<PAGE>

                      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 September 30, 1998

                                      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 000-22653

                           Coventry Industries Corp.
       -----------------------------------------------------------------
       (Exact name of small business issuer as specified in its charter)

                                    Florida
       -----------------------------------------------------------------
        (State or other jurisdiction of incorporation or organization)

                                  65-0353816
       -----------------------------------------------------------------
                       (IRS Employer Identification No.)

               7777 Glades Road, Suite 211, Boca Raton, FL 33434
       -----------------------------------------------------------------
                   (Address of principal executive offices)

                                 561-488-4802
       -----------------------------------------------------------------
                          (Issuer's telephone number)


       -----------------------------------------------------------------
             (Former name, former address and former 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 ( ).

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date. As of November 5, 1998 the
registrant had issued and outstanding 3,032,797 shares of common stock.

         Transitional Small Business Disclosure Format (check one);
Yes ( ) No (x)
<PAGE>

PART I - FINANCIAL INFORMATION

Item 1.           Financial Statements



















































<PAGE>


                            COVENTRY INDUSTRIES CORP.
                           Consolidated Balance Sheets



<TABLE>
<CAPTION>
ASSETS                                                                             September 30, 1998          June 30, 1998
                                                                                     (unaudited)
                                                                                   ------------------          -------------
<S>                                                                                <C>                         <C>
CURRENT ASSETS:
     Cash and cash equivalents                                                       $    141,918              $    52,188 
     Accounts receivable, less $50,000 allowance for doubtful accounts                  1,107,846                1,196,993
     Inventory                                                                            866,550                1,071,140
     Prepaid consulting fees                                                              141,667                  141,667
     Other prepaid expenses                                                                54,906                   56,588
                                                                                     -------------             ------------
                                                                                                            
         Total current assets                                                           2,312,887                2,518,576
                                                                                                            
PROPERTY, PLANT AND EQUIPMENT:                                                                              
     Land                                                                                 156,502                  156,502
     Building and improvments                                                           1,439,889                1,439,889
     Machinery and equipment                                                            1,572,696                1,570,972
     Autos and trucks                                                                     197,718                  166,712
     Accumulated depreciation                                                            (635,107)                (571,408)
                                                                                     -------------             ------------
                                                                                                            
         Total property, plant and equipment                                            2,731,698                2,762,667
                                                                                                            
OTHER ASSETS:                                                                                               
     Goodwill, net                                                                      1,374,154                1,391,724
     Prepaid consulting fees                                                              318,816                  354,232
     Fabrication supplies                                                                 301,258                  333,307
     Deposits                                                                              13,794                   14,614
                                                                                     -------------             ------------
                                                                                                            
                                                                                        2,008,022                2,093,877
                                                                                                            
                                                                                                            
                                                                                     $  7,052,607              $ 7,375,120
                                                                                     =============             ============
</TABLE>

                                    Continued
                                        1
<PAGE>

                            COVENTRY INDUSTRIES CORP.
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                           September 30, 1998          June 30, 1998
                                                                              (unaudited)
                                                                           ------------------          -------------
<S>                                                                        <C>                         <C>
CURRENT LIABILITIES:
     Current maturites of long-term debt                                   $    430,295                $    322,655 
     Lines of credit                                                            497,307                     335,902
     Trade accounts payable                                                     759,891                   1,093,270
     Accrued expenses                                                           414,392                     432,970
     Preferred stock dividend payable                                            82,771                      47,896
     Note payable - former shareholder                                          151,824                     151,824
                                                                           -------------               -------------
                                                                                                    
         Total current liabilities                                            2,336,480                   2,384,517
                                                                                                    
LONG TERM DEBT, LESS CURRENT PORTION                                            335,048                     395,325
                                                                                                    
STOCKHOLDERS' EQUITY:                                                                               
     Series A Preferred stock, $.001 par value, 30 shares                                           
         authorized, issued and outstanding                                          --                          --
     Series C Preferred stock, $.001 par value, 30,000 shares                                       
         authorized, issued and outstanding                                          30                          30
     Series E Preferred stock, $.001 par value, 115,000 shares                                      
         authorized, issued and outstanding                                         115                         115
     5% Convertible preferred stock, $.001 par value, 2,500 shares                                  
         authorized, 1,250 shares issued and outstanding                              1                           1
     Common Stock, $.001 par value, 25,000,000 shares                                               
         authorized, 3,032,797 shares issued and outstanding                      3,033                       3,033
     Additional paid in capital                                              21,398,987                  21,398,987
     Stock to be earned                                                      (1,416,667)                 (1,416,667)
     Prepaid media spots                                                       (500,000)                   (500,000)
     Deferred compensation                                                     (394,625)                   (394,625)
     Accumulated deficit                                                    (14,709,795)                (14,495,596)
                                                                           -------------               -------------
                                                                                                    
         Total stockholders' equity                                           4,381,079                   4,595,278
                                                                           -------------               -------------
                                                                                                    
                                                                           $  7,052,607                $  7,375,120
                                                                           =============               =============
</TABLE>

      See accompanying notes to condensed consolidated financial statements
                                        2
<PAGE>

                            COVENTRY INDUSTRIES CORP.
                      Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                                                        (unaudited)
                                                                                     Three Months Ended
                                                                                       September 30,
                                                                                 1998                1997
                                                                            --------------       ------------
<S>                                                                         <C>                   <C>         
Revenues                                                                    $   1,615,595         $ 2,081,885 
                                                                                                 
Cost of revenues                                                                1,150,620           1,504,821
                                                                            --------------        ------------
                                                                                                 
           Gross profit                                                           464,975             577,064
                                                                                                 
Operating expenses:                                                                              
      Selling, general and administrative expense                                 476,107             607,818
      Marketing and public relations                                                  825                  --
      Depreciation and amortization                                                84,395              82,554
      Professional fees                                                            39,872              47,471
                                                                            --------------        ------------
                                                                                                 
Total operating expenses                                                          601,199             737,843
                                                                            --------------          ----------
                                                                                                 
Loss from operations                                                             (136,224)           (160,779)
                                                                                                 
Other expenses:                                                                                  
      Interest expense                                                            (43,100)            (31,465)
      Other income                                                                     --              27,311
                                                                            --------------        ------------
                                                                                                 
Total other expenses                                                              (43,100)             (4,154)
                                                                            --------------        ------------
                                                                                                 
Loss before income tax provision and discontinued operations                     (179,324)           (164,933)
                                                                                                 
Income tax benefit                                                                     --                  --
                                                                            --------------        ------------
                                                                                                 
Loss before discontinued operations                                              (179,324)           (164,933)
                                                                                                 
Discontinued operations                                                                --             (31,642)
                                                                            --------------        ------------
                                                                                                 
Net income (loss)                                                                (179,324)           (196,575)
                                                                                                 
Preferred stock dividends paid                                                    (34,875)                 --
                                                                            --------------        ------------
Net loss available to common shareholders                                   $    (214,199)        $  (196,575)
                                                                            ==============        ============
Per share of common stock:                                                                       
      Net loss from continuing operations                                   $       (0.06)        $     (0.08)
      Net loss from discontinued operations                                            --               (0.01)
                                                                            --------------        ------------
                                                                                                 
      Net loss per common share                                             $       (0.06)        $     (0.09)
                                                                            ==============        ============
                                                                                                 
Weighted average shares outstanding                                             3,032,797           2,171,021
                                                                            ==============        ============
</TABLE>

      See accompanying notes to condensed consolidated financial statements
                                        3
<PAGE>

                            COVENTRY INDUSTRIES CORP.
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                              (unaudited)
                                                                           Three Months Ended
                                                                              September 30,
                                                                         1998              1997
                                                                      ----------        ----------
<S>                                                                   <C>               <C>
OPERATING ACTIVITIES:
      Net loss                                                        $(179,324)        $(196,575)
      Adjustments to reconcile net loss to
        net cash (used) by operating activities
          Depreciation                                                   66,825            64,984
          Amortization                                                   17,570            17,570
          Stock compensation                                               --              35,417
          Changes in assets and liabilities, net of businesses
               acquired
          (Increase) decrease in:
            Trade account receivable                                     89,147          (233,477)
            Other receivable                                                             (163,539)
            Inventory                                                   236,639           (15,277)
            Other current assets                                          1,682           (54,444)
            Other assets                                                 36,236            (7,268)
          Increase (decrease) in:
            Accounts payable                                           (333,379)         (173,848)
            Accrued expenses                                            (18,578)          (10,107)
                                                                      ---------         ---------

Net cash (used) by operating activities                                 (83,182)         (736,564)

INVESTING ACTIVITIES:
      Purchase of property and equipment                                (35,856)         (103,712)
      Purchase of assets of a business, net                                --             (30,993)
                                                                      ---------         ---------

Net cash used by investing activities                                   (35,856)         (134,705)

FINANCING ACTIVITIES:
      Net payments on factoring line of credit                          (53,595)             --
      Net borrowings on line of credit - nonfactoring                   215,000              --
      Proceeds from note payable - shareholder                           50,000              --
      Payments on long term debt                                        (72,637)          (53,741)
      Proceeds from long term debt                                       70,000           123,805
      Issuance of common stock                                             --             667,762
                                                                      ---------         ---------

Net cash provided by financing activities                               208,768           737,826
                                                                      ---------         ---------

Increase (decrease) in cash and cash equivalents                         89,730          (133,443)

Cash and cash equivalents, beginning of period                           52,188           335,321
                                                                      ---------         ---------

Cash and cash equivalents, end of period                              $ 141,918         $ 201,878
                                                                      =========         =========
</TABLE>

      See accompanying notes to condensed consolidated financial statements
                                        4
<PAGE>


                           COVENTRY INDUSTRIES CORP.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                              September 30, 1998

Note 1 - Basis of Presentation

         The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instruction of Form 10-QSB and Article 310 of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. The preparation requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the reporting
period. Actual results may differ from these estimates. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three month period ended September 30, 1998 are not necessarily indicative of
the results that may be expected for the year ended June 30, 1999.

         For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's annual report on
Form 10-KSB as ammended for the year ended June 30, 1998 as filed with the
Securities and Exchange Commission.

Note 2 - Reclassifications

            Certain 1997 amounts have been reclassified to conform to the 1998
presentation.

Note 3 - Supplemental Disclosures of Cash Flows

Cash paid (received) for:

                                          Three months Ended
                                September 30, 1998   September 30, 1997
                                ------------------   ------------------

         Interest                 $    43,100          $ 31,465
         Income taxes             $        --          $     --


Supplemental Disclosures of Non-Cash Investing and Financing Activities

In September 1997, the Company acquired all the common stock of LPS Acquisition
Corp. ("LPS"). The Company purchased all the stock of LPS for 270,000 shares of
the Company's voting common stock totaling $1,298,700. The Company issued an
option to purchase 90,900 shares of common stock at $1.75 per share, or a value
of $278,154 (excess of market value over option price) to consultants as payment
<PAGE>

for acquisition fees. The Company sold LPS effective May, 1998. In addition, a
note payable of $1,150,019 was converted to 115,000 shares of preferred stock in
a transaction not affecting cash.

Note 4 - Acqusition

            On September 29, 1998, the Company entered into an exchange
agreement ("Exchange Agreement") with BSD Healthcare Industries, Inc. and its
wholly owned subsidiaries (collectively known as "BSD") and People First, L.L.C.
("PF"). BSD operates a respiratory therapy and respiratory therapy management
business and PF is in the process of becoming an employee leasing company.
According to the Exchange Agreement, the Company will issue 80.1% of the issued
and outstanding common stock of the Company for 100% of BSD and its subsidiaries
and 100% of the membership interests in PF. The Company, BSD and PF are in the
process of due diligence, and there is no assurance that the transaction will
take place. The Company and/or BDS and PF may terminate the agreement during the
60-day due diligence period. .

Item 2. Management's Discussion and Analysis or Plan or Operation.

         The following discussion regarding the Company and its business and
operations contains "forward-looking statements" within the meaning of Private
Securities Litigation Reform Act 1995. Such statements consist of any statement
other than a recitation of historical fact and can be identified by the use of
forward-looking terminology such as "may," "expect," "anticipate," "estimate" or
"continue" or the negative thereof or other variations thereon
or comparable terminology. The reader is cautioned that all forward-looking
statements are necessarily speculative and there are certain risks and
uncertainties that could cause actual events or results to differ materially
from those referred to in such forward looking statements. The Company does not
have a policy of updating or revising forward-looking statements and thus it
should not be assumed that silence by management of the Company over time means
that actual events are bearing out as estimated in such forward looking
statements.

Results of Operation

           Consolidated revenues for the three months ended September 30, 1998
decreased $466,290 or approximately 22% from the three months ended September
30, 1997. This decrease is attributable to (i) a decrease in revenues generated
by the Company's Tennessee operations and the Federal Supply, Inc. ("Federal")
subsidiary of approximately $423,000 compared to the three months ended
September 30, 1997, and (ii) revenues for one month for Apollo of approximately
$41,000 are included in revenue for the three months ended September 30, 1997
compared to none for the three months ended September 30, 1998 as a result of
the sale of Apollo effective June, 1998. The drop in the Tennessee operations
revenue can be attributed to the fact that during the three months ended
September 30, 1997 the Tennessee operations had a large contract which did not
repeat in the current quarter. The drop in Federal's revenue is attributed to
weaker than expected market conditions. This weak market trend is not expected
to continue in future quarters.
<PAGE>

         Gross profit margins as a percentage of revenues for the three months
ended September 30, 1998 remained stable at approximately 28%. The Company's
gross profit margin for the three months ended September 30, 1998 is comparable
to the Company's gross profit margin in the prior quarter as the operations
included in the Company are now comparable (mainly comprised of the Company's
Federal Supply subsidiary and the Company's Tennessee operations).

         Operating expenses decreased approximately 19% for the three months
ended September 30, 1998 compared to the three months ended September 30, 1997
primarily as a result of decreased selling, general and administrative
expenses ("SG&A"). SG&A on a consolidated basis decreased approximately $132,000
or 22 % during the three months ended September 30, 1998 from the three months
ended September 30, 1997 as a result of reductions in SG&A expenses attributable
to one time costs associated with the relocation of the Company's principal
executive offices from Knoxville, Tennessee to Boca Raton, Florida included in
the prior comparable quarter. Other operating expenses were non-cash items
including depreciation and amortization and professional fees of approximately
$124,000 for the three months ended September 30, 1998 compared to approximately
$130,000 for the three months ended September 30, 1997.

         The Company's discontinued operations reflect the operations of LPS
Acqusition, Corp., which subsidiary the Company sold effective May, 1998.

   The Company reported a net loss of $179,324 for the three months ended
September 30, 1998 as compared to a net loss of $196,575 for the three
months ended September 30, 1997. Approximately $124,000 of the net loss for the
three months ended September 30, 1998 is attributable to non-cash items
including depreciation and amortization of approximately $84,000 and
approximately $40,000 of costs associates with professional fees.

Liquidity and Capital Resources

         The Company's working capital at September 30, 1998 was a deficiency of
$23,593 versus working capital of $134,059 at June 30, 1998. The decrease in
working capital is primarily attributable to a decrease in inventory. The
Company has made a conscious effort to limit inventory levels in light of the
reduced sales for the quarter. The days sales in accounts receivable is
approximately 64 days compared to 51 days at June 30, 1998. The increase in the
days sales is attributed to a slow down in the pay cycle of certain customers at
the Company's Federal operation. This trend is not expected to continue. The
inventory turnover is 76 days compared to 83 days at June 30, 1998. The Company
does not presently anticipate any significant capital expenditures, in order to
pursue the Company's plan of operations for fiscal 1999, consisting of its
normal business operations. The Company used approximately $83,182 of cash for
operating activities for the three months ended September 30, 1998, $35,856 for
investing activities and received approximately $208,768 from financing
activities, primarily from increased short term debt.

           On January 16, 1998 the Company completed a private placement of
1,250 shares of 5% Convertible Preferred Stock at a purchase price of $1,000 per
share, resulting in gross proceeds of $1,250,000. The Company has filed a proxy
statement for a special meeting of shareholders at which the conversion terms of
the additional 1,250 shares 5% Convertible Preferred Stock will be submitted for
approval by the Company's shareholders; however, as of the date hereof, the date
of the special meeting of shareholders has not been set. Readers are encouraged
to carefully review the preliminary proxy statement currently on file with the
<PAGE>

Securities and Exchange Commission for a complete description of the private
placement and the conversion terms of the 5% Convertible Preferred Stock. The
funds received to date from the private placement and the additional funds to be
received upon the second closing, will be sufficient to provide for the
Company's working capital needs during the next 12 months based upon its current
plan of operations. In the event, however, the Company's shareholders do not
approve the conversion terms of the additional 1,250 shares of 5% Convertible
Preferred Stock, or the Company should expand its plan of operations for the
next 12 months, the Company will be required to raise additional working capital
to fund it plan of operations for the balance of fiscal 1999. As of the date
hereof, the Company has not identified any alternative sources of working
capital. Additionally, a substantial portion (approximately $2,170,000) of the
Company's property, plant and equipment and accounts receivable are unencumbered
and, accordingly, would provide additional sources of internal working capital
should the Company elect to enter into an asset based lending arrangement. The
Company also borrowed funds from its president.

Year 2000   

The Company has been and continues to be in the process of evaluating its
information technology infrastructure for the Year 2000 compliance. The Company
has modified certain systems to be Year 2000 compliant. The Company does not
expect that the cost to modify its information technology infrastructure to Year
2000 compliance will be material to its financial condition or results of
operations. The Company does not anticipate any material disruption in its
operations as a result of any failure by the Company to be compliant. The
Company does not currently have information concerning Year 2000 compliance
status of its suppliers and customers. In the event that any of the Company's
significant suppliers or customers does not successfully and timely achieve Year
2000 compliance, the Company's business or operations could be adversely
affected.
<PAGE>

PART II - OTHER INFORMATION

Item 1.     Legal Proceedings.

            None.

Item 2.     Changes in Securities.

            None.

Item 3.     Defaults Upon Senior Securities.

            None.

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

            None.

Item 5.     Other Information.


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

      (a)   Exhibits.

 10.1             Licensing Agreement dated May 31, 1996 by and between Ginsburg
                  Enterprises Incorporated and Products That Produce, Inc. is
                  hereby incorporated by reference to the Report on Form 10-KSB
                  for the fiscal year ended June 30, 1996 as filed with the
                  Securities and Exchange Commission on October 15, 1996.

10.2              Employment Agreement between Industrial Fabrication & Repair,
                  Inc. and Lester E. Gann is hereby incorporated by reference to
                  the Registration Statement on Form SB-2, File No. 333-11169,
                  as filed with the Securities and Exchange Commission on August
                  30, 1996, as amended

10.3              Employment Agreement between American Industrial Management,
                  Inc. and Robert Lovelace is hereby incorporated by reference
                  to the Registration Statement on Form SB-2, File No.
                  333-11169, as filed with the Securities and Exchange
                  Commission on August 30, 1996, as Amended.

10.4              Management agreement between Workforce Systems Corp. and
                  Robert Hausman is hereby incorporated by reference to the
                  Annual Report on Form 10-KSB for the fiscal year ended June
                  30, 1997.

10.5              Amended and Restated Consulting Acquisition Management
                  Agreement between Workforce Systems Corp. and Manny J. Shulman
                  and Shulman & Associates, Inc. is hereby incorporated by
                  reference to the registration statement on Form S-8 as filed
                  with the Securities and Exchange Commission on September 24,
                  1997
<PAGE>

10.6              Stock Purchase and Sale Agreement dated September 22 , 1997
                  between Workforce Systems Corp., a Florida corporation, and
                  Darren Apel, Barbara Hausman and Ronna Newman Rutstein, as
                  shareholders of LPS Acquisition Corp. is incorporated by
                  reference to the Report on Form 8-K as filed with the
                  Securities and Exchange Commission on September 22, 1997

10.7              Conversion Agreement dated October 7, 1997 between Workforce
                  Systems Corp., Federal Supply, Inc. and Robert Hausman and
                  Barbara Hausman is hereby incorporated by reference to the
                  Company's Annual Report on Form 10-KSB for the fiscal year
                  ended June 30, 1997.

10.8              Conversion Agreement dated September 25, 1997 between
                  Workforce Systems Corp., LPS Acquisition Corp, and Eric and
                  Adrienne Deckinger is hereby incorporated by reference to the
                  Company's to the Report on Form 10-QSB for the quarter ended
                  September 30,1997 as filed with the Securities and Exchange
                  Commission on November 7, 1997

10.9              Financial Advisory Agreement between Coventry Industries Corp.
                  and Barron Chase Securities, Inc. is hereby incorpoated by
                  reference to the report on Form 10-QSB for the quarter ended
                  December 31, 1997 as filed with the Securities and Exchange
                  Commission on February 23, 1998.

10.10             Employment Agreement between Industrial Fabrication & Repair,
                  Inc. and Lester E. Gann is hereby attached as an exhibit to
                  the Report on Form 10-KSB for the fiscal year ended June 30,
                  1998.

10.11             Amendment to the Management Agreement between Coventry
                  Industries Corp. and Robert Hausman is hereby attached as an
                  exhibit to the Report on Form 10-KSB for the fiscal year ended
                  June 30, 1998.

      (b) Reports on Form 8-K.

      During the three months ended the Company filed the following Reports on
Form 8-K with the Securities and Exchange Commission:

      1. On July 10, 1998 the Company filed a Report on Form 8-K disclosing its
sale of LPS Acquisition Corp.
<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.

                                        Coventry Industries Corp.,
                                        a Florida corporation

Date: November 10, 1998                 By: /s/ Robert Hausman
                                            -------------------
                                            Robert Hausman,
                                            President