<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
 
                             WASHINGTON, D.C. 20549
 
                                   FORM 10-Q
 
              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
 
                     OF THE SECURITIES EXCHANGE ACT OF 1934
 
                  For the quarterly period ended April 30, 1997
 
                                       OR
 
             [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
 
                     OF THE SECURITIES EXCHANGE ACT OF 1934
 
                 For the transition period from       to
 
                         Commission file number 0-17430
 
                           GLOBAL ENVIRONMENTAL CORP.
 
             (Exact name of registrant as specified in its charter)
 
<TABLE>
<S>                                                   <C>
                      New York                              13-3431486
          (State of other jurisdiction of                 (IRS Employer
           incorporation or organization)              Identification No.)
 
                  17500 York Road                             21740
                   Hagerstown, MD                           (Zip Code)
      (Address of principal executive offices)
</TABLE>
 
                                 (301) 582-2000
 
              (Registrant's telephone number, including area code)
 
    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
 
                                  YES X    NO
 
    Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.


                                                    OUTSTANDING AT
          COMMON STOCK                              APRIL 30, 1997
          ------------------------                -------------------

          $.0001 par value........                13,815,603 shares


<PAGE>


                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY

                                     INDEX

                                                                     PAGE(S) 
                                                                   -----------

PART I--CONSOLIDATED FINANCIAL STATEMENTS:

  Consolidated Balance Sheets--April 30, 1997 and 
    October 31, 1996...........................................         3-4

  Consolidated Statements of Operations-Three Months and Six 
    Months Ended April 30, 1997 and 1996.......................           5
  Consolidated Statements of Cash Flows-Six Months Ended 
    April 30, 1997 and 1996....................................         6-7

  Notes to Consolidated Financial Statements...................        8-16

  Management's Discussion and Analysis of Financial Condition 
    and Results of Operations..................................       17-18


                                       2


<PAGE>


                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY

                          CONSOLIDATED BALANCE SHEETS

                                     ASSETS


<TABLE>
<CAPTION>
                                                                   April 30,   October 31,
                                                                     1997         1996
                                                                  -----------  -----------
<S>                                                               <C>          <C>
CURRENT ASSETS
  Cash and cash equivalents.....................................  $   128,768  $    50,008
  Accounts receivable, less allowance for doubtful accounts of
    $76,188 and $52,188 respectively............................    1,662,664    1,436,339
  Inventories...................................................      795,006      791,758
  Prepaid expenses and other....................................       62,486       75,717
                                                                  -----------  -----------
    Total current assets........................................    2,648,924    2,353,822
                                                                  -----------  -----------
PROPERTY, PLANT AND EQUIPMENT
  Land..........................................................       25,797       25,797
  Building and improvements.....................................    1,440,527    1,385,502
  Equipment.....................................................    2,276,376    2,273,920
                                                                  -----------  -----------
                                                                    3,742,700    3,685,219
  Less--accumulated depreciation and amortization...............   (2,187,210)  (2,076,765)
                                                                  -----------  -----------
    Total property, plant and equipment, net....................    1,555,490    1,608,454
                                                                  -----------  -----------
OTHER ASSETS
  Property under agreement of sale..............................      344,127      344,127
  Other, net....................................................      --                93
                                                                  -----------  -----------
                                                                      344,127      344,220
                                                                  -----------  -----------
                                                                  $ 4,548,541  $ 4,306,496
                                                                  -----------  -----------
                                                                  -----------  -----------
</TABLE>

                See Notes to Consolidated Financial Statements.


                                       3


<PAGE>


                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                          CONSOLIDATED BALANCE SHEETS
 
                      LIABILITIES AND STOCKHOLDERS' EQUITY
 
<TABLE>
<CAPTION>
                                                                   APRIL 30,   OCTOBER 31,
                                                                     1997         1996
                                                                  -----------  -----------
<S>                                                               <C>          <C>
CURRENT LIABILITIES
  Current portion of long-term debt.............................  $   544,725  $   544,725
  Mortgage payable..............................................      344,127      344,127
  Accounts payable..............................................    1,296,545    1,337,117
  Accrued salaries and wages....................................       83,992      147,807
  Accrued expenses, other.......................................      483,022      381,482
                                                                  -----------  -----------
    Total current liabilities...................................    2,752,411    2,755,258
                                                                  -----------  -----------
LONG-TERM DEBT, net of current portion..........................    1,504,870    1,344,182
                                                                  -----------  -----------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
  Common stock, par value $.0001 per share; 20,000,000 shares
    authorized, 13,815,603 and 2,465,144 shares issued in 1997
    and 1996, respectively......................................        1,382        1,382
  Preferred stock, $.001 par value;       , 5,000,000 shares
    authorized; Class of 10% Cumulative Convertible Senior
    Preferred Stock, 10,500 shares authorized, 4,550
    shares issued and outstanding in 1997 and 1996
    (total of $399,044); 
    Series B Cumulative Convertible Senior Preferred Stock,
      16,000 shares authorized, no shares issued and
      outstanding in 1997 and 1996..............................      399,044      399,044
  Additional paid-in capital....................................    4,554,102    4,554,102
  Deficit.......................................................   (4,570,208)  (4,654,412)
  Less: Treasury stock, 612,579 shares, at cost.................      (93,060)     (93,060)
                                                                  -----------  -----------
    Total stockholders' equity..................................      291,260      207,056
                                                                  -----------  -----------
                                                                  $ 4,548,541  $ 4,306,496
                                                                  -----------  -----------
                                                                  -----------  -----------
</TABLE>
 
                See Notes to Consolidated Financial Statements.


                                       4


<PAGE>


                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY

                      CONSOLIDATED STATEMENT OF OPERATIONS
 
<TABLE>
<CAPTION>
                                           THREE MONTHS ENDED           SIX MONTHS ENDED
                                       --------------------------  --------------------------
<S>                                    <C>           <C>           <C>           <C>
                                           1997          1996          1997          1996
                                       ------------  ------------  ------------  ------------
Net Sales............................  $  2,492,310  $  2,142,063  $  4,305,707  $  3,699,664
Cost of Goods Sold...................     1,969,106     1,754,265     3,448,884     3,197,813
                                       ------------  ------------  ------------  ------------
    Gross Profit.....................       523,204       387,798       856,823       501,851
Selling, General and Administrative
    Expenses.........................       374,343       263,996       714,624       540,290
                                       ------------  ------------  ------------  ------------
Loss From Operations.................       148,861       123,802       142,199       (38,439)
                                       ------------  ------------  ------------  ------------
  Interest Expense, Net..............       (48,184)      (66,944)     (106,053)     (106,731)
Other Income Expense.................        11,874       (28,960)       48,058       (21,336)
                                       ------------  ------------  ------------  ------------
  Income (Loss) From Continuing
    Operations.......................       112,551        27,898        84,204      (166,505)
  Income (Loss) From Discontinued
    Operations.......................                    (158,038)                   (259,510)
                                       ------------  ------------  ------------  ------------
Net Income Loss......................  $    112,551  $   (130,140) $     84,204      (426,015)
                                       ------------  ------------  ------------  ------------
                                       ------------  ------------  ------------  ------------
Per Common Share Data:
    Continuing Operations............  $        .01  $       (.01) $        .01  $       (.12)
                                       ------------  ------------  ------------  ------------
                                       ------------  ------------  ------------  ------------
    Discontinued Operations..........                $       (.07) $             $       (.10)
                                       ------------  ------------  ------------  ------------
                                       ------------  ------------  ------------  ------------
    Net Income (Loss)................  $        .01  $       (.08) $        .01  $       (.22)
                                       ------------  ------------  ------------  ------------
                                       ------------  ------------  ------------  ------------
  Weighted Average Shares
    Outstanding......................    13,815,603     2,465,144    13,815,603     2,465,144
                                       ------------  ------------  ------------  ------------
                                       ------------  ------------  ------------  ------------
</TABLE>

                See Notes to Consolidated Financial Statements.


                                       5


<PAGE>


                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                      SIX MONTHS ENDED APRIL 30
                                                                      --------------------------
<S>                                                                   <C>             <C>
                                                                         1997            1996
                                                                      -----------     -----------
OPERATING ACTIVITIES:
  Net loss..........................................................  $    84,204      $(426,015)
  Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities:
    Depreciation and amortization...................................      110,445         93,942
    Net (increase) decrease in non-cash current assets:
      Accounts receivable...........................................     (226,325)      (397,531)
      Inventories...................................................       (3,248)      (104,536)
      Prepaid expenses and other....................................       13,324        (62,988)
    Net increase (decrease) in non-debt current liabilities:
      Accounts payable..............................................      (40,572)       212,067
      Accrued salaries and wages....................................      (63,815)        44,003
      Accrued expenses, other.......................................      101,540         65,906
    (Increase) decrease in other assets, net........................                      (6,582)
    Discontinue operations, liabilities net of assets...............        --            44,329
                                                                      -----------      ----------
      Net cash provided by (used in) operating activities...........      (24,447)      (537,405)
                                                                      -----------      ----------
INVESTING ACTIVITIES:
  Purchase of property, plant and equipment.........................      (57,481)       (35,006)
                                                                      -----------      ----------
    Net cash used in investing activities...........................      (57,481)       (35,006)
                                                                      -----------      ----------
FINANCING ACTIVITIES:
  Net borrowings (repayments) under revolving loan agreement........     (224,265)       628,871
  Payments of long-term debt........................................      (63,577)       (79,264)
  Payment of dividends on preferred stock...........................        --          (117,748)
                                                                      -----------     -----------
    Net cash provided by (used in) financing activities.............     (160,688)       431,859
                                                                      -----------     -----------
Net (Decrease) in Cash and Cash Equivalents.........................      (78,760)      (140,552)
Cash and Cash Equivalents, Beginning................................       50,008       (335,979)
                                                                      -----------     -----------
Cash and Cash Equivalents, Ending...................................  $   128,768        195,427
                                                                      -----------     -----------
                                                                      -----------     -----------

</TABLE>

                 See Notes to Consolidated Financial Statements

                                      6

<PAGE>


                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                                                      SIX MONTHS ENDED APRIL 30
                                                                      --------------------------
<S>                                                                   <C>             <C>
                                                                         1997            1996
                                                                      -----------     -----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:
  Cash paid for-
    Interest........................................................  $   106,053      $  96,731
                                                                      -----------     -----------
                                                                      -----------     -----------
    Income taxes....................................................        --              --
                                                                      -----------     -----------
                                                                      -----------     -----------

</TABLE>

                See Notes to Consolidated Financial Statements.


                                       7

<PAGE>
                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                        SIX MONTHS ENDED APRIL 30, 1997
 
NOTE 1. BASIS OF PRESENTATION, DESCRIPTION OF BUSINESS AND SUMMARY
        OF SIGNIFICANT ACCOUNTING POLICIES
 
    BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS
 
    Global Environmental Corp. (the "Company") was incorporated on October 6,
1987. Effective August 1, 1988, Global Environmental Corp. acquired all of the
issued and outstanding common shares of Global Environmental Holdings, Inc.
("Global Holdings").

    Danzer Industries, Inc.("Danzer"), a wholly-owned subsidiary of Global 
Holdings, is principally engaged in the design, manufacture and installation 
of fabricated metal products. Products produced are normally based upon 
specifications received from customers. Danzer's revenues (subsequent to the 
sale of the Company's Rage subsidiary in 1996 as described below) represent 
approximately 100% of the Company's revenues and are generated throughout the 
United States.
 
    Rage Inc. ("Rage") was a wholly-owned subsidiary of Global Holdings 
through April 30, 1996 and was engaged in the business of engineering and 
supplying pneumatic material handling systems throughout the United States. 
Effective April 30, 1996, Rage was sold to a third party. Accordingly, the 
results of Rage's operations for the six months ended April 30, 1996 are
presented as "discontinued operations" in the consolidated statement of 
operations (Note 3).

    The accompanying consolidated financial statements present the accounts of
Global Environmental Corp. and its wholly-owned subsidiary. The entities are
collectively referred to herein as the "Company". All significant intercompany
transactions and balances have been eliminated in consolidation.
 
    The Company uses the equity method of accounting for a 49% owned interest in
a joint venture. The original investment is recorded at cost, adjusted for the
Company's share of undistributed earnings or losses. The operations of the joint
venture are presently immaterial.
 
    REVENUE RECOGNITION
 
    Revenues from the manufacture of sheet metal products and fabrications are
generally recognized when products are shipped to the customer.

                                      8

<PAGE>

                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                        SIX MONTHS ENDED APRIL 30, 1997
 
NOTE 1. BASIS OF PRESENTATION, DESCRIPTION OF BUSINESS AND SUMMARY
        OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
    INVENTORIES
 
    Inventories are stated at the lower of cost (first-in, first-out) or market
and, at October 31, 1996 and 1995 are comprised of the following components:
 
<TABLE>
<CAPTION>
                                                                       APRIL 30,   OCTOBER 31,
                                                                          1997        1996
                                                                       ----------  -----------
<S>                                                                    <C>         <C>
Raw materials and supplies...........................................  $  403,972   $ 420,469
Work-in-process......................................................     318,395     286,122
Finished goods.......................................................      72,639      85,167
                                                                       ----------  -----------
                                                                       $  795,006   $ 791,758
                                                                       ----------  -----------
                                                                       ----------  -----------
</TABLE>
 
    Work-in-process and finished goods include purchased materials, direct labor
and allocated overhead.
 
    PROPERTY, PLANT AND EQUIPMENT
 
    Property, plant and equipment are stated at cost and are depreciated on the
straight-line method over the following estimated useful lives:
 
<TABLE>
<S>                                                                            <C>
Building and improvements....................................................  10 to 30 years
Equipment....................................................................  5 to 20 years
</TABLE>
 
    CONCENTRATION OF CREDIT RISK
 
    The Company maintains cash balances at a bank, which at various times
throughout the year, exceeded the Federal Deposit Insurance Corporation (FDIC)
limit.

                                       9

<PAGE>

                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                        SIX MONTHS ENDED APRIL 30, 1997
 
NOTE 1. BASIS OF PRESENTATION, DESCRIPTION OF BUSINESS AND SUMMARY
        OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
    MAJOR CUSTOMERS
 
    The following is a list of the Company's customers which represent 10% or
more of consolidated net sales (from continuing operations):
 
<TABLE>
<CAPTION>
                                                                                                   TOTAL PERCENTAGE OF NET SALES
                                                                                                      YEAR ENDED OCTOBER 31,
                                                                                               -------------------------------------
<S>                                                                                            <C>          <C>          <C>
                                                                                                  1996         1995         1994
                                                                                                  -----        -----        -----
Elevator Manufacturer........................................................................          10%          11%          10%
Truck Body Manufacturer......................................................................          29%          32%          32%
</TABLE>
 
    USE OF ESTIMATES
 
    The preparation of financial statements in conformity with generally
accepted accounting principles requires Management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
 
    RECLASSIFICATIONS
 
    Certain amounts in the 1996 financial statements have been
reclassified to conform to the 1997 presentation.
 
    RECENTLY ISSUED ACCOUNTING STANDARDS
 
    In March 1995, FASB issued Statement 121, "ACCOUNTING FOR THE IMPAIRMENT 
OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF" 
("Statement"). The Statement established accounting standards for the 
impairment of long-lived assets, certain identifiable intangibles, and 
goodwill related to those assets to be held and used, and for long-lived 
assets and certain identifiable intangibles to be disposed of. The Statement 
requires that long-lived assets and certain identifiable intangibles to be 
held and used by an entity be reviewed for impairment whenever events or 
changes in circumstances indicate that the carrying amount of an asset may 
not be recoverable. Measurement of an impairment loss for long-lived assets 
and identifiable intangibles that an entity expects to hold and use should be 
based on the fair value of the asset. The standard is effective for the 
Company's fiscal year beginning November 1, 1996. The Company has not 
determined the effect, if any, that this Statement will have on its financial 
position or results of operations.
 
                                       10
<PAGE>
                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                        SIX MONTHS ENDED APRIL 30, 1997
 
NOTE 1. BASIS OF PRESENTATION, DESCRIPTION OF BUSINESS AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    RECENTLY ISSUED ACCOUNTING STANDARDS (CONTINUED)
 
    In October 1995, FASB issued SFAS       123, "Accounting for Stock-Based
Compensation," ("Statement") which provides an alternative method of accounting
for stock-based compensation arrangements, based on fair value of the
stock-based compensation utilizing various assumptions regarding the underlying
attributes of the options and the Company's stock, rather than the existing
method of accounting for stock-based compensation which is provided in
Accounting Principles Board Opinion       25, "Accounting for Stock Issued To
Employees" (APB       25). FASB encourages entities to adopt the fair
value-based method but does not require adoption of this method. The Standard
will be effective for the Company's fiscal year beginning November 1, 1996. The
Company anticipates that it will continue its current accounting policy; SFAS
      123 is not expected to have a material impact on its financial position or
its results of operations.
 
    In February 1997, the FASB issued SFAS       128 "Earnings per Share" and
SFAS       129, "Disclosure of Information About Capital Structures" (the
"Statements") which specify new computation, presentation and disclosure
requirements for earnings per share for entities with publicly held common stock
or potential common stock and require additional information to be disclosed for
capital structures of certain companies. The Statements are effective for
financial statements issued for periods ending after December 15, 1997,
including interim periods. The Company has not yet determined the effect the
Statements will have on its financial condition or results of operations.
 
NOTE 2. FINANCING ARRANGEMENTS, OPERATIONS AND MANAGEMENT'S PLANS
 
    The Company had net sales of $8,153,689 for the year ended October 31, 1996
(an 8% increase over the prior year) and a loss from continuing operations of
$502,294. Working capital decreased from 1995 to 1996 to a deficiency of
$401,436 at October 31, 1996. This was due primarily to the reclassification
from long-term debt of the note payable to joint venture of $345,000 and
mortgage payable of $344,127 to current liabilities. Stockholders' equity
decreased by $353,431 to $207,056 at October 31, 1996 due to dividends accrued
and a net loss incurred, offset by the issuance of common stock and the
conversion of certain debt, and accrued interest and dividends on common stock.

                                      11

<PAGE>
 
                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                        SIX MONTHS ENDED APRIL 30, 1997
 
NOTE 2. FINANCING ARRANGEMENTS, OPERATIONS AND MANAGEMENT'S PLANS (CONTINUED)
 
    During the first quarter of fiscal 1994, the Company entered into a joint
venture agreement (the "Agreement") with Cadema Corporation ("Cadema"). The
joint venture was capitalized by Cadema with $350,000 in cash and by Global with
$1,000 in cash. The joint venture's principal objective is to provide the
partners with current income by contracting for the design and installation of
air pollution control equipment in its name in all areas of the world outside
the United States and its territories. The term of the Agreement expires
December 31, 1998, unless otherwise extended. Income or loss from the joint
venture will be allocated 51% to Cadema and 49% to the Company. The Agreement
allows Global, subject to certain conditions, to acquire Cadema's interest in
the joint venture for 875,000 shares of Global common stock or $350,000 in cash
or an amount equal to Cadema's capital account, whichever is greater, subject to
certain antidilution provisions. The Agreement also allows for quarterly
distributions of income and capital to the joint venture partners. The Company
had borrowed approximately $364,000 from the joint venture as of October 31,
1996. Because of the sale of the Company's Rage Subsidiary (Note 3), it is not
anticipated that the Joint Venture will provide significant revenue or earnings
for the Company in the future. In addition, Management is presently negotiating
with the other party to the Joint Venture with respect to payment by the Company
of the loan due to the Joint Venture.
 
    In September 1994, the Company completed a 10% Cumulative Convertible Senior
Preferred Stock offering whereby 7,550 shares were issued. The Company realized
$662,150 of net proceeds, after placement fees and expenses of approximately
$93,000. The funds were used to expand the Company's new Morrison product line
and provide working capital for overall business activity. During 1996, 3,000 of
such shares were converted to common stock and subsequent to October 31, 1996,
shareholders representing the remaining 4,550 shares agreed to convert their
preferred shares and related accrued dividends to common stock (see Note 7).
 
    Effective December 31, 1994, Renaissance exchanged the $1,600,000 aggregate
amount of 1991 and 1992 convertible debentures for an aggregate of 16,000 shares
of the Company's Series B Cumulative Convertible Senior Preferred Stock. At
October 31, 1996, such preferred shares, related accrued dividends, a related
term note and accrued interest were converted to common stock (see Note 7).
 
    As of October 31, 1996, the Company was in violation of certain loan
covenants with Fremont Financial Corporation and has received waivers of such
noncompliance through November 1, 1997. In addition, the terms of the Loan and
Security Agreement with Fremont were modified in 1996 and extend payment of
principal until January 1998.

                                      12

<PAGE>

                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                        SIX MONTHS ENDED APRIL 30, 1997
 
NOTE 2. FINANCING ARRANGEMENTS, OPERATIONS AND MANAGEMENT'S PLANS (CONTINUED)

 
    In February 1996, the Company's revolving loan payable to Fremont Financial
Corporation was increased by $200,000. The increase enabled the Company to
borrow $200,000 in excess of their previously allowed borrowings under the
revolving loan agreement and provided additional working capital for overall
business activity. During fiscal 1996, this increase in the revolving loan was
reclassified as a term loan (Note 5).
 
    The Company's ability to meet certain interest and principal payments and
its working capital needs in order to execute its backlog and generate sales
volume during fiscal 1997, will be dependent upon the success of the Company's
efforts to increase sales volume, the profitability of new business generated
and the ability to secure additional financing.
 
    In March 1997, the Company received $150,000 from Renaissance Capital Group,
Inc. in the form of convertible debt. The debt bears interest at 10% per annum.
Principal and any accrued and unpaid interest is due and payable in March 1999.
The loan is convertible to common shares upon the Company obtaining a loan
secured by certain land and building owned by the Company. In addition, between
November 1, 1996 and March 25, 1997, shareholders of the Company's remaining
4,550 shares of preferred stock agreed to convert such preferred stock to common
stock (Note 7). The Company is also in negotiations for the closing of a
$650,000 mortgage on its Hagerstown, Maryland facility, which funds are expected
to repay certain term debt and to provide working capital.
 
NOTE 3. DISCONTINUED OPERATIONS
 
    On April 30, 1996, the Company adopted a formal plan to sell its Rage
subsidiary to the past President and Chief Executive Officer of the Company
("Buyer"). On May 22, 1996, the Company completed the sale of all of the
outstanding stock of Rage. The net assets of Rage consisted primarily of
accounts receivable, inventories, and property, plant and equipment less
accounts payable and accrued expenses.
 
                                       13
<PAGE>
                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                        SIX MONTHS ENDED APRIL 30, 1997
 
NOTE 3. DISCONTINUED OPERATIONS (CONTINUED)

The transaction required the Company to pay $104,600 in cash, and transfer
certain real property and improvements with a net book value of approximately
$464,000 in exchange for 517,000 shares of the common stock of the Company owned
by the Buyer, cancellation of an employment agreement with the Buyer and
assumption by the Buyer of the Company's mortgage amounting to approximately
$349,000 related to the real property transferred. The common stock previously
owned by the Buyer was recorded as treasury stock in the amount of $93,060 based
upon the fair value of the Company's common stock at the date of the
transaction.
 
    Operating results of Rage, Inc. for the year ended October 31, 1996 are
shown separately in the accompanying statement of operations as discontinued
operations for the period November 1, 1995 through April 30, 1996.
 
    In accordance with the terms of the Common Stock Purchase Agreement (the
"Agreement"), the Buyer assumed certain mortgage debt on real property and
improvements sold by Global to the Buyer and has been making the required
monthly payments. As of October 31, 1996, the Company has not been released by
the mortgagor from this obligation and, accordingly, has recorded "property
under agreement of sale" and "mortgage payable" in the amount of $344,127 in the
accompanying October 31, 1996 balance sheet. The terms of the mortgage require
monthly principal and interest payments, with a final payment due April 30,
1997. Interest is at 9% and the loan is collateralized by certain land and
building.
 
NOTE 4. NOTE PAYABLE
 
    Effective May 28, 1993, Danzer entered into a loan and security agreement
(the "Agreement") with Fremont Financial Corporation comprised of a revolving
credit facility (the "Facility") and an equipment term loan (the "Term Loan").
The amount available under the Facility is based on a defined percentage of
eligible accounts receivable and inventory. The Company had drawn $942,165 at
October 31, 1996. The maximum amounts available under the Facility and the term
loan are $1,150,000 and $350,000, respectively. Borrowings under the Agreement
accrue interest at prime plus 4.5% (13.25% at October 31, 1996). The Agreement
was amended on May 21, 1996, extending the term of the Agreement to January 31,
1998 (Note 5).
 
    Under the terms of the Agreement, borrowings are collateralized by real
estate and Danzer's accounts receivable, inventory and equipment. The Agreement
provides for certain restrictions including, but not limited to, the Company's
ability to: a) sell, lease, transfer, exchange or otherwise dispose of any
assets except in the ordinary course of business; b) enter into any merger,
consolidation, or acquisition of any other business organization; c) guaranty or
otherwise become in any way liable with respect to the obligations of any third
party; or d) change its ownership by greater than 10%. The Agreement also
restricts: payment of compensation and loans and advances to executives,
officers, directors and certain others; capital expenditures to a specified
level; and distributions to Danzer's Parent. For the year ended October 31,
1996, the Company was in violation of certain covenants and received a waiver
through November 1, 1997 for such noncompliance.
 
NOTE 5. LONG-TERM DEBT
 
    Maturities on long-term debt as of October 31, 1996 are as follows:
 
<TABLE>
<CAPTION>
 YEARS
 ENDING
OCTOBER
  31,                              AMOUNT
----------                       ----------
<S>                              <C>
1997.........................    $  544,725
1998.........................     1,148,652
1999.........................       159,018
2000.........................        36,512
                                 ----------
                                 $1,888,907
                                 ----------
                                 ----------
</TABLE>

                                      14

<PAGE>
                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                        SIX MONTHS ENDED APRIL 30, 1997
 

NOTE 6. INCOME TAXES
 
    The Company files a consolidated income tax return for Federal tax purposes.
Global Environmental Corp., Global and each of Global's subsidiaries file
separate state income tax returns. Effective November 1, 1993, the Company
changed its method of accounting for income taxes to comply with Statement of
Financial Accounting Standards (SFAS)       109, "Accounting for Income Taxes."
A requirement of SFAS       109 is that deferred tax assets and liabilities be
recorded for any temporary differences between the financial statement and tax
bases of assets and liabilities, using the currently enacted tax rate expected
to be in effect when the taxes are actually paid or recovered. In accordance
with SFAS       109, the Company elected to adopt this statement prospectively
in fiscal year 1994 by determining an adjustment for the cumulative effect on
prior years of the change in method of accounting for income taxes. At November
1, 1993, the cumulative effect on prior years of adopting SFAS       109 was
$--0--.
 
    As of October 31, 1996, the Company has available Federal net operating loss
carryforwards of approximately $3,709,000 that may be applied against future
taxable income. These carryforwards expire at various dates through fiscal 2011.
 
NOTE 7. STOCKHOLDERS' EQUITY
 
    On May 7, 1990, the Company's stockholders approved a stock option plan to
issue both "qualified" and "non-qualified" stock options. Under the Plan,
800,000 options to purchase shares of the Company's common stock may be issued
at the discretion of the Company's Board of Directors. The option price per
share will be determined by the Company's Board of Directors, but in no case
will the price be less than 85% of the fair value of the common stock on the
date of grant. Options under the Plan will have a term of not more than ten
years with accelerated termination upon the occurrence of certain events. As of
October 31, 1996 there were 25,000 options outstanding with an exercise price of
$.48 per share. During the year ended October 31, 1995, 350,000 options were
granted and 280,000 operations were terminated. During the year ended October
31, 1995, there were 375,000 options outstanding. Exercise prices at October 31,
1995 ranged from $.30 to $.48 per share with 200,000 options, 150,000 options
and 25,000 options exercisable at $.30, $.35, and $.48 per share, respectively.
No options were exercised during the years ended October 31, 1996 or 1995.
During the year ended October 31, 1996, no options were granted and 350,000
options were terminated.
 
    In connection with a legal settlement during 1994, the Company issued 
30,770 shares of common stock, par value $.0001 per share, and warrants to 
purchase 75,000 shares of common stock through February 9, 1997 at $1.00 per 
share, subject to adjustment as defined. No warrants have been exercised 
through October 31,1996. Subsequent to October 31, 1996, such warrants 
expired without being exercised.
 
    In connection with a consulting agreement effective November 2, 1994, the
Company issued warrants to purchase 100,000 shares of common stock through
November 1, 1999 at $.50 per share, subject to adjustment as defined. No
compensation was recorded in connection with the issuance of such warrants. No
warrants were exercised through October 31, 1996.
 
    In connection with the resignation of the Company's President and Chief
Executive Officer in 1996, the Company issued warrants to purchase 200,000
shares of common stock through August 1999 at $.50 per share, subject to
adjustment as defined. No compensation was recorded in connection with the
issuance of such warrants. No warrants were exercised through October 31, 1996.
 
                                      15

<PAGE>

                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                        SIX MONTHS ENDED APRIL 30, 1997
 
NOTE 7. STOCKHOLDERS' EQUITY (CONTINUED)

    During 1994, Global Environmental Corp. completed a private placement
offering by selling 7,550 shares of its 10,500 authorized shares of 10%
Cumulative Convertible Senior Preferred Stock (the "10% Senior Preferred Stock")
at a stated value of $100 per share. The Company raised $662,150, net of
placement fees of $92,850 as a result of the offering. Commencing September 30,
1994, dividends are cumulative, payable quarterly in arrears at an annual rate
of $10 per share. Total dividends declared and/or accrued were $75,504 in each
of 1996 and 1995. The 10% Senior Preferred Stock is voting and convertible into
the Company's Common Stock. Effective April 30, 1995, the Company registered the
shares of common stock issuable upon conversion of the Senior Preferred Stock
under the Securities Act of 1933. At October 31, 1996, 3,000 shares and related
accrued dividends were converted at a rate of $.25 per share to common stock.
Between November 1, 1996 and March 25, 1997, the shareholders of the remaining
4,550 shares agreed to convert such shares plus accrued dividends to common
stock at the same conversion rate of $.25.
 
    Effective December 31, 1994, Renaissance exchanged the $1,600,000 aggregate
amount 12 1/2% convertible debentures for an aggregate of 16,000 shares of the
Company's Series B Cumulative Convertible Senior Preferred Stock (the "Series B
Stock"), par value $.001 per share, stated value $100 per share. The Company
raised $1,511,319, net of legal and other costs of $88,681 incurred in
connection with the offering. Commencing December 31, 1994, dividends were
cumulative, payable quarterly in arrears at an annual rate of $10 per share.
Total dividends declared and/or accrued during 1996 and 1995 were $160,000 and
$133,333, respectively. On October 31, 1996, Renaissance converted the 16,000
shares of Series B Stock, a $211,635 term note (see Note 5), accrued interest
and accrued dividends to common stock at the conversion rate of $.25 per share.
 
    The 10% Cumulative Convertible Preferred Stock and the Series B Stock
required the Company to comply with certain affirmative and negative covenants
including, but not limited to, the timely filing of financial statements. In
addition, the covenants limited the Company's ability to issue new indebtedness,
issue other classes of preferred stock, pay dividends on the Company's common
stock, purchase equity securities, increase executive compensation, enter into
liens and acquire new businesses, among other items. The Company was also
subject to registration requirements under certain circumstances. As of October
31, 1996 and 1995, the Company was in violation of certain of the above
covenants.
 
    In August 1996, the Company issued 1,200,000 common shares for $300,000,
through a private placement. 1,000,000 shares were issued to a private investor
and 200,000 shares were issued to Renaissance Capital Group, Inc.
 
                                       16

<PAGE>
                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                        SIX MONTHS ENDED APRIL 30, 1997
 
NOTE 8. NET LOSS PER SHARE AMOUNTS AND QUARTERLY DATA
 
    Net loss per share is calculated after deducting dividends earned on
preferred stock of $235,504 in 1996. The conversions of the 10% and Series B
Cumulative Convertible Senior Preferred Stock at October 31, 1995 and exercise
of stock options and warrants for 1996 and 1995 have not been considered in the
calculations of loss per share, since the effect of such conversions/exercises
would be antidilutive.

                                      17

<PAGE>

                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY
 
    Global is made up of one wholly-owned subsidiary. Danzer Industries, Inc.
(Danzer) is principally engaged in the design, manufacture and installation of
fabricated metal products.
 
RESULTS OF OPERATIONS
 
    Global's sales revenues in the second quarter of fiscal 1997 were $2,492,310
compared to $2,142,063 for the same period last year, a increase of 16.4%. This
increase was primarily due to a firm truck market place.
 
    The Company's gross profit margin for the first quarter of fiscal 1997
increased from 18.1% to 21%. The increase in margin was attributable to reduced
material cost and increase in activity levels.
 
    Selling, general and administrative expenses increase $110,347 over the same
period last year. The increase was planned in expectation of expanding Danzer's
markets and revenue with additional attention to marketing and sales. The
Company's ratio of selling, general and administrative costs expressed as a
percentage of net sales was 15% for the second quarter vs. 12.3% for the same
period last year. The Company continues to monitor its costs in an effort to
improve this ratio.
 
LIQUIDITY AND CAPITAL RESOURCES
 
    Cash and cash equivalents during the second quarter ended April 30, 1996
decreased by $78,760. This was caused by the net income $84,204, increase in 
revolver borrowings $224,265, offset by an incrase in accounts receivable by 
$226,325. The decrease in the same period of prior year was $140,552.
 
    The Company has a working capital deficit of $103,487 at April 30, 1997
from a deficit of $401,436 at October 31, 1996. The Company's current cash
position has led to tighter credit terms with some of its vendors.
 
    It is anticipated that additional working capital may be required in order
to efficiently execute the Company's work in progress and backlog. The Company's
weakened financial condition has, in turn, led to tighter credit terms with
certain vendors and has therefore further strained the Company's working
capital.
 
    In light of the Company's backlog at January 31, 1997, its projected cash 
flow from operations and the market for capital equipment, it is anticipated 
that the Company will be dependent on increased sales,

                                      18

<PAGE>

                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY

higher profit margins and/or further infusions of capital in order to sustain 
its operations. The Company's ability to meet certain interest and principal 
payments, as well as its working capital needs to execute its backlog and 
generate sales volume during fiscal 1997, will be dependent upon the success 
of the Company's efforts to increase sales volume, as well as the 
profitability of new business. If it becomes likely that the Company is 
unable to meet its scheduled interest and principal payments on its debt 
securities, the Company may need to examine the restructuring of these 
instruments or the sale of certain assets to satisfy all or a portion of 
these outstanding liabilities.
 
    If such efforts to increase the level of business and profitability and/or
obtain an infusion of capital are unsuccessful, the Company may need to consider
additional steps to reduce costs, generate working capital and improve operating
efficiencies to sustain its operations. Such steps may involve the sale of
certain assets, the consolidation of operating activities, the sale or
discontinuance of a line of business, reductions in staff or other measures, the
effect of which is the reduction of expenses, conservation of cash, and/or
generation of working capital.
 
                                      19

<PAGE>

                   GLOBAL ENVIRONMENTAL CORP. AND SUBSIDIARY

    Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
 
                                GLOBAL ENVIRONMENTAL CORP.
 
                                By:            /s/ WILLIAM F. CLARKE
                                     -----------------------------------------
                                     CHIEF FINANCIAL OFFICER
 
Dated: June 23, 1997
 
                                       20