UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                  ------------

                                   Form 10-K/A

[X] ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15 (d) OF THE  SECURITIES  EXCHANGE
    ACT OF 1934.

                   For the fiscal year ended August 31, 1999

[   ]  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 0-15587

                  EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC.
             (Exact Name of Registrant as Specified in its Charter)

                 Delaware                                52-0991911
       (State or Other Jurisdiction of               (I.R.S. Employer
        Incorporation or Organization)              Identification No.)


                11019 McCormick Road, Hunt Valley, Maryland 21031
               (Address of Principal Executive Offices) (Zip Code)

        Registrant's Telephone Number Including Area Code: (410) 584-7000

        Securities registered pursuant to Section 12(b) of the Act: NONE

    Securities registered pursuant to Section 12(g) of the Act: Common Stock

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 by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-K/A or any  amendment to
this Form 10-K/A. [X]

The aggregate  market value of the voting and  non-voting  common equity held by
non-affiliates  of the  Registrant  as of  October  29,  1999 was  approximately
$2,629,000.

The number of shares outstanding of the Registrant's  Common Stock as of October
29, 1999 was 6,332,515.

                       DOCUMENTS INCORPORATED BY REFERENCE

1.   Portions of the 1999 Annual Report to Stockholders are incorporated by
     reference in Part II of this Report.
2.   Portions  of the Proxy  Statement  for the Annual  Meeting of  Stockholders
     scheduled for January 13, 2000 are incorporated by reference in Part III of
     this Report.

                                   ----------



<PAGE>

                  EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC.

                                   FORM 10-K/A
                                TABLE OF CONTENTS

Item                                                                        Page
----                                                                         ---
                                   PART I

  1   Business                                                                 1
  2   Properties                                                               8
  3   Legal Proceedings                                                        8
  4   Submission of Matters to a Vote of Security Holders                      8

                                 PART II

  5   Market for the Registrant's Common Stock and Related Shareholder
         Matters                                                               9
  6   Selected Financial Data                                                 10
  7   Management's Discussion and Analysis of Financial Condition and
         Results of Operations                                                11
  8   Financial Statements and Supplementary Data                             17
  9   Disagreements on Accounting and Financial Disclosure                    40

                                PART III

10    Directors and Executive Officers of the Registrant                      40
11    Executive Compensation                                                  40
12    Security Ownership of Certain Beneficial Owners and Management          40
13    Certain Relationships and Related Transactions                          40

                                 PART IV

14    Exhibits, Financial Statement Schedules, and Reports on Form 8-K        41
      Signatures                                                              45
      Exhibit Index                                                           46




<PAGE>
                                     PART I


ITEM 1.       BUSINESS

General

EA Engineering,  Science,  and Technology,  Inc., together with its wholly-owned
subsidiaries  ("EA"  or  the  "Company")  is an  international  consulting  firm
specializing in the fields of energy,  the  environment,  and health and safety.
Through  its  network  of more  than 20 branch  and  satellite  offices  and its
international  operations,  EA provides scientific,  engineering,  economic, and
management solutions to government,  industrial and utility clients. The goal of
the Company is to help  management  in industry  and  government  improve  their
performance and achieve their business and organizational objectives.

EA's  organizational  structure consists of the parent company,  EA Engineering,
Science, and Technology, Inc.; its wholly-owned subsidiaries,  EA International,
Inc. and EA Financial,  Inc.; and EA Financial's wholly-owned  subsidiaries,  EA
Global, Inc. and EA de Mexico, S.A. de C.V.

The Company was founded and initially  incorporated in Maryland in 1973; after a
name change, the Company was subsequently  incorporated in Delaware in 1986. The
Company was initially engaged in environmental assessment and permitting related
to power plant siting and expansion.  Since that time, the Company has responded
to market  conditions  and  opportunities  by expanding  its services and client
base. EA provides its services  through a network of offices located  throughout
the United States, Mexico and Guam.

Historically,  the demand for EA's services was driven largely by federal, state
and local environmental laws and regulations  impacting the Company's clients. A
great deal of cleanup  activity and  progress has been  generated as a result of
those laws and  regulations;  in 1996, the U.S.  environmental  market  reported
revenues of $186 billion. However, as with all regulatory-driven businesses, the
industry and the Company's  performance are inextricably  linked to the pace and
intensity with which the  regulations  are written,  promulgated,  and enforced.
During  the past  several  years the  regulatory  enforcement  pace has  slowed,
resulting in an increasingly competitive environmental market.

More recently, the demand for the Company's services has been stimulated by new,
more  business-oriented  factors,  including  the  recognition  that  it is more
cost-effective to prevent pollution than to remediate it after discharge and the
success  of  market-based  programs  such  as  wetlands  banking.  Within  these
incentive  systems  are  a  series  of  programs,  such  as  emissions  trading,
brownfields  redevelopment,  and  wetlands  banking,  that  provide a benefit to
clients and  contribute to the overall  enhancement  of  environmental  quality.
Additionally,  many  clients  now see  environmental  strategy  as a  method  of
increasing global competitiveness and enhancing profitability.  EA believes that
this  strategic  shift  will  stimulate  opportunity  for its  business-oriented
consulting services in both the domestic and international markets.

In our role as an advocate and  strategic  resource to our clients,  EA provides
the management perspective and technical skills to anticipate, identify, address
and resolve those energy, environmental,  and health and safety issues affecting
business performance and profitability.

Matters Relating to the Accounting Irregularities

Accounting Irregularities

On February 4, 2000, the Company announced that during its normal review of aged
unbilled revenue, it had discovered accounting irregularities.  As a result, the
Audit Committee of the Board of Directors (the "Audit Committee") authorized its
Associate General Counsel to perform an independent  investigation (the "Company
Investigation")  into these  accounting  irregularities.  The Company's  counsel
immediately engaged the forensic audit team of  PricewaterhouseCoopers  LLP, the
Company's current auditors,  to assist in the Company  Investigation  into these
accounting irregularities.

On April 10, 2000,  the Company  announced  that the Company  Investigation  was
complete.  The Company  Investigation  isolated the restatements to fiscal years
1999 and 1998 and the  quarterly  periods in fiscal year 1998  through  February
2000.  The  cumulative  effect of the  restatements  would reduce  earnings on a
pre-tax basis by $1.4 million.  In the same

                                      1
<PAGE>
announcement,  the Company  advised that Arthur  Andersen LLP, who had served as
the  Company's  auditors  through  August 31, 1999,  had notified the Company by
letter that its  previously  filed  reports on the  financial  statements of the
Company for the years ended  August 31, 1999 and 1998 should no longer be relied
upon.  The  Company  then  retained  PricewaterhouseCoopers  LLP to conduct  the
financial  audit and to assist in the  restatement  of earnings for the affected
accounting  periods.  The Company made adjustments to correct the misapplication
of  generally  accepted  accounting  principles  resulting  in improper  revenue
recognition. This error involved recording fictitious revenue resulting from the
actions of  individual(s)  who are no longer  employed by or associated with the
Company.  The Company has restated its previously reported financial results for
fiscal years ended August 31, 1999 and 1998 and the quarterly  financial results
for 1998, 1999 and the first two quarters of Fiscal 2000.

The  restated  net loss for fiscal  year 1999  totaled  $1,530,400  or $0.24 per
diluted share. Additionally,  the restated net loss for fiscal year 1998 totaled
$240,100 or $0.04 per diluted share.  The Company had originally  reported a net
loss of  $1,473,600  or $0.23 per  diluted  share and net income of  $604,800 or
$0.10  per  diluted  share in fiscal  years  1999 and  1998,  respectively.  The
cumulative  after tax effect of the  restatement for the two affected years is a
reduction in earnings of $901,700.

Management Consulting Services

EA provides  management  consulting  services to clients in the areas of energy,
the environment,  and health and safety. The Company's primary service areas are
Water Quality and Water Resources Management, Energy and Air Quality Management,
Ecotoxicology and Bioassessment,  Natural Resource and Risk Management, Sediment
Management,  Site  Characterization  and  Remediation,  Solid Waste  Management,
In-Plant Services,  Information Management Technology, and Strategic Planning of
Environmental Issues.

The multi-faceted nature of most environmental  problems,  however,  requires an
interdisciplinary  team of professionals to provide  integrated  solutions,  and
strict classification by service area is not practical for most of the Company's
consulting  practice.  In  providing  its  services,  EA has  developed  certain
remedial and  analytical  technologies,  planning and management  services,  and
processes for the mitigation and control of  environmental  damage and risks. In
addition,  we  assist  clients  in  responding  to issues  raised by  regulatory
agencies,  community groups, and "interested" organizations.  All of the service
areas are part of the vertically  integrated  capabilities the Company may offer
its clients.

The  Company's  services  normally  are  performed  by  a  team  of  scientists,
engineers, planners and economists and include a combination of the following:

o  Consultation  to determine  the nature and scope of potential  environmental,
   energy, or health and safety problems.

o  Development  and  implementation  of solutions to  identified  environmental,
   energy,  or  health  and  safety  issues.  o  Economic   analyses,   database
   development,  strategic and tactical planning of environmental,  energy,  and
   health and safety programs.

o On-site sampling,  monitoring,  and measurement of discharges and emissions. o
Evaluation of  environmental or human health risks. o Preparation of reports for
regulatory agencies.

o Participation and representation of clients in public and regulatory hearings.
o   Engineering   certification   of  design   specifications.   o  Design   and
implementation of remedial action.

o Environmental program management and outsourced support.

The  Company's  contracts  are  generally  undertaken  on a  time-and-materials,
fixed-price,  or  cost-plus-fixed-fee  basis.  Fixed-price contracts and certain
time-and-materials  and cost-plus contracts with upset limits require EA to bear
the risk of cost  overruns.  Most of the  Company's  contracts  provide that the
client may at any time cancel any portion of the work not yet performed.

The following  table reflects the  approximate  percentage of  consolidated  net
revenue  derived by contract type in each of the three years in the period ended
August 31, 1999:


                                       2
<PAGE>
<TABLE>
<CAPTION>

                                                Year Ended August 31,
-----------------------------    ---------------------------------------------------
                                        1999              1998           1997
                                    As Restated)     (As Restated)
-----------------------------    ------------------ ---------------- ---------------
<S>                                      <C>             <C>             <C>
Time-and-materials                        37%             33%             34%
Fixed-price                               41%             48              44
Cost-plus-fixed-fee                       22              19              22
-----------------------------            ---             ---             ---
                                         100%            100%            100%
=============================            ===             ===             ===
</TABLE>

During  fiscal 1999,  the majority of the  Company's  work  continued to be from
fixed-price and time-and-materials  contracts.  The Company considers this to be
an  industry  trend  whereby  clients  transfer  additional  risk  to the  prime
contractor and the Company transfers additional risk to its subcontractors, when
applicable.

In general,  the Company's  contracts vary in length from one month to ten years
and  require  performance  of a  particular  project  within  the  contractually
specified  timeframe.  Although the Company holds certain federal contracts with
options for longer durations, most of these contracts require annual renewals by
the client. A substantial  portion of EA's contracts  represent the provision of
separate services required from time to time by ongoing clients.

Clients

EA  provides  services to  industrial,  utility,  and  government  clients  both
directly  and  indirectly  through  work  performed  for   architects/engineers,
engineer/contractors,  law firms and financial institutions.  The Company's goal
is to assist its clients in achieving  their  business and growth  objectives as
cost-effectively and dependably as possible.

During fiscal 1999, the Company  provided  services to more than 400 industrial,
utility and government  clients  through more than 1,250 projects in the private
sector and 350 projects in the federal government sector.  Although more private
sector  projects  were  performed,  the portion of net  revenue  provided by the
federal  government  was 54%, 50%, and 46% in fiscal years 1999,  1998 and 1997,
respectively.  The Company  believes that a diversified mix of business  revenue
derived from each of its client  sectors  (federal  government,  state and local
governments,  industry and utilities) will help ensure its continuing  financial
success.  As EA's mix of business  varies by  geographic  location,  the Company
implemented  a regional  organization  structure  in fiscal  1999 to support the
decentralization of its marketing and business  development  program. A regional
structure places business  development and marketing  resources  directly within
proximity  to  regional  clients  where they are needed  and  further  increases
concentration  on  operations.  Under the regional  structure,  EA's  operations
include the Northeast, Mid-Atlantic, Southeast, North Central, South Central and
West.

Although a  significant  portion of net revenue was derived from agencies of the
federal  government,  the Company's  services are  performed for many  different
departments and in many different  regions of the country,  thereby reducing the
financial  risks  associated  with  delays  or  cancellation  of any  particular
contract.  In management's opinion, the loss of any one of the Company's clients
other than a major government client within its major revenue-generating sectors
would not have a material effect on operations or profitability.

The following table reflects the  approximate  percentage of net revenue derived
from the  Company's  major  client  sectors  for each of the three  years in the
period ended August 31, 1999:

<TABLE>
<CAPTION>

                                                      Year Ended August 31,
-------------------------------------- ----------------------------------------------------
                                             1999              1998             1997
                                        (As Restated)     (As Restated)
-------------------------------------- ----------------- ----------------- ----------------
<S>                                              <C>             <C>             <C>
Federal government                                54%             50%             46%
Industrial and other private sector               36              37              42
Utilities                                          2               6               5
State and local government                         8               7               7
-------------------------------------            ---             ---             ---
                                                 100%            100%            100%
=====================================            ===             ===             ===
</TABLE>

                                       3
<PAGE>
Sales and Marketing

The Company markets its services from its headquarters in Hunt Valley,  Maryland
and through its network of branch and  satellite  offices  located in and around
major  metropolitan  cities  across the United  States.  The  Company  employs a
variety of business development and marketing  techniques,  including one-on-one
client  meetings  and  presentations,  hosting  and  participating  in  industry
seminars,  responding to formal requests for proposals,  initiating  direct-mail
programs, and establishing an ongoing public relations/technical article program
within industry trade journals.

A  significant  portion of new business  arises from prior  client  engagements.
Clients  frequently expand the scope of work to include follow-on  complementary
activities and new  activities  and often refer us to their  colleagues at other
locations.  It is  estimated  that 41% of new awards in fiscal  1999 were due to
expanded scope of work at existing client locations.  Additionally,  the Company
has an active business development program to identify new clients that have not
yet engaged its services.  In fiscal 1999, the Company was awarded approximately
$12  million,  or 24%,  from new  clients.  The  Company  often teams with other
consulting  firms  or  provides  its  services  as  a  subcontractor  to  larger
architect/engineer or engineer/contractor  firms. The Company tracks prospective
business through an opportunity pipeline network.

Backlog

At August 31, 1999, the Company's total contract backlog was approximately $35.9
million  compared to contract  backlog of $43.4 million at August 31, 1998.  The
decrease  in total  contract  backlog is  largely  attributable  to the  Company
divesting its Analytical  Services  segment during fiscal 1999, which had annual
sales of  approximately  $7.0 million and certain  federal  contracts  that were
completed in fiscal 1999.  Because  subcontractor and other direct project costs
can change  significantly from project to project,  the change in total contract
backlog is not  necessarily a true indication of business  trends.  Accordingly,
the Company  considers net backlog (total  backlog less estimated  subcontractor
and other project  costs) as its primary  measure of backlog.  The Company's net
contract  backlog was  approximately  $24.0  million at the end of fiscal  1999,
compared to  approximately  $22.2  million at the end of fiscal 1998.  This $1.8
million  increase is due to a greater  percentage  of backlog in the  industrial
sector  which  generally  has less  subcontractor  and other  direct  costs than
federal  sector  projects.  The Company  expects that  approximately  80% of the
contract  "fiscal"  backlog  will be  completed  during  the  fiscal  year.  The
Company's total contract backlog attributable to federal government contracts as
of August 31, 1999 was $21.8 million  ($14.2  million,  net),  compared to $27.8
million ($13.5 million, net) a year earlier.

In addition to this  contract  backlog,  at August 31,  1999,  the Company  held
indefinite  delivery/indefinite  quantity  (ID/IQ) type  contracts  from various
clients,  principally government agencies for up to $79 million compared to $217
million at August 31, 1998.  The decrease is due to three large ID/IQ  contracts
that were completed in FY99. The expiring  contracts  contributed  approximately
$11.3  million,  or 22%,  of new awards and  approximately  $8.7  million in net
revenue,  or 25%,  in  fiscal  1999.  Although  the  completion  of these  ID/IQ
contracts is significant, the Company plans to keep awards and revenue steady in
fiscal  2000.* To achieve  growth into  fiscal 2000 and beyond,  the Company has
made several  investments  in the  international  and domestic  markets  opening
offices in Miami and New York City, as well as expanding its Mexico operation in
fiscal 1999. In addition,  the Company expanded in Texas by opening an office in
Houston in fiscal 1999 after winning a large basic  ordering  agreement with its
largest private sector client.

There can be no assurance, however, that work under any of these ID/IQ contracts
will  be  authorized  or  that  work  once  authorized  will  not be  cancelled.
Generally,  these  contracts  provide for a fixed  percentage of profit based on
estimated  costs.  In the event of  cancellation,  the  Company is  entitled  to
recover its incurred costs and associated profit. Terminations and cancellations
of government contracts have not been material in the past. The level of backlog
may fluctuate  during each year,  and  accordingly,  the backlog at any point in
time does not  necessarily  reflect  near-term  anticipated  operating  results.
Reliance on major government  contracts subjects the Company to risks associated
with public budgetary  restrictions  and  uncertainties,  discrepancies  between
awarded contract amounts and actual revenues,  and cancellation at the option of
the government. The Company attempts to mitigate these risks by staffing only to
meet reasonably anticipated average workloads, by using subcontractors to handle
peak  workloads,  and by  obtaining  termination  benefit  contract  provisions.
Cancellation of any of the Company's major government contracts,  however, could
have a material adverse effect on the Company.*

The Company also provides  services on major long-term  private sector contracts
under basic ordering agreements that provide for work on a task basis during any
particular  year.  For  example,  the  Company  was  awarded a $3 million  basic
ordering

                                       4
<PAGE>
agreement with Exxon for sites near Houston,  Texas, and was awarded an
open-ended national basic ordering agreement with Hertz. Upon receipt of related
authorizations,  the work is included in contract backlog. Because such specific
authorizations are generally for periods  considerably shorter than the duration
of the period the Company expects to perform  services for a particular  client,
management  believes that its backlog figures are not necessarily  indicative of
its future revenue.

Employees

As of August 31, 1999,  the Company had  approximately  370 full-time  employees
compared to  approximately  400  full-time  employees  at August 31,  1998.  The
decrease  in  employees  was a result  of staff  reductions  made in the  second
quarter as part of restructuring  efforts and the sale of EA Laboratories in the
third quarter  which had a staff of  approximately  60.  Adjusting to remove the
effects of the strategic staff  reductions in fiscal 1999, the Company  actually
increased in size by approximately 60 employees. Most of the Company's employees
are engaged in performing  scientific,  engineering,  remediation and consulting
services;  the remainder  provides  executive,  administrative and other support
services.  The Company also hires  part-time or temporary  personnel to meet the
requirements  of  a  particular  contract.   EA's  staff  includes  professional
engineers,  biologists,  chemists,  geologists,  industrial  hygienists,  public
health scientists, regulatory specialists,  toxicologists,  industrial planners,
computer scientists, and business managers.

The  Company  has  invested  in  training  and  mentoring  programs to promote a
"continuing  learning"  process  within the firm.  The  Company  has  instituted
several programs including project manager training,  sales management  seminars
and technical development programs,  and has an established  professional career
path   development   program.   Additionally,   the  Company  offers  a  tuition
reimbursement program for all employees of the firm.

None of the Company's employees is represented by a union. The Company considers
its relationship with employees to be good.

Competition

Nationwide,  the  environmental  industry  employs more than one million people,
working at over 100,000 firms and generating revenues in excess of $186 billion.
The  environmental  engineering  and  consulting  market  continues to be highly
competitive and requires skilled and experienced  professional,  technical,  and
management personnel.  Today, the domestic market for environmental services can
be characterized as flat in revenue and income.  Over the past several years, in
an effort to  reduce  costs and  increase  volume,  the  environmental  industry
experienced an increase in merger and acquisition activity, resulting in several
mega-environmental firms with revenues greater than $500 million.

Typical projects, especially those in excess of $100,000, are bid on by numerous
firms.  The principal  competitive  factors are client  relationships,  pricing,
reputation,   and  quality  of   services,   expertise,   and  local   presence.
Increasingly,  multiple firms are deemed "technically  qualified," leaving price
and established relationships to determine the winning bid.

EA believes that its  favorable  competitive  factors are its  multidisciplinary
capabilities,  its  reputation  for quality of  services,  and its  geographical
dispersion.  In each market sector,  EA competes with engineering and consulting
firms which are both larger and smaller  than the Company,  although  management
believes no one firm  currently  dominates a  significant  portion of any of the
service areas either regionally or nationally.

Regulatory Matters

Environmental laws and regulations have been enacted by federal, state and local
governments in response to public pressure and scientific  evidence  identifying
adverse  effects of public and business  activity on the  environment  and human
health and safety. Historically,  compliance with these laws and regulations was
the primary driver in creating  demand for the Company's  services and continues
to be a prime  source of demand for EA's  services.  Among the dozens of federal
environmental  statutes and regulations under which EA provides services are the
following, broad-based statutes:

The Safe Drinking Water Act (SDWA) of 1974, reauthorized in 1996. In addition to
its primary mission of protecting the nation's  drinking water supplies  through
the regulation of public water systems,  the reauthorized Act expands  watershed
protection,  emphasizes the control of non-point sources of  contamination,  and
introduces a revolving  funding  program of nearly $9.6 billion through the year
2006. The reauthorized SDWA will have a strong impact on the Company's state and
local  government  clients,  who are  responsible  for  ensuring the quality and
quantity of their drinking water supplies.

                                       5
<PAGE>
The Federal Water Pollution Control Act of 1972 (known as the Clean Water Act or
CWA)  established a framework for controlling the discharge of pollutants to the
environment from public and private facilities.  The Act centers on the National
Permit Discharge  Elimination  System (NPDES),  which establishes  controls over
discharges  from  regulated  facilities,  and  includes  provisions  to  control
stormwater,  industrial runoff, and nonpoint sources of pollution.  In addition,
the CWA establishes  standards to manage ecological  habitats,  coastal regions,
watersheds and wetlands.

The  Resource   Conservation  and  Recovery  Act  of  1976  (RCRA)   establishes
"cradle-to-grave" regulations affecting the generation,  management and disposal
of hazardous  waste. In addition,  the Act regulates  non-hazardous  solid waste
generated  by  households,  commercial  and public  facilities,  and  industrial
sources.  Specific RCRA  provisions  focus on land disposal of hazardous  waste,
underground and  above-ground  storage tanks,  site  remediation and groundwater
decontamination.

The Clean Air Act (CAA)  Amendments  of 1990,  which was  reauthorized  in 1990,
established a series of programs to control  airborne  emissions from mobile and
stationary sources. The Act confirmed the goal of attaining National Ambient Air
Quality  Standards  (NAAQS) air quality levels  throughout  the U.S.,  requiring
"nonattainment"  areas to establish compliance  programs.  The amendments target
nonattainment problems with a broad array on requirements,  including additional
controls  on  industrial  facilities,  tighter  emissions  standards  from motor
vehicles, and the use of alternative clean fuels.

The CAA Amendments of 1990 also  established  requirements  for the EPA to adopt
Risk  Management  Program  (RMP)  requirements,  affecting an  estimated  64,000
facilities nationwide,  handling toxic,  flammable,  and /or reactive chemicals.
These  regulations were adopted in June 1996 and became effective June 1999. The
regulations  address programs and procedures designed to prevent or minimize the
consequences of accidental releases of hazardous materials that could affect the
public or  environment.  Affected  facilities  will be  required  to develop RMP
programs  and to share the  results  of that  RMP,  including  their  worst-case
scenario data, via the Internet.

The Comprehensive Environmental Response, Compensation and Liability Act of 1980
(CERCLA, or Superfund) and its subsequent  reauthorizations seeks to address the
current  consequences  of  past  hazardous  waste  management   practices.   Any
organization that owns or owned a site on which hazardous materials are present,
or that  operates  or operated a facility  generating  or  containing  hazardous
materials, may be liable under CERCLA for cleanup responsibility.

The  Brownfields  Initiative  was  introduced by the Clinton  Administration  to
resolve the cleanup and liability  issues  associated with  contaminated,  often
abandoned,  industrial and commercial  facilities  known as  "brownfields."  The
Initiative  sought to  encourage  economic  development  and  property  reuse of
brownfields,  which typically are located in urban areas,  by resolving  cleanup
and liability  issues to owners,  operators and  prospective  developers of such
sites.  Most states and many local  governments  now have voluntary or mandatory
brownfields programs in place.

The  Intermodal   Surface   Transportation   Efficiency  Act  (ISTEA)  of  1991,
established  funding  for  mass  transportation  and  public  transit  programs;
introduced the  Congestion  Mitigation and Air Quality (CMAQ) program to provide
funding for non-attainment areas under the CAA to meet attainment deadlines; and
included  funding  for  alternative-fuel  transit  buses.  In  1998,  ISTEA  was
reauthorized  as the  Transportation  Equity Act for the 21st Century  (TEA-21).
TEA-21 earmarks $218 billion for highway and transit  projects over the next six
year period, streamlining the environmental review process, promoting the use of
market-based  incentives,  and giving  states the  flexibility  to use funds for
transportation projects that include reuse of brownfield sites.

The  National  Energy  Policy  Act  (EPAct)  of  1992  established  the  use  of
energy-efficient  technologies  as a national  priority for  improvement  of air
quality and set a goal of 30%  displacement of petroleum fuels with  alternative
fuels in vehicles by the year 2010.  To that end,  EPAct set a schedule by which
industrial  sectors  beginning with the federal  government would be required to
purchase alternative-fueled vehicles.

In addition to the historic EA markets represented by these federal regulations,
two key factors have emerged to expand the Company's market  opportunities.  The
first factor centers on  international  environmental  standards and regulations
including  the  International   Standard  Organization  (ISO)  14000  series  of
certifications,   which  commits  participants  to  an  approach  of  continuous
environmental  improvement and exacting environmental performance standards, and
the Kyoto  Accord,  which the United States  signed in December,  1997,  thereby
committing to a reduction of greenhouse gas emissions to 1990. The second factor
stems  from  a  strategic  shift  in  approach  by US  environmental  regulators
including  the  US  Environmental   Protection  Agency.   Illustrated  by  EPA's
"Common-Sense  Initiative" and the Vice President's "Reinvention of Government,"
this  new  approach  emphasizes   market-based   incentives,   industry-specific
regulation,

                                       6
<PAGE>
pollution  prevention and voluntary  responses by the regulated  community.  The
interest of a growing number of companies to move beyond compliance to a higher,
self-imposed   standard  of  "sustainability"  or  "environmental   stewardship"
introduces substantial new markets for EA's management consulting services.

The Fish and Wildlife Coordination Act (initially enacted 10 March 1934) relates
specifically to the requirement for coordination  with resource agencies for all
federally funded projects.  Consultation has become increasingly  important over
recent years for numerous projects.

o        State Departments of Natural Resources
o        U.S. Army Corps of Engineers
o        State Fish and Game Department
o        U.S. Forest Service
o        State Water Resources Control Boards
o        National Marine Fisheries Service
o        U.S. Fish and Wildlife Serve
o        State Historical Preservation Offices
o        Bureau of Land Management
o        National Park Service

The  Endangered  Species  Act  (Public  Law  93-205 and  amendments)  enacted in
December  1973,  specifies  the  requirements  for  the  protection  of  species
determined to be endangered  by the U.S.  Fish and Wildlife  Service.  Under the
requirements  of the Act, any Federal  actions or actions by entities  receiving
Federal funds,  must not  jeopardize  the continuing  existence of endangered or
threatened  plants  or  wildlife,  nor  result  in the  destruction  or  adverse
modification  of critical  habitat.  Such  projects must involve a review by the
Fish and Wildlife  Service of existing  conditions and a  determination  that no
known rare,  threatened,  or endangered species are involved in the project area
or, if such species are  identified,  that a specific set of  consultations  and
reviews by conducted.

The National  Historic  Preservation  Act (NHPA) has established sets of Federal
policy and  implementing  regulations  for the protection of America's  cultural
environment  that can come into conflict  with the needs of a specific  project.
Section 106 of the NHPA  requires  Federal  agencies to consider  the effects of
their actions on historic properties and seek comments from the Advisory Council
on Historic Preservation.

The Wild and  Scenic  Rivers  Act of 1968  designated  certain  rivers  to be of
national  significance  because they possess  outstanding and remarkable scenic,
recreational, geologic, fish and wildlife, historic, cultural, and other similar
values.  These  rivers,  according  to the law,  should  be  preserved  in their
free-flowing  conditions  for the  benefit and  enjoyment  of present and future
generations.

Insurance

The Company maintains a full range of insurance coverage including  professional
liability insurance and pollution liability coverage.  There can be no assurance
that the  Company  will not incur  liability  with  respect to the  professional
services  it  renders  or that  such  liability,  if  incurred,  will not have a
material adverse effect upon the Company. However, these insurance policies will
provide limited protection and defense up to their stated amounts.

EA has  endeavored to protect itself through  contractual  indemnification  from
clients when  possible and by  intensifying  its  existing  quality  control and
assurance,  internal risk management, and health and safety programs. Generally,
indemnification is not available under the Company's government  contracts.  The
Company's  quality control and assurance  program includes a control function to
establish   standards  and  procedures  for  performance  and  documentation  of
performance  of project  tasks,  and an assurance  function to audit the control
function and to monitor  compliance  with procedures and quality  standards.  An
additional  objective  of this  program  has  been to  establish  practices  and
procedures


                                       7
<PAGE>
to protect EA personnel from hazardous substances.  This is accomplished through
a company-wide  occupational  safety and health  monitoring  program  managed by
corporate health and safety professionals.

Equipment

The Company owns  substantially  all of the  computer,  monitoring,  testing and
other equipment  required to render its various consulting and testing services.
Additionally,  the Company leases certain computer,  office furniture, and other
equipment.  Equipment and various other items the Company purchases on behalf of
clients are available from several suppliers and the Company is not dependent on
any one supplier.

Environmental and Other Considerations

The Company does not believe that its compliance  with federal,  state and local
laws and regulations relating to the protection of the environment will have any
material effect on its capital expenditures, earnings or competitive position.

ITEM 2.  PROPERTIES

The  Company's  headquarters  and  Baltimore  regional  office  are  located  in
approximately  76,100 square feet of leased space, of which  approximately 4,200
square feet are being sublet.  Leases for these facilities are with partnerships
whose members include the Chairman of the Board of EA and certain members of his
family.

The  Company's  primary  branch and  satellite  offices in the United States are
located in:

<TABLE>
<CAPTION>

<S>                                <C>                              <C>
 Baltimore, Maryland               Boston, Massachusetts            Lincoln, Nebraska
 New Castle, Delaware              San Francisco, California        Dallas, Texas
 New York, New York                Sacramento, California           Houston, Texas
 Newburgh, New York                Seattle, Washington              Fairbanks, Alaska
 Syracuse, New York                Chicago, Illinois                Honolulu, Hawaii
 Iselin, New Jersey                Oak Brook, Illinois              Miami, Florida
                                   Pittsburg, Pennsylvania

</TABLE>

In addition, the Company has established office locations in Mexico City, Mexico
and Yigo, Guam.

The Company  leases  office and storage  facilities  for each  regional  office.
Presently,  the facilities  are suitable,  adequate,  and generally  utilized to
capacity.

ITEM 3.  LEGAL PROCEEDINGS

There are no material pending legal proceedings to which the Company is a party.
The  Company is  involved  in various  claims and legal  actions  arising in the
ordinary course of business.  In the opinion of the Company,  the disposition of
these matters will not have a material adverse effect on the financial position,
results of operations or liquidity of the Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No  matters  were  submitted  to a vote of  security  holders  during the fourth
quarter ended August 31, 1999.


                                       8
<PAGE>
                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER
         MATTERS

On  October  31,   1986,   EA  common   stock  began   public   trading  in  the
over-the-counter  market under the symbol "EACO." The following  table shows the
high and low closing sales price  reported on the NASDAQ  National  Market Small
Cap Systems ("NASDAQ"). As of October 13, 1999, the Company's common stock began
trading on the NASDAQ  Small Cap Market  System.  Such  over-the-counter  market
quotations,   however,  reflect  inter-dealer  prices,  without  retail  markup,
markdown or commission and may not necessarily represent actual transactions.

<TABLE>
<CAPTION>

                                                        High        Low
<S>                        <C>                          <C>         <C>
 Fiscal 1998:              First Quarter                $2.44       $1.88
                           Second Quarter                2.50        1.75
                           Third Quarter                 4.00        2.25
                           Fourth Quarter                3.25        1.56

 Fiscal 1999:              First Quarter                $2.00       $1.00
                           Second Quarter                1.50        1.00
                           Third Quarter                 1.56        0.94
                           Fourth Quarter                1.38        1.00
</TABLE>

On October 29, 1999, the closing price of the common stock as reported by NASDAQ
was $0.656 per share.  On that date,  there were  approximately  870  holders of
record.

To date the Company has not paid any cash dividends on its common stock and does
not anticipate paying such dividends in the foreseeable future.


                                       9
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

The selected financial data for the periods indicated have been derived from the
audited  consolidated  financial statements of the Company. In the quarter ended
May 31, 1999, the Company divested its Analytical Services segment. The selected
financial  data for all these years have been  adjusted to show only  continuing
operations  and does not reflect the  Analytical  Services  segment.  These data
should be read in conjunction  with the  consolidated  financial  statements and
notes thereto included in Item 8.

<TABLE>
<CAPTION>

                                                                              Year Ended August 31,
-----------------------------------------------------------------------------------------------------------------
                                                       1999         1998         1997        1996        1995
                                                   (As Restated)(As Restated)
-----------------------------------------------------------------------------------------------------------------
                                                        (in thousands, except per share amounts)
<S>                                                 <C>          <C>          <C>          <C>          <C>
Operations data:
    Total revenue                                   $ 48,727     $ 52,237     $ 68,189     $ 80,933     $85,644
    Net revenue                                       34,146       35,320       37,443       48,495      54,761
    (Loss) income from continuing operations          (2,228)        (187)      (6,863)          38       4,099
    Net (loss) income from continuing operations      (1,447)        (178)      (4,615)        (124)      2,804

    Basic (loss) earnings per share from
           continuing operations                    $  (0.23)    $  (0.03)    $  (0.74)    $  (0.02)    $  0.47
    Diluted (loss) earnings per share from
         continuing operations                      $  (0.23)    $  (0.03)    $  (0.74)    $  (0.02)    $  0.45


    Weighted average shares outstanding                6,312        6,255        6,206        6,138       5,998
    Diluted weighted average shares
        outstanding                                    6,312        6,255        6,206        6,138       6,174

Balance sheet data:
    Working capital                                 $  9,331     $  8,807     $ 10,323     $ 15,955     $17,663
    Total assets                                      22,664       22,140       26,341       33,329      36,368
    Short-term borrowings                               --           --           --           --          --
    Long-term borrowings, net of
        current portion                                3,326        1,349        2,332        2,665       4,033

    Stockholders' equity                            $ 11,616     $ 13,046     $ 13,097     $ 18,558     $18,880
</TABLE>

                                       10
<PAGE>

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

General

The Company's results of operations are significantly  affected by the timing of
the award of contracts,  the timing of performance on contracts,  and the extent
to which the Company's  employees are  performing  billable  tasks as opposed to
engaging in preparing contract proposals,  bids and other required  non-billable
activities.  Results of  operations  may also be affected to the extent that the
Company chooses not to reduce its professional  staff during a period of reduced
demand for its services.  Due to these factors,  quarterly results of operations
are not necessarily indicative of the results of operations for longer periods.

The Company,  in the course of providing  its services,  routinely  subcontracts
such services as drilling,  laboratory analyses, and other specialized services.
In addition, as described in the "General" section of Item 1, the use of teaming
partners for the  performance  of services  similar to those of the Company,  is
included in  subcontracts.  In accordance  with  industry  practice and contract
terms that generally provide for the recovery of overhead costs, these costs are
passed  directly  through to clients and are included in total revenue.  Because
subcontractor costs and direct charges can change  significantly from project to
project,  the change in total revenue is not  necessarily  a true  indication of
business trends. Accordingly,  the Company considers net revenue, which is total
revenue  less  subcontractor  and other  direct  project  costs,  as its primary
measure of revenue.

On February 4, 2000, as a result of the  discovery of accounting  irregularities
related to unbilled  revenue,  the Audit  Committee  of the  Company's  Board of
Directors  ("Audit  Committee")  initiated the Company  Investigation  into such
matters which has recently been  completed.  In June 2000, the Company  restated
its financial  results for fiscal years 1999 and 1998 and the quarterly  periods
in fiscal year 1998 through February 2000. The financial  information  presented
here has been restated to incorporate all relevant information obtained from the
aforementioned investigation.

The Company made adjustments to correct the misapplication of generally accepted
accounting  principles  resulting in improper  revenue  recognition.  This error
involved   recording   fictitious   revenue   resulting   from  the  actions  of
individual(s) who are no longer employed by or associated with the company.

The  restated  net loss for fiscal  year 1999  totaled  $1,530,400  or $0.24 per
diluted share. The Company originally reported a net loss of $1,473,600 or $0.23
per diluted share for fiscal year 1999.

Additionally,  the restated  net loss for fiscal year 1998  totaled  $240,100 or
$0.04 per diluted share. The Company originally  reported net income of $604,800
or $0.10 per diluted share in fiscal year 1998.

Results of Operations

The following table sets forth the percentage relationships of selected items in
the consolidated statement of operations to net revenue for the years indicated.
The table has been adjusted to show the  relationship  of continuing  operations
for each  year  and does not  include  results  of the  discontinued  Analytical
Services segment.

                                       11
<PAGE>
<TABLE>
<CAPTION>

                                                                Year Ended August 31,
                                                  --------------------------------------------
                                                       1999           1998           1997
                                                  (As Restated)    (As Restated)
 ------------------------------------------------ ---------------  -------------  ------------
<S>                                                   <C>            <C>           <C>
Net revenue ..................................          100.0%         100.0%         100.0%
                                                      -------        -------        -------
Operating expenses:
  Direct salaries and other operating expenses           76.7           76.2           89.0
  Sales, general and administrative ..........           23.6           25.0           21.3
  Gain on "key employee" life insurance ......         --               (0.7)        --
  Restructuring charges ......................            6.2         --                8.0
                                                      -------        -------        -------
    Total operating expenses .................          106.5          100.5          118.3
                                                      -------        -------        -------
Loss from operations .........................           (6.5)          (0.5)         (18.3)
Interest expense, net ........................           (0.5)          (0.4)          (0.8)
                                                      -------        -------        -------
Loss before income taxes .....................           (7.0)          (0.9)         (19.1)
Benefit for income taxes .....................           (2.8)          (0.4)          (6.8)
                                                      -------        -------        -------
    Net loss from continuing operations ......           (4.2)%         (0.5)%        (12.3)%
                                                      =======        =======        =======
</TABLE>

Fiscal 1999 (As Restated) Compared to Fiscal 1998 (As Restated)

Net  revenue  from  continuing  operations  in  fiscal  1999  decreased  3.3% to
$34,146,900 from  $35,319,900.  This decrease in net revenue is primarily due to
lower  contract  volume with the federal  government  due to the  completion  of
certain indefinite  delivery/indefinite quantity contracts. In addition to lower
contract  volume,  $500,000 of certain  noncollectible  prior period revenue was
written off in the second  quarter of fiscal 1999.  Additionally  impacting  the
decrease,  in  fiscal  1998  the  Company  realized  approximately  $676,700  in
additional  contract  net revenue on certain  landfill  projects  which had loss
provisions in fiscal 1997.

Direct salaries and other operating costs of $26,199,400  slightly decreased for
the twelve  months ended August 31, 1999  compared to  $26,935,300  in the prior
fiscal period.  However,  as a result of lower net revenue,  direct salaries and
other  operating  costs as a  percentage  of net revenue  increased  to 76.7% in
fiscal 1999 compared to 76.2% in fiscal 1998.

                                       12
<PAGE>
Sales, general and administrative  costs decreased 8.9% to $8,042,500,  or 23.6%
of net revenue, in fiscal 1999 from $8,832,700, or 25.0% of net revenue, for the
twelve  months  ended  August 31,  1998.  The decrease is due to lower sales and
marketing  related costs incurred as a result of strategic  initiatives  made in
fiscal 1999.  These  initiatives  included a restructuring in the second quarter
reducing personnel and implementing a regional sales organization to support the
decentralization of its marketing and business development program.

In the prior  period  ended  August 31,  1998,  the  Company  recorded a gain of
$261,100,  reducing its operating expenses. The gain was related to the increase
in the cash surrender value of "key employee" life insurance  policies  included
in the Company's balance sheet.

To address the Company's  high overhead in relation to net revenue,  in February
1999,  the  Company  implemented  several  cost-cutting  measures  to effect its
long-term  profitability  objectives  by aligning  expenses  more  directly with
revenues. In connection with the restructuring,  the Company incurred a one-time
charge of  $2,132,600  related  primarily  to severance  agreements  of 30 staff
members including several senior sales and executive staff.

As a result of the above factors,  the loss from  continuing  operations for the
twelve  months  ended  August 31, 1999 was  $2,227,600,  or 6.5% of net revenue,
compared  to loss  from  continuing  operations  in the prior  fiscal  period of
$187,000,  or 0.5% of net revenue.  Interest expense,  net, increased $58,800 in
fiscal 1999 compared to fiscal 1998 due to a higher line of credit  balance used
to fund operating activity.

For the twelve  months  ended  August 31,  1999,  the Company had a benefit from
income taxes of $961,400  compared to a benefit from income taxes of $130,900 in
the prior fiscal year.  This  represents an effective rate of 40% in fiscal year
1999 and 42.4% in fiscal 1998.

The net loss from  continuing  operations  for the fiscal year ended  August 31,
1999  was  $1,446,700,  or 4.2% of net  revenue,  compared  to a net  loss  from
continuing operations of $177,800, or 0.5% in the prior fiscal period.

For the twelve months ended August 31, 1999, the Company had a net loss from its
discontinued Analytical Services segment of $83,700. Included in this loss was a
net gain of $35,300 on the sale of the segment.  The discontinued segment in the
prior fiscal period had a net loss of $62,300.

As a result of the above,  the Company had an overall loss of $1,530,400 or 4.5%
of net revenue for the twelve  months ended  August 31, 1999,  compared to a net
loss of $240,100, or 0.7%, in the prior fiscal period.

Fiscal 1998 (As Restated) Compared to Fiscal 1997

Net revenue from  continuing  operations  during fiscal 1998  decreased  5.7% to
$35,319,900 from $37,442,800.  The decrease in net revenue was due to lower than
anticipated sales in the industrial sector. Although sales and marketing efforts
targeted  this  market  and won  approximately  150 new  clients,  larger-volume
projects  were not  achieved  as of the end of the  fiscal  1998  period.  Lower
industrial sector sales were offset by improved net sales in the federal,  state
and local government, and utility sectors.

Direct salaries and other operating costs decreased 19.2% to $26,935,300 in 1998
from $33,344,200 in 1997, or 76.2% and 89.0% of net revenue,  respectively.  The
decreases were  attributable  to increased  staff  utilization and lower overall
non-labor  operating  costs.  The Company  maintained a  utilization  rate (time
charged  to  clients)  of more than 95% for its  technical  staff and an overall
Company  rate of  74%.  Significant  savings  were  also  achieved  by  lowering
equipment  and property  lease costs by  $1,900,000  in fiscal 1998  compared to
fiscal  1997.  These  savings were  achieved by  subletting  unused  facilities,
renegotiating  existing  leases,  and  changing  to  a  different  supplier  for
computer-related items.

Sales,  general and  administrative  costs increased 10.9% to $8,832,700 in 1998
from  $7,961,100 in 1997, or 25.0% and 21.3% of net revenue,  respectively.  The
increase in cost was  primarily  related to  additional  investment in sales and
marketing expenses in fiscal 1998 compared to the prior year.

In the third  quarter of fiscal 1998,  the Company  recorded a gain of $261,100,
which  reduced its operating  expenses.  The gain was related to the increase in
the cash surrender value of "key employee" life insurance  policies  included on
the Company's balance sheet.

In  the  third  quarter  of  fiscal  1997,  the  Company   implemented  a  major
organizational   realignment  to  reposition  itself  in  the  marketplace.   In
connection with the  restructuring,  the Company  incurred charges of $3,000,100
related to severance,  planned  reduction in office space, the suspension of the
implementation of a new project/financial  system, and other related costs. This
restructuring  included a staff reduction of 125 employees.  During fiscal 1998,
the Company  incurred  $803,500 in operating  related costs that were associated
with the FY97 restructuring and charged against the reserve instead of income.

As a result of the above factors, the loss from continuing  operations in fiscal
1998 was $187,000,  compared to a loss from continuing  operations of $6,862,600
in the prior year.  Interest expense,  net, decreased to $121,700 from the prior
year's total of $287,100.  This 57.6%  decrease was attributed to lower interest
paid in  connection  with the  Company's  line of credit,  reduction  of certain
long-term debt  principal  balances,  and the absence of an interest  payment in
connection with a Maryland tax settlement in fiscal 1997.

For the twelve months ended August 31, 1998, the Company had a net loss from its
discontinued  Analytical  Services  segment of $62,300 compared to a net loss of
$792,300 in fiscal 1997.

The net loss for the twelve months ended August 31, 1998, was $240,100,  or 0.7%
of net revenue,  compared to a net loss of  $5,407,600,  or 14.4% of net revenue
for the prior year.

Inflation

Because of its ability to generally pass through increased costs to its clients,
as well as the  generally  low levels of  inflation,  the Company  believes that
inflation has not had a material impact on its operations.

                                       13
<PAGE>
Liquidity and Capital Resources

Cash and cash equivalents  (cash)  increased by $112,800 in 1999,  compared to a
decrease of $481,600 in 1998 and an increase of $1,023,200 in 1997. The increase
in 1999 principally  resulted from the sale of the EA Laboratories  division for
cash during the quarter ended May 31, 1999 and borrowings  against the Company's
line of credit used for  operating  activities.  During  fiscal  year 1999,  the
Company used $3.5 million of cash for  operating  activities,  principally  as a
result of the 1999 net loss as well as  increases  in deferred  taxes,  accounts
receivable, and cost and estimated earnings in excess of billings on uncompleted
contracts,  partially  offset by the  receipt of income tax  refunds.  Increased
borrowings to fund  operating  activities  became  necessary  during the year as
revenue began to decline due to multi-year federal contracts reaching completion
without being replaced by new contracts.  As a result, the Company's revenue was
no longer capable of maintaining the current overhead  structure of the Company.
To address  this  problem,  the Company made several  strategic  initiatives  to
reduce  annual   operating   expenses  by   approximately   $3.5  million.   The
restructuring included a staff reduction of approximately 30 employees including
several officers of the Company.  Proceeds from the sale of EA Laboratories,  as
well as  restructuring  efforts,  helped  decrease the line of credit balance by
$885,900 from  $4,212,100 as of February 28, 1999 to $3,326,200 as of August 31,
1999. The Company  anticipates a further reduction in its line of credit balance
during the next several  quarters,  as revenues  exceed  operating  expenses and
restructuring commitments end.

The  Company's  capital  expenditures  (consisting  primarily  of  purchases  of
equipment  and  leasehold  improvements)  of $487,300,  $546,500 and $747,700 in
1999, 1998 and 1997, respectively, have been funded primarily from cash flows.

The Company maintains a bank credit  arrangement with a regional bank consisting
of: (i) an $8,500,000  revolving line of credit secured by  receivables;  (ii) a
$500,000 term loan; and (iii) an equipment line of credit of $1,500,000.  Of the
$8,500,000  revolving line of credit,  $2,500,000 is available for acquisitions,
joint ventures and licensing  agreements.  Borrowings from the revolving line of
credit are limited to certain  percentages of accounts  receivable and costs and
estimated  earnings in excess of billings (up to a maximum of  $4,000,000).  The
interest on all borrowings is LIBOR +250.

At August 31, 1999, the Company had outstanding  long-term  debt,  including the
current portion, of $3,413,700, which represented an increase of $1,733,900 from
the August 31,  1998  balance of  $1,679,800.  The  increase  is the result of a
$2,064,800 increase in its revolving line of credit as described in the previous
paragraph,  partially  offset by net  repayment  of $330,900 for  equipment  and
computer  loans.  The Company  had no  short-term  borrowings  under its line of
credit at August 31, 1999 and 1998.

The Company's existing funds, cash from operations, and the available portion of
its $8,500,000 bank line of credit and $1,500,000 equipment line are expected to
be  sufficient  to meet the  Company's  present  cash needs.  The  Company  also
currently believes it has the ability to raise capital through placement of debt
and may  pursue  such  options  if the need  arises to expand  facilities,  make
acquisitions  or  acquire  equipment  in  conjunction  with a review of the most
cost-effective means for the Company and its stockholders.

While the Company believes that there is sufficient demand for current operating
levels,  there can be no  assurance  that this  demand  will exist or  continue.
Although the Company has the ability to reduce its professional staff in periods
of reduced  demand,  it may choose not to make full  reductions in such periods,
with resulting adverse effects on operations.

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

Year 2000 Readiness Disclosure

EA Engineering, Science, and Technology, Inc. ("EA" of the "Company") recognizes
the  seriousness of the challenge  businesses  worldwide face as a result of the
Year  2000  problem.  EA has had a formal,  thorough  and  aggressive  Year 2000
project since early 1998. As a result of these  efforts,  we believe that all of
our mission  critical  systems are Year 2000 compliant.  We believe the measures
taken will  minimize  any impact on EA's  ability  to  deliver  services  to our
clients or our financial performance.  Based on the successful completion of our
Year 2000 compliance  program,  the Company does not foresee  significant  risks
associated with Year 2000 at this time.

A.       Assessment and Remediation

During fiscal 1998, EA developed and implemented a three-phase  program for Year
2000 compliance.  Phase I identified those systems,  hardware and software, that
posed a potential compliance risk for EA. EA completed all Phase I

                                       14
<PAGE>

Assessment in mid-1998.  Phase II assessed the business and financial  impact of
these at-risk systems,  established  priorities to address these risk areas, and
proscribed  remediation schedules and details. Phase II was completed during the
fall of 1998.  Phase III carried out the  prescribed  remediation  schedules and
performs  final  testing of the major  systems to ensure  compliance.  Phase III
began in September of 1998 and  concluded in November  1999. We believe that all
major systems,  wide and local area  networks,  and desktop PCs are compliant at
this time.

B.       Testing

EA has tested and will continue to test, the Year 2000 worthiness of each system
on an on-going basis. This compliance  testing is comprised of three independent
assessments:  first,  a  review  all of the  product  manufacturer's  Year  2000
compliance testing  certifications and results--no product is selected unless it
has been identified by the  manufacturer to have passed a comprehensive  battery
of Year 2000 tests;  second,  testing of these products  prior to  installation;
third, independent audit and assessment, using third party auditing software and
independent consultants dedicated to Year 2000 compliance.

Testing  has  been  completed  on  every  EA  system,   including  networks  and
communications,  major  applications,  desktop computers and  applications,  and
non-computer related systems.

C.       Risks and Contingency Plans

We have developed  thorough  contingency  plans to address events that may arise
within or  outside  of the  company.  The  remainder  of 1999 will be focused on
ensuring the readiness of these  contingency plans and addressing any remaining,
presently unknown issues that may arise.

D.       Third Party Vendors, Utilities and Customers

The fact that EA provides environmental consulting services, which are primarily
labor based,  substantially  minimizes its risk  associated  with potential Year
2000 problems with its internal systems and its suppliers. The Company maintains
a broad base of vendors and suppliers  and believes  there is little risk to its
ongoing operations from Year 2000 problems by its outside vendors.

EA has contacted  each of its major vendors and clients to secure  statements of
Year 2000  compliance.  The vendors and clients who have  responded to date have
assured EA of the  adequacy  and  timeliness  of their  Year 2000  preparations.
Additionally  EA  has  incorporated  Year  2000  compliance   clauses  into  its
subcontractor agreements since early 1999.

The Company cannot fully assess the degree to which its customers,  particularly
the U.S. Government,  will successfully complete a Year 2000 upgrade on a timely
basis. Because a significant portion of the Company's business is from contracts
with various federal government  agencies,  a failure by the U.S.  Government to
achieve Year 2000  compliance  could have a  significant  adverse  effect on the
Company's future business, financial operations and results of operations.

E.       Reasonably Likely "Worst-Case" Scenarios

Due to the  magnitude and  complexity  of the Year 2000  problem,  even the most
conscientious  and diligent efforts cannot guarantee that every problem has been
found and remediated prior to January 1, 2000. EA believes that it has addressed
every Year 2000 problem known at this time. We are confident no significant Year
2000 issues  remain and that we can address  any as yet  undiscovered  Year 2000
problems quickly.

EA has gone to significant lengths to provide redundancy in each major system. A
failure in any single  major  system will not result in the  cessation of normal
work processes. The failure of any single system will pose only a minimal risk.

For the reasons  stated above,  EA does not presently  anticipate  that the Year
2000 phenomenon will cause any significant disruption to its business, financial
operations or results of  operations.  However,  if the  company's  customers or
subcontractors fail to prepare adequately for Year 2000, there could be numerous
and significant  effects on EA. For example,  subcontractors  may not be able to
obtain or deliver  needed data;  EA employees  might be unable to perform  work,
resulting in a loss of revenue;  payments may fail to arrive on time. Any or all
of  these  contingencies  could,  under  certain  circumstances,   result  in  a
substantial and material impact on EA's financial performance.

                                       15
<PAGE>

Costs to Address Year 2000 Issues

The Company has not  incurred  and  presently  believes  that it will not likely
incur, material costs in connection with effectuating Year 2000 compliance. This
is because  replacement of major  applications was previously planned to improve
performance  and  functionality   requirements.   These  replacements  were  not
accelerated due to Year 2000 issues; as such the costs of these systems are part
of the Company's  capital budget.  The Company  currently  estimates the cost of
remediating  its software and non-IT systems at  approximately  $50,000 of which
$30,000  has already  been spent.  The  Company  does not  separately  track the
internal  costs for the Y2K  project;  such costs are  principally  the  related
payroll costs for its Information Systems group.

Forward-Looking Statements

The foregoing contains  "forward-looking  information" within the meaning of The
Private  Securities   Litigation  Reform  Act  of  1995.  Such   forward-looking
statements  may be  identified  by an  asterisk  (*) or by such  forward-looking
terminology  as "may,"  "will,"  "believe,"  "anticipate,"  "expect," or similar
words or variations thereof. Such forward-looking statements involve significant
risks and uncertainties,  including,  among other things,  risks associated with
(1) substantial reliance on government contracts,  public budgetary restrictions
and  uncertainties,  discrepancies  between awarded  contract amounts and actual
revenues,  and  cancellation of contracts at the option of the  government,  (2)
timing and award of contracts,  (3) timing and performance of contracts, and (4)
successful  bidding  of  government  and  non-government  contracts  in  a  very
competitive environment. IN EACH CASE, ACTUAL RESULTS MAY DIFFER MATERIALLY FROM
SUCH FORWARD-LOOKING STATEMENTS.

Important  assumptions  and other  important  factors  that could  cause  actual
results  to  differ  materially  from  those in the  forward-looking  statements
include, but are not limited to the accounting  irregularities  discussed in the
explanatory Note 3 and their further impact, if any, on the Company's operations
and/or the Company's  future  profitability.  Other  important  factors that the
Company  believes  may  cause  actual  results  to differ  materially  from such
forward-looking  statements  are  discussed  throughout  this  Report and in the
Company's other filings with the Securities and Exchange Commission. The Company
does not undertake to publicly update or revise its  forward-looking  statements
even if  experience or future  changes  indicate that any such results or events
(expressed or implied) will not be realized.

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

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

None


                                       16
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

  Index to Consolidated Financial Statements and Supplementary Financial Data
<TABLE>
<CAPTION>

                                                                            Page

                                                                       ----

<S>                                                                      <C>
Report of Independent Public Accountants .......................         18

Consolidated Financial Statements:

      Consolidated Balance Sheets as of August 31, 1999 and 1998         19

      Consolidated Statements of Operations for the years ended
         August 31, 1999, 1998, and 1997 .......................         21

      Consolidated Statements of Changes in Stockholders' Equity

         for the years ended August 31, 1999, 1998, and 1997 ...         22

      Consolidated Statements of Cash Flows for the years ended
         August 31, 1999, 1998, and 1997 .......................         23

      Notes to Consolidated Financial Statements for the years
         ended August 31, 1999, 1998, and 1997 .................         24

</TABLE>

                                       17
<PAGE>

                       Report of Independent Accountants

To the Board of Directors and Stockholders of
EA Engineering, Science, and Technology, Inc.:


In our opinion,  the  accompanying  consolidated  balance sheets and the related
consolidated statements of operations,  changes in stockholders' equity and cash
flows present fairly,  in all material  respects,  the financial  position of EA
Engineering, Science, and Technology, Inc. and its subsidiaries as of August 31,
1999 and 1998, and the results of their operations and their cash flows for each
of the three years in the period  ended  August 31,  1999,  in  conformity  with
accounting  principles  generally accepted in the United States. These financial
statements   are  the   responsibility   of  the   Company's   management;   our
responsibility  is to express an opinion on these financial  statements based on
our audits.  We conducted  our audits of these  statements  in  accordance  with
auditing standards  generally accepted in the United States,  which require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates made by management,  and evaluating the overall financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for the opinion expressed above.

As  discussed  in Note 3, the  accompanying  consolidated  balance  sheets as of
August 31, 1999 and 1998, and the related consolidated statements of operations,
changes  in  stockholders'  equity  and cash flows for the years then ended have
been restated.

                                              /s/ PricewaterhouseCoopers LLP

Baltimore, Maryland
June 12, 2000


                                       18
<PAGE>
<TABLE>
<CAPTION>

          EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. & SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                         August 31,           August 31,
                                                           1999                 1998
                                                      (As Restated)         (As Restated)
                                                       -----------           ------------
<S>                                                     <C>                <C>
CURRENT ASSETS:

   Cash and cash equivalents .....................      $  1,963,000       $  1,850,200
   Accounts receivable, net ......................         8,679,600          7,479,100
   Costs and estimated earnings in excess of
     billings on uncompleted contracts ...........         5,176,000          4,279,100
   Refundable income taxes .......................              --              407,600
   Prepaid expenses and other ....................           636,700            694,800
   Deferred income taxes .........................           597,800            373,300
   Net assets of discontinued operations .........              --            1,468,200
                                                        ------------       ------------
     Total Current Assets ........................        17,053,100         16,552,300
                                                        ------------       ------------
PROPERTY AND EQUIPMENT, at cost:

   Furniture, fixtures and equipment .............         8,920,600          8,797,400
   Leasehold improvements ........................         1,031,700            984,600
                                                        ------------       ------------
   Total property and equipment, at cost .........         9,952,300          9,782,000

   Less--Accumulated depreciation and amortization        (9,102,900)        (8,719,100)
   Net property and equipment of discontinued
       operations ................................              --              718,200
                                                        ------------       ------------
     Net Property and Equipment ..................           849,400          1,781,100
                                                        ------------       ------------
OTHER ASSETS:

   Deferred income taxes .........................         3,451,000          2,659,500
   Other Assets ..................................         1,310,500          1,147,300
                                                        ------------       ------------
     Total Other Assets: .........................         4,761,500
                                                                              3,806,800

                                                        ------------       ------------
    Total Assets .................................      $ 22,664,000       $ 22,140,200
                                                        ============       ============
</TABLE>

      The accompanying notes are an integral part of these balance sheets.


                                       19
<PAGE>
<TABLE>
<CAPTION>

          EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. & SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                         August 31,         August 31,
                                                           1999               1998
                                                      (As Restated)       (As Restated)
                                                       -----------        ------------
<S>                                                   <C>                <C>
CURRENT LIABILITIES:

   Accounts payable ............................      $  3,555,300       $  4,494,300
   Accrued expenses ............................         1,443,200            553,100
   Accrued salaries, wages and benefits ........         2,228,400          2,120,800
   Current portion of long-term debt ...........            87,500            330,900
   Billings in excess of costs and estimated
     earnings on uncompleted contracts .........           407,800            246,700
                                                      ------------       ------------
     Total Current Liabilities .................         7,722,200          7,745,800

LONG-TERM DEBT, net of current portion .........         3,326,200          1,348,900
                                                      ------------       ------------

     Total Liabilities .........................        11,048,400          9,094,700
                                                      ------------       ------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
   Common stock, $.01 par value; voting;
     10,000,000 shares authorized; 6,335,000
     and 6,285,000 shares issued and outstanding            63,400             62,900
   Preferred stock, $.01 par value; 8,000,000
     shares authorized; none issued ............              --                 --
   Capital in excess of par value ..............        11,108,300         11,049,300
   Notes receivable from stockholders ..........           (78,000)          (119,000)
   Retained earnings ...........................           521,900          2,052,300
                                                      ------------       ------------

     Total Stockholders' Equity ................        11,615,600         13,045,500
                                                      ------------       ------------

     Total Liabilities and Stockholders' Equity       $ 22,664,000       $ 22,140,200
                                                      ============       ============
</TABLE>

      The accompanying notes are an integral part of these balance sheets.

                                       20
<PAGE>
<TABLE>
<CAPTION>

          EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. & SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                       Year Ended August 31,
                                                        --------------------------------------------------
                                                            1999              1998               1997
                                                        (As Restated)     (As Restated)
                                                        -------------      ------------       ------------
<S>                                                     <C>                <C>                <C>
Total revenue ....................................      $ 48,727,600       $ 52,237,400       $ 68,189,000
Less - Subcontractor costs .......................        (8,904,300)       (11,003,000)       (20,488,600)
Less - Other direct project costs ................        (5,676,400)        (5,914,500)       (10,257,600)
                                                        ------------       ------------       ------------
      Net revenue ................................        34,146,900         35,319,900         37,442,800
                                                        ------------       ------------       ------------
Operating costs and expenses:
    Direct salaries and other operating ..........        26,199,400         26,935,300         33,344,200
    Sales, general and administrative ............         8,042,500          8,832,700          7,961,100
    Gain on "key employee" life insurance ........              --             (261,100)              --
    Restructuring charges ........................         2,132,600               --            3,000,100
                                                        ------------       ------------       ------------
      Total operating expenses ...................        36,374,500         35,506,900         44,305,400
                                                        ------------       ------------       ------------
Loss from continuing operations ..................        (2,227,600)          (187,000)        (6,862,600)
                                                        ------------       ------------       ------------
Interest expense .................................          (268,600)          (220,500)          (378,700)
Interest income ..................................            88,100             98,800             91,600
                                                        ------------       ------------       ------------
Loss from continuing operations
  before income taxes ............................        (2,408,100)          (308,700)        (7,149,700)
Benefit from income taxes ........................          (961,400)          (130,900)        (2,534,400)
                                                        ------------       ------------       ------------
Net loss from continuing operations ..............        (1,446,700)          (177,800)        (4,615,300)
                                                        ------------       ------------       ------------
Discontinued operations
    Loss from operations of discontinued
       segment (net of tax) ......................          (119,000)           (62,300)          (792,300)
    Gain on disposal of discontinued segment,
       including operating losses during phase-out
       period (net of tax) .......................            35,300               --                 --
                                                        ------------       ------------       ------------
Net loss from discontinued operations ............           (83,700)           (62,300)          (792,300)
                                                        ------------       ------------       ------------
Net loss .........................................      $ (1,530,400)      $   (240,100)      $ (5,407,600)
                                                        ============       ============       ============
Loss per share - basic
    Continuing operations ........................      $      (0.23)      $      (0.03)      $      (0.74)
    Discontinued operations ......................      $      (0.01)             (0.01)      $      (0.13)
    Gain on disposal of segment ..................              --                 --                 --
                                                        ------------       ------------       ------------
    Net loss .....................................      $      (0.24)      $      (0.04)      $      (0.87)
                                                        ============       ============       ============
Loss per share - diluted
    Continuing operations ........................      $      (0.23)      $      (0.03)      $      (0.74)
    Discontinued operations ......................      $      (0.01)             (0.01)      $      (0.13)
    Gain on disposal of segment ..................              --                 --                 --
                                                        ------------       ------------       ------------
    Net loss .....................................      $      (0.24)      $      (0.04)      $      (0.87)
                                                        ============       ============       ============
Weighted average shares outstanding ..............         6,312,300          6,255,500          6,205,700
Effect of dilutive stock options .................              --                 --                 --
                                                        ------------       ------------       ------------
Diluted weighted average shares outstanding ......         6,312,300          6,255,500          6,205,700
                                                        ============       ============       ============
</TABLE>

        The accompanying notes are an integral part of these statements.


                                       21
<PAGE>
<TABLE>
<CAPTION>

          EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. & SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

 FOR THE YEARS ENDED AUGUST 31, 1999 (as restated), 1998 (as restated), and 1997



                                     Common         Common      Capital in        Notes            Retained
                                  Stock Shares      Stock        Excess of   Receivable from       Earnings         Total
                                                                 Par Value     Stockholders

--------------------------------- -------------- ------------- -------------- ----------------- -------------- ---------------
<S>                                    <C>            <C>          <C>              <C>             <C>
Balance, August 31, 1996 ........      6,175,000      $61,800      $10,796,300           --         $ 7,700,000       $ 18,558,100

Issuance of stock ...............         52,300          500          106,000           --                --              106,500

Purchase of note receivable
from stockholders ...............           --           --               --         (301,000)             --             (301,000)

Writedown of notes receivable
from stockholders ...............           --           --               --          141,000              --              141,000

Net loss ........................           --           --               --             --          (5,407,600)        (5,407,600)
                                       ---------      -------      -----------      ---------       -----------       ------------

Balance, August 31, 1997 ........      6,227,300       62,300       10,902,300       (160,000)        2,292,400         13,097,000

Issuance of stock ...............         57,700          600          147,000           --                --              147,600

Writedown of notes receivable
from stockholders ...............           --           --               --           41,000              --               41,000

Net loss ........................           --           --               --             --            (240,100)          (240,100)
                                       ---------      -------      -----------      ---------       -----------       ------------

Balance, August 31, 1998 ........      6,285,000       62,900       11,049,300       (119,000)        2,052,300         13,045,500

Issuance of stock ...............         50,000          500           59,000           --                --               59,500

Writedown of notes receivable
from stockholders ...............           --           --               --           41,000              --               41,000

Net loss ........................           --           --               --             --          (1,530,400)        (1,530,400)
                                       ---------      -------      -----------      ---------       -----------       ------------

Balance, August 31, 1999 ........      6,335,000      $63,400      $11,108,300      $ (78,000)      $   521,900       $ 11,615,600
                                       =========      =======      ===========      =========       ===========       ============
</TABLE>

        The accompanying notes are an integral part of these statements.


                                       22
<PAGE>
<TABLE>
<CAPTION>

                  EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                 Year Ended August 31,
                                                                   -------------------------------------------------
                                                                        1999           1998                1997
                                                                   (As Restated)    (As Restated)
                                                                   -------------     ------------       ------------
<S>                                                                  <C>               <C>               <C>
CASH FLOWS FROM (USED FOR) OPERATING ACTIVITIES:
   Net loss ...................................................      $(1,530,400)      $  (240,100)      $(5,407,600)
   Noncash expenses included in net loss-
     Depreciation .............................................          418,800         1,162,200         1,427,100
     Loss from operations of discontinued segment .............          119,000              --                --
     Writedown of notes receivable from stockholders ..........           41,000            41,000           141,000
     Provision for losses on accounts receivable ..............          243,500           130,500           339,100
     Loss (gain) on disposal of fixed assets ..................           48,000           (56,500)            3,000
     Gain on disposal of discontinued segment .................          (35,300)             --                --
     Provision for restructuring ..............................        2,132,600              --           3,000,100
     Deferred income taxes ....................................         (960,200)         (128,900)       (1,309,800)
   Changes in operating assets and liabilities -
     (Increase) decrease in accounts receivable ...............       (1,444,000)          924,900         2,854,800
     (Increase) decrease in costs and estimated
        earnings in excess of billings on uncompleted contracts         (896,900)          635,400         6,828,400
     (Increase) decrease  in prepaid expenses and other assets          (105,100)         (194,200)          455,700
     Decrease in accounts payable and accrued expenses ........       (2,073,900)       (2,433,500)       (3,512,000)
     Refundable income taxes ..................................          407,600         1,476,300        (1,883,900)
     Increase (decrease) in billings in excess of
       of costs and estimated earnings on
       uncompleted contracts ..................................          161,100          (265,500)         (685,500)
                                                                     -----------       -----------       -----------
       Net cash flows (used for) from operating
          activities ..........................................       (3,474,200)        1,051,600         2,250,400
                                                                     -----------       -----------       -----------
CASH FLOWS USED FOR INVESTING ACTIVITIES:
   Purchase of equipment ......................................         (487,300)         (546,500)         (747,700)
   Proceeds from sales of discontinued operations .............        1,908,500              --                --
   Proceeds from sale of fixed assets .........................             --              58,000            44,100
                                                                                       -----------       -----------
                                                                                                         -----------
     Net cash flows used for investing activities .............        1,421,200          (488,500)         (703,600)
                                                                     -----------       -----------       -----------
CASH FLOWS FROM (USED FOR) FINANCING ACTIVITIES:
   Net borrowings from revolving line of credit ...............        2,064,800          (566,300)          481,200
   Proceeds from issuance of common stock .....................           59,500           147,600           106,500
   Reduction of long-term debt and short-term
     borrowings ...............................................         (330,900)         (626,000)         (810,300)
   Issuance of notes receivable to stockholders ...............             --                --            (301,000)
                                                                     -----------       -----------       -----------
       Net cash flows from (used for) financing
         activities ...........................................        1,793,400        (1,044,700)         (523,600)
                                                                     -----------       -----------       -----------
CASH PROVIDED BY DISCONTINUED OPERATIONS: .....................          372,400              --                --
                                                                     -----------       -----------       -----------
NET INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS .................................................          112,800          (481,600)        1,023,200

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ................        1,850,200         2,331,800         1,308,600
                                                                     -----------       -----------       -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD ......................      $ 1,963,000       $ 1,850,200       $ 2,331,800
                                                                     ===========       ===========       ===========
</TABLE>

        The accompanying notes are an integral part of these statements.


                                      23
<PAGE>
          EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. & SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE YEARS ENDED AUGUST 31, 1999 (as restated), 1998 (as restated), AND 1997


Note 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Presentation--

The accompanying  consolidated  financial  statements present the accounts of EA
Engineering,  Science, and Technology, Inc. (EA); its wholly-owned subsidiaries,
EA  International,  Inc.  and  EA  Financial,  Inc.;  and EA  Financial,  Inc.'s
wholly-owned  subsidiaries,  EA Global,  Inc. and EA de Mexico, S.A. de C.V. The
entities are  collectively  referred to herein as the "Company." All significant
intercompany transactions have been eliminated in consolidation.

On February 4, 2000, as a result of the discovery of accounting  irregularities,
the Audit  Committee of the Company's  Board of Directors  initiated the Company
Investigation into such matters which recently has been completed. In June 2000,
the Company restated its previously  reported financial results for fiscal years
1999 and 1998 and the  quarterly  periods in fiscal year 1998 through  February,
2000.  The  accompanying  consolidated  financial  statements  and notes thereto
incorporate   all  relevant   information   obtained  from  the   investigation.
Accordingly, the restated consolidated financial statements presented herein are
the Company's primary historical financial statements for the periods presented.
See Note 3 for a reconciliation of the Company's  financial position and results
of operations from financial  statements  previously filed prior to restatement,
to the restated financial statements, as presented in this Form 10-K/A.

Segment Information--

Historically,  the Company was organized around two operating segments. However,
in the quarter ended May 31, 1999, the Company divested its Analytical  Services
segment.  The remaining  segment is  Management  Consulting  Services,  provided
through a network of offices throughout the United States, Mexico and Guam.

Revenue Recognition--

The Company is an  international  consulting firm  specializing in the fields of
energy,  the  environment,  health and safety,  and analytical  services.  These
services are  generally  performed  under  time-and-material,  fixed-price,  and
cost-plus-fixed-fee  contracts.  Task orders from these contracts vary in length
from one month to two years.

The  Company's  Management  Consulting  Services  segment  accounts for contract
revenues    and    costs    under     fixed-price     contracts     using    the
percentage-of-completion  method.  The  percentage  of  completion is determined
using the  "cost-to-cost"  method for each contract cost  component.  Under this
method,  direct labor and other  contract costs incurred to date are compared to
periodically  revised  estimates of the total of each contract cost component at
contract  completion to determine the  percentage of revenues to be  recognized.
Revenues from  time-and-material  contracts are recognized currently as the work
is performed.  Revenue on  cost-plus-fixed  fee contracts are  recognized to the
extent of costs  incurred plus a  proportionate  amount of the  contracted  fee.
Certain  cost-plus-fixed  fee  contracts  also  include  provisions  for earning
performance based incentive fees.  Provision for estimated losses on uncompleted
contracts,  to the full  extent of the loss,  is made during the period in which
the Company first becomes aware that a loss on a contract is probable.

Contract costs and estimated earnings recognized in excess of amounts billed are
classified as current  assets under "costs and  estimated  earnings in excess of
billings on  uncompleted  contracts."  Billings in excess of contract  costs and
estimated  earnings are  classified as current  liabilities  under  "billings in
excess of costs and estimated earnings on uncompleted contracts."

Generally,  contracts  provide for the billing of costs  incurred and  estimated
fees on a monthly basis.  Amounts  included in "costs and estimated  earnings in
excess of billings  on  uncompleted  contracts"  in the  accompanying  financial
statements will be billed within twelve months of the balance sheet date.


                                       24
<PAGE>
Major Clients--

Various agencies of the federal government accounted for approximately 54%, 50%,
and 46% of the Company's net revenue for the years ended August 31, 1999,  1998,
and 1997, respectively. Additionally, various agencies of the federal government
accounted for approximately 40% and 45% of the Company's accounts receivable and
costs and estimated  earnings in excess of billings on uncompleted  contracts as
of August 31, 1999 and 1998, respectively.

Cash and Cash Equivalents--

Cash equivalents  consist of money market  instruments with a purchased original
maturity of three months or less, stated at cost, which approximates fair value.

Property and Equipment--

Property and equipment are depreciated using the straight-line method over their
estimated  useful lives ranging from 3 to 10 years.  Leasehold  improvements are
amortized  over the  shorter  of the  estimated  useful  life or the term of the
lease. Depreciation expense for the fiscal years ended August 31, 1999, 1998 and
1997 was $631,800, $1,162,200 and $1,427,100, respectively.

Fair Value Information--

The  carrying  amounts  of  financial  instruments,  principally  cash  and cash
equivalents,  accounts receivable and accounts payable,  reported in the balance
sheets  approximate  their fair value,  due to the relatively  short maturity of
these  instruments.   The  carrying  amount  of  variable-rate   long-term  debt
approximates fair value.

Reclassifications--

Certain prior year balances,  primarily related to discontinued operations, have
been reclassified to conform to current year presentation.

Risks and Uncertainties--

Reliance on major government  contracts subjects the Company to risks associated
with public budgetary  restrictions  and  uncertainties,  discrepancies  between
awarded contract amounts and actual revenues,  and cancellation at the option of
the government. The Company attempts to mitigate these risks by staffing only to
meet reasonably anticipated average workloads, by using subcontractors to handle
peak  workloads,  and by  obtaining  termination  benefit  contract  provisions.
Cancellation of any of the Company's major government contracts,  however, could
have a material adverse effect on the Company.

Use of Estimates--

The preparation of financial  statements in accordance  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets, liabilities,  revenues and expenses in the
financial   statements  and  in  the   disclosures  of  contingent   assets  and
liabilities. While actual results could differ from these estimates,  management
believes  that actual  results  will not be  materially  different  from amounts
provided in the accompanying consolidated financial statements.

Supplemental Disclosures and Other Cash Flow Information--

Cash paid during the years ended August 31, 1999,  1998,  and 1997 for interest,
was $268,600, $233,700, and $467,200, respectively.  Retirements of property and
equipment for the same periods were $576,300  (which includes the net book value
of the Lab's PP&E sold),  $28,000, and $897,200,  respectively.  Prior to fiscal
year 1999,  the Company did not  identify  assets by  segments;  therefore,  the
consolidated  statement  of cash  flows  prior to 1999  does not  include  asset
information by segment.

                                      25
<PAGE>
Accounting for Income Taxes--

The Company uses the asset and liability  method of accounting for income taxes.
Under the asset and liability  method,  deferred income taxes are recognized for
the tax  consequences of differences  between the financial  statement  carrying
amounts  and the tax  bases of  existing  assets  and  liabilities  by  applying
currently  enacted  statutory  rates  applicable  to  future  years.   Valuation
allowances are established when deferred tax assets are not currently assured of
realization.

Accounting Pronouncements--

In June 1998,  the FASB issued  Statement  No. 133 (SFAS 133),  "Accounting  for
Derivative Instruments and Hedging Activities," which establishes accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments embedded in other contracts and for hedging activities.  SFAS 133 is
effective for all fiscal quarters of fiscal years beginning after June 15, 2000.
The Company does not hold  derivatives  and, as such,  SFAS 133 will not have an
impact.

Note 2.  DISPOSAL OF ANALYTICAL SERVICES SEGMENT

On April 30, 1999,  the Company  completed the cash sale of the EA  Laboratories
division  to Severn  Trent  Laboratories,  Inc.  The  assets  of the  analytical
sampling  segment sold  consisted  primarily  of an  inventory of supplies,  the
balance of costs and  estimated  earnings in excess of  billings on  uncompleted
contracts as of the  transaction  date,  and property  and  equipment.  The cash
transaction resulted in a net pretax gain of $58,800.

The income statements for the fiscal years 1999, 1998 and 1997 have been revised
to present the operating results of the discontinued segment separately.

Gross  revenue of the  Analytical  Services  segment for the twelve months ended
August 31,  1999,  1998 and 1997 were  $4,298,900,  $6,373,300  and  $5,701,500,
respectively.  These  amounts  are  not  included  in  the  total  revenue  from
continuing  operations in the accompanying  income statement,  but are reflected
within discontinued operations.

Current assets and liabilities of the Analytical  Services  segment  disposed of
consisted of the following as of August 31, 1998:

<TABLE>
<CAPTION>

<S>                                            <C>
Cash and net accounts receivable ........      $   964,300
Costs and estimated earnings in excess of
   billings on uncompleted contracts ....          739,300
Prepaid and other assets ................           22,500
Current portion of long-term debt .......         (107,900)
Accrued expenses ........................         (150,000)
                                               -----------

    Net current assets ..................      $ 1,468,200
                                               ===========
</TABLE>

Property and equipment of the Analytical  Services segment disposed of consisted
of the following at August 31, 1998:

<TABLE>
<CAPTION>

<S>                                            <C>
Furniture, fixtures, and equipment ......      $ 4,309,500
Leasehold improvements ..................        2,691,000
Accumulated depreciation and amortization       (6,282,300)
                                               -----------

    Net property and equipment ..........      $   718,200
                                               ===========
</TABLE>

Assets are shown at their expected net realizable  value and current  portion of
long-term debt at their face amount.

                                       26
<PAGE>
Note 3.  RESTATEMENT

As  announced   on  February  4,  2000,   the  Company   discovered   accounting
irregularities related to unbilled revenue. The Audit Committee of the Company's
Board of Directors  initiated the Company  Investigation into such matters. As a
result of the findings of the Audit  Committee  and Company  Investigation,  the
Company has restated  previously  reported  annual  results for the fiscal years
ended August 31, 1999 and 1998 as set forth herein.

The Company made adjustments to correct the misapplication of generally accepted
accounting principles resulting in improper revenue recognition.  This error was
a direct result of the recording of fictitious revenue.

The following  statements of operations and balance sheets reconcile  previously
reported and restated financial information.

                                       27
<PAGE>
<TABLE>
<CAPTION>

          EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. & SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                                     ASSETS

                                                    ------------------ ------------------ ------------------
                                                                          Accounting
                                                                          Adjustments        August 31,
                                                       August 31,             For               1999
                                                          1999          Irregularities       As Restated
                                                    ------------------ ------------------ ------------------
<S>                                                    <C>                <C>               <C>
Current Assets:

   Cash and cash equivalents ....................      $  1,963,000              --         $  1,963,000

   Accounts receivable, net .....................         8,679,600              --            8,679,600

   Costs and estimated earnings in excess
       of billings on uncompleted contracts .....         6,645,000       $(1,469,000)         5,176,000
   Prepaid expenses and other ...................           636,700              --              636,700
   Deferred income taxes ........................           597,800              --              597,800
                                                       ------------       -----------       ------------
      Total Current Assets ......................        18,522,100        (1,469,000)        17,053,100
                                                       ------------       -----------       ------------
Property and Equipment, at cost:

   Furniture, fixtures, and equipment ...........         8,920,600              --            8,920,600

   Leasehold improvements .......................         1,031,700              --            1,031,700
                                                       ------------       -----------       ------------
      Total property and equipment, at cost .....         9,952,300              --            9,952,300

   Less-Accumulated depreciation and amortization        (9,102,900)             --           (9,102,900)
                                                       ------------       -----------       ------------
      Net Property and Equipment ................           849,400              --              849,400
                                                       ------------       -----------       ------------
Other Assets:

  Deferred income taxes .........................         2,883,700           567,300          3,451,000

  Other assets ..................................         1,310,500              --            1,310,500
                                                       ------------       -----------       ------------
      Total Other Assets: .......................         4,194,200           567,300          4,761,500
                                                       ------------       -----------       ------------
       Total Assets .............................      $ 23,565,700       $  (901,700)      $ 22,664,000
                                                       ============       ===========       ============

</TABLE>

       The accompanying notes are an integral part of this balance sheet.


                                       28
<PAGE>
<TABLE>
<CAPTION>

          EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. & SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                     --------------------------------------------------------
                                                                            Accounting         August 31,
                                                              August 31,    Adjustment            1999
                                                                1999     For Irregularities    As Restated

 --------------------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>                 <C>
 Current Liabilities:

   Accounts payable .................................      $  3,555,300            --         $  3,555,300
   Accrued expenses .................................         1,443,200            --            1,443,200
   Accrued salaries, wages and benefits .............         2,228,400            --            2,228,400
   Current portion of long-term debt ................            87,500            --               87,500
   Billings in excess of costs and estimated earnings
      on uncompleted contracts ......................           407,800            --              407,800
                                                           ------------       ---------       ------------
      Total Current Liabilities .....................         7,722,200            --            7,722,200
                                                           ------------       ---------       ------------
Long-Term Debt, net of current portion ..............         3,326,200            --            3,326,200
                                                           ------------       ---------       ------------
      Total Liabilities .............................        11,048,400            --           11,048,400
                                                           ------------       ---------       ------------
Commitments and Contingencies

Stockholders' Equity:

   Common stock, $.01 par value; voting;
      10,000,000 shares authorized; 6,335,000
     issued and outstanding .........................            63,400            --               63,400
   Preferred stock, $.01 par value;
      8,000,000 shares authorized; none issued ......              --              --                 --
   Capital in excess of par value ...................        11,108,300            --           11,108,300
   Notes receivable from stockholders ...............           (78,000)           --              (78,000)
   Retained earnings ................................         1,423,600       $(901,700)           521,900
                                                           ------------       ---------       ------------
     Total Stockholders' Equity .....................        12,517,300        (901,700)        11,615,600
                                                           ------------       ---------       ------------
    Total Liabilities and Stockholders' Equity ......      $ 23,565,700       $(901,700)      $ 22,664,000
                                                           ============       =========       ============

</TABLE>

       The accompanying notes are an integral part of this balance sheet.


                                      29
<PAGE>
<TABLE>
<CAPTION>

          EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. & SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF OPERATIONS

                                                                  ------------------ ------------------ ------------------
                                                                                        Accounting         August 31,
                                                                     August 31,         Adjustments           1999
                                                                        1999                For            As Restated
                                                                                      Irregularities
 ---------------------------------------------------------------- ------------------ ------------------ ------------------
<S>                                                                    <C>                 <C>             <C>
Total revenue ..................................................       $ 48,820,100        $(92,500)       $ 48,727,600
Less - Subcontractor costs .....................................         (8,904,300)           --            (8,904,300)
Less - Other direct project costs ..............................         (5,676,400)           --            (5,676,400)
                                                                       ------------        --------        ------------
      Net revenue ..............................................         34,239,400         (92,500)         34,146,900
                                                                       ------------        --------        ------------
Operating costs and expenses:
   Direct salaries and other operating .........................         26,199,400            --            26,199,400
   Sales, general and administrative ...........................          8,042,500            --             8,042,500
   Gain on "key employee" life insurance .......................               --              --                  --
   Restructuring charges .......................................          2,132,600            --             2,132,600
                                                                       ------------        --------        ------------
      Total operating expenses .................................         36,374,500            --            36,374,500
                                                                       ------------        --------        ------------
Loss from operations ...........................................         (2,135,100)        (92,500)         (2,227,600)
Interest expense ...............................................           (268,600)           --              (268,600)
Interest income ................................................             88,100            --                88,100
                                                                       ------------        --------        ------------
Loss from continuing operations before income taxes ............         (2,315,600)        (92,500)         (2,408,100)
Benefit for income taxes .......................................           (925,700)        (35,700)           (961,400)
                                                                       ------------        --------        ------------
Net loss from continuing operations ............................       $ (1,389,900)       $(56,800)       $ (1,446,700)
                                                                       ============        ========        ============
Discontinued Operations

   Loss from operations of discontinued segment (net of tax
     benefit of $79,000) .......................................           (119,000)           --              (119,000)
   Gain on disposal of discontinued segment, including
    operating losses during phase-out period (net of tax of
    $23,200)....................................................             35,300            --               (35,300)
                                                                       ------------        --------        ------------
Net loss from discontinued operations ..........................            (83,700)           --               (83,700)
                                                                       ------------        --------        ------------
Net loss .......................................................       $ (1,473,600)       $(56,800)       $ (1,530,400)
                                                                       ============        ========        ============
Loss per share - basic
   Continuing operations .......................................              (0.22)          (0.01)              (0.23)
   Discontinued operations .....................................              (0.01)           --                 (0.01)
                                                                       ------------        --------        ------------
Net loss .......................................................       $      (0.23)       $  (0.01)       $      (0.24)
                                                                       ============        ========        ============
Loss per share - diluted
   Continuing operations .......................................              (0.22)          (0.01)              (0.23)
   Discontinued operations .....................................              (0.01)           --                 (0.01)
                                                                       ------------        --------        ------------
Net loss .......................................................       $      (0.23)       $  (0.01)       $      (0.24)
                                                                       ============        ========        ============
Weighted average shares outstanding ............................          6,312,300            --             6,312,300
Effect of dilutive stock options ...............................               --              --                  --
Diluted weighted average shares outstanding ....................          6,312,300            --             6,312,300
                                                                       ============        ========        ============
</TABLE>

         The accompanying notes are an integral part of this statement.


                                       30
<PAGE>
<TABLE>
<CAPTION>

          EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. & SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                                     ASSETS

                                                                       ------------------   -----------------  ------------------
                                                                                               Accounting
                                                                                               Adjustment          August 31,
                                                                          August 31,              For                1998
                                                                             1998            Irregularities        As Restated
 --------------------------------------------------------------------- ------------------   ------------------  ------------------
<S>                                                                         <C>                <C>                 <C>
Current Assets:

   Cash and cash equivalents ........................................       $  1,850,200               --          $  1,850,200
   Accounts receivable, net .........................................          7,479,100               --             7,479,100
   Costs and estimated earnings in excess
       of billings on uncompleted contracts .........................          5,655,600        $(1,376,500)          4,279,100
   Refundable income taxes ..........................................            407,600               --               407,600
   Prepaid expenses and other .......................................            694,800               --               694,800
   Deferred income taxes ............................................            373,300               --               373,300
   Net assets from discontinued operations ..........................          1,468,200               --             1,468,200
                                                                            ------------        -----------        ------------
      Total Current Assets ..........................................         17,928,800         (1,376,500)         16,552,300
                                                                            ------------        -----------        ------------
Property and Equipment, at cost:

   Furniture, fixtures, and equipment ...............................          8,797,400               --             8,797,400
   Leasehold improvements ...........................................            984,600               --               984,600
                                                                            ------------        -----------        ------------
      Total property and equipment, at cost .........................          9,782,000               --             9,782,000

   Less-Accumulated depreciation and amortization ...................         (8,719,100)              --            (8,719,100)

   Net property and equipment from discontinued operations ..........            718,200               --               718,200
                                                                            ------------        -----------        ------------
      Net Property and Equipment ....................................          1,781,100               --             1,781,100
                                                                            ------------        -----------        ------------
Other Assets:

   Deferred income taxes ............................................          2,127,900            531,600           2,659,500
   Other assets .....................................................          1,147,300               --             1,147,300
                                                                            ------------        -----------        ------------
      Total Other Assets: ...........................................          3,275,200            531,600           3,806,800
                                                                            ------------        -----------        ------------
      Total Assets ..................................................       $ 22,985,100        $  (844,900)       $ 22,140,200
                                                                            ============        ===========        ============
</TABLE>

       The accompanying notes are an integral part of this balance sheet.


                                       31
<PAGE>
<TABLE>
<CAPTION>

          EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. & SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                           --------------------------------------------------------
                                                                               Accounting          August 31,
                                                             August 31,        Adjustment             1998
                                                                1998       For Irregularities     As Restated
 --------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                 <C>              <C>
Current Liabilities:

   Accounts payable .................................       $  4,494,300             --          $  4,494,300
   Accrued expenses .................................            553,100             --               553,100
   Accrued salaries, wages and benefits .............          2,120,800             --             2,120,800
   Current portion of long-term debt ................            330,900             --               330,900
   Billings in excess of costs and estimated earnings
      on uncompleted contracts ......................            246,700             --               246,700
                                                             -----------        ----------        -----------
      Total Current Liabilities .....................          7,745,800             --             7,745,800

Long-Term Debt, net of current portion ..............          1,348,900             --             1,348,900
                                                             -----------        ----------        -----------
      Total Liabilities .............................          9,094,700             --             9,094,700
                                                             -----------        ----------        -----------
Commitments and Contingencies

Stockholders' Equity:

   Common stock, $.01 par value; voting;
      10,000,000 shares authorized; 6,285,000 shares
      issued and outstanding ........................             62,900             --                62,900
   Preferred stock, $.01 par value;
      8,000,000 shares authorized; none issued ......               --               --                  --
   Capital in excess of par value ...................         11,049,300             --            11,049,300
   Notes receivable from stockholders ...............           (119,000)            --              (119,000)
   Retained earnings ................................          2,897,200        $(844,900)          2,052,300
                                                             -----------        ----------        -----------
      Total Stockholders' Equity ....................         13,890,400         (844,900)         13,045,500
                                                             -----------        ----------        -----------
      Total Liabilities and Stockholders' Equity ....       $ 22,985,100        $(844,900)       $ 22,140,200
                                                             ===========        ==========        ===========
</TABLE>

       The accompanying notes are an integral part of this balance sheet.


                                       32
<PAGE>
<TABLE>
<CAPTION>

          EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. & SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF OPERATIONS

                                                                    ----------------- ------------------ -----------------
                                                                                         Accounting
                                                                                         Adjustments        August 31,
                                                                       August 31,            For               1998
                                                                          1998         Irregularities      As Restated
                                                                    ---------------- ------------------ -----------------
<S>                                                                    <C>                <C>               <C>
 Total revenue ..................................................      $ 53,613,900       $(1,376,500)      $ 52,237,400
 Less - Subcontractor costs .....................................       (11,003,000)             --          (11,003,000)
 Less - Other direct project costs ..............................        (5,914,500)             --           (5,914,500)
                                                                       ------------       -----------       ------------
      Net revenue ...............................................        36,696,400        (1,376,500)        35,319,900
                                                                       ------------       -----------       ------------
 Operating costs and expenses:
    Direct salaries and other operating .........................        26,935,300              --           26,935,300
    Sales, general and administrative ...........................         8,832,700              --            8,832,700
    Gain on "key employee" life insurance .......................          (261,100)             --             (261,100)
                                                                       ------------       -----------       ------------
      Total operating expenses ..................................        35,506,900              --           35,506,900
                                                                       ------------       -----------       ------------
 Income (loss) from operations ..................................         1,189,500        (1,376,500)          (187,000)
                                                                       ------------       -----------       ------------
 Interest expense ...............................................          (220,500)             --             (220,500)
 Interest income ................................................            98,800              --               98,800
                                                                       ------------       -----------       ------------
 Income (loss) before income taxes ..............................         1,067,800        (1,376,500)          (308,700)
                                                                       ------------       -----------       ------------
 Benefit for income taxes .......................................           400,700          (531,600)          (130,900)
                                                                       ------------       -----------       ------------
 Net income (loss) from continuing operations ...................           667,100          (844,900)          (177,800)
                                                                       ------------       -----------       ------------
 Discontinued Operations

    Loss from operations of discontinued segment (net of tax) ...           (62,300)             --              (62,300)
    Gain on disposal of discontinued segment, including
     operating losses during phase-out period (net of tax) ......              --                --                 --
                                                                       ------------       -----------       ------------
 Net loss from discontinued operations ..........................           (62,300)             --              (62,300)
                                                                       ------------       -----------       ------------
 Net (loss) income ..............................................      $    604,800       $  (844,900)      $   (240,100)
                                                                       ============       ===========       ============
 Earnings per share - basic
    Continuing operations .......................................              0.11             (0.14)             (0.03)
    Discontinued operations .....................................             (0.01)             --                (0.01)
    Gain on disposal of segment .................................              --                --
                                                                       ------------       -----------       ------------
 Net (loss) income ..............................................      $       0.10       $     (0.14)      $      (0.04)
                                                                       ============       ===========       ============
 Earnings per share - diluted
    Continuing operations .......................................              0.11             (0.14)             (0.03)
    Discontinued operations .....................................             (0.01)             --                (0.01)
    Gain on disposal of segment .................................              --                --
                                                                       ------------       -----------       ------------
 Net (loss) income ..............................................      $       0.10       $     (0.14)      $      (0.04)
                                                                       ============       ===========       ============
 Weighted average shares outstanding ............................         6,255,500              --            6,255,500
 Effect of dilutive stock options ...............................            91,100           (91,100)              --
 Diluted weighted average shares outstanding ....................         6,346,600           (91,100)         6,255,500
                                                                       ============       ===========       ============
</TABLE>

         The accompanying notes are an integral part of this statement.


                                      33
<PAGE>
Note 4.  INCOME TAXES:

The  benefit  for  income  taxes  includes  current  and  deferred  tax  amounts
summarized as follows:

<TABLE>
<CAPTION>

                                                                        Year Ended August 31,
                                                        -------------------------------------------------------
                                                               1999               1998              1997
                                                           (As Restated)      (As Restated)
                                                        -------------------- ---------------- -----------------
<S>                                                          <C>               <C>               <C>
Current tax expense (benefit):
   Federal ............................................      $    (1,200)      $   (43,500)      $(1,659,500)
   State ..............................................             --                --                 --
                                                             -----------       -----------       -----------
                                                                  (1,200)          (43,500)       (1,659,500)
                                                             -----------       -----------       -----------
Deferred tax expense (benefit):
   Federal ............................................         (863,600)         (109,500)       (1,309,800)
   State ..............................................         (152,400)          (19,400)             --
                                                             -----------       -----------       -----------
                                                              (1,016,000)         (128,900)       (1,309,800)
                                                             -----------       -----------       -----------
Benefit for income taxes ..............................      $(1,017,200)      $  (172,400)      $(2,969,300)
                                                             ===========       ===========       ===========
</TABLE>

Total deferred tax assets and liabilities as of August 31, 1999 and 1998 and the
sources of the differences  between the tax and financial reporting bases of the
Company's assets and liabilities  which give rise to the deferred tax assets and
liabilities are as follows:

<TABLE>
<CAPTION>

                                                                          Year Ended August 31,
-------------------------------------------------------------- ----------------------------------------
                                                                       1999                1998
                                                                  (As Restated)        (As Restated)
<S>                                                                 <C>             <C>
Deferred tax assets:
    Property and equipment ...................................      $  354,000      $1,031,300
    Accrued expenses and reserves ............................         764,900         493,900
    Net operating loss and other carryforwards ...............       3,299,800       1,786,500
                                                                    ----------      ----------
                                                                     4,418,700       3,311,700
                                                                    ----------      ----------
Deferred tax liabilities:
    Prepaid expenses .........................................          34,600           9,300
    Miscellaneous ............................................         335,300         269,600
                                                                    ----------      ----------
                                                                       369,900         278,900
                                                                    ----------      ----------
   Net deferred tax assets ...................................      $4,048,800      $3,032,800
                                                                    ==========      ==========
</TABLE>

The  Company  has net  operating  loss  carryforwards  at August 31, 1999 in the
amount of  approximately  $9,700,000 for federal purposes which expire beginning
2017.  The ability of the  Company to benefit  from these  carryforwards  in the
future is  dependent on the  Company's  ability to generate  sufficient  taxable
income prior to their expiration dates. Although realization of the net deferred
tax assets is not assured,  management  believes that it is more likely than not
that all of the net  deferred  tax assets  will be  realized.  The amount of net
deferred tax assets considered realizable,  however could be reduced in the near
term based on changing conditions.

                                       34
<PAGE>

Reconciliation of the statutory federal income tax rate and the effective income
tax rate is summarized as follows:

<TABLE>
<CAPTION>

                                                                    Year Ended August 31,
                                                           ----------------------------------------
                                                                 1999        1998           1997
                                                            (As Restated) (As Restated)
                                                           -------------- ------------- -----------
<S>                                                              <C>         <C>         <C>
Statutory federal income tax rate ........................       (34.0)%     (34.0)%     (34.0)%
State income tax, net of federal income tax effect .......        (5.3)       (5.3)       (5.3)
Other ....................................................        (0.6)       (3.1)        3.9
                                                                ------      ------      ------
Effective income tax rate ................................       (39.9)%     (42.4)%     (35.4)%
                                                                ======      ======      ======

</TABLE>

Note 5.  ACCOUNTS RECEIVABLE:

Accounts receivable, excluding receivables from the disposed Analytical Segment,
consist of the following:

<TABLE>
<CAPTION>

                                                           Year Ended August 31,
                                                    ----------------------------------
                                                          1999             1998
                                                    ----------------- ----------------
<S>                                                    <C>                <C>
Contract accounts receivable ....................      $ 7,632,100        $ 6,390,900
Retainage by clients ............................        1,082,400          1,315,600
                                                       -----------        -----------
Total accounts receivable .......................        8,714,500          7,706,500
Less-Allowance for doubtful accounts ............          (34,900)          (227,400)
                                                       -----------        -----------
Accounts receivable, net ........................      $ 8,679,600        $ 7,479,100
                                                       ===========        ===========
</TABLE>

Retention  balances are billable at contract  completion  or upon  attainment of
other specified milestones. Consistent with industry practice, these receivables
are classified as current assets.  Management anticipates that substantially all
retainages will be billed within one year.

Note 6.  BANK FINANCING ARRANGEMENTS:

The Company  maintains a credit  arrangement with a regional bank consisting of:
(i) an  $8,500,000  revolving  line of credit  secured  by  receivables;  (ii) a
$500,000 Term Loan; and (iii) an equipment line of credit of $1,500,000.  Of the
$8,500,000  revolving line of credit,  $2,500,000 is available for acquisitions,
joint ventures and licensing agreements.  Borrowings under the revolving line of
credit are limited to a percentage of certain accounts  receivable and costs and
estimated  earnings  in excess of  billings on  uncompleted  contracts  (up to a
maximum of  $4,000,000).  As of August 31, 1999,  $2,733,800 was available under
the  revolving  line of credit.  As of August 31,  1999 and 1998,  there were no
borrowings  under the Term Loan or equipment line of credit.  The line of credit
is secured by substantially  all the assets of the Company.  Under the revolving
line of credit,  the Company is required to comply with covenants  which require
certain minimum ratios including debt service coverage,  tangible net worth, and
liabilities  to tangible net worth,  and  restrict the amount of annual  capital
expenditures.  During fiscal years 1999,  1998, and 1997, the Company was either
in  compliance  or had  obtained  waivers  on all  covenants  related  to  these
arrangements.

                                      35
<PAGE>
Short-term borrowings  information resulting from the financing  arrangements is
as follows:

<TABLE>

                                                     Year Ended August 31,
                                      ----------------------------------------------------
                                           1999         1998             1997

<S>                                         <C>         <C>         <C>
Balance as of end of period ......          --          --                  --
Maximum outstanding month-end
   balance during the period .....          --          --          $  3,615,300
Average outstanding month-end
   balance during the period .....          --          --               564,000
Weighted average interest rate
   during the period .............          --          --                    11.5%
Interest rate at the end of period          --          --                    11.5%

</TABLE>

The weighted  average  interest rate has been  calculated  based upon the actual
daily interest  expense and the daily average balance  outstanding.  The Company
had no short-term  borrowings  after fiscal 1997.  For the year ended August 31,
1997,  the Company only  maintained  short-term  borrowing  balances  during the
months of April through August.

<TABLE>
<CAPTION>
                                                                                            Year Ended August 31,
                                                                                          1999              1998
                                                                                       ----------         ----------
<S>                                                                                    <C>                <C>
Long-term debt consists of the following:

     Revolving credit facility payable to commercial  bank,  interest charged at
        LIBOR plus 250 basis  points at August  31,  1999 and plus 200 at August
        31, 1998, (6.85% and 7.66% at August 31, 1999 and 1998)

        facility expires September 2001                                                $3,326,200         $1,261,400

     Note payable to a commercial bank in equal monthly installments of $29,600,
        which includes interest at 9.1%, through December

        1999 collaterialized by certain computer equipment                                 87,500            418,400
                                                                                       ----------         ----------
     Total long-term debt                                                               3,413,700          1,679,800
     Less-current portion                                                                 (87,500)          (330,900)
                                                                                       ----------         ----------
     Long-term portion                                                                 $3,326,200         $1,348,900
                                                                                       ==========         ==========

</TABLE>

The debt repayment schedule for the outstanding notes payable is as follows:

<TABLE>
<CAPTION>

<S>                                <C>
 Year Ending August 31,
 --------------------------------- -----------
 2000                                 $87,500
 2001                               3,326,200

 --------------------------------- -----------
 Total notes payable               $3,413,700
 ================================= ===========
</TABLE>

The fair  value  of the  Company's  outstanding  indebtedness  approximated  its
carrying value at August 31, 1999.

                                       36
<PAGE>
Note 7.  LEASE COMMITMENTS:

The  Company's  central  office,  regional  offices,  and certain  furniture and
equipment are held under operating leases.  These leases expire at various dates
through fiscal 2007, and certain leases call for annual proportionate  increases
due to property  taxes and  certain  other  operating  expenses.  Lease  expense
amounted to $5,732,900,  $6,061,000,  and $8,030,200, for the years ended August
31, 1999,  1998,  and 1997,  respectively.  Lease expense  included  payments of
approximately  $1,775,000,  1,900,400 and  $2,016,500 for the years ended August
31, 1999, 1998, and 1997,  respectively,  to partnerships whose partners include
the  Chairman  of the Board of EA and  certain  members  of his  family  for its
central office, and Loveton, Maryland,  regional office and laboratory facility.
As part of the Analytical Services  divestiture in April 1999, the Company ended
the lease of the laboratory's facilities.  These payments include reimbursements
for  pass-through  taxes and  operating  expenses  incurred by the lessor  which
include local property taxes,  janitorial and mechanical equipment  maintenance,
and utility costs related to the operation of both office and laboratory  leased
space.  Management  of the  Company  believes  the terms and  conditions  of the
transactions  between  the  Company  and  entities  with which the  Chairman  is
affiliated, are at least as favorable to the Company as could have been obtained
from third parties and are in the best interest of the Company.

The minimum  lease  commitments  under  noncancellable  operating  leases are as
follows:

<TABLE>
<CAPTION>

           Year Ending August 31,
           ---------------------------------- ----------------
<S>                                               <C>
           2000                                   $ 3,048,900
           2001                                     2,585,600
           2002                                     2,168,700
           2003                                     1,710,600
           2004                                     1,613,100
           2005 and thereafter                      3,836,900
           ---------------------------------- ----------------
           Total minimum payments                 $14,963,800
           ================================== ================
</TABLE>

Note 8.  NET INCOME (LOSS) PER SHARE:

In accordance with Statement of Financial  Accounting  Standards  (SFAS) No. 128
"Earnings per Share," basic  earnings  (loss) per share is based on the weighted
average number of shares of common stock outstanding during the period.  Diluted
earnings  (loss) per share is based on the weighted  average number of shares of
common stock and common stock equivalents  outstanding during the period. Common
stock  equivalents are calculated  using the treasury stock method.  The diluted
share  base for the years  ending  August  31,  1999,  1998,  and 1997  excludes
incremental  shares  of 600,  91,000,  and  15,800,  respectively,  due to their
antidilutive effect as a result of the Company's loss from continuing operations
in each of the three years.

Note 9.  PROFIT SHARING:

EA maintains a defined contribution plan in which all employees who are at least
21 years of age and have completed six months of credited service, as defined by
the plan,  are eligible to  participate.  The plan  provides  for  discretionary
employer  contributions for each fiscal year, in amounts determined  annually by
the Board of Directors. The plan also includes a 401(k) provision,  allowing for
Company matching  contributions.  For the years ended August 31, 1999, 1998, and
1997, matching contributions to the plan made under the 401(k) provisions of the
plan, were $451,200, $472,100 and $534,900,  respectively.  Certain officers and
stockholders  of the Company serve as trustees to the plan under  appointment of
the Board of Directors.

                                       37
<PAGE>
Note 10.  STOCK OPTION AND EMPLOYEE STOCK PURCHASE PLANS:

The Company  maintains an Amended and Restated  Stock Option Plan (the  "Plan"),
which provides for the grant of  nonqualified  stock options and incentive stock
options to certain key employees and officers of the Company. The exercise price
of an option  granted  under the Plan may not be less than the fair market value
of the  underlying  shares of Common Stock on the date of the grant.  A total of
729,600  options  are issued and  outstanding  of the  1,448,147  reserved as of
August 31, 1999,  having an average  exercise price of $2.28. Of the outstanding
options, 400,000 are held by the former President and CEO. The exercise price of
the 400,000 shares ranges between $2.25 and $3.67, which was equal to the market
value on the dates of grant.

The Company  maintains an Employee Stock Purchase Plan (the "Purchase  Plan") to
provide  eligible  employees  with the  opportunity  to  purchase  shares of the
Company's Common Stock through voluntary payroll deductions.  Under the Purchase
Plan,  eligible employees may purchase shares through monthly payroll deductions
at 90% of current  market  value at the time of  purchase.  The Company pays all
administrative  expenses related to employee purchases. A total of 70,500 shares
remain  authorized  for  distribution  under the Purchase  Plan as of August 31,
1999.

The Company  maintains two  Non-Employee  Director  Stock Option Plans (1993 and
1995)  which  provide  for the  granting of  nonqualified  stock  options to its
non-employee  directors. A total of 36,000 options were outstanding as of August
31,  1999. A total of 64,500  options  remain  reserved  for the Director  Stock
Option Plans as of August 31, 1999

A summary of the status of  activity in fiscal  years 1999,  1998 and 1997 under
the Company's Employee Stock Option Plan and Non-Employee  Director Stock Option
Plans (1993 and 1995) follows:

<TABLE>
<CAPTION>

                                                    1999                    1998                    1997
                                           ----------------------- ----------------------- ------------------------
                                            Shares    Wgtd.Avg.     Shares    Wgtd.Avg.     Shares     Wgtd.Avg.
                                            (000)     Exer.Price    (000)     Exer.Price    (000)     Exer.Price
                                           --------- ------------- --------- ------------- --------- --------------
<S>                                           <C>        <C>           <C>       <C>           <C>        <C>

Outstanding at beginning of year                817      $2.44         616       $2.37         180        $4.13
Granted                                         135       1.17         273        2.65         506         2.10
Exercised                                        --         --         (27)       2.45          --           --
Forfeited                                     (186)       2.23         (45)       2.72         (70)        4.96
Expired                                          --         --          --         --           --           --
                                           --------- ------------- --------- ------------- --------- --------------
Outstanding at end of year                      766       2.27         817        2.44         616         2.37
                                           --------- ------------- --------- ------------- --------- --------------
Exercisable at year end                         383      $2.45         269       $2.59         164        $2.99
Weighted Average Fair Value of Options

  Granted                                                $0.52                   $1.35                    $0.96

</TABLE>

The following table summarizes  information about stock options  outstanding and
exercisable at August 31, 1999 (shares in thousands).

<TABLE>
<CAPTION>

                                                                Weighted Average
                                                      Weighted         Remaining

  Range of exercise                           Average       Contractual Life                        Weighted Average
       prices              Outstanding     Exercise Price      (in years)          Exercisable       Exercise Price
----------------------  ---------------- ----------------- ------------------- ------------------- -------------------
<S>                          <C>               <C>                     <C>             <C>               <C>
$1.031 - $1.94               218               $   1.40                7.5              85               $   1.61
$1.95 - $3.90                527               $   2.44                6.6             277               $   2.34
$3.95 - $11.75                21               $   7.15                4.1              21               $   7.15
                                      ------------------------------------------------------------------------
Total:                       766               $   2.27                                383               $   2.45
                        ======================================================================================
</TABLE>

                                      38
<PAGE>
The Company  accounts  for these plans under APB Opinion No. 25,  under which no
compensation  cost has been  recognized.  Had  compensation  cost for plans been
determined  consistent  with FASB  Statement No. 123, the Company's net loss and
loss per share would have changed to the following pro forma amounts:
<TABLE>
<CAPTION>

                                                           1999              1998             1997
                                                      (As Restated)     (As Restated)
   -------------------------------- ---------------- ----------------- ----------------- ---------------
<S>                                 <C>                  <C>                 <C>           <C>
   Net loss                         As Reported          $(1,530,400)        $(240,100)    $(5,407,600)
                                    Pro Forma             (1,655,600)         (331,700)     (5,470,200)
   Basic loss per share             As Reported          $     (0.24)        $   (0.04)    $     (0.87)
                                    Pro Forma                  (0.26)            (0.05)          (0.88)
   Diluted loss per share           As Reported          $     (0.24)        $   (0.04)    $     (0.87)
                                    Pro Forma                  (0.26)            (0.05)          (0.88)

</TABLE>
The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes   option-pricing   model  with  the   following   weighted-average
assumptions  used for grants in 1999,  1998 and 1997:  Risk-free  interest rates
ranging from 5.14% to 6.68%; expected volatility is 65% in 1999, and 63% in 1998
and 62% in 1997.

Note 11.  COMPANY RESTRUCTURINGS:

On March 25, 1997 the Company implemented a major organizational  realignment to
reposition itself in the marketplace. In connection with the restructuring,  the
Company  incurred  charges of  $3,000,100  during the fiscal 1997 third  quarter
related  to   severance,   planned   reduction   in  office   space,   suspended
implementation of a new project/financial system, and other related costs. As of
August  31,  1999  and  1998,  the  Company  had no  accruals  related  to  this
restructuring on its balance sheet.

In February  1999,  the Company  implemented  several cost  cutting  measures to
affect its long-term profitability objectives by aligning expenses more directly
with  revenues.  In  connection  with the  restructuring,  the Company  incurred
charges of $2,132,600 during the fiscal 1999 second quarter primarily related to
severance   agreements  of  several  senior  sales  and  executive  staff.  This
restructuring included a staff reduction of approximately 30 employees including
several officers.

As of August 31, 1999, the Company had an accrual of $476,400  included as other
current liabilities in the accompanying consolidated balance sheets for costs to
be incurred in future periods primarily related to severance costs.

Note 12.  "KEY EMPLOYEE" LIFE INSURANCE

In April  1998,  adjustments  were  made to the  actual  cash  value of two "key
employee"  life insurance  policies for the Chairman of the Board,  of which the
Company is the named  beneficiary.  Prior to April 1998, the policies had a cash
surrender value of $515,500, which was included in Other Assets on the Company's
balance  sheet.  In fiscal 1994,  the asset value of the policies was originally
adjusted downward due to bankruptcy proceedings involving the original insurance
company.  In April 1998,  Phoenix Home Life Mutual  Insurance Co., the successor
underwriter  of the policies,  confirmed  that the cash  surrender  value of the
policies was $776,600. As a result, Other Assets was increased by $261,100,  and
a one-time  gain was  recognized  during the third quarter of fiscal 1998. As of
August 31, 1999, the policies had a cash surrender value of $817,200.

Note 13.  RELATED PARTY TRANSACTIONS

At the  request  of its  former  primary  lender  and in order to  maintain  its
favorable  relationship with that lender, the Company in December 1996 purchased
from  this  lender  the  secured  loans  of  three  former  EA  officers.  These
interest-free demand loans, in the aggregate amount of $301,000,  are secured by
pledges of the Company's common stock. The differential between the current fair
market value of the pledged stock and the amount of the loans is fully  reserved
within the Company's balance sheet.


                                       39
<PAGE>


Note 14.  COMMITMENTS AND CONTINGENCIES

There are no material pending legal proceedings to which the Company is a party.
The  Company is  involved  in various  claims and legal  actions  arising in the
ordinary course of business.  In the opinion of the Company,  the disposition of
these matters will not have a material adverse effect on the financial position,
results of operations or liquidity of the Company.

Note 15.  SUBSEQUENT EVENTS

On  November  2,  1999,  the  Company  announced  that its  Board  of  Directors
authorized  management  to  purchase up to 500,000  shares of its common  stock.
There is no assurance  as to the actual  number of shares that will be purchased
under the program and, in fact, the program can be suspended by the Board at any
time.

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

ITEM 9.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

         None.
                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

(a)  Directors of the Registrant

Information  on the  Company's  Directors is contained  in the  Company's  Proxy
Statement for its 1999 Annual Meeting of  Stockholders to be held on January 13,
2000, and such information is incorporated herein by reference.

(b)  Executive Officers of the Registrant

Information  on the Company's  Executive  Officers is contained in the Company's
Proxy  Statement  for its 1999  Annual  Meeting  of  Stockholders  to be held on
January 13, 2000, and such information is incorporated herein by reference.

ITEM 11.  EXECUTIVE COMPENSATION

Information  on "Executive  Compensation"  is contained in the  Company's  Proxy
Statement for its Annual Meeting of Stockholders to be held on January 13, 2000,
and such information is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information on "Security  Ownership of Certain Beneficial Owners and Management"
is  contained  in the  Company's  Proxy  Statement  for its  Annual  Meeting  of
Stockholders  to  be  held  on  January  13,  2000,  and  such   information  is
incorporated herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information on "Certain  Relationships and Related Transactions" is contained in
the Company's  Proxy Statement for its Annual Meeting of Stockholders to be held
January 13, 2000, and such information is incorporated herein by reference.

                                       40
<PAGE>

                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
          FORM 8-K

A.  Financial Statements and Schedule II
    ------------------------------------
<TABLE>
<CAPTION>
                                                                                     Page

                                                                                     ----
<S>                                                                                    <C>
1.       The following financial statements are included in Item 8 of
          Part II of this report:

          Report of Independent Public Accountants                                     18

          Consolidated Financial Statements:
            Consolidated Balance Sheets as of August 31, 1999 and 1998                 19
            Consolidated Statements of Operations for the years ended
              August 31, 1999, 1998, and 1997                                          21
            Consolidated Statements of Changes in Stockholders' Equity
              for the years ended August 31, 1999, 1998, and 1997                      22
            Consolidated Statements of Cash Flows for the years ended
              August 31, 1999, 1998, and 1997                                          23
            Notes to Consolidated Financial Statements for the years
              ended August 31, 1999, 1998, and 1997                                    24

2.     The following financial statement schedule for the years ended
          August 31, 1999, 1998, and 1997 is submitted herewith:

          Report of Independent Public Accountants on Schedule                         43
          Schedule II - Valuation and Qualifying Accounts and Reserves                 44
</TABLE>
All other  schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.

3.      Exhibits

 The following exhibits are filed herewith unless otherwise indicated:

Exhibit
  No.         Description

-------   --------------------------
  3.1     Certificate of Incorporation of the Company.(1)
  3.2     By-laws of the Company.(1)
  4.1     Article SIXTH of the Company's Certificate of Incorporation.(1)
 10.1     The Company's Profit Sharing Plan.(1)
 10.2     The Company's Stock Option Plan.(2)
 10.3     The Company's Employee Stock Purchase Plan.(3)
 10.4     The 1993 Stock Incentive Plan.(4)
 10.5     1993 Non-Employee Director Stock Option Plan.(5)
 10.6     The Amended and Restated Stock Option Plan(5)
 10.7     1995 Non-Employee Director Stock Option Plan(5)
 10.8     Employment Agreement dated March 17, 1997, between the
             Company and Donald A. Deieso.(6)



                                       41
<PAGE>
 10.9     Lease, dated August 6, 1997, between ARE Sparks Limited
            Partnership, as landlord, and the Company as tenant.(7)
 10.10    Lease, dated August 6, 1997, between Ecolair Limited
            Partnership, as landlord, and the Company, as tenant.(7)
 11.11    Lease, dated August 6, 1997, between Merrymack Limited
            Partnership, as landlord, and the Company, as tenant.(7)
 11.12    Loan Agreement, dated August 22, 1997, between the Company
            and First National Bank of Maryland.(7)
 13       1999 Annual Report to Stockholders.
 21       Subsidiaries of the Company.
 27       Financial Data Schedule.

 (1)      Incorporated by reference to the Registrant's Registration Statement
            on Form S-1, No. 33-8958, which was declared effective by the
            Commission on October 31, 1986.

 (2)      Incorporated by reference to the Company's Registration Statement on
            Form S-8, File Number 0-15587 filed on October 15, 1990.

 (3)      Incorporated  by reference to the  Registrant's Annual Report on Form
            10-K, File Number 0-15587 filed on November 28, 1990.

 (4)      Incorporated by reference to the Company's Registration Statement on
            Form S-8, File Number 0-15587 filed on March 3, 1994.

 (5)      Incorporated by reference to the Company's Registration Statement on
            Form S-8, File Number 0-15587 filed on April 15, 1998.

 (6)     Incorporated by reference to the Registrant's  Quarterly Report on Form
           10-Q, File Number 0-15587 filed on April 18, 1997.

 (7)      Incorporated by reference to the Company's Annual Report on Form 10-K,
            File Number 0-15587 filed on November 17, 1997.

 b.       Reports on Form 8-K

 -          On February 4, 2000, the Company filed a Form 8-K relative to a
            press release of the same date  announcing  that  management had
            discovered accounting  irregularities  related to  unbilled  revenue
            which will cause the Company to restate earnings for prior years.

 -          The  Company  filed a  report  on Form  8-K  dated  April  10,  2000
            reporting  in  Item 5 that  the  Company's  investigation  into  the
            accounting  irregularities had been concluded;  that Arthur Anderson
            LLP, the Company's  auditors  through the end of the Company's  1999
            Fiscal  Year,  advised that their  reports for the  affected  fiscal
            years 1998 and 1999 could not be relied  upon;  and that the Company
            would be restating earnings for fiscal years 1998 and 1999.

 -          The Company filed a report on Form 8-K dated June 8, 2000  reporting
            that the  Company's  common stock would  continue to trade on Nasdaq
            Smallcap  Market under the symbol  EACEC to signify  that  continued
            trading is under  exception to Nasdaq  listing  requirements  and is
            subject to satisfying  certain  conditions,  specifically  filing by
            June 16, 2000 the Company's  amended  financial  statements for 1998
            and 1999 and satisfying Nasdaq's $1.00 minimum bid price requirement
            by September 16, 2000.


                                       42
<PAGE>
        Report of Independent Accountants on Financial Statement Schedule

To the Board of Directors and Stockholders of
EA Engineering, Science, and Technology, Inc.:


Our audit of the  consolidated  financial  statements  as of August 31, 1999 and
1998,  and for each of the three  years in the period  ended  August  31,  1999,
referred to in our report dated June 12, 2000, included in this Annual Report on
Form 10-K, also included an audit of the financial  statement schedule listed in
Item  14(a)(2)  of this Form  10-K.  In our  opinion,  the  financial  statement
schedule  presents fairly, in all material  respects,  the information set forth
therein  when  read in  conjunction  with  the  related  consolidated  financial
statements.

                         /s/ PricewaterhouseCoopers LLP

Baltimore, Maryland
June 12, 2000


                                       43
<PAGE>

<TABLE>
<CAPTION>

          EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC. & SUBSIDIARIES

          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

                   Years Ended August 31, 1999, 1998, and 1997


      Allowance            Balance at

    for Doubtful            Beginning             Charged to                                 Balance at
      Accounts              of Period          Cost and Expense          Write-offs         End of Period
---------------------- -------------------- ------------------------ ------------------- --------------------
<S>                       <C>                     <C>                     <C>                   <C>
1999                      $  257,200              $  243,500              $  240,400            $  260,300
1998                         532,000                 130,500                 405,300               257,200
1997                       1,612,200                 339,100               1,419,300               532,000


</TABLE>

                                       44
<PAGE>


SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) 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.

                                         EA ENGINEERING, SCIENCE, AND
                                         TECHNOLOGY, INC.

Date: June 16, 2000                      By  /s/ Loren D. Jensen
                                      --------------------------------
                                             Loren D. Jensen
                                             Chairman of the Board

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

Name                            Title                                      Date
<S>                             <C>                                        <C>
    /s/ Loren D. Jensen         Chairman of the Board, President, and      June 16, 2000
Loren D. Jensen                 Chief Executive Officer

   /s/ Barbara L. Posner        Chief Operating Officer and                June 16, 2000
Barbara L. Posner               Chief Financial Officer

   /s/ Edmund J. Cashman, Jr.   Director                                   June 16, 2000
Edmund J. Cashman, Jr.

   /s/ Rudolph P. Lamone        Director                                   June 16, 2000
Rudolph P. Lamone

   /s/ Cleaveland D. Miller     Director                                   June 16, 2000
Cleaveland D. Miller

</TABLE>

                                       45
<PAGE>
                                  EXHIBIT INDEX

Exhibit

   No.                Description                                         Page
   ---           -------------------------------------                      --

3.1      Certificate of Incorporation of the Company.                       41

3.2      By-laws of the Company.                                            41

4.1      Article SIXTH of the Company's Certificate of Incorporation.       41

10.1     The Company's Profit Sharing Plan.                                 41

10.2     The Company's Stock Option Plan.                                   41

10.3     The Company's Employee Stock Purchase Plan.                        41

10.4     The 1993 Stock Incentive Plan.                                     41

10.5     1993 Non-Employee Director Stock Option Plan.                      41

10.6     The Amended and Restated Stock Option Plan.                        41

10.7     1995 Non-Employee Director Stock Option Plan.                      41

10.8     Employment Agreement dated March 17, 1997, between the
           Company and Donald A. Deieso.                                    41

10.9     Lease, dated August 6, 1997, between ARE Sparks Limited
           Partnership, as Landlord, and the Company as tenant.             42

10.10    Lease, dated August 6, 1997, between Ecolair Limited
           Partnership, as landlord, and the Company, as tenant.            42

10.11    Lease, dated August 6, 1997, between Merrymack Limited
           Partnership, as landlord, and the Company, as tenant.            42

10.12    Loan Agreement, dated August 22, 1997, between the Company
           and Allfirst Bank of Maryland.                                   42

13       1999 Annual Report to Stockholders.42

21       Subsidiaries of the Company.                                       42

27       Financial Data Schedule.                                           42



                                       46
<PAGE>