<PAGE>

                                    FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934


For Quarter Ended September 30, 1998            Commission File Number 000-17577
                  ------------------                                   ---------


                     CORE TECHNOLOGIES (PENNSYLVANIA), INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         Delaware                                              22-2537194
--------------------------------------------------------------------------------
(state or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                            Identification Number)

110 Summit Drive , Exton, PA                                   19341-2838
--------------------------------------------------------------------------------
(Address of principal executive offices)                       (Zip Code)


Registrant's telephone number, including area code            (610) 524-7000
                                                              --------------

         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 and
         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           
                              -----                        -----     

Number of shares outstanding as of          October 31, 1998

Common Stock                                8,887,326


<PAGE>


                     CORE TECHNOLOGIES (PENNSYLVANIA), INC.
                           QUARTERLY REPORT FORM 10-Q


                                      INDEX


PART I - FINANCIAL INFORMATION
------------------------------
                                                                            Page
                                                                            ----
Item 1 - Financial Statements:

         Consolidated Balance Sheets -
         September 30, 1998 (unaudited) and December 31, 1997...............  3

         Consolidated Statements of Operations -
         Three and nine Months Ended September 30, 1998 and 1997 (unaudited)  4

         Consolidated Statements of Cash Flows -
         Nine Months Ended September 30, 1998 and 1997 (unaudited)..........  5

         Note to Consolidated Financial Statements..........................  6

Item 2 - Management's Discussion and Analysis of
         Financial Condition and Results of Operations......................  7

Item 4 - Submission of Matters to a Vote of Security Holders................ 11

PART II - OTHER INFORMATION
---------------------------

Item 6 - Exhibits.........................................................   11
Signatures................................................................   12

                                       2

<PAGE>

                                     PART I

CORE TECHNOLOGIES (PENNSYLVANIA), INC.
--------------------------------------------------------------------------------
Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                                                                    September 30,      December 31,
                                                                                          1998               1997              
                                                                                   ---------------    ---------------
                                                                                      (Unaudited)
<S>                                                                                 <C>                <C>    
Assets   

Current assets
   Cash                                                                             $    70,600        $   133,200
   Receivables, less allowances ($7,000 --1998; $18,000 --1997)                         754,200            921,000
   Inventories                                                                          556,200            527,500
   Notes receivable                                                                     420,500            280,300
   Other current assets                                                                 213,200            110,600
                                                                                    -----------        -----------
   Total current assets                                                               2,014,700          1,972,600

Net assets of discontinued operation                                                     15,200            455,800

Plant and equipment
   Leasehold improvements                                                                37,900             37,900
   Machinery and equipment                                                              130,500             86,000
                                                                                    -----------        -----------
                                                                                        168,400            123,900
   Less accumulated depreciation and amortization                                      (118,600)           (94,500)
                                                                                    -----------        -----------
   Net plant and equipment                                                               49,800             29,400

Other assets
   Goodwill, net                                                                        451,800            487,800
   Notes receivable                                                                     953,900          1,234,200
                                                                                    -----------        -----------
   Total other assets                                                                 1,405,700          1,722,000
                                                                                    -----------        -----------
                                                                                    $ 3,485,400        $ 4,179,800
                                                                                    ===========        ===========
Liabilities and Stockholders' Deficit

Current liabilities
   Accounts payable                                                                 $ 1,093,600        $   865,700
   Accrued expenses                                                                     115,100            287,800
                                                                                    -----------        -----------
   Total current liabilities                                                          1,208,700          1,153,500

Long-term debt                                                                        5,327,400          5,983,100
Long-term debt - related party                                                          887,000            887,000
Other liabilities                                                                       981,200            981,200

Redeemable convertible preferred stock issued to related party                        1,882,500          1,815,000

Stockholders'  deficit
   Common stock, $.01 par value; Authorized -- 20,000,000 shares;
     Issued - (9,217,326 shares--1998 and1997)                                           92,200             92,200
   Additional paid-in capital                                                         7,601,400          7,668,900
   Accumulated deficit                                                              (14,074,500)       (13,980,600)
   Treasury stock at cost - 330,000 shares                                             (420,500)          (420,500)
                                                                                    -----------        -----------
   Total stockholders' deficit                                                       (6,801,400)        (6,640,000)
                                                                                    -----------        -----------
                                                                                    $ 3,485,400        $ 4,179,800
                                                                                    ===========        ===========
</TABLE>
See notes to consolidated financial statements

                                       3

<PAGE>


CORE TECHNOLOGIES (PENNSYLVANIA), INC.
--------------------------------------------------------------------------------
Consolidated Statements of Operations
                                      (Unaudited)
<TABLE>
<CAPTION>
                                                                          Three Months Ended             Nine Months Ended
                                                                             September 30,                  September 30,
                                                                         1998          1997               1998          1997      
                                                                      ---------     ---------           --------     ---------
<S>                                                                   <C>          <C>                  <C>         <C>    
Net sales                                                           $  828,600     $1,288,600          $2,844,500   $3,656,000
Cost of goods sold                                                     662,900        919,100           2,291,900    2,740,100
                                                                    ----------     ----------          ----------   ----------

    Gross profit                                                       165,700        369,500             552,600      915,900

Operating expenses:
    Sales and marketing                                                160,600        203,900             484,400      544,500
    General and administrative                                         111,800        206,900             422,000      600,700
                                                                    ----------     ----------          ----------   ----------
Total operating expenses                                               272,400        410,800             906,400    1,145,200
                                                                    ----------     ----------          ----------   ----------

Loss from continuing operations                                       (106,700)       (41,300)           (353,800)    (229,300)

Other income (expense):
   Interest - income                                                    30,800         38,200              91,200      114,500
   Interest - expense                                                 (147,500)       (31,000)           (295,500)     (62,200)
                                                                    ----------     ----------          ----------   ----------

Loss from continuing operations before provision for income taxes     (223,400)       (34,100)           (558,100)    (177,000)
Provision for (benefit of ) income taxes
                                                                    ----------     ----------          ----------   ----------

Loss from continuing operations                                       (223,400)       (34,100)           (558,100)    (177,000)
                                                                                           --

Loss from discontinued security systems operation                                     (22,400)                        (456,200)
Gain on disposition of discontinued security systems operation                                            464,200
                                                                    ----------     ----------          ----------   ----------

Net loss                                                            $ (223,400)    $  (56,500)            (93,900)  $ (633,200)
                                                                    ==========     ==========          ==========   ==========

Net earnings (loss) per share: - Basic
   Continuing operations                                                $ (.02)        $ (.01)             $ (.06)      $ (.02)
   Discontinued operations                                                               (.00)                          $ (.05)
   Gain on disposition of discontinued security systems operation                                            $.05
                                                                    ----------     ----------          ----------   ----------
                                                                        $ (.02)        $ (.01)             $ (.01)      $ (.07)
                                                                    ==========     ==========          ==========   ==========
              

Net earnings (loss) per share: - Diluted
   Continuing operations                                                $ (.02)        $ (.01)             $ (.06)      $ (.02)
   Discontinued operations                                                             $ (.00)                            (.05)
   Gain on disposition of discontinued security systems operation                                            $.05
                                                                    ----------     ----------          ----------   ----------
                                                                        $ (.02)        $ (.01)             $ (.01)      $ (.07)
                                                                    ==========     ==========          ==========   ==========

Weighted average common and common equivalent shares outstanding:
    Basic                                                            8,887,000      8,887,000           8,887,000    8,887,000
    Diluted                                                          8,887,000      8,887,000           8,887,000    8,887,000
</TABLE>
See notes to consolidated financial statements

                                       4

<PAGE>


CORE TECHNOLOGIES (PENNSYLVANIA), INC.
--------------------------------------------------------------------------------
Consolidated Statements of Cash Flows
         (Unaudited)
<TABLE>
<CAPTION>
                                                                         Nine Months Ended September 30,
                                                                            1998              1997
                                                                        -------------    ---------------
<S>                                                                     <C>               <C>    
Operations
   Net loss                                                             $  (93,900)        $ (633,200)

   Adjustments to reconcile net loss to cash from operations
    Loss from discontinued security systems operation                                         456,200
    Gain on disposition of discontinued security systems operation        (464,200)
    Depreciation and amortization                                           60,100             54,800

   Cash provided by (used in) changes in working capital items
    Receivables                                                            166,800            755,300
    Inventories                                                            (28,700)          (315,300)
    Other current assets                                                  (102,600)          (303,000)
    Accounts payable                                                       227,900             86,000
    Accrued expenses                                                      (172,700)          (264,400)
                                                                        ----------         ----------

Cash used by continuing operations                                        (407,300)          (163,600)

Cash provided (used) by discontinued operations
    Cash provided by discontinued furnishings operation                    140,200            542,500
    Cash used by discontinued security systems operation                (1,301,900)          (696,900)
                                                                        ----------         ----------
Cash used by discontinued operations                                    (1,161,700)          (154,400)

Financing activities
   Net borrowings (repayments) of debt                                    (655,700)           363,500
                                                                        ----------         ----------
Cash provided (used) by financing activities                              (655,700)           363,500

Investing activities
   Expenditures for plant and equipment                                    (14,500)            (9,200)
   Proceeds from sale of discontinued security systems operation         2,176,600
                                                                        ----------         ----------
Cash provided (used) by investing activities                             2,162,100             (9,200)
                                                                        ----------         ----------

Increase (decrease) in cash                                                (62,600)            36,300
Cash beginning of period                                                   133,200             16,000
                                                                        ----------         ----------

Cash end of period                                                      $   70,600         $   52,300
                                                                        ==========         ==========                             
</TABLE>
See notes to consolidated financial statements

                                       5
<PAGE>


                     CORE TECHNOLOGIES (PENNSYLVANIA), INC.
                   Notes to Consolidated Financial Statements
                               September 30, 1998

1.       The accompanying unaudited interim consolidated financial statements
         were prepared in accordance with generally accepted accounting
         principles for interim financial information. Accordingly, they do not
         include all of the information and footnotes required by generally
         accepted accounting principles for complete financial statements. The
         Summary of Accounting Policies and Notes to Consolidated Financial
         Statements included in the Company's 1997 Annual Report should be read
         in conjunction with the accompanying statements. These statements
         include all adjustments (consisting only of normal recurring
         adjustments) which the Company believes are necessary for a fair
         presentation of the statements. The interim operating results are not
         necessarily indicative of the results for a full year.

2.       Certain amounts for 1997 have been reclassified to conform to the 
         current year presentation.

3.       In late 1997, the Company and its Board of Directors adopted a formal
         plan to sell the assets of Maris, its security and control system
         integration and installation business, and classify Maris as a
         discontinued operation. On June 8, 1998, effective June 1, 1998,
         substantially all of the assets of Maris were sold to Security
         Technologies Group, Inc., a privately held New Jersey corporation
         (STG). The decision to sell Maris was based on the Company's lack of
         adequate capital to support Maris' operations. The transaction is more
         fully described in note 2 to the Consolidated Financial Statements
         included in the Company's 1997 Annual Report on Form 10-K. The Company
         will now focus on the indoor air quality and hospital/healthcare
         environmental control business of its only operating subsidiary Airo
         Clean, Inc. Continuing operations reflect the results of the on-going
         business of Airo Clean only.

                                       6

<PAGE>

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS



         The following information should be read in connection with information
contained in the Consolidated Financial Statements and notes thereto appearing
elsewhere in this Report. The following discussion includes forward-looking
statements that involve risk and uncertainties and are subject to change at any
time. The Company derives its forward-looking statements from its operating
budgets, estimates and forecasts, which are based upon detailed assumptions
regarding business and operational variables. While the Company believes that
its assumptions are reasonable, it cautions that there are inherent difficulties
in predicting the impact of certain factors, including competition, client
demand, and a dependence on a variety of industries which require particle-free,
ultra-clean working environments. The same comments, as to reasonableness of
assumptions, would apply to the demand from the hospital and healthcare market
where HMO's as well as other revenue factors have had a demonstrable impact on
hospital spending.

Overview

         In late 1997, the Company and its Board of Directors adopted a formal
plan to sell the assets of Maris, its security and control system integration
and installation business, and classify Maris as a discontinued operation. On
June 8, 1998, effective June 1, 1998, substantially all of the assets of Maris
were sold to Security Technologies Group, Inc., a privately held New Jersey
corporation (STG). The decision to sell Maris was based on the Company's lack of
adequate capital to support Maris' operations. The transaction is more fully
described in note 2 to the Consolidated Financial Statements included in the
Company's 1997 Annual Report on Form 10-K. The Company will now focus on the
indoor air quality and hospital/healthcare environmental control business of its
only operating subsidiary Airo Clean, Inc.


         Continuing operations reflect the results of the on-going business of
Airo Clean only.

Review of continuing operations

         Net sales for the quarter ended September 30, 1998 were $.8 million
compared to $1.3 million for the comparable period in 1997. The Company reported
a net loss from continuing operations of $223,400, compared to a net loss of
$34,100 in the same period in 1997. Gross profit, as a percentage of sales, was
20.0% in 1998 and 28.7% for the same period in 1997. The reduction in profit
margin in 1998 reflects the increased pricing pressures partially fueled by the
decrease in market demand in the filter-fan business throughout the worldwide
market.

         For nine months ended September 30, 1998, net sales were $2.8 million
compared to $3.7 million for the comparable period in 1997. The Company reported
a net loss from continuing operations of $558,100, compared to a net loss of
$177,000 in the same period of 1997. Gross profit, as a percentage of sales, was
19.4% in 1998 and 25.1% for the same period in 1997. The significant change in
net earnings from continuing operations can be attributed to a decrease in Airo
Clean sales and the decrease in gross margin described above which was partially
offset by a decrease in operating expenses.

                                       7

<PAGE>

         Sales were lower then comparable periods in the previous year due to
the worldwide slowdown in the semi-conductor industry. This sector consumes the
largest quantity of high efficiency filters by a large margin and a market
recovery in this area is expected in mid 1999. To compensate for the
deteriorating market, the Company has introduced a line of more economically
priced fan filter units along with some new products with enhanced energy
features.

         Sales and marketing expenses were $160,600 in the third quarter of
1998, compared to $203,900 in 1997. These costs, as a percentage of sales, were
19.4% in the third quarter of 1998, compared to 15.8% in the same period in
1997. For the nine-month period ending September 30, 1998, sales and marketing
expenses were $484,400, compared to $544,500 in the same period of 1997. The
absolute decrease in these expenses can be attributed to reduced sales
commissions, primarily due to a change in the sale mix. These expenses increased
as a percentage of sales due to lower sales. The sales effort at Airo Clean
continues to focus on promoting the BioShield, Ultraguard, and laminar air flow
products. These are air-scrubbing devices for controlling airborne contaminants
and are targeted for the micro-electronic and specialty manufacturing markets.
They also provide needed particle control in the health care and hospital
industry.

         General and administrative expenses decreased in the third quarter of
1998 by $95,100 compared to 1997, reflecting staff reductions and salary
freezes. These costs, as a percentage of sales, were 13.5% in the third quarter
of 1998, compared to 16.1% in 1997. For the nine-month period ending September
30, 1998, general and administrative expenses decreased by $178,700 when
compared to the same period in 1997. For the nine month period ending September
30, 1998, these costs, as a percentage of sales, were 14.8%, compared to 16.4%
in the same period of 1997. The decrease in these expenses in 1998 reflects
staff reductions and salary freezes. The Company continues to closely monitor
and control costs and believes that additional sales can be achieved without a
proportional increase in business infrastructure.

         Interest expense in the third quarter of 1998 was $147,500, compared to
$31,000 in 1997. For the nine-month period ending September 30, 1998, interest
expense was $295,500 compared to $62,200 in 1997. The increase in 1998 reflects
the higher average debt level due to operating losses incurred in 1997 and 1998,
and starting in June of 1998, continuing operations began to be attributed all
interest expense due to the sale of the security systems segment. Interest
expense for the continuing operations is projected to be approximately $440,000
for the year ended December 31, 1998.

Review of discontinued operations

         In 1997 the Company and its Board of Directors adopted a formal plan to
sell the assets of Maris and therefore Maris is classified as a discontinued
operation.

         The Company reported a loss from discontinued operations from its
security systems segment for the quarter ended September 30, 1997 of $22,400 and
a loss of $456,200 for the nine-month period ending September 30, 1997. The loss
of $224,100 for the 1998 five-month period prior to the June 1998 sale was fully
reserved at December 31, 1997. The Company reported a gain of $464,200 on the
disposition of the discontinued security systems operation in the second quarter
ended June 30, 1998.

                                       8

<PAGE>


Liquidity and Capital Resources

         The Company has a $6.0 million credit facility due on March 14, 2000.
This credit facility is secured by guarantees of $4.5 million in the form of a
letter of credit from Safeguard Scientifics, Inc. through September 30, 2000 and
substantially all of the assets of the Company. Safeguard is not contractually
obligated to satisfy any of the Company's obligations with the exception of the
$4.5 million letter of credit used as collateral for the Company's credit
facility. Borrowings bear interest at prime plus 1%. The Company believes that
the combination of Safeguard's letter of credit and the working capital assets
of the on going business will be sufficient to satisfy or support the debt. As
of October 31, 1998, outstanding borrowings under the credit facility were $5.2
million with less than $100,000 of availability. On December 29, 1997 the credit
facility was amended to increase the availability up to an additional $195,000
through November 30, 1998.

         In connection with the 1995 sale of its furniture business, the Company
received a $2.0 million Subordinate Note which bears interest at a rate of 8%
per annum. The principal amount of the Subordinate Note is being amortized on a
seven-year level schedule with semi-annual principal and interest payments and a
balloon payment due on August 25, 2000. The Company received an interest and
principal payment on the Subordinate Note of $208,600 in March 1998. The Company
was due the second semi-annual payment in August 1998 of approximately $195,000,
which has been deferred into three equal monthly payments starting in November
1998.

         In June 1998, the Company sold substantially all the assets of Maris to
STG for approximately $2.9 million, of which approximately $2.2 million was
received at closing and the remaining $.7 million will be received as certain
accounts receivable are collected. In addition, the purchase price included a
contingent payment of up to $500,000 which is based on the performance of Maris'
business for the calendar year ending December 31, 1998. The contingent payment
is based upon Maris achieving a minimum gross margin of 22% and the following
three conditions: (1) $200,000, if gross revenues exceed $13.5 million or a
proportional amount from zero to $200,000 when revenues range between $11.5 and
$13.5 million; (2) $200,000, if gross margins exceed 24% or a proportionate
amount from zero to $200,000 when the gross margin is between 22% and 24%; (3)
$100,000, if the bookings exceed $13.5 million or a proportional amount from
zero to $100,000 when the bookings range between $12.5 and $13.5 million. The
contingent payment will be calculated in January 1999, and if any, will be paid
in April 1999.

         As a result of discontinuing the furnishings and security systems
segments, the Company has emerged as a significantly downsized and restructured
company. Credit financing is available for limited working capital requirements.
If these sources of funds prove to be inadequate or in the case of credit
financing, unavailable, then the Company will have to seek additional funds from
other sources to continue operations. There can be no assurance that new sources
of funds, if required, will be available. The Company continues to operate in a
restructured mode and continues to focus on management of working capital and
controlling expenses to minimize the need to utilize availability under the
credit facility.

                                       9
<PAGE>

Year 2000

The Company's State of Readiness

         The Company has reviewed its critical information systems for Year 2000
compliance. The compliance review revealed that the Company's critical
information systems are Year 2000 compliant due to the fact that the Company's
network hardware and operating systems are "off-the-shelf" products from third
parties with Year 2000 compliant versions.

         The Company has determined that there should be no Year 2000 issues for
the products it has already sold as the Company's products contain no date
sensitive software.

         As part of the Company's Year 2000 compliance review, the Company has
also contacted its primary vendors and large customers to determine the extent
to which the Company is vulnerable to those third parties failure to remediate
their Year 2000 compliance issues. The Company will continue to contact its
significant vendors and customers as part of its Year 2000 compliance review.
However, there can be no guarantee that the systems of other companies on which
the Company's business relies will be timely converted or that failure to
convert by another company would not have a material adverse effect on the
Company and its operations.

The Cost to Address the Company's Year 2000 Issues

         The Company estimates that the cost of its Year 2000 compliance issues
will be less than $10,000 and is not expected to be material to the Company's
financial position, cash flow or results of operations.

The Risks Associated with the Company's Year 2000 Issues

         The Company believes that the risks associated with Year 2000 issues
primarily relates to the failure of third parties upon whom the Company's
business relies to timely remediate their Year 2000 issues. Failure by third
parties to timely remediate their Year 2000 issues could result in disruptions
in the Company's supply of parts and materials, late, missed or unapplied
payments, temporary disruptions in order processing and other general problems
related to the Company's daily operations. While the Company believes its Year
2000 compliance review procedures will adequately address the Company's internal
Year 2000 issues, until the Company receives responses from its significant
vendors and customers, the overall risks associated with the Year 2000 issue
remain difficult to accurately describe and quantify, and there can be no
guarantee that the Year 2000 issue will not have a material adverse effect on
the Company's business, operating results and financial position.

The Company's Contingency Plan

         The Company has not, to date, implemented a Year 2000 contingency plan.
It is the Company's intention to devote whatever resources are necessary to
assure Year 2000 compliance issues are resolved. However, the Company will
develop and implement a contingency plan by the end of March 1999 in the event
the Company's Year 2000 compliance initiatives, particularly those that relate
to third parties, fall behind schedule.

                                       10

<PAGE>


PART II   OTHER INFORMATION

Item 1.   Legal Proceedings

              Not applicable.

Item 2.   Change in Securities

              Not applicable.

Item 3.   Defaults Upon Senior Securities

              Not applicable.

Item 4.   Submission of Matters to a Vote of Security Holders

              Not applicable.

Item 5.   Other Information

              Not applicable.

Item 6.   Exhibits

              (a) Exhibits

                     Number                     Description

                       27       Financial Data Schedule (electronic filing only)

              (b)    No reports on Form 8-K have been filed by the registrant  
                     during the quarter ended September 30, 1998.

                                       11

<PAGE>


                                   SIGNATURES

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


                                  CORE TECHNOLOGIES (PENNSYLVANIA), INC.
                                               (Registrant)


                                  /S/ George E. Mitchell      
Date: November 13, 1998           ----------------------------------------------
                                  George E. Mitchell,
                                  President and Chief Executive Officer


                                  /S/ Frederick B. Franks, III        
Date: November 13, 1998           ----------------------------------------------
                                  Frederick B. Franks, III
                                  Vice President Finance and Treasurer
                                  (Principal Financial and
                                  Principal Accounting Officer)

                                       12