UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-QSB


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

For the Quarter ended June 30, 1996                Commission File No. 33-16736


    GULFSTAR INDUSTRIES, INC. (FORMERLY TIER ENVIRONMENTAL SERVICES, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           DELAWARE                                      23-2442288
-------------------------------------    ---------------------------------------
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
 incorporation or organization)


20505 U.S. 19N. #12-283, CLEARWATER, FL                     34624
-------------------------------------    ---------------------------------------
(Address of principal executive offices)                  (Zip Code)


Issuer's telephone number, (813)   441    -   4442
                            ---  --------   ------


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 shorter  period that the  registrant  was
required  to file  such  report),  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.

         Yes:   X                           No:
               ---                              -----

Transitional Small Business Disclosure Format:

         Yes:   X                           No:
               ---                              -----

The number of shares outstanding of each of the registrant's classes of common
stock as of June 30, 1996 is 9,501,123 shares all of one class of $.032 par
value common stock.

<PAGE>

                   GULFSTAR INDUSTRIES, INC. AND SUBSIDIARIES
                  (FORMERLY TIER ENVIRONMENTAL SERVICES, INC.)

                                      INDEX
                                      ------

                                                                           PAGE

PART I            FINANCIAL INFORMATION

                  Consolidated Balance Sheet - June 30, 1996                 1

                  Consolidated Statements of Operations - Nine Months
                    Ended June 30, 1996 and Nine Months Ended
                    June 30, 1995                                            2

                  Consolidated Statements of Operations - Three Months
                    Ended June 30, 1996 and June 30, 1995                    3

                  Consolidated Statement of Changes in Stockholders Equity
                    for the Nine Months Ended June 30, 1996                  4

                  Statement of Cash Flows - Nine Months Ended
                    June 30, 1996 and Nine Months Ended
                    June 30, 1995                                            5

                  Notes to Financial Statements                             6-9

                  Management's Discussion and Analysis of financial
                    conditions and results of operations                  10-11

                  Financial Information Summary                              12


PART II           OTHER INFORMATION

                  Item 1. Legal Proceedings                                  13

                  Item 2. Changes in Securities                              13

                  Item 3. Defaults Upon Senior Securities                    13

                  Item 4. Submission of Matters to a Vote of
                            Security Holders                                 13

                  Item 5. Other Information                                  13

                  Item 6. Exhibits on Reports on Form 8-K                    13

Signature Page                                                               14

<PAGE>

                   GULFSTAR INDUSTRIES, INC. AND SUBSIDIARIES
                  (FORMERLY TIER ENVIRONMENTAL SERVICES, INC.)
                           CONSOLIDATED BALANCE SHEETS
                                  JUNE 30, 1996

      Assets

Current Assets
  Cash                                                               $   68,237
  Accounts receivable, net of allowance for
    doubtful accounts of $20,000                                        532,200
  Contract receivable - current portion                                 277,757
  Contracts in process                                                3,239,892
  Other receivables and escrow deposits                                 139,343
  Prepaid expenses                                                       39,701
                                                                     ----------

      Total Current Assets                                            4,297,130

Long-term contract receivable, less current portion                     648,103

Property and equipment, at cost, net of accumulated
  depreciation and amortization of $303,079                              79,421

Other Assets
  Database, net of accumulated amortization of $53,571                  446,429
  Goodwill, net of accumulated amortization of $272,810               3,143,554
  Financing premium, net of accumulated amortization
    of $87,500                                                          162,500
  Deposits and other assets                                               1,729
                                                                     ----------

      Total Assets                                                   $8,778,866
                                                                     ==========

See notes to the consolidated financial statements.

<PAGE>

      Liabilities and Stockholders' Equity

Current Liabilities
  Accounts payable and accrued expenses                              $1,179,394
  Notes payable                                                         138,612
  Contracts payable                                                   3,179,569
  Amounts due to related parties                                        763,399
  Deferred tax liabilities - net                                         61,940
  Note payable to stockholder - current portion                         386,139
  Anticipated loss on long term contract                                199,006
                                                                     ----------

      Total Current Liabilities                                       5,908,059

Note payable to stockholder, net of current portion                     540,000

Stockholders' Equity
  Common stock, par value $.032 per share;
    authorized 10,000,000  shares, issued
    and outstanding 9,501,123                                           304,292
  Convertible preferred stock, authorized 1,000,000
    shares, par value $10.00; 75,000 shares issued
    and outstanding                                                     750,000
Additional paid in capital                                            3,314,934
Retained deficit (October 1, 1993)                                      (59,033)
Retained deficit, subsequent to quasi-reorganization                 (1,979,386)
                                                                     ----------

      Total Stockholders' Equity                                      2,330,807
                                                                     ----------

      Total Liabilities and Stockholders' Equity                     $8,778,866
                                                                     ==========

                                                                             1

<PAGE>

                   GULFSTAR INDUSTRIES, INC. AND SUBSIDIARIES
                  (FORMERLY TIER ENVIRONMENTAL SERVICES, INC.)
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                           For the Three
                                                            Months Ended
                                                              June 30,
                                                      1996               1995
                                                      ----               ----

Contract Revenues Earned                           $ 932,185          $ 769,569
Other fees and income                                     80                 87
                                                   ---------          ---------

    Total Revenue                                    932,265            769,656

Cost of contract revenues earned                     931,536            686,885
                                                   ---------          ---------

Gross Profit                                             729             82,771

Operating Expenses
  Selling and administrative expenses                165,812            214,571
  Depreciation and amortization                       86,872             49,355
  Interest expense                                    28,267              3,926
  Bad debt provision                                       -                  -
  Acquisition expenses                                18,939                  -
                                                   ---------          ---------

(Loss) before taxes                                 (299,161)          (185,081)

Provision for taxes                                       --                 --
                                                   ---------          ---------

      Net (Loss)                                   $(299,161)         $(185,081)
                                                   =========          =========

(Loss) per share                                   $    (.03)         $    (.03)
                                                   =========          =========

Weighted average shares outstanding                9,479,977          6,041,057
                                                   =========          =========

See notes to the consolidated financial statements
                                                                              2

<PAGE>

                   GULFSTAR INDUSTRIES, INC. AND SUBSIDIARIES
                  (FORMERLY TIER ENVIRONMENTAL SERVICES, INC.)
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                             For the
                                                        Nine Months Ended
                                                             June 30,
                                                      1996              1995
                                                      ----              ----

Contract Revenues Earned                          $3,658,092         $3,035,700
Other fees and income                                 28,010              2,369
                                                  ----------         ----------

  Total Revenue                                    3,686,102          3,038,069

Cost of contract revenues earned                   3,312,761          2,644,682
                                                  ----------         ----------

Gross Profit                                         373,341            393,387

Operating Expenses
  Selling and administrative expenses                749,688            976,771
  Depreciation and amortization                      251,528            148,165
  Interest expense                                    93,118             11,354
  Bad debt provision                                  12,000                  -
  Acquisition expenses                                57,728                  -
                                                  ----------         ----------

(Loss) before taxes                                 (790,721)          (742,903)

Provision for taxes                                       --                 --
                                                  ----------         ----------

      Net (Loss)                                  $ (790,721)        $ (742,903)
                                                  ==========         ==========

(Loss) per share                                  $     (.08)        $     (.15)
                                                  ==========         ==========

Weighted average shares outstanding                9,081,852          4,815,568
                                                  ==========         ==========

See notes to the consolidated financial statements.
                                                                              3

<PAGE>

                   GULFSTAR INDUSTRIES, INC. AND SUBSIDIARIES
                  (FORMERLY TIER ENVIRONMENTAL SERVICES, INC.)
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                       FOR THE PERIOD FROM OCTOBER 1, 1995
                              THROUGH JUNE 30, 1996

                                    Common Stock              Preferred Stock
                              Shares          Amount       Shares        Amount
                              ------          ------       ------        ------

Balance, October 1, 1995     8,391,123     $  268,772      75,000     $  750,000

Issuance of common stock     1,110,000         35,520          --             --

Net loss for the period             --             --          --             --
                             ---------      ---------      ------      ---------

Balance, June, 1996          9,501,123      $ 304,292      75,000      $ 750,000
                             =========      =========      ======      =========

See notes to the consolidated financial statements.

<PAGE>

                                           Retained
                            Quasi-          Deficit
           Additional    Reorganization    Subsequent
            Paid In        (10-1-93)        To Quasi-
            Capital       Adjustment     Reorganization         Total
            -------       ----------     --------------         -----

          $3,107,135      $ (59,033)      $(1,188,665)       $2,878,209

             207,799             --                --           243,319

                  --             --          (790,721)         (790,721)
          ----------      ---------       -----------        ----------

          $3,314,934      $ (59,033)      $(1,979,386)       $2,230,807
          ==========      =========       ===========        ==========

                                                                              4

<PAGE>

                   GULFSTAR INDUSTRIES, INC. AND SUBSIDIARIES
                  (FORMERLY TIER ENVIRONMENTAL SERVICES, INC.)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                      For the Nine Months Ended
                                                               June 30,
                                                         1996            1995
                                                       --------        ------
OPERATING ACTIVITIES
  Cash Flows Used In Operating Activities:
    Net loss                                         $  (790,721)   $  (742,903)
    Adjustments to reconcile net loss to cash
      used in operating activities:
    Expense paid by issuance of common stock              44,419        325,200
    Depreciation and amortization                        251,528        148,165
    Provision for bad debts                               12,000             --
    (Increase) in contracts in progress                1,561,203       (543,130)
    (Increase) decrease in accounts receivable           385,259        (51,380)
    (Increase) decrease in other accounts receivable
      and escrow deposits                                (92,692)       (12,783)
    (Increase) in contract receivable                    (25,667)            --
    (Increase) decrease in deposits and other assets       2,335         (1,000)
    Increase (decrease) in accounts payable              (29,815)       (56,557)
    Increase (decrease) in contracts payable          (1,556,203)       507,852
    Increase in deposits                                      --         22,009
    (Increase) in prepaid expenses                       (17,424)            --
                                                     -----------    -----------
      Net Cash Used in Operating Activities             (255,778)      (404,527)
                                                     -----------    -----------

INVESTMENT ACTIVITIES
  Cash Flows Used In Investment Activities:
    Capital expenditures                                 (13,800)        (3,083)
                                                     -----------    -----------
      Net Cash Used In Investment Activities             (13,800)        (3,083)
                                                     -----------    -----------
FINANCING ACTIVITIES
  Cash Flows Used In Financing Activities:
    Issuance of common stock, net of offering
      costs paid                                         198,900        770,913
    Payment of financing premiums in connection
      with acquisition                                        --       (415,000)
    Repayment of stockholder loans                        (2,000)            --
    Proceeds from loan payable - related parties (net)   110,583        220,262
    Repayment of notes payable                           (33,431)        (2,000)
                                                     -----------    -----------
      Net Cash From Financing Activities                 274,052        574,175
                                                     -----------    -----------

Net increase in cash and cash equivalents                  4,474        166,565

Cash and cash equivalents, beginning of the period        63,763         16,042
                                                     -----------    -----------

Cash and cash equivalents, end of the period         $    68,237    $   182,607
                                                     ===========    ===========

The accompanying notes are an integral part of these financial statements.
                                                                              5

<PAGE>

                   GULFSTAR INDUSTRIES, INC. AND SUBSIDIARIES
                  (FORMERLY TIER ENVIRONMENTAL SERVICES, INC.)
                         NOTES TO CONSOLIDATED FINANCIAL
                        STATEMENTS (For nine months ended
                                 June 30, 1996)

A.   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-QSB
     and Article 10 of Regulation S-X.  Accordingly,  they do not include all of
     the information  and footnotes  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 nine month period ended June 30, 1996 are not necessarily indicative of
     the results  that may be expected  for the year ended  September  30, 1996.
     Earnings per share are based on weighted average shares outstanding for all
     periods  presented  giving effect to 75,000  convertible  preferred  shares
     treated as a common stock equivalent. For further information, refer to the
     consolidated  financial  statements and footnotes  thereto  included in the
     Registrant  Company and  Subsidiaries'  annual  report on form 10-K for the
     year ended September 30, 1995. 

B.   PURCHASE OF SUBSIDIARIES

     ACQUISITION OF TIER ENVIRONMENTAL SERVICES, INC.

     On September 26, 1994 Gulfstar Industries,  Inc. acquired all of the common
     stock of Tier  Environmental  Services,  Inc.  through an  acquisition  and
     redemption  by  Tier  Environmental  Services,  Inc.  of its  common  stock
     totaling approximately $2,982,400 in value, exclusive of acquisition costs.
     Tier's principal business is to provide environmental  remediation services
     in the State of Florida, at petroleum  contaminated sites designated by the
     State of Florida as sites  subject to  authorized  reimbursement  under the
     Inland  Protective  Trust Fund.  The  acquisition  was  accounted  for as a
     purchase in accordance with Accounting Principles Board Opinion No. 16. The
     agreement also called for the additional issuance of Gulfstar stock to Tier
     shareholders if the Company spun off a former subsidiary, which in turn the
     Company did on  September  25, 1995.  As such,  the Company was required to
     issue an additional  357,133 shares which were included in the accompanying
     balance sheet and valued at $142,855. The excess (approximately $2,845,220)
     of the total  acquisition  cost over the recorded value of assets  acquired
     was  allocated  to  goodwill  and is being  amortized  over 20  years.  The
     accompanying  balance sheets include the assets and  liabilities of Tier at
     June 30, 1996.  The  statement of  operations  includes  Tier's  results of
     operations  for the nine months ended June 30, 1995 since Tier was acquired
     on September 26, 1994.

     Acquisition  costs  aggregating  $250,000  ($75,000 in 1995 and $175,000 in
     1994) have been  capitalized  as a result of this  acquisition.  Additional
     acquisition  costs  aggregating  $340,000  and  $516,250  were  charged  to
     additional paid in capital in 1995 and 1994 respectively.  Such capitalized
     acquisition   costs  relate  to  financing   costs   associated   with  the
     acquisition,  which represent  premiums paid to a finance company to assist
     the funding of these projects and are being amortized over 5 years.

                                                                               6

<PAGE>

                   GULFSTAR INDUSTRIES, INC. AND SUBSIDIARIES
                  (FORMERLY TIER ENVIRONMENTAL SERVICES, INC.)
                         NOTES TO CONSOLIDATED FINANCIAL
                        STATEMENTS (For nine months ended
                                 June 30, 1996)

B.   PURCHASE OF SUBSIDIARIES - (CONTINUED)

     ACQUISITION OF PLANT TECHNICAL SERVICES, INC.

     Plant Technical Services,  Inc. is engaged in the professional  engineering
     business,  providing  consulting,   design,  start-up  support,  operation,
     maintenance,  contract  personnel and  construction  management  service to
     technical  industries  throughout the United States.  

     On September  29, 1995  Gulfstar  acquired all of the common stock of Plant
     Technical Services, Inc. (PTS) through an acquisition and redemption by PTS
     of its stock with the issuance of 750,000 shares of Gulfstar  common stock,
     75,000  shares of  Gulfstar  $10.00  preferred  stock and cash and notes of
     $1,220,000,  exclusive of acquisition  costs. The acquisition was accounted
     for as a purchase in accordance  with Accounting  Principles  Board Opinion
     No. 16. The excess (approximately $1,278,000) of the total acquisition cost
     over the  recorded  value of assets  acquired was  allocated  $500,000 to a
     proprietary  database PTS  developed  and is expected to be amortized  over
     seven  years and  $571,144  to goodwill  which is being  amortized  over 20
     years.  The  accompanying  balance sheet includes assets and liabilities of
     PTS at December 31, 1995.  The  statement of  operations  for June 30, 1995
     does not include PTS since PTS was acquired on September 29, 1995.

     The pro forma results of operations, that follow below assume that both the
     acquisitions had occurred at the beginning of the period ended December 31,
     1994. The historical  income  statement for the three months ended December
     31, 1994 do not include the revenue and expenses of the PTS subsidiary.  In
     addition to  combining  the  historical  results of  operations  of the two
     companies, the pro forma calculations include adjustments for the estimated
     effect on the Company's  historical  results of operations for amortization
     and interest related to the acquisition.  

                 Condensed Historical and Proforma Information

                                           For the Nine    For the nine
                                           Months Ended    Months Ended
                                             June 30,        June 30,
                                               1996            1995
                                            Historical      (Proforma)
                                            ----------      ----------

     Total Revenue                         $ 3,686,102    $ 6,625,562

     Cost of Revenue                         3,312,761      6,012,562
     Operating Expenses                      1,164,062      1,499,579
                                           -----------    -----------

     Net (Loss)                            $  (790,721)   $  (886,579)
                                           ===========    ===========

     (Loss) Per Share                      $      (.08)   $      (.15)
                                           ===========    ===========

     Weighted Average Shares Outstanding     9,081,852      5,640,568
                                           ===========    ===========

                                                                              7

<PAGE>

                   GULFSTAR INDUSTRIES, INC. AND SUBSIDIARIES
                  (FORMERLY TIER ENVIRONMENTAL SERVICES, INC.)
                         NOTES TO CONSOLIDATED FINANCIAL
                        STATEMENTS (For nine months ended
                                 June 30, 1996)

C.   RESTATEMENT AND RECLASSIFICATION OF FINANCIAL STATEMENT PRESENTATION

     On October 1, 1993, by unanimous  consent of the board of directors,  which
     at the time represented a majority of the shareholders of the Company,  the
     Company spun off all of its subsidiaries  except for MBT Associates.  These
     subsidiaries,  namely Models World Magazine,  Flair  Entertainment and H.B.
     London & Co. were spun off to a shareholder and director.

     On  September  25,  1995,  the  Company  agreed  with the  initial  selling
     shareholder  of  MBT  Associates  to  spin  off  this  subsidiary  to  him.
     Management was not able to ascertain from the preceding independent auditor
     of record, who is now deceased, certain information pertaining to the prior
     years  consolidated  financial  statements,  which  included the assets and
     liabilities  of MBT  Associates.  The present  management  did undertake to
     verify the parent company's records and has contacted the preceding auditor
     for purposes of the parent company's  financial records other than those of
     the MBT subsidiary.  During the period that MBT was the legal subsidiary of
     the  company,  the  parent  company  did  not  exercise  control  over  the
     subsidiary  and as such the  transaction  is being  accounted for as if the
     Company has retroactively  rescinded the acquisition,  in light of the fact
     that acquired in June of 1993,  MBT  Associates  was spun off for the exact
     terms it had originally been acquired for, namely the redemption of 650,000
     shares  of  preferred  stock  and  cancellation  of the  note,  of which no
     payments had been made, for $2,000,000.

     The above  activities have been excluded from this  consolidated  financial
     statement and prior retained deficits,  common stock and additional paid in
     capital   have  been   restated   to  reflect   this   readjustment   as  a
     quasi-organization.

     Amounts  shown in the  consolidated  statement of income  differ from those
     previously  reported  to  shareholders  due to the  rescission  of the  MBT
     acquisition.  A  reconciliation  of revenue  and net  income  (loss) are as
     follows:

                                                                   Six Months
                                                                      Ended
                                                                    June 30,
                                                                      1995
                                                                      ----

     Revenues - as previously reported                             $1,674,000
                                                                   ==========
     Revenues as restated                                          $3,038,069
                                                                   ==========

     Net Income (Loss) - as previously reported                    $  869,000
                                                                   ==========
     Net (Loss) as restated                                        $ (742,903
                                                                   ==========

                                                                              8

<PAGE>

                   GULFSTAR INDUSTRIES, INC. AND SUBSIDIARIES
                  (FORMERLY TIER ENVIRONMENTAL SERVICES, INC.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (For nine months ended June 30, 1996)

D.   RELATED PARTY TRANSACTIONS

     During the nine  months  ending  June 30,  1995,  $325,200  was  charged to
     operations  based upon the value  ascribed to  services  of a director  and
     administrative  assistant  performed  during the period for which they were
     issued 485,000 shares. During the nine months ending June 30, 1996, $44,419
     was charged to operations  based upon the value  ascribed to 110,000 shares
     which were issued to a law firm and a  consultant  for  services  performed
     during the period.

     Included in amounts due to related  parties at March 31, 1996 for  expenses
     advanced by a company  affiliated  with a  stockholder  and director of the
     company is  $754,399  and $9,000  advanced  from a  corporate  stockholder.
     Presently these amounts bear no interest.

     Note payable to stockholder  (the former sole  stockholder of PTS) includes
     $7,145 of a non-interest  bearing instrument.  Additionally,  this note has
     been  reduced by amounts  reserved  for the  anticipated  loss on long term
     contract  and  $918,944   remains  which  represents  the  balance  on  the
     acquisition  note after such reduction,  bearing interest at 8%. $54,760 of
     interest  was accrued on this note and is included in interest  expense and
     accrued expenses for the nine month period ending June 30, 1996.

                                                                              9

<PAGE>

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

The following is  management's  discussion  and analysis of certain  significant
factors  which have  affected the  Company's  financial  position and  operating
results  during the periods  included in the  accompanying  condensed  financial
statements  including the Company's  Florida  operating  subsidiary,  as well as
information  relating to the plans of the  Company's  current  management.  Tier
Environmental,   Inc.  for  both  periods  presented  and  the  Company's  Texas
subsidiary, Plant Technical Services, Inc. for the period ended March 31, 1996.

ABOUT THE SUBSIDIARIES

TIER ENVIRONMENTAL SERVICES, INC.

The  primary  revenue of this  environmental  subsidiary  comes from its work in
direct  cooperation  with the  Florida  legislature  towards  reimbursement  for
eligible sites for environmental  clean-up. The Governor's executive order dated
March 8, 1995 in  reference  to the Inland  Protection  Trust Fund (the  "fund")
referendum has caused some  confusion over the past few months.  For the purpose
of clearing this up and stating the facts, the fund is still very much in place,
claims are still being paid by the State,  and the interests of the  contractors
as well as those of the investors are still being met.

To be specific,  on March 29, 1995 Governor Chiles signed into law 95-2, Laws of
Florida  (SB  1290).  This law  revises  Florida  Statute  376 as it  relates to
continued and future site rehabilitation  tasks for eligible sites. Chapter 95-2
does not specifically amend or change the reimbursement regulations set forth in
Chapter  62-773,  F.A.C.  As of this date, the Legislature has not finalized the
fiscal year  1995-96  budget  allocation  and  accompanying  Legislative  intent
regarding the IPTF (SB 2800; HB 2585). Therefore,  the new Legislation primarily
affects what eligible  sites can continue and start site  rehabilitation  tasks;
does not revise the  allowable  markups and handling  fees in the  Reimbursement
Rule;  and does not  provide  any more  certainty  as to the actual  date when a
Reimbursement Claim will be paid.

It should also be noted that the Legislature,  DEP and representatives  from the
petroleum  clean-up  industry worked during the last Legislative  session to pay
off the entire outstanding backlog of reimbursement claims through a bond issue.
Discussions  and  negotiations  concerning  a bonding of the entire  backlog are
continuing.  One investment group interested in underwriting the bond issue will
be making a proposal to DEP and the Governor's  office in an attempt to bond out
the backlog without any additional changes to statutory language.

Due to the above referenced law and discussions,  the Company's management feels
very  optimistic  towards the Company's  ability to fund claims and  essentially
enhance its growth  ability  during the latter  quarter of this year,  as all of
these Legislative uncertainties settle.

                                                                             10

<PAGE>

PLANT TECHNICAL SERVICES

The primary  revenue  sources of this  subsidiary  comes from utilities in North
America with high demands at peak periods for engineering professionals.

During  the  fourth  quarter  1995  the  Company's   former  president  spent  a
substantial  portion of his time pursuing one  acquisition in Mexico,  the Hemyc
Group (see form 10-K for the fiscal  year ended  September  30,  1995)  which in
turn,  the  Company has since  rescinded.  The  Company  has also  continued  to
complete or resolve a joint venture with the Hemyc Group which was substantially
delayed as for the  fiscal  year  ended  September  30,  1995.  This  subsidiary
recorded a loss on the  contract to the extent it has accrued  costs  associated
with the joint  venture  and  charged the same loss to amounts due to the former
president  shareholder.  The Company does not anticipate additional loss on this
contract and as such would seek to reduce amounts due to the former  shareholder
president should such costs be incurred.

RESULTS OF OPERATIONS

NINE MONTHS ENDED JUNE 30, 1996 VS. JUNE 30, 1995

The Company's  historical results from operations for the nine months ended June
30,  1995  consisted a loss of $790,721  on total  revenues  of  $3,686,102,  as
compared  with a loss of $742,903 on revenues of $3,038,069  for the  comparable
period ended June 30, 1995.  The revenue  figures for the periods ended June 30,
1995 do not include the sales of the PTS subsidiary.

The proforma results of operations for the prior year accentuates the decline in
sales in the current year for both of the  subsidiary's as the proforma  results
indicate a  comparative  loss of  $886,579 on  revenues  of  $6,625,562  for the
corresponding nine months ended June 30, 1995.

LIQUIDITY AND WORKING CAPITAL

The Company's  working capital  declined during the quarter ended June 30, 1996.
At September  30, 1995 the Company had a deficit of  $1,238,546 as compared to a
deficit of $1,610,929 at June 30, 1996.

The Company is pursuing the possibility of reversing the joint venture activity,
the corresponding accrual loss and the long term receivable, if agreed to by the
other  participants.  Should this be permitted,  such a transaction would reduce
the  deficit in the  working  capital by the long term  portion of the  contract
receivable or $711,980.

The  Company  completed  an  offering  of  stock in early  1996  which  provided
approximately $200,000 of working capital to the Company.

The Company plans to increase its traditional volume of engineering  services of
its PTS  subsidiary and has obtained a factoring  agreement  which should assist
the funding of operations until such time the company can obtain profitability.

Management  believes,  if  necessary,   they  can  pursue  additional  financing
alternatives,  including  equity  funding,  if operations  alone cannot fund the
Company's on going liquidity needs.

                                                                              11



                                                                           
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS
-------   -----------------

          The  Company  has  presently  commenced  an action  against its former
          president  of its MBT  subsidiary.  Additionally,  on May 15, 1996 the
          Company  terminated  and  initiated  legal  action  against the former
          president and shareholder of its PTS subsidiary. The parent company is
          not a defendant to any material  litigation  nor, to the  knowledge of
          management,  is any material litigation  threatened other than counter
          claims in the above actions. However, both subsidiaries are defendants
          in various  litigations  with debtors,  over contract  obligations and
          performance clauses.

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
-------   -----------------

          NONE

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K
-------   --------------------------------

          NONE

                                                                              13

<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.



                                GULFSTAR INDUSTRIES, INC.
                                FORMERLY TIER ENVIRONMENTAL SERVICES, INC.
                                ------------------------------------------

Dated: 10/15/96             By: /s/ Warren Douglas Cattanach
                                Warren Douglas Cattanach, President & Director
                                ----------------------------------------------

                                                                             14