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

   
                                   FORM 10-Q/A
    

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


For the Quarter Ended  September 30, 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 November 13, 1998.

             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>

                                                                               September 30, 1998             March 31, 1998
                                                                               ------------------             --------------
ASSETS       (unaudited)                                                           (audited)
Current assets:
<S>                                                                                  <C>                      <C>          
    Cash and cash equivalents                                                        $    100,023             $     206,750
    Accounts receivable:
       Trade (net of allowance of $50,000 in 1998 and 1997)                             3,687,891                 2,540,810
       Other 221,021                                                                       78,936
    Costs and estimated earnings in excess of billings
       on uncompleted contracts                                                           509,005                   563,924
    Notes receivable                                                                                                200,000
    Inventory683,619                                                                      931,590
    Prepaid expenses                                                                      120,879                   143,174
                                                                                     ------------             -------------
         Total current assets                                                           5,322,456                 4,665,184

Property, plant and equipment:
    Furniture and fixtures                                                                376,329                   345,857
    Machinery, tools and equipment                                                      4,123,898                 4,027,556
    Vehicles 1,331,372                                                                  1,373,657
    Leasehold improvements                                                                303,795                   340,282
                                                                                     ------------             -------------
                                                                                        6,135,394                 6,087,352
    Less accumulated depreciation                                                       3,604,928                 3,475,318
                                                                                     ------------             -------------
         Total property, plant and equipment, net                                       2,530,466                 2,612,034

Other assets:
   Restricted cash                                                                        600,000                   600,000
   Franchise agreements                                                                    47,666                    50,916
    Notes receivable from officers                                                        151,040                   151,040
    Note receivable from ETS, Inc.                                                         99,693                   100,000
    Cash value of life insurance                                                            6,693                     6,693
    Other assets                                                                           15,146                    97,338
                                                                                     ------------             -------------
         Total other assets                                                               920,238                 1,005,987

   Assets of business transferred under
        contractual agreements                                                            221,532                   267,666
                                                                                     ------------             -------------

         Total assets                                                                 $ 8,994,692               $ 8,550,871
                                                                                     ============             =============


<PAGE>



LIABILITIES AND STOCKHOLDERS' EQUITY
<CAPTION>
                                                                              September 30, 1998              March 31, 1998
                                                                              ------------------              --------------
                                                                                  (unaudited)                   (audited)

Current liabilities:

    Bank overdraft                                                               $       772,061           $       173,493
    Notes payable to bank                                                                 89,062                    89,062
    Notes payable to stockholders                                                        850,000                 3,410,000
    Notes payable to affiliates                                                          374,573                   966,159
    Notes payable                                                                         24,375                         0
    Current portion of long-term debt                                                    487,477                   480,543
    Accounts payable                                                                   2,312,364                 1,846,539
    Accrued expenses and other current liabilities                                       283,498                   768,638
    Reserve for loss on closing subsidiary                                               500,000                         0
                                                                                 ---------------           ---------------

         Total current liabilities                                                     5,693,410                 7,734,434

Long-term liabilities:
    Long-term debt                                                                       641,198                   907,896
    Deferred gain on sale/leaseback                                                      329,667                   481,821
    Liabilities of business transferred under contractual
       arrangements                                                                      140,339                   140,339
                                                                                 ---------------           ---------------

         Total liabilities                                                             6,804,614                 9,264,490
   
Stockholders' equity:
    Preferred  stock,  no par value,  authorized  5,000,000
    shares;  issued and outstanding  3,250,000  and 0 shares 
    at September  30, 1998 and March 31, 1998, respectively
       net of valuation allowance of $1,950,000                                        1,321,667                         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)                                           (5,064,815)               (6,646,845)
    Less notes receivable from officers                                                 (193,112)                 (193,112)
                                                                                 ---------------           ---------------
    
         Total stockholders' equity                                                    2,190,078                 (713,619)
                                                                                 ---------------           ---------------

         Total liabilities and  stockholders' equity                                 $ 8,994,692               $ 8,550,871 
                                                                                 ===============           ===============


<PAGE>



INFRACORPS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

<CAPTION>
                                                        Three months ended                            Six months ended
                                                September 30              September 30        September 30          September 30
                                                    1998                     1997                 1998                  1997
                                                    ----                     ----                 ----                  ----
                                                 (unaudited)              (unaudited)          (unaudited)           (unaudited)
   
Contract Revenues - Commercial                  $  5,811,587              $  5,425,099        $ 10,102,509          $ 11,079,506
Cost of goods and services                         5,364,760                 3,906,489           8,992,297             8,430,963
                                                ------------              ------------        ------------          ------------
Gross Profits (losses)                               818,864                 1,518,610           1,110,212             2,648,543

Selling, general and administrative expenses         725,037                   545,232           1,558,241             1,104,956
                                                ------------              ------------        ------------          ------------
Net Operating Income                                (278,210)                  973,378            (448,029)            1,543,587
Interest income                                        9,324                     8,316              20,366                13,104
Interest expense                                    (103,771)                 (276,967)           (248,118)             (442,395)
Gain on sale of equipment                                  0                         0             329,478                     0
                                                ------------              ------------        ------------          ------------
Income (Loss) from continuing operations        $   (372,657)             $    704,727        $   (346,303)         $  1,114,296

Loss from discontinued operations                          0                  (492,559)                  0              (339,438)
Valuation allowance on preferred shares            1,950,000                         0           1,950,000                     0
                                                ------------              ------------        ------------          ------------
Net income (loss)                               $  1,577,343              $    212,168        $  1,603,697          $    774,858
                                                ============              ============        ============          ============

Earnings (Loss) from continuing operations
  per common share:
          Basic                                 $       (.02)             $        .05        $       (.02)         $        .08
          Diluted                               $       (.02)             $        .05        $       (.02)         $        .08

Earnings (Loss) per common share:
          Basic                                 $       0.10              $        .01        $       0.10          $        .05
          Diluted                               $       0.08              $        .01        $       0.09          $        .05
    
Average shares of common stock used for above
  computation:
          Basic                                   16,492,043                14,999,955          16,492,043            14,548,333
          Diluted                                 19,742,043                14,999,955          18,117,043            14,548,333


<PAGE>




                                              INFRACORPS INC. AND SUBSIDIARIES
                             CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                             SIX MONTHS ENDED SEPTEMBER 30, 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

Valuation Allowance                                                       (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
    



<PAGE>



INFRACORPS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOW

                                                                                                 Six months ended
                                                                                  September 30, 1998        September 30, 1997
                                                                                  ------------------        ------------------
                                                                                     (unaudited)               (unaudited)
   
Cash flows from operating activities:
       Net income (loss)                                                             $ 1,603,697               $   774,856

Adjustments  to  reconcile  net  income  (loss)  to net cash  used in  operating
activities:
       Depreciation and amortization                                                     276,628                   612,921
       Amortization of convertible debentures discount                                         0                   252,289
       Professional services received in exchange for common stock                             0                   133,444
       Amortization of deferred gain on sale/leaseback                                  (152,154)                 (152,154)
       Gain on disposal of equipment                                                    (329,478)                        0
       Reserve for closing subsidiary                                                   (500,000)                        0
       Valuation allowance on preferred shares                                        (1,950,000)                        0
    
Increase/decrease in operating assets and liabilities:
       Accounts receivable                                                            (1,289,166)                 (878,938)
       Costs and estimated earnings in excess of billings on uncompleted contracts        54,919                  (440,743)
       Inventories247,971                                                               (287,577)
       Prepaid expenses                                                                   22,277                   (70,342)
       Cash surrender value of life insurance, net                                             0                   (17,611)
       Accounts payable                                                                   82,192                  (361,841)
       Accrued expenses and other liabilities                                            465,825                  (651,046)
       Other Assets                                                                     (485,140)                  333,094
                                                                                     -----------               -----------
Net cash used in operating activities                                                   (952,429)                 (753,655)

Cash flow from investing activities:
       Purchase of property, plant and equipment                                        (372,332)                 (804,966)
       Proceeds from sale of Service Division                                            350,000                         0
       Notes Receivable decrease                                                         200,307                         0
       Decrease in assets of business transferred under contractual agreement             46,134                         0
                                                                                     -----------               -----------
Net cash used in investing activities                                                    224,109                  (804,966)

Cash flows from financing activities:
       Bank overdraft                                                                    598,568                   884,318
       Notes payable increase (decrease)                                              (3,817,211)                        0
       Issuance of preferred stock                                                     3,250,000                         0
       Principal payments on long-term debt                                             (259,764)               (1,160,236
       Proceeds from exercise of stock options                                                 0                   492,188
       Proceeds from notes payable to stockholder                                        850,000                 1,696,972
                                                                                     -----------               -----------
Net cash provided by financing activities                                                621,593                 1,913,242
                                                                                     -----------               -----------

Increase (decrease) in cash and cash equivalents                                        (106,727)                  354,621
Cash and cash equivalents at beginning of year                                           206,750                   377,313
                                                                                     -----------               -----------

Cash and cash equivalents at end of period                                           $   100,023               $   731,934
                                                                                     ===========               ===========
</TABLE>

   
Supplemental   disclosures  of  cash  flow  information  and  noncash  investing
activities:  Interest paid on notes payable and long-term  debt was $248,118 and
$442,395  for the six months ended  September  30, 1998 and  September  30, 1997
respectively.   There  were  no  capital  lease   obligations  for  the  periods
represented.  Dividends on  preferred  shares of $21,667 and $0 were accrued for
the six months ended September 30, 1998 and September 30, 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
six months  ended  September  30,  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 six month
period  ended  September  30,  1998,  the  Company  had cash  used in  operating
activities  of  $952,429,  and  at  September  30,  1998,  the  Company  had  an
accumulated deficit of $5,064,815 from operations and a stockholders'  equity of
$2,190,078.
    
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  six  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 $850,000 loan from a shareholder.

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.


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  September 30, 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  September  30,  1998,  "assets  of  business  transferred  under
contractual arrangements" was stated net of a valuation allowance of $858,000.


<PAGE>




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 six-month period
ended  September 30, 1997.  Revenues of $1,865,431  for the  three-months  ended
September 30, 1997 and $3,650,077 for the  six-months  ended  September 30, 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 valuation  allowance 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 valuation allowance 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.
    



<PAGE>



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

RESULTS OF OPERATIONS
   
Three months and six months ended  September  30, 1998  compared to three months
and six months ended September 30, 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 six-month  period ended  September  30, 1997.  Revenues for the
three-month  period  ended  September  30, 1998 (the  "second  quarter of fiscal
1999") were $5,811,587  compared to $5,425,099 for the three-month  period ended
September  30,  1997,  resulting  in a 7% increase in  revenues.  This  increase
largely was the result of increase in new orders in previous quarters.  Revenues
for the  six-month  period  ended  (the  "year  to date of  fiscal  1999")  were
$10,102,509  compared to $11,079,506  for the six-month  period ended  September
30,1997  resulting in a 9%  decrease.  This  decrease  largely was the result of
inclement  weather,  slowness in orders in the first quarter of the year and the
sale of the Service Division of ETSW.
   
Cost of goods and services for the second  quarter of fiscal 1999 was $5,364,760
or 92% of sales  compared  to  $3,906,489  or 72% of sales  for the  three-month
period ended September 30, 1997. Cost of goods and services for the year to date
of fiscal 1999 was  $8,992,297  or 89% of sales as compared to $8,430,963 or 76%
for the six-month  period ended September 30, 1997. Gross profits for the second
quarter of fiscal 1999 were  $446,827 or 8% of sales  compared to  $1,518,610 or
28% of sales for the three-month  period ended September 30, 1997. Gross profits
for the year to date of fiscal 1999 was $1,110,212 as compared to $2,648,543 for
the six-month  period ended September 30, 1997. These decreases in gross profits
were due to the  decreases  in  margins  for the  period.  The cost of goods and
services  included a charge of $372,000  for  closing  the  Florida  operations.
Selling,  general  and  administrative  expenses  were  $725,037  for the second
quarter of fiscal 1999 or 12.5% of net sales  compared to $545,232 or 10% of net
sales for the three-month period ended September 30, 1997. Selling,  general and
administrative  expenses were  $1,558,241 for the year to date of fiscal 1999 or
15% of net sales  compared to  $1,104,956  or 10% of net sales for the six-month
period ended September 30, 1997. The general and administrative expense increase
was due to costs associated with the management  reorganization,  as well as the
timing of  professional  services for year-end  reporting.  There was a one time
charge of $128,000 for closing the Florida operations.
    
Gain on sale of $329,478 for the year to date of fiscal 1999  reflected the sale
of the Service  Division  of ETSW.  Interest  expense for the second  quarter of
fiscal 1999 was $103,771  compared to $276,967 for the three-month  period ended
September  30,  1997.  Interest  expense for the year to date of fiscal 1999 was
$248,118 as compared to $442,395 for the  six-month  period ended  September 30,
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.
   
Loss from  continuing  operations  for the  second  quarter  of fiscal  1999 was
$372,657  compared  to income  of  $704,727  for the  three-month  period  ended
September  30,1997.  Loss  from  continuing  operations  for the year to date of
fiscal 1999 was  $346,303  compared to income of  $1,114,296  for the  six-month
period ended September 30,1997.  Discontinued  operations include  environmental
operations   which  were  sold  in  October  1997  and  March  1998.  Loss  from
discontinued  operations was $492,559 for the three-month period ended September
30, 1997 and loss from  discontinued  operations  was $339,438 for the six-month
period ended  September 30, 1997.  Revenues of $1,865,431  for the  three-months
ended  September 30, 1997 and $3,650,077 for the six-months  ended September 30,
1997 related to the discontinued environmental operations.

On July 30, 1998, certain shareholders  converted debt to preferred shares. As a
result, a valuation allowance 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.  Therefore,  a valuation
allowance in the amount of $1,950,000 was recognized.

Effective November 30, 1998, the Company will close 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 if no
buyer  steps  forward  the assets  will be moved to  Virginia  and  utilized  in
Virginia's operation or sold. All current contracts will be completed within the
next six months.

Net income for the second quarter of fiscal 1999 was $1,577,343  compared to net
income of $212,168 for the  three-month  period ended  September  30, 1997.  Net
income for the year to date of fiscal 1999 was $1,603,697 compared to net income
of $774,858 for the six-month period ended September 30, 1997.

LIQUIDITY AND CAPITAL RESOURCES AS OF SEPTEMBER 30, 1998

The Company  continues  to be cash  deficient.  For the  six-month  period ended
September  30,  1998,  the  Company  had cash used in  operating  activities  of
$952,429,  and at September 30, 1998, the Company had an accumulated  deficit of
$5,064,815  from  operations  and a  stockholders'  equity  of  $2,190,078.  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 valuation  allowance  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
valuation allowance in the amount of $1,950,000 was recognized.
    
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 accounts  payable of $465,825,  an increase in  inventories  of  $247,971,  a
decrease in accounts receivable of $1,289,166 and a decrease in accrued expenses
and other current  liabilities  of $485,140.  Adjustments  to net cash flows are
gain  on  the  sale  of the  Service  Division  of  $329,478,  depreciation  and
amortization of $276,628 and amortization of deferred gain on  sale/leaseback of
$152,154.

Net cash  provided  by  investing  activities  of $224,109  consisted  mainly of
purchase of property,  plant and  equipment in the amount of $372,332,  proceeds
from sale of Service  Division of $350,000 and decrease in notes  receivable  of
$200,000. The net cash used in financing activities of $651,593 includes in part
proceeds  from  notes  payable  to  stockholder  of  $850,000,  payment  of debt
principal  of $259,764,  decrease in notes  payable of  $3,817,211,  increase in
preferred stock of $3,250,000 and an increase in bank overdraft of $598,568. The
cash and cash  equivalents  at  September  30,  1998 were  $100,023.  New orders
received  for the second  quarter of fiscal  1999 were  $6,020,032  compared  to
$4,075,032 for the three months ended  September 30, 1997. New orders were up in
the  second  quarter as a result of strong  construction  activity  during  this
period.  Backlog at September 30, 1998 was $14,500,000 compared to $4,200,000 at
September 30, 1997.


<PAGE>

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.


<PAGE>

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 six month
period  ended  September  30,  1998,  the  Company  had cash  used in  operating
activities  of  $952,429,  and  at  September  30,  1998,  the  Company  had  an
accumulated deficit of $5,064,815 from operations and a stockholders'  equity of
$2,190,078.
    
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 quarter 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 $850,000 loan from a shareholder.

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.


<PAGE>



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.


<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.  It is not  possible  at  this  stage,  however,  to  determine  the
likelihood of an unfavorable  outcome in the case or an estimate of the range of
potential loss.

Item 2.           CHANGED IN SECURITIES.
                  None

Item 3.           DEFAULTS UPON SENIOR SECURITIES.
                  None


<PAGE>



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

         On August 17,  1998,  the annual  shareholders  meeting  was held.  The
following items were put forth to the security holders for a vote.

1.)  Five   individuals   were  nominated  by  management  and  elected  by  the
     shareholders by the following votes:

                                                 For           Withheld
                                                 ---           --------
                  Terence Dellecker           12,208,353         66,375
                  Coleman S. Lyttle           12,139,853        134,875
                  John R. Potter              12,209,353         65,375
                  James B. Quarles            12,219,203         55,525
                  Navin D. Sheth              12,226,253         48,475

2.)  Approval of the Amendment  and  Restatement  of the  Company's  Articles of
     Incorporation  to change the name of the  Company  from ETS  International,
     Inc. to InfraCorps Inc.:

               For                      Withheld                      Abstain
               ---                      --------                      -------
            12,168,686                   85,345                        20,700

3.)  Approval of the Board's  appointment  of KPMG Peat  Marwick as auditors for
     fiscal 1999:

               For                      Withheld                      Abstain
               ---                      --------                      -------
            12,244,928                   15,400                        14,400

4.)  Approval of the proposed  amendments of Sections 2 and 10 of Article III of
     the Company's  Bylaws to increase the number of directors  from 5 to 10 and
     set the number of directors to 7:

               For                      Withheld                      Abstain
               ---                      --------                      -------
            12,274,728                     0                             0


<PAGE>



Item 5.           OTHER INFORMATION.
                  None

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

                                    The Company did not file any Current Reports
                                    on  Form  8-K  during  the   quarter   ended
                                    September 30, 1998.



<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 8, 1999             BY: s/  James B. Quarles            
         ----------------                 --------------------------------
                                                   James B. Quarles
                                                   Chairman and President



DATE     February 8, 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.