U.S. SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC 20549
                                
                           FORM 10-KSB
                                
[X]   Annual  report  pursuant to section  13  or  15(d)  of  the
Securities  Exchange  Act  of 1934  for  the  fiscal  year  ended
December 27, 1997, or

[  ]  Transition report pursuant to section 13 or 15(d)  of  the
Securities Exchange act of 1934 for the transition period from  to

                  Commission File No.  0-22408

                           PURUS, INC.
   (Name of Small Business Issuer as specified in its charter)

           Delaware                         77-0234694
(State or Other Jurisdiction of           (IRS Employer
Incorporation or Organization)         Identification No.)

       605 Tennant Avenue, Suite B, Morgan Hill, CA  95037
      (Address of Principal Executive Offices and Zip Code)

Issuer's Telephone Number:  (408) 778-3465

Securities registered under Section 12(b) of the Act:  None

Securities registered under Section 12(g) of the Act:

                  Common Stock, Par Value $0.01

Check  whether  the issuer (1) filed all reports required  to  be
filed by sections 13 or 15(d) of the Exchange Act during the past
12 months (or such shorter period that the issuer was required to
file  such  reports),  and (2) has been subject  to  such  filing
requirements for the past 90 days.  Yes [X] No [ ]

Check  if there is no disclosure of delinquent filers in response
to  Item  405  of Regulation S-B in this form, and no  disclosure
will  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-KSB or any  amendment  to
this Form 10-KSB.  [ ]

The  issuer's  revenues  for  its most  recent  fiscal  year  are
$1,335,884.

The aggregate market value of voting stock held by non-affiliates
computed  on the basis of the last sale price on April 14,  1998,
was $2,307,813.

As  of  December 27, 1997, the Registrant had outstanding 666,193
shares of Common Stock, par value $0.01.

Documents incorporated by reference:  None

<PAGE>

                        TABLE OF CONTENTS

ITEM NUMBER AND CAPTION                                     Page

Part I                                                           

1.   Description of Business                                    3

2.   Description of Properties                                  4

3.   Legal Proceedings                                          4

4.   Submission of Matters to a Vote of Security Holders        5
                                                                 
Part II                                                          

5.    Market  for  Common Equity and  Related  Stockholder      5
Matters

6.    Management's  Discussion and Analysis  of  Financial      6
Condition
     and Results of Operations

7.   Financial Statements                                       7

8.   Changes in and Disagreements with Accountants              7
     on Accounting and Financial Disclosure

Part III                                                         

9.   Directors, Executive Officers, Promoters and Control       7
       Persons;  Compliance  with  Section  16(a)  of  the
Exchange Act

10.  Executive Compensation                                     8

11.   Security Ownership of Certain Beneficial Owners  and      9
Management

12.  Certain Relationships and Related Transactions             9

13.  Exhibits and Reports on Form 8-K                          10


<PAGE>


                FORWARD-LOOKING STATEMENT NOTICE

When  used  in  this  report, the words "may," "will,"  "expect,"
"anticipate,"  "continue," "estimate," "project,"  "intend,"  and
similar  expressions  are  intended to  identify  forward-looking
statements  within the meaning of Section 27a of  the  Securities
Act  of  1933 and Section 21e of the Securities Exchange  Act  of
1934 regarding events, conditions, and financial trends that  may
affect   the  Company's  future  plans  of  operations,  business
strategy,  operating  results, and financial  position.   Persons
reviewing  this  report  are cautioned that  any  forward-looking
statements  are  not  guarantees of future  performance  and  are
subject  to  risks and uncertainties and that actual results  may
differ  materially from those included within the forward-looking
statements  as  a  result of various factors.  Such  factors  are
discussed  under the headings "Item 1.  Description of Business,"
and  "Item  6.  Management's Discussion and Analysis of Financial
Condition  and  Results of Operations," and also include  general
economic  factors and conditions that may directly or  indirectly
impact   the   Company's  financial  condition  or   results   of
operations.
                                
                             PART I
                                
                ITEM 1.  DESCRIPTION OF BUSINESS

Development and Discontinuation of Air Pollution Control Business

Purus,  Inc. (the "Company") was founded in 1989 to research  and
develop  environmental technologies and products.  In  1992,  the
Company  focused its efforts on the development of an  adsorptive
based technology for the separation of volatile organic compounds
from  air  streams  and  began to manufacture,  market  and  sell
products now known as PADRE air pollution control systems.

Beginning  in November 1993, the Company expanded its efforts  to
commercialize  the  PADRE technology, but encountered  mechanical
design  problems  resulting  in  significant  field  service  and
redesign   expenses.   A  market  perception   of   unreliability
developed which adversely affected sales.  In August 1995,  after
an  extensive review of its markets and technologies, the Company
announced that it would pursue the option of selling some or  all
of  its  PADRE technology while taking other actions intended  to
minimize further losses and preserve its capital.

In  October  1995, the Company licensed its PADRE  air  pollution
control  technology to Thermatrix Inc., a California  corporation
("Thematrix").  In April 1996, the Company consummated  the  sale
of  substantially all of its noncash assets, excluding inventory,
to  Thermatrix,  including  all of  its  interest  in  the  PADRE
technology.   In  consideration  for  such  assets,  the  Company
received  a  $300,000 cash payment and the right to royalties  in
the  amount  of  seven  percent  of  the  net  invoice  value  of
Thermatrix'  PADRE  equipment sales  until  the  earlier  of  (i)
October  2000, or (ii) the date on which the Company has received
an  aggregate  of $2,000,000 in royalty payments.   In  addition,
Thermatrix agreed to take possession of a substantial portion  of
the  Company's  inventory on consignment, and to  offer  warranty
services  to the Company as an independent contractor on  an  as-
requested  basis.   In  April  1997, the  Company  completed  its
obligations to the owner of the last remaining PADRE installation
covered  by a warranty agreement.  The Company believes  that  it
has  no further obligations under PADRE warranty agreements  that
were  not  assumed by Thermatrix.  Also in April 1997, Thermatrix
and  the  Company mutually terminated Thermatrix'  obligation  to
provide  warranty services to the Company and Thermatrix returned
to  the Company the inventory that it held on consignment.   Such
returned  inventory, which had been entirely written-off  by  the
Company in 1995, was liquidated.  There can be no assurance  that
the  Company  will receive any significant income from  Thematrix
for   royalties  on  PADRE  equipment  sales.    See   "Item   6,
Management's  Discussion and Analysis of Financial Condition  and
Results of Operations."

General Description of Continuing Operations

In light of the discontinuation of its active business operations
in  1996,  the Company's current operating plan is to (i)  defend
against  legal  actions (see "Item 3. Legal Proceedings"  below),
(ii)  handle the administrative and reporting requirements  of  a
public  company, and (iii) seek to identify potential businesses,
products,   technologies  and  companies  for  acquisition.    At
present,  the  Company  has  no commitments  or  agreements  with
respect  to  the acquisition of any business, product, technology
or  company,  but  has  entered into a loan  transaction  with  a
prospective acquisition target.

To facilitate its acquisition effort, the Company entered into  a
consulting  agreement  in  August 1997,  with  Friedli  Corporate
Finance  Inc., under which the Company pays a consulting  fee  of
$4,000  per month, reimburses the consultant for expenses  up  to
$6,000  per  year,  and  issued to the consultant  a  warrant  to
purchase  20,000 shares of common stock at an exercise  price  of
$4.00 per share.  At the time of the transaction, an affiliate of
the consultant was a five percent stockholder of the Company.

Due  to  the  legal proceedings pending against the Company  (see
"Item  3. Legal Proceedings" below), the Company has been  unable
to  acquire  an  interest in a business venture, because  of  the
unwillingness of the business ventures reviewed by the Company to
consider  an  acquisition transaction while the legal proceedings
are unresolved.  In the view of management, the legal proceedings
prevent the Company from moving ahead, and are detrimental to the
Company  and  its stockholders.  Most recently, the inability  of
the  Company to acquire a business activity because of the  legal
proceedings  resulted  in a determination  by  the  Nasdaq  Stock
Market  to  delist the Company's common stock from the  quotation
system  on  the  grounds that the Company is not engaged  in  any
active  business  operations.   The  Company  has  appealed  this
determination to obtain additional time with which to resolve the
legal proceedings and acquire a business venture, but there is no
assurance this appeal will be successful or, if successful,  that
the Company will be able to acquire a business venture within the
time  allotted  by The Nasdaq Stock Market.  Loss of  its  Nasdaq
listing  would  adversely  affect  the  trading  market  in   the
Company's  common stock.  (See Item 5. Market for  Common  Equity
and Related Stockholder matters.")

In  February 1998, the Company made a loan of $1,800,000 to  Casa
Solaz,  Inc. ("CSI"), a private Nevada corporation which recently
commenced   the   business  of  manufacturing,   marketing,   and
installing  prefabricated housing units in  South  America.   The
loan bears interest at the rate of six percent per annum, and all
principal  and interest is due December 31, 1999.   The  loan  is
secured by all of the assets of CSI, including all of the capital
stock  of  its  Venezuelan subsidiaries conducting operations  in
South  America.   The loan is convertible at the  option  of  the
Company at any time prior to maturity into 450,000 shares of  the
Series  A  Convertible Preferred Stock of CSI.  As  a  negotiated
element  of the transaction, CSI granted to the Company a warrant
to  purchase  550,000 additional shares of Series  A  Convertible
Preferred Stock at a price of $4.00 per share exerciseable on  or
before  December  31,  1998.  The Series A Convertible  Preferred
Stock  provides for a cumulative dividend at the rate of  8%  per
annum  and is convertible to common stock of CSI at the  rate  of
one  share of common for one share of preferred.  The Company  is
hopeful  this  lending arrangement is a prelude  to  a  potential
acquisition,  but  is unable to proceed much  further  until  the
stockholder litigation and other issues are resolved in a  manner
acceptable  to  Casa Solaz, Inc.  There can be no assurance  that
the  Company  would be successful in consummating any acquisition
on  favorable terms or that it will be able to profitably  manage
any business it acquires.

                ITEM 2. DESCRIPTION OF PROPERTIES

In  March  1997, the Company relocated its corporate headquarters
to  605  Tennant Avenue, Suite B, Morgan Hill, California  95037-
5529  where it sub-leases approximately 300 square feet of office
space  on  a month-to-month basis and the Company terminated  its
lease of warehouse space in Alcoa, Tennessee.

                    ITEM 3. LEGAL PROCEEDINGS

In  July  1995, Aron Parnes, a stockholder of the Company,  filed
suit  against  the  Company and five of  its  current  or  former
employees, officers, and directors in the United States  District
Court  for  the  Northern  District of California.   The  lawsuit
alleges  violations of the federal securities laws, and  purports
to  seek  damages  on  behalf  of a  class  of  stockholders  who
purchased  the Company's common stock during the period  November
1993  through  March 1995.  In April 1996, the  Company  filed  a
motion to dismiss the complaint.  In March 1997, the Court issued
an order granting the defendants' motion to dismiss the complaint
and  granting the plaintiff 45 days leave to amend.  In May 1997,
the suit was re-filed reasserting the claims previously made, and
in  June 1997, the Company filed a new motion to dismiss the  re-
filed  complaint.  If the action is not dismissed with prejudice,
the  Company intends to defend the suit vigorously.  The  Company
and  other  defendants  have  obtained  discovery  regarding  the
propriety  of  plaintiff's  named  class  representative  through
document  and interrogatory requests.  The plaintiffs have  begun
to  pursue formal discovery, including requesting documents  from
the Company and third parties.

In  July  1995, eight former employees of the AT&T Multi Language
Center  filed  suit against the Company and AT&T in  Santa  Clara
County  Superior Court. The lawsuit alleges that plaintiffs  were
exposed  to an unspecified toxic substance while working  at  the
AT&T  facility,  previously located next door  to  the  Company's
former  San Jose, California facility. The Company has  filed  an
answer  denying  all  liability.  The  parties  have  engaged  in
discovery  through  document procedure requests,  interrogatories
and depositions.

The Company is not a party to any other pending legal proceedings
which  it believes will materially affect its financial condition
or results of operations.

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

No matter was submitted to a vote of security holders in the
fourth quarter of 1997.

                             PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Quotations  for  the Company's common stock are reported  on  the
Nasdaq  SmallCap  Market  System under the  symbol  "PURS."   The
following table sets forth, for the respective periods indicated,
the  prices of the Company's Common Stock in the over-the-counter
market, as reported and summarized by the Nasdaq SmallCap  Market
System.   Such  prices  are  based on  inter-dealer  bid  prices,
without markup, markdown, commissions, or adjustments and may not
represent actual transactions.

Calendar Quarter Ended              Low Bid ($)     High Bid ($)

March 31, 1996                         2.13            7.00
June 30, 1996                          3.50            4.75
September 30, 1996                     3.38            5.25
December 31, 1996                      3.00            6.25

March 31, 1997                         3.25            4.38
June 30, 1997                          2.13            3.25
September 30, 1997                     2.25            3.75
December 31, 1997                      2.00            3.75

In  late February 1998, the Company received notice of a decision
by  the Nasdaq Stock Market to delist the Company's common  stock
from the SmallCap Market.  This decision was based on the finding
by Nasdaq that the Company was not engaged in any active business
operations, and that as a matter of policy Nasdaq does  not  list
inactive  companies with only cash assets, regardless of  whether
those  companies  satisfy  the quantitative  listing  maintenance
requirements.   The  Company has appealed  this  decision  and  a
hearing  on the matter will be held April 23, 1998.  The  Company
will  contend that the stockholder litigation described  in  this
report  has  prevented the Company from acquiring a new  business
venture,  the Company is attempting to terminate the  stockholder
litigation,   and   the  Company  is  pursuing  acquisitions   as
expeditiously   as  possible  under  the  circumstances.    These
arguments  may  give  the  Company some  time  extension  on  the
decision  to  delist, but management does not  believe  any  such
extension  would be more than a few months.  Accordingly,  unless
the  Company can prevail on the appeal, terminate the stockholder
litigation  soon,  and  enter into  an  agreement  to  acquire  a
business  venture,  there is a substantial  likelihood  that  the
Company's  listing on the Nasdaq SmallCap Market will  terminate.
Management  believes loss of the listing would  adversely  affect
the trading market in the common stock of the Company.

Since its inception, no dividends have been paid on the Company's
common  stock.  The Company intends to retain it capital and  any
earnings  for  future business activities, so it is not  expected
that  any dividends on the common stock will be declared and paid
in the foreseeable future.

At December 31, 1997, there were approximately 83 holders of
record of the Company's Common Stock.

    ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                            CONDITION
                   AND RESULTS OF OPERATIONS.

Results of Operations

Years Ended December 27, 1997, and December 29, 1996

The  Company had no revenue from continuing operations for fiscal
years 1997 and 1996.

General  and  administrative expenses from continuing  operations
for  fiscal  years  1997 and 1996 consisted of general  corporate
administration, legal and professional expenses,  accounting  and
auditing  costs,  public  company costs, directors  and  officers
insurance, and similar items.  These expenses were $1,305,195 and
$1,006,713   for  1997  and  1996,  respectively.   General   and
administrative  expenses  in  1997  were  greater  than  in  1996
primarily due to increases in the reserves for legal expenses.

The  Company  had no interest expense in 1996 or 1997.   Interest
income in fiscal years 1997 and 1996 resulted from the investment
of   the  Company's  cash  assets  in  short-term,  liquid   cash
equivalents.  Interest income was $245,780 and $307,992  in  1997
and 1996, respectively.  Interest income in 1997 is lower than in
1996  due  to  a  reduction in the Company's cash and  short-term
investments  used  to fund operating losses and  to  pay  accrued
expenses.   Interest income will likely continue to  decrease  if
additional  cash  or  short-term investments  are  used  to  fund
operating  losses  and  accrued expenses, or  if  interest  rates
decline.

As  a result of the foregoing factors, the Company realized a net
loss  from continuing operations of $1,059,415 for 1997  compared
to a net loss of $698,721 for 1996.

Results of Discontinued Operations

Years Ended December 27, 1997, and December 29, 1996

Income  from discontinued operations was $1,090,104 and  $781,624
for  1997  and  1996,  respectively.   Income  from  discontinued
operations  consists of royalty payments and inventory  purchases
by  Thermatrix, and revenues from customer services  provided  by
the  Company  on PADRE.  The Company expects that the  amount  of
such revenues will be insignificant in the future.

Net Income/Net Loss from Continuing and Discontinued Operations

As  a  result of the foregoing factors, the Company's net  income
from both continuing and discontinued operations was $30,689  and
$82,903  for 1997 and 1996, respectively.  Net income  per  share
from  both  continuing and discontinued operations was $0.05  and
$0.13 for 1997 and 1996, respectively.

Liquidity and Capital Resources

At  December  27,  1997,  the  Company  had  working  capital  of
approximately $3,759,635.  Working capital consists substantially
of  short-term  investments, cash and cash  equivalents,  accrued
liabilities,  and  net liabilities from discontinued  operations.
Net  cash used in operating activities was approximately $553,689
for  1997, and $1,884,697 for 1996.  Although the Company's  most
significant  assets consist largely of cash and cash equivalents,
the  Company has no intent to become, or hold itself out  to  be,
engaged  primarily in the business of investing, reinvesting,  or
trading  in  securities.   Accordingly,  the  Company  does   not
anticipate  being required to register pursuant to the Investment
Company  Act of 1940 and expects to be limited in its ability  to
invest  in securities, other than cash equivalents and government
securities,  in the aggregate amount of over 40% of  its  assets.
There  can  be  no  assurances that any investment  made  by  the
Company will not result in losses.

Management  believes  that the Company has  sufficient  cash  and
short-term  investments  to meet the  anticipated  needs  of  the
Company's continuing and discontinued operations through at least
the  next 12 months.  However, there can be no assurances to that
effect,  as the Company has no assurance of significant  revenues
and  is  subject to contingent liabilities which could result  in
the  depletion of its capital, including, without limitation, any
damages  awarded  and/or costs and expenses  incurred  by  it  in
connection   with   pending  litigation  against   the   Company.
Judgments  or settlements against the Company in connection  with
such litigation could exceed the Company's insurance coverage and
require  the  Company  to use its limited  capital  resources  in
satisfaction  thereof.   In addition,  the  Company  may  require
outside  advisors to assist management in seeking and  evaluating
potential acquisitions, in consummating such transactions  and/or
in  managing  the resulting enterprises.  In the event  that  the
Company  has not reserved sufficient cash for costs and  expenses
relating  to  pending or threatened litigation or the acquisition
of  a particular business, product or technology, the Company may
require  additional financing.  There can be  no  assurance  that
such  financing would be available to the Company  on  acceptable
terms or at all.

                  ITEM 7. FINANCIAL STATEMENTS

The  following  financial statements are filed with  this  report
beginning at page F-2 following the signature page:

     Reports of Independent Certified Public Accountants
     Balance Sheet
     Statements of Operations
     Statements of Shareholders' Equity
     Statements of Cash Flows
     Notes to Financial Statements

    ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
              ACCOUNTING AND FINANCIAL DISCLOSURE.

None

                            PART III

  ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL

                            PERSONS;

       COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

Directors and Officers

The following table sets forth the names, ages, and positions
with the Company for each of the directors and officers of the
Company.

Name               Age   Positions (1)                   Since

Peter Friedli      44    Chief  Executive  Officer  and   1998
                         Director
                         
Jorg Bader         44    Director                         1997
                         
Reinhard Siegrist  51    Director                         1996


All  executive officers are elected by the Board and hold  office
until  the  next annual meeting of stockholders and  until  their
successors are elected and qualified.

The  following is information on the business experience of  each
director and officer.

Peter Friedli has been a principal since 1986  of Friedli Corporate
Finance Inc., an investment bank and consulting firm based in Zurich,
Switzerland.  He has over a decade of experience as an independent
investment manager in corporate finance and has successfully managed
various venture investment companies in the United States.  

Jorg  Bader has served since 1983 as the president and  principal
of Maliga, LTI, a financial firm located in Biel, Switzerland.

Reinhard  Siegrist has been an independent investor  since  1989.
From  1981  to 1989 he served as financial analyst, fund  manager
and  head  of asset management for at a branch of Credit  Suisse.
Mr.   Siegrist   holds  a  Federal  Diploma  of   Accounting   of
Switzerland.

Section 16(a) Filing Compliance

Section  16(a)  of the Securities Exchange Act of  1934  requires
officers  and Directors of the Company and persons who  own  more
than  ten  percent of a registered class of the Company's  equity
securities  to  file reports of ownership and  changes  in  their
ownership  on Forms 3, 4, and 5 with the Securities and  Exchange
Commission,  and forward copies of such filings to  the  Company.
Based  on  the copies of filings received by the Company,  during
the  most recent fiscal year two of the Company's directors, Jorg
Bader  and  Reinhard Siegrist, each failed to file one report  on
Form 5 for 1997 due February 15, 1998, reporting their receipt of
options  to acquire shares of the Company's common stock  in  the
amount  of 1,000 options for Mr. Bader and 6,000 options for  Mr.
Siegrist.   The  Company  is not aware of  any  other  directors,
officers, and beneficial owners of more than ten percent  of  the
equity  securities of the Company who failed to file on a  timely
basis all required Forms 3, 4, and 5 and any amendments thereto.

                ITEM 10.  EXECUTIVE COMPENSATION

During  the  calendar year 1997, the Company's former  president,
Donald Winstead received cash compensation in the total amount of
$61,530.   In addition, Mr. Winstead was granted an option  under
the Company's 1993 Stock Option Plan to purchase 5,000 shares  at
an exercise price of $4.00 per share, which expired following the
end  of  his  association with the Company.  No other officer  or
director  received  any  cash compensation  for  services  as  an
officer and director to the Company.

Russell  K. Burbank, former president and chief executive officer
of  the  Company,  received at the beginning of  1997  the  final
termination payments pertaining to his employment in  the  amount
of $134,000.

Five  months prior to the appointment in January 1998,  of  Peter
Friedli as an executive officer and director, the Company entered
into  a consulting agreement with Friedli Corporate Finance  Inc.
("FCF"), a private consulting company owned by Mr. Friedli, under
which  the  Company  pays a consulting fee of $4,000  per  month,
reimburses the consultant for expenses up to $6,000 per year, and
issued  to the consultant a warrant to purchase 20,000 shares  of
common  stock  at an exercise price of $4.00 per share.   At  the
time  of  the transaction, an affiliate of the consultant  was  a
five percent stockholder of the Company.

In consideration of the commitment of time and resources required
of Peter Friedli in his new positions as an executive officer and
director, the Company approved in February 1998, the issuance  to
FCF  of  warrants  to purchase 250,000 shares  of  the  Company's
common stock at an exercise price of $4.00 per share exerciseable
on or before November 30, 1999, which exercise price represents a
premium  over the trading price of $3.25 in the common  stock  of
the Company on the date of grant.

  ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                           MANAGEMENT

The  following  table  sets forth as of February  19,  1998,  the
number  and percentage of the outstanding shares of common  stock
which, according to the information supplied to the Company, were
beneficially owned by (i) each person who is currently a director
of  the  Company, (ii) each executive officer, (iii) all  current
directors  and executive officers of the Company as a  group  and
(iv)  each  person who, to the knowledge of the Company,  is  the
beneficial owner of more than 5% of the outstanding common stock.
Except  as  otherwise indicated, the persons named in  the  table
have sole voting and dispositive power with respect to all shares
beneficially  owned,  subject to community  property  laws  where
applicable.

                                            Common    Percent of
                                            Shares     Class(1)
Name                                                       

Peter Friedli (2)                           300,555      31.1

Jorg Bader                                 1,000 (3)      *

Reinhard Siegrist                          2,000 (3)      *

All directors and officers as a group (3    303,555      31.3
persons)

*    Less than one percent

(1)  Percentage  of beneficial ownership is calculated  based  on
     666,193  shares of Common Stock outstanding on February  19,
     1998,  and Common Stock which such individual or entity  has
     the  right to acquire beneficial ownership within  60  days,
     including  but  not limited to the exercise of  options  and
     warrants..   These  figures  represent  the  percentage   of
     ownership  of  the named individuals assuming each  of  them
     alone  has  exercised his or her options  or  warrants,  and
     percentage  ownership of all officers  and  directors  of  a
     group  assuming  all  such  purchase  rights  held  by  such
     individuals are exercised.

(2)  The business address of Mr. Friedli is c/o Friedli Corporate
     Finance  Inc.,  Freigutstrasse 5, 8002 Zurich,  Switzerland.
     This figure includes 270,000 shares of Common Stock issuable
     to Friedli Corporate Finance Inc., of which Peter Friedli is
     a  principal,  upon exercise of warrants  with  an  exercise
     price  of $4.00 per share.  Peter Friedli and Confinvest  97
     Ltd., share beneficial ownership with respect 20,555 shares,
     which is included in this figure.  The Company believes that
     holders  of  securities of the Company held beneficially  by
     persons advised by Friedli Corporate Finance Inc., represent
     approximately  60% of the outstanding Common  Stock  of  the
     Company.  Holders of securities advised by Friedli Corporate
     Finance  Inc.,  are likely to vote the same  way  on  issues
     presented  to  them.  Consequently, it is likely  that  such
     stockholders will be able to control all decisions requiring
     the vote of stockholders.

(3)  Represents  shares  subject  to  stock  options  which   are
     presently exerciseable.

    ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There are no proposed transactions and no transactions during the
past two years to which the Company was a party and in which  any
officer,  director, or principal stockholder, or their affiliates
or associates, was also a party.

                            ITEM 13.
                EXHIBITS AND REPORTS ON FORM 8-K

Exhibits.

Copies  of  the following documents are included as  exhibits  to
this report pursuant to Item 601 of Regulation S-B.

Exhibit    SEC Ref.    Title of Document                        Location
  No.        No.
   
   1       (3)(i)      Certificate of Incorporation, as amended    (1)
                 
   2      (3)(ii)      By-Laws                                     (2)
                                                           
   3         (27)      Financial Data Schedules                 This Filing
                                                                 Page E-1

(1)   Incorporated  by  reference  to  exhibit  no.  3.1  to  the
Company's  Registration  Statement (no.  33-68946)  which  became
effective November 8, 1993, and exhibit 3.3 to the Company's Form
10-Q for the quarterly period ending April 1, 1995.

(2)   Incorporated  by  reference  to  exhibit  no.  3.2  to  the
Company's Form 10-K for the fiscal year ended December 31, 1994.

FORM 8-K FILINGS

No reports on Form 8-K were filed in the last calendar quarter of
1997.

                           SIGNATURES

      In accordance with Section 13 or 15(d) of the Exchange Act,
the  registrant caused this report to be signed on its behalf  by
the undersigned thereunto duly authorized.

                                      PURUS, INC.

Date:  April 14, 1998                 By: (Signature)
                                      Peter Friedli
                                      Chief Executive Officer


      In  accordance with the Exchange Act, this report has  been
signed  by the following persons on behalf of the registrant  and
in the capacities and on the dates indicated.


Dated:  April 14, 1998           (Signature)
                                 Peter Friedli
                                 Principal  Executive,  Financial
                                 and Accounting Officer, Director
                           
Dated:  April 14, 1998           (Signature)
                                 Jorg Bader, Director
                           
Dated:  April 14, 1998           (Signature)
                                 Reinhard Siegrist, Director
                                 
<PAGE>

                  INDEX TO FINANCIAL STATEMENTS


                                                             Page

REPORTS OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS           F-2

FINANCIAL STATEMENTS

     Balance Sheet                                            F-4
     
     Statements of Operations                                 F-5
     
     Statement of Shareholders' Equity                        F-6
     
     Statements of Cash Flows                                 F-7
     
     Notes to Financial Statements                            F-8


<PAGE>

         Report of Independent Certified Public Accountants




The Board of Directors
Purus, Inc.

We  have  audited the accompanying balance sheet of  Purus,  Inc.
(the  "Company"),  as  of  December 27,  1997,  and  the  related
statements  of operations, shareholders' equity, and  cash  flows
for  the  year  then ended.  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 audit.

We  conducted  our  audit in accordance with  generally  accepted
auditing  standards.  Those standards 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.   An
audit also includes assessing the accounting principles used  and
significant  estimates made by management, as well as  evaluating
the  overall  financial statement presentation.  We believe  that
our audit provides a reasonable basis for our opinion.

In  our  opinion,  the  financial statements  referred  to  above
present  fairly, in all material respects, the financial position
of  the  Company as of December 27, 1997, and the results of  its
operations  and  its  cash  flows for the  year  then  ended,  in
conformity with generally accepted accounting principles.


Grant Thornton LLP


San Jose, California
April 13, 1998


<PAGE>

                Report of Independent Auditors





The Board of Directors
Purus, Inc.

We  have  audited the accompanying statements  of operations,
shareholders' equity, and  cash  flows of Pursu, Inc. (the Company)
for the year ended December 29, 1996.  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 in accordance with  generally  accepted
auditing  standards.  Those standards 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.   An
audit also includes assessing the accounting principles used  and
significant  estimates made by management, as well as  evaluating
the  overall  financial statement presentation.  We believe  that
our audits provide a reasonable basis for our opinion.

In  our  opinion,  the  financial statements  referred  to  above
present  fairly, in all material respects, the results of  its
operations  and  its  cash  flows for the  year ended December 29,
1996, in conformity with generally accepted accounting principles.


                                           KPMG Peat Marwick LLP

                                       Mountain View, California
                                                January 15, 1997

<PAGE>

                      Purus, Inc.

                     BALANCE SHEET

                   December 27, 1997

                        ASSETS


Current assets:

Cash and cash equivalents                                      $    172,881
Short-term investments                                            4,508,594
Other current assets                                                175,874
                                                                
 Total current assets                                             4,857,349
                                                                
Other assets                                                         10,745

                                                               $  4,868,094
                                                                
           LIABILITIES AND SHAREHOLDERS' EQUITY

                                                                
Current liabilities:

Accounts payable                                               $     81,619
Accrued legal and litigation expenses                             1,016,095
                                                                
 Total current liabilities                                        1,097,714
                                                                
Shareholders' equity:

Preferred stock; $.001 par value, 5,000,000 shares               
  authorized; none outstanding                                            -
Common stock; $.01 par value, 5,000,000 shares                  
  authorized; 666,193 issued and outstanding                          6,662
Additional paid in capital                                       45,126,395
Accumulated deficit                                             (41,362,677)
                                                                
 Total shareholders' equity                                       3,770,380
                                                                
                                                               $  4,868,094
                                                                
                                                                
The accompanying notes are an integral part of this statement.

<PAGE>

                          Purus, Inc.

                   STATEMENTS OF OPERATIONS
                                                     
                          Year ended
                                                                 
                                             December 27,      December 29,
                                                  1997              1996

Operating (income) expense from
  continuing operations:

  General and administrative                 $  1,305,195      $  1,006,713
  Interest income                                (245,780)         (307,992)
                                                                 
      Loss from continuing operations          (1,059,415)         (698,721)
                                                                 
Income form discontinued operations             1,090,104           781,624

      Net income                             $     30,689      $     82,903
                                                                 
Income (loss) per share from:
  Continuing operations:
    Basic                                    $      (1.59)     $      (1.06)
    Diluted                                         (1.59)            (1.06)
  Discontinued operations:
    Basic                                    $       1.64      $       1.19
    Diluted                                          1.64              1.19

Net income per share:
  Basic                                      $        .05      $        .13
  Diluted                                             .05               .13

Weighted average shares outstanding               666,193           654,947


The accompanying notes are an integral part of these statements.

<PAGE>

                            Purus, Inc.

                  STATEMENT OF SHAREHOLDERS' EQUITY

                  Two years ended December 27, 1997
                                                                  
                                                  Additional       
                               Common stock        Paid-In        Accumulated
                               Shares    Amount    Capital          Deficit
                                                                
Balance, January 1, 1996      637,208   $ 6,372   $45,039,185    $(41,476,269)

  Stock options exercised      28,985       290        87,210               -

  Net income                        -         -             -          82,903

Balance, December 29, 1996    666,193     6,662    45,126,395     (41,393,366)
                                                                
  Net income                        -         -             -          30,689

Balance, December 27, 1997    666,193   $ 6,662   $45,126,395    $(41,362,677)

                                                               
The accompanying notes are an integral part of this statement.

<PAGE>

                          Purus,Inc.

                   STATEMENTS OF CASH FLOWS

                         Year ended


                                                 December 27,    December 29,
                                                      1997            1996

Cash flows from operating activities:
                                                                
  Net income                                     $     30,689    $     82,903
  Adjustments to reconcile net income to
    net cash used in operating activities:
      Depreciation and amortization                       652           9,257
      Settlement of net liabilities of
       discontinued operations                       (915,386)              -
      Accrual for litigation                          542,139               -
      Changes in operating assets and liabilities:
        Other current assets                          (76,535)         74,287
        Other assets                                        -           3,720
        Accounts payable and accrued expenses         (61,671)       (543,134)
        Net liabilities of discontinued operations    (73,577)     (1,511,730)
          Net cash used in operationg activities     (553,689)     (1,884,697)
                                                                
Cash flows from investing activities:
  Purchases of short-term investments              (4,508,594)    (30,358,165)
  Proceeds from sale/maturity of short-term
   investments                                      4,740,963      32,367,641
         Net cash provided by investing activities    232,369       2,009,476
                                                                
Cash flows from financing activities:
  Proceeds from sale of common stock                        -          87,500
                                                                
         Net (decrease) increase in cash and cash
           equivalents                               (321,320)        212,279
                                               
Cash and cash equivalents, beginning of year          494,201         281,922
                                                                
Cash and cash equivalents, end of year           $    172,881     $   494,201


The accompanying notes are an integral part of these statements.

                                
<PAGE>                                
                           Purus, Inc.
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
             December 27, 1997 and December 29, 1996

NOTE  A  -  SUMMARY  OF  THE  COMPANY AND SIGNIFICANT  ACCOUNTING
 POLICIES

 Purus,   Inc.  ("Purus"  or  the  "Company")  discontinued   its
 environmental    technology   business   in    November    1995.
 Consequently,  thereafter  the Company's  continuing  operations
 consist  principally  of management of the Company's  short-term
 investments,  administration  of  general  corporate  and  legal
 matters,   and   investigation  of  potential  acquisitions   of
 businesses,  products or technologies that may  or  may  not  be
 related to the environmental market.

 1. Use of Estimates
 
  The  preparation  of  financial statements in  conformity  with
   generally  accepted accounting principles requires  management
   to  make  estimates and assumptions that affect  the  reported
   amounts   of   assets  and  liabilities  and   disclosure   of
   contingent  assets  and  liabilities  at  the  date   of   the
   financial statements and the reported amounts of revenues  and
   expenses  during the reporting period.  Actual  results  could
   differ from those estimates.
 
 2. Cash Equivalents
 
  For  purposes  of  the accompanying statements of  cash  flows,
   the  Company considers all highly liquid investments purchased
   with  an original maturity of three months or less to be  cash
   equivalents.
 
 3. Short-Term Investments
 
  Short-term  investments consist of debt  securities  issued  by
   the  U.S. Treasury with maturity dates of less than two years.
   These  investments  are  classified  as  available  for   sale
   securities and are valued at market, which approximates  cost.
   Realized  and unrealized losses and gains within the Company's
   short-term investments are not material.
 
 4. Income Taxes
 
  The  Company  accounts  for income taxes  using  an  asset  and
   liability  approach  for  financial accounting  and  reporting
   purposes.
 
 5. Fair Value of Financial Instruments
 
  Fair  value estimates, methods, and assumptions for certain on-
   and  off-balance  sheet financial instruments  are  set  forth
   below for the Company's financial statements.
 
   i)  The  carrying amounts of cash, cash equivalents,  accounts
     payable,  and  accrued liabilities approximate  fair  values
     due to the short maturity of those instruments.
   
   ii)  The  fair  value  of  short term  investments,  based  on
     quotations  received  from securities  dealers,  approximate
     cost.

<PAGE>
   
                           Purus, Inc.
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
             December 27, 1997 and December 29, 1996
   
NOTE  A  -  SUMMARY  OF  THE  COMPANY AND SIGNIFICANT  ACCOUNTING
 POLICIES (continued)

 6. Earnings (Loss) Per Share
 
   The  Company  has  adopted Statement of  Financial  Accounting
   Standards   ("SFAS")  No.  128,  Earnings  Per   Share."    In
   accordance  with  SFAS No. 128, primary  earnings  (loss)  per
   share  has been replaced with basic earnings (loss) per share,
   and  fully diluted earnings (loss) per share has been replaced
   with   diluted  earnings  (loss)  per  share  which   includes
   potentially  dilutive securities such as  outstanding  options
   and convertible securities, using the treasury stock method.
 
 7. Fiscal Year
 
  The  Company  uses a reporting calendar in which  quarters  end
   on  the  Saturday closest to March 31, June 30, September  30,
   and December 31.
 
 8. Recent Accounting Pronouncements
 
  The  Financial Accounting Standards Board ("FASB")  has  issued
   SFAS  No. 130, Reporting Comprehensive Income.  SFAS  No.  130
   establishes   standards   for   reporting   and   display   of
   comprehensive  income  and  its components  in  the  financial
   statements.   SFAS  No.  130  is effective  for  fiscal  years
   beginning  after  December  15,  1997.   Reclassification   of
   financial   statements  for  earlier  periods   provided   for
   comparative  purposes  is required.  The  Company  is  in  the
   process of determining its preferred format.  The adoption  of
   SFAS  No. 130 will have no effect on the Company's results  of
   operations, financial position or cash flows.
 
  In  June 1997, the FASB issued SFAS No. 131, Disclosures  about
   Segments  of an Enterprise and Related Information.  SFAS  No.
   131  establishes  standards for the way that  public  business
   enterprises  report  information about operating  segments  in
   annual   financial   statements  and   requires   that   those
   enterprises   report  selected  information  about   operating
   segments  in interim financial reports issued to shareholders.
   It  also  establishes standards for related disclosures  about
   products  and services, geographic areas, and major customers.
   SFAS  No. 131 is effective for financial statements for fiscal
   years  beginning after December 15, 1997.  Financial statement
   disclosures  for  prior periods are required to  be  restated.
   The  Company  is  in the process of evaluating the  disclosure
   requirements.   The  adoption of SFAS No.  131  will  have  no
   effect  on  the  Company's  results of  operations,  financial
   position or cash flows.

<PAGE>

                           Purus, Inc.
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
             December 27, 1997 and December 29, 1996

NOTE B - DISCONTINUED OPERATIONS

 During   the   fourth  quarter  of  1995,   when   the   Company
 discontinued  its  operations, it included  provisions  for  the
 write-down  of  inventory and fixed assets,  for  the  costs  of
 employee  termination,  for anticipated  warranty  expenditures,
 and  for  the  operating losses of the discontinued  operations.
 The   net  liabilities  of  the  discontinued  operations   were
 $1,062,373  as of December 29, 1996.  During 1997,  the  Company
 settled  all  outstanding  claims related  to  the  discontinued
 operations.

 A  summary  of operating results of the discontinued  operations
 follows:

                                              December 27,      December 29,
                                                   1997              1996
     
     Revenue                                  $   174,720       $   251,723
     Reversal of warranty provision               915,384           529,901
     
     Income from discontinued operations      $ 1,090,104       $   781,624

NOTE C - SHAREHOLDERS' EQUITY

 The  Company  has  reserved 100,000 shares of common  stock  for
 issuance  under  its 1993 Stock Option Plan (the  "1993  Plan"),
 which  succeeded  the  Company's 1990 Stock  Option  Plan.   The
 Company's  Board  of Directors administers  the  1993  Plan  and
 determines  the  terms  of the options granted  under  the  1993
 Plan, including the exercise price, number of shares subject  to
 each  option and exercisability thereof.  The exercise price  of
 incentive options granted under the 1993 Plan must be  at  least
 equal to the fair market value of such shares on the grant  date
 and  the  exercise price of nonqualified stock  options  granted
 under  the 1993 Plan must be at least equal to 85% of  the  fair
 market  value of such shares on the date of the grant.   Options
 granted  under  the  1993 Plan usually become  exercisable  over
 four  years and have a five-year term.  The maximum term of each
 option is 10 years.

 The  Company's 1995 Non-Employee Director Stock Option Plan (the
 "1995  Director  Plan") was adopted by the  Company's  Board  of
 Directors  and  approved by the Company's  shareholders  as  the
 successor  to  the  Company's 1993 Non-Employee  Director  Stock
 Option  Plan.  The 1995 Director Plan provides for the  granting
 of  stock options to non employee directors of the Company.  The
 Board  of Directors and the shareholders have authorized a total
 of  20,000  shares of common stock for issuance under  the  1995
 Director  Plan.   The  Company's Board of Directors  administers
 the 1995 Director Plan.

 The  Company has elected to use the intrinsic value-based method
 of APB Opinion No.  25 to account for all of its employee stock-
 based  compensation  plans.  Accordingly, no  compensation  cost
 has  been  recognized in the accompanying consolidated financial
 statements  for  the  stock option plans  because  the  exercise
 price  of  each option equals or exceeds the fair value  of  the
 underlying  common stock as of the grant date for  each  option.
 The  Company has adopted the pro forma disclosure provisions  of
 SFAS No. 123.

<PAGE>

                           Purus, Inc.
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
             December 27, 1997 and December 29, 1996

NOTE C - SHAREHOLDERS' EQUITY (continued)

 A  summary of the status of the Company's stock option plans  as
 of  December  27, 1997 and December 29, 1996 and changes  during
 the  fiscal years ended on those dates along with the pro  forma
 effects  of  the options, as determined under SFAS No.  123,  on
 income and earnings per share is presented below:

                                        12/27/97                12/29/96
                                              Weighted                Weighted
                                   Number     Average      Number     Average
                                     of       Exercise       of       Exercise
                                   Shares      Price       Shares      Price
                                                  
Outstanding at beginning of year    2,500      $4.56       63,876      $15.16
                                                 
Granted                             7,000       3.16       32,000        3.52
Exercised                               -          -      (29,000)       3.02
Forfeited                          (1,500)      7.60      (64,376)      15.22
                                                  
Outstanding at end of year          8,000      $3.59        2,500       $4.56
                                                  
Options exercisable at year end     5,500      $3.41        2,125       $3.99
                                                  
Weighted average fair value of
  options granted                              $1.50                    $1.36


                                                  December 27,   December 29,
                                                       1997           1996
     Loss from continuing operations
      As reported                                 $(1,059,415)   $  (698,721)
      Pro forma                                    (1,065,680)      (700,081)
     
     Net income
      As reported                                 $    30,689    $    82,903
      Pro forma                                        24,424         81,543
     
     Basic and diluted loss per share from
      continuing operations
       As reported                                $     (1.59)   $     (1.06)
       Pro forma                                        (1.60)         (1.06)
     
     Basic and diluted net income per share
      As reported                                 $       .05    $       .13
      Pro forma                                           .04            .13

<PAGE>
     
                           Purus, Inc.
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
             December 27, 1997 and December 29, 1996
     
NOTE C - SHAREHOLDERS' EQUITY (continued)

 As  required  by  SFAS No. 123, the fair value  of  each  option
 grant  is estimated on the date of grant using the Black-Scholes
 option  pricing  model  with  the  following  assumptions:    no
 expected  dividends, an expected life of 3 years, volatility  of
 50% and a risk free rate of return of 5.5%.

 The  following table summarizes information about stock  options
 outstanding at December 27, 1997:

                              Weighted                          
                              Average       Weighted                 Weighted
  Range of                   Remaining      Average                  Average
  Exercise     Outstanding  Contractual     Exercise    Exercisable  Exercise
   Prices      at 12/27/97  Life (Years)     Price       12/27/97     Price
                                                    
$2.63 - $4.00    8,000          9.9          $3.59        5,500        $3.41

 A  total  of  70,157 shares of common stock remain reserved  for
 future grants under the plans as of December 29, 1996.

 As  of  December 27, 1997, the Company had outstanding  warrants
 to  purchase 20,000 shares of common stock at $4.00  per  share.
 The warrants are vested and expire in 2000.

NOTE D - INCOME TAXES

 The  provision for income taxes differs from the amount computed
 by  applying  the  federal statutory rate  of  34%  due  to  the
 Company's  inability  to  utilize its  currently  generated  net
 operating losses.

 The  tax  effect  of  temporary differences that  give  rise  to
 significant  portions of the deferred tax amounts are  presented
 as follows at December 27, 1997:

     Net operating loss carryforward              $ 11,980,000
     Litigation and legal accruals                     435,000
     Research credit carryforward                      650,000
       Gross deferred tax asset                     13,065,000
     Less valuation allowance                      (13,065,000)
     
       Net deferred tax asset                     $          -

 As   of  December  27,  1997,  the  Company  had  available  net
 operating  loss  carryforwards  approximating  $33,143,000   and
 $8,020,000   for   federal   and   California   tax    purposes,
 respectively.    The   Company   also   has   research    credit
 carryforwards  of  approximately  $460,000  and   $190,000   for
 federal  and California tax purposes, respectively.  The federal
 and  California net operating losses can be carried  forward  to
 reduce   income  taxes  on  future  earnings  subject   to   the
 limitations discussed below.

<PAGE>

                           Purus, Inc.
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
             December 27, 1997 and December 29, 1996

NOTE D - INCOME TAXES (continued)

 Sections  382 and 383 of the Internal Revenue Code  provide  for
 annual limitations on the utilization of net operating loss  and
 credit  carryforwards following an ownership change as  defined.
 Further,   if  the  Company  failed  to  continue  its  business
 enterprise  for  a  period of two years following  an  ownership
 change,   the   net  operating  loss  carryforwards   could   be
 forfeited.   As the Company has not determined if  an  ownership
 change has occurred, the net operating loss carryforwards  maybe
 subject to such limitation.

NOTE E - COMMITMENTS AND CONTINGENCIES

 On  or  about July, 27, 1995, Aron Parnes, a stockholder of  the
 Company, filed suit against the Company and five of its  current
 or  former  employees,  officers, and directors  in  the  United
 States  District Court for the Northern District of  California.
 The  lawsuit alleges violations of the federal securities  laws,
 and   purports  to  seek  damages  on  behalf  of  a  class   of
 stockholders  who  purchased the Company's common  stock  during
 the  period  November 9, 1993 through March 8, 1995.   In  March
 1997,  the court issued an order granting the defendants' motion
 to  dismiss and granting the plaintiff 45 days leave  to  amend.
 In  May  1997,  the  suit  was re-filed  reasserting  the  clams
 previously  made,  and in June 1997, the  Company  filed  a  new
 motion  to dismiss the refiled complaint.  If the action is  not
 dismissed  with  prejudice, the Company intends  to  defend  the
 suit  vigorously.  At March 31, 1998, a ruling on the  Company's
 motion  to  dismiss  plaintiff's  complaint  was  pending.   The
 Company  and other defendants have obtained discovery  regarding
 the  validity  of  plaintiff's purported  class  action  through
 document and interrogatory requests.  The plaintiffs have  begun
 to  pursue formal discovery, including requesting documents from
 the Company and from third parties.

 In  July 1995, eight former employees of the AT&T Multi Language
 Center  filed suit against the Company and AT&T in  Santa  Clara
 County  Superior  Court.   The lawsuit alleges  that  plaintiffs
 were exposed to an unspecified toxic substance while working  at
 the   AT&T  facility,  previously  located  next  door  to   the
 Company's  former  San Jose, California facility.   The  Company
 has  filed an answer denying all liability.  On January 3, 1997,
 the   plaintiffs  began  to  pursue  formal  discovery   through
 document requests.

 Aside  from certain provisions for legal expenses, the financial
 statements  for  the  period ended  December  27,  1997  do  not
 contain   any   provisions  for  settlement   of   these   legal
 proceedings.

 Although  the  Company was engaged in research  and  development
 and  manufacturing  operations that generated  only  very  small
 volumes  of  waste, it, like its customers, may  be  potentially
 subject  to  environmental  liabilities  with  respect  to   the
 investigation or cleanup of hazardous waste sites.  The  Company
 currently   maintains   no  specific  environmental   impairment
 liability  insurance.  Although the Company  believes  that  the
 risk  is  minimal  that it would ever be found  by  a  court  or
 regulatory agency to be liable for the investigation or  cleanup
 of  a  hazardous waste site, the costs associated  with  such  a
 finding could be substantial.

<PAGE>

                           Purus, Inc.
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
             December 27, 1997 and December 29, 1996

NOTE F - RELATED PARTY TRANSACTIONS

 In  March,  1996,  the Company retained The Dettmers  Consulting
 Group  ("DCG"),of which Mr.  Dettmers, a former director of  the
 Company,  is  a principal, to provide services with  respect  to
 the  wind-down  of the Company's operations.  For  the  services
 provided  to the Company in fiscal year 1996, Mr.  Dettmers  and
 DCG were paid $5,000.

 The  Company  retained the accounting firm  of  Burr,  Pilger  &
 Mayer  ("BPM")  for  financial,  accounting  and  administrative
 services,  of  which  Stephen  D. Mayer,  the  Company's  former
 Treasurer and Principal Financial and Accounting Officer,  is  a
 managing  partner.  For the services provided to the Company  in
 fiscal  years 1997 and 1996, BPM was paid $65,000 and  $144,000,
 respectively.  BPM's services were terminated in March 1997.

 In  September  1997,  the  Company  entered  into  a  consulting
 agreement  with  Friedli  Corporate  Finance,  Inc.  ("FCF"),  a
 principal  shareholder  of  the  Company.   Mr.  Peter   Friedli
 ("Friedli")  is  a  principal in FCF and is  the  current  Chief
 Executive Officer of the Company.  The agreement calls  for  FCF
 to  provide  general business, financial and  investment  advice
 and  serve  as a liaison between FCF clients/investors  and  the
 Company.   FCF  is  paid  a monthly fee of  $4,000  plus  annual
 expenses  of  up  to $6,000 per year.  The agreement  terminates
 December  31, 2000.  FCF was granted 20,000 warrants to purchase
 the  Company's common stock at $4 per share.  The  warrants  are
 vested and expire in 2000.

 During  1997,  the  Company  paid  Friedli  $149,000  for   past
 reimbursement of expenses and consulting services rendered.

 In   1997,  the  Company  made  payments  to  its  former  Chief
 Executive  Officer  in  the  amount  of  $134,000  as  severance
 payments pursuant to a November 1996 agreement.

 During  1997,  the Company paid consulting and management  fees,
 including  reimbursed  expenses to Mr. Don  Winstead,  a  former
 officer and director of the Company totaling $61,530.

NOTE G - SUBSEQUENT EVENTS

 In  February 1998, the Company made a loan of $1,800,000,  which
 bears  interest at 6% per annum, to Casa Solaz, Inc.  (a  Nevada
 corporation,   "CSI"),  a  related  company  through   ownership
 affiliations   of   Friedli.   CSI  manufactures   prefabricated
 housing,  primarily in South America.  The proceeds of the  loan
 will  be  used  to  construct  manufacturing  facilities.    The
 principal  and  any  accrued  and  unpaid  interest  is  due  on
 December  31, 1999.  The loan is collateralized by  all  of  the
 assets  of CSI, including the stock of the CSI subsidiary.   The
 loan  is  convertible into 450,000 shares of 8% preferred  stock
 of  CSI.   As  consideration for making the  loan,  the  Company
 received  a  warrant to purchase 550,000 shares of 8%  preferred
 stock  of  CSI  at $4.00 per share.  Each share of 8%  preferred
 stock is convertible into one share of common stock of CSI.