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

                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 193


For the Quarter Ended  December 31, 1998           Commission File No. 00019678
--------------------------------------------------------------------------------

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


         Virginia                                               54-1414643
--------------------------------------------------------------------------------
State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                              Identification No.)


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


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

                             ETS INTERNATIONAL, INC.
--------------------------------------------------------------------------------
             (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 fill such  reports),  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                             16,492,043

<PAGE>
<TABLE>

PART I - FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

INFRACORPS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<CAPTION>
                                                                                  December 31, 1998           March 31, 1998
ASSETS       (unaudited)                                                              (audited)
Current assets:
<S>                                                                                  <C>                      <C>          
    Cash and cash equivalents                                                        $    553,331             $     206,750
    Accounts receivable:
       Trade (net of allowance of $50,000 in 1998 and 1997)                             3,375,580                 2,540,810
       Other                                                                              211,264                    78,936
    Costs and estimated earnings in excess of billings
       on uncompleted contracts                                                           535,550                   563,924
    Notes receivable                                                                            0                   200,000
    Inventory                                                                             593,485                   931,590
    Prepaid expenses                                                                       46,667                   143,174
         Total current assets                                                           5,315,877                 4,665,184

Property, plant and equipment:
    Furniture and fixtures                                                                362,554                   345,857
    Machinery, tools and equipment                                                      4,117,668                 4,027,556
    Vehicles                                                                            1,328,466                 1,373,657
    Leasehold improvements                                                                301,370                   340,282
                                                                                        6,110,058                 6,087,352
    Less accumulated depreciation                                                       3,720,114                 3,475,318
         Total property, plant and equipment, net                                       2,389,944                 2,612,034

Other assets:
   Restricted cash                                                                        600,000                   600,000
   Franchise agreements                                                                    46,041                    50,916
    Notes receivable from officers                                                        151,040                   151,040
    Note receivable from ETS, Inc.                                                         99,503                   100,000
    Note receivable                                                                        40,000                         0
    Cash value of life insurance                                                            6,693                     6,693
    Other assets                                                                            8,220                    97,338
         Total other assets                                                               951,497                 1,005,987

   Assets of business transferred under
        contractual agreements                                                            198,438                   267,666

         Total assets                                                                 $ 8,855,756               $ 8,550,871


<PAGE>

                                              LIABILITIES AND STOCKHOLDERS' EQUITY
<CAPTION>
                                                                               December 31, 1998           March 31, 1998
                                                                                  (unaudited)                (audited)

Current liabilities:

    Bank overdraft                                                              $      1,533,862           $       173,493
    Notes payable to bank                                                                 89,061                    89,062
    Notes payable to stockholders                                                      1,291,700                 3,410,000
    Notes payable to affiliates                                                          414,573                   966,159
    Notes payable                                                                         92,000                         0
    Current portion of long-term debt                                                    487,477                   480,543
    Accounts payable                                                                   1,802,791                 1,846,539
    Accrued expenses and other current liabilities                                       154,914                   768,638
    Reserve for loss on closing subsidiary                                                 9,608                         0

         Total current liabilities                                                     5,875,986                 7,734,434

Long-term liabilities:
    Long-term debt                                                                       552,019                   907,896
    Deferred gain on sale/leaseback                                                      253,590                   481,821
    Liabilities of business transferred under contractual
       arrangements                                                                      140,339                   140,339

         Total liabilities                                                             6,821,934                 9,264,490

Stockholders' equity:
    Preferred stock, no par value, authorized 5,000,000  
       shares; issued and outstanding 1,750,000 and 0 shares at  
       December 31, 1998 and March 31, 1998, respectively
       net of valuation allowance of $2,550,000                                          712,684                         0
    Common stock, no par value; authorized 30,000,000
       shares; issued and outstanding 16,492,043 shares                                6,126,338                 6,126,338
    Retained earnings (accumulated deficit)                                           (4,612,088)               (6,646,845)
    Less notes receivable from officers                                                 (193,112)                 (193,112)

         Total stockholders' equity                                                    2,033,822                  (713,619)

         Total liabilities and  stockholders' equity                                 $ 8,855,756                $ 8,550,871



<PAGE>



                                                 INFRACORPS INC. AND SUBSIDIARIES
                                                CONSOLIDATED STATEMENTS OF INCOME

                                               Three months ended Nine months ended
<CAPTION>
                                                     December 31         December 31           December 31           December 31
                                                         1998                1997                  1998                  1997
                                                     (unaudited)          (unaudited)          (unaudited)           (unaudited)

Contract revenues - commercial                       $ 4,712,275          $ 3,317,398         $ 14,814,784          $ 14,396,905
Cost of goods and services                             4,050,917            2,952,443           13,043,214            11,383,406
Gross profits (losses)                                   661,358              364,955            1,771,570             3,013,499

Selling, general and administrative expenses             474,552            1,054,698            2,032,793             2,159,654
Net operating income                                     186,806             (689,743)            (261,223)              853,845
Interest income                                           11,914                8,948               32,280                22,052
Interest expense                                         (51,162)            (156,867)            (299,280)             (466,665)
Gain/(loss) on sale of equipment                         (12,114)                   0              317,364                     0
Income (loss) from continuing operations             $   135,444          $  (837,662)        $   (210,859)         $    276,632

Loss from discontinued operations                              0             (566,092)                   0              (550,351)
Extraordinary gain on extinguishment of debt             600,000                    0            2,550,000                     0
Net income (loss)                                    $   735,444          $(1,403,754)        $  2,339,141          $   (141,119)

Earnings (loss) from continuing operations per 
     common share:
          Basic                                       $      .01           $     (.05)         $      (.01)          $        .03
          Diluted                                     $      .01           $     (.05)         $      (.01)          $        .03

Earnings (Loss) per common share:
          Basic                                       $     0.04           $     (.09)         $       0.14          $       (.01)
          Diluted                                     $     0.04           $     (.09)         $       0.13          $       (.01)

Average shares of common stock used for 
     above computation:
          Basic                                       16,492,043           15,586,075            16,492,043            14,894,247
          Diluted                                     19,742,043            15,586,075           18,658,710            14,894,247


<PAGE>



                                         INFRACORPS INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                        NINE MONTHS ENDED DECEMBER 31, 1998

<CAPTION>
                                                                                          Retained        Notes
                                                                                          Earnings      Receivable
                                    Common Stock                Preferred Stock         Accumulated       from
                                Shares       Amount           Shares       Amount         (Deficit)      Officer        Total
                             (unaudited)   (unaudited)    (unaudited)    (unaudited)     (unaudited)   (unaudited)    (unaudited)
Balances at March 31, 1998   16,492,043    $ 6,126,338             0     $        0     $ (6,646,845)  $ (193,112)   $  (713,619)

Net Income                                                                                    26,354                      26,354
Balances at
    June 30, 1998            16,492,043    $ 6,126,338             0     $        0     $ (6,620,491)  $ (193,112)   $  (687,265)

Conversion of debt to
       preferred shares                                    3,250,000     $3,250,000                                  $ 3,250,000
Extraordinary gain on
   extinguishment of debt                                                (1,950,000)                                  (1,950,000)
Accrued dividends
   preferred shares                                                          21,667          (21,667)                          0
Net Income                                                                                 1,577,343                   1,577,343
Balances at
   September 30, 1998        16,492,043    $ 6,126,338     3,250,000     $1,321,667     $ (5,064,815)  $ (193,112)   $ 2,190,078

Redemption of preferred shares                            (2,500,000)   $(1,041,700)        (250,000)                $(1,291,700)
Conversion of debt to
       preferred shares                                    1,000,000      1,000,000                                    1,000,000
Extraordinary gain on
   extinguishment of debt                                                  (600,000)                                    (600,000)
Accrued dividends
   preferred shares                                                          32,717          (32,717)                          0
Net Income                                                                                   735,444                     735,444
Balances at
   December 31, 1998         16,492,043    $ 6,126,338     1,750,000     $712,684        $(4,612,088)  $ (193,112)   $ 2,033,822


<PAGE>




                                         INFRACORPS INC. AND SUBSIDIARIES

                                       CONSOLIDATED STATEMENTS OF CASH FLOW
                                                                                                    Nine months ended
                                                                                           December 31, 1998      December 31, 1997
                                                                                              (unaudited)             (unaudited)

Cash flows from operating activities:
       Net income (loss)                                                                      $  2,339,141           $    (141,119)

Adjustments  to  reconcile  net  income  (loss)  to net cash  used in  operating activities:
       Depreciation and amortization                                                               390,403                 816,606
       Amortization of convertible debentures discount                                                   0                 334,113
       Professional services received in exchange for common stock                                       0                 133,444
       Amortization of deferred gain on sale/leaseback                                            (228,231)               (228,231)
       Gain on disposal of equipment                                                              (317,364)                      0
       Reserve for closing subsidiary                                                                9,608                       0
       Extraordinary gain on extinguishment of debt                                             (2,550,000)                      0

Increase/decrease in operating assets and liabilities:
       Accounts receivable                                                                        (967,098)                673,106
       Costs and estimated earnings in excess of billings on uncompleted contracts                  28,374                (528,741)
       Inventories338,105                                                                         (155,322)
       Prepaid expenses                                                                             96,507                  40,596
       Cash surrender value of life insurance, net                                                       0                 (24,222)
       Accounts payable                                                                             93,993                (293,221)
       Accrued expenses and other liabilities                                                      (43,748)             (1,078,962)
       Restricted cash                                                                                   0                (600,000)
       Other Assets                                                                               (613,724)                267,874
Net cash used in operating activities                                                           (1,424,034)               (782,079)

Cash flow from investing activities:
       Purchase of property, plant and equipment                                                  (529,400)             (1,403,002)
       Proceeds from sale of Service Division                                                      390,000                       0
       Notes Receivable decrease                                                                   200,497                       0
       Decrease in assets of business transferred under contractual agreement                      69,228                        0
Net cash used in investing activities                                                              130,325              (1,403,002)

Cash flows from financing activities:
       Bank overdraft                                                                            1,360,369                  80,319
       Notes payable increase (decrease)                                                        (4,655,902)             (1,036,146)
       Issuance of preferred stock                                                               4,250,000                       0
       Preferred stock redemption                                                               (1,250,000)                      0
       Principal payments on long-term debt                                                       (355,877)               (432,086)
       Proceeds from exercise of stock options                                                           0                 777,680
       Proceeds from notes payable to stockholder                                                2,291,700               2,876,533
Net cash provided by financing activities                                                        1,640,290               1,878,800
 
Increase (decrease) in cash and cash equivalents                                                   346,581                (306,281)
Cash and cash equivalents at beginning of year                                                     206,750                 377,313

Cash and cash equivalents at end of period                                                  $      553,331          $       71,032
</TABLE>

Supplemental   disclosures  of  cash  flow  information  and  noncash  investing
activities:  Interest paid on notes payable and long-term  debt was $299,280 and
$466,665  for the nine months  ended  December  31, 1998 and  December  31, 1997
respectively.   There  were  no  capital  lease   obligations  for  the  periods
represented.  Dividends on  preferred  shares of $32,717 and $0 were accrued for
the nine months ended December 31, 1998 and December 31, 1997 respectively.


<PAGE>
                        INFRACORPS INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  A - BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting  principles for interim financial information
as set forth in 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
necessary  adjustments  (consisting  of normal  recurring  accruals)  considered
necessary for a fair presentation have been included.  Operating results for the
nine months  ended  December  31,  1998 are not  necessarily  indicative  of the
results that may be expected for the fiscal year ending March 31, 1999. On April
6,1998, the Company changed its year end from May 31 to March 31.

The  accompanying  financial  statements  have been prepared on a  going-concern
basis which  contemplates  the  realization  of assets and the  satisfaction  of
liabilities and commitments in the normal course of business. For the nine month
period  ended  December  31,  1998,  the  Company  had  cash  used in  operating
activities  of  $1,424,034,  and  at  December  31,  1998,  the  Company  had an
accumulated deficit of $4,612,088 from operations and a stockholders'  equity of
$2,033,822.

These factors, plus significant losses and cash flow deficits from operations in
prior  years,  indicate  that the Company may not be able to continue as a going
concern  for  a  reasonable  period  of  time.  The  Company's  working  capital
requirements  for the first  nine  months of  fiscal  1999 were met  principally
through the  proceeds of $350,000  from the sale of the ETSW  Service  Division,
$200,000 payment on notes receivable and $2,291,700 loan from shareholders.

Management's  plans to continue as a going concern include the following efforts
to generate necessary cash flow to meet the Company's working capital needs: (i)
raising additional  capital,  (ii) obtaining a line of credit,  (iii) increasing
sales of its infrastructure  products,  systems and services and (iv) continuing
to evaluate and manage costs and expenses and utilizing resources effectively to
increase gross profit and reduce selling and general administrative expenses.

Management  has  negotiated  with certain note holders to convert  their debt to
preferred stock (see Note H of Notes to Consolidated  Financial  Statements) and
is currently in  negotiation  with lenders to obtain a line of credit to provide
working  capital.  Management  believes it can return the Company to  profitable
operations  in  fiscal  1999.  There  can  be  no  assurance  that  management's
negotiations with lenders will be successful or the Company will have profitable
operations in fiscal 1999.

The consolidated  financial statements do not include any adjustments related to
the  recoverability  and classification of recorded asset amounts or the amounts
and classifications of liabilities that might be necessary should the Company be
unable to continue as a going concern.


<PAGE>



NOTE  B - PRINCIPLES OF CONSOLIDATION

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

NOTE  C - EARNINGS PER SHARE

Basic  earnings  per share have been  computed on the basis of  weighted-average
number of shares outstanding.  Diluted earnings per share did not include shares
related to stock options and warrants for the quarter ended December 31, 1998 as
their effect was antidilutive.

NOTE  D - RESTRICTED CASH

Restricted  cash of $600,000 is included in other assets 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  limestone
emission control ("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.

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 of business  transferred under  contractual  arrangements"
and "liabilities of business  transferred  under  contractual  arrangements." At
March  31  and  December  31,  1998,  "assets  of  business   transferred  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, 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.  The total  purchase
price was $1,896,124 for all of the aforementioned.  The purchase price was paid
in  cash,  stock of the  Company,  assumption  of  certain  liabilities  of ETS,
delivery of a $200,000 thirty-day note bearing 8 1/2% interest and delivery of a
ten-year  $100,000 note bearing 8 1/2% interest.  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 six  former  executive
officers of the Company 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 of  Notes  to
Consolidated Financial Statements above for additional  information.  See note G
of Notes to Consolidated Financial Statements for additional information.

In connection  with the Company's  disposal of its  environmental  operations in
October 1997 and March 1998, income from these discontinued  operations has been
reclassified in the consolidated  statements of income for the nine-month period
ended  December  31,  1997.  Revenues of  $964,571  for the  three-months  ended
December 31, 1997 and  $4,281,421  for the  nine-months  ended December 31, 1997
related to the discontinued environmental operations.

NOTE  F-  SALE OF SERVICE DIVISION OF ETSW

On April 29, 1998, the Company sold the Service  Division of ETSW (e.g.,  septic
system  installation  and  repair,  plumbing,   jacuzzi  service  contracts  and
incidental concrete manufacturing/concrete products) to a new corporation formed
by Coleman S. Lyttle,  a director of the Company and  President  of ETSW,  for a
total purchase price of $550,000,  payable as follows: $350,000 cash at closing,
assumption  of certain  indebtedness  of the  Company  and notes  payable to the
Company in the aggregate  amount of $200,000.  Mr. Lyttle will continue to serve
as a director of the Company and as  President  of ETSW.  A gain of $329,478 was
recognized on this sale.

NOTE  G - CONTINGENT LIABILITIES AND OTHER MATTERS

Management  believes  that the existing  potential  liabilities  under the China
Steel  Contract  will make  obtaining  significant  outside  capital  difficult.
Management  is  negotiating  to obtain a line of credit from a bank.  Management
believes that it can return the Company to positive cash flow from operations in
fiscal  1999.  There can be no  assurance  of the  extent to which  management's
negotiations  will be successful or that the Company will generate positive cash
flow from  operations in fiscal 1999. See notes D and E of Notes to Consolidated
Financial Statements for additional information. NOTE H - PREFERRED STOCK

On July 30, 1998,  the Company issued  3,250,000  shares of Series A Convertible
Preferred stock, no par value (the "Series A Convertible  Preferred Stock"),  to
convert and retire an  aggregate  of  $3,250,000  of Company  debt  evidenced by
promissory notes of the Company held by certain  shareholders.  The Company sold
shares of Series A Convertible  Preferred Stock to each shareholder,  at a price
of $1.00 per share,  which was paid by the shareholder's  delivery and surrender
to the Company of his promissory note and any security agreements, guarantees or
liens  executed  by the  Company or any of its  affiliates  in  relation  to the
promissory note.

In relation to the  issuance of the  preferred  shares a  extraordinary  gain on
extinguishment of debt was recorded of $1,950,000. This valuation was determined
by reference to the common stock price and the  effective  interest rate a third
party  would  expect  to  receive  in a  similar  transaction.  As a  result,  a
extraordinary gain on extinguishment of debt arose due to the effective value of
the  shares  was less  than the  amount  being  converted.  This was  based on a
presumption of effective interest rate earned on the preferred shares as well as
the price of the preferred stock on a converted to common basis.

On  December  31,  1998,  the  Company  redeemed  2,500,000  shares  of Series A
Convertible  Preferred  Stock  held by The Thomas W.  Marmon  Trust at $0.50 per
share payable with $250,000 cash and a promissory note for $1,000,000 bearing 8%
interest  due  March  31,  1999 and  secured  by  2,000,000  shares  of Series A
Convertible  Preferred Stock. In a related matter, Mr. Thomas W. Marmon resigned
from the Board of Directors.

In a subsequent  transaction,  Dr.  Allen Kahn has agreed to purchase  1,000,000
shares of Series A Convertible  Preferred  Stock at $1.00 per share,  payable in
$150,000  cash and  forgiveness  of a  promissory  note for  $850,000  which was
secured by the  Company's  assets.  Dr. Kahn will join the Board of Directors of
the  Company  as elected by the  holders of the Series A  Convertible  Preferred
Stock.



<PAGE>



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

RESULTS OF OPERATIONS

Three  months and nine months ended  December 31, 1998  compared to three months
and nine months ended December 31, 1997.

Substantially  all  of  the  assets  and  certain  liabilities  relating  to the
Company's   environmental   operations   have  been  sold  and   revenues   from
environmental  operations have been removed from  continuing  operations for the
three-month  and  nine-month  period ended  December 31, 1997.  Revenues for the
three-month  period ended December 31, 1998 (the "third quarter of fiscal 1999")
were $4,712,275 compared to $3,317,398 for the three-month period ended December
31, 1997, resulting in a 42% increase in revenues. This increase largely was the
result  of  increase  in new  orders  in  previous  quarters.  Revenues  for the
nine-month  period ended  December 31, 1998 (the "year to date of fiscal  1999")
were  $14,814,784  compared  to  $14,396,905  for the  nine-month  period  ended
December  31,1997  resulting in a 3%  increase.  This  increase  largely was the
result of inclement weather in 1997.

Cost of goods and services for the third  quarter of fiscal 1999 was  $4,050,917
or 86% of sales  compared  to  $2,952,443  or 89% of sales  for the  three-month
period ended December 31, 1997.  Cost of goods and services for the year to date
of fiscal 1999 was $13,043,214 or 88% of sales as compared to $11,383,406 or 79%
for the nine-month  period ended December 31, 1997.  Gross profits for the third
quarter of fiscal 1999 were $661,358 or 14% of sales compared to $364,955 or 11%
of sales for the three-month  period ended December 31, 1997.  Gross profits for
the year to date of fiscal 1999 was $1,771,570 as compared to $3,013,499 for the
nine-month period ended December 31, 1997. These decreases in gross profits were
due to the  decreases in margins  during  prior  periods.  Selling,  general and
administrative  expenses  were  $474,552 for the third quarter of fiscal 1999 or
10% of net sales compared to $1,054,698 or 32% of net sales for the  three-month
period ended December 31, 1997.  Selling,  general and  administrative  expenses
were $2,032,793 for the year to date of fiscal 1999 or 14% of net sales compared
to $2,159,654 or 15% of net sales for the  nine-month  period ended December 31,
1997. The general and  administrative  expense decrease was due to reduced costs
associated with the management reorganization.

Gain on sale of $317,364 for the year to date of fiscal 1999  reflected the sale
of the Service  Division  of ETSW.  Interest  expense  for the third  quarter of
fiscal 1999 was $51,162  compared to $156,867 for the  three-month  period ended
December  31,  1997.  Interest  expense  for the year to date of fiscal 1999 was
$299,280 as compared to $466,605 for the  nine-month  period ended  December 31,
1997.  Interest  expense  reflects  interest paid on notes payable and long-term
debt,  including  credit lines,  amortization  of discount  associated  with the
convertible debentures and capital leases.

Income  from  continuing  operations  for the third  quarter of fiscal  1999 was
$135,444  compared  to a loss of  $837,662  for  the  three-month  period  ended
December 31,1997. Loss from continuing operations for the year to date of fiscal
1999 was $210,859 compared to income of $409,232 for the nine-month period ended
December 31,1997. Discontinued operations include environmental operations which
were sold in October 1997 and March 1998. Loss from discontinued  operations was
$566,092  for the  three-month  period  ended  December  31,  1997 and loss from
discontinued  operations was $550,351 for the  nine-month  period ended December
31, 1997.  Revenues of $964,571 for the three-months ended December 31, 1997 and
$4,281,421  for  the  nine-months   ended  December  31,  1997  related  to  the
discontinued environmental operations.

On July 30, 1998, certain shareholders  converted debt to preferred shares. As a
result,  a  extraordinary  gain  on  extinguishment  of  debt  arose  due to the
effective  value of the shares  being less than the amount  converted.  This was
based on a presumption of effective interest rate earned on the preferred shares
as well as the price of the  preferred  shares on an as-if  converted  to common
stock basis.  Therefore,  a extraordinary  gain on extinguishment of debt in the
amount of  $1,950,000  was  recognized.  On December  31,  1998,  a  shareholder
converted  debt  to  preferred   shares  in  the  amount  of  $1,000,000  and  a
extraordinary gain on extinguishment of debt of $600,000 was recognized.

On  December  31,  1998,  the  Company  redeemed  2,500,000  shares  of Series A
Convertible  Preferred  Stock  held by The Thomas W.  Marmon  Trust at $0.50 per
share payable with $250,000 cash and a promissory note for $1,000,000 bearing 8%
interest  due  March  31,  1999 and  secured  by  2,000,000  shares  of Series A
Convertible  Preferred Stock. In a related matter, Mr. Thomas W. Marmon resigned
from the Board of Directors.

In a subsequent  transaction,  Dr.  Allen Kahn has agreed to purchase  1,000,000
shares of Series A Convertible  Preferred  Stock at $1.00 per share,  payable in
$150,000  cash and  forgiveness  of a  promissory  note for  $850,000  which was
secured by the  Company's  assets.  Dr. Kahn will join the Board of Directors of
the  Company  as elected by the  holders of the Series A  Convertible  Preferred
Stock.

Effective  November 30, 1998,  the Company  closed  InfraCorps of Florida,  Inc.
("Florida").  This  is due to the  losses  that  have  been  sustained  by  that
operation in the past year. A reserve of $500,000 was expensed for the estimated
costs of closing the Florida operations.  $372,000 was expensed to cost of goods
and services while the remaining  $128,000 was expensed to selling,  general and
administrative.  The  Company has  attempted  to find a buyer for Florida but no
buyer stepped  forward so the assets were moved to Virginia and will be utilized
in Virginia's  operation or sold. All current contracts will be completed within
the next six months.

Net income for the third  quarter of fiscal  1999 was  $735,444  compared to net
loss of  $1,403,754  for the  three-month  period ended  December 31, 1997.  Net
income for the year to date of fiscal 1999 was  $2,339,141  compared to net loss
of $141,119 for the nine-month period ended December 31, 1997.


<PAGE>



LIQUIDITY AND CAPITAL RESOURCES AS OF DECEMBER 31, 1998

The Company  continues to be cash  deficient.  For the  nine-month  period ended
December  31,  1998,  the  Company  had cash  used in  operating  activities  of
$1,424,034 and at December 31, 1998,  the Company had an accumulated  deficit of
$4,612,088  from  operations  and a  stockholders'  equity  of  $2,033,822.  See
discussion under "Going Concern" above.

During  fiscal 1998,  InfraCorps  concluded  that it was in the  Company's  best
interest to de-emphasize its environmental products and services and to focus on
its construction  operations,  particularly with respect to the installation and
rehabilitation of subsurface  pipelines for the transmission of water, waste and
natural gas.
Management currently is negotiating to obtain a line of credit.

Management's  success in this  regards  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 negotiations with China Steel Corporation are
on-going, there can be no assurance that such negotiations will be successful or
that the Company will find sufficient  sources of outside capital to support its
future operations. See Note E of Notes to Consolidated Financial Statements.

Effective May 1, 1998, the Company  restructured its credit facility with Thomas
W. Marmon,  a former  director and a large  shareholder of the Company.  The new
note for the credit  facility,  which in part is a renewal of the previous note,
permitted total aggregate borrowings by ETSI of up to $3.5 million. The new note
provided  for  monthly  interest  payments  at a rate of 10%  until  the  credit
facility's maturity at May 1, 1999 and 12% thereafter and was subject to call by
the holder  upon  sixty days  written  notice.  The new note was  secured by the
assets of InfraCorps and its  subsidiaries.  On July 30, 1998, Mr. Marmon's debt
was retired  through the  issuance of 2,500,000  shares of Series A  Convertible
Preferred  Stock of the  Company  and a cash  payment of  $696,655.  The Company
financed  the cash  payment  through an  existing  shareholder  by delivery of a
promissory  note  secured by the  assets of the  Company.  The note,  which pays
interest monthly at 10%, matures on October 31, 1998.

On July 30, 1998, certain shareholders  converted debt to preferred shares. As a
result,  a  extraordinary  gain  on  extinguishment  of  debt  arose  due to the
effective  value of the shares  being less than the amount  converted.  This was
based on a presumption of effective interest rate earned on the preferred shares
as well as the price of the  preferred  shares on an as-if  converted  to common
stock basis.  Therefore,  a extraordinary  gain on extinguishment of debt in the
amount of $1,950,000 was recognized.

On  December  31,  1998,  the  Company  redeemed  2,500,000  shares  of Series A
Convertible  Preferred  Stock  held by The Thomas W.  Marmon  Trust at $0.50 per
share payable with $250,000 cash and a promissory note for $1,000,000 bearing 8%
interest  due  March  31,  1999 and  secured  by  2,000,000  shares  of Series A
Convertible  Preferred Stock. In a related matter, Mr. Thomas W. Marmon resigned
from the Board of Directors.

In a subsequent  transaction,  Dr.  Allen Kahn has agreed to purchase  1,000,000
shares of Series A Convertible  Preferred  Stock at $1.00 per share,  payable in
$150,000  cash and  forgiveness  of a  promissory  note for  $850,000  which was
secured by the  Company's  assets.  Dr. Kahn will join the Board of Directors of
the  Company  as elected by the  holders of the Series A  Convertible  Preferred
Stock.

On April 28, 1998,  InfraCorps sold the Service  Division of ETSW (e.g.,  septic
system installation and repair, irrigation,  plumbing, jacuzzi service contracts
and incidental  concrete  manufacturing/concrete  products) to a new corporation
formed by  Coleman  S.  Lyttle,  a  director  of  InfraCorps  and  President  of
InfraCorps  of  Virginia,  Inc.  ("Virginia"),  for a total  purchase  price  of
$550,000,  payable as follows:  $350,000 cash at closing,  assumption of certain
indebtedness  of Virginia and notes payable to Virginia in the aggregate  amount
of $200,000. A gain of $329,478 was recognized on the sale.

Major components of cash flows used in operating  activities include an increase
in inventories of $338,105,  a decrease in accounts receivable of $967,098 and a
decrease  in  accrued  expenses  and  other  current  liabilities  of  $613,724.
Adjustments to net cash flows are the  extraordinary  gain on  extinguishment of
debt  of  $2,550,000,  the  gain  on the  sale  of  fixed  assets  of  $317,364,
depreciation  and  amortization of $390,403 and amortization of deferred gain on
sale/leaseback of $228,231.

Net cash  provided  by  investing  activities  of $130,325  consisted  mainly of
purchase of property,  plant and  equipment in the amount of $529,400,  proceeds
from sale of fixed  assets of  $390,000  and  decrease  in notes  receivable  of
$200,497.  The net cash from financing activities of $1,433,540 includes in part
proceeds  from  notes  payable to  stockholder  of  $2,291,700,  payment of debt
principal  of $355,877,  decrease in notes  payable of  $4,655,902,  increase in
preferred  stock of $4,250,000  and an increase in bank overdraft of $1,360,369.
The cash and cash  equivalents  at December 31, 1998 were  $346,581.  New orders
received  for the third  quarter  of fiscal  1999 were  $1,985,730  compared  to
$4,235,602 for the three months ended December 31, 1997. New orders received for
the year to date of  fiscal  1999 was  $21,116,034  compared  to new  orders  of
$14,520,487  for the nine-month  period ended December 31, 1997. New orders were
down in the  third  quarter  as a result of  slowdown  of  construction  for the
winter.  Backlog at December 31, 1998 was $11,800,000  compared to $5,100,000 at
December 31, 1997.

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
or 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  system  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 it Year 2000  readiness.  This
assessment  included a review of the Company's internal  information  technology
systems and non-information  technology systems. Upon review of this assessment,
The Company believes that its technology systems are fully Year 2000 compliant.

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, 1998. Although the cost
of the Company's Year 2000 remediation  program has not yet been finalized,  the
Company  estimates  that these cost will not exceed  $30,000  and, in any event,
believes  that such  costs will not have a  material,  adverse  effect  upon the
company's result of operation or financial condition.

FORWARD LOOKING STATEMENTS

Management has included  herein certain forward  looking  statements  within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the Securities  Exchange Act of 1934, as amended.  When used,  statements
which  are  not  historical  in  nature,   including  the  words  "anticipated",
"estimate", "should", "expect", "believe", "intend", and similar expressions are
intended to identify forward-looking  statements.  Such statements are, by their
nature, subject to certain risks and uncertainties. Among the factors that could
cause the actual  results to differ  materially  from  those  projected  are 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 (viii)  abrupt  changes  in market  opportunities,.  Other  risks,
uncertainties,  and factors that could cause actual results to differ materially
from those  projected  are  detailed  from time to time in reports  filed by the
Company with the Securities and Exchange Commission,  including Forms 8-K, 10-Q,
and 10-K.

GOING CONCERN

The  accompanying  financial  statements  have been prepared on a  going-concern
basis which  contemplates  the  realization  of assets and the  satisfaction  of
liabilities and commitments in the normal course of business. For the nine month
period  ended  December  31,  1998,  the  Company  had  cash  used in  operating
activities  of  $1,424,034,  and  at  December  31,  1998,  the  Company  had an
accumulated deficit of $4,612,088 from operations and a stockholders'  equity of
$2,033,822.

These factors, plus significant losses and cash flow deficits from operations in
prior  years,  indicate  that the Company may not be able to continue as a going
concern  for  a  reasonable  period  of  time.  The  Company's  working  capital
requirements  for the year to date of fiscal 1999 were met  principally  through
the proceeds of $390,000  from the sale of the ETSW  Service  Division and other
fixed assets,  $200,000  payment on notes  receivable and  $2,291,700  loan from
shareholders.

Management's  plans to continue as a going concern include the following efforts
to generate necessary cash flow to meet the Company's working capital needs: (i)
raising additional  capital,  (ii) obtaining a line of credit,  (iii) increasing
sales of its infrastructure products, systems and services and (iv)continuing to
evaluate and manage costs and expenses and utilizing  resources  effectively  to
increase gross profit and reduce selling and general administrative expenses.

Management  has  negotiated  with certain note holders to convert  their debt to
preferred stock (see Note H of Notes to the Consolidated  Financial  Statements)
and is  currently  in  negotiation  with  lenders  to obtain a line of credit to
provide  working  capital.  Management  believes  it can return  the  Company to
profitable   operations  in  fiscal  1999.   There  can  be  no  assurance  that
management's  negotiations  with lenders will be  successful or the Company will
have profitable operations in fiscal 1999.

The consolidated  financial statements do not include any adjustments related to
the  recoverability  and classification of recorded asset amounts or the amounts
and classifications of liabilities that might be necessary should the Company be
unable to continue as a going concern.

RECENT EVENTS

On March  12,  1998,  substantially  all of the  assets of 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 CCTI, a newly formed firm based in Roanoke,  Virginia.
In  connection  with the  foregoing  transaction,  the  Company  entered  into a
Management  Agreement with ATI, a newly formed firm based in Roanoke,  Virginia,
to provide management services with respect to the Company's contract with China
Steel  Corporation.  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 six former  executive  officers of
the Company or ETS and former members of the Company's Board of Directors.

The Board of Directors of the Company is  continuing to review the financial and
other aspects of the LEC technology  that is being developed for the China Steel
Contract.  This review was  undertaken  after  potential  issues were 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.

The Company has continued to undertake  cost cutting  measures and is continuing
to seek  additional  capital.  On April 29,  1998,  the Company sold the Service
Division of ETSW (e.g., septic system installation and repair, plumbing, jacuzzi
service contracts and incidental concrete manufacturing/concrete  products) to a
new  corporation  formed by Coleman S.  Lyttle,  a director  of the  Company and
President of ETSW, for a total  purchase price of $550,000,  payable as follows:
$350,000 cash at closing,  assumption of certain indebtedness of the Company and
notes  payable to the Company in the  aggregate  amount of $200,000.  Mr. Lyttle
continues to serve as a director of the Company and as President of ETSW. A gain
of $329,478 was recognized on this sale.

On July 30, 1998,  the Company issued  3,250,000  shares of Series A Convertible
Preferred Stock to convert and retire an aggregate of $3,250,000 of Company debt
evidenced by promissory notes of the Company held by certain  shareholders.  The
Company sold shares of Series A Convertible Preferred Stock to each shareholder,
at a price of $1.00 per share, which was paid by the shareholder's  delivery and
surrender to the Company of his  promissory  note and any  security  agreements,
guarantees or liens executed by the Company or any of its affiliates in relation
to the promissory note.

On  December  31,  1998,  the  Company  redeemed  2,500,000  shares  of Series A
Convertible  Preferred  Stock  held by The Thomas W.  Marmon  Trust at $0.50 per
share payable with $250,000 cash and a promissory note for $1,000,000 bearing 8%
interest  due  March  31,  1999 and  secured  by  2,000,000  shares  of Series A
Convertible  Preferred Stock. In a related matter, Mr. Thomas W. Marmon resigned
from the Board of Directors.

In a subsequent  transaction,  Dr.  Allen Kahn has agreed to purchase  1,000,000
shares of Series A Convertible  Preferred  Stock at $1.00 per share,  payable in
$150,000  cash and  forgiveness  of a  promissory  note for  $850,000  which was
secured by the  Company's  assets.  Dr. Kahn will join the Board of Directors of
the  Company  as elected by the  holders of the Series A  Convertible  Preferred
Stock.


<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
         RISK.

         Not Applicable.

PART II - OTHER INFORMATION

Item 1.           LEGAL PROCEEDINGS.

A lawsuit was served on ETS  Analytical  Services,  Inc.  ("ETSAS")  on or about
March 18, 1998 and filed in the Circuit Court for Chesterfield  County under the
caption,   Steven  R.  Pond  v.  ETS  Analytical   Services,   Inc.,   Case  No.
041CL98000254-00  (Circuit  Court for  Chesterfield  County).  In this  lawsuit,
Steven R. Pond  ("Pond"),  a former  employee of ETSAS and the owner of premises
leased to ETSAS, has asserted that ETSAS has breached its obligations  under the
lease by failing  to make  certain  monthly  payments,  including  late fees and
interest,  as well as by causing or permitting  "physical damages and waste upon
the premises." Pond is seeking judgment against ETSAS "in the sum of $129,189.85
for  accelerated  rent,  together  with  accrued  late  fees  in the  amount  of
$4,579.79;  compensatory  damages in the amount of $1,000.00,  plus the costs of
remediation and all damages, costs, liability or expense arising from or related
to environmental  contamination or environmental  degradation of the [p]remises;
prejudgment  interest  at the rate of  1.00%;  together  with the  costs of this
action and award of attorney's fees and costs." On April 8, 1996,  ETSAS filed a
Special Plea, Grounds of Defense, and Counterclaim, in which ETSAS asserted that
it is  entitled  to a set-off of any monies  allegedly  due and owing  under the
lease by virtue of Pond's  indebtedness to ETSAS, in the amount of approximately
$60,000,   under  a  promissory  note.  ETSAS  intends  to  defend  the  lawsuit
vigorously.  On December 17, 1998 this suit was settled  without  prejudice  for
$85,000,  payable with $25,000 cash and a promissory note for $60,000 bearing 8%
interest payable monthly and due February 1, 2001.

Item 2.           CHANGES IN SECURITIES AND USE OF PROCEEDS.
                  Not Applicable.

Item 3.           DEFAULTS UPON SENIOR SECURITIES.
                  Not Applicable.

Item 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
                  Not Applicable.

Item 5.           OTHER INFORMATION.
                  None


<PAGE>



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

           (a)      Exhibits

                    Exhibits to this Form 10-Q are as follows:

                    Exhibit No.     Description
                    -----------     -----------

                        3.1         Articles of  Incorporation,  as amended,  of
                                    the Registrant*

                        3.1         Bylaws, as amended, of the Registrant*

                        4.1         Specimen   copy  of   certificate   for  the
                                    Registrant's common stock, no par value*

                        4.2         Article  II  of  the   Registrant's   Bylaws
                                    (included in Exhibit 3.2)*

                        10.1        Employment Agreement dated January 20, 1998,
                                    between J. B. Quarles and the Registrant*

                        10.2        Stock   Option   Agreements    between   the
                                    Registrant and James B. Quarles*

                        10.3        Management  Agreement  dated march 12, 1998,
                                    between  Air  Technologies,   Inc.  and  the
                                    Registrant*

                        10.4        Contract dated  September 12, 1997,  between
                                    China Steel Corporation and the Registrant**

                        10.5        Lease dated June 1, 1996,  between Estate of
                                    Stamie  E.  Lyttle  and ETS  Water and Waste
                                    Management, Inc.***

                        10.6        Agreement  for  the  Purchase  of  Series  A
                                    Convertible  Preferred  Stock  and  for  the
                                    Conversion of Certain Promissory Notes dated
                                    July 30, 1998****

                        10.7        Contract  License  Agreement dated September
                                    14, 1995, between  Ultraliner,  Inc. and ETS
                                    Water and Waste Management, Inc.*

                        27          Financial Data Schedule*****


<PAGE>

*       Incorporated by reference to the Registrant's Annual Report on Form 10-K
        for the transition period from June 1, 1997 to March 31, 1998.

**      Incorporated by reference to the  Registrant's  Quarterly Report on Form
        10-Q for the quarter ended August 31, 1997.

***     Incorporated by reference to the Registrants  Annual Report of Form 10-K
        for the fiscal year ended May 31, 1997.

****    Incorporated by reference to the  Registrant's  Quarterly Report on Form
        10-Q for the quarter ended June 30, 1998.

*****   Filed herewith.

(b)     Reports on Form 8-K

        (1)     The  Company  filed one  Current  Report on Form 8-K  during the
                quarter ended December 31, 1998. This report,  dated January 13,
                1999, referenced the redemption of preferred stock,  resignation
                of director and issuance of additional preferred stock.


<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     February 12, 1999                  BY:   s/James B. Quarles            
         -----------------                        ------------------------------
                                                  James B. Quarles
                                                  Chairman and President



DATE     February 12, 1999                  BY:   s/Warren E. Beam, Jr.         
         -----------------                        ------------------------------
                                                  Warren E. Beam, Jr.
                                                  Secretary and Controller


<PAGE>



                                  EXHIBIT INDEX

         Exhibit No.    Description
         -----------    -----------

            3.1         Articles   of   Incorporation,   as   amended,   of  the
                        Registrant*

            3.1         Bylaws, as amended, of the Registrant*

            4.1         Specimen copy of certificate for the Registrant's common
                        stock, no par value*

            4.2         Article  II of  the  Registrant's  Bylaws  (included  in
                        Exhibit 3.2)*

            10.1        Employment  Agreement dated January 20, 1998, between J.
                        B. Quarles and the Registrant*

            10.2        Stock Option Agreements between the Registrant and James
                        B. Quarles*

            10.3        Management  Agreement dated March 12, 1998,  between Air
                        Technologies, Inc. and the Registrant*

            10.4        Contract dated  September 12, 1997,  between China Steel
                        Corporation and the Registrant**

            10.5        Lease  dated June 1, 1996,  between  Estate of Stamie E.
                        Lyttle and ETS Water and Waste Management, Inc.***

            10.6        Agreement  for the  Purchase  of  Series  A  Convertible
                        Preferred  Stock  and  for  the  Conversion  of  Certain
                        Promissory Notes dated July 30, 1998****

            10.7        Contract  License  Agreement  dated  September 14, 1995,
                        between  Ultraliner,   Inc.  and  ETS  Water  and  Waste
                        Management, Inc.*

            27.1        Financial Data Schedule*****


<PAGE>



*       Incorporated by reference to the Registrant's Annual Report on Form 10-K
        for the transition period from June 1, 1997 to March 31, 1998.

**      Incorporated by reference to the  Registrant's  Quarterly Report on Form
        10-Q for the quarter ended August 31, 1997.

***     Incorporated by reference to the Registrants  Annual Report of Form 10-K
        for the fiscal year ended May 31, 1997.

****    Incorporated by reference to the  Registrant's  Quarterly Report on Form
        10-Q for the quarter ended June 30, 1998.

*****   Filed herewith.