIQUIDITY AND CAPITAL RESOURCES
                              
At   July  31,  1998,  consolidated  open  lines  of  credit available  to  the
Company for borrowing, were $750,000 as compared to $950,000 at April 30, 1998.
It is the  opinion of the Company's management that operating expenses, as well
as  obligations coming due during the next fiscal year, will be  met primarily
by cash flow generated from operations and from available borrowing levels.

Working capital was a deficit of $486,157 at July 31,  1998, compared to working
capital of $157,067 at April 30,  1998.  The decrease in working capital is
principally due increased borrowing on the open lines of credit to purchase
equipment for rental in the new subsidiary.

Net cash used by operating activities was $102,877 in 1998, compared $229,369
net cash provided in 1997.  The change was due to increases in net loss,
accounts receivable, inventory and  accrued expenses.  These changes were
partially  offset by decreases in accounts payable and other liabilities.

Net  cash used in investing activities was $778,395 in 1998, compared  to $0 in
1997.  This was a result of the purchase of equipment for rental in the new
subsidiary  MED  Services Corp.

Net  cash  provided by financing activities was $782,788  in 1998,  compared to
$2,310 net cash used in 1997.  The change was due to the issuance of notes
payable and long term debt.

In  March  1997,  AVES  established a line of credit  with  BSB  Bank  &  Trust,
Binghamton, New York, in the amount of $1,250,000.  The interest rate  is  8.75%
annually  and  the  line  is due and payable on March 1,  2000.   There  are  no
financial  covenants associated with the line of credit.  As of July 31, 1998,
AVES hds $500,000 outstanding.

In  July  1998, the Company amended its Certificate of Incorporation  increasing
its  authorized Common Stock from 10,000,000 to 30,000,000 shares and decreasing
the par value of its Common Stock from $.30 to $.01 per share.

In September 1998, the Company offered to each stockholder, the right  to
purchase,  pro  rata, two shares of Common Stock at a price of $.10  per  share.
The  Company filed a Registration Statement on  Form  S-1  with  the
Securities  and Exchange Commission in order to  register
such  rights  to  purchase Common Stock, under the Securities Act  of  1933,  as
amended.  The Registration Statement was effective September 15, 1998 and
as a result, stockholders  will receive  notification of the Rights Offering
and instructions on how to exercise the rights.

<PAGE>

The  Rights Offering is an integral part of the recapitalization of the Company.
The  immediate  effect  of  the Rights Offering, and the  participation  of  the
Koffman Group, will be to reduce the debt on the Company's balance sheet with  a
view to enhancing the equity value of the Company.  The completion of the Rights
Offering  will not only reduce even further the amount of debt on the  company's
balance  sheet (since debt will either be repaid from cash proceeds, or  retired
as  it is tendered from Common Stock), but will also enable stockholders of  the
Company to participate in any potential enhanced equity value of the Company  by
permitting them to purchase additional shares of Common Stock at $.10 per share.

In  June  1998,  Jayark  Corporation,  through  a  newly  formed,  wholly  owned
subsidiary,  MED  Services  Corp. ("Med"), entered  into  a  Purchase  and  Sale
Agreement with Vivax Medical Corporation ("Vivax"), a company that manufactures,
sells  and  rents  durable  medical equipment to hospitals,  nursing  homes  and
individuals.   Under the terms of the agreement, Med purchased  certain  medical
equipment  from  Vivax for cash of $579,700 and a $144,925 unsecured  promissory
note  due  in  five years.  Med then entered into a Consignment  Agreement  with
Vivax whereby this medical equipment was consigned to Vivax to rent through  its
distribution network.  In consideration of Vivax renting and maintaining the Med
equipment, Vivax is entitled to a range of forty-eight to sixty-seven percent of
the  rental proceeds, based upon the equipment rented.  Vivax has an  option  to
purchase the medical equipment from Med after the twenty-fourth, thirty-six  and
forty-eight month of the consignment period.  Med, under the Purchase  and  Sale
Agreement  has  an  option, through October 31, 1999 to purchase  an  additional
$2,475,000  of  medical  equipment  from Vivax.   Upon  the  expiration  of  the
consignment period, which is five years from the purchase of the equipment,  Med
has the option to sell the equipment back to Vivax.

Med  negotiated a $1,000,000 revolving line of credit with Atlantic Bank of  New
York  and  invested approximately $130,000 of the Company's presently  available
working  capital  to  purchase the medical equipment.  The  $1,000,000  line  of
credit  is due one year from signing and bears interest at prime plus  2%.   The
line  of  credit is secured by the inventories and accounts receivable  of  Med.
The  are no financial covenants associated with the line of credit.  As of  July
31, 1998 Med had $450,000 outstanding on the line of credit.

If the medical equipment is successfully rented, the rental income and cash flow
could  have  a  material affect on the operating results of Jayark  Corporation.
There  can  be no assurances that the Company will be successful in renting  the
medical equipment.

<PAGE>

Year 2000

The  Company  believes that the cost of administering its Year 2000 issues  will
not have a material adverse impact on future earnings.

The  Company  is continuing its review of its internal business software,  which
presently  appears to be Year 2000 compliant.  The Company is in the process  of
replacing  some of its older hardware with new equipment to enable a  successful
Year  2000  transition.  The Company anticipates having these  modifications  in
place  by  early 1999.  The Company will continue its internal review  and  will
correct  further issues as they are identified, but the Company does not believe
that  the impact of the Year 2000 transition will have a material adverse impact
on future results.

The  Company is communicating with, but is presently uncertain of the compliance
status  of, its customers' businesses.  This may have an effect on the Company's
ability  to  collect outstanding receivables, but the Company does  not  believe
that  this  would have a material effect on its operations.  Since all  customer
situations  cannot  be  anticipated, particularly  those  involving  third-party
products,  the  Company may see an increase in warranty and other  claims  as  a
result  of the Year 2000 transition.  Such claims, if successful, could  have  a
material adverse impact on future results.

The Company is asking its suppliers about compliance, but is presently uncertain
as  to their Year 2000 status.  The majority of the Company's suppliers are very
large corporations, such as Sony, Panasonic, Mitsubishi, 3M, and others, who are
carefully reviewing and updating their systems to ensure compliance.   While  it
is  likely that their efforts will be successful, if necessary modifications and
conversions are not completed in a timely manner, the Year 2000 issue could have
a  material  adverse effect on certain operations and the financial position  of
the  Company.   There  is  currently no contingency plan  in  place  to  replace
suppliers should their Year 2000 efforts be unsuccessful.

<PAGE>



                 PART II. OTHER INFORMATION


ITEM 6.   Exhibits and Reports on Form 8-K.
     
     (a)  Exhibits - None
     
     (b)  Report on Form 8-K .
       1.   Other Events
          Purchase  and Sale Agreement between MED  Services Corp., a newly
          formed wholly owned subsidiary, and Vivax Medical Corporation on June
          17, 1998.
     
<PAGE>                              
                         Signatures

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

                                   JAYARK CORPORATION
                                   Registrant

     /s/  David L. Koffman                      September 20, 1998
     David L. Koffman, President
     Chief Executive Officer



     /s/ Robert C. Nolt                         September 20, 1998
     Robert C. Nolt
     Chief Financial Officer

<PAGE>

[ARTICLE] 5
[CIK] 0000053260
[NAME] 
<TABLE>
<S>                             <C>
[PERIOD-TYPE]                   3-MOS
[FISCAL-YEAR-END]                          APR-30-1999
[PERIOD-START]                             MAY-01-1998
[PERIOD-END]                               JUL-31-1998
[CASH]                                          140374
[SECURITIES]                                         0
[RECEIVABLES]                                1,864,529
[ALLOWANCES]                                         0
[INVENTORY]                                    509,869
[CURRENT-ASSETS]                             2,564,929
[PP&E]                                       1,229,810
[DEPRECIATION]                                 380,657
[TOTAL-ASSETS]                               3,677,484
[CURRENT-LIABILITIES]                        3,051,086
[BONDS]                                              0
[PREFERRED-MANDATORY]                                0
[PREFERRED]                                          0
[COMMON]                                     2,766,359
[OTHER-SE]                                 (5,718,769)
[TOTAL-LIABILITY-AND-EQUITY]                 3,677,484
[SALES]                                      4,047,269
[TOTAL-REVENUES]                             4,047,269
[CGS]                                        3,499,261
[TOTAL-COSTS]                                3,499,261
[OTHER-EXPENSES]                               481,176
[LOSS-PROVISION]                                     0
[INTEREST-EXPENSE]                              93,675
[INCOME-PRETAX]                               (26,843)
[INCOME-TAX]                                         0
[INCOME-CONTINUING]                           (26,843)
[DISCONTINUED]                                       0
[EXTRAORDINARY]                                      0
[CHANGES]                                            0
[NET-INCOME]                                  (26,843)
[EPS-PRIMARY]                                        0
[EPS-DILUTED]                                        0
</TABLE>