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

                                   FORM 10-QSB

                   QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For the Quarter Ended  September 30, 1999           Commission File No. 00019678
--------------------------------------------------------------------------------

                                 INFRACORPS INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


          Virginia                                        54-1414643
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State or Other Jurisdiction of                         (I.R.S. Employer
Incorporation or Organization)                        Identification No.)

           7400 Beaufont Springs Drive, Suite 415, Richmond, VA 23225
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                              (Address)                       (Zip Code)

        Registrant's telephone number, including area code (804) 272-6600
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
   (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  and  (2)  has  been  subject  to the  filing
requirements for the past 90 days.
                                                     Yes     x          No
                                                         --------         ------

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
stock, as of the close of the period covered by this report.

             Class                            Number of Shares Outstanding
     ----------------------                   ----------------------------
         Common Stock                                  16,395,487
<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

INFRACORPS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
                                                                           September 30, 1999          March 31, 1999
                                                                           ------------------          --------------
ASSETS                                                                         (unaudited)                (audited)
------
<S>     <C>
Current assets:
    Cash and cash equivalents                                                 $    122,541             $     272,259
    Accounts receivable:
       Trade (net of allowance of $50,000 at September 30, 1999 and
         March 31, 1999)                                                         3,830,964                 3,389,342
       Other                                                                             0                    12,917
    Costs and estimated earnings in excess of billings
       on uncompleted contracts                                                    709,478                   868,061
    Notes receivable                                                                23,085                    23,085
    Inventory                                                                      740,547                   599,451
    Prepaid expenses                                                               122,024                    47,612
                                                                              ------------             -------------
         Total current assets                                                    5,548,639                 5,212,727

Property, plant and equipment:
    Furniture and fixtures                                                         369,236                   346,236
    Machinery, tools and equipment                                               4,237,163                 3,766,096
    Vehicles                                                                     1,875,553                 1,567,493
    Leasehold improvements                                                         305,265                   301,370
                                                                              ------------             -------------
                                                                                 6,787,217                 5,999,195
    Less accumulated depreciation                                                4,098,874                 3,829,184
                                                                              ------------             -------------
         Total property, plant and equipment, net                                2,688,343                 2,170,011

Other assets:
   Restricted cash                                                                 600,000                   600,000
   Notes receivable                                                                314,627                   321,454
    Cash value of life insurance                                                    22,879                    22,879
    Assets under contractual arrangements (net of
       valuation allowance of $858,000)                                            190,740                   190,740
    Other assets                                                                    55,069                    52,636
                                                                              ------------             -------------
         Total other assets                                                      1,183,315                 1,187,709

       Total assets                                                           $  9,420,297             $   8,570,447
                                                                              ============             =============
</TABLE>
<PAGE>

LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                                 September 30, 1999         March 31, 1999
                                                                                 ------------------         --------------
                                                                                      (unaudited)              (audited)
<S>     <C>
Current liabilities:
    Bank overdraft                                                                $            0           $       241,931
    Notes payable to bank - line of credit                                             1,000,000                         -
    Notes payable to affiliates                                                          622,400                   609,900
    Current portion of long-term debt                                                    476,748                   364,248
    Accounts payable                                                                   3,582,809                 3,574,837
    Accrued expenses and other current liabilities                                        25,014                   382,229
                                                                                  --------------           ---------------

         Total current liabilities                                                     5,706,971                 5,173,145

Long-term liabilities:
    Long-term debt                                                                       867,139                   682,046
    Liabilities of business transferred under contractual arrangements                   140,339                   140,339
                                                                                  --------------           ---------------

         Total liabilities                                                             6,714,449                 5,995,530

Stockholders' equity:
    Preferred stock, no par value,  authorized  5,000,000  shares: 4% cumulative
       Series A, $1 convertible, 1,850,000 shares outstanding September 30, 1999
       and 1,750,000 shares  outstanding at March 31, 1999 (liquidation value of
       $1,850,000 and $1,750,000 respectively)                                           866,701                   730,311
       8% Series B, 10,421 shares outstanding at September 30, 1999
       and March 31, 1999 (liquidation value of $1,042,100)                            1,042,100                 1,042,100
    Common  stock,  no par  value;  authorized  30,000,000  shares;  issued  and
       outstanding  16,395,487 and  16,492,043  shares at September 30, 1999 and
       March 31, 1999, respectively                                                    5,933,226                 6,126,338
    Retained earnings (accumulated deficit)                                           (5,136,179)               (5,130,720)
    Less notes receivable from officers                                                        0                  (193,112)
                                                                                  --------------               -----------

         Total stockholders' equity                                                    2,705,848                 2,574,917
                                                                                  --------------           ---------------

         Total liabilities and  stockholders' equity                              $    9,420,297           $     8,570,447
                                                                                  ==============           ===============
</TABLE>
<PAGE>

INFRACORPS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>

                                                                      Three months ended                   Six months ended
                                                                 September 30,    September 30,      September 30,  September 30,
                                                                     1999              1998               1999         1998
                                                                     ----              ----               ----         ----
                                                                 (unaudited)      (unaudited)        (unaudited)    (unaudited)
<S>     <C>
Contract Revenues - Commercial                                   $ 5,266,816       $ 5,423,100       $ 10,200,825    $  9,333,261
Cost of goods and services                                         4,471,628         4,951,794          8,742,296       8,181,138
                                                                 -----------       -----------       ------------    ------------
Gross Profits (losses)                                               795,188           471,306          1,458,529       1,152,123

Selling, general and administrative expenses                         683,941           630,181          1,267,791       1,279,241
                                                                 -----------       -----------       ------------    ------------
                                                                     111,247          (158,875)           190,738        (127,118)
Interest income                                                        6,891             9,324             17,043          20,366
Interest expense                                                     (79,767)          (90,818)          (135,862)       (226,699)
Gain on sale of equipment                                                  0                 0                695         329,478
                                                                 -----------       -----------       ------------    ------------
Income (Loss) from continuing operations                         $    38,371       $  (240,369)      $     72,614    $     (3,973)

Loss from discontinued operations                                          0          (132,287)                 0        (342,330)
Extraordinary Gain                                                         0         1,950,000                  0       1,950,000
                                                                 -----------       -----------       ------------    ------------
Net income (loss)                                                $    38,371       $ 1,577,344       $     72,614    $  1,603,697
                                                                 ============      ===========       ============    ============

Earnings (Loss) from continuing operations per common share:
          Basic                                                  $      0.01       $      (.01)      $       0.01    $       (.01)
          Diluted                                                $      0.01       $      (.01)      $       0.01    $       (.01)

Earnings (Loss) per common share:
          Basic                                                  $      0.00       $      0.10       $       0.00    $       0.10
          Diluted                                                $      0.00       $      0.08       $       0.00    $       0.09

Average shares of common stock used for above computation:
          Basic                                                   16,395,487        16,492,043         16,492,043      16,492,043
          Diluted                                                 18,547,172        19,742,043         18,666,929      18,117,043
</TABLE>
<PAGE>

INFRACORPS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>

                         Preferred Stock         Preferred Stock                                                 Notes
                            Series A                Series B            Common Stock                          Receivable
                       ----------------------------------------------------------------------   Accumulated      from
                         Shares    Amount      Shares     Amount    Shares        Amount         Deficit       Officers     Total
                       -----------------------------------------------------------------------------------------------------------
<S>     <C>
Balances at
  March 31, 1999       1,750,000  $ 730,311   10,421  $1,042,100  16,492,043   $ 6,126,338   $ (5,130,720) $ (193,112) $ 2,574,917


Net income                                                                                         34,243                   34,243
Dividends Series A                   18,403                                                       (18,403)                       0
Dividends Series B                                                                                (20,841)                 (20,841)
Issuance of preferred
  shares                 100,000    100,000                                                                                100,000
Repayment of debt                                                    (96,556)     (193,112)                   193,112            0

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

Balances at
  June 30, 1999        1,850,000  $ 848,714   10,421  $1,042,100  16,395,487   $ 5,933,226   $ (5,135,723)  $       0  $ 2,688,317


Net income                                                                                         38,371                   38,371
Dividends Series A                   17,987                                                       (17,987)                       0
Dividends Series B                                                                                (20,841)                 (20,841)

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

Balances at
  September 30, 1999   1,850,000   $866,701   10,421  $1,042,100  16,395,487    $5,933,226   $ (5,136,179)  $       0  $ 2,705,848
</TABLE>

<PAGE>

INFRACORPS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
                                                                                                      Six months ended
                                                                                       September 30, 1998        September 30, 1998
                                                                                       ------------------        ------------------
                                                                                            (unaudited)               (unaudited)
<S>     <C>
Cash flows from operating activities:
       Net income (loss)                                                                     $  72,614               $  1,603,697

Adjustments to reconcile net income (loss) to net cash used in operating activities:
       Depreciation and amortization                                                           269,690                    276,628
       Amortization of deferred gain on sale/leaseback                                               0                   (152,154)
       Gain on disposal of equipment                                                              (695)                  (329,478)
       Reserve on discontinued operations                                                            0                    500,000
       Extraordinary gain                                                                            0                 (1,950,000)

Increase/decrease in operating assets and liabilities:
       Accounts receivable                                                                    (428,705)                (1,289,166)
       Costs and estimated earnings in excess of billings on uncompleted contracts             158,583                     54,919
       Inventories                                                                            (141,096)                   247,971
       Prepaid expenses                                                                        (74,412)                    22,277
       Accounts payable                                                                          7,972                     82,192
       Accrued expenses and other liabilities                                                 (357,215)                   465,825
       Other Assets                                                                             (2,433)                  (485,140)
                                                                                             ---------                -----------

Net cash used in operating activities                                                         (495,697)                  (952,429)

Cash flow from investing activities:
       Purchase of property, plant and equipment                                              (788,022)                  (372,332)
       Proceeds from sale of Service Division                                                        0                    350,000
       Notes Receivable decrease                                                                 6,527                    200,307
       Decrease in assets of business transferred under contractual agreement                        0                     46,134
                                                                                             ---------                -----------

Net cash used in investing activities                                                         (781,195)                   224,109
</TABLE>
<PAGE>

INFRACORPS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOW (continued)
<TABLE>
<CAPTION>
                                                                                                     Six months ended
                                                                                     September 30, 1998          September 30, 1998
                                                                                     ------------------          ------------------
                                                                                         (unaudited)                 (unaudited)
<S>     <C>
Cash flows from financing activities:
       Bank overdraft                                                                        (241,931)                   598,568
       Proceeds from line of credit                                                         1,000,000                          0
       Notes payable increase (decrease)                                                            0                 (3,817,211)
       Issuance of preferred stock                                                            100,000                  3,250,000
       Dividends paid                                                                         (41,682)                         0
       Principal payments on long-term debt                                                  (160,403)                  (259,764)
       Proceeds from notes payable                                                            471,190                          0
       Proceeds from notes payable to stockholder                                                   0                    850,000
                                                                                      ---------------               ------------

Net cash provided by financing activities                                                   1,127,174                    621,593
                                                                                      ---------------               ------------


Increase (decrease) in cash and cash equivalents                                             (149,718)                  (106,727)
Cash and cash equivalents at beginning of year                                                272,259                    206,750
                                                                                      ---------------               ------------

Cash and cash equivalents at end of period                                            $       122,541                $   100,023
                                                                                      ===============               ============
</TABLE>

Supplemental   disclosures  of  cash  flow  information  and  noncash  investing
activities:  Interest paid on notes payable and long-term  debt was $135,862 and
$226,699  for the six months ended  September 30, 1999 and  September  30, 1998,
respectively.   There  were  no  capital  lease   obligations  for  the  periods
represented. Preferred dividends of $43,337 and $21,667 were accrued for the six
months ended September 30, 1999 and September 30, 1998, respectively.
<PAGE>
INFRACORPS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A--BASIS OF PRESENTATION

The  accompanying  unaudited  financial  statements  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 necessary
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the six months ended
September  30, 1999 are not  necessarily  indicative  of the results that may be
expected for the fiscal year ending March 31, 2000.


NOTE B--PRINCIPLES OF CONSOLIDATION

The consolidated  financial statements include the accounts of INFRACORPS,  Inc.
and its wholly-owned subsidiaries, IC Subsidiary, Inc. (formerly ETS, Inc.), ETS
Analytical Services,  Inc., InfraCorps of Virginia, Inc. (formerly ETS Water And
Waste Management, Inc.) and its subsidiary InfraCorps of Florida, Inc. (formerly
ETS Liner, Inc.), InfraCorps Technology, Inc. and InfraCorps International, Inc.
Significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation.


NOTE C--EARNINGS PER SHARE

Earnings  per share  have been  computed  on the basis of the  weighted  average
number of shares  outstanding,  after giving appropriate effect for common stock
issued.   Stock  options  and  warrants  have  been  included  as  common  stock
equivalents when they result in dilution of earnings per share. At September 30,
1999,  925,000 stock options and 300,000  warrants were included.  The remaining
options and warrants were not included as they would be antidilutive.


NOTE D--CASH AND CASH EQUIVALENTS

Restricted  cash of $600,000 is not included in cash and cash  equivalents as it
is  restricted  for a performance  bond relating to the Company's  contract with
China Steel Corporation (the "China Steel Contract"). Potential issues have been
brought to current  management's  attention regarding the budget to meet certain
of the  performance  specifications  of the China Steel Contract and the overall
viability of the LEC  technology for  wide-scale  commercialization.  If the LEC
technology does not meet contract  specifications,  China Steel  Corporation may
seek to impose financial penalties or attempt to recover damages or obtain other
relief under the contract,  including  drawing down on the $600,000  performance
bond  posted  by the  Company.  See note E of Notes  to  Consolidated  Financial
Statements for additional information.
<PAGE>


NOTE E--DISPOSAL OF ENVIRONMENTAL OPERATIONS SEGMENT

On October 31, 1997, ETS Analytical  Services,  Inc.  ("ETSAS"),  a wholly owned
subsidiary of the Company,  sold substantially all of its assets in return for a
ten-year 8.5%  promissory  note in the amount of $1,000,000,  which exceeded the
net book value of the  assets and  liabilities  sold.  Also,  since the risks of
ownership  were not  transferred  to the  purchaser,  no sale was recognized for
accounting purposes.  Accordingly, the assets and liabilities transferred to the
purchaser  remain  in the  noncurrent  sections  of the  balance  sheet  and are
designated  as "assets  under  contractual  arrangements"  and  "liabilities  of
business  transferred  under  contractual  arrangements." At September 30, 1999,
"assets under contractual  arrangements" was stated net of a valuation allowance
of $858,000.

On March 12, 1998,  substantially  all of the assets and certain  liabilities of
ETS, Inc.  ("ETS"),  a wholly owned subsidiary of the Company,  were sold to ETS
Acquisition, Inc., a newly formed firm based in Roanoke, Virginia. In connection
with this sale,  the Company sold a portion of its assets and business  relating
to the LEC  technology,  including  patents  and  licenses,  to  Christel  Clear
Technologies,  Inc.  ("CCTI"),  a newly formed firm based in Roanoke,  Virginia.
Also,  the  Company  will  receive  50% of all  royalties  received  by  CCTI in
connection with the license of the LEC technology.  While there is no indication
that the LEC will be resold by CCTI,  the  agreement  further  provides that the
Company  will  receive  50% of the net  sales  price  from a  resale  of the LEC
technology  on or before March 12,  1999,  and 25% of the net sales price from a
resale after March 12, 1999 but on or before March 12, 2000.

In  connection  with the  foregoing  transaction,  the  Company  entered  into a
Management  Agreement with Air Technologies,  Inc. ("ATI"),  a newly formed firm
based in Roanoke,  Virginia,  to provide management services with respect to the
Company's China Steel Contract. ATI and CCTI agreed to accept responsibility for
any  potential  liabilities  associated  with the China  Steel  Contract  and to
provide its best  effort to have the  contract  transferred  from the Company to
ATI. ETS  Acquisition,  Inc.,  CCTI and ATI are owned by three former  executive
officers  of the  Company or ETS and former  members of the  Company's  Board of
Directors.

If the  LEC  technology  does  not  meet  contract  specifications  China  Steel
Corporation may seek to impose financial penalties or attempt to recover damages
or  obtain  other  relief  under the  contract,  including  drawing  down on the
$600,000  performance bond posted by the Company. See note D and note F of Notes
to Consolidated Financial Statements for additional information.


NOTE F--CONTINGENT LIABILITIES AND OTHER MATTERS

Management  believes  that the existing  potential  liabilities  under the China
Steel Contract make obtaining significant outside financing difficult.  However,
Management  negotiated a line of credit from BB&T for $1,000,000 effective April
16,  1999.  The  interest  rate is  prime  plus  one  percent  payable  monthly.
Additional equity or credit is being sought. Management's success in this regard
will,  to a large extent,  depend upon whether  InfraCorps is able to accomplish
the  assignment  without  recourse  of the China Steel  contract  to ATI.  While

<PAGE>

negotiations  with  China  Steel  Corporation  are  on-going,  there  can  be no
assurance that such negotiations will be successful.  See notes D and E of Notes
to Consolidated Financial Statements for additional information.


NOTE G--DISPOSAL OF FLORIDA OPERATIONS

On November 30, 1998, the Florida operations were discontinued.  All assets were
sold,  transferred  to  Virginia  or  abandoned.  Current  operations  should be
completed by September 1999. Due to the unique licensed construction  techniques
employed,  Management believes that its Florida operations constitute a separate
line of  business.  Revenues  for the three  month and six  month  period  ended
September 30, 1998 were $388,488 and 769,249, respectively.

NOTE H--OFFICER LOANS

On June 30, 1999,  the Company  accepted  96,556 shares of stock in repayment of
the loans to  officers in the amount of  $193,112.  These funds were used to buy
these shares of stock during the merger in 1994.

<PAGE>

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

         From time to time, the Company may publish  forward-looking  statements
relating  to  such  matters  as  anticipated  financial  performance,   business
prospects,  technological  developments,  new products, research and development
activities and similar matters. The Private Securities  Litigation Reform Act of
1995 provides a safe harbor for forward-looking  statements.  In order to comply
with the terms of the safe harbor,  the Company  notes that a variety of factors
could cause the Company's  actual  results and  experience to differ  materially
from the anticipated  results or other  expectations  expressed in the Company's
forward-looking statements. The risks and uncertainties that could significantly
affect the  operations,  performance,  development  and results of the Company's
business  include,  but are not  limited  to,  the  following:  (i)  changes  in
legislative  enforcement  and direction,  (ii) unusually bad or extreme  weather
conditions,  (iii)  unanticipated  delays in contract  execution,  (iv)  project
delays or changes in  project  costs,  (v)  unanticipated  changes in  operating
expenses  and capital  expenditures,  (vi) sudden loss of key  personnel,  (vii)
abrupt  changes in competition  or the political or economic  climate,  and (vi)
abrupt changes in market opportunities.

Results of operations

Three months and six months ended  September  30, 1999  compared to three months
and six months ended September 30, 1998

         All of the revenues and expenses for the Florida  operations  have been
removed from  continuing  operations  for the period ended  September  30, 1998.
Revenues for the three month period ended September 30, 1999 ("second quarter of
fiscal 2000") were $5,266,816  compared to $5,423,100 for the three month period
ended  September  30, 1998 ("second  quarter of fiscal 1999")  resulting in a 3%
decrease in  revenues.  This  decrease is due to timing of billings on contracts
performed during the quarter.  Revenues for the six month period ended September
30, 1999 ("year to date fiscal  2000") were  $10,200,825  compared to $9,333,261
for the six month period ended  September  30, 1998 ("year to date fiscal 1999")
resulting in a 9% increase in revenues.  This  increase  reflects the  increased
backlog of work being completed.

         Cost of goods and services  for the second  quarter of fiscal 2000 were
$4,471,628  or 84.9% of sales  compared to  $4,951,794 or 91.3% of sales for the
second quarter of fiscal 1999.  Gross profits (losses) for the second quarter of
fiscal  2000 were $ 795,188 or 14.1% of sales  compared  to  $471,306 or 8.7% of
sales for the second quarter of fiscal 1999.  Cost of goods and services for the
year to date  fiscal  2000  were  $8,742,296  or  85.7%  of  sales  compared  to
$8,181,138  or 87.7% of sales for the year to date fiscal  1999.  Gross  profits
(losses)  for the year to date fiscal  2000 were $  1,458,529  or 15.1% of sales
compared to $1,152,123 or 12.3% of sales for the year to date fiscal 1999. These
increases in gross  profits are due to more smaller  contracts  being  completed
that have a better  gross  margin  as well as  controlling  costs of work  being
performed.
<PAGE>

         Selling,  general and  administrative  expenses  were  $683,941 for the
second  quarter of fiscal 2000 or 13% of net sales compared to $630,181 or 11.6%
of net sales for the three month  period  ended  September  30,  1998.  Selling,
general and administrative  expenses were $1,267,791 for the year to date fiscal
2000 or 12.4% of net sales  compared to $1,279,241 or 13.7% of net sales for the
year to date fiscal 1999. The general and  administrative  expense  continues to
decrease due to cost savings associated with the management reorganization.  The
increase  in the  second  quarter  reflects  timing  differences  and a  general
increase in fixed costs of insurance and employee benefits.

         Gain on sale of  assets  was  $695  for the  year to date  fiscal  2000
compared to $329,478 for the year to date fiscal 1999 which  reflected  the sale
of the Service Division of InfraCorps of Virginia, Inc. in fiscal 1999. Interest
expense for the second  quarter of fiscal  2000 was $79,767  compared to $90,818
for the second  quarter of fiscal  1999.  Interest  expense for the year to date
fiscal 2000 was $135,862  compared to $226,699 for the year to date fiscal 1999.
Interest  expense  reflects  interest paid on notes payable and long-term  debt,
including credit lines and capital leases. This decrease reflects the conversion
of the high interest debt to preferred  stock and the new line of credit that is
currently being paid at a lower rate.

         Profit for the second quarter of fiscal 2000 from continuing operations
was  $38,371  compared to a loss of  $240,369  for the second  quarter of fiscal
1999.  Profit for the year to date fiscal 2000 from  continuing  operations  was
$72,614 compared to a loss of $3,973 for year to date fiscal 1999.  Discontinued
operations is the Florida operations which were closed prior to the beginning of
fiscal 2000. These operations  accounted for a loss of $132,287 and $342,330 for
the second  quarter of fiscal 1999 and year to date fiscal  1999,  respectively.
Florida  operations had revenues of $388,488 and $769,249 for the second quarter
of fiscal 1999 and year to date fiscal 1999, respectively.

         There was an extraodinary  gain of $1,950,000 for the second quarter of
fiscal  1999.  This was a gain on  conversion  of debt to preferred  stock.  Net
profit for the second quarter of fiscal 2000 was $38,371  compared to net profit
of $1,577,344  for the second quarter of fiscal 1999. Net profit for the year to
date fiscal 2000 was $72,614  compared to net profit of $1,603,697  for the year
to date fiscal 1999.


Liquidity And Capital Resources As Of September 30, 1999

         In April 1999, a secured  credit line of up to $1,000,000 was obtained.
The note that established the line calls for a monthly interest of prime plus 1%
over a three year term. At September 30, 1999,  the balance owed under this line
was $1,000,000. The credit line is provided by BB&T.

         On April 30, 1999, the Company issued 100,000 shares of preferred stock
for an investment  of $100,000  which was used to start  InfraCorps  Technology,
Inc.("ICTI").  These funds were used to acquire the  equipment for the business.
<PAGE>

ICTI  is  negotiating  to  acquire  the  license  to  manufacture   and  install
FirstlinerUSA  pipe.  Firstliner USA pipe is a  cured-in-place-process  ("CIPP")
pipe. This product is different from the other products  offered by ICVA. It can
be manufactured in diameters up to 120 inches.  The market for the license would
be Virginia and Maryland along with any other unlicensed market. ICTI would have
right  of first  refusal  for the  states  of North  Carolina,  South  Carolina,
Pennsylvania, New Jersey and Delaware.

         On June 30,  1999,  the  Company  accepted  96,556  shares  of stock in
payment of the loans to  officers  in the amount of  $193,112.  These loans were
used to buy these shares of stock during the merger in 1994.

         Major components of cash flows used in operating  activities  include a
decrease in accrued expenses of $357,215 and an increase in accounts  receivable
of $428,705. Adjustments to net cash flows include depreciation and amortization
of $269,690.

         Net cash used in investing  activities of $781,195  consisted mainly of
purchase of property,  plant and  equipment  in the amount of $788,022.  The net
cash from financing  activities of $1,127,174 include in part proceeds from line
of credit of  $1,000,000,  proceeds from notes payable of $471,190 and repayment
of bank  overdraft of $241,931.  The cash and cash  equivalents at September 30,
1999 was $122,541  which excludes the $600,000 of restricted  cash  guaranteeing
the bond for the China Steel contract.

         New  orders  received  for the  second  quarter  of  fiscal  2000  were
$10,998,906  compared to $7,587,469  for the second  quarter of fiscal 1999. New
orders  received  for the year to date fiscal 2000 are  $19,376,070  compared to
$19,938,103  for year to date fiscal  1999.  Backlog at  September  30, 1999 was
$21,732,000  compared to $14,500,000 at September 30, 1998. New orders are being
received to keep pace with work being performed and maintain a backlog.

Year 2000

         Many currently  installed  computer  systems and software  products are
programmed to assume that the century  portion of a date as "19" to conserve the
use of storage and  memory.  This  assumption  resulted in the use of two digits
(rather than four) to define an applicable year.

         Accordingly,  computer  systems  that  rely on two  digits to define an
applicable  year may  recognize a date using "00" as the year 1900,  rather than
the year 2000. This could result in a system failure to miscalculations  causing
disruptions of operations,  including, among other things, a temporary inability
to  process  or  transmit  data or  engage in normal  business  activities.  The
Company's  ability to operate is, to a large extent,  dependent  upon the proper
operation of its computer system and those of its customers.  To the extent that
Year 2000 issues result in the  long-term  inoperability  of Company's  computer
systems  or those of its  customers,  the  Company's  results of  operation  and
financial condition will be materially and adversely affected.

         The  Company  believes  that  it  has  fully  assessed  its  Year  2000
readiness.   This  assessment  included  a  review  of  the  Company's  internal
<PAGE>

information technology systems and non-information  technology systems. Based on
this review,  the Company does not  anticipate  any  disruption  of its internal
technology systems.

         The  Company  is  currently  in  the  process  of   initiating   formal
communications  with all of its  customers to determine  the extent to which the
company is vulnerable to those third  parties'  failures to remediate  their own
Year 2000 issues.  The Company  expects to complete this process by December 31,
1999.  Although the cost of the Company's Year 2000 remediation  program has not
yet been  finalized,  the  Company  estimates  that these  costs will not exceed
$30,000  and, in any event,  believes  that such costs will not have a material,
adverse effect upon the Company's results of operation or financial condition.

New Businesses

         The Company  started up two new  businesses  during the first  quarter.
These businesses are ICTI and InfraCorps International, Inc. ("ICII"). ICTI is a
trenchless   technology  company  that  uses  CIPP  pipe  for  installation  and
rehabilitation of water,  sewer and gas lines. ICTI is in negotiation to acquire
the  FirstlinerUSA  license for the CIPP pipe. The market would include Virginia
and Maryland along with any other  unlicensed  market.  ICTI would have right of
first refusal to be licensed for the states of North  Carolina,  South Carolina,
Pennsylvania,  New Jersey and  Delaware.  The  license  would  include a royalty
payment for each foot installed.  ICTI will be headed by Richard Herrick who has
30 years experience in the industry.

         The second  business  started  during the  quarter is ICII.  This is an
engineering consulting company that specializes in design and management support
for projects involving the utilization of trenchless technologies.  It is headed
by Michael  Kirby,  P.E.  who is an  engineer  with 20 years  experience  in the
trenchless  technology  industry.  ICII is  currently  working on a project  for
Baltimore Gas and Electric. The market for ICII will be worldwide.
<PAGE>

PART II - OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS.
         None

Item 2.  CHANGES IN SECURITIES.
         None

Item 3.  DEFAULTS UPON SENIOR SECURITIES.
         None

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.

            On July 26, 1999, the annual shareholders meeting was
         held. As there was not a quorum, the meeting was adjourned.
         Subsequent attempts to gain a quorum proved unsuccessful.
         The Company postponed the meeting until 2000.

Item 5.  OTHER INFORMATION.
         None

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

         (A)      Exhibits

                  27     Financial Data Schedule - attached as an exhibit hereto

         (B)      Reports on Form 8-K

                  None
<PAGE>

                                   SIGNATURES

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


                                                     INFRACORPS INC.


DATE     November 13, 1999                  BY:      s/James B. Quarles
         -----------------                           ---------------------------
                                                     James B. Quarles
                                                     Chairman and President



DATE     November 13, 1999                  BY:      s/Warren E. Beam, Jr.
         -----------------                           ---------------------------
                                                     Warren E. Beam, Jr.
                                                     Secretary and Controller