<PAGE>



                          SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C.  20549
                       ----------------------------------------
                                      FORM 10-Q

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

                     For the quarterly period ended June 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 No. 1-11822
                       ----------------------------------------

                            TRANSCOR WASTE SERVICES, INC.
                       ----------------------------------------
                (Exact name of registrant as specified in its charter)

                      Florida                         65-0369288
          -------------------------------  -------------------------------
              (State of incorporation)             (I.R.S. Employer
                                                Identification Number)

                   1502 Second Avenue, East, Tampa, Florida  33605
                (Address of registrant's principal executive offices, 
                                 including zip code)
                       ----------------------------------------

                (Registrant's telephone number, including area code):
                                    (813) 248-3878

                                    Not applicable                             
                       ----------------------------------------
                (Former name, former address, and former fiscal year,
                            if changed since last report)

      Indicate  by check mark whether the registrant  (1) has filed all reports
      required 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 [  ]<PAGE>



                  Applicable Only to Issuers Involved in Bankruptcy
                     Proceedings During the Preceding Five Years

      Indicate  by a check mark whether  the registrant has filed all documents
      and reports  required to be  filed by  Sections 12, 13,  or 15(d)  of the
      Securities Exchange  Act  of  1934  subsequent  to  the  distribution  of
      securities under a plan confirmed by a court.   
      Yes [  ]        No [  ]

                         Applicable Only to Corporate Issuers

                 The number of shares of Common Stock outstanding on 
                        August 14, 1998, was 4,000,000 shares.<PAGE>



                            TRANSCOR WASTE SERVICES, INC.

                                      FORM 10-Q

                                        INDEX


                                                                          PAGE 
      PART I.  FINANCIAL INFORMATION

               Item 1.  Consolidated balance sheets at 
                         December 31, 1997 and June 30, 1998 
                         (unaudited)  . . . . . . . . . . . . . . . . . . 1 - 2

                        Consolidated statements of operations for the
                         three and six months ended June 30, 1997 
                         and 1998 (unaudited) . . . . . . . . . . . . . . 3 - 4

                        Consolidated statements of cash flows for 
                         the six months ended June 30, 1997 
                         and 1998 (unaudited) . . . . . . . . . . . . . . . . 5

                        Notes to consolidated financial statement . . .  6 - 13

               Item 2.  Management's discussion and analysis of 
                         financial condition and results of 
                         operations . . . . . . . . . . . . . . . . . . 14 - 19

               Item 3.  Quantitative and qualitative disclosures about
                         market risk  . . . . . . . . . . . . . . . . . . .  19

      PART II.  OTHER INFORMATION

              Item 1. Legal proceedings   . . . . . . . . . . . . . . . . .  20

              Item 2. Changes in securities   . . . . . . . . . . . . . . .  20

              Item 3. Defaults upon senior securities   . . . . . . . . . .  20

              Item 4. Submission of matters to a vote of security holders    20
      
              Item 5. Other information   . . . . . . . . . . . . . . . . .  20

              Item 6. Exhibits and reports on Form 8-K  . . . . . . . . . .  20

                      Signatures  . . . . . . . . . . . . . . . . . . . . .  21<PAGE>



                     SECURITIES AND EXCHANGE COMMISSION FORM 10-Q
                            PART I - FINANCIAL INFORMATION


      Item 1.  FINANCIAL STATEMENTS


                            TRANSCOR WASTE SERVICES, INC.

                             CONSOLIDATED BALANCE SHEETS

                                        ASSETS

      
                                                   December 31,     June 30,
                                                       1997           1998    
                                                   ------------- -------------
                                                                  (unaudited)

      Current assets:                              
       Cash   . . . . . . . . . . . . . . . . . .  $  2,115,510  $  4,272,946 
       Accounts receivable - trade, net   . . . .     1,364,772     1,544,473 
       Costs and estimated earnings in excess of   
         billings on uncompleted contracts  . . .       415,514       414,893 
       Income tax refund receivable   . . . . . .       143,672         -     
       Deferred income taxes  . . . . . . . . . .       720,410       720,410 
       Property held for sale   . . . . . . . . .       410,681       475,681 
       Other current assets   . . . . . . . . . .        48,771       122,674 
       Due from affiliate - current   . . . . . .         -         6,703,363 
       Net assets of discontinued solid waste      
         management operations  . . . . . . . . .     7,265,280     4,696,613 
                                                   ------------- -------------
          Total current assets    . . . . . . . .    12,484,610    18,951,053 
                                                   ------------- -------------
      Property and equipment, net . . . . . . . .       312,748       323,195 
      Due from affiliate  . . . . . . . . . . . .     4,040,110     4,040,110 
                                                   ------------- -------------
          Total assets  . . . . . . . . . . . . .  $ 16,837,468  $ 23,314,358 
                                                   ============= =============

                    The accompanying notes are an integral part of
                       these consolidated financial statements.<PAGE>



                            TRANSCOR WASTE SERVICES, INC.

                             CONSOLIDATED BALANCE SHEETS

                         LIABILITIES AND STOCKHOLDERS' EQUITY


                                                   December 31,     June 30,
                                                       1997           1998    
                                                   ------------- -------------
                                                                  (unaudited)
                                                   
      Current liabilities:                         
       Accounts payable, trade  . . . . . . . . .  $    541,104  $  1,097,844 
       Income tax payable   . . . . . . . . . . .         -         2,052,855 
       Accrued expenses   . . . . . . . . . . . .       954,432     1,163,972 
       Billings in excess of costs and estimated   
         earnings on uncompleted contracts  . . .        15,978       225,563 
                                                   ------------- -------------
          Total current liabilities . . . . . . .     1,511,514     4,540,234 
                                                   ------------- -------------
      Long-term debt, net of current maturities    
       (including debt owed to Kimmins of          
       $2,003,258 at December 31, 1997             
       and June 30, 1998)   . . . . . . . . . . .     2,003,258     2,003,258 
      Deferred income taxes . . . . . . . . . . .     2,267,742     2,267,742 
      Commitments and contingencies . . . . . . .         -             -     
                                                   
      Stockholders' equity:                        
       Preferred stock, $.001 par value;           
         1,000,000 shares authorized; none issued  
         and outstanding  . . . . . . . . . . . .         -             -     
       Capital stock, $.001 par value; 10,000,000  
         shares authorized; 4,010,000 shares       
         issued and 4,000,000 shares               
         outstanding  . . . . . . . . . . . . . .         4,010         4,010 
       Capital in excess of par value   . . . . .    12,193,547    12,193,547 
       Retained earnings (deficit)  . . . . . . .    (1,094,597)    2,353,573 
                                                   ------------- -------------
       Less treasury stock, at cost                  11,102,960    14,551,130 
         (10,000 shares)  . . . . . . . . . . . .       (48,006)      (48,006)
                                                   ------------- -------------
          Total stockholders' equity  . . . . . .    11,054,954    14,503,124 
          Total liabilities and stockholders'      ------------- -------------
           equity   . . . . . . . . . . . . . . .  $ 16,837,468  $ 23,314,358 
                                                   ============= =============


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

                                           <PAGE>



                            TRANSCOR WASTE SERVICES, INC.

                        CONSOLIDATED STATEMENTS OF OPERATIONS


                                                   Three months ended June 30,
                                                   ---------------------------
                                                       1997           1998    
                                                   ------------- -------------
                                                   (unaudited)    (unaudited)
                                                   
      Revenue . . . . . . . . . . . . . . . . . .  $  3,122,585  $  2,441,968 
                                                   
      Expenses:                                    
       Operating expenses   . . . . . . . . . . .     2,622,018     2,121,678 
       Selling, general, and administrative        
         expenses . . . . . . . . . . . . . . . .       148,068       165,204 
                                                   ------------- -------------
                                                   
      Operating income  . . . . . . . . . . . . .       352,499       155,086 
                                                   
      Interest income, net of expense . . . . . .        71,386        83,685 
                                                   ------------- -------------
      Income from continuing operations before     
       income taxes   . . . . . . . . . . . . . .       423,885       238,771 
                                                   
      Provision for income taxes  . . . . . . . .       165,315       102,771 
                                                   ------------- -------------
      Income from continuing operations . . . . .       258,570       136,000 
                                                   
      Discontinued operations:                     
       Income (loss) from discontinued solid       
         waste division (less applicable tax       
         provision of ($263,286) and $2,051,315 in 
         1997 and 1998, respectively) . . . . . .      (411,804)    3,091,044 
                                                   ------------- -------------
                                                   
      Net income (loss) . . . . . . . . . . . . .  $   (153,234) $  3,227,044 
                                                   ============= =============

                    The accompanying notes are an integral part of
                       these consolidated financial statements.<PAGE>



                            TRANSCOR WASTE SERVICES, INC.

                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (continued)


                                                   Three months ended June 30,
                                                   ---------------------------
                                                       1997           1998    
                                                   ------------- -------------
                                                   (unaudited)    (unaudited)
                                                   
      Share data:                                  
       Basic income per share from continuing      
         operations . . . . . . . . . . . . . . .  $        .06  $        .04 
                                                   ============= =============
       Diluted income per share from continuing    
         operations . . . . . . . . . . . . . . .  $        .06  $        .04 
                                                   ============= =============
                                                   
       Basic income (loss) per share from          
         discontinued operations  . . . . . . . .  $       (.10) $        .77 
                                                   ============= =============
       Diluted income (loss) per share from        
         discontinued operations  . . . . . . . .  $       (.10) $        .76 
                                                   ============= =============
                                                   
       Total basic income (loss) per share  . . .  $       (.04) $        .81 
                                                   ============= =============
       Total diluted income (loss) per share  . .  $       (.04) $        .80 
                                                   ============= =============
                                                   
      Weighted average number of shares            
       outstanding used in computations:
          Basic   . . . . . . . . . . . . . . . .     4,000,000     4,000,000 
                                                   ============= =============
          Diluted   . . . . . . . . . . . . . . .     4,000,000     4,042,151 
                                                   ============= =============

                    The accompanying notes are an integral part of
                       these consolidated financial statements.<PAGE>



                            TRANSCOR WASTE SERVICES, INC.

                        CONSOLIDATED STATEMENTS OF OPERATIONS


                                                    Six months ended June 30, 
                                                   ---------------------------
                                                       1997           1998    
                                                   ------------- -------------
                                                    (unaudited)   (unaudited)
                                                   
      Revenue . . . . . . . . . . . . . . . . . .  $  7,059,381  $  4,310,377 
                                                   
      Expenses:                                    
       Operating expenses   . . . . . . . . . . .     5,391,182     3,552,655 
       Selling, general, and administrative        
         expenses . . . . . . . . . . . . . . . .       559,532       365,417 
                                                   ------------- -------------
                                                   
      Operating income  . . . . . . . . . . . . .     1,108,667       392,305 
                                                   
      Interest income, net of expense . . . . . .      (135,969)     (171,794)
                                                   ------------- -------------
      Income from continuing operations before     
       income taxes   . . . . . . . . . . . . . .     1,244,636       564,099 
                                                   
      Provision for income taxes  . . . . . . . .       485,408       194,649 
                                                   ------------- -------------
      Income from continuing operations . . . . .       759,228       369,450 
                                                   
      Discontinued operations:                     
       Income (loss) from discontinued solid       
         waste management operations (less         
         applicable tax benefit of $570,409 in     
         1997 and $2,001,878 tax provision in      
         1998 . . . . . . . . . . . . . . . . . .      (892,177)    3,078,720 
                                                   ------------- -------------
                                                   
       Net income (loss)  . . . . . . . . . . . .  $   (132,949) $  3,448,170 
                                                   ============= =============

                    The accompanying notes are an integral part of
                       these consolidated financial statements.<PAGE>



                            TRANSCOR WASTE SERVICES, INC.

                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (continued)


                                                    Six months ended June 30, 
                                                   ---------------------------
                                                       1997           1998    
                                                   ------------- -------------
                                                    (unaudited)   (unaudited)
                                                   
      Share data:                                  
       Basic income per share from continuing      
         operations . . . . . . . . . . . . . . .  $        .19  $        .09 
                                                   ============= =============
       Diluted income per share from continuing    
         operations . . . . . . . . . . . . . . .  $        .19  $        .09 
                                                   ============= =============
                                                   
       Basic income (loss) per share from          
         discontinued operations  . . . . . . . .  $       (.22) $        .77 
                                                   ============= =============
       Diluted income (loss) per share from        
         discontinued operations  . . . . . . . .  $       (.22) $        .77 
                                                   ============= =============
                                                   
       Total basic income (loss) per share  . . .  $       (.03) $        .86 
                                                   ============= =============
       Total diluted income (loss) per share  . .  $       (.03) $        .86 
                                                   ============= =============
                                                   
      Weighted average number of shares            
       outstanding used in computations:
          Basic   . . . . . . . . . . . . . . . .     4,000,000     4,000,000 
                                                   ============= =============
          Diluted   . . . . . . . . . . . . . . .     4,000,000     4,042,151 
                                                   ============= =============
      
                    The accompanying notes are an integral part of
                       these consolidated financial statements.<PAGE>



                            TRANSCOR WASTE SERVICES, INC.

                        CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                    Six months ended June 30, 
                                                   ---------------------------
                                                       1997           1998    
                                                   ------------- -------------
                                                    (unaudited)   (unaudited)
      Cash flows from operating activities:                                   
       Net income from continuing operations  . .  $    759,228  $    369,450 
       Adjustments to reconcile net income from    
         continuing operations to net cash         
         provided by operating activities:         
          Depreciation and amortization . . . . .     2,114,766        41,615 
          Gain on disposal of equipment . . . . .      (354,739)        -     
          Changes in operating assets and          
           liabilities:                            
            Accounts receivable   . . . . . . . .       257,946      (253,604)
            Costs and estimated earnings in        
              excess of billings on uncompleted    
              contracts . . . . . . . . . . . . .      (423,136)          621 
            Income tax refund receivable/          
              payable . . . . . . . . . . . . . .        51,753     2,196,527 
            Other assets  . . . . . . . . . . . .      (509,094)        -     
            Accounts payable  . . . . . . . . . .      (522,278)      556,740 
            Accrued expenses  . . . . . . . . . .       (90,422)      209,540 
            Billings in excess of costs and        
              estimated earnings on uncompleted    
              contracts . . . . . . . . . . . . .      (114,609)      209,585 
                                                   ------------- -------------
       Total adjustments  . . . . . . . . . . . .       410,187     2,961,024 
       Net cash provided by continuing             ------------- -------------
         operations . . . . . . . . . . . . . . .     1,169,415     3,330,474 
       Net loss from discontinued operations  . .      (892,177)   (2,184,536)
       Changes in net assets of discontinued       
         operations . . . . . . . . . . . . . . .         -         2,979,348 
      Net cash provided by operating               ------------- -------------
       activities   . . . . . . . . . . . . . . .       277,238     4,125,286 
                                                   ------------- -------------

                    The accompanying notes are an integral part of
                       these consolidated financial statements.<PAGE>



                            TRANSCOR WASTE SERVICES, INC.

                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     (continued)


                                                    Six months ended June 30, 
                                                   ---------------------------
                                                       1997           1998    
                                                   ------------- -------------
                                                    (unaudited)   (unaudited)
                                                   
      Cash flows from investing activities:        
       Capital expenditures   . . . . . . . . . .    (2,398,444)     (527,743)
       Proceeds from sale of property and          
         equipment  . . . . . . . . . . . . . . .     1,108,883         -     
       Gain on sale of assets of discontinued      
         operations . . . . . . . . . . . . . . .         -         5,263,256 
      Net cash provided by (used in) investing     ------------- -------------
       activities   . . . . . . . . . . . . . . .    (1,289,561)    4,735,513 
                                                   ------------- -------------
                                                   
      Cash flows from financing activities:        
       Proceeds from long-term debt   . . . . . .     2,088,212         -     
       Repayment of long-term debt  . . . . . . .    (2,385,806)        -     
       Proceeds from advances to Kimmins  . . . .         -        (6,703,363)
       Repayment of advances from Kimmins   . . .     1,747,376         -     
      Net cash provided by (used in) financing     ------------- -------------
       activities   . . . . . . . . . . . . . . .     1,449,782    (6,703,363)
                                                   ------------- -------------
                                                   
      Net increase (decrease)  in cash  . . . . .       437,459     2,157,436 
      Cash, beginning of period . . . . . . . . .     1,437,788     2,115,510 
                                                   ------------- -------------
      Cash, end of period . . . . . . . . . . . .  $  1,875,247  $  4,272,946 
                                                   ============= =============

                    The accompanying notes are an integral part of
                       these consolidated financial statements.<PAGE>



                            TRANSCOR WASTE SERVICES, INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


      1.  Organization and summary of significant accounting policies

          Organization  - TransCor  Waste  Services, Inc.  (the   Company ) was
      formed on November 6, 1992, as a subsidiary of Kimmins Corp. ( Kimmins ).
      As  of  June 30,  1998,  Kimmins owns  approximately  74  percent of  the
      outstanding  common stock  of the  Company.   The Company  provides solid
      waste  management services  to commercial,  industrial,  residential, and
      municipal  customers in the state  of Florida. The  Company also provides
      demolition  services in conjunction with, and  as an economic complement,
      to its solid waste management services.

          Basis  of   presentation  -  The  accompanying   unaudited  condensed
      consolidated financial  statements have been prepared  in accordance with
      generally   accepted  accounting   principles   for   interim   financial
      information and with the instructions to Form 10-Q.  Accordingly, they do
      not  include all  of  the information  and  notes required  by  generally
      accepted accounting principles for complete financial statements.  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- and six-month  periods ended
      June 30, 1998, are not necessarily  indicative of the results that may be
      expected for the year ending December 31, 1998.  For further information,
      refer  to the consolidated financial  statements and notes  thereto as of
      and for the year ended December  31, 1997, included in the Company s Form
      10-K dated December 31, 1997, as  filed with the United States Securities
      and Exchange Commission.

          Certain amounts  in the  1997 consolidated financial  statements have
      been reclassified to conform to the 1998 presentation.

          Intangible assets - Intangible assets consist primarily of the excess
      of  cost  over fair  market  value  of the  net  assets  of the  acquired
      business,  which will be amortized  on a straight-line  basis over twenty
      years, and customer contracts, which will be amortized on a straight-line
      basis over five years.   Amortization expense was  approximately $247,000
      and  $37,000  for   the  six  months  ended  June  30,   1997  and  1998,
      respectively. Accumulated  amortization was  $245,000 and $0  at December
      31,  1997,  and June  30,  1998,  respectively.  The  intangible  assets,
      including customer contracts,  were sold on May 31, 1998,  as part of the
      sale of the Jacksonville operations to Eastern  Environmental Services of
      Florida,  Inc.  See Note  3 for  additional  information. The  balance of
      intangible  assets  was $81,000  and $607,000  as of  June 30,  1998, and
      December  31, 1997,  respectively. These  amounts are  reflected in   net
      assets of discontinued operations. <PAGE>



                            TRANSCOR WASTE SERVICES, INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


      1.  Organization   and  summary   of  significant   accounting   policies
          (continued)

          Other assets - Other assets  consist primarily of pre-contract  costs
      associated with  residential solid  waste  management contracts  obtained
      during  1997 and 1998, which are being amortized on a straight-line basis
      over  five years, the  term of the  contracts, and loan  costs, which are
      amortized over the  term of the loans.  Amortization  expense was $83,000
      and  $131,000  for  the  six  months  ended   June  30,  1997  and  1998,
      respectively.   Accumulated  amortization  was $533,000  and $664,000  at
      December 31, 1997, and  June 30, 1998,  respectively. The net balance  of
      other  assets was  $896,000  and  $1,142,000 as  of  June 30,  1998,  and
      December 31, 1997, respectively. All pre-contract costs capitalized as of
      December 31,  1997, and June  30, 1998, are held  by KRC, which  is being
      sold  effective  August 31,  1998.  Accordingly,  pre-contract costs  are
      included in  net assets of discontinued operations. 

          As of June  30, 1998, other assets include approximately  $787,000 of
      pre-contract  costs.  As explained above, these costs are currently being
      amortized  over the terms of the related contracts. However, the American
      Institute of  Certified Public Accountants ( AICPA )  has recently issued
      Statement of Position 98-5  ( SOP ),  Reporting on the Costs  of Start-up
      Activities,  which  requires all  start-up costs,  including pre-contract
      costs, to  be expensed  as incurred.  The SOP is  effective in  the first
      quarter of 1999  and will require the Company to  write off the remaining
      unamortized balance of approximately $330,000. If the anticipated sale of
      the Company s solid  waste subsidiary  occurs, the Company  will have  no
      capitalized start-up costs remaining at December 31, 1998.

          Earnings per share - Net income (loss) per share is computed based on
      the weighted average number of shares of  capital stock and stock options
      outstanding.  Diluted  earnings  per  share  includes  unexercised  stock
      options  assuming an  average stock  price. The  convertible subordinated
      debt  was not included in the computations because the assumed conversion
      would be antidilutive.

      2.  Property held for sale

          As  a result of management s review of the Company s various regional
      solid waste operating  facilities, a decision was made to dispose of less
      profitable operating assets. The Company sold its residential solid waste
      services  contract with  St.  Lucie County  to  a competitor  and  ceased
      operations at its Lantana,  Florida, facility. The Lantana and  St. Lucie
      facilities contributed  losses of approximately $1,111,000  and $476,000,
      respectively, of the  $2,184,000 operating  loss of the  Company for  the
      year ended December 31,  1997. The Company wrote off intangible assets of
      $183,000 associated with  these operations. Also, in accordance with SFAS
      No. 121,  Impairment of Long-Lived Assets and for Long-Lived Assets to be
      Disposed  Of,  the  Company wrote  down certain  land and  buildings that
      management believed had  carrying amounts higher  than their fair  market
      value.<PAGE>



                            TRANSCOR WASTE SERVICES, INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


      2.  Property held for sale (continued)

          The  impairment loss  of  $590,000 was  determined  by  comparing the
      carrying  amount  of impaired  assets  of  approximately $2,834,000  with
      recent  offers on the properties  held for sale.  The $590,000 impairment
      loss is included in  selling, general and administrative expenses  on the
      consolidated statements  of operations  for the  year ended  December 31,
      1997. The land and buildings that were impaired at December 31, 1997, and
      as of the date  of these financial statements had executed  contracts for
      sale,  are expected  to be  sold during  1998. Accordingly,  the carrying
      value of the land of approximately $476,000 for the period ended June 30,
      1998, net  of the  impairment loss  $25,000, is classified  as a  current
      asset under the  caption  Property  Held for Sale   in this  consolidated
      balance  sheet. The carrying value  of the land  and buildings associated
      with  discontinued operations  of approximately  $734,000 for  the period
      ended  December  31, 1997,  net  of the  impairment  loss of  $90,000, is
      included in net assets of discontinued  solid waste management operations
      on the balance sheet.

      3.  Property and equipment, net
                                                   December 31,     June 30,
                                                       1997           1998    
                                                   ------------- -------------
                                                                  (unaudited)
                                                   
          Land  . . . . . . . . . . . . . . . . .  $  3,019,969  $  2,606,831 
          Buildings and improvements  . . . . . .     4,068,476     3,163,389 
          Vehicles  . . . . . . . . . . . . . . .    16,936,386    13,426,334 
          Waste containers and equipment  . . . .    13,133,877     9,775,438 
          Furniture and fixtures  . . . . . . . .       700,711       698,969 
          Construction in progress  . . . . . . .        48,419       203,473 
                                                   ------------- -------------
                                                     37,907,838    29,874,434 
          Less accumulated depreciation . . . . .   (12,846,420)  (10,347,868)
                                                   ------------- -------------
                                                     25,061,418    19,526,566 
          Less net property and equipment included 
           in net assets of discontinued solid     
           waste management operations  . . . . .   (24,748,670)  (19,203,371)
                                                   ------------- -------------
                                                   
          Net property and equipment attributable  
           to assets of continuing operations   .  $    312,748  $    323,195 
                                                   ============= =============

          Property and equipment is recorded at cost.  Depreciation is provided
      using  the straight-line method over  estimated useful lives, which range
      from 3 to 30 years.   Depreciation expense was $1,785,000 and  $1,853,000
      for the  six months ended June  30, 1997 and 1998,  respectively. For the
      six  months  ended June  30, 1998,  $42,000  of depreciation  expense was
      attributable to continuing operations  and $1,811,000 was attributable to
      discontinued operations.<PAGE>



                            TRANSCOR WASTE SERVICES, INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


      3.  Property and equipment, net (continued)

          On  May  31,  1998,  the Company  sold  its  Jacksonville area  waste
      collection and recycling operating assets and certain assets of the Miami
      front-end load  and rear-load commercial waste and  recycling business to
      Eastern Environmental Services of Florida, Inc., for $11,600,000 in cash.
      The proceeds exceeded the net book value of the underlying assets sold by
      approximately  $5,200,000.  This  gain   is  shown  in  the  Consolidated
      Statements   of  Operations   as  part   of   income   from  discontinued
      operations. 

      4.  Long-term debt

                                                   December 31,     June 30,
                                                       1997           1998    
                                                   ------------- -------------
                                                                  (unaudited)
                                                   
          Notes payable, due through March 1,      
          2001, payable in monthly installments    
          with interest at varying rates up to     
          9.75 percent, collateralized by          
          equipment . . . . . . . . . . . . . . .  $ 14,191,400  $ 11,334,470 
                                                   
          Convertible subordinated term note to    
          Kimmins, interest payable in monthly     
          installments, principal due December 1,  
          2003, interest at bank s base rate (8.5  
          percent) plus 1 percent . . . . . . . .     2,003,258     2,003,258 
                                                   
          Mortgage notes, principal and interest   
          payable in monthly installments through  
          August 1, 2010, interest at varying      
          rates up to prime plus 1.5 percent,      
          collateralized by land and buildings  .     4,860,013     3,231,573 
                                                   ------------- -------------
                                                   
          Total long-term debt  . . . . . . . . .    21,054,671    16,569,301 
                                                   
          Less debt of discontinued operations:    
           Long-term debt   . . . . . . . . . . .   (14,389,103)   (9,345,087)
           Current portion of long-term debt  . .    (4,662,310)   (5,220,956)
                                                   ------------- -------------
          Long-term debt of continuing             
           operations   . . . . . . . . . . . . .  $  2,003,258  $  2,003,258 
                                                   ============= =============<PAGE>



                            TRANSCOR WASTE SERVICES, INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


      4.  Long-term debt (continued)

          As of  June 30,  1998, the  Company is a  co-borrower with  joint and
      several liability  on approximately  $4,244,000 of  financial institution
      debt of Kimmins.  The debt agreements contain certain covenants, the most
      restrictive  of which  require, for  Kimmins for  1998, maintenance  of a
      consolidated  tangible net worth, as defined, of not less than $7,500,000
      and net  income not  less than  $3,000,000.   In addition,  the covenants
      prohibit the payment of dividends by the Company without lender approval.
      For all  periods presented and for all of 1998, the Company believes that
      Kimmins has complied with or obtained waivers for all loan covenants.

          Francis M.  Williams has  guaranteed approximately $7,817,000  of the
      total notes payable of $11,334,000. 

          The lenders  prime and base rates under the Company s  notes were 8.5
      percent at June 30, 1998.

          Included  in  the  notes  payable  of approximately  $11,334,000  are
      equipment notes of the Company for $3,647,000 that are due  in July 1998.
      The  Company has  executed  a commitment  agreement  that refinances  the
      $3,647,000  until January 1,  2000 and,  accordingly, has  classified the
      debt pursuant to the expected maturity schedule.

      5.  Stockholders  equity

          The Company has authorized 1,000,000 shares of preferred stock with a
      par  value of  $.001 per  share,  none of  which has  been issued.   Such
      preferred stock may  be issued in series and will have such designations,
      rights, preferences,  and limitations  as may  be fixed  by the  Board of
      Directors.

          The convertible  subordinated term  note is convertible  into 400,652
      shares of  the Company s capital stock  at the time the  market value per
      share equals or exceeds $9.00 for twenty consecutive trading days.

          Warrants  to purchase 100,000 shares of the Company s common stock at
      $6.00 per share were issued in 1993 to the underwriters  of the Company s
      initial  public offering.  Warrants  to purchase 10,000  shares of common
      stock  were  exercised  during  March  1996.  The remaining  warrants  to
      purchase  90,000  shares  expired  on  March  25,  1998,  without   being
      exercised.

      6.  Subsequent events

          On  August 14, 1998, Kimmins, the  parent of the Company, acquired an
      additional 297,200 shares of common stock  of the Company from Francis M.
      Williams,  President   and  Chief  Executive  Officer   of  Kimmins.  The
      acquisition increased Kimmins  ownership percentage to 81 percent from 74
      percent and results in the ability to consolidate the Company and Kimmins
      for federal income tax purposes on a prospective basis.<PAGE>



                            TRANSCOR WASTE SERVICES, INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


      7.  Discontinued operations

          On July  20, 1998, the Company  executed an agreement to  sell all of
      the  common  stock  of  its wholly-owned  operating  subsidiary,  Kimmins
      Recycling Corp.  ( KRC ), for $51.1 million in  cash and stock to Eastern
      Environmental Services  of Florida,  Inc., an unrelated  competitor. This
      transaction,  coupled   with  the  earlier   sale  this  year   of  KRC s
      Jacksonville and Miami operations, results in the Company s exit from the
      solid  waste  industry. The  transaction  will result  in a  gain  as the
      proceeds  of $41.1 million  in cash and  $10 million in  stock of Eastern
      Environmental Services  of Florida,  Inc., exceed the  Company s carrying
      value of the underlying investment in KRC. The transaction is expected to
      close by August 31, 1998.

          Information  related to  the discontinued  operations of KRC  for the
      three- and six-month periods ended June 30, 1998, are as follows:

                                                   Three months    Six months
                                                       ended         ended
                                                   June 30, 1998 June 30, 1998
                                                   ------------- -------------
                                                    (unaudited)   (unaudited)
                                                   
          Net revenue . . . . . . . . . . . . . .  $  8,099,000  $ 16,693,000 
          Operating expenses  . . . . . . . . . .     6,743,000    13,831,000 
          Selling, general and administrative      
           expenses   . . . . . . . . . . . . . .     1,178,000     2,352,000 
                                                   ------------- -------------
          Operating income  . . . . . . . . . . .       178,000       510,000 
          Non-operating gain on sale of assets  .     5,263,000     5,263,000 
          Interest expense, net . . . . . . . . .       299,000       692,000 
                                                   ------------- -------------
          Income before provision for income       
           taxes  . . . . . . . . . . . . . . .       5,142,000     5,081,000 
          Income taxes  . . . . . . . . . . . . .     2,051,000     2,002,000 
                                                   ------------- -------------
          Net income  . . . . . . . . . . . . . .  $  3,091,000  $  3,079,000 
                                                   ============= =============<PAGE>



                            TRANSCOR WASTE SERVICES, INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


      7.  Discontinued operations (continued)

          The  net assets and liabilities of the discontinued operations of KRC
      included in the accompanying consolidated  balance sheets as of  December
      31, 1997, and June 30, 1998, respectively, are as follows:

                                                   December 31,     June 30,
                                                       1997           1998    
                                                   ------------- -------------
                                                                  (unaudited)
          Current assets:                          
           Accounts receivable - trade, net   . .  $  3,677,670  $  2,506,482 
           Property held for sale   . . . . . . .       322,978         -     
           Other current assets   . . . . . . . .       265,770       107,895 
                                                   ------------- -------------
            Total current assets  . . . . . . . .     4,266,418     2,614,377 
                                                   
          Property and equipment, net . . . . . .    24,748,670    19,203,371 
          Property held for sale  . . . . . . . .     1,510,723     1,493,311 
          Intangible assets, net  . . . . . . . .       606,975        81,333 
          Other assets  . . . . . . . . . . . . .     1,142,205       895,509 
                                                   ------------- -------------
            Total assets  . . . . . . . . . . . .    32,274,991    24,287,901 
                                                   ------------- -------------
          Current liabilities:                     
           Accounts payable, trade  . . . . . . .     3,748,911     2,892,564 
           Accrued expenses   . . . . . . . . . .     2,209,387     2,132,681 
           Current portion of long-term debt  . .     4,662,310     5,220,956 
                                                   ------------- -------------
            Total current liabilities   . . . . .    10,620,608    10,246,201 
           Long-term debt   . . . . . . . . . . .    14,389,103     9,345,087 
                                                   ------------- -------------
            Total liabilities   . . . . . . . . .    25,009,711    19,591,288 
                                                   ------------- -------------
           Net assets of discontinued              
            operations  . . . . . . . . . . . . .  $  7,265,280  $  4,696,613 
                                                   ============= =============
      <PAGE>



                            TRANSCOR WASTE SERVICES, INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      

      8.  Earnings per share

          As  required by  Financial Accounting  Standards Board  Statement No.
      128, the following tables set forth the computation  of basic and diluted
      earnings per share:

                                                        Three months ended
                                                             June 30,         
                                                   ---------------------------
                                                       1997           1998    
                                                   ------------- -------------
          Numerator:                               
                                                   
          Income from continuing operations . . .  $    258,570  $    136,000 
          Adjustment for basic earnings per        
           share  . . . . . . . . . . . . . . . .         -             -     
                                                   ------------- -------------
          Numerator for basic earnings per share - 
           income available to common              
           stockholders   . . . . . . . . . . . .       258,570       136,000 
          Effect of dilutive securities:           
          Interest on convertible subordinated     
           term note  . . . . . . . . . . . . . .         -             -     
          Less tax effect of interest . . . . . .         -             -     
                                                   ------------- -------------
          Numerator for diluted earnings per                                  
           share:
           Income from continuing operations  . .       258,570       136,000 
           Income (loss) from discontinued         
            operations  . . . . . . . . . . . . .      (411,804)    3,091,044 
                                                   ------------- -------------
          Income (loss) applicable to common       
            stockholders after assumed             
            conversions   . . . . . . . . . . . .  $   (153,234) $  3,227,044 
                                                   ============= =============
                                                   <PAGE>



                            TRANSCOR WASTE SERVICES, INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      

      8.  Earnings per share (continued)

                                                        Three months ended
                                                             June 30,         
                                                   ---------------------------
                                                       1997           1998    
                                                   ------------- -------------
          Denominator:                             
                                                   
          Denominator for basic earnings per       
           share - Weighted-average shares  . . .     4,000,000     4,000,000 
          Effective of dilutive securities:        
          Stock options . . . . . . . . . . . . .         -            42,151 
          Warrants  . . . . . . . . . . . . . . .         -             -     
          Convertible subordinated term note  . .         -             -     
                                                   ------------- -------------
          Dilutive potential common shares  . . .         -            42,151 
                                                   ------------- -------------
          Denominator for diluted earnings per     
           share - Adjusted weighted-average       
           shares and assumed conversions   . . .     4,000,000     4,042,151 
                                                   ============= =============
                                                   
          Basic income (loss) per share from       
           continuing operations  . . . . . . . .  $       (.06) $        .04 
                                                   ============= =============
          Diluted income (loss) per share from     
           continuing operations  . . . . . . . .  $       (.06) $        .04 
                                                   ============= =============
                                                   
          Basic income (loss) per share from       
           discontinued operations  . . . . . . .  $       (.10) $        .77 
                                                   ============= =============
          Diluted income (loss) per share from     
           discontinued operations  . . . . . . .  $       (.10) $        .76 
                                                   ============= =============
                                                   
          Total basic income (loss) per share . .  $       (.04) $        .81 
                                                   ============= =============
          Total diluted income (loss) per share .  $       (.04) $        .80 
                                                   ============= =============<PAGE>



                            TRANSCOR WASTE SERVICES, INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


      8.  Earnings per share (continued)

                                                         Six months ended
                                                             June 30,         
                                                   ---------------------------
                                                       1997           1998    
                                                   ------------- -------------
          Numerator:                               
                                                   
          Income from continuing operations . . .  $    759,228  $    369,450 
          Adjustment for basic earnings per        
           share  . . . . . . . . . . . . . . . .         -             -     
                                                   ------------- -------------
          Numerator for basic earnings per share - 
           income available to common              
           stockholders   . . . . . . . . . . . .       759,228       369,450 
          Effect of dilutive securities:           
          Interest on convertible subordinated     
           term note  . . . . . . . . . . . . . .         -             -     
          Less tax effect of interest . . . . . .         -             -     
                                                   ------------- -------------
          Numerator for diluted earnings per                                  
           share:
           Income from continuing operations  . .       759,228       369,450 
           Income (loss) from discontinued         
           operations   . . . . . . . . . . . . .      (892,177)    3,078,720 
                                                   ------------- -------------
         Income (loss) applicable to common        
          stockholders after assumed               
          conversions . . . . . . . . . . . . . .  $   (132,949) $  3,448,170 
                                                   ============= =============
                                                   <PAGE>



                            TRANSCOR WASTE SERVICES, INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


      8.  Earnings per share (continued)

                                                         Six months ended
                                                             June 30,         
                                                   ---------------------------
                                                       1997           1998    
                                                   ------------- -------------
          Denominator:                             
                                                   
          Denominator for basic earnings per       
           share - weighted-average shares  . . .     4,000,000     4,000,000 
          Effective of dilutive securities:        
          Stock options . . . . . . . . . . . . .         -            31,407 
          Warrants  . . . . . . . . . . . . . . .         -             -     
          Convertible subordinated term note  . .         -             -     
                                                   ------------- -------------
          Dilutive potential common shares  . . .         -            31,407 
                                                   ------------- -------------
          Denominator for diluted earnings per     
           share - adjusted weighted-average       
           shares and assumed conversions   . . .     4,000,000     4,031,407 
                                                   ============= =============
                                                   
          Basic income per share from continuing   
           operations   . . . . . . . . . . . . .  $        .19  $        .09 
                                                   ============= =============
          Diluted income per share from            
           continuing operations  . . . . . . . .  $        .19  $        .09 
                                                   
          Basic income (loss) per share from       
           discontinued operations  . . . . . . .  $       (.22) $        .77 
                                                   ============= =============
          Diluted income (loss) per share from     
           discontinued operations  . . . . . . .  $       (.22) $        .77 
                                                   ============= =============
                                                   
          Total basic income (loss) per share . .  $       (.03) $        .86 
                                                   ============= =============
          Total diluted income (loss) per share .  $       (.03) $        .86 
                                                   ============= =============

          Unexercised options  to purchase  209,000 shares of common  stock for
      1998 are included in the above calculations. The convertible subordinated
      debt  and unexercised options to  purchase 92,000 shares  of common stock
      for 1997  were not  included in  the computations of  diluted income  per
      share because the assumed conversion would be antidilutive.<PAGE>



      Item 2.          MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                RESULTS OF OPERATIONS

               COMPARISON OF THREE MONTHS ENDED JUNE 30, 1998 AND 1997

          Revenue for  the three months  ended June 30,  1998, was  $2,442,000,
      representing a decrease of  $681,000, or approximately 22   percent, from
      $3,123,000 for the  three months ended  June 30, 1997.   The decrease  in
      total revenue  was attributable  to the Company s  demolition operations,
      which generated revenue of approximately  $2,442,000 for the three months
      ended  June 30, 1998, compared  to approximately $3,123,000  for the same
      period in  1997. In addition,  discontinued operations  from solid  waste
      management  services experienced  a decrease  in  revenue of  $273,000 to
      $8,099,000  for the  three  months  ended  June  30,  1998,  compared  to
      $8,372,000 for the same period in  1997 primarily as a result of closures
      of  facilities   and  sales  of  operating   assets,  including  customer
      contracts.

          Operating expenses  for the three  months ended June  30, 1998,  were
      $2,122,000,  representing a  decrease  of $500,000,  or approximately  19
      percent,  from $2,622,000  for  the three  months  ended June  30,  1997.
      Operating expenses include  fees charged by landfills for  waste disposal
      (which to date has been the largest  component of the Company s operating
      expenses), direct  labor costs associated with  the collection, transfer,
      and  recycling of  waste, and  depreciation.   The decrease  in operating
      expenses  was  attributable  primarily  to  volume-related  decreases  in
      certain  major operational  expenses; such  as, landfill fees  and direct
      labor costs related to the Company s demolition operations.

          For  continuing  operations,  selling,  general,  and  administrative
      expenses  for  the  three months  ended  June  30,  1998, were  $165,000,
      representing an increase  of $17,000, or  approximately 11 percent,  from
      $148,000  for  the three  months ended  June  30, 1997.  For discontinued
      operations, selling,  general and  administrative expenses for  the three
      months ended June 30,  1998, were $1,178,000, representing a  decrease of
      $1,038,000, or 47  percent, from $2,216,000 for the  same period in 1997.
      The   dollar   and  percentage   decrease   in   selling,  general,   and
      administrative  expenses is  primarily attributable  to  reduced overhead
      costs,  such as administrative, sales, marketing and labor costs that are
      associated  with  facilities  that have  been  closed  or  sold and  from
      management s actions to reduce overhead costs.

          The Company sold its Jacksonville area waste collection and recycling
      operating assets and certain assets of the Miami front-end load and rear-
      load  commercial waste  and recycling  business to  Eastern Environmental
      Services of  Florida, Inc.,  for $11,600,000  in cash.  This transaction,
      combined  with  the  Company s  sale  of certain  other  vehicles,  waste
      containers,  and equipment during the  three months ended  June 30, 1998,
      resulted  in a  non-operating gain  of  approximately $5,263,000.   These
      assets  were   primarily  utilized   in  the  Company s   commercial  and
      residential  waste collection  services.  This gain  is  included in  the
      income from discontinued operations for the three-  and six-month periods
      ended June 30, 1998.<PAGE>



      Item 2.          MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                RESULTS OF OPERATIONS

               COMPARISON OF THREE MONTHS ENDED JUNE 30, 1998 AND 1997
                                     (continued)

          Revenues   and  costs  for   the  remainder  of  the   year  will  be
      substantially decreased primarily due  to the expected sale of  the solid
      waste operations  during  the  third quarter  of  1998. See  Note  6  for
      additional  information   regarding  the  sale.  Solid  waste  operations
      comprise approximately 75 percent of revenues and operating expenses.

          Interest  expense, net of interest income, for the three months ended
      June 30,  1998, was $84,000 as  compared to $71,000 for  the three months
      ended June 30,  1997. The  average amount of  debt outstanding  decreased
      between periods.

          The Company s  income tax provision  was calculated using  a rate  of
      approximately 43 percent and 39 percent for the three month periods ended
      June 30, 1998 and 1997, respectively.

          As a  result of  the foregoing,  the Company  recorded net  income of
      $3,227,000 for the three months ended June 30, 1998, as compared to a net
      loss of $153,000 for the three months ended June 30, 1997.

                COMPARISON OF SIX MONTHS ENDED JUNE 30, 1998 AND 1997

          Revenue  for  the six  months  ended June  30, 1998,  was $4,310,000,
      representing a decrease of $2,749,000, or  approximately 39 percent, from
      $7,059,000 for the six months ended June 30, 1997.  The decrease in total
      revenue   was  primarily   attributable  to   the   Company s  demolition
      operations, which  generated revenue of approximately  $4,310,000 for the
      six  months ended June 30, 1998, compared to approximately $7,059,000 for
      the  same period in 1997. In addition, discontinued operations from solid
      waste management services experienced a decrease in revenue of $86,000 to
      $16,693,000  for  the  six  months  ended  June  30,  1998,  compared  to
      $16,779,000 for the same period  in 1997. The decrease was  primarily the
      result of closures of facilities and sales of operating assets, including
      customer  contracts,  partially offset  by  revenues  generated from  new
      municipal solid waste service contracts.

          Operating  expenses  for the  six  months ended  June 30,  1998, were
      $3,553,000, representing  a decrease  of $1,838,000, or  approximately 34
      percent,  from $5,391,000  for  the  six  months  ended  June  30,  1997.
      Operating expenses include fees  charged by landfills for waste  disposal
      (which to date has been the largest component of  the Company s operating
      expenses), direct  labor costs associated with  the collection, transfer,
      and  recycling of  waste, and  depreciation.   The decrease  in operating
      expenses  was  attributable  primarily  to  volume-related  decreases  in
      certain major  operational expenses;  such as,  landfill fees and  direct
      labor costs related to the Company s demolition operations.<PAGE>



      Item 2.          MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                RESULTS OF OPERATIONS

                COMPARISON OF SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                     (continued)

          For  continuing  operations,  Selling,  general,  and  administrative
      expenses  for  the  six  months  ended  June  30,  1998,  were  $365,000,
      representing a  decrease of $195,000,  or approximately 35  percent, from
      $560,000 for the six months ended June 30, 1997. The decrease in selling,
      general and  administrative expenses  is primarily attributable  to lower
      costs  associated  with  reduced  volumes of  services  and  management s
      actions to  reduce overhead costs. For  discontinued operations, selling,
      general and administrative  expenses for  the six months  ended June  30,
      1998,  were $2,353,000,  representing  a decrease  of  $1,611,000, or  41
      percent, from  $3,964,000 for  the same  period in  1997. The dollar  and
      percentage decrease  in selling, general, and  administrative expenses is
      primarily attributable to reduced overhead costs, such as administrative,
      sales, marketing and labor costs that are associated with facilities that
      have been closed or sold and from management s actions to reduce overhead
      costs.

          The Company sold its Jacksonville area waste collection and recycling
      operating assets and certain assets of the Miami front-end load and rear-
      load  commercial waste  and recycling  business to  Eastern Environmental
      Services  of Florida,  Inc., for $11,600,000  in cash.  This transaction,
      combined  with the  Company s  sale  of  certain  other  vehicles,  waste
      containers,  and equipment during the  three months ended  June 30, 1998,
      resulted  in  a non-operating  gain of  approximately $5,263,000.   These
      assets  were   primarily  utilized   in  the  Company s   commercial  and
      residential waste collection services.  This gain is included in   income
      from  discontinued operations for the  three- and six-month periods ended
      June 30, 1998.

          Revenues   and  costs  for   the  remainder  of  the   year  will  be
      substantially decreased primarily due  to the expected sale of  the solid
      waste  operations during  the  third  quarter of  1998.  See Note  6  for
      additional  information   regarding  the  sale.  Solid  waste  operations
      comprise approximately 75 percent of revenues and operating expenses.

          Interest  expense, net of  interest income, for the  six months ended
      June 30,  1998, was $172,000 as  compared to $136,000 for  the six months
      ended  June  30,  1997.  The  average  amount  of  debt  outstanding  was
      consistent between periods.

          The Company s  income tax provision  was calculated using  a rate  of
      approximately 35 percent  and 39 percent for the  six month periods ended
      June 30, 1998 and 1997, respectively.

          As a  result of  the foregoing,  the Company  recorded net  income of
      $3,448,000 for the six months  ended June 30, 1998, as compared  to a net
      loss of $133,000 for the six months ended June 30, 1997.<PAGE>



      Item 2.          MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                RESULTS OF OPERATIONS

                           LIQUIDITY AND CAPITAL RESOURCES

          At  June 30,  1998,  the Company  had  a working  capital  surplus of
      $14,411,000  compared  to  a  working capital  surplus  of  $4,997,000 at
      December 31, 1997. Working capital was impacted primarily by increases in
      cash,  amounts  due  from affiliates,  and  income  tax  payable. Current
      financial resources, anticipated funds  from operations, and repayment of
      receivables from affiliate  (if needed)  are expected to  be adequate  to
      meet cash requirements in the year  ahead and the foreseeable future.  At
      June 30, 1998,  the Company had cash of $4,273,000. On  May 31, 1998, the
      Company  sold its Jacksonville area  operating assets and  certain of its
      Miami area operating assets to Eastern Environmental Services of Florida,
      Inc., for $11,600,000 in cash.

          Net cash provided by operating activities during the six months ended
      June 30, 1998,  was $4,125,000 compared  to $277,000 for  the six  months
      ended  June  30,  1997.  The  increase  in  cash  provided  by  operating
      activities was  due primarily  to net income  earned during 1998,  net of
      changes  in certain  operating assets  and liabilities  (primarily income
      from  and changes  in net  assets in  discontinued operations,  costs and
      estimated  earnings  in  excess  of billings  on  uncompleted  contracts,
      accounts payable, and accrued expenses).  

          Net cash provided by investing activities during the six months ended
      June 30, 1998, was $4,736,000  as compared to net cash used  in investing
      activities  of $1,290,000 for  the six  months ended  June 30,  1997. The
      increase in cash provided by investing activity is primarily attributable
      to a  gain  of  $5,263,000  from  the  sale  of  assets  of  discontinued
      operations. 

          Net cash  used in financing  activities during the  six months  ended
      June  30, 1998,  was  $6,703,000 as  compared  to  net cash  provided  by
      financing  activities of  $1,450,000 for  the six  months ended  June 30,
      1997. This  was primarily  a result  of repayment of  cash advances  from
      Kimmins Corp., as well as repayments of long-term debt.

          During  the six months  ended June  30, 1998 and  1997, the Company s
      average   trade  receivables  were  outstanding   for  35  and  45  days,
      respectively.   Both  averages  were based  on  the first  six  months of
      revenue annualized  and  compared to  the  trade receivable  balances  at
      quarter end.  Management believes that the number of days outstanding for
      its receivables approximates industry norms.  Credit is extended based on
      an evaluation of the  customer s financial condition.  Credit  losses are
      provided  for  in   the  financial  statements   and  have  been   within
      management s expectations.

          During the  six months  ended June 30,  1998 and 1997,  the Company s
      average  trade payables were extended  for 36 and  28 days, respectively.
      Both  averages  were based  on  the first  six  months  of operating  and
      selling, general, and administrative  expenses annualized and compared to
      trade payable balances at quarter end.<PAGE>



      Item 2.          MANAGEMENT S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                RESULTS OF OPERATIONS

                     LIQUIDITY AND CAPITAL RESOURCES (continued)

          As of  June 30,  1998, the  Company is a  co-borrower with  joint and
      several liability  on approximately  $4,244,000 of  financial institution
      debt of Kimmins.  The debt agreements contain certain covenants, the most
      restrictive  of which  require, for  Kimmins for  1998, maintenance  of a
      consolidated  tangible net worth, as defined, of not less than $7,500,000
      and net  income not  less than  $3,000,000.   In addition,  the covenants
      prohibit the payment of dividends by the Company without lender approval.
      For all  periods presented and for all of 1998, the Company believes that
      Kimmins has complied with or obtained waivers for all loan covenants.

          Francis M.  Williams has  guaranteed approximately $7,817,000  of the
      total notes payable of $11,334,000.

          The lenders  prime and base rates under the Company s  notes were 8.5
      percent at June 30, 1998. 

          Included  in  the  notes  payable  of approximately  $11,334,000  are
      equipment notes of the Company for $3,647,000 that are due  in July 1998.
      The  Company has  executed  a commitment  agreement  that refinances  the
      $3,647,000  until January 1,  2000 and,  accordingly, has  classified the
      debt pursuant to the expected maturity schedule.

          The  Company   has  no  current  material   commitments  for  capital
      expenditures  relating to any other new facilities, other than to acquire
      vehicles  and equipment estimated to be  approximately $3,500,000 for the
      City  of Cape  Coral  Contract, which  begins  October 1,  1998.  Cash of
      approximately  $41,000,000 is anticipated from  the sale of the Company s
      solid waste  subsidiary, which is expected  to close on August  31, 1998.
      See Note 6 for additional information regarding the sale.

          Historically,  inflation  has  not  had  a  material  effect  on  the
      Company s operations.   If inflation increases, the  Company will attempt
      to increase its prices  to offset its increased  expenses.  No  assurance
      can  be given,  however,  that the  Company will  be  able to  adequately
      increase its prices in response to inflation.

      New Accounting Pronouncements

          In February  1997, the Financial Accounting  Standards Board ( FASB )
      issued Statement of Financial Accounting Standards No. 128,  Earnings per
      Share   ( SFAS No. 128"). Statement  No. 128 replaced  the calculation of
      primary  and  fully diluted  earnings per  share  with basic  and diluted
      earnings per share. The  Company adopted the provisions of  Statement 128
      No. effective December 31,  1997. All earnings per share accounts for all
      periods presented have been restated to  conform to the Statement No. 128
      requirements.<PAGE>



      Item 2.          MANAGEMENT S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


          In  June  1997, the  FASB issued  Statement  of Financial  Accounting
      Standards No. 130,  Reporting Comprehensive Income ( SFAS No. 130"). SFAS
      No. 130 requires that total comprehensive income and comprehensive income
      per share be  disclosed with equal prominence as net  income and earnings
      per  share. Comprehensive income  is defined as  changes in stockholders 
      equity   exclusive  of   transactions   with  owners   such  as   capital
      contributions and dividends. SFAS  No. 130 is effective for  fiscal years
      beginning after December 15, 1997.  Management is currently assessing the
      impact of SFAS No. 130, but does not expect its effect to be material.

          In June  1997,  the  FASB issued  Statement of  Financial  Accounting
      Standards  No.  131,  Disclosures  about  Segments of  an  Enterprise and
      Related   Information   ( SFAS  No.  131"),  which  supercedes  Financial
      Accounting  Standards No. 14. SFAS No. 131  uses a management approach to
      report financial and descriptive  information about a Company s operating
      segments. Operating  segments  are revenue-producing  components  of  the
      enterprise  for   which  separate   financial  information   is  produced
      internally  for the Company s management.  SFAS No. 131  is effective for
      fiscal  years beginning after December 31,  1997. Management is currently
      assessing the impact of  SFAS No. 131, but does not  expect its effect to
      be material.

          The  American  Institute  of  Certified  Public  Accountants recently
      issued Statement of  Position 98-5,  Reporting on the  Costs of  Start-up
      Activities.  Start-up costs are defined broadly in  the SOP as those one-
      time  activities related  to opening  a new  facility, introducing  a new
      product or service,  conducting business in  a new territory,  conducting
      business with a  new class of  customer or beneficiary, initiating  a new
      process in an existing facility, or commencing some new operation. Start-
      up costs, including  organizational costs, should be expensed as incurred
      under  the new  SOP. The  SOP would  be effective  for most  entities for
      fiscal years beginning after December 15, 1998.  The SOP will require the
      Company,  upon adoption, to write off as  a cumulative effect of a change
      in  accounting   principle  any   previously   capitalized  start-up   or
      organization  costs. Therefore, in the first quarter of 1999, the Company
      may  have  to write  off the  remaining  unamortized balance  of contract
      start-up costs of  approximately $330,000  at December 31,  1998. If  the
      anticipated  sale of  the Company s  solid  waste subsidiary  occurs, the
      Company will have no capitalized start-up costs remaining at December 31,
      1998.

      Impact of Year 2000

          Some  of the Company s older computer programs were written using two
      digits rather  than  four digits  to  define the  applicable  year. As  a
      result,  those  computer  programs  have  time-sensitive  software   that
      recognize  a date using  00" as the year  1900 rather than the year 2000.
      This could cause  a system failure or miscalculations causing disruptions
      of operations,  including, among other  things, a temporary  inability to
      process transactions, send invoices, or engage in similar normal business
      activities.<PAGE>



      Item 2.          MANAGEMENT S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


          The Company has  completed an assessment and  will have to modify  or
      replace  portions of  its  software so  that  its computer  systems  will
      function properly with respect  to dates in the year 2000 and thereafter.
      The  total  Year 2000  project  is  estimated  to  be immaterial  to  the
      financial  statements.  To  date,  the Company s  incremental  costs  for
      assessment  of the  Year 2000  issue, the  development of  a modification
      plan, and the purchase of new software have been insignificant.

          The majority of software used by the Company is licensed from various
      software providers who  are currently  updating our programs  to be  Year
      2000 compliant. In-house  developed programs comprise a small  portion of
      the  total  software utilized,  and the  majority  of these  programs are
      believed to be Year 2000 compliant.

          The project is estimated to  be completed not later than December 31,
      1998, which is prior to  any anticipated impact on its operating  system.
      The  Company  believes,  with  modifications  to  existing  software  and
      conversions   to  new  software,  the  Year  2000  issue  will  not  pose
      significant operational  problems for  its computer systems.  However, if
      such modifications and  conversions are  not made, or  are not  completed
      timely,  the  Year  2000  Issue  could  have a  material  impact  on  the
      operations of the Company.

          The  Company  has  initiated formal  communications with  all  of its
      significant suppliers  and large  customers to  determine  the extent  to
      which  the Company s  interface  systems are  vulnerable  to those  third
      parties   failure to remediate  their own Year  2000 Issues.  There is no
      guarantee  that the  systems of  other companies  on which  the Company s
      systems rely  will be  timely converted  and  would not  have an  adverse
      effect on the Company s systems.

          The costs of the project  and the date on which the  Company believes
      it  will complete the Year  2000 modifications are  based on management s
      best  estimates, which  were  derived utilizing  numerous assumptions  of
      future events, including the  continued availability of certain resources
      and  other factors.  However,  there  can  be  no  guarantee  that  these
      estimates will  be achieved and  actual results  could differ  materially
      from those anticipated.  Specific factors that might cause  such material
      differences include, but are not limited to, the availability and cost of
      personnel trained  in this area,  the ability to  locate and correct  all
      relevant computer codes, and similar uncertainties.<PAGE>



      Item 2.          MANAGEMENT S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


      Forward-Looking Information

          The foregoing discussion in   Management s Discussion and Analysis of
      Financial Condition  and Results of  Operations  contains forward-looking
      statements within the meaning of the Private Securities Litigation Reform
      Act  of 1995,  that reflect  management s current  views with  respect to
      future events and financial  performance. Such forward looking statements
      include, without  limitation, statements  regarding the Company s  future
      capital  expenditures,  facility  closures,  service  demand  and  market
      growth,  competitive  position,  expected revenues  from  new  contracts,
      ability  to  meet  cash  requirements,  and  other  statements  regarding
      anticipated changes  in the  Company s Nasdaq  listing, future plans  and
      strategies,   anticipated  events  or  trends,  and  similar  expressions
      concerning  matters  that  are  not historical  facts.    Such statements
      involve risks and uncertainties, and there are certain important  factors
      that  could   cause  actual  results  to  differ  materially  from  those
      anticipated.  Some  of the  important  factors  that could  cause  actual
      results  to differ materially from those anticipated include, but are not
      limited  to,  economic  conditions,  competitive  factors,  increases  in
      landfill charges, the outcome of competitive bids, unanticipated costs in
      connection with facility  closures, and other uncertainties, all of which
      are difficult to  predict and many of which are beyond the control of the
      Company.  Due  to such uncertainties and risk,  readers are cautioned not
      to place  undue reliance on such forward-looking  statements, which speak
      only as of the date hereof.

      Effect of Inflation

          Inflation has not had, and is not expected to have, a material impact
      upon  the Company s operations.  If inflation increases, the Company will
      attempt to  increase its  prices to  offset its  increased expenses.   No
      assurance  can  be given,  however,  that  the Company  will  be  able to
      adequately increase its prices in response to inflation.

      Item 3.               QUANTITATIVE AND QUALITATIVE 
                            DISCLOSURES ABOUT MARKET RISK

          Not required pursuant to Item 305, General Instruction 1.<PAGE>



                             PART II - OTHER INFORMATION


      Item 1.  Legal proceedings

          During June 1997, Kimmins Recycling Corp. ( KRC ), St. Lucie  County,
      a political subdivision  of the State  of Florida, and  the City of  Fort
      Pierce, a municipality organized under the  laws of the State of Florida,
      were notified of a class action lawsuit filed  in the Nineteenth Judicial
      Circuit Court  of Florida by three  residents of St. Lucie  County.  This
      action challenged  the propriety of certain  contract provisions included
      in  KRC s  solid  waste   and  recyclable  materials  collection  service
      agreement with  St. Lucie County, which  allow KRC to place  liens on the
      property  of delinquent service recipients. The  court, permitting KRC to
      file  counterclaims against  the class  members,  has with  KRC s consent
      certified the  existence of a class.  KRC, the county, and  the city have
      filed motions for summary judgement  against the class plaintiff s claim,
      which was  heard on May  26, 1998.  On June 12,  1998, the  Court granted
      summary judgement in favor of KRC, the County, and the  City. At December
      31, 1997, the total amount of lien rights was approximately $474,000.

      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

          Effective with the close of business  on June 10, 1998, the Company s
      stock  was delisted from the  Nasdaq National Market  because the Company
      could  not  satisfy the  market value  public  float requirement  and was
      delinquent in filing its 1997  Form 10-K and its 1998 first  quarter Form
      10-Q. The Company recently applied to Nasdaq to initiate listing with the
      OTC Bulleting Service, which became effective on August 17, 1998.<PAGE>



      Item 6.  Exhibits and reports on Form 8-K

               (a)  The following documents are filed as exhibits to 
                    this Form 10-Q:

                    27.1 - Financial Data Schedule - 1998 (for SEC use only)
                    27.2 - Financial Data Schedule - 1997 (for SEC use only)

               (b)  Reports on Form 8-K:

                    On  May 27, 1998,  the Company filed a  Form 8-K announcing
                    the sale  of operating  assets related to  the Jacksonville
                    facility and certain operating  assets related to the Miami
                    facility.  On August 4, 1998, the  Company filed an amended
                    Form  8-K  that  included  the  Asset  Purchase   Agreement
                    relating to the sale. 

                    On July 27,  1998, the Company filed a Form  8-K announcing
                    the  sale of the common stock of Kimmins Recycling Corp. On
                    August  4, 1998, the Company filed an amended Form 8-K that
                    included the Stock Purchase Agreement relating to the sale.<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.

                                    TRANSCOR WASTE SERVICES, INC.


                                    By:  /S/ JOSEPH M. WILLIAMS                
                                        ---------------------------------------
                                        Joseph M. Williams
                                        President
      August 19, 1998

          Pursuant  to the requirements  of the Securities and  Exchange Act of
      1934,  this report  has been  signed below  by the  following  persons on
      behalf of  the registrant and in  the capacities indicated on  August 19,
      1998.
                                          


      Date:  August 19, 1998         By:  /s/ JOSEPH M. WILLIAMS
            -----------------             ------------------------------------
            -
                                          Joseph M. Williams
                                          President 
                                          (Principal Executive Officer)



      Date:  August, 19, 1998        By:  /s/ NORMAN S. DOMINIAK
            ------------------            ------------------------------------
            -
                                          Norman S. Dominiak
                                          Treasurer    and    Chief   Financial
                                          Officer
                                          (Principal Accounting and 
                                          Financial Officer)<PAGE>
<PAGE>