<DOCUMENT>
<TYPE>S-1/A
<SEQUENCE>1
<FILENAME>v041249_s1a.txt
<TEXT>

     As filed with the Securities and Exchange Commission on April 28, 2006


                                                     Registration No. 333-128788

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

                                 Amendment No. 2
                                       to
                                    FORM S-1
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                       WINDSWEPT ENVIRONMENTAL GROUP, INC.
                       -----------------------------------
             (Exact Name of registrant as specified in its charter)

        DELAWARE                      4955                    11-2844247
        --------                      ----                    ----------
      (State or Other           (Primary Standard          (I.R.S. Employer
     Jurisdiction of       Industrial Classification      Identification No.)
     Incorporation or             Code Number)
     Organization)

                             100 SWEENEYDALE AVENUE
                            BAY SHORE, NEW YORK 11706
                                 (631) 434-1300
               (Address, including zip code, and telephone number,
        including area code, of registrant's principal executive offices)

                                MICHAEL O'REILLY
                      PRESIDENT AND CHIEF EXECUTIVE OFFICER
                             100 SWEENEYDALE AVENUE
                            BAY SHORE, NEW YORK 11706
                                 (631) 434-1300
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)


                                 With a copy to:

                             GARY T. MOOMJIAN, ESQ.
                              MOOMJIAN & WAITE, LLP
                             100 JERICHO QUADRANGLE
                                    SUITE 225
                             JERICHO, NEW YORK 11753
                            TELEPHONE: (516) 937-5000

      APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.

<PAGE>

      If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities act
of 1933, check the following box. [x]

      If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]


      If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

      If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

      If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]


                         CALCULATION OF REGISTRATION FEE


<TABLE>
<CAPTION>

                                                                      PROPOSED MAXIMUM      PROPOSED MAXIMUM      AMOUNT OF
                                                    AMOUNT TO BE     OFFERING PRICE PER    AGGREGATE OFFERING   REGISTRATION
        TITLE OF SHARES TO BE REGISTERED           REGISTERED (4)         UNIT (5)             PRICE (5)             FEE
-------------------------------------------------- ---------------- --------------------- --------------------- ---------------
<S>                                                    <C>                 <C>               <C>                  <C>
Common stock, par value $0.0001 per share              1,500,000           $0.33                495,000.00           $58.26
Common stock, par value $0.0001 per share (1)         28,895,179           $0.33              9,535,409.00        $1,222.32
Common stock, par value $0.0001 per share (2)         13,750,000           $0.33              4,537,500.00        $  534.06
Common stock, par value $0.0001 per share (3)         40,327,333           $0.33             13,308,019.00        $1,566.36
          Total                                                                                                   $3,381.00 (6)
</TABLE>


 (1) The number of shares being registered represents the maximum number of
     shares to be issued in connection with the exercise of option rights
     granted by the registrant pursuant to an option having an exercise price of
     $.0001 per share.

(2)  The number of shares being registered represents the maximum number of
     shares to be issued in connection with the exercise of warrant rights
     granted by the registrant pursuant to a warrant having an exercise price of
     $.10 per share.


(3)  The number of shares being registered represents shares issuable in
     connection with the exercise of the conversion right granted by the
     registrant pursuant to a three-year secured convertible term note having a
     conversion price of $.09 per share or shares that may be issued, in lieu of
     cash, in payment of principal and interest on the note. The note currently
     represents an aggregation of four separate convertible note financings as
     follows: (1) June 30, 2005 (original principal balance $5,000,000, current
     principal balance $4,081,249), (2) July 13, 2005 ($350,000 principal
     amount), (3) September 9, 2005 ($650,000 principal amount), and (4) October
     6, 2006 ($1,350,000 principal amount). None of the shares issuable as a
     result of the October 6, 2005 financing are registered hereby.

(4)  Pursuant to Rule 416 of the General Rules and Regulations under the
     Securities Act of 1933, this registration statement also registers a
     currently indeterminate number of additional shares of our common stock
     that may be issued as a result of stock splits, stock dividends and similar
     events that result in stockholders, including the selling stockholder,
     holding additional shares of common stock or having the right to receive
     additional shares of common stock.

(5)  Estimated solely for purposes of calculating the registration fee pursuant
     to Rule 457(c) under the Securities Act of 1933, as amended.

(6)  Previously paid.


      THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

<PAGE>


      THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDER MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.

                   SUBJECT TO COMPLETION, DATED APRIL 28, 2006


                                84,472,512 SHARES

                       WINDSWEPT ENVIRONMENTAL GROUP, INC.

      The shares of common stock of Windswept covered by this prospectus may be
sold from time to time by Laurus Master Fund, Ltd., the selling stockholder.
This prospectus relates to up to 84,472,512 shares of common stock of Windswept,
of which:


      o     1,500,000 shares have been issued to the selling stockholder;
      o     up to 40,327,333 shares are issuable upon conversion of the
            principal and interest of a three-year secured convertible term note
            issued to the selling stockholder having a conversion rate of $.09
            per share, subject to adjustment, or shares that may be issued, in
            lieu of cash, in payment of principal and interest on a note;
      o     up to 28,895,179 shares are issuable upon the exercise of a
            currently outstanding option exercisable at a price of $.0001 per
            share; and
      o     up to 13,750,000 shares are issuable upon the exercise of a
            currently outstanding warrant exercisable at a price of $.10 per
            share.

The secured convertible term note identified above represents an aggregation of
four separate convertible note financings as follows: (1) June 30, 2005
(original principal amount of $5,000,000, current principal amount $4,081,249),
(2) July 13, 2005 ($350,000 principal amount), (3) September 9, 2005 ($650,000
principal amount) and (4) October 6, 2005 ($1,350,000 principal amount). None of
the shares issuable as a result of the October 6, 2005 financing are registered
hereby.


      We will not receive any of the proceeds from the sale of our common stock
by the selling stockholder. We may receive proceeds from the exercise of the
option and the warrant if the selling stockholder opts to pay the exercise price
in cash rather than executing a cashless exercise.


      Our common stock is traded on Over-the-Counter Bulletin Board of the
National Association of Securities Dealers, Inc. under the symbol "WEGI.OB".

      The shares of common stock covered by this prospectus may be sold through
broker-dealers or in privately negotiated transactions in which commissions and
other fees may be charged. These fees, if any, will be paid by the selling
stockholder. We will not be paying any underwriting discounts or commissions in
this offering. We have no agreement with any broker-dealer with respect to these
shares, and we are unable to estimate the commissions that may be paid in any
given transaction. For a more complete description of the methods of
distribution that the selling stockholder may use, see "Plan of Distribution"
beginning on page 57.

      On April 27, 2006, the closing sale price of our common stock on the
Over-the-Counter Bulletin Board was $.26 per share. See "Market Price of and
Dividends on our Common Stock." You should obtain a current market price
quotation before you buy any of the offered shares.


      You should read this prospectus carefully before you invest in our common
stock offered hereby.


      THE SECURITIES OFFERED BY THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK.
YOU SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER THE HEADING "RISK
FACTORS" BEGINNING ON PAGE 9 OF THIS PROSPECTUS.


      NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.


                 THE DATE OF THIS PROSPECTUS IS APRIL __, 2006.


<PAGE>

                                TABLE OF CONTENTS

                                                                            Page


Summary........................................................................1

Risk Factors...................................................................9

Forward-Looking Statements....................................................18

Use of Proceeds...............................................................19

Market Price of and Dividends on Our Common Stock.............................19

Selected Consolidated Financial Data..........................................21

Management's Discussion and Analysis of Financial Condition
and Results of Operations.....................................................22

Quantitative and Qualitative Disclosures About Market Risk....................36

Business......................................................................37

Properties....................................................................46

Legal Proceedings.............................................................46

Management....................................................................47

Security Ownership of Certain Beneficial Owners and Management................51

Selling Stockholder Information...............................................52

Plan of Distribution..........................................................58

Related Party Transactions....................................................60

Description of Capital Stock..................................................64

Legal Matters.................................................................66

Experts.......................................................................66

Where You Can Find More Information...........................................67

Index to Financial Statements................................................F-1


      YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS OR TO
WHICH WE HAVE REFERRED YOU. WE AND THE SELLING STOCKHOLDER HAVE NOT AUTHORIZED
ANY OTHER PERSON TO PROVIDE YOU WITH INFORMATION OR REPRESENTATIONS. IF ANYONE
PROVIDES YOU WITH DIFFERENT OR INCONSISTENT INFORMATION, YOU SHOULD NOT RELY ON
IT. THIS PROSPECTUS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER
TO BUY ANY SECURITIES OTHER THAN THOSE REGISTERED BY THIS PROSPECTUS, NOR IS IT
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SECURITIES WHERE AN OFFER
OR SOLICITATION WOULD BE UNLAWFUL. YOU MAY NOT IMPLY FROM THE DELIVERY OF THIS
PROSPECTUS, NOR FROM ANY SALE MADE UNDER THIS PROSPECTUS, THAT OUR AFFAIRS ARE
UNCHANGED SINCE THE DATE OF THIS PROSPECTUS OR THAT THE INFORMATION CONTAINED IN
THIS PROSPECTUS IS CORRECT AS OF ANY TIME AFTER THE DATE OF THIS PROSPECTUS. THE
INFORMATION IN THIS PROSPECTUS SPEAKS ONLY AS OF THE DATE OF THIS PROSPECTUS
UNLESS THE INFORMATION SPECIFICALLY INDICATES THAT ANOTHER DATE APPLIES.


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


      In this prospectus, when we refer to Windswept Environmental Group, Inc.
and our subsidiaries, we use the terms "Windswept," "we," "our" and "us" when we
do not need to distinguish among these entities or their predecessors or when
any distinction is clear from the context.


<PAGE>

                               PROSPECTUS SUMMARY

      You should read this summary together with the entire prospectus,
including the more detailed information in our consolidated financial statements
and related notes appearing elsewhere in this prospectus.

                                  OUR BUSINESS

GENERAL

      We, through our wholly-owned subsidiaries, Trade-Winds Environmental
Restoration Inc. and North Atlantic Laboratories, Inc., provide a full array of
emergency response, remediation and disaster restoration services to a broad
range of clients. We have expertise in the areas of:

      o     hazardous materials remediation,
      o     microbial remediation, including halting mold, mildew and bacterial
            growth;
      o     testing, including the gauging and monitoring of moisture and
            humidity levels;
      o     toxicology;
      o     training, including providing project management and expert
            consultation to our customers;
      o     wetlands restoration;
      o     wildlife and natural resources rehabilitation;
      o     asbestos and lead abatement;
      o     technical advisory services; and
      o     restoration and site renovation services, including:
            o     on-location blast freezing;
            o     off-site freeze drying to restore documents;
            o     dehumidification services; and
            o     drying and restoration of structures, furnishings and
                  equipment.

      Our revenues are derived from projects for which we work either on a time
and materials basis or pursuant to a fixed price contract. In the twenty-six
week period ended December 27, 2005 and in the fiscal year ended June 28, 2005,
substantially all of our revenues were derived from time and materials
contracts. Under our fixed-price contracts, we assess the scope of work to be
done and contract to perform a specified scope of work for a fixed price,
subject to adjustment for work outside such scope of work, upon prior approval
by our customers. Because most of our projects consist of emergency or disaster
responses, which do not permit a definitive prior assessment of the full scope
of work entailed and require immediate attention in order to mitigate loss and
maximize recovery, most of our projects are performed on a time and materials
basis. Under our time and materials contracts, we charge our customers for
labor, equipment usage, allocated overhead and a markup relating thereto.

      With the exception of our efforts relating to Hurricane Katrina, we
principally market our services in the northeastern and southeastern United
States. We obtain our business through client referrals, cross-selling of
services to existing clients, sponsorship of training and development programs,
professional referrals, including from insurance companies, architectural and
engineering firms and construction management firms for whom we have provided
services, competitive bidding and/or advertising. We have endeavored to
stimulate internal growth by expanding services to our existing customer base
and by marketing ourselves to prospective customers as a multiple-service
company with immediate response capabilities. In our marketing efforts, we
emphasize our experience, industry knowledge, safety record, reputation and
competitive bidding. In connection with our response to Hurricane Katrina, we
launched a multimedia marketing campaign, including radio and newspaper
advertising and a public relations program, to inform residents of New Orleans
and the surrounding gulf areas about our services. At the same time, we have
continued our on-going marketing program, as finances have permitted, in an
effort to establish and maintain business relationships.

      We believe that we have assembled the resources, including key
environmental professionals, construction managers, and specialized equipment to
become a leader in the expanding worldwide emergency services market. We further
believe that few competitors provide the diverse range of services that we
provide on an emergency response basis. We believe that our breadth of services
and our emergency response capability have positioned us for rapid growth in
this expanding market. In the New York metropolitan area, we believe that we are
able to perform all the tasks necessary to rapidly restore a property to
pre-loss conditions, thus minimizing dislocation, downtime and business
interruption. In other geographic areas, we perform all of these services except
reconstruction.


                                        1
<PAGE>

      In order to address the needs of our customers, both commercial and
residential, we have dedicated ourselves toward the strategic integration of all
of our services in an effort to provide immediate remedial responses to a wide
variety of natural and man-made disasters, including hurricanes, floods, fire,
smoke, wind, oil and chemical spills, biological hazards, explosions and
radiological releases. As a result, we provide our customers with the capability
to respond to a wide variety of natural or man-made catastrophes. We are capable
of responding in this manner by virtue of our 24-hour call center and teams of
diversely skilled and trained responders. In addition, we have an extensive
array of equipment available to these responders on a 24-hour basis, and this
equipment enables our responders to assess and control damage, safeguard
structures, remediate damage and restore property irrespective of the type of
emergency with minimized down time. We also provide our own turn-key remediation
services for all kinds of property damage or hazardous waste contamination,
which enhances our ability to respond to emergencies by virtue of avoiding the
delays associated with sub-contracting to provide these specific services. When
responding to emergencies, we generally:

      o     secure the site and implement loss prevention measures;
      o     determine priorities;
      o     work closely with property owners to formulate remediation and
            restoration plans that facilitate normal operations as much as
            possible;
      o     develop a project schedule and cost estimate;
      o     assemble project teams;
      o     deploy necessary equipment and personnel; and
      o     implement remediation and restoration measures.

      We have agreed to become the on-call responder for a growing number of
prospective commercial customers, including one insurance company, that have
entered into emergency response arrangements with us. Pursuant to these
arrangements, we have agreed to provide priority service to these parties to the
extent they select us as their provider, which they are not obligated to do by
the terms of the arrangements. Although we have not been engaged pursuant to any
of these emergency response arrangements as of yet, we believe that these
arrangements will facilitate our responsiveness and efficiency in the event that
we are engaged by such prospective customers because as part of this process we:


      o     gain knowledge of such prospective customers' businesses and likely
            needs;
      o     become familiar with such prospective customers' site plans and
            logistics, such as road access, water and electrical supply,
            building layout and potential hazards; and
      o     centralize communications between us and such prospective customers'
            representatives.


COMPANY BACKGROUND

      We were incorporated under the laws of the state of Delaware on March 21,
1986 under the name International Bankcard Services Corporation. On March 19,
1997, we changed our name to our present name. Our principal executive offices
are located at 100 Sweeneydale Avenue, Bay Shore, New York, 11706. Our telephone
number is (631) 434-1300.

      In December 1993, we acquired Trade-Winds, an asbestos abatement and lead
remediation company. On February 24, 1997, we acquired North Atlantic, a
certified environmental training, laboratory testing and consulting company.

      In February 2004, we purchased certain assets of an environmental
remediation business in Florida for $75,000. These assets included office
equipment, a telephone account, telephone and facsimile numbers and the
assumption of an office lease. These assets formed the core of our Florida
office.


                                        2
<PAGE>

ABILITY TO CONTINUE AS A GOING CONCERN


      Our independent auditors raised a concern in their report on our financial
statements for our 2005 fiscal year about our ability to continue as a going
concern. Due to our recurring losses from operations, working capital deficit,
stockholders' deficit and difficulty in generating sufficient cash flow to meet
our obligations and sustain our operations, there is "substantial doubt" about
our ability to continue as a going concern. Although we had net profits of
$53,066 and $1,874,720 for the fiscal year ended June 28, 2005 and for the
twenty-six weeks ended December 27, 2005, respectively, and had positive working
capital as of December 27, 2005, the uncertainty about our ability to continue
as a going concern may limit our ability to access certain types of financing,
or may prevent us from obtaining financing on acceptable terms.


THE LAURUS MASTER FUND, LTD. FINANCING TRANSACTION

      On June 30, 2005, we entered into a financing transaction with Laurus
Master Fund, Ltd. pursuant to the terms of a securities purchase agreement, as
amended, and related documents. Under the terms of the financing transaction, we
issued to Laurus:


      o     pursuant to the terms of a secured convertible term note, dated June
            30, 2005, a three-year note in the principal amount of $5,000,000
            (as amended and restated, the "Note"). The Note bears interest at
            the prime rate as published in the Wall St. Journal plus 2% (but not
            to less than 7.25%), decreasing by 2% (but not to less than 0%) for
            every 25% increase in the Market Price (as defined therein) of our
            common stock above the fixed conversion price of $.09 following the
            effective date(s) of the registration statement or registration
            statements covering the shares of our common stock underlying the
            Note and the warrant issued to Laurus;
      o     pursuant to the terms of an option agreement, dated June 30, 2005, a
            twenty-year option to purchase 30,395,179 shares of our common stock
            at a purchase price of $.0001 per share; and
      o     pursuant to the terms of a common stock purchase warrant, dated June
            30, 2005, a seven-year common stock purchase warrant to purchase
            13,750,000 shares of our common stock at a purchase price of $0.10
            per share.


      After consummating the transaction on June 30, 2005, Laurus subsequently
provided additional financing to us on the same terms and conditions as follows:

      o     On July 13, 2005, Laurus loaned us an additional $350,000, and we
            amended and restated the Note, to be in the principal amount of
            $5,350,000.
      o     On September 9, 2005, Laurus loaned us an additional $650,000, and
            we further amended and restated the Note to be in the principal
            amount of $6,000,000.
      o     On October 6, 2005, Laurus loaned us an additional $1,350,000, and
            we further amended and restated the Note to be in the principal
            amount of $7,350,000.


      The $7,350,000 Note is the only Laurus note issued by us that is currently
outstanding. Payments made by us on the Note on the required due dates have
reduced the current principal balance of the Note to $6,431,249.


      Concurrently with the Laurus financing, on June 30, 2005, we also issued a
variable interest rate secured promissory note in the principal amount of
$500,000 to Spotless Plastics (USA), Inc., an affiliate of our previous majority
stockholder and senior secured lender, bearing interest at LIBOR plus 1%.


                                        3
<PAGE>

      The proceeds we received in connection with the financing transaction and
subsequent borrowings from Laurus were used to pay the amounts set forth below
to the persons or for the purposes set forth below:


      SPOTLESS DEBT

      o     Former majority stockholder and senior secured
            lender (Spotless), consisting of approximately
            $2,650,000 in settlement of the principal and
            $100,000 in interest                                   $  2,750,000
                                                                   ------------

      TRANSACTION EXPENSES

      o     Laurus transaction fee                                    1,750,000
      o     Laurus Capital Management, LLC management and
            due diligence fees                                          262,900
      o     Loeb & Loeb escrow fee                                        2,000
      o     Insurance premiums                                           37,500
      o     Legal fees                                                  146,773
      o     Special committee and advisor fees                           61,136
      o     Payments to series A preferred stockholders                  35,000
                                                                   ------------

            Sub-total                                                 2,295,309
                                                                   ------------

      OTHER PAYMENTS

      o     Audit fees                                                   50,000
      o     Insurance premiums                                          276,711
      o     Initial Hurricane Katrina mobilization costs                238,173
      o     Working capital                                           1,739,807
                                                                   ------------

              Sub-total                                               2,304,691
                                                                   ------------

      TOTAL                                                        $  7,350,000
                                                                   ============


      As part of the financing transaction, Laurus required us to obtain a
$3,000,000 key man renewable term life insurance policy on the life of our
president and chief executive officer. We are the beneficiary of the policy,
which has a current annual premium of $24,769 payable by us. Laurus is a
contingent beneficiary of this life insurance policy.

      Set forth below is a summary of the material terms of the agreements
governing the Laurus financing transaction:

      The funds borrowed under the Laurus financing are governed by the
Securities Purchase Agreement, as amended, the Note, a security agreement, a
stock pledge agreement, a registration rights agreement, as amended, and a
subsidiary guaranty. Under the terms of the Securities Purchase Agreement, as
amended, Laurus had a right to provide us with $1,300,000 of financing in
addition to the original $5,000,000 that it provided to us on the same terms as
the original Note. In connection with the additional borrowings described above,
Laurus has provided all of such additional financing.


PRINCIPAL BORROWING TERMS AND PREPAYMENT. Under the terms of the Note, which
matures on June 30, 2008, we are required to make monthly repayments of
principal, on the first day of each month, to Laurus in the amount of
$229,687.50, commencing as of January 1, 2006. Principal repayments were due to
commence starting November 1, 2005 but, in November 2005, Laurus agreed to defer
the initial repayment date until January 1, 2006. The principal monthly payments
due November 1, 2005 and December 1, 2005 in the aggregate amount of $495,375
have been deferred until June 30, 2008. Interest is payable monthly and started
to accrue on August 1, 2005. All required principal and interest payments as of
the date of this prospectus have been made. We are required to pay such amounts
in shares of our common stock should all of the following conditions be
satisfied:



                                        4
<PAGE>


      o     the average closing price of its common stock for the five (5)
            trading days immediately prior to the first of each month is equal
            to or greater than $.10;
      o     the amount of the payment then due is not an amount greater than
            thirty percent (30%) of the aggregate dollar trading volume of the
            common stock for the period of twenty-two (22) trading days
            immediately prior to the first day of each month for which payment
            is due;
      o     the common stock underlying the Note has been registered under an
            effective registration statement under the Securities Act of 1933 or
            is otherwise covered by an exemption from registration for resale
            pursuant to Rule 144 of the Securities Act of 1933;
      o     Laurus' aggregate beneficial ownership of our shares of common stock
            does not and would not by virtue thereof exceed 4.99%; and
      o     we are not in default of the Note.


      If any of these conditions are not satisfied, we will be required to make
payments in cash in an amount equal to 103% of the principal amount, plus
accrued interest, then due. Should we be required to pay cash, this may have an
adverse effect on our cash flow and liquidity.

      The Note may be redeemed by us in cash by paying the holder of the Note
120% of the principal amount, plus accrued interest. As discussed below, the
holder of the Note may convert all or a portion of the Note, together with
related interest and fees, into fully paid shares of our common stock at any
time. The number of shares to be issued shall equal the total amount of the Note
to be converted, divided by an initial fixed conversion price of $.09.

      If we issue shares of common stock to a third-party for consideration
below the fixed conversion price of $.09 per share or issue derivative
securities convertible into or exercisable for shares of common stock at prices
below the fixed conversion price of $.09 per share, then the fixed conversion
price of the Note will be reduced to such lower issuance or exercise price. In
addition, the conversion price of the Note may be adjusted pursuant to customary
anti-dilution provisions, such as if we pay a stock dividend, reclassify our
capital stock or subdivide or combine our outstanding shares of common stock
into a greater or lesser number of shares.

      We may receive proceeds from the exercise of the option and the warrant
described above if Laurus elects to pay the exercise price in cash rather than
executing a cashless exercise. Laurus may effect a cashless exercise of the
warrant if the market price of our common stock exceeds the per share exercise
price, and it may effect a cashless exercise of the option if (a) the market
price of our common stock exceeds the per share exercise price and (b) (1) we
have not registered the shares underlying the option pursuant to an effective
registration statement or (2) an event of default under the Note has occurred
and is continuing. Upon a cashless exercise in lieu of paying the exercise price
in cash, Laurus would receive shares of our common stock with a value equal to
the difference between the market price per share of our common stock at the
time of exercise and the exercise price per share set forth in the option and
the warrant, multiplied by the number of shares with respect to which the option
or warrant is exercised. There would be no proceeds payable to us upon a
cashless exercise of the option or the warrant. There can be no assurances that
Laurus will exercise the option and warrant or that it will elect to pay the
exercise price in cash in lieu of a cashless exercise. On September 12, 2005, we
issued 1,500,000 shares of our common stock to Laurus in connection with its
partial exercise of the Option at an exercise price of $.0001 per share for an
aggregate exercise price of $150.


      Laurus has contractually agreed to restrict its ability to convert the
Note and/or exercise its warrant and option if such conversion and/or exercise
would cause its beneficial ownership of shares of our common stock to exceed
4.99% of the outstanding shares of our common stock. The 4.99% limitation is
null and void without notice to us upon the occurrence and during the
continuance of an event of default or upon 75 days' prior written notice to us.
As of the date of this prospectus, Laurus directly beneficially owns 1,500,000
shares of our common stock, or approximately 4.46% of our outstanding common
stock. As a result, Laurus could only acquire up to approximately 184,405
additional shares, which would constitute a conversion of approximately $16,596
of the principal amount of the Note, while remaining in compliance with the
4.99% limitation. Because Laurus is irrevocably prohibited from waiving this
4.99% limitation, except as described above, even if the other conditions
allowing us to pay in shares of common stock have been satisfied, if Laurus
cannot or does not reduce its ownership of our common stock at a time when such
reduction would be necessary to allow us to make a payment in shares of common
stock, we would be required to pay Laurus in cash. This may have an adverse
effect on our cash flow and liquidity.



                                        5
<PAGE>


      EVENTS OF DEFAULT AND COLLATERAL. In the event we default on the Note, we
will be required to pay 120% of the outstanding principal amount of the Note,
plus accrued but unpaid interest. In addition, upon the occurrence of an event
of default, the interest rate charged with respect to the Note will be increased
by 2% per month until the default is cured. The Note is secured by a lien on
substantially all of our assets, including the stock of our subsidiaries, all
cash, cash equivalents, accounts, accounts receivable, deposit accounts,
inventory, equipment, goods, fixtures, documents, instruments, including
promissory notes, contract rights and general intangibles, including payment
intangibles. The Master Security Agreement, dated June 30, 2005, between us and
Laurus contains no specific financial covenants. The Master Security Agreement
and the Note, as amended, define the circumstances under which they can be
declared in default and subject to termination, including:

      o     a failure to pay interest and principal payments under the Note when
            due on the first day of the month or prior to the expiration of the
            three-business day grace period, unless agreed otherwise;
      o     a breach by us of any material covenant or term or condition of the
            Note or in any agreement made in connection therewith and, to the
            extent subject to cure, the continuation of such breach without
            remedy for a period of fifteen or thirty days, as the case may be;
      o     a breach by us of any material representation or warranty made in
            the Note or in any agreement made in connection therewith;
      o     any form of bankruptcy or insolvency proceeding instituted by or
            against us, which is not vacated within 30 days;
      o     any attachment or lien in excess of $75,000 in the aggregate made
            upon our assets or a judgment rendered against our property
            involving a liability of more than $75,000 which shall remain
            unvacated, unbonded or unstayed for a period of 30 days;
      o     a failure to timely deliver shares of common stock when due upon
            conversion of the Note or a failure to timely deliver a replacement
            note;
      o     an SEC stop trade order or principal market trading suspension of
            our common stock is in effect for 5 consecutive trading days or 5
            days during a period of 10 consecutive trading days, if we are not
            able to cure such trading suspension within 30 days of receiving
            notice or are not able to list our common stock on another principal
            market within 60 days of such notice;
      o     a failure to have authorized and reserved shares of our common stock
            for issuance on or before November 1, 2006 sufficient to provide for
            the full conversion of the Note, and full exercise of the option and
            warrant issued by us to Laurus;
      o     an indictment or threatened indictment of us or any of our executive
            officers under any criminal statute or commencement or threatened
            commencement of criminal or civil proceedings against us or any of
            our executive officers pursuant to which statutory or proceeding
            penalties or remedies available include forfeiture of any of our
            property; and
      o     the departure of Michael O'Reilly from our senior management.


      ESCROW. We also entered into a Funds Escrow Agreement, dated June 30,
2005, with Laurus and Loeb & Loeb LLP, as escrow agent, pursuant to the
requirements of the Security Agreement. Under the terms of the Funds Escrow
Agreement, the funds from Laurus were placed in escrow pending receipt by the
escrow agent of fully executed transaction documents and disbursement
instructions, upon receipt of which such funds were released to us. No funds
remain in escrow.


      REGISTRATION RIGHTS. Pursuant to the terms of a Registration Rights
Agreement, dated June 30, 2005 and amended on March 20, 2006, we are obligated
(1) to file a registration statement with the Securities and Exchange Commission
registering the resale of shares of our common stock issuable upon a conversion
of the Note and upon the exercise of the option and warrant issued to Laurus up
to the number of shares included in the registration statement of which this
prospectus is a part and (2) after appropriate corporate action is taken, to
increase our authorized shares and, after our audited financial statements for
the 2006 fiscal year are final, to file a new or post-effective registration
statement(s) to cover all the shares issuable upon conversion of the Note and
upon the exercise of the option and warrant issued to Laurus. If the
registration statement of which this prospectus forms a part is not declared
effective by May 10, 2006 by the Securities and Exchange Commission, then we
will be required to pay to Laurus the following amounts:



                                        6
<PAGE>


      o     1.5% of the principal outstanding on the Note, for the first thirty
            days, prorated for partial periods, which equals $3,216 per day
            based upon the $6,431,249 principal amount of the Note currently
            outstanding; and
      o     2.0% of the principal outstanding on the Note, for each thirty day
            period, prorated for partial periods, which equals $4,288 per day.

In addition, penalties at the same percentage rates apply in the event that the
second registration statement is not declared effective by December 30, 2006 by
the Securities and Exchange Commission.


RECENT DEVELOPMENTS

      In order to provide environmental remediation and other services
necessitated by the aftermath of Hurricane Katrina, in September 2005, we
mobilized over sixty employees to the gulf coast region. Trade-Winds
Environmental Restoration Inc., one of our wholly owned subsidiaries, has leased
three premises to serve as a satellite office, regional command center, training
center and housing for our employees in Louisiana. We consider these premises to
be sufficient for our anticipated operations. In order to finance anticipated
expenses, we borrowed an additional $1,350,000 from Laurus on October 6, 2005,
pursuant to the terms an amended and restated convertible term Note on
substantially the same terms as the original convertible term Note issued to
Laurus on June 30, 2005 in the principal amount of $5,000,000, bringing our
aggregate borrowings thereunder at that time to $7,350,000.


      We were recently engaged on various projects within our customary scope of
services for private sector commercial and residential customers in the gulf
coast and Florida regions. Under time and materials contracts or other
arrangements, we have billed in excess of $20.9 million of work in these regions
as of March 28, 2006. Revenue recognized for the twenty-six weeks ended December
27, 2005 in connection with these projects were $16,391,516. For the thirteen
weeks ended March 28, 2006, based upon billings, our revenues from these
projects were approximately $4.5 million. We do not expect that our revenue from
these projects will be material subsequent to March 28, 2006.

      Management believes that we may be engaged to perform substantial
additional projects in the United States in the near term, possibly including
federally funded projects on which we have not focused to date; however, no
assurance can be given in this regard until contracts relating to these projects
have been executed.


<TABLE>
<CAPTION>

                                  THE OFFERING

<S>                                              <C>
Issuer                                           Windswept Environmental Group, Inc.

Common stock (1)                                 1,500,000

Common stock underlying the Note (2)             40,327,333

Common stock underlying the Laurus warrant (3)   13,750,000

Common stock underlying Laurus option (4)        28,895,179

Maximum common stock to be outstanding
 after the offering                              116,543,727 shares (5)

Use of Proceeds                                  We will not receive any proceeds from this
                                                 offering, except the proceeds, if any, from
                                                 the exercise of the option and the warrant held by
                                                 the selling stockholder.

Registration Rights                              We have agreed to use all reasonable commercial
                                                 efforts to keep the registration statement of which
                                                 this prospectus forms a part effective and current
                                                 until the date that all of the shares of common stock
                                                 covered by this prospectus have been sold under the
                                                 registration statement, have been sold pursuant to
                                                 Rule 144 of the 1933 Securities Act, as amended, or may
                                                 be freely traded without the effectiveness of such
                                                 registration statement.
</TABLE>


                                        7
<PAGE>


<TABLE>
<S>                                              <C>
Trading                                          Our common stock is traded on Over-the-Counter
                                                 Bulletin Board under the symbol "WEGI.OB".

Risk                                             Factors See "Risk Factors" and the other information
                                                 in this prospectus for a discussion of the factors you
                                                 should carefully consider before deciding to invest
                                                 in our common stock.
</TABLE>

----------
(1)   Represents the shares issued to Laurus on September 12, 2005, in
      connection with Laurus' partial exercise of its option at an exercise
      price of $.0001 per share for an aggregate exercise price of $150.

(2)   Represents the maximum number of shares issuable upon conversion of, or
      payment of principal and interest in shares by us on, the Note based on
      our currently authorized 150,000,000 shares of common stock. None of the
      shares issuable as a result of the October 6, 2005 financing ($1,350,000)
      are registered hereby. To ensure that we would have a sufficient number of
      authorized and unissued and unreserved shares of common stock to
      accommodate issuance of all shares under the Laurus warrant, Laurus option
      and the Note, our largest stockholder, who is also our president, chief
      executive officer and one of our directors, and our series A preferred
      stockholders, one of whom is also one of our directors, contractually
      agreed to propose and vote in favor of an amendment to our certificate of
      incorporation in order to accommodate the full issuance of the shares of
      our common stock underlying the Note and the option and warrant we issued
      to Laurus at our next stockholders meeting.

(3)   Represents the maximum number of shares issuable upon exercise of the
      warrant we issued to Laurus.

(4)   Represents the maximum number of shares issuable upon exercise of the
      option we issued to Laurus.

(5)   Represents our common stock outstanding assuming partial conversion of the
      Note outstanding to Laurus and the exercise of the warrant and option
      owned by Laurus. Laurus' beneficial ownership of our common stock is
      contractually limited to 4.99%.

      The outstanding share information is based on our shares outstanding as of
March 28, 2006. Except as otherwise stated, this information excludes shares of
our common stock:

o     issuable upon full conversion of the Note (or payment in shares of
      principal and interest) at an initial conversion price of $.09 per share;
o     reserved and available for issuance under our three equity incentive
      plans;
o     issuable upon exercise of all issued plan and non-plan options (other than
      those issued to Laurus) to purchase an aggregate of 32,156,273 shares; and
o     issuable upon conversion of our series A preferred stock into 1,300,000
      shares.



                                        8
<PAGE>

                                  RISK FACTORS

      Before you invest in our common stock by purchasing shares from the
selling stockholder named in this prospectus, you should be aware that there are
various risks involved in investing in our common stock. We have described below
all of the risks that we deem material to your investment decision. You should
consider carefully these risk factors, together with all of the other
information included in this prospectus.

Factors Affecting Future Operating Results

WE HAVE EXPERIENCED SIGNIFICANT OPERATING LOSSES IN PRIOR YEARS AND MAY INCUR
LOSSES IN THE FUTURE.

      Future losses could adversely affect the market value of our common stock.
Although we generated net income of $53,066 in our fiscal year ended June 28,
2005 and $1,874,720 for the twenty-six weeks ended December 27, 2005, we
incurred net losses of ($3,535,344) and ($469,004) in our fiscal years ended
June 29, 2004 and July 1, 2003. As of December 27, 2005, we had an accumulated
deficit of ($32,789,980). Our results from operations will be adversely affected
in future periods by significant interest expense changes resulting from the
accounting for the Laurus financing, including from direct interest expense on
the Note, amortization of the discount on the Note and amortization of deferred
financing costs. Even though we have taken steps in an effort to increase
revenues, particularly with respect to disaster remediation activities, we may
not generate profits in the future.

ABILITY TO CONTINUE AS A GOING CONCERN.


      Our independent auditors raised a concern in their report on our financial
statements for our 2005 fiscal year about our ability to continue as a going
concern. Due to our recurring losses from operations, working capital deficit,
stockholders' deficit and difficulty in generating sufficient cash flow to meet
our obligations and sustain our operations, there is "substantial doubt" about
our ability to continue as a going concern. Although we had net profits of
$53,066 for our 2005 fiscal year and $1,874,720 for the twenty-six weeks ended
December 27, 2005, and had positive working capital as of December 27, 2005, the
uncertainty about our ability to continue as a going concern may limit our
ability to access certain types of financing, or may prevent us from obtaining
financing on acceptable terms.

A DELAY BY US IN HAVING (1) THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS
FORMS A PART DECLARED EFFECTIVE BY THE SEC ON OR BY MAY 10, 2006 AND (2) A
SECOND REGISTRATION STATEMENT DECLARED EFFECTIVE BY THE SEC ON OR BY DECEMBER
30, 2006, THE CONTRACTUAL DEADLINES AS REQUIRED BY THE LAURUS REGISTRATION
RIGHTS AGREEMENT, AS AMENDED, WILL CAUSE US TO BE SUBJECT TO A SIGNIFICANT
LIQUIDATED DAMAGES CLAIM, UNLESS WAIVED, DEPENDING ON THE DURATION OF THE DELAY
PERIOD.

      In conjunction with the Laurus transactions, we entered into a
registration rights agreement, as amended, by which we are required, among other
things, (1) to have the registration statement of which this prospectus forms a
part declared effective by the SEC by May 10, 2006 and (2) to have a second
registration statement, containing our fiscal 2006 audited financial statements
and including all of the shares covered by the securities owned by Laurus,
declared effective by the SEC by December 30, 2006. If we fail to meet either
deadline, we will be subject to a liquidated damage claim equal to 1.5% of the
principal outstanding on the Note, for the first thirty days, prorated for
partial periods (currently $3,216 per day based upon the $6,431,249 principal
amount of the Note currently outstanding), and then 2.0% of the principal
outstanding on the Note, for each thirty day period, prorated for partial
periods (currently $4,288 per day).


IF OUR COMMON STOCK DOES NOT TRADE IN SUFFICIENT VOLUME AT HIGH ENOUGH PRICES,
OR IF LAURUS IS NOT WILLING OR ABLE TO SUFFICIENTLY REDUCE ITS OWNERSHIP OF OUR
COMMON STOCK, WE WOULD BE REQUIRED TO REPAY ALL OR PART OF OUR SENIOR SECURED
CONVERTIBLE DEBT TO LAURUS IN CASH, WHICH COULD ADVERSELY AFFECT OUR CASH FLOW
AND LIQUIDITY.


      Under the terms the Note, we are required to make monthly principal
repayments, on the first day of each month, to Laurus in the amount of
$229,687.50, plus accrued but unpaid interest, commencing on January 1, 2006,
after giving effect to a two-month deferral granted by Laurus in November 2005.
We are required to pay such amounts in shares of our common stock should all of
the following conditions be satisfied:



                                        9
<PAGE>


      o     the average closing price of its common stock for the five (5)
            trading days immediately prior to the first of each month is equal
            to or greater than $.10;
      o     the amount of the payment then due is not an amount greater than
            thirty percent (30%) of the aggregate dollar trading volume of the
            common stock for the period of twenty-two (22) trading days
            immediately prior to the first day of the month for which payment is
            due;
      o     the common stock underlying the Note has been registered under an
            effective registration statement under the Securities Act of 1933 or
            is otherwise covered by an exemption from registration for resale
            pursuant to Rule 144 of the Securities Act of 1933;
      o     Laurus' aggregate beneficial ownership of our shares of common stock
            does not exceed 4.99%; and o we are not in default of the Note.


      If we are required to pay Laurus in shares of our common stock, the
issuance of such shares could have a substantial dilutive effect on our common
stock. If any of these conditions are not satisfied, we will be required to make
payments in cash in an amount equal to 103% of the principal amount, plus
accrued interest, then due. Should we be required to pay cash, this may have an
adverse effect on our cash flow and liquidity.


WE ARE DEPENDENT ON THE INCURRENCE OF LARGE PROJECTS.

      Due to the nature of the services we offer, we generate most of our
revenues from new customers. We cannot anticipate whether we will be able to
replace our revenues with revenues from new projects in future periods. Our
inability to replace the revenues generated as a result of large projects
performed in the fiscal year ended July 2, 2002, particularly the catastrophe
response projects in the vicinity of the World Trade Center following the
terrorist attack on September 11, 2001, which accounted for approximately 52% of
our revenues during such fiscal year, had a materially adverse impact on our
sales in the fiscal years ended June 29, 2004 and June 28, 2005. Our projects in
the areas damaged by Hurricanes Katrina and Wilma have had a favorable impact on
our business. We have substantially completed our work in these areas and are
not sure when and if we will be able to find other similar favorable business.


WE COULD DEVELOP CONCENTRATIONS OF CREDIT RISK.

      We often contract with a limited number of customers. A small number of
customers may therefore be responsible for a substantial portion of our revenues
and accounts receivable at any time. While our management assesses the credit
risk associated with each prospective customer prior to the execution of a
definitive contract, no assurances can be given that such assessments will be
correct or that we will not incur substantial, uncollectible accounts
receivable.

WE COULD BE HARMED BY OUR SLOW COLLECTIONS OF ACCOUNTS RECEIVABLE.


      It typically takes us between eight to sixteen months to collect on our
accounts receivables. Although we have implemented new measures in an effort to
improve our collections, as described below under "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital
Resources," no assurances can be given that they will be successful in improving
our collections and cash flows. If our collections prove to be insufficient for
our cash flow needs, this may have an adverse effect on our business and
operations.


COST OVERRUNS OR DISPUTED CHANGE ORDERS ON PROJECTS CALLING FOR FIXED PRICE
PAYMENTS COULD HAVE A MATERIAL ADVERSE EFFECT ON US.

      Cost overruns on projects covered by fixed-price contracts, due to such
things as unanticipated price increases, unanticipated problems, inaccurate
estimation of labor or material costs, procedural difficulties or disputes over
the terms and specifications of contract performance or change orders, could
have a material adverse effect on our operations. For example, a disputed change
order on a large contract had a material adverse effect on our results of
operations for our fiscal year ended June 29, 2004. There can be no assurance
that cost overruns or disputed change orders will not occur in the future and
have a material adverse effect on us. In addition, in order to remain
competitive in the future, we may have to agree to enter into more fixed price
and per unit contracts than in the past.


                                       10
<PAGE>

WE MUST CORRECTLY MANAGE GROWTH.

      Our future growth, including growth relating to Hurricanes Katrina and
Wilma, may place significant demands on our operational, managerial and
financial resources. There can be no assurance that our current management,
personnel and systems will be adequate to address this or any other future
expansion of our business. In such event, any inability to manage our growth or
operations effectively could have a material adverse effect on our business,
financial condition and results of operations.

OUR ABILITY TO SERVICE OUR DEBT AND OTHER FINANCING TRANSACTIONS DEPENDS ON MANY
FACTORS BEYOND OUR CONTROL.


      Our ability to service our debt and meet our other financial obligations
as they come due is dependent on our future financial and operating performance.
This performance is subject to various factors, including factors beyond our
control such as changes in the general economy, our industry or the
environmental and other laws pertaining to the services that we provide, and
changes in interest rates, energy and other costs. Although we believe that we
have sufficient resources to service our Note in the current principal amount of
$6,431,249 and our other obligations, we cannot ensure that we will have the
ability to service the Note in the future.


      If our cash flow and capital resources are insufficient to enable us to
service the Note, and we are unable to obtain alternative financing, we could be
forced to:

      o     reduce or delay capital expenditures;
      o     sell some or all of our assets; or
      o     limit or discontinue, temporarily or permanently, our operations or
            business.

AN EVENT OF DEFAULT UNDER THE NOTE COULD RESULT IN A MATERIAL ADVERSE EFFECT ON
OUR BUSINESS, OPERATING RESULTS OR FINANCIAL CONDITION.


      Laurus holds a Note of ours with a current principal amount of $6,431,249.
Events of default under the Note include:

      o     a failure to pay interest and principal payments when due on the
            first day of the month or prior to the expiration of any applicable
            grace period;
      o     a breach by us of any material covenant or term or condition of the
            Note or in any agreement made in connection therewith and, to the
            extent subject to cure, the continuation of such breach without
            remedy for a period of fifteen or thirty days, as the case may be;
      o     a breach by us of any material representation or warranty made in
            the Note or in any agreement made in connection therewith;
      o     any form of bankruptcy or insolvency proceeding instituted by or
            against us, which is not vacated within 30 days;
      o     any attachment or lien in excess of $75,000 in the aggregate made
            upon our assets or a judgment rendered against our property
            involving a liability of more than $75,000 which shall remain
            unvacated, unbonded or unstayed for a period of 30 days;
      o     a failure to timely deliver shares of common stock when due upon
            conversion of the Note or a failure to timely deliver a replacement
            note;
      o     an SEC stop trade order or principal market trading suspension of
            our common stock is in effect for 5 consecutive trading days or 5
            days during a period of 10 consecutive trading days, provided we are
            not able to cure such trading suspension within 30 days of receiving
            notice or are not able to list our common stock on another principal
            market within 60 days of such notice;
      o     a failure to have authorized and reserved shares of our common stock
            for issuance on or before November 1, 2006 sufficient to provide for
            the full conversion of the Note, option and warrant issued by us to
            Laurus;
      o     an indictment or threatened indictment of us or any of our executive
            officers under any criminal statute or commencement or threatened
            commencement of criminal or civil proceedings against us or any of
            our executive officers pursuant to which statutory or proceeding
            penalties or remedies available include forfeiture of any of our
            property; and
      o     the departure of Michael O'Reilly from our senior management.



                                       11
<PAGE>

      If we default, the interest rate charged with respect to the Note will be
increased by 2% per month until the default is cured. In addition, if the holder
of the Note demands payment of all amounts due and payable in connection with a
default, we will be required to pay 120% of the outstanding principal amount of
the Note and any accrued and unpaid interest. The cash required to pay such
amounts will most likely come out of working capital, unless we are able to
arrange alternative financing. Since we rely on our working capital for our
day-to-day operations, such a default on the Note could have a material adverse
effect on our business, operating results, or financial condition. To such
extent that we are forced to restructure, file for bankruptcy, sell assets or
cease operations, your investment dollars would be at significant risk.

WE CANNOT GIVE ANY ASSURANCE THAT WE WILL BE ABLE TO SECURE ADDITIONAL FINANCING
TO MEET OUR FUTURE CAPITAL NEEDS.

      Our long-term capital requirements will depend on many factors, including,
but not limited to, cash flow from operations, our level of capital
expenditures, our working capital requirements and the growth of our business.
Historically, we have financed our operations primarily through issuances of
debt and equity securities, through short-term borrowings from our former
majority stockholder, and through cash generated from operations.

      We may need to incur additional indebtedness or raise additional capital
to fund the capital needs of our operations or related to growth. There are no
assurances that Laurus will provide financing in the future. In addition, our
ability to borrow additional funds from lenders other than Laurus may be limited
in light of:

      o     the senior security interest that Laurus holds securing its Note
            from us; and
      o     the subordinated security interest that Spotless holds securing its
            $500,000 note.

      To the extent additional debt financing cannot be raised on acceptable
terms, we may need to raise additional funds through public or private equity
financings. No assurance can be given that additional debt or equity financing
will be available or that, if either or such financing is available, the terms
of such financing will be favorable to us or our stockholders without
substantial dilution of their ownership and rights. If adequate funds are not
available, we may be required to curtail our future operations significantly or
to forego expansion opportunities.

DUE TO THE NATURE OF OUR BUSINESS AND THE INTENSE REGULATORY CLIMATE IN WHICH WE
OPERATE, OUR SERVICES ARE SUBJECT TO EXTENSIVE FEDERAL, STATE AND LOCAL LAWS AND
REGULATIONS THAT ARE CONSTANTLY CHANGING.

      These regulations impose stringent guidelines on companies that handle
hazardous materials as well as other companies involved in various aspects of
the environmental remediation services industry. Failure to comply with
applicable federal, state and local regulations could result in substantial
costs to us, the imposition of penalties or in claims not covered by insurance,
any of which could have a material adverse effect on our business.

      In addition to the burdens imposed on operations by various environmental
regulations, federal law imposes strict liability upon present and former owner
and operators of facilities that release hazardous substances into the
environment and the generators and transporters of such substances, as well as
persons arranging for the disposal of such substances. All such persons may be
liable for the costs of waste site investigation, waste site clean up, natural
resource damages and related penalties and fines. Such costs can be substantial.

ENVIRONMENTAL REMEDIATION OPERATIONS MAY EXPOSE OUR EMPLOYEES AND OTHERS TO
DANGEROUS AND POTENTIALLY TOXIC QUANTITIES OF HAZARDOUS PRODUCTS.

      Toxic quantities of hazardous products can cause cancer and other
debilitating diseases. Although we take extensive precautions to minimize worker
exposure and we have not experienced any such claims from workers or other
persons, there can be no assurance that, in the future, we will avoid liability
to persons who contract diseases that may be related to such exposure. Such
persons potentially include employees, persons occupying or visiting facilities
in which contaminants are being, or have been, removed or stored, persons in
surrounding areas, and persons engaged in the transportation and disposal of
waste material. In addition, we are subject to general risks inherent in the
construction industry. We may also be exposed to liability from the acts of our
subcontractors or other contractors on a work site.


                                       12
<PAGE>

THE FAILURE TO OBTAIN AND MAINTAIN REQUIRED GOVERNMENTAL LICENSES, PERMITS AND
APPROVALS COULD HAVE A SUBSTANTIAL ADVERSE AFFECT ON OUR OPERATIONS.

      The remediation industry is highly regulated. We are required to have
federal, state and local governmental licenses, permits and approvals for our
facilities and services. There can be no assurance as to the successful outcome
of any pending application or demonstration testing for any such license, permit
or approval. In addition, our existing licenses, permits and approvals are
subject to revocation or modification under a variety of circumstances. Failure
to obtain timely, or to comply with the conditions of, applicable licenses,
permits or approvals could adversely affect our business, financial condition
and results of operations. As we expand our business and as new procedures and
technologies are introduced, we may be required to obtain additional licenses,
permits or approvals. We may be required to obtain additional licenses, permits
or approvals if new environmental legislation or regulations are enacted or
promulgated or existing legislation or regulations are amended, reinterpreted or
enforced differently than in the past. Any new requirements that raise
compliance standards may require us to modify our procedures and technologies to
conform to more stringent regulatory requirements. There can be no assurance
that we will be able to continue to comply with all of the environmental and
other regulatory requirements applicable to our business.

A SUBSTANTIAL PORTION OF OUR REVENUES ARE GENERATED AS A RESULT OF REQUIREMENTS
ARISING UNDER FEDERAL AND STATE LAWS, REGULATIONS AND PROGRAMS RELATED TO
PROTECTION OF THE ENVIRONMENT.

      Environmental laws and regulations are, and will continue to be, a
principal factor affecting demand for our services. The level of enforcement
activities by federal, state and local environmental protection agencies and
changes in such laws and regulations also affect the demand for such services.
If the requirements of compliance with environmental laws and regulations were
to be modified in the future, the demand for our services, and our business,
financial condition and results of operations, could be materially adversely
affected.

WE ARE DEPENDENT ON THE SUCCESSFUL DEVELOPMENTAL AND COMMERCIAL ACCEPTANCE OF
OUR PROCEDURES AND TECHNOLOGIES.

      We are constantly developing, refining and implementing our procedures and
technologies for environmental remediation. Our operations and future growth are
dependent, in part, upon the acceptance and implementation of these procedures
and technologies. There can be no assurance that successful development of
future procedures and technologies will occur or, even if successfully developed
or that we will be able to successfully commercialize such procedures and
technologies. The successful commercialization of our procedures and
technologies may depend in part on ongoing comparisons with other competing
procedures and technologies and more traditional treatment, storage and disposal
alternatives, as well as the continuing high cost and limited availability of
commercial disposal options. There can be no assurance that our procedures and
technologies will prove to be commercially viable or cost-effective or, if
commercially viable and cost-effective, that we will be successful in timely
securing the requisite regulatory licenses, permits and approvals for any such
procedures or technologies or that such procedures or technologies will be
selected for use in future projects. Our inability to develop, commercialize or
secure the requisite licenses, permits and approvals for our procedures and
technologies on a timely basis could have a material adverse effect on our
business, financial condition and results of operations.


WE ARE SUBJECT TO QUARTERLY FLUCTUATIONS IN OPERATING RESULTS.

      Our revenue is dependent on our projects and the timing and performance
requirements of each project. Our revenue is also affected by the timing of our
customers' remediation activities and need for our services. Due to this
variation in demand, our quarterly results may fluctuate. Accordingly, specific
quarterly or interim results should not be considered indicative of results to
be expected for any future quarter or for the full year. It is possible that in
future quarters, our operating results will not meet the expectations of
securities analysts and investors. In such event, the price of our common stock
could be materially adversely affected.



                                       13
<PAGE>


WE INCREASINGLY SEEK LARGE, MULTI-YEAR CONTRACTS.

      We are increasingly pursuing large, multi-year contracts as a method of
achieving more predictable revenues, more consistent utilization of equipment
and personnel, and greater leverage of sales and marketing costs. These larger
projects pose significant risks if actual costs are higher than those estimated
at the time of the placement of any fixed-price bids. A loss on one or more of
such larger contracts could have a material adverse effect on our business,
financial condition and results of operations. In addition, the failure to
obtain, or a delay in obtaining, targeted large, multi-year contracts could
result in significantly less revenue for us than anticipated.


OUR OPERATIONS ARE AFFECTED BY WEATHER CONDITIONS.

      While we provide our services on a year-round basis, the services we
perform outdoors or outside of a sealed environment may be adversely affected by
inclement weather conditions. Extended periods of rain, cold weather or other
inclement weather conditions may result in delays in commencing or completing
projects, in whole or in part. Any such delays may adversely affect our
operations and financial results and may adversely affect the performance of
other projects due to scheduling and staffing conflicts.

OUR ABILITY TO PERFORM UNDER OUR CONTRACTS AND TO SUCCESSFULLY BID FOR FUTURE
CONTRACTS IS DEPENDENT UPON THE CONSISTENT PERFORMANCE OF EQUIPMENT AND
FACILITIES IN CONFORMITY WITH SAFETY AND OTHER REQUIREMENTS OF THE LICENSES AND
PERMITS UNDER WHICH WE OPERATE.

      Our equipment and facilities are subject to frequent routine inspections
by the regulatory authorities issuing such licenses and permits. In the event
any of our key equipment and facilities were to be shut down for any appreciable
period of time, either due to equipment breakdown or as the result of regulatory
action in response to an alleged safety or other violation of the terms of the
licenses under which we operate, our business, financial condition and results
of operations could be materially adversely affected.

THE ENVIRONMENTAL REMEDIATION INDUSTRY IS HIGHLY COMPETITIVE AND WE FACE
SUBSTANTIAL COMPETITION FROM OTHER COMPANIES.

      Many of our competitors have greater financial, managerial, technical and
marketing resources than we do. To the extent that competitors possess or
develop superior or more cost effective environmental remediation solutions or
field service capabilities, or otherwise possess or acquire competitive
advantages compared to us, our ability to compete effectively could be
materially adversely affected.

OUR FUTURE SUCCESS DEPENDS ON OUR CONTINUING ABILITY TO ATTRACT, RETAIN AND
MOTIVATE HIGHLY QUALIFIED MANAGERIAL, TECHNICAL AND MARKETING PERSONNEL.


      We are highly dependent upon the continuing contributions of key
managerial, technical and marketing personnel. Our business necessitates that we
employ highly specialized technical, managerial and marketing employees who have
industry specific knowledge. Our employees may voluntarily terminate their
employment with us at any time, and competition for qualified technical
personnel experienced in the environmental remediation industry is intense,
particularly in light of the demand generated by recent hurricanes. The loss of
the services of any of our key managerial, technical or marketing personnel,
especially Michael O'Reilly, our chief executive officer, could materially
adversely affect our business, financial condition and results of operations.


IN ORDER TO SUCCESSFULLY BID ON AND SECURE CONTRACTS TO PERFORM ENVIRONMENTAL
REMEDIATION SERVICES OF THE NATURE OFFERED BY US TO OUR CUSTOMERS, WE SOMETIMES
MUST PROVIDE SURETY BONDS WITH RESPECT TO EACH PROSPECTIVE AND, UPON SUCCESSFUL
BID, ACTUAL PROJECTS.


      The number and size of contracts that we can perform from time to time is
to a certain extent dependent upon our ability to obtain bonding. This ability
to obtain bonding is dependent, in material part, upon our net worth and working
capital. While our ability to obtain bonding has been limited in recent years,
we expect that our bonding capacity will be improved by the commitment by
Michael O'Reilly, our chief executive officer, to personally guarantee such
bonding; however, no assurance can be given in this regard. There can be no
assurance that we will have adequate bonding capacity to bid on all of the
projects which we would otherwise bid upon were we to have such bonding capacity
or that we will in fact be successful in obtaining additional contracts on which
we may bid, which could have a material adverse effect on our results of
operations. None of our current projects require surety bonding.



                                       14
<PAGE>

WE HAVE IDENTIFIED ISSUES RELATING TO OUR INTERNAL CONTROLS OVER FINANCIAL
REPORTING THAT MAY PREVENT US FROM BEING ABLE TO ACCURATELY REPORT OUR FINANCIAL
RESULTS, WHICH COULD HARM OUR BUSINESS AND OPERATING RESULTS.

      In connection with our first quarter fiscal 2006 review, we identified
issues arising in connection with a change in our accounting staff during such
period regarding the timing and related processing of cash receipts and
allocation of costs associated with our contract and billing procedures and have
or are in the process of implementing the following measures:

      o     We have modified our calendar quarterly period end dates in our
            computer system to correspond with our actual quarterly period end
            dates in order to enhance the accurate and timely processing of our
            cash receipts for each quarterly period. We have also emphasized to
            our accounting staff that they need to record transactions on the
            dates that they occur instead of batching such transactions for
            processing at the end of one of our monthly, quarterly or annual
            periods.
      o     We are in the process of modifying the way in which we allocate our
            costs to specific projects in an effort to more precisely record our
            project costs.

      Any delay or failure to implement these measures, or difficulties
encountered in their implementation or operation, could harm our operating
results, cause us to fail to meet our financial reporting obligations, or
prevent us from providing reliable and accurate financial reports. Disclosure of
failure to remediate these problems in a timely fashion could cause investors to
lose confidence in our reported financial information, which could have a
negative effect on the trading price of our stock and our access to capital.


Factors Affecting Our Securities


ONE MAJOR STOCKHOLDER MAINTAINS THE ABILITY TO CONTROL OUR OPERATIONS.


      Currently, Michael O'Reilly, our chief executive officer and president,
owns an aggregate of 15,647,297 shares of our common stock and holds
approximately 46.6% of our voting power. In addition, Mr. O'Reilly currently
owns options which are exercisable for 24,306,273 shares of our common stock.
Should Mr. O'Reilly exercise his options to the fullest extent possible, he
would own 39,953,570 shares of our common stock and hold approximately 69.0% of
our voting power. Accordingly, Mr. O'Reilly may be able to control the Board of
Directors and thereby determine the corporate policy and the direction of our
operations. Mr. O'Reilly entered into a lock-up agreement with Laurus that
prohibits his disposition of his shares of our common stock and any and all
related derivative securities until the earlier of (a) the repayment in full of
the Note or (b) June 30, 2010.


CONVERSION OR EXERCISE OF OUR OUTSTANDING CONVERTIBLE OR OTHER DERIVATIVE
SECURITIES COULD SUBSTANTIALLY DILUTE YOUR INVESTMENT AND THE EXISTENCE OF OUR
CONVERTIBLE AND DERIVATIVE SECURITIES COULD NEGATIVELY AFFECT THE PRICE OF OUR
COMMON STOCK.


      As of December 27, 2005, we had a pro forma net tangible book of
$7,036,125 or $.21 per share, based on our outstanding number of shares of
33,571,215 shares as of such date, which do not include 184,405 shares of common
stock deemed outstanding for financial statement presentation purposes. Without
giving effect to the 4.99% limitation applicable to Laurus, with the inclusion
of the proceeds we would expect to receive in connection with an exercise of the
warrant and option, excluding any cashless exercises, our net tangible book
value per share would decrease to approximately $.05 per share if we paid Laurus
an aggregate of $888,623 in interest under the Note in shares of our common
stock and Laurus converted the Note and exercised in full its option and warrant
based on the current conversion and exercise prices thereof, and existing
stockholders would thereby suffer a decrease in net tangible book value of
approximately $.16 per share.



                                       15
<PAGE>

      As required by Laurus in connection with consummating our financing
transaction, we have issued to Laurus:


      o     the Note, which is convertible at $.09 per share into, after
            payments of principal and interest to date, approximately 71,458,311
            shares of our common stock (plus up to an 8,446,922 shares issuable
            in payment of interest);
      o     an option exercisable at $.0001 per share currently for 28,895,179
            shares. Laurus previously acquired 1,500,000 shares in connection
            with its partial exercise of the option; and
      o     a warrant exercisable at $.10 per share for 13,750,000 shares.

      In addition, the number of shares issuable pursuant to Laurus' derivative
securities may be adjusted as follows:


      o     increased, in the event of a reclassification or subdivision of our
            shares of common stock, in proportion to the total number of shares
            of our common stock outstanding immediately after such event
            relative to the total number of shares of our common stock
            outstanding immediately prior to such event;
      o     decreased, in the event of a reclassification or combination of our
            shares of common stock or stock dividend in the form of common stock
            on our common stock, in proportion to the total number of shares of
            our common stock outstanding immediately after such event relative
            to the total number of shares of our common stock outstanding
            immediately prior to such event; and
      o     with respect to the Note, increased pursuant to a decrease in the
            conversion price to the price at which we issue any shares of our
            common stock or the conversion or exercise price of any securities
            convertible into or exercisable for shares of our common stock,
            except in connection with a reclassification, stock split,
            combination, certain acquisition transactions, employee incentive
            stock options and/or qualified stock options, obligations to issue
            shares of common stock existing on June 30, 2005 or grants to key
            employees as part of an incentive program.


      If all of the conditions which would require us to pay Laurus in shares of
common stock are satisfied, assuming an interest rate of 9.75% under the Note,
which was the rate of interest for the month of April 2006, without the
assessment of any late fees or penalties, we would be required to issue
approximately 3,160,927 shares of our common stock for such month to Laurus in
payment of $54,796 in interest and the $229,687.50 monthly amortization payment,
based on an initial fixed conversion price of $.09 per share. In view of the
declining principal, the amount of interest (assuming a constant interest rate)
would decline in future months.

      We also have other outstanding options to purchase up to 26,806,273 shares
of our common stock, which include 24,306,273 shares issuable upon exercise of
options granted to our president and chief executive officer exercisable at $.01
per share with respect to 2,000,000 shares, at $.07904 per share with respect to
5,486,309 shares and at $.09 per share with respect to 15,469,964 shares. The
issuance of shares of our common stock pursuant to these options could have a
further dilutive effect on our common stock.


FUTURE SALES OF SUBSTANTIAL AMOUNTS OF OUR COMMON STOCK IN THE PUBLIC MARKET
COULD HAVE AN ADVERSE EFFECT ON THE MARKET PRICE OF OUR COMMON STOCK.


      As of March 28, 2006, we had 33,571,215 shares of common stock
outstanding. The registration statement of which this prospectus forms a part
registers for resale 84,472,512 shares, or approximately 56.2% of our common
stock assuming the exercise in full of the Laurus option and warrant and
conversion in full of the Note.

      We are unable to predict the potential effect that sales into the market
of 84,472,512 shares may have on the then prevailing market price of our common
stock. It is likely that market sales of the 84,472,512 shares offered for
resale pursuant to this prospectus (or the potential for those sales even if
they do not actually occur) may have the effect of depressing the market price
of our common stock. As a result, the potential resale and possible fluctuations
in trading volume of such a substantial amount of our stock may affect our share
price negatively.



                                       16
<PAGE>

IF YOU ARE NOT AN INSTITUTIONAL INVESTOR, YOU MAY PURCHASE OUR SECURITIES IN
THIS OFFERING ONLY IF YOU RESIDE WITHIN CERTAIN STATES AND MAY ENGAGE IN RESALE
TRANSACTIONS ONLY IN THOSE STATES AND A LIMITED NUMBER OF OTHER JURISDICTIONS.


      The "manual exemption" for secondary trading of securities to be resold by
the selling stockholder under this registration statement is currently available
by virtue of our recent listing in Standard and Poor's. If you are not an
"institutional investor," you will need to be a resident of certain
jurisdictions to purchase our securities in this offering. The definition of an
"institutional investor" varies from state to state but generally includes
financial institutions, broker-dealers, banks, insurance companies and other
qualified entities. In order to prevent resale transactions in violation of
states' securities laws, you may engage in resale transactions only in these
states and in other jurisdictions in which an applicable exemption is available
or a Blue Sky registration has been filed and accepted. This restriction on
resale may limit your ability to resell the securities purchased in this
offering and may impact the price of our shares.

      The manual exemption permits a security to be distributed in a particular
state without being registered if the issuer of that security has a listing for
that security in a securities manual recognized by the state. Furthermore, the
manual exemption is a non-issuer exemption restricted to secondary trading
transactions. Most of the accepted manuals are those published in Standard and
Poor's (in which we are listed), Moody's Investor Service, Fitch's Investment
Service, and Best's Insurance Reports, and many states expressly recognize these
manuals. A smaller number of states declare that they "recognize securities
manuals" but do not specify the recognized manuals. The following states do not
have any provisions and therefore do not expressly recognize the manual
exemption: Alabama, California, Georgia, Illinois, Kentucky, Louisiana, Montana,
New York, Pennsylvania, Tennessee, Vermont, Virginia and Wisconsin. If you
reside in one of these states and are not an institutional investor, you
generally will not be permitted to purchase shares in this offering unless there
is an available exemption or we register the shares covered by this prospectus
in such states. You will be permitted to purchase shares in this offering in New
York as we have taken the steps required by the state to allow for the secondary
trading of securities under this registration statement.


WE ARE PRECLUDED FROM PAYING AND DO NOT ANTICIPATE PAYING ANY CASH DIVIDENDS TO
OUR COMMON STOCKHOLDERS FOR THE FORESEEABLE FUTURE.


      Pursuant to the Securities Purchase Agreement, as amended, we are
prohibited from declaring or paying any dividends to our common stockholders
without Laurus' prior written consent for so long as at least twenty-five
percent of the original principal amount of the Note is outstanding. Further, we
expect that future earnings, if any, will be used to finance the working
capital, debt service growth and the development of our business and do not
expect to declare or pay any cash dividends on our common stock in the
foreseeable future. The payment of any future cash dividends by us will be
dependent upon our earnings, the stability thereof, our financial requirements
and other relevant factors. In addition, prior to paying any dividends on our
common stock, we are required to pay any accrued and unpaid quarterly dividends
on our series A convertible preferred stock.


OUR SECURITIES HAVE BEEN THINLY TRADED ON THE OVER-THE-COUNTER BULLETIN BOARD,
WHICH MAY NOT PROVIDE LIQUIDITY FOR OUR INVESTORS.


      Our securities are quoted on the Over-the-Counter Bulletin Board. The
Over-the-Counter Bulletin Board is an inter-dealer, over-the-counter market that
provides significantly less liquidity than the NASDAQ Stock Market or national
or regional securities exchanges. Securities traded on the Over-the-Counter
Bulletin Board are usually thinly traded, highly volatile, have fewer market
makers and are not followed by analysts. The Securities and Exchange
Commission's order handling rules, which apply to NASDAQ-listed securities, do
not apply to securities quoted on the Over-the-Counter Bulletin Board. Quotes
for stocks included on the Over-the-Counter Bulletin Board are not listed in
newspapers. Therefore, prices for securities traded solely on the
Over-the-Counter Bulletin Board may be difficult to obtain and holders of our
securities may be unable to resell their securities at or near their original
acquisition price, or at any price.


IF WE FAIL TO REMAIN CURRENT ON OUR REPORTING REQUIREMENTS, WE COULD BE REMOVED
FROM THE OVER-THE-COUNTER BULLETIN BOARD, WHICH WOULD LIMIT THE ABILITY OF
BROKER-DEALERS TO SELL OUR SECURITIES AND THE ABILITY OF OUR STOCKHOLDERS TO
SELL THEIR SECURITIES IN THE SECONDARY MARKET.

      Companies trading on the Over-the-Counter Bulletin Board, such as us, must
be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as
amended, and must be current in their reports under Section 13 in order to
maintain price quotation privileges on the Over-the-Counter Bulletin Board. If
we fail to remain current on our reporting requirements, our common stock could
be delisted from the OTC Bulletin Board. If this were to happen, it could
severely limit the ability of broker-dealers to sell our securities, and the
ability of stockholders to sell their securities in the secondary market may be
severely affected.


                                       17
<PAGE>


THE MARKET PRICE OF OUR COMMON STOCK HAS FLUCTUATED CONSIDERABLY AND WILL
PROBABLY CONTINUE TO DO SO.


      The stock markets have experienced price and volume fluctuations, and the
market price our common stock historically has been volatile. The market price
of our common stock could be subject to wide fluctuations in the future as well
in response to a variety of events or factors, some of which may be beyond our
control. These could include, without limitation:

      o     the occurrence of catastrophes requiring remediation;
      o     our ability to obtain large projects;
      o     changing policies and regulations of the federal state, and local
            governments;
      o     fluctuations in our financial results;
      o     liquidity of the market for our securities;
      o     future announcements of new competing technologies and procedures;
      o     public perception of our entry into new markets; and
      o     general conditions in our industry and the economy.

OUR CHARTER CONTAINS AUTHORIZED, UNISSUED PREFERRED STOCK THAT MAY INHIBIT A
CHANGE OF CONTROL UNDER CIRCUMSTANCES THAT COULD OTHERWISE GIVE OUR STOCKHOLDERS
THE OPPORTUNITY TO REALIZE A PREMIUM OVER PREVAILING MARKET PRICES OF OUR
SECURITIES.


      Our restated certificate of incorporation, as amended, and by-laws contain
provisions that could make it more difficult for a third party to acquire us
under circumstances that could give stockholders an opportunity to realize a
premium over then-prevailing market prices of our securities. Our certificate of
incorporation authorizes our board to issue preferred stock without stockholder
approval and upon terms as our board may determine. The rights of holders of our
common stock are subject to, and may be adversely affected by, the rights of
future holders of preferred stock. Section 203 of the Delaware General
Corporation Law makes it more difficult for an "interested stockholder"
(generally, a 15% stockholder) to effect various business combinations with a
corporation for a three-year period after the stockholder becomes an "interested
stockholder." In general, these provisions may discourage a third party from
attempting to acquire us and, therefore, may inhibit a change of control.


                           FORWARD-LOOKING STATEMENTS


      Statements contained in this prospectus include "forward-looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act of 1934, as amended, that are based on the
beliefs and current expectations of and assumptions made by our management.
Forward-looking statements may be identified by the use of forward-looking
terminology such as "may," "will," "expect," "believe," "estimate,"
"anticipate," "continue" or similar terms, variations of those terms or the
negative of those terms. Forward-looking statements involve known and unknown
risks, uncertainties and other factors which could cause the actual results,
performance and achievements, whether expressed or implied by such
forward-looking statements, not to occur or be realized. Such forward-looking
statements generally are based upon our best estimates of future results,
performance or achievement, based upon current conditions and the most recent
results of operations. Actual results could differ materially from any
expectation, estimate or projection conveyed by these statements and there can
be no assurance that any such expectation, estimate or projection will be met.
Numerous important factors, risks and uncertainties affect our operating results
and could cause actual results to differ from the results implied by these or
any other forward looking statements. These potential factors, risks and
uncertainties include, among other things, such factors as:


      o     the market acceptance and amount of sales of our services;
      o     our success in increasing revenues and, except for special
            circumstances, reducing expenses;


                                       18
<PAGE>


      o     the frequency and magnitude of environmental disasters or
            disruptions resulting in the need for the types of services we
            provide;
      o     our ability to service our debt and other financial obligations,
            particularly if required to pay in cash;
      o     the extent of the enactment, enforcement and strict interpretations
            of laws relating to environmental remediation;
      o     our ability to obtain and manage new and large projects;
      o     the competitive environment within the industries in which we
            operate;
      o     our ability to raise or access capital;
      o     our ability to continue as a going concern;
      o     our ability to effectively implement and maintain our internal
            controls and procedures;
      o     our dependence on key personnel;
      o     our ability to timely collect our accounts receivable;
      o     our ability to attract and retain qualified personnel; and
      o     the other factors and information disclosed and discussed under the
            "Risk Factors" and elsewhere in this prospectus.


      You should carefully consider such risks, uncertainties and other
information, disclosures and discussions which contain cautionary statements
identifying important factors that could cause actual results to differ
materially from those provided in the forward-looking statements.

      Except as may be required, we undertake no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.

      The foregoing discussion and analysis provides information which
management believes is relevant to an assessment and understanding of our
results of operations and financial condition. This discussion should be read in
conjunction with the consolidated financial statements and notes thereto
appearing elsewhere in this prospectus.


                                 USE OF PROCEEDS

      We will not receive any of the proceeds from the sale of the shares of our
common stock offered by the selling stockholder. The selling stockholder will
receive all of the proceeds from the sale of our common stock offered by this
prospectus. We may, however, receive the exercise prices with respect to the
option and the warrant to purchase an aggregate of 42,645,179 shares of our
common stock, if and when exercised by the selling stockholder. If the option
and warrant are exercised to the limits permitted under their terms, we estimate
our net proceeds would be approximately $1,377,890. In certain instances, the
selling stockholder may elect to use cashless exercises under which it would be
entitled to receive shares in exchange for its option and warrant without making
any cash payments. Laurus may effect a cashless exercise of the warrant if the
market price of our common stock exceeds the per share exercise price, and it
may effect a cashless exercise of the option if (a) the market price of our
common stock exceeds the per share exercise price and (b) (1) we have not
registered the shares underlying the option pursuant to an effective
registration statement or (2) an event of default under the Note has occurred
and is continuing. Accordingly, there can be no assurance that we will receive
any payments even if the option and warrant are exercised. Any proceeds received
in connection with the exercise of the option and warrant will be used for
working capital and other general corporate purposes.

MARKET PRICE OF AND DIVIDENDS ON OUR COMMON STOCK


      Our common stock is quoted on the Over-the-Counter Electronic Bulletin
Board of the NASD, under the symbol "WEGI.OB". The following table shows the
high and low daily closing sale prices per share of common stock on the
Over-the-Counter Electronic Bulletin Board for each quarterly period within the
two most recent fiscal years and for the most recent subsequent quarterly
period, as provided by Yahoo Finance Historical Price Quote.



                                       19
<PAGE>

                                                Price Range of Common Stock
                                                ---------------------------


FISCAL YEAR ENDED JUNE 29, 2004
-------------------------------

Quarter Ended                                  HIGH                      LOW
-------------                                  ----                      ---
September 30, 2003                             $.14                      $.08
December 30, 2003                              $.11                      $.02
March 30, 2004                                 $.13                      $.04
June 29, 2004                                  $.11                      $.05

FISCAL YEAR ENDED JUNE 28, 2005
-------------------------------

Quarter Ended                                  HIGH                      LOW
-------------                                  ----                      ---
September 28, 2004                             $.06                      $.04
December 28, 2004                              $.07                      $.03
March 29, 2005                                 $.12                      $.04
June 28, 2005                                  $.09                      $.06

FISCAL YEAR ENDING JUNE 30, 2006
--------------------------------

Quarter Ended                                  HIGH                      LOW
--------------                                 -----                     ---
September 27, 2005                             $.79                      $.05
December 27, 2005                              $.45                      $.10
March 28, 2006                                 $.22                      $.09
June 30, 2006 (through April 27, 2006)         $.30                      $.13

      As of March 24, 2006, there were approximately 745 holders of record of
our common stock.

      Pursuant to the Securities Purchase Agreement, as amended, we are
prohibited from declaring or paying any dividends to our common stockholders
without receiving Laurus' prior written consent for so long as at least
twenty-five percent of the original principal amount of the Note is outstanding.
Further, we expect that future earnings, if any, will be used to finance the
working capital, debt service, growth and development of our business and do not
expect to declare or pay any cash dividends on our common stock in the
foreseeable future. The payment of any future cash dividends by us will be
dependent upon our earnings, our financial requirements and other relevant
factors. In addition, prior to paying any dividends on our common stock, we are
required to pay quarterly dividends on our series A convertible preferred stock.
Upon conversion of the series A convertible preferred stock into common stock,
dividends on the series A convertible preferred stock shall no longer accrue and
all accrued and unpaid dividends, and any related accrued and unpaid interest,
as of the date of such conversion, shall be paid in cash. However, our series A
convertible preferred stock stockholders have agreed to:

      o     propose and vote in favor of an amendment to our certificate of
            incorporation in order to accommodate the full issuance of the
            shares of our common stock underlying the Note and the option and
            warrant we issued to Laurus;
      o     postpone their right, upon six months' notice after February 2007,
            to require us to redeem their series A convertible preferred stock,
            until the earlier of six months after the repayment of the Note or
            June 30, 2010;
      o     defer receipt of dividend payments on the series A convertible
            preferred stock due after June 30, 2005, until the earlier of six
            months after the repayment of the Note or June 30, 2010; and
      o     forbear from appointing a second director until the earlier of (a)
            June 30, 2008 or (b) the repayment in full of the secured
            convertible term note that we have issued to Laurus.



                                       20
<PAGE>


                      SELECTED CONSOLIDATED FINANCIAL DATA

      The selected consolidated financial data set forth below should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and with our audited and unaudited financial
statements and the notes thereto included elsewhere in this prospectus.

<TABLE>
<CAPTION>
                          Twenty-Six Weeks Ended
                         ------------------------                                                       Period from
                         December 27, December 28, Fiscal Year   Fiscal Year  Fiscal Year  Fiscal Year  May 1, 2001   Fiscal Year
                             2005         2004        Ended         Ended        Ended        Ended       Through        Ended
                         (unaudited)  (unaudited) June 28, 2005 June 29, 2004 July 1, 2003 July 2, 2002 July 3, 2001 April 30, 2001
                         -----------  ----------- ------------- ------------- ------------ ------------ ------------ --------------
<S>                      <C>          <C>          <C>           <C>          <C>          <C>          <C>           <C>
Consolidated Operations
 Data:

Revenues                 $22,878,681  $12,837,785  $20,640,410   $19,166,753  $17,831,189  $32,903,740  $ 2,322,511   $22,022,766
Gross Profit (loss)       10,302,701    4,105,794    5,463,675     1,724,694    3,516,670   12,148,063      (91,684)    6,686,575
Net income (loss)          1,874,720    1,058,962       53,066    (3,535,334)    (469,004)   3,494,867     (720,303)    1,065,877
Net income (loss)
 per common                     0.05         0.01         0.00          (.05)       (0.01)        0.05        (0.02)         0.03
share-basic
Net income (loss)
 per common              $      0.01  $      0.01  $      0.00   $      (.05) $     (0.01) $      0.04  $     (0.02)  $      0.01
share-diluted

Weighted average common
 shares outstanding:
Basic                     33,593,275   77,936,358   77,936,358    77,936,358   77,936,358   63,300,953   38,481,254    38,459,953
Diluted                  184,206,507   77,980,720   77,936,358    77,936,358   77,936,358   85,455,580   38,481,254    76,244,295

Consolidated Balance
 Sheet Data:


Total assets             $22,613,603  $14,002,164  $10,056,538   $11,331,165  $11,054,263  $10,212,538  $ 8,192,568   $ 8,806,398
Total current assets      16,490,607   11,349,086    7,491,847     8,375,045    8,458,701    8,861,054    6,922,379     7,256,017
Total current
 liabilities               9,781,271   12,209,929    9,195,938    10,479,016    6,241,411    4,534,581    6,979,416     6,703,167
Total long-term debt       1,529,367      260,228      197,400       340,104      338,848       63,703       14,250        26,837
Redeemable convertible
 preferred stock           1,300,000    1,300,000    1,300,000     1,300,000    1,300,000    1,300,000    1,300,000     1,300,000
Stockholders' equity
 (deficit)               $10,002,965  $   232,007  $  (712,889)  $  (787,955) $ 2,825,379  $ 3,372,383  $(2,487,156)  $(1,753,853)
</TABLE>


We did not pay any cash dividends on our common stock during any of the periods
set forth in the table above.


                                       21
<PAGE>


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


      The following discussion and analysis provides information that we believe
is relevant to an assessment and understanding of our results of operations and
financial condition. This discussion and analysis information should be read in
conjunction with the accompanying consolidated financial statements and notes
thereto.


      This discussion contains forward-looking statements that are subject to a
number of known and unknown risks, that in addition to general, economic,
competitive and other business conditions, could cause actual results,
performance and achievements to differ materially from those described or
implied in the forward-looking statements, as more fully discussed in
the"Forward-Looking Statements" and "Risk Factors" sections above.

      We are subject to significant external factors that could significantly
impact our business. These external factors could cause future results to differ
materially from historical trends. These external factors are more fully
discussed in the "Risk Factors" section above.


OVERVIEW

      We, through our wholly-owned subsidiaries, provide a full array of
emergency response, remediation and disaster restoration services to a broad
range of clients. We have expertise in the areas of hazardous materials
remediation, microbial remediation, testing, toxicology, training, wetlands
restoration, wildlife and natural resources rehabilitation, asbestos and lead
abatement, technical advisory services, restoration and site renovation
services.

      Our revenues are derived primarily from providing emergency response,
remediation and disaster restoration services to new and repeat customers on
time and materials basis or pursuant to fixed-price contracts, including in
connection with sudden catastrophes, such as in connection with the services
that we are providing in the aftermath of Hurricanes Katrina and Wilma. In the
twenty-six week period ended December 27, 2005 and fiscal 2005, substantially
all of our revenues were derived from time and materials contracts. Under our
fixed-price contracts, we assess the scope of work to be done and contract to
perform a specified scope of work for a fixed price, subject to adjustment for
work outside such scope of work, upon prior approval by our customers. Because
most of our projects consist of emergency or disaster responses, which do not
permit a definitive prior assessment of the full scope of work entailed and
require immediate attention in order to mitigate loss and maximize recovery,
most of our projects are performed on a time and materials basis. Under our time
and materials contracts, we charge our customers for labor, equipment usage,
allocated overhead and a markup relating thereto. Our cost of revenues consists
primarily of labor and labor-related costs, insurance, benefits and insurance,
travel and entertainment repairs, maintenance, equipment rental, materials and
supplies, disposal costs and depreciation of capital equipment. Our selling,
general, and administrative expenses primarily consist of expenses related to
provisions for doubtful accounts, legal fees, sales salaries, marketing and
consulting.


      We have encountered difficulty with cash collections and slow cash flow
due primarily to factors including:

      o     customers refusing to pay prior to receiving insurance
            reimbursements;
      o     customers' facility managers needing to wait for insurance adjustors
            to approve work before the remission of payment; and
      o     certain customers refusing to pay in connection with disputed change
            orders.


      In an effort to enhance our cash flows from operations, beginning in our
2005 fiscal year, we began implementing improvements in our billing and
invoicing procedures as follows:

      o     we generally do not commence projects until we have a fully executed
            contract;
      o     our service contracts provide that our customers are directly
            obligated for our services;
      o     we require client approval with respect to the work performed or to
            be performed;
      o     we generally seek deposits or mobilization fees for our time and
            materials contracts;


                                       22
<PAGE>


      o     we engage local legal counsel in the areas in which we operate to
            file liens against customers' real property in the event of contract
            disputes; and
      o     all invoices submitted for payment are reviewed for proper
            documentation.


      Because some of these are relatively new changes, no assurances can be
given that they will be successful in improving our collections and cash flows.
Further, approximately 4% of our current projects are performed under procedures
that predate these improvements.

      In light of the foregoing, we expect to generate sufficient cash flow from
operations to support our working capital needs and to adequately fund our
current operations for at least the next twelve months. However, any further
difficulty collecting our accounts receivable or further significant growth
could adversely affect our liquidity. In the event that we do not generate
sufficient positive cash flow from operations, we may need to seek additional
financing in addition to the financing provided by Laurus. Laurus is under no
obligation to provide any funding to us. Currently, we have no credit facility
for additional borrowing.


      On June 30, 2005, we issued to Laurus a three-year secured convertible
term note in the principal amount of $5,000,000. Subsequently, Laurus loaned us
an additional $2,350,000, and we amended and restated the note accordingly. As
of April 15, 2006, the principal amount of the Laurus note outstanding equaled
$6,431,249. On November 10, 2005, Laurus agreed to defer the principal monthly
payments due in November and December 2005 in the aggregate amount of $495,375
until June 30, 2008, the maturity date of the Laurus note, in order to
facilitate financing of our gulf coast and Florida operations.

      During the twenty-six weeks ended December 27, 2005, we were engaged on
various projects within our customary scope of services for private sector
commercial and residential customers in the gulf coast and Florida regions.
Revenue recognized for the twenty-six weeks ended December 27, 2005 in
connection with these projects were $16,391,516. For the thirteen weeks ended
March 28, 2006, based upon billings, our revenues from these projects were
approximately $4.5 million. We do not expect that our revenues from these
projects will be material subsequent to March 28, 2006.

      Management believes that we will be engaged to perform substantial
additional projects in the United States in the near term, possibly including
federally funded projects on which we have not focused to date; however, no
assurance can be given in this regard until contracts relating to these projects
have been executed.


ABILITY TO CONTINUE AS A GOING CONCERN


      Our independent auditors raised a concern in their report on our financial
statements for our 2005 fiscal year about our ability to continue as a going
concern. Due to our recurring losses from operations, working capital deficit,
stockholders' deficit and difficulty in generating sufficient cash flow to meet
our obligations and sustain our operations, there is "substantial doubt" about
our ability to continue as a going concern. Although we had a net profit of
$53,066 for our 2005 fiscal year and $1,874,720 for the twenty-six weeks ended
December 27, 2005, and had positive working capital as of December 27, 2005, the
uncertainty about our ability to continue as a going concern may limit our
ability to access certain types of financing, or may prevent us from obtaining
financing on acceptable terms.


CRITICAL ACCOUNTING POLICIES


      Management's discussion and analysis of our financial position and results
of operations is based upon our audited consolidated financial statements for
our fiscal year ended June 28, 2005, which have been prepared in accordance with
accounting principles generally accepted in the United States of America, and
our unaudited interim consolidated financial statements for our twenty-six weeks
ended December 27, 2005. The preparation of these consolidated financial
statements requires management to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses and related
disclosure of contingent assets and liabilities. Actual results could differ
from those estimates. We believe that the critical accounting policies and areas
that require the most significant judgments and estimates to be used in the
preparation of our consolidated financial statements are accounting for stock
based transactions, contracts, allowance for doubtful accounts and the valuation
allowance related to deferred tax assets.



                                       23
<PAGE>


      Stock Based Transactions--We consummated various transactions where we
paid the consideration primarily in options or warrants to purchase our common
stock. These transactions include financing transactions and providing
incentives to attract, retain and motivate employees, officers and directors.


      We have recognized the value of the equity instruments issued in
connection with financing transactions in accordance with Accounting Principles
Board Opinion No. 14 and Emerging Issues Task Force Consensuses 98-5 and 00-27.
The intrinsic value of the options and the fair value of the warrants were
calculated and the proportionate values of the resulting debt and equity
components have been recognized as debt discounts with equivalent increases in
amounts reflected as equity. The beneficial conversion feature of the Note,
including the effective values under EITF 00-27, has also been recognized as a
debt discount, with an equivalent increase in the amount reflected as equity.
All of these discounts are being amortized over the three-year term of the debt
in accordance with EITF 00-27. Once the transaction value is determined, we
record the transaction value as an expense with a corresponding increase on
paid-in capital.


      When options or warrants to purchase our common stock are used as
incentives for employees, officers or directors, we use the intrinsic value
method in accordance with the recognition and measurement principles of
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," as permitted by Statement of Financial Accounting Standards "SFAS"
No. 123. The intrinsic value method calculates the value of the option or
warrant at the difference between the exercise price per share and the market
price per share of the common stock on the day the option or warrant is granted,
except that such value is zero if the exercise price is higher than the market
price of the common stock. Once the transaction value is determined, we record
the transaction value as an expense with a corresponding increase in paid-in
capital.


      When options or warrants to purchase our common stock are used in
transactions with third parties, the transaction is valued using the
Black-Scholes valuation method. The Black-Scholes valuation method is widely
accepted as providing the fair market value of an option or warrant to purchase
stock at a fixed price for a specified period of time. Black-Scholes uses five
variables to establish market value of stock options or warrants:

      o     exercise price (the price to be paid for a share in our stock);
      o     price of our stock on the day the options or warrants are granted;
      o     number of days that the options or warrants can be exercised before
            they expire;
      o     trading volatility of our stock; and
      o     annual interest rate on the day the option or warrant is granted.

      The determination of expected volatility requires management to make an
estimate and the actual volatility may vary significantly from that estimate.
Accordingly, the determination of the resulting expense is based on a management
estimate.


      Revenue Recognition--Revenue derived from services provided to customers
over periods of less than one month is recognized when billed.

      Revenue from claims, such as claims relating to disputed change orders, is
recognized when realization is probable and the amount can be reliably
estimated, based upon meeting the following conditions:

      o     The original contract or other evidence provides a legal basis for
            the claim;
      o     The additional costs were caused by circumstances that were
            unforeseen at the contract date;
      o     Costs associated with the claims are identifiable; and
      o     The evidence supporting the claims is objective and verifiable.

      Revenue from fixed price contracts that extend over periods of one month
or more is recognized using the percentage-of-completion method, measured by the
percentage of costs incurred to date compared to estimated total costs for each
contract. Provisions for estimated losses on uncompleted contracts are made in
the period in which such losses are determined. Changes in job performance, job
conditions, estimated profitability, the effect of contract penalty provisions
and final contract settlements may result in revisions to estimates of costs and
income and are recognized in the period in which the revisions are determined.



                                       24
<PAGE>


      Contract Accounting--Revenue derived from services provided to customers
over periods of less than one month is recognized at the completion of the
related contracts. Revenue from fixed price contracts that extend over periods
of one month or more is recognized using the percentage-of-completion method,
measured by the percentage of costs incurred to date compared to estimated total
costs for each contract. Provisions for estimated losses on uncompleted
contracts are made in the period in which such losses are determined. Changes in
job performance, job conditions, estimated profitability, the effect of contract
penalty provisions and final contract settlements may result in revisions to
estimates of costs and income and are recognized in the period in which the
revisions are determined. Revenue from claims, such as claims relating to
disputed change orders, is recognized when realization is probable and the
amount can be reliably estimated, based upon meeting the following conditions:

      o     The original contract or other evidence provides a legal basis for
            the claim;
      o     The additional costs were caused by circumstances that were
            unforeseen at the contract date;
      o     Costs associated with the claims are identifiable; and
      o     The evidence supporting the claims is objective and verifiable.


Revenues from time and material contracts that extend over a period of more than
one month are recognized as services are performed.


      Allowance for Doubtful Accounts--We maintain an allowance for doubtful
trade accounts receivable for estimated losses resulting from the inability of
our customers to make required payments. In determining collectibility, we
review available customer account and financial information, including public
filings and credit reports, current trends, credit policy, and accounts
receivable aging and may also consult legal counsel when appropriate. A
considerable amount of judgment is required when we assess the likelihood of our
realization of accounts receivables, including assessing the probability of
collection and the current credit worthiness of each customer. If the financial
condition of our customers were to deteriorate, resulting in an impairment of
their ability to make payments, an additional provision for doubtful accounts
could be required. The need to file a lawsuit in a particular case is determined
by a variety of factors, including the Company's mandate to aggressively pursue
all monies owed. The other considered factors include the responsiveness of the
client, the running of applicable limitations periods, the ability to perfect a
lien against the subject property, the value of the receivable compared to the
costs of litigation and the likelihood of success in the lawsuit. When it is
deemed probable that a specific customer account is uncollectible, that balance
is included in the reserve calculation. Actual results could differ from these
estimates.


      Deferred Tax Asset Valuation Allowance - We record a valuation allowance
to reduce our deferred tax assets to the amount that is more likely than not to
be realized. Due to our history of losses, we have recorded a full valuation
allowance against our net deferred tax assets as of June 28, 2005 and December
27, 2005. We currently provide for income taxes only to the extent that we
expect to pay cash taxes on current income. When we are profitable at levels
which cause management to conclude that is more likely than not that we will
realize all or a portion of our deferred tax assets, we record the estimated net
realizable value of our deferred tax assets at that time and provide for income
taxes at our combined federal and state effective rates.

RESULTS OF OPERATIONS

Twenty-six weeks ended December 27, 2005 and December 28, 2004

Revenue


      Total revenues for the twenty-six weeks ended December 27, 2005 increased
by $10,040,896, or 78.2%, to $22,878,681 from $12,837,785 for the twenty-six
weeks ended December 28, 2004. This increase in revenue was primarily
attributable to $15,070,747 of revenues from work relating to Hurricane Katrina
and $1,320,769 of revenues from work relating to Hurricane Wilma. This increase
was partially offset by a $1,063,799 decrease in spill related work.



                                       25
<PAGE>


Cost of Revenues

      Cost of revenues increased $3,843,989, or 44.0%, to $12,575,980 for the
twenty-six weeks ended December 27, 2005 as compared to $8,731,991 for the
twenty-six weeks ended December 28, 2004. This increase was primarily
attributable to labor and other costs relating to our work in connection with
Hurricanes Katrina and Wilma. Our cost of revenues consists primarily of labor
and labor-related costs, payroll taxes, benefits, training, job-related
insurance costs, travel and travel-related costs, repairs, maintenance and
rental of job equipment, materials and supplies, testing and sampling,
transportation, disposal, and depreciation of capital equipment.

Gross Profit

      Gross profit increased by $6,196,907, or 150.9%, to $10,302,701, or 45.0%
of total revenues for the twenty-six weeks ended December 27, 2005, as compared
to $4,105,794, or 32.0% of total revenues for the twenty-six weeks ended
December 28, 2004. This increase in gross profit was due primarily to a higher
percentage of higher margin equipment usage in connection with our
hurricane-related projects. Higher margins on equipment used on hurricane and
other catastrophe-related projects are necessary to compensate us for the fact
that this equipment is generally used less often, or may not be utilized at all,
as compared to equipment utilized for more routine projects.

Selling, General and Administrative Expenses

      Selling, general and administrative expenses increased by $1,274,255, or
46.6%, to $4,009,705 for the twenty-six weeks ended December 27, 2005 from
$2,735,450 for the twenty-six weeks ended December 28, 2004 and constituted
approximately 17.5% and 21.3% of revenues in such periods, respectively. This
increase was primarily attributable to an increased provision of $1,250,000 to
our allowance for doubtful accounts, increased accounting and legal fees of
$303,726, and a $40,256 increase in marketing expenses. The increase in the
allowance for doubtful accounts reflects the substantial increase in sales and
accounts receivable. Of the total $1,250,000 increase to the allowance for
doubtful accounts, $788,668 is related to the receivables that are in dispute.
Of this total, $33,322 is related to four claims that were open as of June 29,
2004 and the balance of $755,346 was for 3 additional claims that arose during
fiscal year 2005. These were partially offset by a decrease of $114,316 in
consulting fees. Our selling, general, and administrative expenses primarily
consist of expenses related to provisions for doubtful accounts, professional
fees, salaries and related benefits, insurance, marketing and all other
office-and administrative-related expenses.

Benefit Related to Variable Accounting Treatment for Officer Options

      Under the terms of a previous employment agreement we entered into and a
separate agreement with Spotless, our president and chief executive officer was
able to sell to us, or in certain circumstances to Spotless, all shares of our
common stock held by him and all shares of our common stock underlying vested
options to purchase shares of our common stock held by him upon the occurrence
of certain events. Due to the terms of the options, changes in the market price
of our common stock, in either direction, resulted in a corresponding expense or
benefit. There was no benefit or expense required to be recorded in the
twenty-six weeks ended December 27, 2005 due to the elimination of this risk on
June 30, 2005. There was no benefit or expense required to be recorded in the
twenty-six weeks ended December 28, 2004 due to the low market price of our
common stock.

Interest Expense

      Interest expense increased by $961,954, or 361.0%, to $1,228,410 for the
twenty-six weeks ended December 27, 2005 from $266,456 for the thirteen weeks
ended December 28, 2004. This increase was primarily due to an increase of
$289,656 of interest expense incurred to Laurus, $317,216 of amortization of
discounts, and an increase of $587,690 attributable to the amortization of
deferred financing costs relating to the Laurus transaction, partially offset by
a reduction of $226,021 in interest expense incurred to Spotless, including a
decrease of $145,846 in interest expense recognized in connection with sales of
accounts receivable to Spotless because there were no such sales in the
twenty-six week period ended December 27, 2005. Due to the accounting of the
Laurus financing, we anticipate significant interest expenses to be charged in
future periods.



                                       26
<PAGE>

Provision for Income Taxes


      The provision for income taxes for the twenty-six weeks ended December 27,
2005 was $3,167,356 as compared to $46,248 for the twenty-six weeks ended
December 28, 2004. This increase was the result of higher taxable income for the
twenty-six weeks ended December 27, 2005, primarily attributable to
hurricane-related work in that period. The provision for income taxes reflects
an effective rate of 56.3% The accounting expense for taxes currently payable
attributable to timing differences could not be offset by the future benefit of
the reversal of such timing differences because a full valuation allowance was
recorded. Such valuation allowance was recorded because we do not believe that
the utilization of the tax benefit from net operating losses and other temporary
differences are "more likely than not" to be realized. As a result of a change
in the Company's ownership on June 30, 2005, net operating loss carryforwards
are subject to significant annual usage limitations which have not yet been
determined.


Net Income

      We generated net income of $1,874,720 and net income attributable to
common stockholders of $1,835,720, for the twenty-six weeks ended December 27,
2005, as compared to net income of $1,058,962 and net income attributable to
common stockholders of $1,019,962 incurred for the twenty-six weeks ended
December 28, 2004. These changes were the result of the factors discussed above.

Fiscal Year Ended June 28, 2005 Compared to Fiscal Year Ended June 29, 2004

Revenues

      Revenues increased by $1,473,657, or 7.7%, to $20,640,410 in our fiscal
year ended June 28, 2005, compared to $19,166,753 in our fiscal year ended June
29, 2004, primarily attributable to an increase of $8,340,007 in our emergency,
disaster response and remediation work (associated primarily with hurricanes in
Florida) and an increase of $500,240 associated with our marine spill business.
In addition, $440,000 of revenues was recorded as the result of the settlement
of a claim for work performed on change orders. Costs associated with these
revenues have been recognized in prior years. These increases were partially
offset by a decrease of $2,642,995 in work performed in relation to insurance
claims, a decrease of $3,898,446 in our spill and soil environmental remediation
and a decrease of $413,736 in our asbestos, lead and mold work.

Cost of Revenues


      Cost of revenues decreased by $2,265,324, or 13%, to $15,176,735, or 73.5%
of total revenues, in our fiscal year ended June 28, 2005, as compared to
$17,442,059, or 91% of total revenues, in our fiscal year ended June 29, 2004.
This decrease was primarily the result of a $2,350,249, or 27.1%, reduction in
payroll, including fringe and union benefits, and a $224,903 decrease in direct
project related expenses, such as the cost of subcontractors, materials,
supplies and equipment rental, partially offset by an increase of $309,828 in
other expenses, such as testing, sampling, truck-related expenses, training and
insurance. Our cost of revenues consists primarily of labor and labor related
costs, including salaries to laborers, supervisors and foremen, payroll taxes,
training, insurance and benefits. Additionally, cost of revenues include job
related insurance costs, repairs, maintenance and rental of job equipment, job
materials and supplies, testing and sampling, and transportation, disposal, and
depreciation of capital equipment.


Gross Profit

      Gross profit increased by $3,738,981, or 216.8%, to $5,463,675, or 26.5%,
of total revenues for our fiscal year ended June 28, 2005 from $1,724,694, or 9%
of total revenues, for our fiscal year ended June 29, 2004. This increase in
gross profit was due primarily to a greater proportion of emergency response
work related to hurricanes in Florida and equipment intensive projects with
higher gross margins and a corresponding reduction in labor costs. In addition,
there were no current year costs associated with the $440,000 of revenues
recorded in the 2005 period on the settlement of the previously discussed claim.


                                       27
<PAGE>

Selling, General and Administrative Expenses

      Selling, general and administrative expenses decreased by $463,552, or
8.7%, to $4,884,972 in our fiscal year ended June 28, 2005 from $5,348,524 in
our fiscal year ended June 29, 2004 and constituted approximately 24% and 28% of
total revenues, respectively. The decrease in selling, general and
administrative expenses was primarily due to reductions of $436,028 in payroll
and fringe benefits, $284,138 in marketing expenses and $193,889 in travel and
entertainment expenses, partially offset by increases of $233,393 in
professional fees and $818,691 in our allowance for doubtful accounts.

Expense (Benefit) Related to Variable Accounting Treatment for Officer
Securities

      Under the terms of an employment agreement, our president and chief
executive officer, until June 30, 2005, could sell to us all shares of our
common stock held by him and all shares of common stock underlying vested
options to purchase shares of our common stock held by him. There was a charge
of $76,089 related to variable accounting treatment for these officer securities
in our fiscal year ended June 28, 2005, which resulted from an increase in our
stock price, as compared to a benefit of ($348,626) in our fiscal year ended
June 29, 2004, which resulted from a decrease in our stock price. Due to the
terms of the options, changes in the market price of our common stock, in either
direction, resulted in a corresponding expense or benefit.

Interest Expense

      Interest expense decreased by $560,611, or 60.6%, to $363,850 in our
fiscal year ended June 28, 2005 from $924,461 in our fiscal year ended June 29,
2004. The decrease in interest expense was primarily due to a reduction in
interest expenses attributable to sales of accounts receivable at a discount to
Spotless.


(Benefit) Provision for Income Taxes

      The (benefit) provision for income taxes reflects an effective rate of
31.2% and (15.2)% in fiscal 2005 and 2004, respectively. The accounting benefit
for taxable losses generated in prior periods was offset by recording a full
valuation allowance. Such valuation allowance was recorded because we do not
believe that the utilization of the tax benefits from operating losses, and
other temporary differences are "more likely than not" to be realized, as
required by accounting principles generally accepted in the United States of
America.


Net (Loss) Income

      Net income and basic net (loss) attributable to common stockholders per
share for our fiscal year ended June 28, 2005 were $53,066 and ($24,934),
respectively. This compares to net (loss) and basic net (loss) attributable to
common stockholders per share for our fiscal year ended June 29, 2004 of
($3,535,334) and ($3,613,334), respectively. The changes were primarily
attributable to the factors described above.

Fiscal Year Ended June 29, 2004 Compared to Fiscal Year Ended July 1, 2003

Revenues

      Revenues increased by $1,335,564, or 7%, to $19,166,753 in our fiscal year
ended June 29, 2004 compared to $17,831,189 in our fiscal year ended July 1,
2003. The increase was primarily due to increases of $1,200,000 related to an
oil tank cleaning project, $1,033,702 related to an emergency spill response,
$1,582,097 related to insurance, $918,799 related to catastrophe response
associated with Hurricane Isabel and $385,252 related to new operations in
Florida. These increases were partially offset by decreases of $3,486,469
related to a non-recurring mold remediation project in Hawaii and $343,543
related to a non-recurring lead remediation project in New York City.

Cost of Revenues


      Cost of revenues increased by $3,127,540, or 21.8%, to $17,442,059, or 91%
of total revenues, in our fiscal year ended June 29, 2004 compared to
$14,314,519, or 80% of total revenues, in our fiscal year ended July 1, 2003.
Direct field labor, including fringe and union benefits, subcontractor costs,
disposal costs, equipment rental and insurance costs increased $1,513,728,
$490,210, $471,624, $285,494 and $170,772, respectively, primarily as a result
of the increased revenue. In response to deteriorating cash flows, we reduced
our direct labor force. Our cost of revenues consists primarily of labor and
labor related costs, including salaries to laborers, supervisors and foremen,
payroll taxes, training, insurance and benefits. Additionally, cost of revenues
include job related insurance costs, repairs, maintenance and rental of job
equipment, job materials and supplies, testing and sampling, and transportation,
disposal, and depreciation of capital equipment.



                                       28
<PAGE>

Gross Profit


         Gross profit decreased by $1,791,976, or 9%, to $1,724,694, or 9% of
total revenues, for our fiscal year ended June 29, 2004 from $3,516,670, or 20%,
of total revenues, for our fiscal year ended July 1, 2003. This decrease in
gross profit of $1,791,976, or 51%, was due primarily to cost overruns incurred
on an oil tank cleaning project.


Selling, General and Administrative Expenses

      Selling, general and administrative expenses decreased by $255,033, or 5%,
to $5,348,524 in our fiscal year ended June 29, 2004 from $5,603,557 in fiscal
year ended July 1, 2003 and constituted approximately 28% and 31% of total
revenues in fiscal year ended June 29, 2004 and fiscal year ended July 1, 2003,
respectively. The decrease was primarily attributable to decreases in legal
expenses and sales salaries of $441,477 and $178,963, respectively. The
decreases were partially offset by an increase in consulting expenses of
$341,386.


Expense (Benefit) Related to Variable Accounting Treatment for Officer
Securities


      Under the terms of an employment agreement, our president and chief
executive officer, until June 30, 2005, could sell to us all shares of our
common stock held by him and all shares of our common stock underlying vested
options to purchase shares of our common stock held by him. The expense relating
to variable accounting treatment for these officer options amounted to a benefit
of $348,626 in our fiscal year ended June 29, 2004 and a benefit of $593,246 in
our fiscal year ended July 1, 2003. The benefits in our fiscal years ended June
29, 2004 and July 1, 2003 were due to a decrease in the market price of our
common stock. Due to the terms of the options, changes in the market price of
our common stock, in either direction, resulted in a corresponding expense or
benefit.

Interest Expense


      Interest expense increased by $852,272, or 1,181%, in our fiscal year
ended June 29, 2004 to $924,461 from $72,189 in our fiscal year ended July 1,
2003. The increase in interest expense was primarily attributable to greater
levels of debt and the discount recorded under an Accounts Receivable Finance
Agreement with Spotless.

(Benefit) Provision for Income Taxes

      The (benefit) provision for income taxes reflects an effective rate of
(15)% and (70)% in fiscal year ended June 29, 2004 and July 1, 2003,
respectively. The book benefit for taxable losses generated in prior periods was
offset by recording a full valuation allowance. Such valuation allowance was
recorded because management does not believe that the utilization of the tax
benefits from operating losses, and other temporary differences are "more likely
than not" to be realized, as required by accounting principles generally
accepted in the United States of America.

Net (Loss) Income


      Net (loss) and basic net (loss) attributable to common stockholders per
share for our fiscal year ended June 29, 2004 were ($3,535,334) and ($.05),
respectively. This compares to net loss and basic net loss attributable to
common stockholders per share for our fiscal year ended July 1, 2003 of
($469,004) and ($.01), respectively. The changes are primarily attributable to
the factors described above.


                                       29
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES


      As of December 27, 2005, we had a cash balance of $2,494,266, working
capital of $6,709,336 and stockholders' equity of $10,002,965. As of June 28,
2005, we had a cash balance of $512,711, a working capital deficit of
($1,704,091) and a stockholders' deficit of ($712,889). As of June 29, 2004, we
had cash balances of $63,562, a working capital deficit of ($2,103,971) and
stockholders' deficit of ($787,955). At July 1, 2003, we had cash balances of
$130,096, working capital of $2,217,290 and stockholders' equity of $2,825,379.
We generated a net profit of $1,874,720, a net profit of $53,066 and a net loss
of ($3,535,334) for the twenty-six weeks ended December 27, 2005 and our fiscal
years ended June 28, 2005 and June 29, 2004, respectively

      Accounts receivable, net of allowance of doubtful accounts, at December
27, 2005, June 28, 2005 and June 29, 2004 were $13,182,621, $6,755,338 and
$6,652,806, respectively. For these periods, approximately $3,080,000,
$1,976,000 and $1,706,000, respectively, of these amounts were subject to
collection litigation, primarily relating to disputes over changed work orders
or other modifications to our scope of work. We do not believe that the disputed
receivables had a material effect on liquidity for the periods presented.

      Net cash provided by operating activities was $587,948 for the twenty-six
weeks ended December 27, 2005, as compared to the net cash provided by
operations of $473,288 for the twenty-six weeks ended December 28, 2004.
Accounts receivable increased by $4,423,045, or 38%, as of December 27, 2005 to
$15,940,452, from $11,517,407 as of December 28, 2004, primarily as a result of
work performed in connection with Hurricanes Katrina and Wilma. Accounts payable
and accrued expenses decreased by $1,268,723, or 26.3%, as of December 27, 2005
to $3,560,800, from $4,829,523 as of December 28, 2004, primarily as a result of
accelerated payments to our venders as a result of our favorable cash position.

      Net cash provided by operating activities was $818,673 in fiscal year
ended June 28, 2005, as compared to net cash provided by (used in) operating
activities of ($2,343,180) and ($317,504) in our fiscal years ended June 29,
2004 and July 1, 2003, respectively. Accounts receivable increased $921,223, or
12.6%, to $8,263,169 as of June 28, 2005, from $7,341,946 as of June 29, 2004,
reflecting primarily delayed payments by customers. Accounts receivable
increased $1,057,539, or 17%, to $7,341,946 as of June 29, 2004, from $6,284,407
as of July 1, 2003, reflecting processing delays in our invoicing of our
customers. Accounts payable and accrued expenses decreased by $624,933, or
18.3%, as of June 28, 2005, from $3,411,029 as of June 29, 2004, as a result of
our efforts to pay vendors on a more timely basis, partly offset by an increase
in professional fees resulting from our recent refinancing and change of control
transactions. Accounts payable and accrued expenses increased by $730,007, or
27.2%, as of June 29, 2004, from $2,681,022 as of July 1, 2003, as a result of
increased revenues and slower payments to vendors. Such slow payment resulted
from delays in invoicing discussed above and the resulting deterioration of cash
receipts.

      Net cash provided by financing activities for the twenty-six weeks ended
December 27, 2005 was $2,332,363, as compared to cash used by financing
activities of $134,508 for the twenty-six weeks ended December 28, 2004,
primarily as a direct result of $7,350,000 received in connection with our
borrowings from Laurus, the proceeds of which borrowings were used to pay
related transaction and other expenses in the amount of $2,314,172 and repay
indebtedness to Spotless in the amount of $2,650,000. These transactions
resulted in a net increase of $2,350,000 in borrowings and the cancellation of
$1,230,228 of our previous secured note payable to Spotless. The balance of the
proceeds, in the amount of $2,053,011, was used to fund working capital and our
initial Hurricane Katrina mobilization costs. Financing activities for the
twenty-six weeks ended December 28, 2004 used net cash of $134,508 for long-term
debt repayment.

      Cash used for capital expenditures increased to $938,756, during the
twenty-six weeks ended December 27, 2005, as compared to $56,011 for the
twenty-six weeks ended December 28, 2004, due to the cost of equipment purchased
to perform the work in the Gulf Coast region. At this time, we do not have any
other material commitments or plans for capital expenditures. We intend,
however, to make additional capital expenditures, to the extent our financial
condition permits, as may be required in connection with rendering our services
in the future.

      Historically, we have financed our operations primarily through issuance
of debt and equity securities, through short-term borrowings from our former
majority shareholder, and through cash generated from operations. We expect to
generate sufficient cash flow from operations to support our working capital
needs and to adequately fund our current operations for at least the next twelve
months. However, any further difficulty collecting our accounts receivable or
further significant growth could adversely affect our liquidity. In the event
that we do not generate sufficient positive cash flow from operations, or if we
experience changes in our plans or other events that adversely affect our
operations or cash flow, we may need to seek additional financing in addition to
the financing provided by Laurus. Laurus is under no obligation to provide any
funding to us. Currently, we have no credit facility for additional borrowing.



                                       30
<PAGE>

      Our future cash requirements are expected to depend on numerous factors,
including, but not limited to our ability to:


      o     Obtain profitable environmental or related construction contracts.
            So long as we have sufficient working capital, we anticipate
            continued revenue growth in new and existing service areas and to
            continue to bid on large projects, though there can be no assurance
            that any of our bids will be accepted or that we will have
            sufficient working capital. We were recently engaged on various
            projects within our customary scope of services for private sector
            commercial and residential customers in the gulf coast and Florida
            regions in connection with the aftermath of Hurricanes Katrina and
            Wilma. Under time and materials contracts or other arrangements, we
            have billed in excess of $20.9 million of work in connection with
            these projects through March 28, 2006. Revenue recognized for the
            twenty-six weeks ended December 27, 2005, in connection with these
            projects, were $16,391,516. For the thirteen weeks ended March 28,
            2006, based upon billings, our revenues from these projects were
            approximately $4.5 million. We do not expect that our revenues from
            these projects will be material subsequent to March 28, 2005.
      o     Control our selling, general and administrative expenses, which have
            recently increased in connection with our need to incur labor,
            operating and equipment expenses in relation to our operations in
            the gulf coast and Florida regions. In order to control our selling,
            general and administrative expenses, we have or are in the process
            of optimizing the efficiency of our support staff through training
            and enhanced task allocation while reducing unneeded resources and
            reviewing non-project related expenses in an effort to reduce costs
            where appropriate while preserving the quality of our service.
      o     Raise additional capital or obtain additional financing. Management
            has preliminarily explored additional funding sources, but has been
            unable to attract additional debt or equity capital. Laurus
            indicated to us that it did not intend to provide any additional
            financing at the time that it loaned an additional $1,350,000 to us
            in October 2005. In addition, the existence of the Laurus and
            Spotless security interests may impair our ability to raise
            additional debt capital. No assurance can be given that we will be
            able to obtain additional debt or equity capital although our
            management expects to continue seeking any such favorable
            opportunities.
      o     Generate positive cash flow from operations. We seek to obtain
            profitable contracts that generate gross profits more than
            sufficient to pay our expenses. Our plans for our 2006 fiscal year
            include concentrating our efforts in the gulf coast and Florida
            regions in connection with the aftermath of Hurricanes Katrina and
            Wilma and addressing our difficulty with cash collections and slow
            cash flow.


      We have encountered difficulties with cash collections and slow cash flow
due primarily to factors including:


      o     customers refusing to pay prior to receiving insurance
            reimbursements;
      o     customers' facility managers needing to wait for insurance adjustors
            to approve work before the remission of payment; and
      o     certain customers refusing to pay in connection with disputed change
            orders.


      In an effort to enhance our cash flows from operations, beginning in our
2005 fiscal year, we began implementing improvements in our billing and
invoicing procedures as follows:


      o     we generally do not commence projects until we have a fully executed
            contract;
      o     our service contracts provide that our customers are directly
            obligated for our services;
      o     we require client approval with respect to the work performed or to
            be performed;
      o     we generally seek deposits or mobilization fees for time and
            materials contracts;
      o     we engage local legal counsel in the areas in which we operate to
            file liens against customers' real property in the event of contract
            disputes; and
      o     all invoices submitted for payment are reviewed for proper
            documentation.



                                       31
<PAGE>

      Due to the nature of our business, which includes responding to emergency
situations on a 24 hours/7 days a week basis, we, on occasion, will commence an
emergency project prior to obtaining a formal contract. In these situations, we
may commence emergency services upon the oral authorization of the property
owners or their agents or government workers (e.g. police or Coast Guard). In
these isolated instances, we do not incur significant expense and require on
executed contract within 48 hours of commencement of work.

      Because some of these are relatively new changes, no assurances can be
given that they will be successful in improving our collections and cash flows.
Further, approximately 4% of our current projects are performed under procedures
that predate these improvements.


      On June 30, 2005, we issued to Laurus Master Fund, Ltd. a three-year
secured convertible term note in the principal amount of $5,000,000.
Subsequently, Laurus loaned us an additional $2,350,000, and we amended and
restated the note accordingly. As of December 27, 2005, the principal amount of
the Note outstanding equaled $7,350,000. As of April 15, 2006, the outstanding
principal amount of the Note, as a result of repayments, equaled $6,431,249.

      Laurus holds a senior security interest in our and our subsidiaries assets
collateralizing the Note, including a pledge of the stock of our subsidiaries.
In addition, Spotless holds a subordinated security interest collateralizing our
$500,000 note issued to Spotless, which bears interest at a rate of LIBOR plus
1% per annum and is required to be repaid at a rate of $50,000 per month
commencing July 1, 2007. The existence of these security interests may impair
our ability to raise additional debt capital.


      Under the terms of the Note, which matures on June 30, 2008, we are
required to make monthly repayments of principal, on the first of each month, to
Laurus in the amount of $229,687.50, which commenced as of January 1, 2006.
Principal repayments were originally due to commence starting November 1, 2005
but, in November 2005, Laurus agreed to defer the initial repayment date until
January 1, 2006. The principal monthly payments due November 1, 2005 and
December 1, 2005 in the aggregate amount of $495,375 have been deferred until
June 30, 2008. Interest is payable monthly and started to accrue on August 1,
2005. All required principal and interest payments as of the date of this
prospectus have been made. We are required to pay such amounts in shares of our
common stock should all of the following conditions be satisfied:


      o     the average closing price of our common stock for the five (5)
            trading days immediately prior to the first of each month is equal
            to or greater than $.10;
      o     the amount of the payment then due is not an amount greater than
            thirty percent (30%) of the aggregate dollar trading volume of the
            common stock for the period of twenty-two (22) trading days
            immediately prior to the first of each month;
      o     the common stock underlying the Note and the warrant issued to
            Laurus has been registered under an effective registration statement
            under the Securities Act of 1933 or is otherwise covered by an
            exemption from registration for resale pursuant to Rule 144 of the
            Securities Act of 1933;
      o     Laurus' aggregate beneficial ownership of our shares of common stock
            does not and would not by virtue thereof exceed 4.99%; and
      o     we are not in default of the Note.


      If any of these conditions are not satisfied, we will be required to make
payments in cash in an amount equal to 103% of the principal amount, plus
accrued interest, then due. Should we be required to pay cash, this may have an
adverse effect on our cash flow and liquidity.

      The Note may be redeemed by us in cash by paying the holder of the Note
120% of the principal amount, plus accrued interest. As discussed below, the
holder of the Note may convert all or a portion of the Note, together with
related interest and fees, into fully paid shares of our common stock at any
time. The number of shares to be issued shall equal the total amount of the Note
to be converted, divided by an initial fixed conversion price of $.09.

      If we issue shares of common stock to a third-party for consideration
below the fixed conversion price of $.09 per share or issue derivative
securities convertible into or exercisable for shares of common stock at prices
below the fixed conversion price of $.09 per share, then the fixed conversion
price of the Note will be reduced to such lower issuance or exercise price. In
addition, the conversion price of the Note may be adjusted pursuant to customary
anti-dilution provisions, such as if we pay a stock dividend, reclassify our
capital stock or subdivide or combine our outstanding shares of common stock
into a greater or lesser number of shares.


                                       32
<PAGE>

      We may receive proceeds from the exercise of the option and the warrant
described above if Laurus elects to pay the exercise price in cash rather than
executing a cashless exercise. Laurus may effect a cashless exercise of the
warrant if the market price of our common stock exceeds the per share exercise
price, and it may effect a cashless exercise of the option if (a) the market
price of our common stock exceeds the per share exercise price and (b) (1) we
have not registered the shares underlying the option pursuant to an effective
registration statement or (2) an event of default under the Note has occurred
and is continuing. Upon a cashless exercise, in lieu of paying the exercise
price in cash, Laurus would receive shares of our common stock with a value
equal to the difference between the market price per share of our common stock
at the time of exercise and the exercise price per share set forth in the option
and the warrant, multiplied by the number of shares with respect to which the
option or warrant is exercised. There would be no proceeds payable to us upon a
cashless exercise of the option or the warrant. There can be no assurances that
Laurus will exercise the option and warrant or that it will elect to pay the
exercise price in cash in lieu of a cashless exercise. On September 12, 2005, we
issued 1,500,000 shares of our common stock to Laurus in connection with its
partial exercise of the Option at an exercise price of $.0001 per share for an
aggregate exercise price of $150.


      Laurus has contractually agreed to restrict its ability to convert the
Note and/or exercise its warrant and option if such conversion and/or exercise
would cause its beneficial ownership of shares of our common stock to exceed
4.99% of the outstanding shares of our common stock. The 4.99% limitation is
null and void without notice to us upon the occurrence and during the
continuance of an event of default or upon 75 days' prior written notice to us.
As of the date of this prospectus, Laurus directly beneficially owns 1,500,000
shares of our common stock, or approximately 4.46% of our outstanding common
stock. As a result, Laurus could only acquire up to approximately 184,405
additional shares, which would constitute a conversion of approximately $16,596
of the principal amount of the Note, while remaining in compliance with the
4.99% limitation. Because Laurus is irrevocably prohibited from waiving this
4.99% limitation, except as described above, even if the other conditions
allowing us to pay in shares of common stock have been satisfied, if Laurus
cannot or does not reduce its ownership of our common stock at a time when such
reduction would be necessary to allow us to make a payment in shares of common
stock, we would be required to pay Laurus in cash. This may have an adverse
effect on our cash flow and liquidity.

      In the event we default on the Note, we will be required to pay 120% of
the outstanding principal amount of the Note, plus accrued but unpaid interest.
Upon the occurrence of an event of default, the interest rate charged will be
increased by 2% per month until the default is cured. The Note is secured by a
lien on substantially all of our assets, including the stock of our
subsidiaries, all cash, cash equivalents, accounts, accounts receivable, deposit
accounts, inventory, equipment, goods, fixtures, documents, instruments,
including promissory notes, contract rights and general intangibles, including
payment intangibles. The Master Security Agreement, dated June 30, 2005, between
us and Laurus contains no specific financial covenants. The Master Security
Agreement and the Note, as amended, define the circumstances under which they
can be declared in default and subject to termination, including:


      o     a failure to pay interest and principal payments under the Note when
            due on the first day of the month or prior to the expiration of the
            three-business day grace period, unless agreed otherwise;
      o     a breach by us of any material covenant or term or condition of the
            Note or in any agreement made in connection therewith and, to the
            extent subject to cure, the continuation of such breach without
            remedy for a period of fifteen or thirty days, as the case may be;
      o     a breach by us of any material representation or warranty made in
            the Note or in any agreement made in connection therewith;
      o     any form of bankruptcy or insolvency proceeding instituted by or
            against us, which is not vacated within 30 days;
      o     any attachment or lien in excess of $75,000 in the aggregate made
            upon our assets or a judgment rendered against our property
            involving a liability of more than $75,000 which shall remain
            unvacated, unbonded or unstayed for a period of 30 days;


                                       33
<PAGE>


      o     a failure to timely deliver shares of common stock when due upon
            conversion of the Note or a failure to timely deliver a replacement
            note;
      o     an SEC stop trade order or principal market trading suspension of
            our common stock is in effect for 5 consecutive trading days or 5
            days during a period of 10 consecutive trading days, if we are not
            able to cure such trading suspension within 30 days of receiving
            notice or are not able to list our common stock on another principal
            market within 60 days of such notice;
      o     a failure to have authorized and reserved shares of our common stock
            for issuance on or before November 1, 2006 sufficient to provide for
            the full conversion of the Note, and full exercise of the option and
            warrant issued by us to Laurus;
      o     an indictment or threatened indictment of us or any of our executive
            officers under any criminal statute or commencement or threatened
            commencement of criminal or civil proceedings against us or any of
            our executive officers pursuant to which statutory or proceeding
            penalties or remedies available include forfeiture of any of our
            property; and
      o     the departure of Michael O'Reilly from our senior management.


      We also entered into a Funds Escrow Agreement, dated June 30, 2005, with
Laurus and Loeb & Loeb LLP, as escrow agent, pursuant to the requirements of the
Security Agreement. Under the terms of the Funds Escrow Agreement, the funds
from Laurus were placed in escrow pending receipt by the escrow agent of fully
executed transaction documents and disbursement instructions, upon receipt of
which such funds were released to us. No funds remain in escrow.


      Pursuant to the terms of a Registration Rights Agreement, dated June 30,
2005 and amended on March 20, 2006, we are obligated to (1) file a registration
statement with the Securities and Exchange Commission registering the resale of
shares of our common stock issuable upon a conversion of the Note and upon the
exercise of the option and warrant issued to Laurus up to the number of shares
included in the registration statement of which this prospectus is a part and
(2) after appropriate corporate action is taken, to increase our authorized
shares and, after our audited financial statements for the 2006 fiscal year are
final, to file a new or post-effective registration statement(s) to cover all of
the shares issuable upon conversion of the Note and upon exercise of the option
and warrant issued to Laurus. If the registration statement of which this
prospectus forms a part is not declared effective by May 10, 2006 by the
Securities and Exchange Commission, then we will be required to pay to Laurus
the following amounts:

      o     1.5% of the principal outstanding on the Note, for the first thirty
            days, prorated for partial periods, which equals $3,216 per day
            based upon the $6,431,249, principal amount of the Note currently
            outstanding; and
      o     2.0% of the principal outstanding on the Note, for each thirty day
            period, prorated for partial periods, which equals $4,288 per day.

In addition, penalties at the same percentage rates apply in the event that the
second registration statement is not declared effective by December 30, 2006 by
the Securities and Exchange Commission.


      The proceeds we received in connection with the financing transaction and
subsequent borrowings from Laurus were used to pay the amounts set forth below
to the persons or for the purposes set forth below:


      SPOTLESS DEBT

      o     Former majority stockholder and senior
            secured lender (Spotless), consisting of
            approximately $2,650,000 in settlement of
            the principal and $100,000 in interest                  $ 2,750,000
                                                                    -----------

      TRANSACTION EXPENSES

      o     Laurus transaction fee                                    1,750,000
      o     Laurus Capital Management, LLC
             management and due diligence fees                          262,900
      o     Loeb & Loeb escrow fee                                        2,000
      o     Insurance premiums                                           37,500
      o     Legal fees                                                  146,773
      o     Special committee and advisor fees                           61,136
      o     Payments to series A preferred
             stockholders                                                35,000
                                                                    -----------
            Sub-total                                                 2,295,309
                                                                    -----------

      OTHER PAYMENTS

      o     Audit fees                                                   50,000
      o     Insurance premiums                                          276,711
      o     Initial Hurricane Katrina
             mobilization costs                                         238,173
      o     Working capital                                           1,739,807
                                                                    -----------
            Sub-total                                                 2,304,691
                                                                    -----------

      TOTAL                                                         $ 7,350,000
                                                                    ===========



                                       34
<PAGE>


      The table below summarizes contractual obligations and commitments as of
December 27, 2005, including principal and interest payments on our debt (1):


<TABLE>
<CAPTION>


                                           Total             1 Year          2-3 Years         4-5 Years     Thereafter
                                           -----             ------          ---------         ---------     ----------
<S>                                     <C>               <C>               <C>               <C>             <C>
Operating Leases                        $   953,727       $   692,009       $   261,718       $        --     $     --
Capitalized Leases--Principal               423,923           207,806           196,087            20,030           --
Capitalized Leases--Interest                 44,769            27,330            16,907               532
Laurus Note Principal                     7,350,000         1,378,128         5,971,872                --           --
Laurus Note Interest Expense--Cash          888,623           538,496           350,127                --           --
Spotless Note Principal                     500,000                --           500,000                --           --
Spotless Note Interest Expense               13,828                --            13,828                --           --
                                        -----------       -----------       -----------       -----------     --------
Total                                   $10,174,870       $ 2,843,769       $ 7,310,539       $    20,562     $     --
                                        ===========       ===========       ===========       ===========     ========
</TABLE>

(1)   This table reflects the effectiveness of Laurus' agreement to defer the
      initial monthly amortization repayment in the amount of $229,687.50 from
      November 1, 2005 until January 1, 2006.


      These amounts are based on assumed interest payments reflecting:

      o     the Laurus Note at a rate of 8.75% per annum;
      o     the Spotless note at a rate of 5.86% per annum; and
      o     an aggregate of $423,923 of other long-term debt with maturities
            ranging from 3 months to 54 months for financed trucks and vehicles
            with interest rates ranging from 3.95% to 13.99%.

OFF-BALANCE SHEET ARRANGEMENTS

      Although we do not have any financing arrangements that have not been
recorded in our financial statements, our transaction with Laurus resulted in a
significant discount that reduced the carrying value on our balance sheet of our
debt obligation to Laurus. As of December 27, 2005, the Note had a principal
balance of $7,350,000 with a corresponding discount of $6,123,517, resulting in
a carrying amount of $1,226,483 on our balance sheet, $413,234 of which is
included as a current liability and $813,249 of which is included as long-term
debt.


                                       35
<PAGE>


EFFECT OF INFLATION


      Inflation has not had a material impact on our operations during fiscal
years ended June 28, 2005, June 29, 2004 and July 1, 2003, except that we
experienced an increase of 8.1% in fuel costs during the second quarter of this
fiscal year due to increased oil prices.


SEASONALITY


      Since we and our subsidiaries are able to perform most of our services
throughout the year, our business is not considered seasonal in nature. However,
we are affected by:

      o     the timing of large projects in certain of our service areas, i.e.,
            asbestos and mold abatement and construction;
      o     the timing of catastrophes; and
      o     inclement weather conditions. In particular, extended periods of
            rain, cold weather or other inclement weather conditions may result
            in delays in commencing or completing projects, in whole or in part.
            Any such delays may adversely affect our operations and financial
            results and may adversely affect the performance of other projects
            due to scheduling and staffing conflicts.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


      Equity Price Risk--Our primary market risk exposure relates to the shares
of common stock issuable upon conversion of the Note, which we originally issued
to Laurus in June 2005. In connection with the issuance of the Note, we issued
to Laurus a warrant to purchase 13,750,000 shares of our common stock and an
option to purchase 30,395,175 shares of our common stock. On September 12, 2005,
we issued 1,500,000 shares of our common stock to Laurus in connection with its
partial exercise of its option. The option issued to Laurus has been recorded at
its intrinsic value, which is based on the difference between the exercise price
per share and the market price per share of our common stock on June 30, 2005,
the date of issuance at the inception date of the agreement. The warrant, along
with shares of common stock issuable upon exercise thereof, have been recorded
at their relative fair value at the June 30, 2005 inception date of the
agreement, and will be recorded at fair value at each subsequent balance sheet
date. Any change in value between reporting periods will be recorded as a
non-operating, non-cash charge at each reporting date. The impact of these
non-operating, non-cash charges could have an adverse effect on our stock price
in the future. The Note also exposes us to additional risks also relating to our
own common stock because if Laurus is unable to convert the loan into common
stock due to low price or low trading volume in the market, we then must repay
the loan in cash at a 3% premium.

      The intrinsic value of the option and the fair value of the warrant and
the underlying shares of common stock are tied in a large part to our stock
price. If our stock price increases between reporting periods, the option,
warrant and underlying shares of common stock become more valuable. As such,
there is no way to forecast what the non-operating, non-cash charges will be in
the future or what the future impact will be on our financial statements.

      Interest Rate Sensitivity--Interest rate risk is the risk that interest
rates on our debt is fully dependent upon the volatility of these rates. We do
not use derivative financial instruments to manage interest rate risk. The Note
bears interest at the prime rate as published in the Wall St. Journal plus 2%
(but not to less than 7.25%), decreasing by 2% (but not to less than 0%) for
every 25% increase in the Market Price (as defined therein) of our common stock
above the fixed conversion price of $.09 following the effective date of the
registration statement covering the common stock issuable upon conversion.
Should the price of our common stock maintain a price equal to 125% of $.09 for
a twelve month period, we would benefit from a reduced interest rate of 2% on
the outstanding principal amount for that twelve-month period. On June 30, 2005,
we also issued a variable interest rate secured promissory note in the principal
amount of $500,000 to Spotless Plastics (USA), Inc., bearing interest at LIBOR
plus 1%. We also have various other debt with maturities ranging from 3 months
to 54 months aggregating to $423,923 for financed trucks and vehicles. A
hypothetical 1% increase in the interest rate applicable to the outstanding
amounts of the Laurus and Spotless notes along with the various other debt for
financed trucks and vehicles would increase our interest expense by
approximately $70,000 annually. This hypothetical calculation reflects the
assumed interest payments for the:



                                       36
<PAGE>

      o     Note at a rate of 8.75% per annum;
      o     Spotless note at a rate of 5.86% per annum; and
      o     various other debt for financed trucks and vehicles with maturities
            ranging from 3 months to 54 months with interest rates ranging from
            3.95% to 13.99%.


BUSINESS


GENERAL

      We, through our wholly-owned subsidiaries, Trade-Winds Environmental
Restoration Inc. and North Atlantic Laboratories, Inc., provide a full array of
emergency response, remediation and disaster restoration services to a broad
range of clients. We have expertise in the areas of:

      o     hazardous materials remediation,
      o     microbial remediation, including halting mold, mildew and bacterial
            growth;
      o     testing, including the gauging and monitoring of moisture and
            humidity levels;
      o     toxicology;
      o     training, including providing project management and expert
            consultation to our customers;
      o     wetlands restoration;
      o     wildlife and natural resources rehabilitation;
      o     asbestos and lead abatement;
      o     technical advisory services; and
      o     restoration and site renovation services, including:
            o     on-location blast freezing;
            o     off-site freeze drying to restore documents;
            o     dehumidification services; and
            o     drying and restoration of structures, furnishings and
                  equipment.

      Our revenues are derived from projects for which we work either on a time
and materials basis or pursuant to a fixed price contract. In the twenty-six
week period ended December 27, 2005 and fiscal 2005, substantially all of our
revenues were derived from time and materials contracts. Under our fixed-price
contracts, we assess the scope of work to be done and contract to perform a
specified scope of work for a fixed price, subject to adjustment for work
outside such scope of work, upon prior approval by our customers. Because most
of our projects consist of emergency or disaster responses, which do not permit
a definitive prior assessment of the full scope of work entailed and require
immediate attention in order to mitigate loss and maximize recovery, most of our
projects are performed on a time and materials basis. Under our time and
materials contracts, we charge our customers for labor, equipment usage,
allocated overhead and a markup relating thereto.


      With the exception of our efforts relating to Hurricanes Katrina and
Wilma, we principally market our services in the northeastern and southeastern
United States. We obtain our business through client referrals, cross-selling of
services to existing clients, sponsorship of training and development programs,
professional referrals, including from insurance companies, architectural and
engineering firms and construction management firms for whom we have provided
services, competitive bidding and/or advertising. We have endeavored to
stimulate internal growth by expanding services to our existing customer base
and by marketing ourselves to prospective customers as a multiple-service
company with immediate response capabilities. In our marketing efforts, we
emphasize our experience, industry knowledge, safety record, reputation and
competitive bidding. In connection with our response to Hurricane Katrina, we
launched a multimedia marketing campaign, including radio and newspaper
advertising and a public relations program, to inform residents of New Orleans
and the surrounding gulf areas about our services. At the same time, we have
continued our on-going marketing program, as finances have permitted, in an
effort to establish and maintain business relationships.



                                       37
<PAGE>

      We believe that we have assembled the resources, including key
environmental professionals, construction managers, and specialized equipment to
become a leader in the expanding worldwide emergency services market. We further
believe that few competitors provide the diverse range of services that we
provide on an emergency response basis. We believe that our breadth of services
and our emergency response capability have positioned us for rapid growth in
this expanding market. In the New York metropolitan area, we believe that we are
able to perform all the tasks necessary to rapidly restore a property to
pre-loss conditions, thus minimizing dislocation, downtime and business
interruption. In other geographic areas, we perform all of these services except
reconstruction.


      In order to address the needs of our commercial and residential customers,
we have dedicated ourselves toward the strategic integration of all of our
services in an effort to provide immediate remedial responses to a wide variety
of natural and man-made disasters, including hurricanes, floods, fire, smoke,
wind, oil and chemical spills, biological hazards, explosions and radiological
releases. As a result, we provide our customers with the capability to respond
to a wide variety of natural or man-made catastrophes. We are capable of
responding in this manner by virtue of our 24-hour call center and teams of
diversely skilled and trained responders. In addition, we have an extensive
array of equipment available to these responders on a 24-hour basis, and this
equipment enables our responders to assess and control damage, safeguard
structures, remediate damage and restore property irrespective of the type of
emergency with minimized down time. We also provide our own turn-key remediation
services for all kinds of property damage or hazardous waste contamination,
which enhances our ability to respond to emergencies by virtue of avoiding the
delays associated with sub-contracting to provide these specific services. When
responding to emergencies, we generally:


      o     secure the site and implement loss prevention measures;
      o     determine priorities;
      o     work closely with property owners to formulate remediation and
            restoration plans that facilitate normal operations as much as
            possible;
      o     develop a project schedule and cost estimate;
      o     assemble project teams;
      o     deploy necessary equipment and personnel; and
      o     implement remediation and restoration measures.

      We have agreed to become the on-call responder for a growing number of
prospective commercial customers, including one insurance company, that have
entered into emergency response arrangements with us. Pursuant to these
arrangements, we have agreed to provide priority service to these parties to the
extent they select us as their provider, which they are not obligated to do by
the terms of the arrangements. Although we have not been engaged pursuant to any
of these emergency response arrangements as of yet, we believe that these
arrangements will facilitate our responsiveness and efficiency in the event that
we are engaged by such prospective customers because as part of this process we:


      o     gain knowledge of such prospective customers' businesses and likely
            needs;
      o     become familiar with such prospective customers' site plans and
            logistics, such as road access, water and electrical supply,
            building layout and potential hazards; and
      o     centralize communications between us and such prospective customers'
            representatives.


COMPANY BACKGROUND

      We were incorporated under the laws of the state of Delaware on March 21,
1986 under the name International Bankcard Services Corporation. On March 19,
1997, we changed our name to our present name. Our principal executive offices
are located at 100 Sweeneydale Avenue, Bay Shore, New York, 11706. Our telephone
number is (631) 434-1300.

      In December 1993, we acquired Trade-Winds, an asbestos abatement and lead
remediation company. On February 24, 1997, we acquired North Atlantic, a
certified environmental training, laboratory testing and consulting company.


                                       38
<PAGE>

      In February 2004, we purchased certain assets of an environmental
remediation business in Florida for $75,000. These assets included office
equipment, a telephone account, telephone and facsimile numbers and the
assumption of an office lease. These assets formed the core of our Florida
office.


OPERATIONS


      In order to position ourselves into stronger and more profitable markets,
we have evolved from an asbestos abatement contractor to a hazardous materials
clean-up and natural resource restoration firm, and finally, to a full service
emergency response provider. We provide a broad range of services through
vertically integrated businesses in the service areas described below:

      o     Emergency Response and Catastrophe Restoration
      o     Microbial Remediation
      o     Site Restoration
      o     Mold Contamination Remediation
      o     Commercial Drying
      o     Natural Resource/Wetlands Restoration/Wildlife Rehabilitation
      o     Forensic Investigation
      o     Asbestos Abatement
      o     Fire and Flood Restoration
      o     Demolition
      o     Lead Abatement
      o     Underground Storage Tank Removal
      o     Soil Remediation
      o     Oil Spill Response - Land and Marine
      o     Hazardous Waste/Biohazard Clean-up
      o     Chemical Spill Response
      o     Duct Cleaning
      o     Indoor Air Quality Investigation
      o     Environmental and Health and Safety Training
      o     Environmental Testing
      o     Environmental Consulting Services

      We have specially trained emergency response teams that respond to both
hazardous and non-hazardous spills and other emergencies on land and water on a
24-hour, seven day a week basis. The following examples are types of emergencies
for which we are capable of conducting response and remediation services:
explosions, fires, earthquakes, mudslides, hazardous spills, transportation
catastrophes, storms, hurricanes, tornadoes, floods, and biological threats.


      In order to provide environmental remediation and other services
necessitated by the aftermath of Hurricane Katrina, in September 2005, we
mobilized over sixty employees to the gulf coast region. Trade-Winds
Environmental Restoration Inc., one of our wholly owned subsidiaries, leased, on
a short-term basis, five premises to serve as a satellite office, regional
command center, training center and housing for our employees in Louisiana. In
view of the substantial completion of our projects in this region, we have
reduced the number of full-time employees in Louisiana to two and are planning
to allow four of the five leases to expire. In order to finance the expenses
associated with the foregoing, we borrowed an additional $1,350,000 from Laurus
on October 6, 2005, pursuant to the terms an amended and restated convertible
term Note on substantially the same terms as the original convertible term Note
issued to Laurus on June 30, 2005 in the principal amount of $5,000,000,
bringing our aggregate borrowings thereunder to $7,350,000.


      In an effort to enhance our cash flows from operations, beginning in our
2005 fiscal year, we began implementing improvements in our billing and
invoicing procedures as follows:

      o     we generally do not commence projects until we have a fully executed
            contract;


                                       39
<PAGE>


      o     our service contracts provide that our customers are directly
            obligated for our services;
      o     we require client approval with respect to the work performed or to
            be performed;
      o     we generally seek deposits or mobilization fees for our time and
            materials contracts;
      o     we engage local legal counsel in the areas in which we operate to
            file liens against customers' real property in the event of contract
            disputes; and
      o     all invoices submitted for payment are reviewed for proper
            documentation.


      Because some of these are relatively new changes, no assurances can be
given that they will be successful in improving our collections and cash flows.
Further, approximately 4% of our current projects are performed under procedures
that predate these improvements.

      We believe that our comprehensive emergency response abilities have
greatly expanded our customer base to include those entities that value
immediate response, enhanced capabilities and customer service. Our customers
have included Fortune 500TM companies, insurance companies, industrial
businesses, construction companies, oil companies, utilities, banks, school
districts, state, local and county governments, commercial building owners, real
estate developers and residential real estate owners.

      Health professionals have been aware of the adverse health effects of
exposure to mold for decades, but the issue has gained increased public
awareness in recent years. Studies indicate that 50% of all homes contain mold
and that the dramatic increase in asthma over the past 20 years can be
attributed, at least in part, to mold exposure. Our current focus is on mold
remediation in both commercial and residential structures. Our experience
includes identification and development of remediation plans, detailing methods
and performing microbial (mold, fungus, etc.) abatement in commercial,
residential, educational, medical and industrial facilities. These activities
include decontamination, application of biocides and sealant, removal of
building systems (drywall, carpet, etc.), duct cleaning, and disposal of
building furnishings.

      In order to address the needs of our customers, we have dedicated
ourselves toward the strategic integration of all of our services. As a result,
we provide our customers with the capability to respond to virtually any type of
loss. We believe that we are able to perform all the tasks necessary to rapidly
restore a property to pre-loss conditions, thus minimizing dislocation, downtime
and business interruption.

      From time to time, insurance customers have represented a substantial
portion of our target market: those with recurring needs for emergency services.
During the fiscal years ended June 28, 2005, June 29, 2004 and July 1, 2003, we
recognized net sales to significant customers as set forth below:

                                      June 28,       June 29,       July 1,
           Major Customers              2005           2004           2003
      --------------------------     -----------     ----------     ----------
             Customer A                     19%             4%             0%
             Customer B                      4%             0%            19%
             Customer C                      4%             0%             0%


      While we intend to increase the amount of work performed for entities
other than these customers, we expect to continue to be dependent on a few
customers and/or the incurrence of large projects. The level of business with a
particular customer in a succeeding period is not expected to be commensurate
with the prior period, principally because of the project nature of our
services. However, we believe that the loss of any single customer would not
have a material adverse effect on our financial condition and results of
operations, unless the revenues generated from any such customer were not
replaced by revenues generated by other customers. See "Risk Factors".

      In order to provide emergency response services, it is necessary for us to
employ a professional staff and to maintain an inventory of vehicles, equipment
and supplies. We currently maintain a fleet of 24 spill response vessels with
skimmer, diving and booming capabilities, 84 vehicles (including vacuum trucks,
a life raft, earth moving equipment, supply trucks, drilling vehicles, campers)
and 40 trailers equipped with various capabilities (such as a mobile wildlife
clinic).



                                       40
<PAGE>

COMPETITION

      The environmental and restoration industries in the United States have
developed rapidly since the passage of the Resources Conservation and Recovery
Act of 1976 and are highly competitive. We believe that the industry is going
through a rapid transition resulting from several mergers and consolidations
during the last several years. Several large companies have emerged from this
transition period, but we believe that the industry still has numerous small and
medium-sized companies serving niche markets according to geography, industry,
media (air, water, soil, etc.), and technological specialization
(bioremediations, etc.). We differentiate ourselves from our competitors by
providing some unique services (such as wildlife rehabilitation, natural
resource recovery, water spill clean-up, microbial remediation, forensic
testing, biohazard clean-up) and complementary packages of services. For
example, our oil spill response service line includes our wetlands/natural
resource restoration, laboratory and construction-related services. We further
believe that our turnkey approach to the emergency response business provides a
distinct advantage over our competition.

      We have obtained a WCD Tier 3 marine oil spill response designation from
the United States Coast Guard. This designation, which is the highest
designation that can be obtained, allows us to respond to contamination
containment spills, such as oil tanker disasters.

      We believe that the principal competitive factors applicable to all areas
of our business are price, breadth of services offered, ability to collect and
transport waste products efficiently, reputation for customer service and
dependability, technical proficiency, environmental integrity, operational
experience, quality of working relations with federal, state and local
environmental regulators and proximity to customers and licensed waste disposal
sites. We also believe that we are, and will continue to be, able to compete
favorably on the basis of these factors. However, many of our competitors have
financial and capital equipment resources that are greater than those available
to us. Additionally, at any time and from time to time, we may face competition
from new entrants into the industry. We may also face competition from
technologies that may be introduced in the future, and there can be no assurance
that we will be successful in meeting the challenges that may be created by
competition in the future.


      Our ability to compete effectively depends upon our success in networking,
generating leads and bidding opportunities through our marketing efforts; the
quality, safety and timely performance of our contracts; the accuracy of our
bidding; our ability to hire and train field operations and supervisory
personnel; and our ability to generate sufficient capital to hire and retain
personnel with requisite skills, meet our ongoing obligations, and promote
growth. See "Risk Factors".


MARKETING AND SALES


      With the exception of our efforts relating to Hurricanes Katrina and
Wilma, we principally market our services in the northeastern and southeastern
United States. We obtain our business through client referrals, cross-selling of
services to existing clients, sponsorship of training and development programs,
professional referrals, including from insurance companies, architectural and
engineering firms and construction management firms for whom we have provided
services, competitive bidding and/or advertising. We have endeavored to
stimulate internal growth by expanding services to our existing customer base
and by marketing ourselves to prospective customers as a multiple-service
company with immediate response capabilities. In our marketing efforts, we
emphasize our experience, industry knowledge, safety record, reputation and
competitive bidding. In connection with our response to Hurricane Katrina, we
launched a multimedia marketing campaign, including radio and newspaper
advertising and a public relations program, to inform residents of New Orleans
and the surrounding gulf areas about our services. At the same time, we have
continued our on-going marketing program, as finances have permitted, in an
effort to establish and maintain business relationships.


GOVERNMENT REGULATION

      Our operations are subject to extensive regulation supervision and
licensing by the Environmental Protection Agency and various other federal,
state, and local environmental authorities. These regulations directly impact
the demand for the services we offer. We believe that we are in substantial
compliance with all federal, state, and local regulations governing its
business.


                                       41
<PAGE>


      The Resource Conservation and Recovery Act is the principal federal statue
governing hazardous waste generation, treatment, storage, and disposal. The
Resource Conservation and Recovery Act, or the Environmental Protection
Agency-approved state programs, govern any waste handling activities of
substances classified as "hazardous." Moreover, facilities that treat, store or
dispose of hazardous waste must obtain a Resource Conservation and Recovery Act
permit from the Environmental Protection Agency, or equivalent state agency, and
must comply with certain operating, financial responsibility, and site closure
requirements. Wastes are generally hazardous if they either are specifically
included on a list of hazardous waste, or exhibit certain characteristics
defined as hazardous, and are not specifically designated as non-hazardous. In
1984, the Resource Conservation and Recovery Act was amended to substantially
expand its scope by, among other things, providing for the listing of additional
wastes as "hazardous" and also for the regulation of hazardous wastes generated
in lower quantities than had been previously regulated. The amendments imposed
additional restrictions on land disposal of certain hazardous wastes, prescribe
more stringent standards for hazardous waste and underground storage tanks, and
provided for "corrective" action at or near sites of waste management units.
Under the Resource Conservation and Recovery Act, liability and stringent
operating requirements may be imposed on a person who is either a "generator" or
a "transporter" of hazardous waste, or an "owner" or "operator" of a waste
treatment, storage, or disposal facility.


      Underground storage tank legislation, in particular Subtitle I of the
Resource Conservation and Recovery Act, focuses on the regulation of underground
storage tanks in which liquid petroleum or hazardous substances are stored and
provides the regulatory setting for a portion of our business. Subtitle I of the
Resource Conservation and Recovery Act requires owners of all existing
underground tanks to list the age, size, type, location, and use of each tank
with a designated state agency. The Environmental Protection Agency has
published performance standards and financial responsibility requirements for
storage tanks over a five-year period. The Resource Conservation and Recovery
Act and the Environmental Protection Agency regulations also require that all
new tanks be installed in such a manner as to have protection against spills,
overflows, and corrosion. Subtitle I of the Resource Conservation and Recovery
Act provides civil penalties of up to $27,500 per violation for each day of
non-compliance with such tank requirements and $11,000 for each tank for which
notification was not given or was falsified. The Resource Conservation and
Recovery Act also imposes substantial monitoring obligations on parties that
generate, transport, treat, store, or dispose of hazardous waste.


      The Comprehensive Environmental Response Compensation and Liability Act of
1980 authorizes the Environmental Protection Agency to identify and clean-up
sites where hazardous waste treatment, storage, or disposal has taken place. The
Comprehensive Environmental Response Compensation and Liability Act also
authorizes the Environmental Protection Agency to recover the costs of such
activities, as well as damages to natural resources, from certain classes of
persons specified as liable under the statute. Liability under the Comprehensive
Environmental Response Compensation and Liability Act does not depend upon the
existence or disposal of "hazardous waste" as defined by the Resource
Conservation and Recovery Act, but can be based on the existence of any number
of 700 "hazardous substances" listed by the Environmental Protection Agency,
many of which can be found in household waste. The Comprehensive Environmental
Response Compensation and Liability Act assigns joint and several liability for
cost of clean-up and damages to natural resources to any person who, currently
or at the time of disposal of a hazardous substance, by contract, agreement, or
otherwise, arranged for disposal or treatment, or arranged with a transporter
for transport of hazardous substances owned or possessed by such person for
disposal or treatment, and to any person who accepts hazardous substances for
transport to disposal or treatment facilities or sites from which there is a
release or threatened release of such hazardous substances. Among other things,
the Comprehensive Environmental Response Compensation and Liability Act
authorizes the federal government either to clean up these sites itself or to
order persons responsible for the situation to do so. The Comprehensive
Environmental Response Compensation and Liability Act created a fund, financed
primarily from taxes on oil and certain chemicals, to be used by the federal
government to pay for these clean-up efforts. Where the federal government
expends money for remedial activities, it may seek reimbursement from the
potentially responsible parties. Many states have adopted their own statutes and
regulations to govern investigation and clean up of, and liability for, sites
contaminated with hazardous substances.

      In October 1986, the Superfund Amendment and Reauthorization Act was
enacted. The Superfund Amendment and Reauthorization Act increased environmental
remediation activities significantly. The Superfund Amendment and
Reauthorization Act imposed more stringent clean-up standards and accelerated
timetables. The Superfund Amendment and Reauthorization Act also contains
provisions which expanded the Environmental Protection Agency's enforcement
powers and which encourage and facilitate settlements with potentially
responsible parties. We believe that, even apart from funding authorized by the
Superfund Amendment and Reauthorization Act, industry and governmental entities
will continue to try to resolve hazardous waste problems due to their need to
comply with other statutory and regulatory requirements and to avoid liabilities
to private parties.



                                       42
<PAGE>

      The liabilities provided by the Superfund Amendment and Reauthorization
Act could, under certain circumstances, apply to a broad range of our possible
activities, including the generation or transportation of hazardous substances,
release of hazardous substances, designing a clean-up, removal or remedial plan
and failure to achieve required clean-up standards, leakage of removed wastes
while in transit or at the final storage site, and remedial operations on ground
water. Such liabilities can be joint and several where other parties are
involved. The Superfund Amendment and Reauthorization Act also authorizes the
Environmental Protection Agency to impose a lien in favor of the United States
upon all real property subject to, or affected by, a remedial action for all
costs that the party is liable. The Superfund Amendment and Reauthorization Act
provides a responsible party with the right to bring a contribution action
against other responsible parties for their allocable share of investigative and
remedial costs. The Environmental Protection Agency may also bring suit for
treble damages from responsible parties who unreasonably refuse to voluntarily
participate in such a clean up or funding thereof.

      The Oil Pollution Act of 1990, which resulted from the Exxon Valdez oil
spill and the subsequent damage to Prince William Sound, established a new
liability compensation scheme for oil spills from onshore and offshore
facilities and requires all entities engaged in the transport and storage of
petroleum to maintain a written contingency plan to react to such types of
events. Under the contingency plan, the petroleum products storage or
transportation company must retain an oil spill response organization and a
natural resources/wildlife rehabilitator. Oil spill response organizations are
certified by the United States Coast Guard and receive designations based upon
the level of their capabilities. In the event of an incident, the oil response
organization on standby must respond by being on site with containment
capability within two to six hours of notification.


      Asbestos abatement firms are subject to federal, state and local
regulators, including the Occupational Safety and Health Administration, the
Environmental Protection Agency and the Department of Transportation. The
Environmental Protection Agency regulations establish standards for the control
of asbestos fiber and airborne lead emissions into the environment during
removal and demolition projects. The Occupational Safety and Health
Administration regulations establish maximum airborne asbestos fiber, airborne
lead and heavy metal exposure levels applicable to asbestos and demolition
employees and set standards for employee protection during the demolition,
removal or encapsulation of asbestos, as well as storage, transportation and
final disposition of asbestos and demolition debris. The Department of
Transportation regulations, in addition to the regulations imposed by the
Superfund Amendment and Reauthorization Act, cover the management of the
transportation of asbestos and demolition debris and establish certain
certification labeling and packaging requirements. Government regulations have
heightened public awareness of the danger of asbestos contamination, creating
pressure on both private and public building owners to abate this hazard, even
in the absence of specific regulations requiring corrective action.

      In 1992, in an effort to protect families from exposure to the hazards of
lead based paint, Congress amended the Toxic Substances Control Act to add Title
X, titled "Lead Exposure Reduction." Since May 1993, the Occupational Safety and
Health Administration has had standards for lead exposure in the construction
industry that requires testing before, during and after construction or
renovation. The Occupational Safety and Health Administration estimates that
1,000,000 workers fall under its Lead Based Paint Hazard Reduction Act.


      Our operations also are subject to other federal laws protecting the
environment, including the Clean Water Act and Toxic Substances Control Act. In
addition, many states also have enacted statutes regulating the handling of
hazardous substances, some of which are broader and more stringent than the
federal laws and regulations.

COMPLIANCE/HEALTH AND SAFETY

      We regard compliance with applicable environmental regulations and the
health and safety of our workforce as critical components of our overall
operations. This includes medical surveillance as required by these regulations.
We believe that all requisite health and safety programs are in place and comply
with the regulations in all material respects.


                                       43
<PAGE>

      Among our many services, we provide training programs on environmental and
safety hazards in the environmental, industrial and construction industry
trades. The training program is designed for use by supervisors, foremen,
project safety and health trainers, construction workers and laborers. The
training program includes the following topics:

      o     sources of exposure;
      o     health effects;
      o     personal protective equipment and the medical surveillance required
            by the Occupational Safety and Health Administration; and
      o     engineering controls and remediation procedures.

      Our personnel and subcontractors also:

      o     receive general and on-the-job training, which includes health
            effects, medical and safety procedures and personal protective
            equipment;
      o     generally have at least three years of on-the-job experience in the
            field in which they are working; and
      o     generally have at least a high school diploma or a vocational
            equivalent.


      We designate a site safety officer to each project, and the site safety
officer delegates authority to personnel at each project to facilitate effective
implementation of our policies and procedures, including compliance with
applicable environmental regulations. Any person designated as the site safety
officer is authorized to require that a site specific health and safety plan be
implemented in compliance with all applicable regulations protecting us and our
personnel. The site specific health and safety plans are either devised by our
personnel or we adopt the health and safety plans of the customer's consultant,
if we deem it to be satisfactory. In connection with adopting the health and
safety plans of third parties, our health and safety officers review such plans
to confirm compliance with our policies prior to the initiation of site work. We
also encourage our professional staff to attend continuing professional
development programs in an effort to stay informed of regulatory developments.


      Trade-Winds is also a participant in ISO 9001, an internationally
recognized voluntary quality assurance management system program pursuant to
which Trade-Winds is periodically audited by National Quality Assurance, U.S.A.
in relation to its disaster recovery and emergency response capability. In May
2003, Trade-Winds received a three-year certificate attesting to this capability
conditioned upon the company maintaining its system to the required standards of
National Quality Assurance, U.S.A.

INSURANCE


      We maintain comprehensive general liability insurance on an occurrence
basis, which provides coverage for harm suffered by others for events occurring
while the policy is in force, regardless of when a claim may be made. Our
comprehensive general liability insurance contains a general aggregate limit of
$2,000,000 with a limit of $1,000,000 for any single occurrence. We also carry
comprehensive auto, property, executive and organization liability insurance,
property and worker's compensation and disability coverage with aggregate
liability coverage of $7,000,000. In addition, we carry property insurance with
respect to of our property, including leased and owned mobile equipment, papers
and records, business interruption coverage and flood insurance coverage, with
varying limits for certain items ranging from $100,000 up to $4,500,000 with a
limit of $4,500,000 relating to losses resulting from any single occurrence.


SURETY BONDS


      Certain of our remediation and abatement contracts may from time to time
require performance and payment surety bonds. None of our current projects
require surety bonds. The relationships with various sureties and the issuance
of bonds is dependent on the sureties' willingness to write bonds for the
various types of work that we perform, their assessment of our performance
record and their view of our credit worthiness. Events in the national economy
and insurance industry have adversely affected the major insurance and surety
companies, which has resulted in a tightening of the insurance and bonding
markets increasing costs and decreasing availability of certain types of
insurance and surety capacity.



                                       44
<PAGE>

      At present, we believe that surety bonds for a number of our service lines
are available only from a limited number of sureties. As a result of the
foregoing and our inability to obtain sufficient credit enhancements, our
ability to obtain surety and performance bonds has been limited, and this may
have had an adverse impact on our ability to obtain some projects. We expect
that our ability to obtain surety and performance bonds will improve due to the
agreement by our chief executive officer and president to guarantee our bonding
obligations. No assurance can be given that we will be able to obtain the surety
or performance bonds required for all potential projects. Our continued failure
to obtain these bonds could materially and adversely affect certain components
of our operations.


EMPLOYEES/TECHNICAL STAFF

      As of April 14, 2006, we employed a core group of approximately 78
persons, including executive officers, project managers, specialists,
supervisors, field staff, marketing and clerical personnel. We attempt to
provide year-round employment for our core field staff by cross training. We
promote qualified field workers to supervisory positions and supervisors into
production management and other staff positions, when applicable.

      We employ laborers for field operations based upon our current workload.
Approximately 35 field staff and supervisors are employed by us on a steady
basis, with additional labor hired on an as-needed basis to supplement our work
force. We utilize several local unions to supply labor for projects that require
it. We have never had a work stoppage, and we believe that we maintain good
relations with our employees.


PERMITS AND LICENSES

      The Federal Government and the states in the areas in which we operate
require that mold, asbestos and lead abatement firms be licensed. Licensing
generally requires that workers and supervisors receive training from state
certified organizations and pass required tests.


      While we believe that we are in substantial compliance with all of our
licensing and permit requirements, and we, or our personnel, maintain the
required licenses and permits in all locations for which we conduct any
applicable operations, we may need additional licenses or permits in areas into
which we plan to expand our operations. In addition, we may be required to
obtain additional permits or licenses if new environmental legislation or
regulations are enacted or existing legislation or regulations are amended or
enforced differently than in the past. There can be no assurance that we will be
able to continue to comply will all of the permit and licensing requirements
applicable to our business. We believe that the types of licenses we possess
have reciprocity in most of the states due to their adherence to Federal
standards, but no assurances can be given in that regard.


PATENTS, TRADEMARKS, LICENSES AND COPYRIGHTS

      We do not own any patents or registered trademarks or trade names. We rely
on common law trademark protection for certain of our trade names and service
marks. We have copyrights for certain of our promotional and employee training
materials. We do not believe that intellectual property is a competitive factor
in our industry.

GEOGRAPHIC INFORMATION


      Since all of our operations are located in the United States of America,
our geographic revenue information is based on the country in which the revenues
originate. The following is a table that shows the origin of revenues for the
first two quarters of fiscal 2006 and our fiscal years ended June 28, 2005, June
29, 2004 and July 1, 2003:


<TABLE>
<CAPTION>


                                                         Geographic Information
                                                         ----------------------
                                                 United States         Non-United States           Consolidated Total
                                                 -------------         -----------------           ------------------
<S>                                              <C>                       <C>                           <C>
First Two Quarters of Fiscal 2006                $  22,878,681             $           0                 $ 22,878,681
Fiscal Year 2005                                 $  20,200,410             $           0                 $ 20,200,410
Fiscal Year 2004                                 $  19,143,717             $      23,036                 $ 19,166,753
Fiscal Year 2003                                 $  17,370,931             $     460,258                 $ 17,831,189
</TABLE>



                                       45
<PAGE>

BACKLOG

      We do not have any measurable backlog. In fiscal 2005, our audit committee
directed management to implement a system by which backlog can be reliably
measured. Management is in the process of formulating how best to implement such
a system.


PROPERTIES


      We hold a lease expiring in 2007 for our 50,000 square foot facility
located at 100 Sweeneydale Avenue, Bay Shore, New York 11706. The lease provides
for a current annual rent of $380,852 and is subject to a 4% annual escalation.
This facility houses all our operations, with the exception of satellite offices
in Florida and Louisiana. We hold a lease expiring in 2007 for our satellite
office in Tamarac, Florida, which enables us to procure projects in that state.
The lease provides for a current annual rent of $77,274.


      Trade-Winds Environmental Restoration Inc., one of our wholly owned
subsidiaries, has leased five premises to serve as a satellite office, regional
command center, training center and housing for our employees in Louisiana. On
September 1, 2005, Trade-Winds made arrangements to lease a house located in
Baton Rouge, Louisiana for $1,000 per month for six months. On September 8,
2005, Trade-Winds entered into a one-year lease agreement for property located
in Convent, Louisiana for $39,500 per month. The other four leases are for
periods ranging from six months to one year with monthly rents ranging from
$1,000 to $3,500. In view of the anticipated completion of our projects in the
region, we do not intend to renew four of these five leases.

      We consider our facilities sufficient for our present uses and our
anticipated future operations, and we believe that these properties are
adequately covered by insurance.

LEGAL PROCEEDINGS

      On April 16, 2002, Richard S. Fischbein and Mimi Fischbein commenced an
action against us and Michael O'Reilly, our CEO, in the Supreme Court of the
State of New York, County of New York, claiming that they are entitled to
approximately $4,400,000 of damages relating to alleged breaches of a contract
for a residential construction project. On May 7, 2002, we filed an answer
denying the plaintiffs' claims and seeking approximately $45,418 in a
counterclaim for uncollected accounts. We believed that we had meritorious
defenses and that the likelihood of an unfavorable outcome was remote. On
November 1, 2005, we settled this matter by agreeing to pay $60,000 to the
plaintiffs in six equal monthly installments beginning December 1, 2005.


      In April 2003, we commenced a remediation project in New York City for
Consolidated Edison Company, a local utility, to remove sediment from an oil
storage tank. During the course of the project, the sediment in the tank was
found to be substantially different than the sediment that the customer
represented to be in the tank prior to the inception of the project. We
continued to work on the project so as not to default on the terms which we
understood to exist with the customer. The additional costs incurred to remove
this matter were approximately $1,600,000. As of June 28, 2005, we have
recognized revenue of approximately $1,700,000 with respect to the original
scope of this project. All amounts due under the original contract have been
paid. We have not recognized the revenue associated with our claim for the
additional work for which we billed the customer. The project has been
substantially completed and the customer has refused to acknowledge its
liability for these additional charges we billed it. On October 22, 2004, we
commenced an action against Consolidated Edison Company in the New York State
Supreme Court, County of New York, claiming that we are entitled to
approximately $2,000,000 of contractual billings and related damages in
connection with this matter. On December 6, 2004, Consolidated Edison Company
filed an answer, denying our claims. The case is currently in pre-trial
discovery.


                                       46
<PAGE>


      On August 5, 2004, we commenced an action against the New York City
Economic Development Corporation in the New York State Supreme Court, County of
New York, seeking to collect approximately $1,255,000 of contractual billings
relating to a large roof tar removal project. On October 15, 2004, the Economic
Development Corporation filed an answer, denying our claims. On November 4,
2004, the Economic Development Corporation filed an amended answer denying our
claims and asserting counterclaims in unspecified amounts seeking liquidated
damages, reimbursement for consultant's fees and breach of contract. The case is
currently in pre-trial discovery.

      As of April 17, 2006, we were a plaintiff in 17 lawsuits, including those
described above, claiming an aggregate of approximately $7,173,000 pursuant to
which we are seeking to collect amounts we believe are owed to us by customers,
primarily with respect to changed work orders or other modifications to our
scope of work. The defendants in these actions have asserted counterclaims for
an aggregate of approximately $500,000.


      We are party to litigation matters and claims that are in the ordinary
course of our operations, and while the results of such litigation and claims
cannot be predicted with certainty, we believe that the final outcome of such
matters will not have a material adverse effect on our financial condition.

                                   MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS


      Our executive officers and directors, and their ages and positions, are as
follows:

Name                       Age        Positions and Offices
----                       ---        ---------------------
Michael  O'Reilly          56         Chairman of the Board, President and Chief
                                      Executive Officer
Andrew C. Lunetta          56         Vice President and Chief Financial Officer
Anthony P. Towell          74         Director
Dr. Kevin J. Phillips      57         Director

      Michael O'Reilly has served as our president and chief executive officer
and a director since 1996, and has been the sole director and president of our
Trade-Winds Environmental Restoration, Inc. subsidiary since 1993. Since
September 2005, and from 1996 to 1999, he has been and was also the chairman of
our board of directors. Prior to joining us, Mr. O'Reilly was vice president and
chief operating officer of North Shore Environmental Solutions, Inc., an
environmental remediation firm which provided a wide array of services,
including asbestos, hazardous materials and lead removal.

      Andrew C. Lunetta, CPA was appointed as our chief financial officer on
August 29, 2005 and as our vice president on September 21, 2005. Prior to
joining us, from January 2004 to August 2005, Mr. Lunetta served as the chief
financial officer of the Tyree Company, a Long Island-based construction company
that performs maintenance and environmental services throughout the New England
states. From November 1998 to December 2003, Mr. Lunetta served as the chief
financial officer of the Holiday Organization, a real estate developer on Long
Island. From July 1995 to November 1998, Mr. Lunetta served as the chief
financial officer of Tostel Corp., a non-reporting publicly traded construction
company. Mr. Lunetta received a Bachelors of Science degree in Accounting from
Long Island University in 1973 and a Master's Business Administration degree in
Finance from Pace University in 1980.


      Anthony P. Towell has served as a director since November 1996. Prior to
December 2000, he was a vice president, co-chairman, and a director of Worksafe
Industries, Inc., a manufacturing company that specialized in industrial safety.
He had held executive positions during a 25-year career with the Royal Dutch
Shell Group.


      Kevin J. Phillips, Ph.D. has served as a director since March 1998. Over
the past five years, Dr. Phillips has been a partner, principal and director of
FPM Group Ltd., formerly known as Fanning, Phillips & Molnar, an engineering
firm located on Long Island, New York. Dr. Phillips has a B.A. in Civil
Engineering from the City University of New York, an M.S. Degree in Civil
Engineering from the Massachusetts Institute of Technology and a Ph.D. in
Environmental Engineering from the Polytechnic Institute of New York. He is a
licensed professional engineer in eight states, including New York,
Pennsylvania, New Jersey and Connecticut, with over 20 years experience in
geohydrology and environmental engineering. Dr. Phillips serves on our board as
the nominee of our series A convertible preferred stockholders.



                                       47
<PAGE>

BOARD OF DIRECTORS

      Each member of our board is elected at the annual meeting of stockholders
and serves until the next annual meeting of stockholders and until a successor
has been elected and qualified or their earlier death, disability, resignation
or otherwise is removed. Vacancies on our board are filled by a majority vote of
the remaining members of our board.

      Our board has an audit committee and a compensation committee.

AUDIT COMMITTEE


      The audit committee is currently comprised of Anthony P. Towell and Dr.
Kevin J. Phillips, each of whom does not have any relationship with us that may
interfere with the exercise of independent judgment in carrying out the
responsibilities of a director. The board of directors has determined that
Anthony P. Towell is an "audit committee financial expert" as defined under Item
401(h) of Regulation S-K of the Securities Exchange Act of 1934, and our audit
committee members are "independent directors," as defined by the NASDAQ
Marketplace Rule 4200(a)(15) and the Sarbanes-Oxley Act of 2002.


      The audit committee, which met 9 times during our fiscal year ended June
28, 2005, operates pursuant to a charter approved by our board of directors.

      The audit committee has been established to:

      1)    assist our board in its oversight responsibilities regarding:


            o     the integrity of our financial statements,
            o     our compliance with legal and regulatory requirements,
            o     the financial reporting process, including reviewing our
                  annual, quarterly and other reports,
            o     the independent accountant's qualifications and independence,
                  and
            o     the performance of our internal audit function;


      2)    retain and terminate our independent accountant;


      3)    review and approve non-audit and special engagement services to be
            performed by the independent accountant; and


      4)    perform such other functions as our board may from time to time
            assign to the audit committee.

      In discharging its oversight role, the audit committee is empowered to
meet and discuss with our management and independent auditors the quality and
accuracy of our accounting principles, the completeness and clarity of our
financial disclosures and other significant decisions made by management in the
preparation of our financial reports.


COMPENSATION COMMITTEE

      The compensation committee is currently comprised of Dr. Kevin J. Phillips
and Anthony P. Towell. The compensation committee met 5 times during our fiscal
year ended June 28, 2005 and operates pursuant to a charter approved by our
board of directors. Currently, both committee members are "independent
directors," as defined by the NASDAQ Marketplace Rule 4200(a)(15) and the
Sarbanes-Oxley Act of 2002.


      The principal responsibilities of the compensation committee are to review
and approve compensation of our chief executive officer and other executive
officers with compensation of $100,000 or more per year and administer our
existing stock plans, other than our 2001 equity incentive plan, which is
administered by our board of directors.


                                       48
<PAGE>

DIRECTOR COMPENSATION

      Each of our non-employee directors receives $5,000 annually for service on
our board of directors. Other directors receive no cash compensation for their
service as directors. Additionally, each member of the audit committee receives
$300 a month for their services on the audit committee and the chairman of the
audit committee receives $500 a month for his services as chairman of the audit
committee. All of our directors are reimbursed for expenses actually incurred in
connection with attending meetings of our board of directors.

      On May 24, 2005, as compensation for service on our special committee of
our board of directors during our fiscal year ended June 28, 2005, we granted to
Anthony P. Towell a ten-year option to purchase 250,000 shares of our common
stock, at an exercise price equal to $.06 per share, the market value on the
date of grant.

      On December 6, 2004, as compensation for service on our board of directors
during our fiscal year ended June 29, 2004, we granted to each of our
non-employee directors serving on the audit committee options, pursuant to our
2001 equity incentive plan, with terms of ten years to purchase 100,000 shares
of our common stock, at an exercise price equal to $.035 per share, the market
value on the date of grant.

EXECUTIVE COMPENSATION


      The following summary compensation table sets forth the cash and other
compensation paid during the last three full fiscal years to our chief executive
officer and president. Other than our president and chief executive officer, no
individual who served as an executive officer received compensation for services
rendered to us of $100,000 or more.

<TABLE>
<CAPTION>
                           SUMMARY COMPENSATION TABLE

                                       ANNUAL COMPENSATION                    LONG-TERM COMPENSATION
                        FISCAL                                               RESTRICTED       SECURITIES
   NAME AND PRINCIPAL    YEAR                                OTHER ANNUAL   STOCK AWARDS      UNDERLYING       ALL OTHER
       POSITION          ENDED      SALARY ($)   BONUS ($)   COMPENSATION      ($)              OPTIONS      COMPENSATION
       --------          -----      ----------   ---------   ------------   ------------        -------      ------------
<S>                     <C>          <C>         <C>          <C>            <C>              <C>                <C>
Michael O'Reilly        6/28/05      285,000      2,938                                       2,250,000 (1)
 President  and Chief   6/29/04      285,000                                                     450,00 (2)       74,580 (3)
 Executive Officer      7/01/03      287,475     49,073(4)
</TABLE>

---------------------
(1)   Includes options granted to Mr. O'Reilly (a) on May 24, 2005, to purchase
      2,000,000 shares of our common stock at an exercise price of $.01 per
      share, and (b) on May 24, 2005, to purchase 250,000 shares of our common
      stock at an exercise price of $0.1875 per share. Does not include options
      granted to Mr. O'Reilly on June 30, 2005 to purchase 15,469,964 shares of
      our common stock at an exercise price of $.09 per share. All of the
      options are fully vested.

(2)   On November 10, 2003, we granted Mr. O'Reilly options to purchase (a)
      250,000 shares of our common stock at an exercise price of $.22 per share
      and (b) 200,000 shares of our common stock at an exercise price of $.34
      per share. Such options are fully vested.

(3)   This compensation includes the value of in-kind damage mitigation and
      restoration goods and services that we provided to Mr. O'Reilly in
      connection with severe water damage caused by a failed water heater at a
      condominium that he beneficially owned and allowed us to use for marketing
      and employee-relations purposes. In connection with these services, our
      entire direct costs and allocated overhead, without any markup, equaled
      approximately $56,780. We also paid the full carrying costs, including
      mortgage payments, in the amount of $17,800, relating to this condominium.

(4)   Mr. O'Reilly, under the terms of a prior employment agreement, earned a
      bonus equal to 2.5% of our pretax income. The bonus set forth above with
      respect to fiscal 2003 was earned by Mr. O'Reilly in fiscal 2002, was not
      calculable at that time and was paid in fiscal 2003.



                                       49
<PAGE>


OPTION/STOCK APPRECIATION RIGHTS GRANTS IN LAST FISCAL YEAR


      The following table sets forth the:

      o     number of shares underlying options granted to our only named
            executive officer during our fiscal year ended June 28, 2005;
      o     percentage the grant represents of the total number of options
            granted to all of our employees during our fiscal year ended June
            28, 2005;
      o     per share exercise price of each option;
      o     expiration date of each option; and
      o     potential realizable value of each grant.


<TABLE>
<CAPTION>
                                                                                         VALUE AT ASSUMED ANNUAL
                                                                                           RATES OF STOCK PRICE
                                         INDIVIDUAL GRANTS                             APPRECIATION FOR OPTION TERM
                --------------------------------------------------------------------   -----------------------------
                    NUMBER OF          PERCENT OF TOTAL
                    SECURITIES        OPTIONS GRANTED TO     EXERCISE
                UNDERLYING OPTIONS    EMPLOYEES IN FISCAL      PRICE      EXPIRATION
    NAME           GRANTED (1)               YEAR             ($/SH)         DATE          5% ($)         10% ($)
-------------   ------------------           ----             ------      ----------       ------         -------
<S>                 <C>                      <C>              <C>         <C>             <C>             <C>
   Michael
  O'Reilly          2,000,000                88.9%              .01       5/23/2010       133,154         173,261
   Michael
  O'Reilly           250,000                 11.1%             .1875      5/23/2010          0               0
</TABLE>


----------------------
(1)   Excludes 15,469,964 shares of our common stock issuable to Mr. O'Reilly
      pursuant to an option that we issued to him on June 30, 2005 at an
      exercise price of $.09 per share.

      Set forth in the table below is information, with respect to our only
named executive officer, as to the:

      o     number of shares acquired during our fiscal year ended June 28, 2005
            upon each exercise of options granted to such individual;
      o     the aggregate value realized upon each exercise (i.e. the difference
            between the market value of the shares at exercise and their
            exercise price);
      o     the total number of unexercised options held on June 28, 2005,
            separately identified between those exercisable and those not
            exercisable; and
      o     the aggregate value of in-the-money, unexercised options held on
            June 28, 2005, separately identified between those exercisable and
            those not exercisable.


<TABLE>
<CAPTION>
                                                       NUMBER OF SHARES UNDERLYING          VALUE OF OUTSTANDING
                              SHARES                      OUTSTANDING OPTIONS             IN-THE-MONEY OPTIONS AT
                             ACQUIRED       VALUE         AT FISCAL YEAR-END (1)        FISCAL YEAR-END ($) (1) (2)
                                ON         REALIZED   -----------------------------   ------------------------------
       NAME                  EXERCISE        ($)      EXERCISABLE     UNEXERCISABLE   EXERCISABLE      UNEXERCISABLE
-----------------            --------      --------   -----------     -------------   -----------      -------------
<S>                              <C>          <C>      <C>               <C>              <C>                  <C>
Michael O'Reilly                 --           --       2,000,000              --          160,000              --
Michael O'Reilly                 --           --              --         250,000               --              --
Michael O'Reilly                 --           --       2,811,595              --           30,815              --
Michael O'Reilly                 --           --       2,674,714              --           29,315              --
Michael O'Reilly                 --           --              --         200,000               --              --
Michael O'Reilly                 --           --              --         250,000               --              --
Michael O'Reilly                 --           --              --         650,000               --              --
</TABLE>

-----------------
(1)   Excludes 15,469,964 shares of our common stock issuable to Mr. O'Reilly
      pursuant to an option that we issued to him on June 30, 2005 at an
      exercise price of $.09 per share.
(2)   The value is calculated based on the aggregate amount of the excess of
      $.09 (the closing sale price per share for our common stock on June 28,
      2005) over the relevant exercise price(s).



                                       50
<PAGE>

EMPLOYMENT AGREEMENT


      On June 30, 2005, we entered into an employment agreement with Michael
O'Reilly, our president and chief executive officer. The employment agreement is
for a term of five years beginning on July 1, 2005 and automatically renews
yearly provided that neither party objects to its renewal six months prior to
July 1, 2010, calls for a base salary of $285,000 per year and a bonus equal to
2.5 percent of our pre-tax income (as that term is defined in the Employment
Agreement). On March 13, 2006, the Compensation Committee of our company
approved an increase in Mr. O'Reilly's base salary to $342,000 per year. In
addition, on such date, in lieu of the bonus provided by the Employment
Agreement, we agreed to pay Mr. O'Reilly an annual bonus for each fiscal year,
commencing with the fiscal year ending in June 2006, in an amount equal to 5% of
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)
determined in accordance with Generally Accepted Accounting Principles and
calculated without taking into account any payments made by us to Laurus Master
Fund, Ltd. The amount of such bonus and the date of payment shall be authorized
by the Compensation Committee within 90 days after the end of each fiscal year.
An amendment to Mr. O'Reilly's employment agreement, effective as of March 13,
2006, was executed by Mr. O'Reilly and us to reflect these revisions to
compensation. Mr. O'Reilly currently holds 15,647,297 shares of our common
stock, and vested options to purchase 24,306,273 shares of our common stock.


         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


      The following table sets forth the beneficial ownership of each class of
our voting stock as of March 24, 2006 of:


      o     each person known by us to beneficially own 5% or more of the
            outstanding shares of any class of our voting stock, based on
            filings with the Securities and Exchange Commission and certain
            other information;
      o     each of our executive officers and directors; and
      o     all of our executive officers and directors as a group.

<TABLE>
<CAPTION>
                                                                       CLASS

                                    -----------------------------------------------------------------------------
                                                COMMON STOCK                          SERIES A PREFERRED
                                              -----------------                       ------------------
                                              AMOUNT AND NATURE                       AMOUNT AND NATURE
                                         OF BENEFICIAL OWNERSHIP (1)              OF BENEFICIAL OWNERSHIP (1)
                                    -----------------------------------       -----------------------------------
NAME OF                              NUMBER OF SHARES        PERCENT OF        NUMBER OF SHARES        PERCENT OF
BENEFICIAL OWNER                    BENEFICIALLY OWNED         CLASS          BENEFICIALLY OWNED         CLASS
----------------                    ------------------       ----------       ------------------       ----------
<S>                                   <C>                     <C>                   <C>                   <C>
Michael O'Reilly (2)                  39,953,570 (3)           69.0%                      0                 --
Anthony P. Towell (2)                    933,599 (4)            2.7%                      0                 --
Dr. Kevin J. Phillips (5)              1,645,839 (6)            4.7%                650,000               50.0%
Andrew C. Lunetta (7)                          0 (7)             --                       0                 --
Gary Molnar (5)                        1,135,839 (8)            3.3%                650,000               50.0%
All directors and
Executive Officers
as a group
(4 individuals)                       42,533,008 (9)           76.4%                650,000               50.0%
</TABLE>
---------------
(1)   Beneficial ownership is determined in accordance with the rules of the
      SEC. In computing the number of shares beneficially owned by a person and
      the percentage ownership of that person, shares of our common stock
      subject to options, warrants or convertible securities held by that person
      that are currently exercisable or convertible or will become exercisable
      or convertible within 60 days are deemed to be beneficially owned by such
      person, while such shares are not deemed outstanding for purposes of
      computing the percentage ownership of any other person. Unless otherwise
      indicated in the footnotes below, the persons and entities named in the
      table have sole voting and investment power with respect to all shares
      beneficially owned, subject to community property laws where applicable.


(2)   The address for this person is c/o Windswept Environmental Group, Inc.,
      100 Sweeneydale Ave., Bay Shore, New York 11706.


                                       51
<PAGE>


(3)   Includes 15,647,297 shares of our common stock directly held by Mr.
      O'Reilly and options under which he may purchase 24,306,273 shares of our
      common stock. Does not include 11,000 shares of our common stock directly
      held by JoAnn O'Reilly, the wife of Mr. O'Reilly, as to which Mr. O'Reilly
      disclaims beneficial ownership.


(4)   Includes 24,533 shares of our common stock directly held by Mr. Towell,
      9,066 shares of our common stock held jointly by Mr. Towell and his wife,
      and options under which Mr. Towell may purchase 900,000 shares of our
      common stock.

(5)   The address for each of Dr. Phillips and Mr. Molnar is c/o FPM Group Ltd.,
      909 Marconi Avenue, Ronkonkoma, New York 11779.

(6)   Includes 245,839 shares of our common stock directly held by Dr. Phillips,
      options under which Dr. Phillips may purchase 750,000 shares of our common
      stock and 650,000 shares of our common stock issuable upon conversion of
      650,000 shares of series A convertible preferred stock directly held by
      Dr. Phillips.

(7)   Andrew C. Lunetta was appointed as our chief financial officer on August
      29, 2005.

(8)   Includes 235,839 shares of our common stock directly held by Mr. Molnar,
      an option under which Mr. Molnar may purchase 250,000 shares of our common
      stock and 650,000 shares of our common stock issuable upon conversion of
      650,000 shares of our series A preferred stock directly held by Mr.
      Molnar.

(9)   Includes 15,917,669 shares of our common stock directly held by members of
      the group, options under which members of the group may purchase an
      aggregate of 25,956,273 shares of our common stock and 650,000 shares of
      our common stock issuable upon conversion of 650,000 shares of series A
      convertible preferred stock directly held by a member of the group.

                         SELLING STOCKHOLDER INFORMATION

      This prospectus only covers the 84,472,512 shares of common stock issued
or to be issued to the selling stockholder. The following table lists certain
information with respect to the selling stockholder as follows:


      o     the selling stockholder's name;
      o     the number of outstanding shares of common stock beneficially owned
            by the selling stockholder prior to this offering; and
      o     the number of shares of common stock offered by the selling
            stockholder.


      Except as noted, the selling stockholder has not had any position, office,
or other material relationship with us or any of our predecessors or affiliates
within the past three years.


      The selling stockholder may resell all, none or any portion of its shares
in this offering. See "Plan of Distribution."

<TABLE>
<CAPTION>
                                                                       NUMBER OF
                                   SHARES BENEFICIALLY OWNED           SHARES TO           SHARES BENEFICIALLY OWNED
                                     PRIOR TO THE OFFERING          BE OFFERED FOR               AFTER OFFERING
                                  -----------------------------       THE ACCOUNT          --------------------------
                                  NUMBER OF          PERCENT OF     OF THE SELLING        NUMBER OF       PERCENT OF
NAME                                SHARES             CLASS        STOCKHOLDER (1)       SHARES (2)       CLASS (3)
----                              ---------          ----------     ---------------       ----------      ----------
<S>                               <C>                 <C>            <C>                  <C>              <C>
Laurus Master Fund, Ltd.          1,684,405           4.99% (3)      84,472,512 (4)       5,815,532 (5)    4.99% (6)
</TABLE>


---------------------
(1)       This table assumes that the selling stockholder will sell all shares
          offered for sale by it under this registration statement, although it
          is not required to sell its shares.


                                       52
<PAGE>

(2)   Assumes that all shares of common stock registered for resale by this
      prospectus will be sold.


(3)   Reflects Laurus' direct beneficial ownership of 1,500,000 shares of common
      stock and Laurus' right to acquire additional shares pursuant to other
      securities of ours which Laurus owns up to a maximum of 4.99% of our
      outstanding shares based on 33,571,215 shares of our common stock issued
      and outstanding as of March 24, 2006.

(4)   Details of the transaction under which the selling stockholder purchased
      our securities are provided in the Section entitled "Selling Stockholder
      Financing Transaction" below. Includes shares of common stock which may be
      acquired upon:

      o     conversion of the Note into 40,327,333 shares, the maximum shares of
            common stock presently permitted, at a rate of $.09 per share,
            including related interest;
      o     13,750,000 shares of common stock which may be acquired upon
            exercise of warrants at an exercise price of $.10 per share; and
      o     28,895,179 shares of common stock which may be acquired upon
            exercise of an option at an exercise price of $.0001 per share. This
            amount excludes 1,500,000 shares Laurus previously acquired in
            connection with its partial exercise of this option.

(5)   Represents 4.99% of our outstanding shares, assuming the exercise of the
      warrant and the option and the conversion into shares of common stock upon
      a partial exercise of the Note, as set forth in note (4) above.

(6)   As previously described, this is the maximum percentage of our shares that
      may be owned by Laurus.


      The terms of the Note, warrant and option issued to the selling
stockholder, the shares of common stock underlying which are included for resale
under this prospectus, provide that the selling stockholder is not entitled to
receive shares upon exercise of the warrant option or upon conversion of the
Note if such receipt would cause the selling stockholder to be deemed to
beneficially own in excess of 4.99% of the outstanding shares of our common
stock on the date of issuance of such shares (such limitation may be waived by
the selling stockholder in the event of a default by us or upon seventy-five
days written notice).

SELLING STOCKHOLDER FINANCING TRANSACTION

      On June 30, 2005, we entered into a financing transaction with Laurus
Master Fund, Ltd. pursuant to the terms of a securities purchase agreement, as
amended, and related documents. Under the terms of the financing transaction, we
issued to Laurus:

      o     pursuant to the terms of a secured convertible term note, dated June
            30, 2005, a three-year note in the principal amount of $5,000,000.
            The Note bears interest at the prime rate as published in the Wall
            St. Journal plus 2% (but not to less than 7.25%), decreasing by 2%
            (but not to less than 0%) for every 25% increase in the Market Price
            (as defined therein) of our common stock above the fixed conversion
            price of $.09 following the effective date(s) of the registration
            statement or registration statements covering the shares of our
            common stock underlying the Note and the warrant issued to Laurus;

      o     pursuant to the terms of an Option Agreement, dated June 30, 2005, a
            twenty-year option to purchase 30,395,179 shares of our common stock
            at a purchase price of $.0001 per share; and

      o     pursuant to the terms of a Common Stock Purchase Warrant, dated June
            30, 2005, a seven-year common stock purchase warrant to purchase
            13,750,000 shares of our common stock at a purchase price of $0.10
            per share.


      The number of shares issuable pursuant to Laurus' derivative securities
may be adjusted as follows:


      o     increased, in the event of a reclassification or subdivision of our
            shares of common stock, in proportion to the total number of shares
            of our common stock outstanding immediately after such event
            relative to the total number of shares of our common stock
            outstanding immediately prior to such event;


                                       53
<PAGE>

      o     decreased, in the event of a reclassification or combination of our
            shares of common stock or stock dividend in the form of common stock
            on our common stock, in proportion to the total number of shares of
            our common stock outstanding immediately after such event relative
            to the total number of shares of our common stock outstanding
            immediately prior to such event; and
      o     with respect to the Note, increased pursuant to a decrease in the
            conversion price to the price at which we issue any shares of our
            common stock or the conversion or exercise price of any securities
            convertible into or exercisable for shares of our common stock,
            except in connection with a reclassification, stock split,
            combination, certain acquisition transactions, employee incentive
            stock options and/or qualified stock options, obligations to issue
            shares of common stock existing on June 30, 2005 or grants to key
            employees as part of an incentive program.


      After consummating the transaction on June 30, 2005, Laurus subsequently
provided additional financing to us on the same terms and conditions as follows:


      o     On July 13, 2005, Laurus loaned us an additional $350,000, and we
            amended and restated the Note, to be in the principal amount of
            $5,350,000.
      o     On September 9, 2005, Laurus loaned us an additional $650,000, and
            we further amended and restated the Note to be in the principal
            amount of $6,000,000.
      o     On October 6, 2005, Laurus loaned us an additional $1,350,000, and
            we further amended and restated the Note to be in the principal
            amount of $7,350,000.


      The $7,350,000 Note (currently in the principal amount of $6,431,249) is
the only Laurus note issued by us that is currently outstanding.


      Concurrently with the Laurus financing, on June 30, 2005, we also issued a
variable interest rate secured promissory note in the principal amount of
$500,000 to Spotless Plastics (USA), Inc., an affiliate of our previous majority
stockholder and senior secured lender, bearing interest at LIBOR plus 1%.

      The proceeds we received in connection with the financing transaction and
subsequent borrowings from Laurus were used to pay the amounts set forth below
to the persons or for the purposes set forth below:


      SPOTLESS DEBT

      o     Former majority stockholder and senior
             secured lender (Spotless), consisting of
             approximately $2,650,000 in settlement of
             the principal and $100,000 in interest               $   2,750,000
                                                                  -------------
      TRANSACTION EXPENSES

      o     Laurus transaction fee                                    1,750,000
      o     Laurus Capital Management, LLC management
             and due diligence fees                                     262,900
      o     Loeb & Loeb escrow fee                                        2,000
      o     Insurance premiums                                           37,500
      o     Legal fees                                                  146,773
      o     Special committee and advisor fees                           61,136
      o     Payments to series A preferred stockholders                  35,000
                                                                  -------------
            Sub-total                                                 2,295,309
                                                                  -------------
      OTHER PAYMENTS

      o     Audit fees                                                   50,000
      o     Insurance premiums                                          276,711
      o     Initial Hurricane Katrina mobilization costs                238,173
      o     Working capital                                           1,739,807
                                                                  -------------
            Sub-total                                                 2,304,691
                                                                 --------------
      TOTAL                                                      $    7,350,000
                                                                 ==============



                                       54
<PAGE>


      As part of the financing transaction, Laurus required us to obtain a
$3,000,000 key man renewable term life insurance policy on the life of our
president and chief executive officer. We are the beneficiary of the policy,
which has a current annual premium of $24,769 payable by us. Laurus is a
contingent beneficiary of this life insurance policy.


      Set forth below is a summary of the material terms of the agreements
governing the Laurus financing transaction:

      The funds borrowed under the Laurus financing are governed by the
Securities Purchase Agreement, as amended, the Note, a security agreement, a
stock pledge agreement, a registration rights agreement, as amended, and a
subsidiary guaranty. Under the terms of the Securities Purchase Agreement, as
amended, Laurus had a right to provide us with $1,300,000 of financing in
addition to the original $5,000,000 that it provided to us on the same terms as
the original Note. In connection with the additional borrowings described above,
Laurus has provided all of such additional financing.

      PRINCIPAL BORROWING TERMS AND PREPAYMENT. Under the terms of the Note,
which matures on June 30, 2008, we are required to make monthly repayments of
principal, on the first of each month, to Laurus in the amount of $229,687.50,
commencing as of January 1, 2006. Principal repayments were due to commence
starting November 1, 2005, but, in November 2005, Laurus agreed to defer the
initial repayment date until January 1, 2006. The principal monthly payments due
November 1, 2005 and December 1, 2005 in the aggregate amount of $495,375 have
been deferred until June 30, 2008. Interest is payable monthly and started to
accrue on August 1, 2005. All required principal and interest payments as of the
date of this prospectus have been made. We are required to pay such amounts in
shares of our common stock should all of the following conditions be satisfied:


      o     the average closing price of its common stock for the five (5)
            trading days immediately prior to the first of each month is equal
            to or greater than $.10;
      o     the amount of the payment then due is not an amount greater than
            thirty percent (30%) of the aggregate dollar trading volume of the
            common stock for the period of twenty-two (22) trading days
            immediately prior to the first of each month;
      o     the common stock underlying the Note has been registered under an
            effective registration statement under the Securities Act of 1933 or
            is otherwise covered by an exemption from registration for resale
            pursuant to Rule 144 of the Securities Act of 1933;
      o     Laurus' aggregate beneficial ownership of our shares of common stock
            does not and would not by virtue thereof exceed 4.99%; and
      o     we are not in default of the Note.


      If any of these conditions are not satisfied, we will be required to make
payments in cash in an amount equal to 103% of the principal amount, plus
accrued interest, then due. Should we be required to pay cash, this may have an
adverse effect on our cash flow and liquidity.

      The Note may be redeemed by us in cash by paying the holder of the Note
120% of the principal amount, plus accrued interest. As discussed below, the
holder of the Note may convert all or a portion of the Note, together with
related interest and fees, into fully paid shares of our common stock at any
time. The number of shares to be issued shall equal the total amount of the Note
to be converted, divided by an initial fixed conversion price of $.09.

      If we issue shares of common stock to a third-party for consideration
below the fixed conversion price of $.09 per share or issue derivative
securities convertible into or exercisable for shares of common stock at prices
below the fixed conversion price of $.09 per share, then the fixed conversion
price of the Note will be reduced to such lower issuance or exercise price. In
addition, the conversion price of the Note may be adjusted pursuant to customary
anti-dilution provisions, such as if we pay a stock dividend, reclassify our
capital stock or subdivide or combine our outstanding shares of common stock
into a greater or lesser number of shares.


                                       55
<PAGE>

      We may receive proceeds from the exercise of the option and the warrant
described above if Laurus elects to pay the exercise price in cash rather than
executing a cashless exercise. Laurus may effect a cashless exercise of the
warrant if the market price of our common stock exceeds the per share exercise
price, and it may effect a cashless exercise of the option if (a) the market
price of our common stock exceeds the per share exercise price and (b) (1) we
have not registered the shares underlying the option pursuant to an effective
registration statement or (2) an event of default under the Note has occurred
and is continuing. Upon a cashless exercise in lieu of paying the exercise price
in cash, Laurus would receive shares of our common stock with a value equal to
the difference between the market price per share of our common stock at the
time of exercise and the exercise price per share set forth in the option and
the warrant, multiplied by the number of shares with respect to which the option
or warrant is exercised. There would be no proceeds payable to us upon a
cashless exercise of the option or the warrant. There can be no assurances that
Laurus will exercise the option and warrant or that it will elect to pay the
exercise price in cash in lieu of a cashless exercise. On September 12, 2005, we
issued 1,500,000 shares of our common stock to Laurus in connection with its
partial exercise of the Option at an exercise price of $.0001 per share for an
aggregate exercise price of $150.


      Laurus has contractually agreed to restrict its ability to convert the
Note and/or exercise its warrant and option if such conversion and/or exercise
would cause its beneficial ownership of shares of our common stock to exceed
4.99% of the outstanding shares of our common stock. The 4.99% limitation is
null and void without notice to us upon the occurrence and during the
continuance of an event of default or upon 75 days' prior written notice to us.
As of the date of this prospectus, Laurus directly beneficially owns 1,500,000
shares of our common stock, or approximately 4.46% of our outstanding common
stock. As a result, Laurus could only acquire up to approximately 184,405
additional shares, which would constitute a conversion of approximately $16,596
of the principal amount of the Note, while remaining in compliance with the
4.99% limitation. Because Laurus is irrevocably prohibited from waiving this
4.99% limitation, except as described above, even if the other conditions
allowing us to pay in shares of common stock have been satisfied, if Laurus
cannot or does not reduce its ownership of our common stock at a time when such
reduction would be necessary to allow us to make a payment in shares of common
stock, we would be required to pay Laurus in cash. This may have an adverse
effect on our cash flow and liquidity.

      EVENTS OF DEFAULT AND COLLATERAL. In the event we default on the Note, we
will be required to pay 120% of the outstanding principal amount of the Note,
plus accrued but unpaid interest. In addition, upon the occurrence of an event
of default, the interest rate charged with respect to the Note will be increased
by 2% per month until the default is cured. The Note is secured by a lien on
substantially all of our assets, including the stock of our subsidiaries, all
cash, cash equivalents, accounts, accounts receivable, deposit accounts,
inventory, equipment, goods, fixtures, documents, instruments, including
promissory notes, contract rights and general intangibles, including payment
intangibles. The Master Security Agreement, dated June 30, 2005, between us and
Laurus contains no specific financial covenants. The Master Security Agreement
and the Note, as amended, define the circumstances under which they can be
declared in default and subject to termination, including:


      o     a failure to pay interest and principal payments under the Note when
            due on the first day of the month or prior to the expiration of the
            three-business day grace period, unless agreed otherwise;
      o     a breach by us of any material covenant or term or condition of the
            Note or in any agreement made in connection therewith and, to the
            extent subject to cure, the continuation of such breach without
            remedy for a period of fifteen or thirty days, as the case may be;
      o     a breach by us of any material representation or warranty made in
            the Note or in any agreement made in connection therewith;
      o     any form of bankruptcy or insolvency proceeding instituted by or
            against us, which is not vacated within 30 days;
      o     any attachment or lien in excess of $75,000 in the aggregate made
            upon our assets or a judgment rendered against our property
            involving a liability of more than $75,000 which shall remain
            unvacated, unbonded or unstayed for a period of 30 days;
      o     a failure to timely deliver shares of common stock when due upon
            conversion of the Note or a failure to timely deliver a replacement
            note;
      o     an SEC stop trade order or principal market trading suspension of
            our common stock is in effect for 5 consecutive trading days or 5
            days during a period of 10 consecutive trading days, if we are not
            able to cure such trading suspension within 30 days of receiving
            notice or are not able to list our common stock on another principal
            market within 60 days of such notice;


                                       56
<PAGE>


      o     a failure to have authorized and reserved shares of our common stock
            for issuance on or before November 1, 2006 sufficient to provide for
            the full conversion of the Note, and full exercise of the option and
            warrant issued by us to Laurus;
      o     an indictment or threatened indictment of us or any of our executive
            officers under any criminal statute or commencement or threatened
            commencement of criminal or civil proceedings against us or any of
            our executive officers pursuant to which statutory or proceeding
            penalties or remedies available include forfeiture of any of our
            property; and
      o     the departure of Michael O'Reilly from our senior management.


      ESCROW. We also entered into a Funds Escrow Agreement, dated June 30,
2005, with Laurus and Loeb & Loeb LLP, as escrow agent, pursuant to the
requirements of the Security Agreement. Under the terms of the Funds Escrow
Agreement, the funds from Laurus were placed in escrow pending receipt by the
escrow agent of fully executed transaction documents and disbursement
instructions, upon receipt of which such funds were released to us. No funds
remain in escrow.


      REGISTRATION RIGHTS. Pursuant to the terms of a Registration Rights
Agreement, dated June 30, 2005 and amended March 20, 2006, we are obligated (1)
to file a registration statement with the Securities and Exchange Commission
registering the resale of shares of our common stock issuable upon a conversion
of the Note and upon the exercise of the option and warrant issued to Laurus up
to the number of shares included in the registration statement of which this
prospectus is a part and (2) after appropriate corporate action is taken, to
increase our authorized shares and, after our audited financial statements for
the 2006 fiscal year are final, to file a new or post-effective registration
statement(s) to cover all the shares issuable upon conversion of the Note and
upon the exercise of the option and warrant issued to Laurus. If the
registration statement of which this prospectus forms a part is not declared
effective by May 10, 2006 by the Securities and Exchange Commission, then we
will be required to pay to Laurus the following amounts:

      o     1.5% of the principal outstanding on the Note, for the first thirty
            days, prorated for partial periods, which equals $3,216 per day
            based upon the $6,431,249 principal amount of the Note currently
            outstanding; and

      o     2.0% of the principal outstanding on the Note, for each thirty day
            period, prorated for partial periods, which equals $4,288 per day.

In addition, penalties at the same percentage rates apply in the event that the
second registration statement is not declared effective by December 30, 2006 by
the Securities and Exchange Commission.


      As consideration for investment banking services in connection with the
securities purchase agreement, as amended, we paid an aggregate of $262,900 or
3.58% of the gross proceeds, to Laurus Capital Management, L.L.C., which is an
affiliate of Laurus. We also paid a transaction fee of $1,750,000 to Laurus as a
condition of the securities purchase agreement, as amended.

      Laurus is not a natural person. Laurus does not file any reports under the
Securities and Exchange Act of 1934. Laurus is not a majority subsidiary of a
reporting company under the Securities and Exchange Act. Laurus is not a
registered investment adviser under the 1940 Act or a registered broker-dealer.
Laurus has represented it has no agreement or understandings, directly or
indirectly, with any person to distribute our securities, as of the time of
their purchase of the Note and has not entered into any agreements or
understandings, directly or indirectly, with any person to distribute our
securities since the purchase of the Note. The natural person or persons having
voting and investment control over the securities held by Laurus are David Grin
and Eugene Grin.


      Laurus is neither a registered broker-dealer nor a broker-dealer's
affiliate.


      We are filing the registration statement, of which this prospectus is a
part, primarily to fulfill a contractual obligation to do so.


                                       57
<PAGE>

      No warrant solicitation fees were paid, and the gross proceeds received by
us were $7,350,000. Resale of the shares of our common stock issuable in
connection with the Note, warrant and option purchased in connection with the
securities purchase agreement, as amended, is covered by this prospectus.

      We are unaware, since its purchases of securities, whether the selling
stockholder has entered into any agreements or understandings with any person to
distribute these securities.


PLAN OF DISTRIBUTION


      We are registering the shares of our common stock on behalf of the selling
stockholder and its pledgees, transferees, assignees, distributors and
successors-in-interest selling shares received after the date of this prospectus
from the selling stockholder as a gift, pledgee, partnership or limited
liability company distribution or other non-sale related transfer. The name of
any pledge, transferee, assignee, distributor or successors-in-interest selling
shares added after effectiveness would be added in a post-effective amendment to
the registration statement of which this prospectus forms a part. The selling
stockholder may offer its shares of our common stock at prevailing market
prices, at prices related to the prevailing market prices, at negotiated prices
or at fixed prices or its competitively bid transactions. The selling
stockholder reserves the right to accept or reject, in whole or in part, any
proposed purchase of shares, whether the purchase is to be made directly or
through agents.

      The selling stockholder may offer its shares of common stock at various
times in one or more of the following transactions:


      o     in ordinary broker's transactions and transactions in which the
            broker solicits purchasers;
      o     purchases by a broker-dealer for its account pursuant to this
            prospectus;
      o     in transactions involving cross or block trades;
      o     in transactions "at the market" to or through market makers in the
            common stock or into an existing market for the common stock;
      o     in other ways not involving market makers or established trading
            markets, including direct sales of the shares to purchasers or sales
            of the shares effected through agents;
      o     through transactions in options, swaps or other derivatives which
            may or may not be listed on an exchange;
      o     in privately negotiated transactions;
      o     in transactions to cover short sales made after the Note is no
            longer outstanding;
      o     in underwritten transactions; or
      o     in a combination of any of the above transactions.


      The selling stockholder also may sell all or a portion of its shares in
open market transactions in accordance with Rule 144 under the Securities Act
provided that such sales meet the criteria and conform to the requirements of
that rule. In general, under Rule 144 as currently in effect, a person, or
persons whose shares are aggregated, who has beneficially owned restricted
shares for at least one year is entitled to sell within any three-month period
up to that number of shares that does not exceed the greater of:


      o     1% of the number of shares of common stock then outstanding, which
            on March 28, 2006 was 33,571,215 shares, or
      o     the average weekly trading volume of the common stock during the
            four calendar weeks preceding the filing of such person's Form 144.

      Sales under Rule 144 are also subject to certain "manner of sale"
provisions and notice requirements and to the requirement that current public
information about the issuer be available. Under Rule 144(k), a person who is
not deemed to have been an affiliate of the issuer at any time during the three
months preceding a sale, and who has beneficially owned the shares proposed to
be sold for at least two years, including the holding period of any prior owner
except an affiliate, is entitled to sell those shares without complying with the
manner of sale, public information, volume limitation or notice provisions of
Rule 144.



                                       58
<PAGE>

      From time to time, the selling stockholder may pledge or grant a security
interest in some or all of the shares owned by it. If the selling stockholder
defaults in performance of its secured obligations, the pledgees or secured
parties may offer to sell the shares from time to time by this prospectus. The
selling stockholder also may transfer and donate shares in other circumstances.
The number of shares beneficially owned by selling stockholder will decrease as
and when the selling stockholder transfers or donates it shares or defaults in
performing obligations secured by its shares. The plan of distribution for the
shares offered and sold under this prospectus will otherwise remain unchanged,
except that the transferees, donees, pledgees, other secured parties or other
successors-in-interest will be selling stockholders for purposes of this
prospectus. In such event, the name of any pledgee, transferee, assignee,
distributor or successors in interest selling shares added after effectiveness
would be added in a post-effective amendment to the registration statement of
which this prospectus forms a part.

      Pursuant to the Securities Purchase Agreement, as amended, the selling
stockholder is contractually prohibited from selling short shares of our common
stock while the Note is outstanding. To the extent that the Note has been
satisfied and the selling stockholder sells short shares of our common stock,
the selling stockholder may deliver this prospectus in connection with such
short sales and use the shares offered by this prospectus to cover any such
short sales. As of the date of this prospectus, the Note is outstanding and thus
Laurus is prohibited from selling short shares of our common stock and has been
so prohibited prior to the effectiveness of the registration statement of which
this prospectus forms a part.

      The selling stockholder may enter into hedging transactions with
broker-dealers. The broker-dealers may engage in short sales of the common stock
in the course of hedging the positions they assume with the selling stockholder,
including positions assumed in connection with distributions of the shares by
such broker-dealers. The selling stockholder also may enter into options or
transactions with broker-dealers that involve the delivery of shares to the
broker-dealers, who may then resell or otherwise transfer such shares. In
addition, the selling stockholder may loan or pledge shares to a broker-dealer,
which may sell the loaned shares or, upon a default by the selling stockholder
of the pledge obligation, may sell or otherwise transfer the pledged shares.

      We have advised the selling stockholder that during such times as it may
be engaged in a distribution of the shares, it is required to comply with
Regulation M under the Securities Exchange Act. With some exceptions, Regulation
M prohibits the selling stockholder, any affiliated purchasers and other persons
who participate in such a distribution from bidding for or purchasing, or
attempting to induce any person to bid for or purchase, any security that is the
subject of the distribution until the entire distribution is complete. We will
make copies of this prospectus available to the selling stockholder and shall
notify the selling stockholder of the need to deliver copies of this prospectus
to purchasers at or prior to the time of any sale of shares of our common stock.

      The selling stockholder may use broker-dealers to sell its shares of our
common stock. If this occurs, broker-dealers will either receive discounts or
commission from the selling stockholder, or they will receive commissions from
the purchasers of shares of common stock for whom they acted as agents. These
brokers may act as dealers by purchasing any and all of the shares covered by
this prospectus either as agents for others or as principles for their own
accounts and reselling these securities under the prospectus.

      Any broker-dealers or other persons acting on behalf of parties that
participate in the distribution of the shares may be considered underwriters
under the Securities Act. As such, any commissions or profits they receive on
the resale of the shares may be considered underwriting discounts and
commissions under the Securities Act. We cannot presently estimate the amount of
such compensation. In offering the shares covered by this prospectus, the
selling stockholder may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in connection with such sales.

      As of the date of this prospectus, we are not aware of any agreement,
arrangement or understanding between any broker or dealer and the selling
stockholder with respect to the offer or sale of the shares under this
prospectus. If we become aware of any agreement, arrangement or understanding,
to the extent required under the Securities Act, we will file a prospectus
supplement to disclose:

      o     the name of any of the broker-dealers;
      o     the number of shares involved;
      o     the price at which the shares are to be sold;


                                       59
<PAGE>

      o     the commissions paid or discounts or concessions allowed to
            broker-dealers, where applicable;
      o     that the broker-dealers did not conduct any investigation to verify
            the information set out in this prospectus, as supplemented; and
      o     other facts material to the transaction.

      Certain of the agreements with the selling stockholder contain reciprocal
indemnification provisions between us and the selling stockholder to indemnify
each other against certain liabilities, including liabilities under the
Securities Act, which may be based upon, among other things, any untrue
statement or alleged untrue statement of a material fact or any omission or
alleged omission of a material fact.

      We have agreed to pay substantially all of the expenses incidental to the
registration, offering and sale to the public of the shares of common stock
covered by this prospectus, other than commissions, fees and discounts of
underwriters, brokers, dealers and agents, if any.

      It is possible that a significant number of shares could be sold at the
same time. Such sales, or the perception that such sales could occur, may
adversely affect prevailing market prices for our common stock.


      This offering by the selling stockholder will terminate on the date on
which the selling stockholder has sold all of such selling stockholder's shares.


                           RELATED PARTY TRANSACTIONS


      As of June 28, 2005, we owed Spotless Plastics (USA) Inc. $5,000,000 of
principal and $127,730 of interest under a promissory note dated November 16,
2001 (the "Spotless Loan"), in the original principal amount of $1,700,000. The
note we issued to Spotless was collateralized by all of our assets. During the
fiscal year ended June 29, 2004, we borrowed $3,300,000 from Spotless for
working capital requirements and to fund our losses.

      As of September 27, 2005, Spotless was due payment from third parties for
purchased accounts receivable in the amount of $189,197 under an account
receivable finance agreement dated February 5, 2004 entered into with us. As of
such date, Spotless had purchased from us an aggregate amount of $4,991,252 of
our accounts receivable at an aggregate discount of $911,202, for an aggregate
purchase price of $4,080,050. Pursuant to the account receivable finance
agreement, Spotless was able to purchase certain of our accounts receivable
without recourse for cash, subject to certain terms and conditions. Pursuant to
an administrative services arrangement, Spotless also provided us with certain
administrative services. During our fiscal years 2005, 2004 and 2003, we were
charged by Spotless an administrative fee of $84,138, $131,556 and $101,256,
respectively, of which $84,138 remained unpaid and was included in accrued
expenses as of June 28, 2005.


      On June 30, 2005, we completed a financing transaction, in which we sold
the Note to Laurus Master Fund, Ltd. The sale of the Note was completed pursuant
to a securities purchase agreement, as amended, and related documents, dated
June 30, 2005. $2,750,000 of the proceeds from this transaction were used to
satisfy all of our financial obligations to Spotless, including the Spotless
Loan.

      We also issued a subordinated secured promissory note to Spotless in the
principal amount of $500,000, bearing interest at LIBOR plus 1%. Pursuant to the
terms of the note we issued to Spotless, amortized payments of $50,000 per month
become due and payable beginning July 1, 2007 until all amounts due thereunder
are fully paid, so long as we are not in default on the note we issued to
Laurus. The note we issued to Spotless, together with the $2,750,000 payment to
Spotless referred to above, fully satisfied all of our financial obligations to
Spotless. In connection with this financing transaction, we, along with
Spotless, terminated the account receivable finance agreement, except with
respect to our obligation to continue to collect and remit payment of accounts
receivable that Spotless purchased under the agreement. As part of the
transactions, Spotless assigned to us an account receivable with a balance of
$189,197 and we agreed to pay this amount to Spotless no later than June 30,
2006. In addition, Spotless agreed to forgive the $84,138 in administrative fees
that was outstanding.


                                       60
<PAGE>

      On June 30, 2005, Messrs. Peter Wilson, John Bongiorno, Ronald Evans and
Brian Blythe, who were nominees of Spotless, resigned as our directors, and Mr.
Charles L. Kelly, Jr., also a Spotless nominee, resigned as our chief financial
officer and as one of our directors. In addition, Mr. Joseph Murphy, an employee
of Spotless, resigned as our vice president of finance and administration and
Secretary. Pursuant to a transition services agreement, Spotless agreed to
provide the services of Mr. Murphy to the Company, including in relation to
advice in the areas of:

      o     administration;
      o     accounting, finance and risk management; and
      o     assisting in the preparation and review of our reports filed with
            the SEC

during a six-month transitional process for a fee of $5,000 per month and a
payment of $25,000 to Mr. Murphy at the end of the transitional period.


      On June 30, 2005, Spotless, through one of its wholly owned subsidiaries,
sold 15,469,964 shares of our common stock to Michael O'Reilly, our president
and chief executive officer, in consideration for a non-recourse ten-year
balloon promissory note in the principal amount of $120,500 issued by Mr.
O'Reilly to Spotless, bearing interest at LIBOR plus 1%. Spotless also
surrendered its remaining 45,865,143 shares of our common stock to us for
cancellation.

      Mr. O'Reilly issued a personal guaranty to Laurus for $3,250,000 of the
Note.

      In addition, we issued an option exercisable at $.09 per share to Mr.
O'Reilly to purchase 15,469,964 shares of our common stock in connection with
his:


      o     agreement to a new employment agreement, which (a) does not include
            a put right that existed in his former employment agreement
            requiring us, under certain circumstances, to buy his shares of our
            common stock and shares underlying his vested options, and (b) calls
            for a base salary of $285,000 per year and a bonus equal to 2.5% of
            our pre-tax income, as defined in the employment agreement; and
      o     agreement to personally guarantee our bonding obligations,

each of which was a condition precedent to the consummation of our financing
transaction with Laurus.


      On March 13, 2006, the Compensation Committee of our company approved an
increase in Mr. O'Reilly's base salary to $342,000 per year. In addition, in
lieu of the bonus provided by the Employment Agreement, we agreed to pay Mr.
O'Reilly an annual bonus for each fiscal year, commencing with the fiscal year
ending in June 2006, in an amount equal to 5% of EBITDA (Earnings Before
Interest, Taxes, Depreciation and Amortization) determined in accordance with
Generally Accepted Accounting Principles and calculated without taking into
account any payments made by us to Laurus Master Fund, Ltd. The amount of such
bonus and the date of payment shall be authorized by the Compensation Committee
within 90 days after the end of each fiscal year. An amendment to Mr. O'Reilly's
employment agreement, effective as of March 13, 2006, was executed by Mr.
O'Reilly and us to reflect these revisions to compensation.

      On May 24, 2005, we issued non-plan five-year options exercisable at $.01
per share and $0.1875 per share to Michael O'Reilly to purchase 2,000,000 and
250,000 shares of our common stock, respectively, in an effort to continue
incentivizing him in his capacity as our president and chief executive officer.
We recorded these options based on the intrinsic value method and recognized an
expense of $100,000 in connection therewith pursuant to APB No. 25.

      On June 30, 2005, we issued ten-year options exercisable at $.09 per share
to our series A convertible preferred stockholders, including Dr. Kevin J.
Phillips, one of our directors, to purchase an aggregate of 500,000 shares of
our common stock. We also agreed to pay to our series A convertible preferred
stockholders, out of legally available funds, accrued and unpaid dividends in an
aggregate of (a) $35,000 on each June 30, 2005, September 30, 2005 and December
30, 2005 and (b) $50,000 on February 28, 2007 in consideration for their
agreement to:


      o     propose and vote in favor of an amendment to our certificate of
            incorporation in order to accommodate the full issuance of the
            shares of our common stock underlying the Note and the option and
            warrant we issued to Laurus;


                                       61
<PAGE>


      o     postpone their right, upon six months' notice after February 2007,
            to require us to redeem their series A convertible preferred stock,
            until the earlier of six months after the repayment of the Note or
            June 30, 2010;
      o     defer receipt of dividend payments on the series A convertible
            preferred stock due after June 30, 2005, until the earlier of six
            months after the repayment of the Note or June 30, 2010; and
      o     forbear from appointing a second director until the earlier of (a)
            June 30, 2008 or (b) the repayment in full of the secured
            convertible term note that we have issued to Laurus.

      On June 30, 2005, Michael O'Reilly and the series A convertible preferred
stock stockholders, including Dr. Kevin J. Phillips, who is one of our
directors, agreed, pursuant to a forebearance and deferral agreement to which we
are a party, to propose and vote in favor of an amendment to our certificate of
incorporation in order to accommodate the full issuance of the shares of our
common stock underlying the Note and the option and warrant we issued to Laurus
at our next stockholders meeting to be held by February 2006. In addition, Mr.
O'Reilly, the series A convertible preferred stock stockholders and Anthony P.
Towell, one of our directors, entered into lock-up agreements with Laurus that
prohibit a disposition of their shares of our common stock and any and all
related derivative securities until the earlier of the repayment in full of the
Note or June 30, 2010. On December 6, 2004, we issued a ten-year option to Dr.
Kevin J. Phillips to purchase 100,000 shares under our 2001 equity incentive
plan in connection with his service as one of our directors.

      During our fiscal year ended July 1, 2003, we repaid a $100,000
convertible note held by Anthony P. Towell, one of our directors. This note was
issued in 1997, provided for interest at a rate equal to 12% per annum and was
convertible at a rate of $.15 per share of our common stock. On May 24, 2005, we
issued a non-plan ten-year option exercisable at $.06 per share to Anthony P.
Towell to purchase 250,000 shares in connection with his service on our
then-existing special committee of our board of directors. On December 6, 2004,
we issued a ten-year option exercisable at $.035 per share to Anthony P. Towell
under our 2001 equity incentive plan in connection with his service as one of
our directors.


      On October 29, 1999, we entered into a subscription agreement with
Spotless Plastics (USA), Inc., a Delaware corporation, pursuant to which we sold
to Windswept Acquisition Corporation, a Delaware corporation and a wholly-owned
subsidiary of Spotless:

      o     22,284,683 shares of our common stock, par value $.0001 per share;
            and
      o     9,346 shares of series B convertible preferred stock, par value $.01
            per share, for an aggregate subscription price of $2,500,000 or
            $.07904 per share of our common stock and $79.04 per share of series
            B preferred stock.

      Each share of series B preferred stock had the equivalent voting power of
1,000 shares of our common stock and was convertible into 1,000 shares of our
common stock.

      In October 1999, we, Trade-Winds and North Atlantic, as joint and several
obligors, borrowed $2,000,000 from Spotless. This borrowing was evidenced by a
secured convertible promissory note, dated October 29, 1999. Outstanding
principal under this note bore interest at a rate equal to the London Interbank
Offering Rate plus an additional 1% and was payable monthly. The note had a
maturity date of October 29, 2004, unless Spotless elected to defer repayment
until October 29, 2005. The outstanding principal amount and all accrued and
unpaid interest under this note was convertible, at the option of Spotless, in
whole or in part, at any time, into shares of our common stock at the rate of
one share of our common stock for every $.07904 of principal and accrued
interest so converted (or, in the event that certain approvals were not obtained
at the time of conversion, into shares of series B preferred stock at the rate
of one share of series B preferred stock for every $79.04 of principal and
accrued interest so converted). In connection with the note, each of the
obligated parties granted to Spotless a security interest in all of their
respective assets pursuant to a security agreement dated October 29, 1999.


                                       62
<PAGE>

      On November 16, 2001, Windswept Acquisition Corp. exercised its right to
convert all 9,346 shares of our series B preferred stock. As a result of such
conversion and in accordance with the terms of our series B preferred stock,
Windswept Acquisition Corp. was issued 10,495,174 shares of our common stock.
Such amount included 9,346,000 shares as a result of the 1,000:1 conversion
ratio, and an additional 1,149,174 shares that were calculated based upon a
formula that took into consideration the value of the series B preferred stock
on the date of issuance and the number of days elapsed from the date of the
issuance of the series B preferred stock through the conversion date. The
issuance of the additional shares of common stock was recorded as a dividend of
$390,719. The dividend represented the difference between the fair market value
of our common stock issued on November 16, 2001 and the fair market value of our
common stock at the date the series B preferred stock was issued.

      On November 16, 2001, Spotless exercised its right to convert all
principal and accrued and unpaid interest on the $2,000,000 note. As a result of
the conversion of the note and accrued and unpaid interest:

      o     we issued an additional 28,555,250 shares of our common stock to
            Windswept Acquisition Corp. in full satisfaction of the note and the
            related accrued and unpaid interest; and
      o     an option that we granted to our president and chief executive
            officer in October 1999 to purchase 2,811,595 shares of our common
            at an exercise price of $.079 per share became fully vested and
            exercisable.


      On February 5, 2004, we entered into an account receivable finance
agreement with Spotless pursuant to which Spotless purchased certain of our
accounts receivable without recourse for cash, subject to certain terms and
conditions. Pursuant to the account receivable finance agreement, Spotless had
the ability, but not the obligation to, purchase one or more of our accounts
receivable, that were approved by Spotless, in its sole discretion, in respect
of the particular debtor, invoices and related credit. As part of the agreement,
Spotless could purchase accounts receivable at a 15% discount, as adjusted by
Spotless in its sole discretion, to invoice prices, which we believed was at
least as favorable to us as would have been available from an unaffiliated
third-party, based upon a good-faith estimate of an applicable discount
negotiated at arm's length. In this regard, all of the accounts receivable
purchased by Spotless were so purchased at a 15% discount except one with an
invoice price of $1,028,194, which was purchased at a 31% discount on April 29,
2004, given certain factors, including anticipated slower collections associated
with the particular account debtor. In addition, we paid monthly discount fees
on any purchased accounts receivable based upon invoice prices. Spotless
purchased accounts receivable in the aggregate face amount of $4,991,252 from us
for an aggregate purchase price of $4,080,050. The $911,202 difference between
the aggregate face amount and the aggregate purchase price, representing the
purchase discounts and the monthly discount fees were treated as an interest
expense. The aggregate amount of the purchase discounts and monthly discount
fees under this agreement were $917,169 for the fiscal year ending June 29, 2004
and $255,585 for the fiscal year ending June 28, 2005. Further, we managed all
accounts receivable that we sold to Spotless while remitting to Spotless any
proceeds received, and we bear all related litigation costs. As of March 28,
2006, we continued to manage approximately $189,197 of accounts receivable which
had been sold to Spotless.

      On December 16, 1998, we entered into an operating lease agreement with
Michael O'Reilly, our president and chief executive officer. Pursuant to the
terms of the arrangement that expired in December 2002 and has continued on a
month-to-month basis thereafter, we lease a forty-two foot custom Topaz boat for
monthly rental payments of $5,000. The leasing arrangement was necessitated by a
marine assistance contract that expired on December 31, 2000, although the
arrangement continues to provide us with our largest floating vessel capable of
handling specialty equipment and facilitating an offshore support crew. We are
responsible for all taxes, insurance and repairs pertaining to this boat.

      We had an oral understanding with Michael O'Reilly pursuant to which we
paid the full carrying costs, including mortgage payments, of a condominium that
he beneficially owned and that we used for marketing and employee-relations
purposes. The full carrying costs during our fiscal years ended June 28, 2005
and June 29, 2004 were approximately $7,150 and $17,800, respectively. In
connection with this arrangement, we also provided mitigation and restoration
goods and services to Mr. O'Reilly during our fiscal year ended June 29, 2004 in
connection with severe water damage caused by a failed water heater at this
condominium. In connection with these services, our entire direct costs and
allocated overhead, without any markup, equaled approximately $56,780.



                                       63
<PAGE>


      In February 1997, we issued 650,000 shares of redeemable convertible
preferred stock to Dr. Kevin J. Phillips, one of our directors and an additional
650,000 shares of redeemable convertible preferred stock to a business partner
of Dr. Phillips. During fiscal years 2005, 2004 and 2003, we paid an aggregate
of $0, $39,000 and $78,000, respectively, of dividends and accrued interest to
the redeemable convertible preferred stockholders.


      We paid a former director $24,385 and $46,926 for consulting services in
our fiscal years 2004 and 2003, respectively.

      We believe that all of the transactions that we have entered into with our
officers, directors and principal stockholders, except our provision of
mitigation and restoration services at the condominium owned by our president
and chief executive officer as discussed above, have been on terms no less
favorable to us than those available from unrelated third parties.


                          DESCRIPTION OF CAPITAL STOCK

      The following description of our capital stock is subject to our
certificate of incorporation and bylaws, which are included as exhibits to the
registration statement of which this prospectus is a part, and the applicable
provisions of the Delaware General Corporation Law.


GENERAL BACKGROUND

      Our authorized capital stock currently consists of 150,000,000 shares of
our common stock, $.0001 par value, and 10,000,000 shares of preferred stock,
$.01 par value. Of our authorized preferred stock, 1,300,000 shares have been
designated as series A convertible preferred stock.


      As of March 28, 2006, we had issued and outstanding 33,571,215 shares of
our common stock, held by approximately 745 stockholders. In addition, as of
March 28, 2006, we had issued and outstanding 1,300,000 shares of our series A
convertible preferred stock.


PROPOSED AMENDMENTS TO CERTIFICATE OF INCORPORATION

      At our next meeting of stockholders, we intend to seek stockholder
approval of the following amendments to our certificate of incorporation:

      o     to increase the number of our authorized shares of common stock to
            400,000,000 from 150,000,000;
      o     to reflect the postponement of the mandatory redemption of the
            series A convertible preferred stock from February 2007 until the
            earlier of (a) six months after the repayment of a secured
            convertible term note issued by us to Laurus Master Fund, Ltd. or
            (b) June 30, 2010; and
      o     to reflect the deferral of accrued and unpaid dividends on the
            series A convertible preferred stock as of June 30, 2005 and
            dividends thereon accruing after June 30, 2005 until the earlier of
            (a) June 30, 2010, or (b) six months after the repayment of the
            Laurus note.

COMMON STOCK

      Holders of our common stock are entitled to one vote for each share on all
matters voted upon by our stockholders, including the election of directors, and
do not have cumulative voting rights. Subject to the rights of holders of any
outstanding shares of our preferred stock, holders of our common stock are
entitled to share ratably in our net assets upon our dissolution or liquidation
after payment or provision for all liabilities and any preferential liquidation
rights of our preferred stock then outstanding. Holders of our common stock have
no preemptive rights to purchase shares of our stock. The shares of our common
stock are not subject to any redemption provisions and are not convertible into
any other shares of our capital stock. All outstanding shares of our common
stock are, and the shares of common stock to be issued in the offering will be,
upon payment therefor, fully paid and nonassessable. The rights, preferences and
privileges of holders of our common stock will be subject to those of the
holders of any shares of our preferred stock we may issue in the future. Our
common stock is currently quoted on the Over-the-Counter Bulletin Board.


                                       64
<PAGE>

PREFERRED STOCK


      We issued 1,300,000 shares of our series A convertible preferred stock
with a liquidation value of $1.00 per share plus accumulated dividends. The
dividend rate is the greater of 6% or the inflation rate (as defined) plus 2.5%.
The series A convertible preferred stockholders can convert their preferred
shares into shares of our common stock at a ratio of one share of preferred to
one share of our common stock, subject to adjustment. The series A convertible
preferred stock is currently redeemable by us. The series A convertible
preferred stock is subject to redemption, in whole or in part, at our option,
for a redemption price per share equal to the higher of $1.00, plus any accrued
and unpaid dividends, or the market price of one share of our common stock. The
series A convertible preferred stock is also subject to redemption, in whole or
in part, at the option of the holders thereof, upon six months' notice at any
time after February 2007, for a redemption price per share equal to the
equivalent of our redemption price. Pursuant to the terms of the series A
convertible preferred stock, we are prohibited, without first obtaining the
approval of at least a majority of the holders of our series A convertible
preferred stock, from:


      o     altering or changing the rights, preferences, privileges or
            restrictions of shares of series A convertible preferred stock;
      o     increasing the authorized number of shares or adjusting the par
            value of the series A convertible preferred stock;
      o     issuing any shares of capital stock ranking senior as to dividends
            or rights upon liquidation or dissolution to the series A
            convertible preferred stock; or
      o     issuing any common stock at a price below the conversion price, as
            defined, to any officer, director or 10% stockholder.

      The liquidation value of the series A convertible preferred stock was
$1,300,000 at June 28, 2005 and June 29, 2004, respectively. Pursuant to a
deferral and forbearance agreement, dated June 30, 2005, entered into in
connection with the Laurus transaction, the series A convertible preferred
stockholders agreed to:


      o     propose and vote in favor of an amendment to its certificate of
            incorporation in order to accommodate the full issuance of the
            shares of our common stock underlying the Note, the option and
            warrant we issued to Laurus;
      o     postpone their right, upon six months' notice after February 2007,
            to require the Company to redeem their series A convertible
            preferred stock, until the earlier of six months after the repayment
            of the Note or June 30, 2010;
      o     defer receipt of dividend payments on the series A convertible
            preferred stock due after June 30, 2005, until the earlier of six
            months after the repayment of the Note or June 30, 2010; and
      o     forbear from appointing a second director until the earlier of (a)
            June 30, 2008 or (b) the repayment in full of the secured
            convertible term note that the Company has issued to Laurus.


      Our board may, from time to time, authorize the issuance of up to
8,650,000 shares in one or more classes or series of preferred stock without
stockholder approval. Subject to the provisions of our certificate of
incorporation, limitations prescribed by law and a restriction under the
securities purchase agreement with Laurus that prohibits us from issuing any
preferred stock that is mandatorily redeemable prior to June 30, 2009, our board
is authorized to adopt resolutions to issue shares, establish the number of
shares, determine the number of shares constituting any series, and provide or
change the voting powers, designations, preferences and relative rights,
qualifications, limitations or restrictions on shares of our preferred stock,
including dividend rights, terms of redemption, conversion rights and
liquidation preferences, in each case without any action or vote by our
stockholders.

      One of the effects of undesignated preferred stock may be to enable our
board to discourage an attempt to obtain control of our company by means of a
tender offer, proxy contest, merger or otherwise. The issuance of preferred
stock may adversely affect the rights of our common stockholders by, among other
things:

      o     restricting dividends on the common stock;
      o     diluting the voting power of the common stock;
      o     impairing the liquidation rights of the common stock; or
      o     delaying or preventing a change in control without further action by
            the stockholders.


                                       65
<PAGE>

LIMITATION OF LIABILITY OF OFFICERS AND DIRECTORS


      Our certificate of incorporation, as amended, limits the liability of
directors to the fullest extent permitted by Delaware law. The effect of these
provisions is to eliminate our rights, and the rights of our stockholders,
through stockholders' derivative suits on behalf of us, to recover monetary
damages against a director for breach of fiduciary duty as a director, including
breaches resulting from grossly negligent behavior. However, our directors will
be personally liable to us and our stockholders for monetary damages if they
acted in bad faith, knowingly or intentionally violated the law, authorized
illegal dividends or redemptions or derived an improper benefit from their
actions as directors. In addition, our certificate of incorporation provides
that we will indemnify our directors and officers to the fullest extent
permitted by Delaware law. We also maintain directors and officers liability
insurance.


DELAWARE ANTI-TAKEOVER LAW


      We are subject to Section 203 of the Delaware General Corporation Law,
which regulates corporate acquisitions. This law provides that specified persons
who, together with affiliates and associates, own, or within three years did
own, 15% or more of the outstanding voting stock of a corporation may not engage
in business combinations with the corporation for a period of three years after
the date on which the person became an interested stockholder. The law defines
the term "business combination" to include mergers, asset sales and other
transactions from which the interested stockholder receives or could receive a
financial benefit other than a pro rata basis with other stockholders. This
provision has an anti-takeover effect with respect to transactions not approved
in advance by our board, including discouraging takeover attempts that might
result in a premium over the market price for the shares of our market price.
With approval of our stockholders, we could amend our certificate of
incorporation in the future to avoid the restrictions imposed by this
anti-takeover law.


TRANSFER AGENT AND REGISTRAR

      The transfer agent and registrar for our common stock is OTC Corporate
Transfer Services Co.

                                  LEGAL MATTERS

      The validity of the shares of common stock offered by this prospectus will
be passed upon for our company by Moomjian & Waite, LLP, Jericho, New York.

                                     EXPERTS

      Our audited consolidated financial statements for the fiscal year ended
June 28, 2005 appearing in this prospectus and the related registration
statement has been audited by Massella & Associates, CPA, PLLC, independent
registered public accounting firm, as set forth in their report on our audited
consolidated financial statements appearing herein and elsewhere in the
registration statement, and are included in reliance upon their report given
upon the authority of Massella & Associates CPA, PLLC as experts in accounting
and auditing.

      Our audited consolidated financial statements for the fiscal year ended
June 29, 2004, included in this prospectus have been audited by Deloitte &
Touche LLP, an independent registered public accounting firm, as stated in their
report on our audited consolidated financial statements appearing herein and
elsewhere in the registration statement, and are included in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.


                                       66
<PAGE>

                       WHERE YOU CAN FIND MORE INFORMATION


      We have filed with the Securities and Exchange Commission a registration
statement on Form S-1 under the Securities Act with respect to our common stock.
This prospectus does not contain all of the information set forth in the
registration statement and the exhibits and schedules to the registration
statement. For further information with respect to us and our common stock, we
refer you to the registration statement and the exhibits and schedules filed as
a part of the registration statement. The registration statement, including
exhibits and schedules, may be inspected without charge at the principal office
of the Securities and Exchange Commission in Washington, D.C., and copies of all
or any part of it may be obtained from that office after payment of fees
prescribed by the Securities and Exchange Commission. The Securities and
Exchange Commission maintains an Internet website that contains reports, proxy
and information statements and other information regarding registrants that file
electronically with the Securities and Exchange Commission at www.sec.gov.



                                       67
<PAGE>


                       WINDSWEPT ENVIRONMENTAL GROUP, INC.
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                               ----
<S>                                                                                                             <C>
Reports of Independent Registered Public Accounting Firms.......................................................F-2

Consolidated Balance Sheets as of December 27, 2005 (unaudited), June 28, 2005, and June 29, 2004...............F-4

Consolidated Statements of Operations for the twenty-six-week period ended December 27, 2005
and December 28, 2004 (unaudited) and the fiscal years ended
June 28, 2005, June 29, 2004 and July 1, 2003...................................................................F-5

Consolidated Statements of Stockholders' Equity for the twenty-six-week periods ended
December 27, 2005 and December 28, 2004 (unaudited) and the fiscal years ended June 28, 2005,
June 29, 2004 and July 1, 2003..................................................................................F-6

Consolidated Statements of Cash Flows for the twenty-six-week periods ended December 27, 2005
and December 28, 2004 (unaudited) and the fiscal years ended June 28, 2005, June 29, 2004 and
July 1, 2003....................................................................................................F-7

Notes to Consolidated Financial Statements......................................................................F-8
</TABLE>



                                       F-1
<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of Windswept Environmental Group, Inc.
Bay Shore, New York


We have audited the accompanying consolidated balance sheet of Windswept
Environmental Group, Inc. and subsidiaries (the "Company") as of June 29, 2004,
and the related consolidated statements of operations, stockholders' equity and
cash flows for the fiscal years ended June 29, 2004 and July 1, 2003. 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 standards of the Public Company
Accounting Oversight Board (United States). 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, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of June 29, 2004 and
the results of their operations and their cash flows for the fiscal years ended
June 29, 2004 and July 1, 2003, in conformity with accounting principles
generally accepted in the United States of America.


The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company has incurred recurring losses
from operations, has a working capital deficit and a stockholders' deficit, and
is experiencing difficulty in generating sufficient cash flow to meet its
obligations and sustain its operations, which raises substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 4. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.


/s/ Deloitte & Touche LLP

Jericho, New York
September 24, 2004


                                       F-2
<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of Windswept Environmental Group, Inc.
Bay Shore, New York


We have audited the accompanying consolidated balance sheet of Windswept
Environmental Group, Inc. and subsidiaries (the "Company") as of June 28, 2005,
and the related consolidated statements of operations, stockholders' equity and
cash flows for the fiscal year ended June 28, 2005. 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 standards of the Public Company
Accounting Oversight Board (United States). 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, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of June 28, 2005 and
the results of operations and cash flows for the fiscal years ended June 28,
2005, in conformity with accounting principles generally accepted in the United
States of America.


The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company has incurred recurring losses
from operations, has a working capital deficit and a stockholders' deficit, and
is experiencing difficulty in generating sufficient cash flow to meet its
obligations and sustain its operations, which raises substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 4. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.


As discussed in Note 2 to the financial statements, certain errors resulting in
an understatement of previously reported expenses for the year ended June 28,
2005 were discovered by the Company subsequent to the year end. Accordingly, the
2005 financial statements have been restated to correct the errors.

As discussed in Note 3 to the financial statements, on June 30, 2005, the
Company was recapitalized after completing a financing transaction in which it
issued a secured convertible term note which resulted in the repayment of its
secured note payable to a related party.

/s/ Massella & Associates, CPA, PLLC

Syosset, New York
September 13, 2005, except for Note 20, which is as of September 26, 2005


                                       F-3
<PAGE>

              WINDSWEPT ENVIRONMENTAL GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                             December 27,         June 28,           June 29,
                                                                                2005                2005               2004
                                                                             (unaudited)         (restated)
                                                                             ------------       ------------       ------------
<S>                                                                          <C>                <C>                <C>
ASSETS:
CURRENT ASSETS:
   Cash                                                                      $  2,494,266       $    512,711       $     63,562
   Accounts receivable, net of allowance for doubtful accounts of
      $2,757,831, $1,507,831 and $689,140, respectively                        13,182,621          6,755,338          6,652,806
   Inventory                                                                      202,950            146,079            151,270
   Costs and estimated earnings in excess of billings on
    uncompleted contracts                                                         215,997             30,466            608,047
   Prepaid expenses and other current assets                                      394,773             47,253            257,565
   Refundable income taxes                                                             --                 --            641,795
                                                                             ------------       ------------       ------------
      Total current assets                                                     16,490,607          7,491,847          8,375,045

PROPERTY AND EQUIPMENT, net of accumulated depreciation and
amortization of $6,739,039, $6,386,731 and $5,707,705, respectively             2,986,156          2,242,645          2,757,463

OTHER ASSETS:
   Deferred financing costs                                                     2,966,840                 --                 --
   Other                                                                          170,000            322,046            198,657
                                                                             ------------       ------------       ------------
   Total other assets                                                           3,136,840            322,046            198,657
                                                                             ------------       ------------       ------------
TOTAL                                                                        $ 22,613,603       $ 10,056,538       $ 11,331,165
                                                                             ============       ============       ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT):
CURRENT LIABILITIES:
   Accounts payable                                                          $  1,985,409       $  1,174,840       $  2,309,328
   Liability for repurchased account receivable                                   189,197                 --                 --
   Accrued expenses                                                             1,575,391          1,611,256          1,101,701
   Secured note payable to a related party                                             --          5,000,000          5,000,000
   Current portion of secured convertible note payable                            413,234                 --                 --
   Billings in excess of costs and estimated earnings on
    uncompleted contracts                                                          62,350             83,316            239,511
   Accrued payroll and related fringe benefits                                    520,715            528,867            924,725
   Current maturities of long-term debt                                           207,805            169,612            307,224
   Income taxes payable                                                         4,140,361            138,579            129,435
   Other current liabilities                                                      686,809            489,468            467,092
                                                                             ------------       ------------       ------------
   Total current liabilities                                                    9,781,271          9,195,938         10,479,016
                                                                             ------------       ------------       ------------
LONG-TERM DEBT:
   Secured convertible note payable                                               813,249                 --                 --
   Secured note payable                                                           500,000                 --                 --
   Other                                                                          216,118            197,400            340,104
                                                                             ------------       ------------       ------------
   Total long-term debt                                                         1,529,367            197,400            340,104
                                                                             ------------       ------------       ------------
COMMITMENTS AND CONTINGENCIES (Notes 11 and 15)

REDEEMABLE COMMON STOCK
                                                                                       --             76,089                 --
                                                                             ------------       ------------       ------------
SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK,
   $.01 par value; 1,300,000 shares authorized and
    outstanding, respectively                                                   1,300,000          1,300,000          1,300,000
                                                                             ------------       ------------       ------------
STOCKHOLDERS' EQUITY (DEFICIT):
Series B preferred stock, $.01 par value; 50,000
   shares authorized; 0 shares outstanding                                             --                 --                 --
Nondesignated preferred stock, no par value; 8,650,000
   shares authorized; 0 shares outstanding                                             --                 --                 --
Common stock, $.0001 par value; 150,000,000 shares
    authorized; 33,755,620 shares deemed outstanding at
   December 27, 2005, 77,936,358 shares outstanding
   at June 28, 2005 and June 29, 2004                                               3,375              7,794              7,794
Additional paid-in capital
                                                                               42,789,570         33,944,017         33,922,017
Accumulated deficit                                                           (32,789,980)       (34,664,700)       (34,717,766)
                                                                             ------------       ------------       ------------
      Total stockholders' equity (deficit)                                     10,002,965           (712,889)          (787,955)
                                                                             ------------       ------------       ------------
TOTAL                                                                        $ 22,613,603       $ 10,056,538       $ 11,331,165
                                                                             ============       ============       ============
</TABLE>


                 See notes to consolidated financial statements.


                                       F-4
<PAGE>

              WINDSWEPT ENVIRONMENTAL GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                    Twenty-Six Weeks Ended                       Fiscal Year Ended
                                                 ----------------------------     ----------------------------------------------
                                                    December       December          June 28,
                                                   27, 2005        28, 2004            2005          June 29,          July 1,
                                                  (unaudited)     (unaudited)       (restated)         2004             2003
                                                 ------------    ------------     ------------     ------------     ------------
<S>                                              <C>             <C>              <C>              <C>              <C>
Revenues                                         $ 22,878,681    $ 12,837,785     $ 20,640,410     $ 19,166,753     $ 17,831,189

Cost of revenues                                   12,575,980       8,731,991       15,176,735       17,442,059       14,314,519
                                                 ------------    ------------     ------------     ------------     ------------
Gross profit                                       10,302,701       4,105,794        5,463,675        1,724,694        3,516,670
                                                 ------------    ------------     ------------     ------------     ------------
Operating expenses (income):
   Selling, general and administrative
      expenses                                      4,009,705       2,735,450        4,884,972        5,348,524        5,603,557
   (Benefit) expense related to variable
      accounting treatment for officer
      options and redeemable common stock                  --              --          176,089         (348,626)        (593,246)
                                                 ------------    ------------     ------------     ------------     ------------
      Total operating expenses                      4,009,705       2,735,450        5,061,061        4,999,898        5,010,311
                                                 ------------    ------------     ------------     ------------     ------------
Income (loss) from operations                       6,292,996       1,370,344          402,614       (3,275,204)      (1,493,641)
                                                 ------------    ------------     ------------     ------------     ------------
Other expense (income):
   Interest expense                                 1,228,410         266,456          363,850          924,461           72,189
   Other expense (income), net                         22,510          (1,322)         (51,629)         (29,386)         (23,040)
                                                 ------------    ------------     ------------     ------------     ------------
      Total other expense (income)                  1,250,920         265,134          312,221          895,075           49,149
                                                 ------------    ------------     ------------     ------------     ------------
Income (loss) before provision for
   income taxes                                     5,042,076       1,105,210           90,393       (4,170,279)      (1,542,790)

Provision (benefit) for income taxes                3,167,356          46,248           37,327         (634,945)      (1,073,786)
                                                 ------------    ------------     ------------     ------------     ------------
Net income (loss)                                   1,874,720       1,058,962           53,066       (3,535,334)        (469,004)

Dividends on preferred stock                           39,000          39,000           78,000           78,000           78,000
                                                 ------------    ------------     ------------     ------------     ------------
Net income (loss) attributable to common
   shareholders                                  $  1,835,720    $  1,019,962     $    (24,934)    $ (3,613,334)    $   (547,004)
                                                 ============    ============     ============     ============     ============
Basic and diluted net (loss) income per
   common share:
      Basic                                      $        .05    $        .01     $        .00     $       (.05)    $       (.01)
                                                 ============    ============     ============     ============     ============
      Diluted                                    $        .01    $        .01     $        .00     $       (.05)    $       (.01)
                                                 ============    ============     ============     ============     ============
Weighted average number of common shares
   outstanding:
      Basic                                        33,593,275      77,936,358       77,936,358       77,936,358       77,936,358
                                                 ============    ============     ============     ============     ============
      Diluted                                     184,206,507      77,980,720       77,936,358       77,936,358       77,936,358
                                                 ============    ============     ============     ============     ============
</TABLE>


                 See notes to consolidated financial statements.


                                       F-5
<PAGE>


              WINDSWEPT ENVIRONMENTAL GROUP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                   (RESTATED)

<TABLE>
<CAPTION>
                                                              Common Stock
                                                              ------------            Additional
                                                        Number of                       Paid-in       Accumulated
                                                         Shares        Par Value        Capital         Deficit           Total
                                                      ------------    ------------    ------------    ------------    ------------
<S>                                                     <C>           <C>             <C>             <C>             <C>
Balance at July 2, 2002                                 77,936,358    $      7,794    $ 34,078,017    $(30,713,428)   $  3,372,383

Dividends on series A preferred stock                           --              --         (78,000)             --         (78,000)
Net loss and comprehensive loss                                 --              --              --        (469,004)       (469,004)
                                                      ------------    ------------    ------------    ------------    ------------
Balance at July 1, 2003                                 77,936,358           7,794      34,000,017     (31,182,432)      2,825,379

Dividends on series A preferred stock                           --              --         (78,000)             --         (78,000)
Net loss and comprehensive loss                                 --              --              --      (3,535,334)     (3,535,334)
                                                      ------------    ------------    ------------    ------------    ------------
Balance at June 29, 2004                                77,936,358           7,794      33,922,017     (34,717,766)       (787,955)

Options issued for compensation                                 --              --         100,000              --         100,000

Dividends on series A preferred stock                           --              --         (78,000)             --         (78,000)

Net income and comprehensive income                             --              --              --          53,066          53,066
                                                      ------------    ------------    ------------    ------------    ------------
Balance at June 28, 2005                                77,936,358           7,794      33,944,017     (34,664,700)       (712,889)

Laurus Financing:
     Allocation of proceeds to warrants and options
                                                                                         2,200,927                       2,200,927
     Allocation of proceeds to beneficial
     conversion feature                                                                  2,200,927                       2,200,927
     Assumed exercise of shares available for nominal
     consideration, including partial actual exercise
     to purchase 1,500,000 shares                        1,684,405             168             (18)                            150

     Allocation of proceeds to beneficial conversion
     feature on second increase of financing                                                38,889                          38,889

     Allocation of proceeds to beneficial conversion
     feature on third increase of financing                                                650,000                         650,000
     Allocation of proceeds to beneficial conversion
     feature on fourth increase of financing                                             1,350,000                       1,350,000

Spotless Transactions:
     Cancellation of Spotless shares net of
     shares sold to Michael O'Reilly                   (45,865,143)         (4,587)          4,587                              --

     Early extinguishment of Spotless Note,
     accrued interest and administrative fees
      (net of tax effect of $731,640)                                                    1,230,228                       1,230,228

     Additional taxes attributable to
     cancellation of Spotless debt)                                                       (107,434)                       (107,434)

     Surrender of Redemption Right with respect to
     Common Stock                                                                           76,089                          76,089
     Value of Spotless shares sold to
     Michael O'Reilly less consideration                                                 1,195,708                       1,195,708
Options granted to preferred stockholders for
forbearance of mandatory redemption and dividends                                           44,650                          44,650
Dividends on series A preferred stock                                                      (39,000)                        (39,000)

Net income                                                      --              --              --       1,874,720       1,874,720
                                                      ------------    ------------    ------------    ------------    ------------
Balance at December 27, 2005 (unaudited)                33,755,620    $      3,375    $ 42,789,570    $(32,789,980)   $ 10,002,965
                                                      ============    ============    ============    ============    ============
</TABLE>


                 See notes to consolidated financial statements


                                       F-6
<PAGE>

              WINDSWEPT ENVIRONMENTAL GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                               Twenty-Six Weeks Ended                  Fiscal Year Ended
                                                      -----------------------------------------    --------------------------
                                                        December       December       June 28,
                                                        27, 2005       28, 2004         2005        June 29,        July 1,
                                                      (unaudited)    (unaudited)     (restated)       2004           2003
                                                      -----------    -----------    -----------    -----------    -----------
<S>                                                   <C>            <C>            <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net (loss) income                                  $ 1,874,720    $ 1,058,962    $    53,066    $(3,535,334)   $  (469,004)
   Adjustments to reconcile net (loss)
      income to net cash provided
      by (used in) operating activities:
   Depreciation and amortization                          352,308        331,053        679,026        596,189        561,510
   Provision for doubtful accounts, net                 1,250,000        711,594        818,691        286,336       (506,225)
   Compensation (benefit) related to officer
      options and redeemable common stock                      --             --        176,089       (348,625)      (593,246)
   Amortization of deferred financing cost                587,690             --             --             --             --
   Amortization of beneficial conversion                  317,216             --             --             --             --
Changes in operating assets and liabilities:
   Accounts receivable                                 (7,488,086)    (4,175,461)      (921,223)    (1,057,539)     2,143,825
   Inventory                                              (56,871)        31,889          5,191         64,196         81,008
   Costs and estimated earnings in excess of
     billings on uncompleted contracts                   (185,531)        48,003        577,581        263,706       (370,329)
   Income tax refund                                           --        641,795        641,795             --             --
   Prepaid expenses and other current assets             (347,520)        50,908        210,312         22,032       (135,323)
   Other assets                                           152,046         28,000       (198,389)      (100,530)       108,988
   Accounts payable and accrued expenses                  886,573      1,379,494       (702,933)       691,007       (119,145)
   Accrued payroll and related fringe benefits             (8,152)       (19,326)      (395,858)       265,066        108,568
   Income taxes payable                                 3,140,989             --          9,144        567,826     (1,531,006)
   Other current liabilities                              133,532        613,807         22,376          2,406        296,699
   Billings in excess of costs and estimated
     earnings on uncompleted contracts                    (20,966)      (227,430)      (156,195)       (59,916)       106,176
                                                      -----------    -----------    -----------    -----------    -----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES       587,948        473,288        818,673     (2,343,180)      (317,504)
                                                      -----------    -----------    -----------    -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment                   (938,756)       (56,011)       (89,208)      (856,217)    (1,914,576)
                                                      -----------    -----------    -----------    -----------    -----------
NET CASH USED IN INVESTING ACTIVITIES                    (938,756)       (56,011)       (89,208)      (856,217)    (1,914,576)
                                                      -----------    -----------    -----------    -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Principal payments of long-term debt                  (100,152)      (134,508)      (307,737)      (448,261)      (203,712)
   Proceeds from long-term debt                           157,063             --         27,421        320,124        844,209
   Exercise of stock options                                  150             --             --             --             --
   Proceeds from short-term note payable to a
     related party                                             --             --             --      3,300,000      2,325,000
   Payments for deferred financing costs               (2,312,830)            --             --             --
   Repayment and cancellation of secured
     note payable to a related party                   (2,761,868)            --             --             --             --
   Dividends on preferred stock                                --             --             --        (39,000)       (78,000)
   Payment of convertible term note                            --             --             --             --       (100,000)
   Repayment of short-term notes payable
     to a related party                                        --             --             --             --       (825,000)
   Proceeds from secured notes payable                  7,350,000             --             --             --             --
                                                      -----------    -----------    -----------    -----------    -----------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES     2,332,363       (134,508)      (280,316)     3,132,863      1,962,497
                                                      -----------    -----------    -----------    -----------    -----------
NET INCREASE (DECREASE) IN CASH                         1,981,555        282,769        449,149        (66,534)      (269,583)

CASH - BEGINNING OF PERIOD                                512,711         63,562         63,562        130,096        399,679
                                                      -----------    -----------    -----------    -----------    -----------
CASH - END OF PERIOD                                  $ 2,494,266    $   346,331    $   512,711    $    63,562    $   130,096
                                                      ===========    ===========    ===========    ===========    ===========
Cash paid during the period for:
   Interest                                           $    91,477    $   198,098    $   111,012    $    45,146    $    39,405
                                                      ===========    ===========    ===========    ===========    ===========
   Income taxes                                       $        --    $     2,250    $     1,305    $        --    $   230,596
                                                      ===========    ===========    ===========    ===========    ===========
SUPPLEMENTAL SCHEDULE OF NON-CASH ACTIVITIES:
Financing cost related to beneficial
   conversion value of secured note                   $ 4,239,816    $        --    $        --    $        --    $        --
                                                      ===========    ===========    ===========    ===========    ===========
Capitalized gain on extinguishment of
  secured note payable - related party                $ 1,122,794    $        --    $        --    $        --    $        --
                                                      ===========    ===========    ===========    ===========    ===========
Financing cost related to warrants and options        $ 2,200,927    $        --    $        --    $        --    $        --
                                                      ===========    ===========    ===========    ===========    ===========
Capitalized cancellation of put right
  relating to redeemable common stock                 $    76,089    $        --    $        --    $        --    $        --
                                                      ===========    ===========    ===========    ===========    ===========
Property and equipment acquired through financing     $   157,063    $        --    $        --    $        --    $        --
                                                      ===========    ===========    ===========    ===========    ===========
Financing cost related to guaranties
  of CEO remunerated through
   sale of discounted shares                          $ 1,195,708    $        --    $        --    $        --    $        --
                                                      ===========    ===========    ===========    ===========    ===========
Financing cost related to issuance
  of options to preferred stockholders                $    44,650    $        --    $        --    $        --    $        --
                                                      ===========    ===========    ===========    ===========    ===========
Account receivable repurchased in
  connection with refinancing                         $   189,197    $        --    $        --    $        --    $        --
                                                      ===========    ===========    ===========    ===========    ===========
</TABLE>

                 See notes to consolidated financial statements.


                                       F-7
<PAGE>

              WINDSWEPT ENVIRONMENTAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Nature of Business


      Windswept Environmental Group, Inc. and its subsidiaries (the "Company")
      provides a full array of environmental services through vertically
      integrated businesses in the areas of hazardous waste remediation,
      asbestos removal, mold remediation, lead clean-up, emergency spill
      response and laboratory testing and training. In providing a turnkey
      environmental solution, the Company also provides demolition, renovation
      and other general construction services. The Company provides these
      services to a diversified customer base located primarily in the
      Northeastern and Southeastern United States. The Company's operations are
      conducted in a single business segment - environmental services.


      Basis of Presentation and Going Concern Considerations

      The accompanying consolidated financial statements include the accounts of
      Windswept Environmental Group, Inc. and its subsidiaries, Trade-Winds
      Environmental Restoration Inc. and North Atlantic Laboratories, Inc. All
      intercompany accounts and transactions have been eliminated in
      consolidation.


      The accompanying consolidated financial statements have been prepared
      assuming that the Company will continue as a going concern. The Company
      has incurred recurring losses from operations, has a working capital
      deficit and a stockholders' deficit, and is experiencing difficulty in
      generating sufficient cash flow to meet its obligations and sustain its
      operations, which raises substantial doubt about the Company's ability to
      continue as a going concern. Management's plans in regard to these matters
      are also described in Note 4. These consolidated financial statements do
      not include any adjustments that might result from the outcome of this
      uncertainty.


      Discounts on Debt with Equity Instruments

      The Company has recognized the value of the equity instruments issued in
      connection with financing transactions described in Note 3 in accordance
      with Accounting Principles Board Opinion No. 14 and Emerging Issues Task
      Force (EITF) Consensuses 98-5 and 00-27. The intrinsic value of the
      options and the fair value of the warrants are calculated and the
      proportionate values of the resulting debt and equity components have been
      recognized as debt discounts with equivalent credits to equity. The
      beneficial conversion features of the warrants, including the effective
      values under EITF 00-27, have also been recognized. All of the discounts
      are being amortized over the life of the debt in accordance with the
      latter pronouncement.

      Interim Period


      The accompanying unaudited interim financial statements have been prepared
      in accordance with accounting principles generally accepted in the United
      States of America for interim financial information, the instructions to
      Form 10-Q, Item 303 of Regulation S-K and Article 10 of Regulation S-X. In
      the opinion of management, the unaudited financial statements have been
      prepared on the same basis as the annual financial statements and reflect
      all adjustments, which include only normal recurring adjustments,
      necessary to present fairly the financial position as of December 27, 2005
      and the results of the operations, stockholders' equity and cash flows for
      the six months ended December 27, 2005. The results for the twenty-six
      weeks ended December 27, 2005 are not necessarily indicative of the
      results to be expected for any subsequent quarter or the entire fiscal
      year ending June 30, 2006.


      Additionally, information relating to events subsequent to September 13,
      2005, unless specifically identified, are unaudited.

      Use of Estimates

      The preparation of financial statements in conformity with accounting
      principles generally accepted in the United States of America requires
      management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities, revenues and expenses as well as the
      disclosure of contingent assets and liabilities at the date of the
      financial statements. Actual results could differ from those estimates.


                                       F-8
<PAGE>

      Revenue Recognition

      Revenue derived from services provided to customers over periods of less
      than one month is recognized when billed.

      Revenue from claims, such as claims relating to disputed change orders, is
      recognized when realization is probable and the amount can be reliably
      estimated, based upon meeting the following conditions:


            o     The original contract or other evidence provides a legal basis
                  for the claim;
            o     The additional costs were caused by circumstances that were
                  unforeseen at the contract date;
            o     Costs associated with the claims are identifiable; and
            o     The evidence supporting the claims is objective and
                  verifiable.

      Revenue from fixed price contracts that extend over periods of one month
      or more is recognized using the percentage-of-completion method, measured
      by the percentage of costs incurred to date compared to estimated total
      costs for each contract. Provisions for estimated losses on uncompleted
      contracts are made in the period in which such losses are determined.
      Changes in job performance, job conditions, estimated profitability, the
      effect of contract penalty provisions and final contract settlements may
      result in revisions to estimates of costs and income and are recognized in
      the period in which the revisions are determined.


      Revenue from time and material contracts that extend over a period of more
      than one month are recognized as services are performed.

      Inventory


      Inventory consists entirely of finished goods (materials and supplies
      utilized on the Company's remediation projects) and is recorded at the
      lower of cost (first-in, first-out) or market.


      Property and Equipment


      Property and equipment, consisting of machinery and equipment, office
      furniture and equipment, trucks and vehicles, and leasehold improvements,
      are stated at cost. Depreciation is recorded on the straight-line method
      over the estimated useful lives of the assets. The Company depreciates
      small tools based on an estimated useful life of three years. The Company
      depreciates leasehold improvements, office furniture, trucks, other
      vehicles and telephone systems, over the lesser of the term of the related
      lease or the estimated useful life of five years. The Company depreciated
      all other equipment, including project-specific and office-related,
      including computer, equipment, based on an estimated useful life of three
      to seven years. Long-lived assets, such as property and equipment, are
      reviewed for impairment when events or changes in circumstances indicate
      that the carrying amount of the assets may not be recoverable through the
      estimated future cash flows from the use of the assets. Impairment is
      measured at fair value. There were no impairment charges for the fiscal
      years ended June 28, 2005, June 29, 2004 and July 1, 2003 and the
      twenty-six weeks ended December 27, 2005.


      Allowance for Doubtful Accounts

      The Company has established an allowance for accounts receivable based
      upon factors such as the credit risk of specific customers, historical
      trends and other information.


      The activity within the allowance for doubtful accounts for the twenty-six
      weeks ended December 27, 2005 and for the fiscal years ended June 28,
      2005, June 29, 2004 and July 1, 2003 was as follows:

<TABLE>
<CAPTION>
                             Twenty-Six Weeks Fiscal Year    Fiscal Year    Fiscal Year
                                  Ended          Ended          Ended         Ended
                                December 27,    June 28,       June 29,       July 1,
                                   2005           2005           2004          2003
                                -----------   -----------    -----------    -----------
<S>                             <C>           <C>            <C>            <C>
Balance, beginning of period    $ 1,507,831   $   689,140    $   402,804    $   909,029
Charged to costs and expenses     1,250,000       806,000        323,384        303,972
Deductions                               --       (86,799)       (52,777)      (868,197)
Recoveries                               --        99,490         15,729         58,000
                                -----------   -----------    -----------    -----------
Balance, end of period          $ 2,757,831   $ 1,507,831    $   689,140    $   402,804
                                ===========   ===========    ===========    ===========
</TABLE>



                                       F-9
<PAGE>

      Claims

      Revenue from claims, such as claims relating to disputed change orders, is
      recognized when realization is probable and the amount can be reliably
      estimated.


      In the fiscal year ended June 28, 2005, the Company recorded a settlement
      in connection with a claim of approximately $440,000 and recognized this
      amount as "Revenue."


      (Loss) Income Per Share

      The basic net (loss) income per share is computed using weighted average
      number of common shares outstanding for the applicable period. The diluted
      net (loss) income per share is computed using the weighted average number
      of common shares plus common equivalent shares outstanding, except if the
      effect on the per share amounts of including equivalents would be
      anti-dilutive.

      Income Taxes


      Deferred income taxes result from timing differences arising between
      financial and income tax reporting due to the deductibility of certain
      expenses in different periods for financial reporting and income tax
      purposes. A valuation allowance is provided against net deferred tax
      assets unless, in managements' judgment, it is more likely than not that
      such deferred tax asset will be realized.


      The Company files a consolidated Federal income tax return. Accordingly,
      Federal income taxes are provided on the taxable income, if any, of the
      consolidated group. State franchise and income taxes are provided on a
      separate company basis, if and when taxable income, after utilizing
      available carry forward losses, exceeds certain levels.

      Stock-Based Compensation


      In December 2002, the Financial Accounting Standards Board ("FASB") issued
      Statement of Financial Accounting Standards ("SFAS") No. 148, "Accounting
      for Stock-Based Compensation-Transition and Disclosure - an amendment of
      FASB Statement No. 123 ("SFAS 148"). SFAS 148 amends SFAS No. 123,
      "Accounting for Stock-Based Compensation" ("SFAS 123"), to provide
      alternative methods of transition for a voluntary change to the fair value
      based method of accounting for stock-based employee compensation and does
      not permit the use of the original SFAS 123 prospective method of
      transition in fiscal years beginning after December 15, 2003. In addition,
      SFAS 148 amends the disclosure requirements of SFAS 123 to require
      prominent disclosures in both annual and interim financial statements
      about the method of accounting for stock-based employee compensation and
      the effect of the method used on reported results, regardless of whether,
      when, or how an entity adopts the preferable, fair value based method of
      accounting. SFAS 148 improves the prominence and clarity of the pro forma
      disclosures required by SFAS 123 by prescribing a specific tabular format
      and by requiring disclosure in the "Summary of Significant Accounting
      Policies" or its equivalent and improves the timeliness of those
      disclosures by requiring their inclusion in financial reports for interim
      periods. The Company adopted the disclosure requirements of SFAS 148 for
      the fiscal year ended July 1, 2003. The Company will continue to account
      for stock-based employee compensation under APB Opinion No. 25 and its
      related interpretations until its fiscal quarter ending December 27, 2005,
      when it will adopt SFAS 123R.

      The following table illustrates the effect on net (loss) income
      attributable to common shareholders and net (loss) income per share if the
      Company had applied the fair value recognition provisions of SFAS 123,
      "Accounting for Stock-Based Compensation," to stock-based employee
      compensation for the fiscal years ended June 28, 2005, June 29, 2004 and
      July 1, 2003 and the twenty-six weeks ended December 27, 2005:



                                      F-10
<PAGE>


<TABLE>
<CAPTION>
                                                    Twenty-Six Weeks    Fiscal Year        Fiscal Year          Fiscal Year
                                                         Ended             Ended              Ended                Ended
                                                      December 27,        June 28,           June 29,             July 1,
                                                          2005              2005               2004                 2003
                                                      ------------      -----------        -----------          -----------
<S>                                                   <C>               <C>                <C>                 <C>
Net (loss) income attributable to common
shareholders, as reported                              $1,835,720       $  (24,934)        $(3,613,334)         $  (547,004)
Stock based compensation (benefits) cost,
net of related tax effects, included in the
determination of net income as reported                       --        $  176,089         $  (348,626)         $  (593,246)
Stock-based employee compensation-cost
determined under the fair value method, net
of related tax effects                                   (112,500)        (431,781)            208,507              354,125
                                                        ---------         ---------          ---------            ---------
Pro forma net (loss) income attributable to
common shareholders                                    $1,723,220       $ (280,626)        $(3,753,453)         $  (786,125)
                                                       ==========       ==========         ===========          ===========
Net (loss) income per share:
   Basic - as reported                                       $.05             $.00               $(.05)               $(.01)
                                                             ====             ====               =====                =====
   Basic - pro forma                                         $.05             $.00               $(.05)               $(.01)
                                                             ====             ====               =====                =====

   Diluted - as reported                                     $.01             $.00               $(.05)               $(.01)
                                                             ====             ====               =====                =====
   Diluted - pro forma                                       $.01             $.00               $(.05)               $(.01)
                                                             ====             ====               =====                =====
</TABLE>

      The weighted average fair value of options granted during the fiscal years
      ended June 28, 2005, June 29, 2004 and July 1, 2003 and the twenty-six
      weeks ended December 27, 2005 was estimated at $.20, $.22, $.14 and $.15,
      respectively, on the date of the grant.

      The fair value of these options was estimated using the Black-Scholes
      option pricing model with the following weighted average assumptions:

<TABLE>
<CAPTION>
                                       Twenty-Six            Fiscal Year         Fiscal Year           Fiscal Year
                                      Weeks Ended               Ended               Ended                  Ended
                                      December 27,             June 28,            June 29,               July 1,
                                          2005                   2005                2004                   2003
                                     ---------------        --------------     ----------------       --------------
      <S>                                <C>                   <C>                     <C>                 <C>
      Risk free rate                            4.0                   3.8%                 3.3%                 3.3%
      Dividend yield                             --                    --                   --                   --
      Volatility                                151%                  162%                 149%                 133%
      Expected Option Life               5-10 years            5-10 years              5 years              5 years
</TABLE>


      Fair Value of Financial Instruments


      As of June 28, 2005, the carrying value of cash, accounts receivable,
      accounts payable and notes payable and current maturities of long-term
      debt approximated fair value because of their short maturity. Based on a
      closing market price of the Company's common stock of $.09 at June 28,
      2005, and the conversion provisions of the underlying instrument, the fair
      value of the Series A Redeemable Preferred Stock was $117,000 as of such
      date. The Company believes that an undetermined discount for lack of
      liquidity would be appropriate due to the large amount of stock that would
      be issuable upon conversion.



                                      F-11
<PAGE>

      Fiscal Year


      On April 13, 2006, the Company's Board of Directors determined to change
      the fiscal year of the Company to the twelve months ending June 30 of each
      year. The Company's fiscal year will be comprised of quarterly periods
      ending on each of September 30, December 31, March 31 and June 30.
      Previously, the Company's fiscal year was a 52-53 week fiscal year ending
      on the Tuesday nearest June 30. Each fiscal year was comprised of four
      13-week quarters, each containing two four-week months followed by one
      five-week month.


      New Accounting Pronouncements


      In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment".
      SFAS No. 123R is a revision of SFAS No. 123, "Accounting for Stock Based
      Compensation", and supersedes APB 25, "Accounting for Stock Issued to
      Employees". Among other items, SFAS 123R eliminates the use of APB 25 and
      the intrinsic value method of accounting, and requires companies to
      recognize the cost of employee services received in exchange for awards of
      equity instruments, based on the grant date fair value of those awards, in
      the financial statements. In addition, SFAS No. 123R will cause
      unrecognized expense related to options vesting after the date of initial
      adoption to be recognized as a charge to results of operations over the
      remaining vesting period. The effective date of SFAS 123R is the first
      interim or annual reporting period beginning after December 15, 2005. The
      Company is currently evaluating the impact of this new standard, but
      believes that it will not have a material effect on the Company's
      financial position, results of operations and cash flows.

      In December 2004, the FASB issued FSP FAS No. 109-1, "Application of FASB
      Statement No. 109, Accounting for Income Taxes, for the Tax Deduction
      Provided to U.S. Based Manufacturers by the American Jobs Creation Act of
      2004" ("FSP FAS No. 109-1"). This statement requires the qualified
      production activities deduction as defined in the American Jobs Creation
      Act of 2004 (the "Jobs Act") to be accounted for as a special deduction in
      accordance with SFAS No. 109, "Accounting for Income Taxes". The statement
      also requires that the special deduction should be considered in measuring
      deferred taxes when graduated tax rates are a significant factor and when
      assessing whether a valuation allowance is necessary, FSP FAS No. 109-1
      was effective upon issuance. In accordance with the Jobs Act,
      determination of the qualified production activities deduction is required
      in the Company's 2006 fiscal year. The Company believes that this
      statement will not have a material effect on the Company's financial
      position, results of operations and cash flows.

      In December 2004, the FASB issued SFAS No. 153 "Exchanges of Non-monetary
      Assets - an amendment of APB Opinion No. 2." This Statement amended APB
      Opinion No. 29 to eliminate the exception for non-monetary exchanges of
      similar productive assets and replaces it with a general exception for
      exchanges of non-monetary assets that do not have commercial substance. A
      non-monetary exchange has commercial substance if the future cash flows of
      the entity are expected to change significantly as a result of the
      exchange. The Company is currently evaluating the impact of this new
      standard, but believes that it will not have a material effect on the
      Company's financial position, results of operations and cash flows.

      In November 2004, the FASB issued SFAS No. 151 "Inventory Costs". This
      Statement amends the guidance in APB No. 43, Chapter 4, "Inventory
      Pricing", to clarify the accounting for abnormal amounts of idle facility
      expense, freight, handling costs, and wasted material (spoilage). In
      addition, this Statement requires that allocation of fixed production
      overhead to the costs of conversion be based on the normal capacity of the
      production facilities. The provisions of this Statement will be effective
      for the Company beginning with its 2006 fiscal year. The Company is
      currently evaluating the impact of this new standard, but believes that it
      will not have a material effect on the Company's financial position,
      results of operations and cash flows.


2.    RESTATEMENTS FOR THE FISCAL QUARTER ENDED SEPTEMBER 27, 2005 AND THE
      FISCAL YEAR ENDED JUNE 28, 2005


      The September 27, 2005 interim financial statements have been restated to
      account for additional deferred financing costs and additional liabilities
      forgiven as part of the Company's transactions with Spotless, as follows:

      1.    The value of the shares of common stock sold by Spotless to the
            Company's President and Chief Executive Officer has been increased
            by $86,597, which resulted in an increase of such amount in deferred
            financing costs from the amount previously reported.
      2.    An additional $39,391, net of tax effect, which was owed to Spotless
            and which was forgiven by the terms of the transaction, has been
            recorded as a reduction of accrued expenses and an increase in
            additional paid in capital. 1.



                                      F-12
<PAGE>


      3.    The value of the options and the warrant and the beneficial
            conversion feature of the Laurus Note have been recalculated,
            resulting in a reduction of $16,774 to the carrying value of the
            Laurus Note under "secured convertible note payable."


      The result of these restatements was to increase the net loss for the
period by $81,660, as follows:

                                      As Originally Reported        Restated
                                      ----------------------        --------
Net Loss                              $(1,259,281)                  $(1,340,941)
Basic net (loss) per common share     $(0.04)                       $(0.04)

      The financial statements for the fiscal year ended June 28, 2005 have been
      restated to reclassify costs and liabilities relating to variable equity
      based compensation and the recovery of claims not billed in prior years,
      as follows:

      1.    The 2005 fiscal year calculation for the liability of the Company
            and deemed compensation expense under a redeemable common stock
            agreement with its president and chief executive officer has been
            recalculated, resulting in a reduction of $70,625 from $146,714 to
            $76,089.


      2.    The 2005 year calculation of compensation expense relating to
            options granted to the Company's president and chief executive
            officer has been has been recalculated, resulting in an increase of
            $100,000, which has been credited to additional paid in capital.



      3.    A claim for $440,000 of additional billing to a customer for work
            done in prior years was settled in the 2005 fiscal year. This amount
            had been classified as a reduction of selling, general and
            administrative expenses and has been reclassified as a component of
            "Revenue."


      The result of the restatements was to increase expense related to variable
      treatment of officer options and redeemable common stock by $29,375 and
      reduce net income by the same amount to $53,066 in the 2005 fiscal year as
      follows:

                                      As Originally Reported        Restated
                                      ----------------------        --------
Net income                            $82,441                       $53,066
Basic net income per common share     $0.00                         $0.00

3.    SALES OF CONTROLLING INTEREST AND REFINANCINGS AND SECURED CONVERTIBLE
      NOTE PAYABLE


      On October 26, 1999, the Board of Directors of the Company created a class
      of 50,000 shares of preferred stock, par value $.01 per share, designated
      as the Series B Convertible Preferred Stock (the "Series B Preferred").
      Each share of Series B Preferred had a liquidation preference of $79.04,
      was initially convertible into 1,000 shares of Common Stock, par value
      $.0001 per share, of the Company (the "Common Stock") (subject to
      adjustment) and was entitled to cast 1,000 votes, together with the Common
      Stock and the Series A Convertible Preferred Stock, par value $.01 per
      share (the "Series A Preferred"), on any matters subject to a vote of the
      holders of the Common Stock.

      On October 29, 1999, the Company entered into a subscription agreement
      with Spotless Plastics (USA), Inc. ("Spotless"), a Delaware corporation,
      pursuant to which the Company issued to Windswept Acquisition Corporation
      ("Acquisition Corp."), a Delaware corporation and a wholly-owned
      subsidiary of Spotless, 22,284,683 shares (the "Acquisition Corp. Common
      Shares") of common stock, par value $.0001 per share ("Common Stock"), and
      9,346 shares of Series B Convertible Preferred Stock, par value $.01 per
      share ("Series B Preferred"), for an aggregate subscription price of
      $2,500,000 or $.07904 per share of Common Stock and $79.04 per share of
      Series B Preferred.

      In addition, the Company and its wholly-owned subsidiaries, Trade-Winds
      Environmental Restoration, Inc. and North Atlantic Laboratories, Inc., as
      joint and several obligors (collectively, the "Obligors"), borrowed
      $2,000,000 from Spotless. This borrowing was evidenced by a secured
      convertible promissory note, dated October 29, 1999 (the "2,000,000
      Note"). Outstanding principal under the 2,000,000 Note bore interest at a
      rate equal to the London Interbank Offering Rate ("LIBOR") plus an
      additional 1% and was payable monthly. The 2,000,000 Note had a maturity
      date of October 29, 2004, unless Spotless elected to defer repayment until
      October 29, 2005. The outstanding principal amount and all accrued and
      unpaid interest under the 2,000,000 Note was convertible, at the option of
      Spotless, in whole or in part, at any time, into shares of Common Stock at
      the rate of one share of Common Stock for every $.07904 of principal and
      accrued interest so converted (or, in the event that certain approvals had
      not been obtained at the time of conversion, into shares of Series B
      Preferred at the rate of one share of Series B Preferred for every $79.04
      of principal and accrued interest so converted). In connection with the
      2,000,000 Note, each of the Obligors granted to Spotless a security
      interest in all of their respective assets pursuant to a Security
      Agreement dated October 29, 1999. The transaction with Spotless described
      above is hereafter referred to as the "Spotless Transaction".



                                      F-13
<PAGE>


      On November 16, 2001, Acquisition Corp. exercised its right to convert all
      9,346 shares of the Company's Series B preferred stock. As a result of
      such conversion and in accordance with the terms of the Company's Series B
      preferred stock, Acquisition Corp. was issued 10,495,174 shares of the
      Company's common stock. Such amount included 9,346,000 shares as a result
      of the 1,000:1 conversion ratio, and an additional 1,149,174 shares that
      were calculated based upon a formula that took into consideration the
      value of the Series B preferred stock on the date of issuance and the
      number days elapsed from the date of the issuance of the Series B
      preferred stock through the conversion date. The issuance of the
      additional shares of common stock was recorded as a dividend of $390,719.
      The dividend represented the difference between the fair market value of
      the Company's common stock issued on November 16, 2001 and the fair market
      value of the Company's common stock at the date the Series B preferred
      stock was issued.


      On November 16, 2001, Spotless exercised its right to convert all
      principal and accrued and unpaid interest on the $2,000,000 Note. As a
      result of the conversion of the $2,000,000 Note and accrued and unpaid
      interest, the Company issued 28,555,250 shares of its common stock to
      Acquisition Corp. in full satisfaction of the $2,000,000 Note and the
      related accrued and unpaid interest.


      After giving effect to these conversions, until June 30, 2005, Spotless
      beneficially owned 61,335,107 shares, or approximately 79%, of the
      Company's issued and outstanding shares of common stock.

      On February 5, 2004, the Company entered into an account receivable
      finance agreement with Spotless pursuant to which Spotless purchased
      certain of the Company's accounts receivable without recourse for cash,
      subject to certain terms and conditions. Pursuant to the account
      receivable finance agreement, Spotless had the ability, but not the
      obligation, to purchase one or more of the Company's accounts receivable,
      that were approved by Spotless, in its sole discretion, in respect of the
      particular debtor, invoices and related credit. Pursuant to the agreement,
      Spotless could purchase accounts receivable at a 15% discount, as adjusted
      by Spotless in its sole discretion, to invoice prices, which the Company
      believed was at least as favorable to it as would have been available from
      an unaffiliated third-party, based upon a good-faith estimate of an
      applicable discount negotiated at arm's length. In this regard, all of the
      accounts receivable purchased by Spotless were at a 15% discount except
      one with an invoice price of $1,028,194, which was purchased at a 31%
      discount on April 29, 2004, given certain factors, including anticipated
      slower collections associated with the particular account debtor. In
      addition, the Company paid monthly discount fees on any purchased accounts
      receivable based upon invoice prices. Spotless purchased accounts
      receivable in the aggregate face amount of $4,991,251 from the Company for
      an aggregate purchase price of $4,080,042. The $911,209 difference between
      the aggregate face amount and the aggregate purchase price, representing
      the purchase discounts and the monthly discount fees incurred in the
      transactions with Spotless were recorded as a component of "Interest
      Expense" in the Company's consolidated statements of operations. The
      aggregate amount of the purchase discounts and monthly discount fees under
      this Agreement were $917,169 for the fiscal year ending June 29, 2004 and
      $255,585 for the fiscal year ending June 28, 2005. No accounts receivable
      were sold thereunder in the Company's twenty-six weeks ended December 27,
      2005. Each sale of an account receivable was treated as a sale thereof,
      and not as a secured borrowing, pursuant to SFAS 140. Each sale reduced
      the Company's accounts receivable on its balance sheet by the face amount
      thereof and increased cash by the net amount received by the Company
      (after deducting the purchase discount applied thereto from the face
      amount thereof). The amount of cash received by the Company in connection
      with sales of its accounts receivable in its fiscal years ended June 28,
      2005 and June 29, 2004 equaled $826,465 and $3,253,585, respectively. The
      proceeds of these sales of accounts receivable, exclusive of discounts,
      were recorded as cash provided by operating activities in the Company's
      statement of cash flows, under the categories "Changes in Operating Assets
      and Liabilities" under the line item "Accounts Receivable" and under "Net
      Cash Provided By (Used In) Operating Activities." All discounts under the
      Accounts Receivable Finance Agreement were recorded within interest
      expense in the Company's consolidated statements of operations. Further,
      the Company manages the $189,197 in accounts receivable that it sold to
      Spotless which remain outstanding while remaining obligated to remit to
      Spotless any proceeds received, and bears any related litigation costs.
      The Company did not recognize any service income relating to its
      management of the accounts receivable sold to Spotless because it deemed
      any amounts thereof to be immaterial.



                                      F-14
<PAGE>


      In addition, on June 30, 2005, the Company repurchased from Spotless an
      account receivable in the face amount of $189,197 which it had previously
      sold to Spotless pursuant to the Accounts Receivable Finance Agreement, in
      a non-cash transaction. In connection therewith, the Company is obligated
      to pay to Spotless $189,197 on or before June 30, 2006. This amount is
      included as an asset in the Company's accounts receivable on its balance
      sheet at September 27, 2005, and is also reflected thereon as a liability
      entitled "liability for repurchased account receivable."


      On June 30, 2005, the Company entered into a financing transaction with
      Laurus Master Fund, Ltd. pursuant to the terms of a securities purchase
      agreement, as amended, and related documents. Under the terms of the
      financing transaction, the Company issued to Laurus:


      o     pursuant to the terms of a secured convertible term note, dated June
            30, 2005, a three-year note in the principal amount of $5,000,000
            (as amended and restated, the "Note"). The Note bears interest at
            the prime rate as published in the Wall St. Journal plus 2% (but not
            to less than 7.25%), decreasing by 2% (but not to less than 0%) for
            every 25% increase in the Market Price (as defined therein) of our
            common stock above the fixed conversion price of $.09 following the
            effective date(s) of the registration statement or registration
            statements covering the shares of our common stock underlying the
            Note and the warrant issued to Laurus;


      o     pursuant to the terms of an Option Agreement, dated June 30, 2005, a
            twenty-year option to purchase 30,395,179 shares of our common stock
            at a purchase price of $.0001 per share; and

      o     pursuant to the terms of a Common Stock Purchase Warrant, dated June
            30, 2005 a seven-year common stock purchase warrant to purchase
            13,750,000 shares of our common stock at a purchase price of $0.10
            per share.


      The Option Agreement and the Common Stock Purchase Warrant were valued at
      $2,200,927 based on the fair value method and this amount was allocated to
      additional paid-in capital. The shares issuable upon conversion of the
      face value of the Note resulted in a beneficial conversion feature of
      $2,200,927, which amount was also allocated to additional paid-in capital.
      The resulting carrying value of the Note was recorded on the Company's
      balance sheet, with an effective interest rate of 72.667%.


      After consummating the transaction on June 30, 2005, Laurus subsequently
      provided additional financing to the Company on the same terms and
      conditions as follows:


      o     On July 13, 2005, Laurus loaned the Company an additional $350,000,
            and the Company amended and restated the Note, to be in the
            principal amount of $5,350,000. The additional shares issuable upon
            conversion of the increased face value of this amended and restated
            Note had a beneficial conversion feature valued at $38,889, which
            was allocated to additional paid-in capital. The remaining $311,111
            was added to the carrying value of the Note on the Company's balance
            sheet.
      o     On September 9, 2005, Laurus loaned the Company an additional
            $650,000, and the Company further amended and restated the Note to
            be in the principal amount of $6,000,000. In accordance with
            Emerging Issues Task Force (EITF) 98-5, the beneficial conversion
            value recognized is limited to the amount of the Note proceeds.
            Accordingly, the $650,000 increased face value of this amended and
            restated Note had a beneficial conversion value of $650,000,
            resulting in a carrying value of $0, although the $.41 two-day
            average stock price of the Company's common stock would have
            resulted in a beneficial conversion value initially greater than the
            increased value of the Note.
      o     On October 6, 2005, Laurus loaned the Company an additional
            $1,350,000, and the Company further amended and restated the Note to
            be in the principal amount of $7,350,000 on substantially the same
            terms as the original note. In accordance with EITF 98-5, the
            beneficial conversion value recognized is limited to the amount of
            the Note proceeds. Accordingly, the $1,350,000 increased face value
            of this amended and restated Note had a beneficial conversion value
            of $1,350,000, resulting in a carrying value of $0, although the
            $.21 two-day average stock price of the Company's common stock would
            have resulted in a beneficial conversion value initially greater
            than the increased value of the Note. The Note, in the principal
            amount of $7,350,000 as of December 1, 2005, is the only note issued
            to Laurus by the Company that is currently outstanding. (unaudited)



                                      F-15
<PAGE>


      Set forth below is a summary of the material terms of the agreements
      governing the Laurus financing transaction.

      The funds borrowed under the Laurus financing are governed by the
      Securities Purchase Agreement, as amended, the Note, a security agreement,
      a stock pledge agreement, a registration rights agreement, as amended, and
      a subsidiary guaranty. Under the terms of the Securities Purchase
      Agreement, as amended, Laurus had a right to provide the Company with
      $1,300,000 of financing in addition to the original $5,000,000 that it
      provided to the Company on the same terms as the original Note. In
      connection with the additional borrowings described above, Laurus has
      provided all of such additional financing.

      PRINCIPAL BORROWING TERMS AND PREPAYMENT. Under the terms of the Note,
      which matures on June 30, 2008, the Company is required to make monthly
      repayments of principal, on the first of each month, to Laurus in the
      amount of $229,687.50, commencing as of January 1, 2006. Principal
      repayments were due to commence starting November 1, 2005, but in November
      2005 Laurus agreed to defer the initial repayment date until January 1,
      2006. The principal monthly payments due November 1, 2005 and December 1,
      2005 in the aggregate amount of $495,375 have been deferred until June 30,
      2008. Interest is payable monthly and started to accrue on August 1, 2005.
      All required principal and interest payments as of the date of this
      prospectus have been made. The Company is required to pay such amounts in
      shares of the Company's common stock should all of the following
      conditions be satisfied:

            o     the average closing price of its common stock for the five (5)
                  trading days immediately prior to the first of each month is
                  equal to or greater than $.10;
            o     the amount of the payment then due is not an amount greater
                  than thirty percent (30%) of the aggregate dollar trading
                  volume of the common stock for the period of twenty-two (22)
                  trading days immediately prior to the first of each month;
            o     the common stock underlying the Note has been registered under
                  an effective registration statement under the Securities Act
                  of 1933 or is otherwise covered by an exemption from
                  registration for resale pursuant to Rule 144 of the Securities
                  Act of 1933;
            o     Laurus' aggregate beneficial ownership of the Company's shares
                  of common stock does not and would not by virtue thereof
                  exceed 4.99%; and
            o     the Company is not in default of the Note.

      If any of these conditions are not satisfied, the Company will be required
      to make payments in cash in an amount equal to 103% of the principal
      amount, plus accrued interest, then due. Should the Company be required to
      pay cash, this may have an adverse effect on the Company's cash flow and
      liquidity.

      The Note may be redeemed by the Company in cash by paying the holder of
      the Note 120% of the principal amount, plus accrued interest. As discussed
      below, the holder of the Note may convert all or a portion of the Note,
      together with related interest and fees, into fully paid shares of the
      Company's common stock at any time. The number of shares to be issued
      shall equal the total amount of the Note to be converted, divided by an
      initial fixed conversion price of $.09.


      If the Company issues shares of common stock to a third-party for
      consideration below the fixed conversion price of $.09 per share or issue
      derivative securities convertible into or exercisable for shares of common
      stock at prices below the fixed conversion price of $.09 per share, then
      the fixed conversion price of the Note will be reduced to such lower
      issuance or exercise price. In addition, the conversion price of the Note
      may be adjusted pursuant to customary anti-dilution provisions, such as if
      the Company pays a stock dividend, reclassifies its capital stock or
      subdivides or combines its outstanding shares of common stock into a
      greater or lesser number of shares.


      The Company may receive proceeds from the exercise of the option and the
      warrant described above if Laurus elects to pay the exercise price in cash
      rather than executing a cashless exercise. Laurus may effect a cashless
      exercise of the warrant if the market price of the Company's common stock
      exceeds the per share exercise price, and it may effect a cashless
      exercise of the option if (a) the market price of the Company's common
      stock exceeds the per share exercise price and (b) (1) the Company has not
      registered the shares underlying the option pursuant to an effective
      registration statement or (2) an event of default under the Note has
      occurred and is continuing. Upon a cashless exercise in lieu of paying the
      exercise price in cash, Laurus would receive shares of the Company's
      common stock with a value equal to the difference between the market price
      per share of the Company's common stock at the time of exercise and the
      exercise price per share set forth in the option and the warrant,
      multiplied by the number of shares with respect to which the option or
      warrant is exercised. There would be no proceeds payable to the Company
      upon a cashless exercise of the option or the warrant. There can be no
      assurances that Laurus will exercise the option and warrant or that it
      will elect to pay the exercise price in cash in lieu of a cashless
      exercise. On September 12, 2005, the Company issued 1,500,000 shares of
      its common stock to Laurus in connection with its partial exercise of the
      Option at an exercise price of $.0001 per share for an aggregate exercise
      price of $150.



                                      F-16
<PAGE>


      Laurus has contractually agreed to restrict its ability to convert the
      Note and/or exercise its warrant and option if such conversion and/or
      exercise would cause its beneficial ownership of shares of the Company's
      common stock to exceed 4.99% of the outstanding shares of the Company's
      common stock. The 4.99% limitation is null and void without notice to the
      Company upon the occurrence and during the continuance of an event of
      default or upon 75 days' prior written notice to the Company. However,
      because Laurus' options are exercisable for nominal consideration, the
      Company has accounted for the issuance of 184,405 shares of common stock
      pursuant to a deemed exercise of these options up to the 4.99% limitation.
      In connection with this, there was no net effect on stockholders' equity
      in relation to the deemed issuance. As of the date of this prospectus,
      Laurus directly beneficially owns 1,500,000 shares of the Company's common
      stock, or approximately 4.46% of its outstanding common stock. As a
      result, Laurus could only acquire up to approximately 184,405 additional
      shares, which would constitute a conversion of approximately $16,596 of
      the principal amount of the Note, while remaining in compliance with the
      4.99% limitation. Because Laurus is irrevocably prohibited from waiving
      this 4.99% limitation, except as described above, even if the other
      conditions allowing the Company to pay in shares of common stock have been
      satisfied, if Laurus cannot or does not reduce its ownership of the
      Company's common stock at a time when such reduction would be necessary to
      allow the Company to make a payment in shares of common stock, the Company
      would be required to pay Laurus in cash. This may have an adverse effect
      on the Company's cash flow and liquidity.

      EVENTS OF DEFAULT AND COLLATERAL. In the event the Company defaults on the
      Note, the Company will be required to pay 120% of the outstanding
      principal amount of the Note, plus accrued but unpaid interest. Upon the
      occurrence of an event of default, the interest rate charged with respect
      to the Note will be increased by 2% per month until the default is cured.
      The Note is secured by a lien on substantially all of the Company's
      assets, including the stock of its subsidiaries, all cash, cash
      equivalents, accounts, accounts receivable, deposit accounts, inventory,
      equipment, goods, fixtures, documents, instruments, including promissory
      notes, contract rights and general intangibles, including payment
      intangibles. The Master Security Agreement, dated June 30, 2005, between
      the Company and Laurus contains no specific financial covenants. The
      Master Security Agreement and the Note, as amended, define the
      circumstances under which they can be declared in default and subject to
      termination, including:

            o     a failure to pay interest and principal payments under the
                  Note when due on the first day of the month or prior to the
                  expiration of the three-business day grace period, unless
                  agreed otherwise;
            o     a breach by the Company of any material covenant or term or
                  condition of the Note or in any agreement made in connection
                  therewith and, to the extent subject to cure, the continuation
                  of such breach without remedy for a period of fifteen or
                  thirty days, as the case may be, after any occurrence thereof;
            o     a breach by the Company of any material representation or
                  warranty made in the Note or in any agreement made in
                  connection therewith;
            o     any form of bankruptcy or insolvency proceeding instituted by
                  or against the Company, which is not vacated within 30 days;
            o     any attachment or lien in excess of $75,000 in the aggregate
                  made upon the Company's assets or a judgment rendered against
                  the Company's property involving a liability of more than
                  $75,000 which shall remain unvacated, unbonded or unstayed for
                  a period of 30 days;
            o     a failure to timely deliver shares of common stock when due
                  upon conversion of the Note or a failure to timely deliver a
                  replacement note;
            o     an SEC stop trade order or principal market trading suspension
                  of the Company's common stock is in effect for 5 consecutive
                  trading days or 5 days during a period of 10 consecutive
                  trading days, if the Company is not able to cure such trading
                  suspension within 30 days of receiving notice or are not able
                  to list the Company's common stock on another principal market
                  within 60 days of such notice;
            o     a failure to have authorized and reserved shares of the
                  Company's common stock for issuance on or before November 1,
                  2006 sufficient to provide for the full conversion of the
                  Note, and full exercise of the option and warrant issued by
                  the Company to Laurus;
            o     an indictment or threatened indictment of the Company or any
                  of the Company's executive officers under any criminal statute
                  or commencement or threatened commencement of criminal or
                  civil proceedings against the Company or any of the Company's
                  executive officers pursuant to which statutory or proceeding
                  penalties or remedies available include forfeiture of any of
                  the Company's property; and
            o     the departure of Michael O'Reilly from our senior management.



                                      F-17
<PAGE>


      ESCROW. The Company also entered into a Funds Escrow Agreement, dated June
      30, 2005, with Laurus and Loeb & Loeb LLP, as escrow agent, pursuant to
      the requirements of the Security Agreement. Under the terms of the Funds
      Escrow Agreement, the funds from Laurus were placed in escrow pending
      receipt by the escrow agent of fully executed transaction documents and
      disbursement instructions, upon receipt of which such funds were released
      to the Company. No funds remain in escrow.

      REGISTRATION RIGHTS. Pursuant to the terms of a Registration Rights
      Agreement, dated June 30, 2005 and amended on March 20, 2006, the Company
      was obligated to file a registration statement with the Securities and
      Exchange Commission registering the resale of shares of the Company's
      common stock issuable upon a conversion of the Note and upon the exercise
      of the option and warrant issued to Laurus up to the number of shares
      included in the registration statement of which this prospectus is a part
      and (2) after appropriate corporate action is taken, to increase our
      authorized shares and after our audited financial statements for the 2006
      fiscal year are final, to file a new or post-effective registration
      statement(s) to cover all the shares issuable upon conversion of the Note
      and upon the exercise of the option and warrant issued to Laurus. If the
      registration statement of which this prospectus forms a part is not
      declared effective by May 10, 2006 by the Securities and Exchange
      Commission, then the Company will be required to pay to Laurus the
      following amounts:

            o     1.5% of the principal outstanding on the Note, for the first
                  thirty days, prorated for partial periods, which equals $3,216
                  per day based upon the $6,431,249 principal amount of the Note
                  outstanding on March 15, 2006; and
            o     2.0% of the principal outstanding on the Note, for each thirty
                  day period, prorated for partial periods, which equals $4,288
                  per day.

      In addition, penalties at the same percentage rates apply in the event
      that the second registration statement is not declared effective by
      December 30, 2006 by the Securities and Exchange Commission.


      The following represents the scheduled repayments of the principal of the
      Laurus loans along with the accretion of the discounts, as of December 27,
      2005:

      Year Ended         Principal       Accreted Discounts         Total
      ----------         ---------       ------------------     ------------
         2006           $ 1,239,236          $   659,839        $  1,899,075
         2007             2,276,683            1,342,447           3,619,130
         2008             2,484,081            3,110,669           5,594,750
                        -----------          -----------        -------------
                        $ 6,000,000          $ 5,112,955        $ 11,112,955
                        ===========          ===========        ============

      As consideration for investment banking services in connection with the
      securities purchase agreement, as amended, the Company paid $262,900 or
      3.58% of the gross proceeds to Laurus Capital Management, L.L.C., which is
      an affiliate of Laurus Master Fund, Ltd., to which the Company paid a fee
      of $1,750,000 in connection with the securities purchase agreement, as
      amended.

      The Company also issued a subordinated secured promissory note to Spotless
      in the principal amount of $500,000, bearing interest at LIBOR plus 1%.
      Pursuant to the terms of this note, amortized payments of $50,000 per
      month become due and payable beginning July 1, 2007 until all amounts due
      thereunder are fully paid, so long as the Company is not in default of the
      note it issued to Laurus. The note the Company issued to Spotless,
      together with the $2,750,000 payment to Spotless referred to above, fully
      satisfied all of its financial obligations to Spotless.


      The benefit from the cancellation of the remaining Spotless obligations
      was $1,230,228 and has been credited to stockholders' equity, net of a tax
      benefit of $731,640. In addition, the Company incurred $2,262,852 of
      transaction expenses, including the $1,750,000 fee paid to Laurus and
      professional fees relating to these transactions.

      In connection with the transaction with Laurus, the Company, along with
      Spotless, terminated their account receivable finance agreement, dated
      February 5, 2004, as amended, except with respect to the Company's
      obligation to continue to collect and remit payment of outstanding
      accounts receivable that Spotless had purchased under the agreement. As of
      June 30, 2005, Spotless was due payment for purchased accounts receivable
      in the amount of $189,197. As part of the transactions, Spotless assigned
      to the Company an account receivable with a balance of $189,197, and the
      Company agreed to pay this amount to Spotless no later than June 30, 2006.
      This amount is included on the Company's balance sheet as (a) an asset,
      part of the Company's $8,210,155 accounts receivable at September 27, 2005
      and (b) a liability, as an accounts receivable payable.



                                      F-18
<PAGE>


      On June 30, 2005, Spotless sold 15,469,964 shares of the Company's common
      stock to Michael O'Reilly, the Company's president and chief executive
      officer, in consideration for a non-recourse ten-year balloon promissory
      note in the principal amount of $120,500 issued to Spotless, bearing
      interest at LIBOR plus 1%. This resulted in the Company recording a charge
      of $1,195,708, which amount has been added to the deferred financing costs
      relating to the Laurus transaction. Spotless also surrendered its
      remaining 45,865,143 shares to the Company for cancellation, which
      resulted in a credit of $4,587 to additional paid-in capital.

      Mr. O'Reilly issued a personal guaranty to Laurus for $3,250,000 of the
      Note.

      In addition, the Company issued an option exercisable at $.09 per share to
      Mr. O'Reilly to purchase 15,469,964 shares of its common stock in
      connection with his:

            o     agreement to a new employment agreement, which (a) does not
                  include a put right that existed in his former employment
                  agreement requiring the Company, under certain circumstances,
                  to buy his shares of its common stock and shares underlying
                  his vested options, and (b) calls for a base salary of
                  $285,000 per year and a bonus equal to 2.5% of our pre-tax
                  income, as defined in the employment agreement; and
            o     agreement to personally guarantee the Company's bonding
                  obligations,

      each of which was a condition precedent to the consummation of the
      Company's financing transaction with Laurus. This option was accounted for
      in accordance with APB No. 25 based on the intrinsic value method because
      it was agreed to be issued in connection with Mr. O'Reilly's employment.
      No portion of this option was allocated to Mr. O'Reilly's $3.25 million
      personal guaranty to Laurus.

      After giving effect to the above-mentioned financing transactions,
      Spotless ceased beneficially owning any of the Company's issued and
      outstanding shares of common stock.

      On June 30, 2005, agreements among the Company, Spotless and Mr. O'Reilly
      pursuant to which Mr. O'Reilly had the right to sell to the Company, and
      in certain circumstances to Spotless, all shares of the Company's common
      stock held by him upon the occurrence of certain events, were terminated.
      The $76,089 carrying value as of June 28, 2005 of that right to sell was
      credited to the net cost of recapitalization and finance charges. See
      Note 9.

      On June 30, 2005, the Company issued ten-year options exercisable at $.09
      per share to its series A convertible preferred stockholders, including
      Dr. Kevin J. Phillips, one of its directors, to purchase an aggregate of
      500,000 shares of its common stock. The Company valued these options using
      the Black-Scholes valuation method and recorded deferred financing costs
      of $44,650 as a credit to additional paid-in capital in connection
      therewith. The Company also agreed to pay, out of legally available funds,
      accrued and unpaid dividends in an aggregate of (1) $35,000 to the series
      A convertible preferred stockholders, on each of June 30, 2005, September
      30, 2005 and December 30, 2005 and (2) $50,000 to the series A convertible
      preferred stockholders on February 28, 2007. In the aggregate, this was in
      consideration for their agreement to:

            o     propose and vote in favor of an amendment to its certificate
                  of incorporation in order to accommodate the full issuance of
                  the shares of its common stock underlying the Note and the
                  option and warrant the Company issued to Laurus;
            o     postpone their right, upon six months' notice after February
                  2007, to require the Company to redeem their series A
                  convertible preferred stock, until the earlier of six months
                  after the repayment of the Note or June 30, 2010;
            o     defer receipt of dividend payments on the series A convertible
                  preferred stock due after June 30, 2005, until the earlier of
                  six months after the repayment of the Note or June 30, 2010;
                  and
            o     forbear from appointing a second director until the earlier of
                  (a) June 30, 2008 or (b) the repayment in full of the secured
                  convertible term note that the Company has issued to Laurus.

      On June 30, 2005, Michael O'Reilly, the Company's president and chief
      executive officer and a director, and the series A convertible preferred
      stock stockholders, one of whom is also a director, agreed to propose and
      vote in favor of an amendment to its Certificate of Incorporation in order
      to accommodate the full issuance of the shares of its common stock
      underlying the Note and the option and warrant the Company issued to
      Laurus at the Company's next annual shareholders meeting to be held by
      February 2006. In addition, Mr. O'Reilly, the series A convertible
      preferred stock stockholders and Anthony P. Towell, a director, entered
      into lock-up agreements with Laurus that prohibit dispositions of their
      shares of our common stock and any and all related derivative securities
      until the earlier of (a) the repayment in full of the Note or (b) June 30,
      2010. Additionally, Mr. O'Reilly agreed to guarantee (a) all of the
      Company's bonding obligations and (b) up to $3,250,000 of the Note.



                                      F-19
<PAGE>


As a result of these transactions, the Company has recorded deferred financing
costs as follows:

             ITEM                                         AMOUNT
-------------------------------                -------------------------
Transactional, insurance costs                                $2,314,172
  and professional fees
Deemed cost to the Company                                     1,195,708
  of the 15,469,964 shares of
  common stock sold by Spotless
  to the Company's president and
  CEO
Options granted to preferred                                      44,650
                                                              ----------
stockholders for forbearance of
mandatory redemption and other
rights
Balance                                                       $3,554,530
                                                              ----------
Amortization of deferred                                         587,690
  financing cost for the twenty-six
  weeks ended
  December 27, 2005
Total deferred financing costs                                $2,966,840
                                                              ----------


4.    LIQUIDITY AND BUSINESS RISKS

      Historically, the Company has financed its operations primarily through
      issuance of debt and equity securities, through short-term borrowings from
      its former majority shareholder, and through cash generated from
      operations. The Company expects to generate sufficient cash flow from
      operations to support its working capital needs and to adequately fund its
      current operations for at least the next twelve months. However, any
      further difficulty collecting its accounts receivable or further
      significant growth could adversely affect its liquidity. In the event that
      the Company does not generate sufficient positive cash flow from
      operations, or if the Company experiences changes in its plans or other
      events that adversely affect its operations or cash flow, the Company may
      need to seek additional financing in addition to the financing provided by
      Laurus. Laurus is under no obligation to provide any funding to the
      Company. Currently, the Company has no credit facility for additional
      borrowing.


      On June 30, 2005, the Company issued to Laurus Master Fund, Ltd. a
      three-year secured convertible term note in the principal amount of
      $5,000,000. Subsequently, Laurus loaned the Company an additional
      $2,350,000, and it amended and restated the note accordingly. As of
      December 27, 2005, the principal amount of the Note outstanding equaled
      $7,350,000. On November 10, 2005, Laurus agreed to defer the principal
      monthly payments due in November and December 2005 in the aggregate amount
      of $495,375 until June 30, 2008, the maturity date of the Note.


      Laurus holds a senior security interest in its and its subsidiaries assets
      collateralizing the Note, including a pledge of the stock of its
      subsidiaries. In addition, Spotless holds a subordinated security interest
      collateralizing its $500,000 note issued to Spotless, which bears interest
      at a rate of LIBOR plus 1% per annum and is required to be repaid at a
      rate of $50,000 per month commencing July 1, 2007. The existence of these
      security interests may impair its ability to raise additional debt
      capital.

      The Note may be redeemed by the Company in cash by paying the holder of
      the Note 120% of the principal amount, plus accrued interest. As discussed
      below, the holder of the Note may convert all or a portion of the Note,
      together with related interest and fees, into fully paid shares of its
      common stock at any time. The number of shares to be issued shall equal
      the total amount of the Note to be converted, divided by an initial fixed
      conversion price of $.09.


      If the Company issues shares of common stock to a third-party for
      consideration below the fixed conversion price of $.09 per share or issue
      derivative securities convertible into or exercisable for shares of common
      stock at prices below the fixed conversion price of $.09 per share, then
      the fixed conversion price of the Note will be reduced to such lower
      issuance or exercise price. In addition, the conversion price of the Note
      may be adjusted pursuant to customary anti-dilution provisions, such as if
      the Company pays a stock dividend, reclassify its capital stock or
      subdivide or combine its outstanding shares of common stock into a greater
      or lesser number of shares.



                                      F-20
<PAGE>


      The Company may receive proceeds from the exercise of the option and the
      warrant described above if Laurus elects to pay the exercise price in cash
      rather than executing a cashless exercise. Laurus may effect a cashless
      exercise of the warrant if the market price of its common stock exceeds
      the per share exercise price, and it may effect a cashless exercise of the
      option if (a) the market price of its common stock exceeds the per share
      exercise price and (b) (1) the Company has not registered the shares
      underlying the option pursuant to an effective registration statement or
      (2) an event of default under the Note has occurred and is continuing.
      Upon a cashless exercise, in lieu of paying the exercise price in cash,
      Laurus would receive shares of its common stock with a value equal to the
      difference between the market price per share of its common stock at the
      time of exercise and the exercise price per share set forth in the option
      and the warrant, multiplied by the number of shares with respect to which
      the option or warrant is exercised. There would be no proceeds payable to
      the Company upon a cashless exercise of the option or the warrant. There
      can be no assurances that Laurus will exercise the option and warrant or
      that it will elect to pay the exercise price in cash in lieu of a cashless
      exercise. On September 12, 2005, the Company issued 1,500,000 shares of
      its common stock to Laurus in connection with its partial exercise of the
      Option at an exercise price of $.0001 per share for an aggregate exercise
      price of $150.

      Laurus has contractually agreed to restrict its ability to convert the
      Note and/or exercise its warrant and option if such conversion and/or
      exercise would cause its beneficial ownership of shares of its common
      stock to exceed 4.99% of the outstanding shares of its common stock. The
      4.99% limitation is null and void without notice to the Company upon the
      occurrence and during the continuance of an event of default or upon 75
      days' prior written notice to us. As of the date of this prospectus,
      Laurus directly beneficially owns 1,500,000 shares of its common stock, or
      approximately 4.46% of its outstanding common stock. As a result, Laurus
      could only acquire up to approximately 184,405 additional shares, which
      would constitute a conversion of approximately $16,596 of the principal
      amount of the Note, while remaining in compliance with the 4.99%
      limitation. Because Laurus is irrevocably prohibited from waiving this
      4.99% limitation, except as described above, even if the other conditions
      allowing the Company to pay in shares of common stock have been satisfied,
      if Laurus cannot or does not reduce its ownership of its common stock at a
      time when such reduction would be necessary to allow the Company to make a
      payment in shares of common stock, the Company would be required to pay
      Laurus in cash. This may have an adverse effect on its cash flow and
      liquidity.

      In the event the Company defaults on the Note, it will be required to pay
      120% of the outstanding principal amount of the Note, plus accrued but
      unpaid interest. Upon the occurrence of an event of default, the interest
      rate charged will be increased by 2% per month until the default is cured.
      The Note is secured by a lien on substantially all of its assets,
      including the stock of its subsidiaries, all cash, cash equivalents,
      accounts, accounts receivable, deposit accounts, inventory, equipment,
      goods, fixtures, documents, instruments, including promissory notes,
      contract rights and general intangibles, including payment intangibles.
      The Master Security Agreement, dated June 30, 2005, between the Company
      and Laurus contains no specific financial covenants. The Master Security
      Agreement and the Note, as amended, define the circumstances under which
      they can be declared in default and subject to termination, including:

            o     a failure to pay interest and principal payments under the
                  Note when due on the first day of the month or prior to the
                  expiration of the three-business day grace period, unless
                  agreed otherwise;
            o     a breach by the Company of any material covenant or term or
                  condition of the Note or in any agreement made in connection
                  therewith and, to the extent subject to cure, the continuation
                  of such breach without remedy for a period of fifteen or
                  thirty days, as the case may be;
            o     a breach by the Company of any material representation or
                  warranty made in the Note or in any agreement made in
                  connection therewith;
            o     any form of bankruptcy or insolvency proceeding instituted by
                  or against us, which is not vacated within 30 days;
            o     any attachment or lien in excess of $75,000 in the aggregate
                  made upon its assets or a judgment rendered against its
                  property involving a liability of more than $75,000 which
                  shall remain unvacated, unbonded or unstayed for a period of
                  30 days;
            o     a failure to timely deliver shares of common stock when due
                  upon conversion of the Note or a failure to timely deliver a
                  replacement note;



                                      F-21
<PAGE>


            o     an SEC stop trade order or principal market trading suspension
                  of its common stock is in effect for 5 consecutive trading
                  days or 5 days during a period of 10 consecutive trading days,
                  if the Company is not able to cure such trading suspension
                  within 30 days of receiving notice or are not able to list its
                  common stock on another principal market within 60 days of
                  such notice;
            o     failure to have authorized and reserved shares of its common
                  stock for issuance on or before November 1, 2006 sufficient to
                  provide for the full conversion of the Note, and full exercise
                  of the option and warrant issued by the Company to Laurus; and
            o     an indictment or threatened indictment of the Company or any
                  of its executive officers under any criminal statute or
                  commencement or threatened commencement of criminal or civil
                  proceedings against the Company or any of its executive
                  officers pursuant to which statutory or proceeding penalties
                  or remedies available include forfeiture of any of its
                  property.


      The Company also entered into a Funds Escrow Agreement, dated June 30,
      2005, with Laurus and Loeb & Loeb LLP, as escrow agent, pursuant to the
      requirements of the Security Agreement. Under the terms of the Funds
      Escrow Agreement, the funds from Laurus were placed in escrow pending
      receipt by the escrow agent of fully executed transaction documents and
      disbursement instructions, upon receipt of which such funds were released
      to us. No funds remain in escrow.


      Pursuant to the terms of a Registration Rights Agreement, dated June 30,
      2005 and amended on March 20, 2006, we are obligated (1) to file a
      registration statement with the Securities and Exchange Commission
      registering the resale of shares of our common stock issuable upon a
      conversion of the Note and upon the exercise of the option and warrant
      issued to Laurus up to the number of shares included in the registration
      statement of which this prospectus is a part and (2) after appropriate
      corporate action is taken, to increase our authorized shares and after our
      audited financial statements for the 2006 fiscal year are final, to file a
      new or post-effective registration statement(s) to cover all the shares
      issuable upon conversion of the Note and upon the exercise of the option
      and warrant issued to Laurus. If the registration statement of which this
      prospectus forms a part is not declared effective by May 10, 2006 by the
      Securities and Exchange Commission, then we will be required to pay to
      Laurus the following amounts:

            o     1.5% of the principal outstanding on the Note, for the first
                  thirty days, prorated for partial periods, which equals $3,216
                  per day based upon the $6,431,249 principal amount of the Note
                  outstanding on March 15, 2006; and
            o     2.0% of the principal outstanding on the Note, for each thirty
                  day period, prorated for partial periods, which equals $4,288
                  per day.

      In addition, penalties at the same percentage rates apply in the event
      that the second registration statement is not declared effective by
      December 30, 2006 by the Securities and Exchange Commission.


5.    PROPERTY AND EQUIPMENT

      Property and equipment consists of the following:

                                                        June 28,      June 29,
                                                          2005          2004
                                                       ----------    ----------
      Machinery and equipment                          $5,487,422    $5,386,673
      Office furniture and equipment                      533,572       509,052
      Vehicles                                          2,068,023     2,029,084
      Leasehold improvements                              540,359       540,359
                                                       ----------    ----------
                                                        8,629,376     8,465,168
      Less: accumulated depreciation and
        amortization                                    6,386,731     5,707,705
                                                       ----------    ----------
                                                       $2,242,645    $2,757,463
                                                       ==========    ==========


                                      F-22
<PAGE>


6.    ACCRUED EXPENSES


      Accrued expenses consist of the following:

                                              June 28,           June 29,
                                                2005               2004
                                            ----------         ----------
      Professional Fees                     $  339,330         $  167,970
      Bonuses                                  228,713            144,443
      Insurance                                387,491            194,050
      Dividends & Interest                     251,668            175,840
      Other                                    404,054            419,398
                                            ----------         ----------
                                            $1,611,256         $1,101,701
                                            ==========         ==========

7.    LONG-TERM DEBT

      Long-term debt (other than the Note and the note issued to Spotless on
      June 30, 2005) consists of various capitalized leases and auto loans
      relating to the purchase of vehicles and equipment with interest rates
      ranging from 0% to 12.25%. The capitalized leases are secured by the
      underlying vehicles and equipment with a net carrying value of $425,406 at
      June 28, 2005.

      Repayments of long-term debt as of June 28, 2005 are as follows:


                    Fiscal Years Ending
                    -------------------
                       June 30, 2006                        $   169,612
                       June 30, 2007                            130,273
                       June 30, 2008                             54,267
                       June 30, 2009                              9,014
                       June 30, 2010                              3,846
                                                            -----------
                                                            $   367,012
                                                            ===========


8.    CONVERTIBLE NOTES

      On October 29, 1999, in connection with the sale of controlling interest
      of the Company, the Company and all of its subsidiaries borrowed
      $2,000,000 from Spotless pursuant to a secured convertible promissory note
      that bore interest at a rate equal to LIBOR plus 1 percent. The Spotless
      Note had a maturity date of October 29, 2004, and was convertible into
      either 25,304,352 shares of Common Stock or 25,305 shares of Series B
      Preferred. On November 16, 2001, Spotless exercised its right to convert
      all principal and accrued and unpaid interest on the $2,000,000 Note. As a
      result of the conversion of the $2,000,000 Note and accrued and unpaid
      interest, the Company issued 28,555,250 shares of its common stock in full
      satisfaction of the $2,000,000 Note and the related accrued and unpaid
      interest.

      In fiscal 1997, a director of the Company loaned the Company $100,000 and
      was issued a 12% convertible promissory note providing for, at the option
      of the note holder, the conversion of the principal and accrued and unpaid
      interest at the rate of $.25 per share of Common Stock. On December 31,
      1997, the conversion price was adjusted to $0.15 per share of Common
      Stock. In fiscal 2003, the Company repaid such note and related interest
      in full.

9.    REDEEMABLE CONVERTIBLE PREFERRED STOCK


      In connection with the acquisition of NAL in February 1997, the Company
      issued 1,300,000 shares of redeemable convertible series A preferred stock
      ("RCPS") having a liquidation value of $1.00 per share plus accumulated
      dividends. The dividend rate is the greater of (i) 6%, or (ii) the
      inflation rate (as defined) plus 2.5%. Each share of RCPS has one vote per
      share. After February 1998, the RCPS holders can convert their preferred
      shares to common at a ratio of one share of preferred to one share of
      common stock, subject to adjustment. The RCPS is currently redeemable by
      the Company. The RCPS is subject to redemption, in whole or in part, at
      the option of the Company, for a redemption price per share equal to the
      higher of (a) $1.00, plus any accrued and unpaid dividends, or (b) the
      market price of one share of the Company's Common Stock (the "Redemption
      Price"). The RCPS is also subject to redemption, in whole or in part, at
      the option of the holders thereof, upon six months' notice at any time
      after February 2007, for a redemption price per share equal to the
      Redemption Price.



                                      F-23
<PAGE>


      In March 1998, the holders of the RCPS exercised their right to elect one
      member to the Board and vote together with common stockholders on the
      election of additional Directors and all other Company matters.

      Pursuant to the terms of the RCPS, the Company is prohibited, without
      first obtaining the approval of at least a majority of the holders of the
      RCPS, from (i) altering or changing the rights, preferences, privileges or
      restrictions of shares of RCPS, (ii) increasing the authorized number of
      shares or adjusting the par value of RCPS, (iii) issuing any shares of
      capital stock ranking senior as to dividends or rights upon liquidation or
      dissolution to the RCPS or (iv) issuing any common stock at a price below
      the conversion price, as defined, to any officer, director or 10%
      shareholder. The liquidation value of the RCPS was $1,300,000 at June 28,
      2005, June 29, 2004 and July 1, 2003, respectively. The accumulated
      dividends payable to the holders of the Series A preferred stock as of
      September 27, 2005, June 28, 2005, June 29, 2004 and July 1, 2003 was
      $101,500, $39,000, $117,000 and $0, respectively.

      On June 30, 2005, the Company (a) issued ten-year options exercisable at
      $.09 per share to the holders of the Company's RCPS, including Dr. Kevin
      J. Phillips, one of its directors, to purchase an aggregate of 500,000
      shares of the Company's common stock and (b) agreed to pay, out of legally
      available funds, accrued and unpaid dividends in an aggregate of (1)
      $35,000 to the holders of the RCPS, on each of June 30, 2005, September
      30, 2005 and December 30, 2005 and (2) $50,000 the holders of the RCPS on
      February 28, 2007 in consideration for their agreement to (1) postpone
      their right to require the redemption of their RCPS upon six months'
      notice after February 2007 until the earlier of (a) six months after the
      repayment of the note the Company issued to Laurus or (b) June 30, 2010;
      and (2) defer receipt of dividend payments on the RCPS due on and after
      June 30, 2005 until the earlier of (a) six months after the repayment of
      the note the Company issued to Laurus or (b) June 30, 2010. In connection
      with this arrangement, the accumulated dividends payable to the holders of
      the Series A Preferred Stock was $101,500 as of September 27, 2005.


10.   REDEEMABLE COMMON STOCK


      On October 29, 1999, the Company entered into an Amended and Restated
      Employment Agreement (the "Employment Agreement") with Michael O'Reilly,
      the Company's President and Chief Executive Officer. The Employment
      Agreement was for an initial term of five years, which was automatically
      extended for an additional year, called for a base salary of $285,000 per
      year and a bonus equal to 2.5 percent of the Company's pre-tax income (as
      that term is defined in the Employment Agreement). Upon the termination of
      Mr. O'Reilly's employment by the Company (other than termination for
      cause, death or disability or his resignation without good reason, as
      defined in the Employment Agreement), Mr. O'Reilly was to be entitled to
      sell, in a single transaction:


            o     an aggregate of 177,333 shares of common stock held by him as
                  of October 29, 1999; and
            o     an aggregate of 8,836,309 shares of common stock underlying
                  options to purchase shares of common stock of the Company held
                  by him, to the extent vested and exercisable,


      (collectively the "O'Reilly Shares"), back to the Company (or pursuant to
      a letter agreement, dated October 29, 1999, between Michael O'Reilly and
      Spotless (the "Letter Agreement"), to Spotless to the extent that the
      Company's capital would be impaired by such a purchase) at a mutually
      agreeable price; provided, however, that Mr. O'Reilly was required to
      surrender, for no additional consideration, his option to purchase
      2,811,595 shares and the ability to require the Company or Spotless to
      purchase such shares if the option had not vested as of the date of any
      repurchase of the O'Reilly Shares. In addition, pursuant to the Letter
      Agreement, Michael O'Reilly had the right, upon receipt of notice that
      Spotless and any of its affiliates has acquired a beneficial ownership of
      more than 75 percent of the outstanding shares of common stock (on a fully
      diluted basis), to require Spotless to purchase, in a single transaction,
      the O'Reilly Shares. The purchase price applicable to any such purchase
      was to be at a price mutually agreed upon. If the parties were not able to
      agree upon a purchase price, then the purchase price was to be determined
      based upon a procedure using the appraised value of the Company at the
      time such obligation to purchase arises. Mr. O'Reilly's options to
      purchase 3,350,000 of the O'Reilly Shares vested immediately. Mr.
      O'Reilly's option to purchase 2,674,714 of the O'Reilly Shares vested as
      follows:


            o     891,572 shares on October 29, 2000;
            o     891,571 shares on October 29, 2001; and
            o     891,571 shares on October 29, 2002.


      The option to purchase the 2,811,595 shares of the O'Reilly Shares vested
      on November 16, 2001 upon the conversion by Spotless of the $2,000,000
      Note. The O'Reilly Shares included an aggregate of 0, 7,663,642,
      5,663,642, 7,663,642 and 8,813,642 shares of common stock , consisting of
      177,333 shares held and shares of common stock underlying fully vested
      options, as of December 27, 2005, June 28, 2005, September 28, 2004, June
      29, 2004 and July 1, 2003, respectively.



                                      F-24
<PAGE>


      The Company recorded compensation expense (benefit) of $76,089, ($348,626)
      and ($593,246) relating to the O'Reilly Shares in the fiscal years ended
      June 28, 2005, June 29, 2004 and July 1, 2003, respectively.

      On June 30, 2005, Spotless sold 15,469,964 shares of the Company's common
      stock to Michael O'Reilly, the Company's president and chief executive
      officer, in consideration for a non-recourse ten-year balloon promissory
      note in the principal amount of $120,500 issued to Spotless, bearing
      interest at LIBOR plus 1%. Spotless surrendered its remaining 45,865,143
      shares to the Company for cancellation. In addition, the Company issued a
      ten year option exercisable at $.09 per share to Mr. O'Reilly to purchase
      15,469,964 shares of its common stock.

      On June 30, 2005, agreements between the Company, Spotless and Mr.
      O'Reilly pursuant to which Mr. O'Reilly had the right to sell to the
      Company, and in certain circumstances to Spotless, all shares of the
      Company's common stock held by him upon the occurrence of certain events,
      were terminated.


11.   INCOME TAXES


      The (benefit) provision for income taxes for the fiscal years ended June
      28, 2005, June 29, 2004 and July 1, 2003 consists of the following:


                              Fiscal Year        Fiscal Year        Fiscal Year
                                 Ended             Ended               Ended
                                June 28,          June 29,             July 1,
                                  2005              2004                2003
                              -----------        -----------        -----------
Current:
   Federal                    $    25,067        $  (648,645)       $(1,080,186)
   State                           12,260             13,700              6,400
                              -----------        -----------        -----------
                                   37,327           (634,945)        (1,073,786)
                              -----------        -----------        -----------
Deferred:
   Federal                             --                 --                 --
   State                               --                 --                 --
                              -----------        -----------        -----------
                              $    37,327        $  (634,945)       $(1,073,786)
                              ===========        ===========        ===========


      The benefit for income taxes for the fiscal years ended June 29, 2004 and
      July 1, 2003 represents the federal tax refund resulting from the carry
      back of the net loss incurred in each fiscal year net of state tax
      expense. The benefit for income taxes for the fiscal year ended June 28,
      2005 represents the effect of carryforward losses from prior years. During
      its fiscal year ended June 28, 2005, the Company received a refund of
      $641,795, which was reflected on its statement of cash flows in the line
      item "Income tax refund". The refund equaled the current year tax benefit
      (net of state taxes) as the only tax benefit provided were the refunds
      because the deferred taxes were subject to a 100% tax valuation. At June
      28, 2005, the Company has net operating loss carryforwards for tax
      purposes of approximately $1,981,000 that expire as follows: $68,115 per
      year for 14 years from June 2006 through June 2019 and $1,027,390 in June
      2024. As a result of a change in the Company's ownership on June 30, 2005,
      net operating loss carryforwards are subject to significant annual usage
      limitations which have not yet been determined.



                                      F-25
<PAGE>


      The Company's effective tax rate for the fiscal years ended June 28, 2005,
      June 29, 2004 and July 1, 2003 differs from the federal statutory rate as
      a result of the following:

                                           Fiscal Year  Fiscal Year  Fiscal Year
                                              Ended        Ended       Ended
                                             June 28,     June 29,     July 1,
                                               2005         2004        2003
                                                (%)         (%)          (%)
                                             --------     --------     -------
Statutory United States federal tax rate        34.0      (34.0)       (34.0)
State income taxes, net of federal benefit      19.1         .2           .2
Utilization of federal and state net
operating loss carryforwards                     0.0        0.0          0.0
Fines and penalties                             13.5        0.2          1.0
Entertainment                                    3.9        0.1          1.5
Other                                             --         --          1.7
Valuation allowance                            (39.3)      18.3        (40.0)
                                              ------     ------       ------
                                                31.2      (15.2)       (69.6)
                                              ======     ======       ======

      Deferred tax assets consisted of the following components at June 28,
      2005, June 29, 2004 and July 1, 2003:


<TABLE>
<CAPTION>


                                                             2005                  2004                   2003
                                                         -----------            -----------            -----------
<S>                                                      <C>                    <C>                    <C>
      Net operating loss and credit carryforwards        $ 1,331,000            $ 1,712,000            $   614,000
      Reserves                                               697,000                281,000                128,000
      Deferred compensation                                   62,000                     --                139,000
      Depreciation                                          (302,000)              (281,000)              (217,000)
      Other, net                                              70,000                 64,000                 60,000
                                                         -----------            -----------            -----------
                                                           1,858,000              1,776,000                724,000
      Less: Valuation allowance                            1,858,000              1,776,000                724,000
                                                         -----------            -----------            -----------
      Net deferred tax asset                             $        --            $        --            $        --
                                                         ===========            ===========            ===========
</TABLE>

      At June 28, 2005, June 29, 2004 and July 1, 2003, the Company provided a
      full valuation allowance against the gross deferred tax asset. Such
      valuation allowance was recorded because management does not believe that
      the utilization of the tax benefits from operating losses and other
      temporary differences are "more likely than not" to be realized.


12.   COMMITMENTS

      Future minimum lease payments under noncancellable operating leases for
      office space as of June 28, 2005 are as follows:


                        Fiscal Years Ending,
                 -----------------------------------
                 June 30, 2006                                    $458,132
                 June 30, 2007                                     379,407
                                                                  --------
                 Total future minimum lease payments              $837,539
                                                                  ========


      Total rental expense was $366,204, $434,790 and $357,510, for the fiscal
      years ended June 28, 2005, June 29, 2004 and July 1, 2003, respectively.

13.   STOCK ISSUANCES

      During the fiscal years ended June 28, 2005, June 29, 2004 and July 1,
      2003, the Company did not issue any shares of common or preferred stock.

      On September 12, 2005, the Company issued 1,500,000 shares of its common
      stock to Laurus, pursuant to its partial exercise of an option the Company
      issued to Laurus on June 30, 2005 to purchase such shares at an exercise
      price of $.0001 per share, or $150 in the aggregate with respect to the
      partial exercise.


                                      F-26
<PAGE>


      On June 30, 2005, the Company sold to Laurus a secured convertible note in
      the principal amount of $5,000,000, pursuant to a Securities Purchase
      Agreement, as amended, and related agreements. In addition, the Company
      also issued to Laurus, as part of the financing transaction and for no
      separate or additional consideration, (a) a twenty-year option to purchase
      30,395,179 shares of the Company's stock at a purchase price of $.0001 per
      share and (b) a seven-year common stock purchase warrant to purchase
      13,750,000 shares of the Company's common stock at a purchase price of
      $0.10 per share. On July 13, 2005, Laurus loaned the Company an additional
      $350,000 on the same terms and conditions as the original secured
      convertible term note and amended and restated the note to be in the
      principal amount of $5,350,000. On September 9, 2005, Laurus loaned the
      Company an additional $650,000 on the same terms and conditions as the
      original financing transaction and further amended and restated the note
      to be in the principal amount of $6,000,000. On October 6, 2005, Laurus
      loaned the Company an additional $1,350,000 on the same terms and
      conditions as the original secured convertible term note and further
      amended and restated the note to be in the principal amount of $7,350,000.
      The replacement note is repayable monthly at the rate of $229,787.50 plus
      accrued but unpaid interest, as of January 1, 2006, after giving effect to
      a two-month amortization deferral granted by Laurus in November 2005.

      In addition, the Company issued a subordinated secured promissory note to
      Spotless in the principal amount of $500,000. Spotless surrendered its
      remaining 45,865,143 shares to the Company for cancellation on June 30,
      2005. Additionally, the Company issued (i) an option exercisable at $.09
      per share to Mr. O'Reilly to purchase 15,469,964 shares of its common
      stock and (ii) ten-year options exercisable at $.09 per share to the
      Company's series A convertible preferred stock stockholders, including Dr.
      Kevin J. Phillips, one of the Company's directors, to purchase an
      aggregate of 500,000 shares of its common stock in consideration for their
      agreement to:

            o     propose and vote in favor of an amendment to its certificate
                  of incorporation in order to accommodate the full issuance of
                  the shares of its common stock underlying the Note and the
                  option and warrant the Company issued to Laurus;
            o     postpone their right, upon six months' notice after February
                  2007, to require the Company to redeem their series A
                  convertible preferred stock, until the earlier of six months
                  after the repayment of the Note or June 30, 2010;
            o     defer receipt of dividend payments on the series A convertible
                  preferred stock due after June 30, 2005, until the earlier of
                  six months after the repayment of the Note or June 30, 2010;
                  and
            o     forbear from appointing a second director until the earlier of
                  (a) June 30, 2008 or (b) the repayment in full of the secured
                  convertible term note that the Company has issued to Laurus.

      On May 24, 2005, the Company's board of directors granted a non-plan
      ten-year option exercisable at $.06 per share to Anthony P. Towell to
      purchase 250,000 shares of common stock in connection with his service on
      its then-existing special committee. Mr. Towell would only be required to
      pay cash to the Company, if at all, in connection with exercising the
      option prior to expiration. This option was accounted for in accordance
      with APB No. 25 based on the intrinsic value method as described in Note 1
      under "Stock-based Compensation."

      On May 24, 2005, the Company's board of directors granted a non-plan
      five-year option exercisable at $.01 per share and $0.1875 per share to
      Michael O'Reilly to purchase 2,000,000 and 250,000 shares of common stock,
      respectively, in an effort to continue incentivizing him in his capacity
      as the Company's President and Chief Executive Officer. Mr. O'Reilly would
      be required to pay cash to the Company, if at all, in connection with
      exercising the option prior to expiration. The Company recorded these
      options based on the intrinsic value method and recognized an expense of
      $100,000 in connection therewith pursuant to APB No. 25.

      On December 6, 2004, the Company's board of directors granted a ten-year
      option exercisable at $.035 per share to each of Anthony P. Towell and Dr.
      Kevin J. Phillips to purchase 100,000 shares of common stock under the
      Company's 2001 Equity Incentive Plan in connection with their service as
      the Company's directors. Mr. Towell and Dr. Phillips would only be
      required to pay cash to the Company, if at all, in connection with
      exercising their options prior to expiration. These options were accounted
      for in accordance with APB No. 25 based on the intrinsic value method as
      described in Note 1 under "Stock-based Compensation."


14.   STOCK OPTIONS


      As of December 27, 2005, 2,850,000 shares of common stock were reserved
      for issuance upon the exercise of options then outstanding and 5,150,000
      shares were available for future grant under the Company's three stock
      option plans, under which options may be granted to key employees,
      directors, and other persons rendering services to the Company. As of
      December 27, 2005, in addition to shares reserved for issuance (a) under
      the Company's equity incentive plans, (b) upon exercise of options and
      warrants issued to Laurus and (c) upon exercise of options granted to the
      series A preferred stockholders, 23,456,273 shares of common stock were
      reserved for issuance upon the exercise of options and warrants then
      outstanding to its chief executive officer and president and one of its
      directors that were not covered under the Company's three stock option
      plans. Options which are designated as "incentive stock options" under the
      option plans may be granted with an exercise price not less than the fair
      market value of the underlying shares at the date of the grant and are
      subject to certain quantity and other limitations specified in Section 422
      of the Internal Revenue Code. Options which are not intended to qualify as
      incentive stock options may be granted at any price, but not less than the
      par value of the underlying shares, and without restriction as to amount.
      The options and the underlying shares are subject to adjustment in
      accordance with the terms of the plans in the event of stock dividends,
      recapitalizations and similar transactions. The right to exercise the
      options generally vests in increments over periods of up to five years
      from the date of grant or the date of commencement of the grantee's
      employment with the Company, up to a maximum term of ten years for all
      options granted.



                                      F-27
<PAGE>


      The summary of the status of the Company's outstanding stock options for
      the twenty-six weeks ended December 27, 2005 and the fiscal years ended
      June 28, 2005, June 29, 2004 and July 1, 2003 is presented below:

<TABLE>
<CAPTION>
                                                  Employees       Weighted                Weighted                Weighted
                                                     and           Average     Non-        Average      Non-       Average
                                                  Directors       Exercise   Employee     Exercise    Employee    Exercise
                                                   Options          Price     Options       Price     Warrants      Price
                                                 -----------      -------  -----------    ---------  -----------   --------
<S>                                               <C>             <C>        <C>          <C>          <C>          <C>
Outstanding at July 2, 2002                       12,941,677      $   .13       48,100    $     .21           --         --
Granted                                              300,000      $   .16           --           --           --         --
Forfeited                                         (1,420,059)     $   .21      (18,100)   $     .01           --         --
Exercised                                                 --           --           --           --           --         --
                                                 -----------               -----------
Outstanding at July 1, 2003                       11,821,618      $   .12       30,000    $     .41           --         --
Granted                                              650,000      $   .22           --           --           --         --
Forfeited                                         (2,175,000)     $   .26      (30,000)   $     .41           --         --
Exercised                                                 --           --           --           --           --         --
                                                 -----------               -----------
Outstanding at June 29, 2004                      10,296,618      $   .14           --           --           --         --
Granted                                            2,700,000      $   .03           --           --           --         --
Forfeited                                         (2,160,309)     $   .03           --           --           --         --
Exercised                                                 --           --           --           --           --         --
                                                 -----------      -------  -----------    ---------  -----------   --------
Outstanding at June 28, 2005                      10,836,309      $   .09           --           --           --         --
Granted                                           15,969,964          .09   30,395,179        .0001   13,750,000        .10
Forfeited                                                 --           --           --           --           --         --
Exercised                                                 --           --   (1,500,000)       .0001           --         --
                                                 -----------      -------  -----------    ---------  -----------   --------
Outstanding at December 27, 2005
(unaudited)                                       26,806,273      $   .11   28,895,179        .0001   13,750,000        .10
                                                 ===========      =======  ===========    =========  ===========   ========
Options exercisable at July 1, 2003               11,821,618      $   .12                 $     .41           --         --
                                                 ===========      =======  ===========    =========  ===========   ========
Options exercisable at June 29, 2004              10,296,618      $   .14           --    $      --           --         --
                                                 ===========      =======  ===========    =========  ===========   ========
Options exercisable at June 28, 2005              10,836,309      $   .09           --    $      --           --         --
                                                 ===========      =======  ===========    =========  ===========   ========
Options exercisable at December 27, 2005
(unaudited)                                       26,806,273      $   .11   28,895,179        .0001   13,750,000        .10
                                                 ===========      =======  ===========    =========  ===========   ========
</TABLE>

      The above table does not include the effect of 184,405 shares underlying
      an option issued to Laurus on June 30, 2005, which are deemed exercised
      because of nominal consideration at December 27, 2005 for financial
      statement presentation purposes.



                                      F-28
<PAGE>



                                  Number       Weighted          Number
                               Outstanding      Average       Exercisable
                                    at         Remaining           at
                   Exercise    December 27,   Contractual     December 27,
                     Price         2005       Life (years)        2005
                   --------    -----------    ------------     ----------
                     $.0001     28,895,179       19.50         28,895,179
                       $.01      2,000,000        4.42          2,000,000
                      $.035        200,000        8.92            200,000
                       $.06        250,000        9.42            250,000
                      $.079      5,486,309        3.75          5,486,309
                       $.08        200,000        2.92            200,000

                       $.16        600,000        1.21            600,000
                       $.17        400,000        0.58            400,000
                     $.1875        250,000        4.46            250,000
                       $.19        650,000        0.67            650,000
                       $.22        200,000        2.00            200,000
                       $.23        350,000        0.75            350,000
                       $.34        250,000        2.67            250,000
                       $.09     15,969,964        4.47         15,969,964
                                ----------                     ----------
                                55,701,452                     55,701,452
                                ==========                     ==========


15.   FINANCING AND RELATED PARTY TRANSACTIONS


      As of June 28, 2005, the Company owed Spotless Plastics (USA) Inc.
      $5,000,000 of principal and $127,730 of interest under the Spotless Loan,
      in the original principal amount of $1,700,000. The Spotless note was
      collateralized by all of the Company's assets. During the fiscal year
      ended June 29, 2004, the Company borrowed $3,300,000 from Spotless for
      working capital requirements and to fund losses.

      As of June 28, 2005, Spotless was due payment from third parties for
      accounts receivable in the amount of $189,197 purchased under its account
      receivable agreement dated February 5, 2004, with the Company. As of such
      date, Spotless had purchased from the Company an aggregate amount of its
      accounts receivable equaling $4,991,252 at an aggregate purchase discount
      of $911,202, for an aggregate purchase price of $4,080,050. Pursuant to
      the account receivable finance agreement, Spotless was able to purchase
      certain of the Company's accounts receivable without recourse for cash,
      subject to certain terms and conditions. Pursuant to an administrative
      services arrangement, Spotless also provided the Company with certain
      administrative services including the services of its former vice
      president of finance and administration. During the Company's fiscal years
      2005, 2004 and 2003, the Company was charged by Spotless an administrative
      fee of $84,138, $131,556 and $101,256, respectively, of which $84,138
      remained unpaid and included in accrued expenses as of June 28, 2005. On
      June 30, 2005, Spotless agreed to forgive the $84,138 in administrative
      fees that was outstanding.

      The Company also issued a subordinated secured promissory note to Spotless
      in the principal amount of $500,000, bearing interest at LIBOR plus 1%.
      Pursuant to the terms of the note the Company issued to Spotless,
      amortized payments of $50,000 per month become due and payable beginning
      July 1, 2007 until all amounts due thereunder are fully paid, so long as
      the Company is not in default on the Laurus Note. The note the Company
      issued to Spotless, together with the $2,750,000 payment to Spotless
      referred to above, fully satisfied all of the Company's financial
      obligations to Spotless. In connection with this financing transaction,
      the Company, along with Spotless, terminated the account receivable
      finance agreement between them, except with respect to the Company's
      obligation to continue to collect and remit payment of accounts receivable
      that Spotless purchased under the agreement. As part of the transactions,
      Spotless assigned to the Company an account receivable with a balance of
      $189,197 and to the Company agreed to pay this amount to Spotless no later
      than June 30, 2006.



                                      F-29
<PAGE>


      On June 30, 2005, Messrs. Peter Wilson, John Bongiorno, Ronald Evans and
      Brian Blythe, who were nominees of Spotless, resigned as directors of the
      Company, and Mr. Charles L. Kelly, Jr., also a Spotless nominee, resigned
      as the Company's chief financial officer and as a director. In addition,
      Mr. Joseph Murphy, an employee of Spotless, resigned as the Company's vice
      president of finance and administration and secretary. Pursuant to a
      transition services agreement, Spotless agreed to provide the services of
      Mr. Murphy to the Company, including in relation to advice in the areas
      of:


            o     administration;
            o     accounting, finance and risk management; and
            o     assisting in the preparation and review of its reports filed
                  with the SEC

      during a six-month transitional process for a fee of $5,000 per month and
      a payment of $25,000 to Mr. Murphy at the end of the transitional period.


      On June 30, 2005, Spotless, through one of its wholly owned subsidiaries,
      sold 15,469,964 shares of common stock of the Company to Michael O'Reilly,
      the Company's president and chief executive officer, in consideration for
      a non-recourse ten-year balloon promissory note in the principal amount of
      $120,500 issued by Mr. O'Reilly to Spotless, bearing interest at LIBOR
      plus 1%. Spotless also surrendered its remaining 45,865,143 shares to the
      Company for cancellation.

      Mr. O'Reilly issued a personal guaranty to Laurus for $3,250,000 of the
      Note.

      In addition, the Company issued a ten year option exercisable at $.09 per
      share to Mr. O'Reilly to purchase 15,469,964 shares of common stock in
      connection with his:

            o     agreement to a new employment agreement, which (a) does not
                  include a put right that existed in his old employment
                  agreement requiring the Company, under certain circumstances,
                  to buy his shares of common stock and shares underlying his
                  options, and (b) calls for a base salary of $285,000 per year
                  and a bonus equal to 2.5% of its pre-tax income, as defined in
                  the employment agreement; and
            o     agreement to personally guarantee the Company's bonding
                  obligations, each of which was a condition precedent to the
                  consummation of its financing transaction with Laurus.

      The Company recorded the option pursuant to APB No. 25 because it was
      agreed to be issued in connection with Mr. O'Reilly's employment. No
      portion of this option was allocated to Mr. O'Reilly's guaranty to Laurus.

      On May 24, 2005, the Company issued non-plan five-year options exercisable
      at $.01 per share and $0.1875 per share to Michael O'Reilly to purchase
      2,000,000 and 250,000 shares of common stock, respectively, in an effort
      to continue incentivizing him in his capacity as the Company's president
      and chief executive officer. The Company recorded these options based on
      the intrinsic value method and recognized an expense of $100,000 in
      connection therewith pursuant to APB No. 25.

      On June 30, 2005, the Company (a) issued ten-year options exercisable at
      $.09 per share to its series A convertible stock preferred stockholders,
      including Dr. Kevin J. Phillips, one of its directors, to purchase an
      aggregate of 500,000 shares of its common stock and (b) agreed to pay, out
      of legally available funds, accrued and unpaid dividends in an aggregate
      of (1) $35,000 to the series A convertible preferred stockholders, on each
      June 30, 2005, September 30, 2005 and December 30, 2005 and (2) $50,000 to
      the series A convertible preferred stockholders on February 28, 2007 in
      consideration for their agreement to:

            o     propose and vote in favor of an amendment to its certificate
                  of incorporation in order to accommodate the full issuance of
                  the shares of its common stock underlying the Note and the
                  option and warrant the Company issued to Laurus;
            o     postpone their right, upon six months' notice after February
                  2007, to require the Company to redeem their series A
                  convertible preferred stock, until the earlier of six months
                  after the repayment of the Note or June 30, 2010;
            o     defer receipt of dividend payments on the series A convertible
                  preferred stock due after June 30, 2005, until the earlier of
                  six months after the repayment of the Note or June 30, 2010;
                  and
            o     forbear from appointing a second director until the earlier of
                  (a) June 30, 2008 or (b) the repayment in full of the secured
                  convertible term note that the Company has issued to Laurus.



                                      F-30
<PAGE>


      On June 30, 2005, Michael O'Reilly and the series A convertible preferred
      stock stockholders, including Dr. Kevin J. Phillips, who is a director,
      agreed, pursuant to a forbearance and deferral agreement to which the
      Company is a party, to propose and vote in favor of an amendment to the
      Company's Certificate of Incorporation in order to accommodate the full
      issuance of the shares of its common stock underlying the Note, the option
      and warrant the Company issued to Laurus at the Company's next annual
      shareholders meeting to be held by March 1, 2006. In addition, Mr.
      O'Reilly, the series A convertible preferred stock stockholders and
      Anthony P. Towell, a director, entered into lock-up agreements with Laurus
      that prohibit a disposition of their shares of common stock and any and
      all related derivative securities until the earlier of (a) the repayment
      in full of the note the Company issued to Laurus or (b) June 30, 2010. On
      December 6, 2004, the Company issued a ten-year option exercisable at
      $.035 per share to Dr. Kevin J. Phillips to purchase 100,000 shares under
      its 2001 Equity Incentive Plan in connection with his service as a
      director of the Company.

      During its fiscal year ended July 1, 2003, the Company repaid a $100,000
      convertible note held by Anthony P. Towell, a director. This note was
      issued in 1997, provided for interest at a rate equal to 12% per annum and
      was convertible at a rate of $.15 per share of common stock. On May 24,
      2005, the Company issued a non-plan ten-year option exercisable at $.06
      per share to Anthony P. Towell to purchase 250,000 shares in connection
      with his service on the then-existing special committee of the Company. On
      December 6, 2004, the Company issued a ten-year option exercisable at
      $.035 per share to Anthony P. Towell under its 2001 Equity Incentive Plan
      in connection with his service as a director of the Company.

      On December 16, 1998, the Company entered into an operating lease
      agreement with Michael O'Reilly, its president and chief executive
      officer. Pursuant to the terms of the arrangement that expired in December
      2002 and has continued on a month-to-month basis thereafter, the Company
      leases a forty-two foot custom Topaz boat for monthly rental payments of
      $5,000. The leasing arrangement was necessitated by a marine assistance
      contract that expired on December 31, 2000, although the arrangement
      continues to provide the Company with its largest floating vessel capable
      of handling specialty equipment and facilitating an offshore support crew.
      The Company is responsible for all taxes, insurance and repairs pertaining
      to this boat.

      The Company had an oral understanding with Michael O'Reilly pursuant to
      which the Company paid the full carrying costs, including mortgage
      payments, of a condominium that he beneficially owned and that the Company
      used for marketing and employee-relations purposes. The full carrying
      costs during the Company's fiscal years ended June 28, 2005 and June 29,
      2004 were approximately $7,150 and $17,800, respectively. In connection
      with this arrangement, we also provided mitigation and restoration goods
      and services to Mr. O'Reilly in fiscal 2004 in connection with severe
      water damage caused by a failed water heater at the condominium that he
      beneficially owned and allowed us to use for marketing and
      employee-relations purposes. In connection with these services, the
      Company's entire direct costs and allocated overhead, without a markup,
      equaled approximately $56,780.

      In February 1997, the Company issued 650,000 shares of redeemable
      convertible preferred stock to Dr. Kevin J. Phillips, a director and an
      additional 650,000 shares of redeemable convertible preferred stock to a
      business partner of Dr. Phillips. During fiscal years 2005, 2004 and 2003,
      the Company paid an aggregate of $0, $39,000 and $78,000, respectively, of
      dividends and accrued interest to the redeemable convertible preferred
      stockholders.


      The Company paid a former director $24,385 and $46,926 for consulting
      services in its fiscal years 2004 and 2003, respectively.

      The Company believes that all transactions that the Company has entered
      into with its officers, directors and principal stockholders, except its
      provision of mitigation and restoration services to its president and
      chief executive officer as discussed above, have been on terms no less
      favorable to the Company than those available from unrelated third
      parties.

      See Notes 3 and 4.

16.   CONTINGENCIES

      Litigation and Disputes


      On August 5, 2004, the Company commenced an action in the New York State
      Supreme Court, County of New York, seeking to collect approximately
      $1,255,000 of contractual billings relating to a large roof tar removal
      project. On October 15, 2004, the Economic Development Corporation filed
      an answer, denying the Company's claims. On November 4, 2004, the Economic
      Development Corporation filed an amended answer denying the Company's
      claims and asserting counterclaims in unspecified amounts seeking
      liquidated damages, reimbursement for consultant's fees and breach of
      contract. The case is currently in pre-trial discovery. This aggregate
      amount of $1,255,000 was recorded when billed as revenues of $32,561,
      $726,257 and $496,182 during the Company's fiscal years ended July 2,
      2002, July 1, 2003 and June 29, 2004, respectively, and is included in the
      Company's accounts receivable because management believes that the
      realization of the full amount thereof is probable.



                                      F-31
<PAGE>

      In April 2003, the Company commenced a remediation project in New York
      City for a local utility to remove sediment from an oil storage tank.
      During the course of the project, the sediment in the tank was found to be
      substantially different than the sediment that the customer represented to
      be in the tank prior to the inception of the project. The Company
      continued to work on the project so as not to default on the terms which
      it understood to exist with the customer. The additional costs incurred to
      remove this matter were approximately $1,600,000. As of June 28, 2005, the
      Company recognized revenue of approximately $1,700,000 with respect to the
      original scope of this project. All amounts due under the original
      contract have been paid. The Company has not recognized the revenue
      associated with its claim because the amount thereof is not presently
      reliably estimable. The project has been substantially completed and the
      customer has refused to acknowledge its liability for these additional
      charges billed. On October 22, 2004, the Company commenced an action
      against a local utility company in the New York State Supreme Court,
      County of New York, claiming that it is entitled to approximately
      $2,000,000 of contractual billings and related damages in connection with
      this matter. On December 6, 2004, the local utility company filed an
      answer, denying its claims. The case is currently in pre-trial discovery.


      On April 16, 2002, two customers commenced an action against the Company
      and Michael O'Reilly, the Company's CEO, in the Supreme Court of the State
      of New York, County of New York, claiming that they are entitled to
      approximately $4,400,000 of damages relating to alleged breaches of a
      contract for a residential construction project. On May 7, 2002, the
      Company filed an answer denying the plaintiffs' claims and seeking
      approximately $45,418 in a counterclaim for uncollected accounts. The
      Company believed it had meritorious defenses and that the likelihood of an
      unfavorable outcome was remote. On November 1, 2005, the Company settled
      this matter by agreeing to pay $60,000 to the plaintiffs in six equal
      monthly installments beginning December 1, 2005.

      As of April 17, 2006, the Company is a plaintiff in 17 lawsuits, including
      those described above, claiming an aggregate of approximately $7,173,000
      pursuant to which it is seeking to collect amounts it believes owed to it
      by customers, primarily with respect to changed work orders or other
      modifications to its scope of work. Of this approximate $7,173,000
      approximately $5,173,000 is included in accounts receivable (for which
      there is a reserve of $1,551,00) and $2,000,000 represents claims that
      have not been recognized. The defendants in these actions have asserted
      counterclaims for an aggregate of approximately $500,000.

      The Company is a party to other litigation matters and claims that are
      normal in the course of its operations, and while the results of such
      litigation and claims cannot be predicted with certainty, management
      believes that the final outcome of such matters will not have a materially
      adverse effect on the Company's consolidated financial statements.


17.   MAJOR CUSTOMERS, GEOGRAPHIC INFORMATION AND CREDIT CONCENTRATIONS

      During the fiscal years ended June 28, 2005, June 29, 2004 and July 1,
      2003, the Company recognized net sales to significant customers as set
      forth below:

                                    June 28,       June 29,        July 1,
         Major Customers              2005           2004           2003
   --------------------------      ----------     ----------     ----------
          Customer A                     19%             4%             0%
          Customer B                      4%             0%            19%
          Customer C                      4%             0%             0%


      The Company is not dependent upon its relationship with any customer in
      the fiscal year ended June 28, 2005. The level of business with a
      particular customer in a succeeding period is not expected to be
      commensurate with the prior period, principally because of the project
      nature of the Company's services. However, because of the significant
      expansion of the Company's services provided, the Company believes that
      the loss of any single customer would not have a material adverse effect
      on the Company's financial condition and results of operations, unless the
      revenues generated from any such customer were not replaced by revenues
      generated by other customers.



                                      F-32
<PAGE>


      At June 28, 2005, 15 percent of the Company's accounts receivable related
      to one customer. At June 29, 2004, 19 percent of the Company's accounts
      receivable related to one customer. During the fiscal year ended June 28,
      2005, the Company had no sales to customers outside the United States.
      During the fiscal year ended June 29, 2004, the Company had sales of
      approximately $23,000 to a customer outside the United States. During the
      fiscal year ended July 1, 2003, the Company had sales of approximately
      $460,000 to a customer outside the United States. All of the Company's
      long-lived assets reside entirely in the United States.

      The Company is highly dependent upon the continuing contributions of key
      managerial, technical and marketing personnel. Employees may voluntarily
      terminate their employment with the Company at any time, and competition
      for qualified technical personnel, in particular, is intense. The loss of
      the services of any of its key managerial, technical or marketing
      personnel, especially Michael O'Reilly, its chief executive officer, could
      materially adversely affect the Company's business, financial condition
      and results of operations.


      The Company contracts with a limited number of customers that are involved
      in a wide range of industries. A small number of customers may therefore
      be responsible for a substantial portion of revenues at any time. While
      management assesses the credit risk associated with each prospective
      customer prior to the execution of a definitive contract, no assurances
      can be given that such assessments will be correct and that the Company
      will not incur substantial, noncollectible accounts receivable.

18.   NET INCOME (LOSS) PER SHARE

      The following table sets forth the computation of the basic and diluted
      net (loss) income per share for the fiscal years ended June 28, 2005, June
      29, 2004 and July 1, 2003:

<TABLE>
<CAPTION>
                                                 Fiscal Year       Fiscal Year         Fiscal Year
                                                   Ended              Ended               Ended
                                                  June 28,           June 29,            July 1,
                                                    2005               2004               2003
                                                 ----------        ------------        -----------
<S>                                              <C>               <C>                 <C>
      Numerator:
         Net (loss) income attributable
            to common shareholders               $  (24,934)       $ (3,613,334)       $  (547,004)
         Add interest and amortization
            on convertible notes, net of
            tax                                          --                  --                 --
                                                 ----------        ------------        -----------
                                                 $  (24,934)       $ (3,613,334)       $  (547,004)
                                                 ==========        ============        ===========
      Denominator:
         Share reconciliation:
            Shares used for basic
               (loss) income per share           77,936,358          77,936,358         77,936,358
            Effect of dilutive items:
               Stock options                        654,187                  --                 --
               Convertible securities                    --                  --                 --
            Shares used for dilutive
               (loss) income per share           78,590,545          77,936,358         77,936,358
                                                 ==========          ==========         ==========
      Net (loss) income per share:
         Basic                                         $.00              $(.05)             $(.01)
                                                       ====              ======             ======
         Diluted                                       $.00              $(.05)             $(.01)
                                                       ====              ======             ======
</TABLE>


      The diluted net loss per share for the fiscal years ended June 28, 2005
      and June 29, 2004 excludes 2,700,000 and 10,296,618 shares issuable upon
      the exercise of stock options and 1,300,000 and 1,300,000 shares issuable
      upon the conversion of convertible securities, respectively. These shares
      are excluded due to their antidilutive effect as a result of the Company's
      net loss attributable to common shareholders during these periods.



                                      F-33
<PAGE>

19.   UNAUDITED QUARTERLY DATA

      Summarized unaudited quarterly financial data for the fiscal years ended
      June 28, 2005 and June 29, 2004 are as follows:


<TABLE>
<CAPTION>
                                               First            Second              Third              Fourth
      Fiscal Year Ended June 28, 2005         Quarter           Quarter            Quarter            Quarter
      -------------------------------      -------------    --------------    ----------------   -----------------
<S>                                          <C>               <C>                 <C>               <C>
      Revenues                               $5,478,506        $7,359,279          $4,801,832        $ 3,000,793
      Gross Profit (loss)                    $1,116,383        $2,989,412          $1,368,778        $   (10,898)
      Net income (loss)                      $(328,545)        $1,388,310          $  128,759        $(1,135,458)
      Net income (loss) attributable to
         common shareholders                 $(348,045)        $1,368,810          $  109,259        $(1,154,958)
      Net income (loss) per common
         Share - basic                       $    (.00)        $      .02          $      .00        $       .00
      Net income (loss) per common
         Share - diluted                     $    (.00)        $      .02          $      .00        $       .00

                                               First            Second              Third              Fourth
      Fiscal Year Ended June 29, 2004         Quarter           Quarter            Quarter            Quarter
      -------------------------------      -------------    --------------    ----------------   -----------------
      Revenues                               $5,259,926        $6,523,473        $ 3,026,183         $ 4,357,171
      Gross Profit (loss)                    $1,329,984        $1,613,762        $(1,624,129)        $   405,077
      Net income (loss)                      $  209,151        $  462,437        $(2,567,984)        $(1,638,938)
      Net income (loss) attributable to
          common shareholders                $  189,651        $  442,937        $(2,587,484)        $(1,658,438)
      Net income (loss) per common
         share - basic                       $      .00        $      .01        $      (.03)        $      (.02)
      Net income (loss) per common
         share - diluted                     $      .00        $      .01        $      (.03)        $      (.02)
</TABLE>


20.   SUBSEQUENT EVENTS (UNAUDITED)

      In conjunction with the Laurus transactions, the Company entered into a
      registration rights agreement, as amended, which obligated it, among other
      things, to file its initial registration statement on Form S-1 with the
      SEC on or before September 23, 2005 or be subject to a liquidated damages
      claim. Laurus granted the Company an extension during which time no
      liquidated damage claim was assessed, and the Company filed its Form S-1
      on October 3, 2005, prior to the expiration of the extension.

      Subsequent to June 28, 2005 and in the wake of Hurricane Katrina, the
      Company has established offices in Louisiana and is directing considerable
      resources to generating new business opportunities in that area.


      On October 6, 2005, Laurus loaned the Company an additional $1,350,000,
      and the Company amended and restated the Laurus note to be in the
      principal amount of $7,350,000. In accordance with EITF 98-5, the
      beneficial conversion value recognized is limited to the amount of the
      Note proceeds. Accordingly, the $1,350,000 increased face value of this
      amended and restated Note had a beneficial conversion value of $1,350,000,
      resulting in a carrying value of $0, although the $.21 two-day average
      stock price of the Company's common stock would have resulted in a
      beneficial conversion value initially greater than the increased value of
      the Note.

      On November 10, 2005, Laurus granted the Company a two-month amortization
      deferral pursuant to which the Company's first principal payment under the
      Laurus note has been deferred from November 1, 2005 until January 1, 2006.
      On November 23, 2005, Laurus agreed to (a) waive the fee associated with
      the lack of effectiveness of the Form S-1 by November 22, 2005, (b)
      postpone the date by which the Company must have the Form S-1 declared
      effective until February 10, 2006 and (c) postpone the date by which the
      Company must increase its authorized capital from December 31, 2005 until
      January 31, 2006. On January 13, 2006, Laurus agreed to (a) postpone the
      date by which the Company must have the Form S-1 declared effective until
      March 1, 2006 and (b) postpone the date by which the Company must increase
      its authorized capital from January 31, 2006 to March 1, 2006.



                                      F-34
<PAGE>


      On February 28, 2006, Laurus agreed to (a) postpone the date by which the
      Company must have the registration statement declared effective until
      April 1, 2006 and (b) postpone the date by which the Company must increase
      its authorized capital from March 1, 2006 to April 1, 2006. On March 20,
      2006, Laurus agreed to (a) postpone the date by which the Company must
      have the registration statement, with respect to the number of shares
      included therein, declared effective until May 10, 2006, (b) postpone the
      date by which the Company must increase its authorized capital from April
      1, 2006 to November 1, 2006 and (c) set December 30, 2006 as the date by
      which the Company must have a second registration statement effective.



                                      F-35
<PAGE>

                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

      The following table sets forth the costs and expenses to be paid by the
Registrant in connection with the sale of the shares of our common stock being
registered hereby. All amounts are estimates except for the Securities and
Exchange Commission registration fee.


Securities and Exchange Commission registration fee               $        3,381
Accounting fees and expenses                                             125,000
Legal fees and expenses                                                  300,000
Printing expenses                                                          2,500
Blue sky fees and expenses                                                20,000
Miscellaneous expenses                                                     1,619
                                                                  --------------
         Total                                                    $      452,500
                                                                  ==============


ITEM 14.  INDEMNIFICATION OF DIRECTORS AND OFFICERS


      Under Section 145 of the Delaware General Corporation Law, a corporation
may indemnify any of its directors and officers against expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding (i) if any such person acted in good faith and in a manner reasonably
believed to be in or not opposed to be the best interests of the corporation,
and (ii) in connection with any criminal action or proceeding if such person had
no reasonable cause to believe such conduct was unlawful. In actions brought by
or in the right of the corporation, however, Section 145 provides that no
indemnification may be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable for negligence or misconduct
in the performance of such person's duty to the corporation unless, and only to
the extent that, the Court of Chancery of the State of Delaware or the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in review of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses that the Court of Chancery or such other court shall deem proper.
Article VIII of the registrant's Certificate of Incorporation, as amended,
requires that the registrant indemnify its directors and officers for certain
liabilities incurred in the performance of their duties on behalf of the
registrant to the fullest extent allowed by Delaware law.


      Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or controlling persons of the
registrant pursuant to the foregoing provisions, the registrant has been
informed that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.

ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES

      On September 12, 2005, we issued 1,500,000 shares of our common stock to
Laurus, pursuant to its partial exercise of an option we issued to it on June
30, 2005 to purchase such shares at an exercise price of $.0001 per share, for
$150 in the aggregate with respect to the partial exercise.

      On June 30, 2005, we sold to Laurus a secured convertible note in the
principal amount of $5,000,000, pursuant to a Securities Purchase Agreement, as
amended, and related agreements. In addition, we also issued to Laurus, as part
of the financing transaction and for no separate or additional consideration,
(a) a twenty-year option to purchase 30,395,179 shares of our stock at a
purchase price of $.0001 per share and (b) a seven-year common stock purchase
warrant to purchase 13,750,000 shares of our common stock at a purchase price of
$0.10 per share. On July 13, 2005, Laurus loaned to us an additional $350,000 on
the same terms and conditions as the original secured convertible term note, and
we amended and restated the Note, to be in the principal amount of $5,350,000.
On September 9, 2005, Laurus loaned to us an additional $650,000 on the same
terms and conditions as the original secured convertible term note, and we
further amended and restated the Note to be in the principal amount of
$6,000,000. On October 6, 2005, Laurus loaned to us an additional $1,350,000 on
the same terms and conditions as the original secured convertible term note, and
we further amended and restated the Note to be in the principal amount of
$7,350,000. The replacement note is repayable monthly at the rate of $229,787.50
plus accrued but unpaid interest, as of January 1, 2006, after giving effect to
a two-month amortization deferral granted by Laurus in November 2005. We did not
issue any additional options, warrants or other securities to Laurus in
connection with any of the three post-June 30, 2005 additional loans.


                                      II-1
<PAGE>

      In addition, on June 30, 2005, we issued a subordinated secured promissory
note to Spotless in the principal amount of $500,000. Concurrently, Spotless
surrendered its remaining 45,865,143 shares to us.


      Additionally, on June 30, 2005, we issued (i) an option exercisable at
$.09 per share to Mr. O'Reilly to purchase 15,469,964 shares of our common stock
and (ii) ten-year options exercisable at $.09 per share to our series A
convertible preferred stock stockholders, including Dr. Kevin J. Phillips, one
of our directors, to purchase an aggregate of 500,000 shares of our common stock
in consideration for their agreement to:

      o     propose and vote in favor of an amendment to our certificate of
            incorporation in order to accommodate the full issuance of the
            shares of our common stock underlying the Note and the option and
            warrant the Company issued to Laurus;
      o     postpone their right, upon six months' notice after February 2007,
            to require us to redeem their series A convertible preferred stock,
            until the earlier of six months after the repayment of the Note or
            June 30, 2010;
      o     defer receipt of dividend payments on the series A convertible
            preferred stock due after June 30, 2005, until the earlier of six
            months after the repayment of the Note or June 30, 2010; and
      o     forbear from appointing a second director until the earlier of (a)
            June 30, 2008 or (b) the repayment in full of the secured
            convertible term note that we have issued to Laurus.


      The proceeds we received in connection with the financing transaction and
subsequent borrowings from Laurus were used to pay the amounts set forth below
to the persons or for the purposes set forth below:


      SPOTLESS DEBT

      o     Former majority stockholder and senior
            secured lender (Spotless), consisting of
            approximately $2,650,000 in settlement of
            the principal and $100,000 in interest                $   2,750,000
                                                                  -------------
      TRANSACTION EXPENSES

      o     Laurus transaction fee                                    1,750,000
      o     Laurus Capital Management, LLC management
            and due diligence fees                                      262,900
      o     Loeb & Loeb escrow fee                                        2,000
      o     Insurance premiums                                           37,500
      o     Legal fees                                                  146,773
      o     Special committee and advisor fees                           61,136
      o     Payments to series A preferred stockholders                  35,000
                                                                  -------------
            Sub-total                                                 2,295,309
                                                                  -------------
      OTHER PAYMENTS

      o     Audit fees                                                   50,000
      o     Insurance premiums                                          276,711
      o     Initial Hurricane Katrina mobilization costs                238,173
      o     Working capital                                           1,739,807
                                                                  -------------
            Sub-total                                                 2,304,691
                                                                 --------------
      TOTAL                                                      $    7,350,000
                                                                 ==============



                                      II-2
<PAGE>


      On May 24, 2005, our board of directors granted a non-plan ten-year option
exercisable at $.06 per share to Anthony P. Towell to purchase 250,000 shares of
common stock in connection with his service on our then-existing special
committee. Mr. Towell would only be required to pay cash to us, if at all, in
connection with exercising the option prior to expiration.

      On May 24, 2005, our board of directors granted a non-plan five-year
options exercisable at $.01 per share and $.1875 per share to Michael O'Reilly
to purchase 2,000,000 and 250,000 shares of common stock, respectively, in an
effort to continue incentivizing him in his capacity as our president and chief
executive officer. Mr. O'Reilly would be required to pay cash to us, if at all,
in connection with exercising the option prior to expiration.

      On December 6, 2004, our board of directors granted a ten-year options
exercisable at $.035 per share to each of Anthony P. Towell and Dr. Kevin J.
Phillips to purchase 100,000 shares of common stock under our 2001 Equity
Incentive Plan in connection with their service as our directors. Mr. Towell and
Dr. Phillips would only be required to pay cash to us, if at all, in connection
with exercising their options prior to expiration.


      All of the securities were sold in private offerings pursuant to
exemptions from registration under Section 4(2) of the Securities Act of 1933,
as amended.

ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

      (a) Certain of the following exhibits have been previously filed with the
Securities and Exchange Commission and are incorporated herein by reference from
the documents described in the footnotes below.

Exhibit
Number      Description
-------     -----------


3.1      Amended and Restated Certificate of Incorporation of Windswept filed
         with the Delaware Secretary of State on March 3, 1995(previously
         filed).

3.2      Certificate of Designations of Series A Convertible Preferred Stock
         filed with the Delaware Secretary of State on February 28,
         1997(previously filed).

3.3      Certificate of Amendment to the Certificate of Incorporation of
         Windswept filed with the Delaware Secretary of State on March 20, 1997
         (Incorporated by reference to Exhibit 3.04 of the Company's Annual
         Report on Form 10-KSB (Date of Report: April 30, 1997) filed with the
         SEC on October 3, 1997).

3.4      Certificate of Designations of Series B Preferred Stock (Incorporated
         by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K
         (Date of Report: October 29, 1999) filed with the SEC on November 12,
         1999).

3.5      Certificate of Amendment to the Certificate of Incorporation of
         Windswept filed with the Delaware Secretary of State on September 18,
         2000(previously filed).

3.6      Certificate of Amendment to the Certificate of Incorporation of
         Windswept filed with the Delaware Secretary of State on March 15,
         2001(previously filed).

3.7      By-laws of Windswept. (Incorporated by reference to Exhibit 3.3 of
         Windswept's Registration Statement (No. 33-14370 N.Y.) filed with
         the SEC on June 1, 1987).

4.1      Specimen Common Stock Certificate. (Incorporated by reference to
         Exhibit 4.01 of Windswept's Annual Report on Form 10-KSB for the fiscal
         year ended April 30, 1998, filed with the SEC on August 13, 1998).

4.2      Specimen Series B Convertible Preferred Stock Certificate.
         (Incorporated by reference to Exhibit 4.01 of Windswept's Current
         Report on Form 8-K (Date of Report: October 29, 1999) filed with
         the SEC on November 12, 1999).

5.1      Opinion of Moomjian & Waite, LLP regarding legality.



                                      II-3
<PAGE>


10.1     Option Certificate for 2,000,000 stock options issued to Michael
         O'Reilly. (Incorporated by reference to Exhibit 4.05 of Windswept's
         Annual Report on Form 10-KSB for the fiscal year ended April 30, 1997,
         filed with the SEC on October 3, 1997).

10.2     1997 Incentive Plan. (Incorporated by reference to Exhibit 4.1 of
         Windswept's  Registration Statement on Form S-8 (No. 333-22491) filed
         with the SEC on February 27, 1997).

10.3     1998 Stock Incentive Plan. (Incorporated by reference to Exhibit 4.1
         of Windswept's Registration Statement on Form S-8 (No. 333-61905)
         filed with the SEC on August 20, 1998).

10.4     2001 Equity Incentive Plan. (Incorporated by reference to Exhibit 10.1
         of Windswept's  Quarterly Report on Form 10-Q for the quarter ended
         January 31, 2001, filed with the SEC on March 19, 2001).

10.5     Employment Agreement, dated June 30, 2005, between Windswept and
         Michael O'Reilly. (Incorporated by reference to Exhibit 10.15 of
         Windswept's Current Report on Form 8-K (Date of Report: June 30, 2005)
         filed with the SEC on July 7, 2005).

10.6     Amended and Restated Employment Agreement dated October 29, 1999
         between Windswept and Michael O'Reilly. (Incorporated by reference to
         Exhibit 10.4 of Windswept's Current Report on Form 8-K (Date of Report:
         October 29, 1999) filed with the SEC on November 12, 1999).

10.7     Option to purchase 15,464,964 shares of common stock dated June 30,
         2005, issued by Windswept to Michael O'Reilly. (Incorporated by
         reference to Exhibit 10.6 of Windswept's Current Report on Form 8-K
         (Date of Report: June 30, 2005) filed with the SEC on July 7, 2005).

10.8     Option to purchase 2,000,000 shares of common stock dated May 24, 2005,
         issued by Windswept to Michael O'Reilly. (Incorporated by reference to
         Exhibit 10.8 of Windswept's Annual Report on Form 10-K for the fiscal
         year ended June 28, 2005, filed with the SEC on October 3, 2005).

10.9     Option to purchase 250,000 shares of common stock dated May 24, 2005,
         issued by Windswept to Michael O'Reilly. (Incorporated by reference to
         Exhibit 10.9 of Windswept's Annual Report on Form 10-K for the fiscal
         year ended June 28, 2005, filed with the SEC on October 3, 2005).

10.10    Option to purchase 250,000 shares of common stock dated May 24, 2005,
         issued by Windswept to Anthony P. Towell. (Incorporated by reference to
         Exhibit 10.10 of Windswept's Annual Report on Form 10-K for the fiscal
         year ended June 28, 2005, filed with the SEC on October 3, 2005).

10.11    Option to purchase 100,000 shares of common stock dated December 6,
         2004, issued by Windswept to Anthony P. Towell. (Incorporated by
         reference to Exhibit 10.11 of Windswept's Annual Report on Form 10-K
         for the fiscal year ended June 28, 2005, filed with the SEC on October
         3, 2005).

10.12    Stock Option Agreement dated October 29, 1999 between Windswept and
         Michael O'Reilly. (Incorporated by reference to Exhibit 10.5 of
         Windswept's Current Report on Form 8-K (Date of Report: October 29,
         1999) filed with the SEC on November 12, 1999).

10.13    Stock Option Agreement dated October 29, 1999 between Windswept and
         Michael O'Reilly relating to options vesting upon exercise of the
         convertible note. (Incorporated by reference to Exhibit 10.6 of
         Windswept's Current Report on Form 8-K (Date of Report: October 29,
         1999) filed with the SEC on November 12, 1999).

10.14    Option to purchase 100,000 shares dated December 6, 2004, issued by
         Windswept to Dr. Kevin J. J. Phillips. (Incorporated by reference to
         Exhibit 10.14 of Windswept's Annual Report on Form 10-K for the fiscal
         year ended June 28, 2005, filed with the SEC on October 3, 2005).

10.15    Letter Agreement dated October 29, 1999 between Michael O'Reilly and
         Spotless Plastics (USA), Inc. (Incorporated by reference to Exhibit
         10.7 of Windswept's Current Report on Form 8-K (Date of Report: October
         29, 1999) filed with the SEC on November 12, 1999).

10.16    Promissory Note dated November 16, 2001 issued by Windswept in favor of
         Spotless Plastics (USA), Inc. (Incorporated by reference to Exhibit
         10.2 of the Windswept's Quarterly Report on Form 10-Q for the quarter
         ended January 1, 2002, filed with the SEC on February 13, 2002).



                                      II-4
<PAGE>


10.17    Form of Security Agreement dated  October 29, 1999 between each of
         Windswept, Trade-Winds Environmental Remediation Inc., North Atlantic
         Laboratories, Inc. and New York Testing, Inc. and Spotless Plastics
         (USA), Inc. (Incorporated by reference to Exhibit 10.3 of Windswept's
         Current Report on Form 8-K (Date of Report: October 29, 1999) filed
         with the SEC on November 12, 1999).

10.18    Form of Amendment No. 1 dated November 16, 2001 to Security Agreement
         dated October 29, 1999 between each of the Company, Trade-Winds
         Environmental Restoration, Inc., North Atlantic  Laboratories, Inc. and
         New York Testing Laboratories, Inc. and Spotless Plastics (USA), Inc.
         (Incorporated by reference to Exhibit 10.1 of Windswept's Quarterly
         Report on Form 10-Q for the quarter ended January 1, 2002, filed with
         the SEC on February 13, 2002).

10.19    Account Receivable Finance Agreement, dated February 5, 2004, by and
         among the Company, Trade-Winds Environmental Restoration Inc. and
         Spotless Plastics (USA) Inc. (Incorporated by reference to Exhibit 10.1
         of the Company's Quarter Report on Form 10-Q for the quarter ended
         December 30, 2003, filed with the SEC on February 10, 2004).

10.20    Amendment No. 1 to the Account Receivable Finance Agreement, dated June
         30, 2005, by and among Windswept, Trade-Winds and Spotless.
         (Incorporated by reference to Exhibit 10.19 of Windswept's Current
         Report on Form 8-K (Date of Report: June 30, 2005) filed with the SEC
         on July 7, 2005).

10.21    Securities Purchase Agreement, dated June 30, 2005, by and between
         Windswept and Laurus. (Incorporated by reference to Exhibit 10.1 of
         Windswept's Current Report on Form 8-K (Date of Report: June 30, 2005)
         filed with the SEC on July 7, 2005).

10.22    Funds Escrow Agreement, dated June 30, 2005, by and among Windswept,
         Laurus and Loeb & Loeb LLP, as escrow agent. (Incorporated by reference
         to Exhibit 10.24 of Windswept's Current Report on Form 8-K (Date of
         Report: June 30, 2005) filed with the SEC on July 7, 2005).

10.23    $5,000,000 Secured Convertible Term Note, dated June 30, 2005, issued
         by Windswept to Laurus. (Incorporated by reference to Exhibit 10.2 of
         Windswept's Current Report on Form 8-K (Date of Report: June 30, 2005)
         filed with the SEC on July 7, 2005).

10.24    $5,350,000 Amended and Restated Secured Convertible Term Note, dated
         July 13, 2005, issued by Windswept to Laurus Master Fund, Ltd.
         (Incorporated by reference to Exhibit 10.1 of Windswept's Current
         Report on Form 8-K (Date of Report: July 13, 2005) filed with the SEC
         on July 13, 2005).

10.25    $6,000,000 Amended and Restated Secured Convertible Term Note, dated
         September 9, 2005, issued by Windswept to Laurus. (Incorporated by
         reference to Exhibit 10.01 of Windswept's Current Report on Form 8-K
         (Date of Report: September 9, 2005) filed with the SEC on September 15,
         2005).

10.26    $7,350,000 Amended and Restated Secured Convertible Term Note, dated
         October 6, 2005, issued by Windswept to Laurus. (Incorporated by
         reference to Exhibit 10.1 of Windswept's Current Report on Form 8-K
         (Date of Report: October 6, 2005) filed with the SEC on October 6,
         2005).

10.27    Option, dated June 30, 2005, issued by Windswept to Laurus.
         (Incorporated by reference to Exhibit 10.3 of Windswept's Current
         Report on Form 8-K (Date of Report: June 30, 2005) filed with the SEC
         on July 7, 2005).

10.28    Common Stock Purchase Warrant, dated June 30, 2005, issued by Windswept
         to Laurus. (Incorporated by reference to Exhibit 10.4 of Windswept's
         Current Report on Form 8-K (Date of Report: June 30, 2005) filed with
         the SEC on July 7, 2005).

10.29    Master Security Agreement, dated June 30, 2005, by and among Windswept,
         Trade-Winds Environmental Restoration Inc. ("Trade-Winds"), North
         Atlantic Laboratories, Inc. ("North Atlantic") and Laurus.
         (Incorporated by reference to Exhibit 10.5 of Windswept's Current
         Report on Form 8-K (Date of Report: June 30, 2005) filed with the SEC
         on July 7, 2005).

10.30    Option to purchase 250,000 shares of common stock, dated June 30, 2005,
         issued by Windswept to Dr. Kevin J. Phillips. (Incorporated by
         reference to Exhibit 10.7 of Windswept's Current Report on Form 8-K
         (Date of Report: June 30, 2005) filed with the SEC on July 7, 2005).



                                      II-5
<PAGE>


10.31    Option to purchase 250,000 shares of common stock, dated June 30, 2005,
         issued by Windswept to Gary Molnar. (Incorporated by reference to
         Exhibit 10.8 of Windswept's Current Report on Form 8-K (Date of Report:
         June 30, 2005) filed with the SEC on July 7, 2005).

10.32    Forebearance and Deferral Agreement, dated June 30, 2005, by and among
         Windswept, Michael O'Reilly, the Series A Convertible Preferred
         Stockholders and Laurus. (Incorporated by reference to Exhibit 10.9 of
         Windswept's Current Report on Form 8-K (Date of Report: June 30, 2005)
         filed with the SEC on July 7, 2005).

10.33    Transition Services Agreement, dated June 30, 2005, by and between
         Spotless Plastics (USA) and Windswept. (Incorporated by reference to
         Exhibit 10.10 of Windswept's Current Report on Form 8-K (Date of
         Report: June 30, 2005) filed with the SEC on July 7, 2005).

10.34    Bonding Support Letter from Michael O'Reilly to Windswept and Laurus.
         (Incorporated by reference to Exhibit 10.11 of Windswept's Current
         Report on Form 8-K (Date of Report: June 30, 2005) filed with the SEC
         on July 7, 2005).

10.35    Registration Rights Agreement, dated June 30, 2005, by and between
         Windswept and Laurus. (Incorporated by reference to Exhibit 10.12 of
         Windswept's Current Report on Form 8-K (Date of Report: June 30, 2005)
         filed with the SEC on July 7, 2005).

10.36    Stock Pledge Agreement, dated June 30, 2005, by and among Windswept,
         Trade-Winds, North Atlantic and Laurus. (Incorporated by reference to
         Exhibit 10.13 of Windswept's Current Report on Form 8-K (Date of
         Report: June 30, 2005) filed with the SEC on July 7, 2005).

10.37    Subsidiary Guaranty, dated the June 30, 2005, from Trade-Winds and
         North Atlantic to Laurus. (Incorporated by reference to Exhibit 10.14
         of Windswept's Current Report on Form 8-K (Date of Report: June 30,
         2005) filed with the SEC on July 7, 2005).

10.38    Secured Promissory Note, dated June 30, 2005, issued by Windswept to
         Spotless in the principal amount of $500,000. (Incorporated by
         reference to Exhibit 10.25 of Windswept's Current Report on Form 8-K
         (Date of Report: June 30, 2005) filed with the SEC on July 7, 2005).

10.39    Security Agreement, dated June 30, 2005, between North Atlantic and
         Spotless. (Incorporated by reference to Exhibit 10.18 of Windswept's
         Current Report on Form 8-K (Date of Report: June 30, 2005) filed with
         the SEC on July 7, 2005).

10.40    Security Agreement, dated June 30, 2005, between Windswept and Spotless
         Plastics (USA) Inc. (Incorporated by reference to Exhibit 10.16 of
         Windswept's Current Report on Form 8-K (Date of Report: June 30, 2005)
         filed with the SEC on July 7, 2005).

10.41    Security Agreement, dated June 30, 2005, between Trade-Winds and
         Spotless. (Incorporated by reference to Exhibit 10.17 of Windswept's
         Current Report on Form 8-K (Date of Report: June 30, 2005) filed with
         the SEC on July 7, 2005).

10.42    Subordination Agreement, dated June 30, 2005, by and between Spotless
         and Laurus, acknowledged by Windswept. (Incorporated by reference to
         Exhibit 10.26 of Windswept's Current Report on Form 8-K (Date of
         Report: June 30, 2005) filed with the SEC on July 7, 2005).

10.43    Account Receivable Sale Agreement, dated June 30, 2005, by and among
         Spotless, Windswept and TradeWinds. (Incorporated by reference to
         Exhibit 10.27 of Windswept's Current Report on Form 8-K (Date of
         Report: June 30, 2005) filed with the SEC on July 7, 2005).

10.44    Termination Agreement, dated June 30, 2005, by and between Trade-Winds
         and Spotless. (Incorporated by reference to Exhibit 10.20 of
         Windswept's Current Report on Form 8-K (Date of Report: June 30, 2005)
         filed with the SEC on July 7, 2005).

10.45    Termination Agreement, dated June 30, 2005, by and between North
         Atlantic and Spotless. (Incorporated by reference to Exhibit 10.21 of
         Windswept's Current Report on Form 8-K (Date of Report: June 30, 2005)
         filed with the SEC on July 7, 2005).



                                      II-6
<PAGE>


10.46    Termination Agreement, dated June 30, 2005, by and between Windswept
         and Spotless. (Incorporated by reference to Exhibit 10.22 of
         Windswept's Current Report on Form 8-K (Date of Report: June 30, 2005)
         filed with the SEC on July 7, 2005).

10.47    Release, dated June 30, 2005, by and among Windswept, Spotless, Peter
         Wilson, John Bongiorno, Ronald Evans, Charles L. Kelly, Jr., Brian
         Blythe and Joseph Murphy. (Incorporated by reference to Exhibit 10.23
         of Windswept's Current Report on Form 8-K (Date of Report: June 30,
         2005) filed with the SEC on July 7, 2005).

10.48    Lease Agreement dated September 2, 2005 between Trade-Winds and Alberta
         Bentily. (Incorporated by reference to Exhibit 10.01 of Windswept's
         Current Report on Form 8-K (Date of Report: September 1, 2005) filed
         with the SEC on September 8, 2005).

10.49    Lease Agreement dated September 8, 2005 between Trade-Winds and Mark J.
         Anderson (Incorporated by reference to Exhibit 10.48 of Windswept's
         Annual Report Form 10-K for the fiscal year ended June 28, 2005, filed
         with the SEC on October 3, 2005).

10.50    Amendment and Deferral Agreement, dated November 10, 2005, by and
         between Windswept and Laurus (Incorporated by reference to Exhibit 10.1
         of Windswept's Current Report on Form 8-K (Date of Report: November 10,
         2005) filed with the SEC on November 14, 2005).

10.51    Amendment and Fee Waiver Agreement, dated as of November 23, 2005, by
         and between Windswept and Laurus (Incorporated by reference to Exhibit
         10.01 of Windswept's Current Report on Form 8-K/A (Date of Report:
         November 23, 2005) filed with the SEC on January 10, 2006).

10.52    Amendment and Fee Waiver Agreement, dated as of January 13, 2006, by
         and between Windswept and Laurus (Incorporated by reference to Exhibit
         10.01 of Windswept's Current Report on Form 8-K (Date of Report:
         January 13, 2006) filed with the SEC on January 17, 2006).

10.53    Amendment and Fee Waiver Agreement, dated as of February 28, 2006, by
         and between Windswept and Laurus (Incorporated by reference to Exhibit
         10.01 of Windswept's Current Report on Form 8-K (Date of Report
         February 28, 2006) filed with the SEC on March 2, 2006).

10.54    Amendment and Fee Waiver Agreement, dated as of March 20, 2006, by and
         between Windswept and Laurus (Incorporated by reference to Exhibit
         10.01 of Windswept's Current Report on Form 8-K (Date of Report March
         20, 2006) filed with the SEC on March 22, 2006).

10.55    Amendment No. 1 to Employment Agreement, effective as of March 13,
         2006, between Windswept and Michael O'Reilly. (Incorporated by
         reference to Exhibit 10.1 of Windswept's Current Report on Form 8-K/A
         (Date of Report: April 13, 2006) filed with the SEC on April 17, 2006).

16.1     Letter, dated July 11, 2005, from Deloitte & Touche LLP to the
         Securities and Exchange Commission (Incorporated by reference to
         Exhibit 16.1 of Windswept's Current Report on Form 8-K/A (Date of
         Report: June 30, 2005) filed with the SEC on July 11, 2005).

16.2     Letter, dated January 20, 2006, from Massella & Associates, CPA, PLLC
         to the Securities and Exchange Commission (Incorporated by reference to
         Exhibit 16.1 of Windswept's Current Report on Form 8-K/A (Date of
         Report: January 20, 2006) filed with the SEC on January 20, 2006)

21.1     Subsidiaries of the Company (previously filed).

23.1     Consent Moomjian & Waite, LLP (included in legal opinion filed as
         Exhibit 5.1).

23.2     Consent of Deloitte & Touche LLP.

23.3     Consent of Massella & Associates, CPA, PLLC.

24.1     Power of Attorney (previously filed).



                                      II-7
<PAGE>

ITEM 17.  UNDERTAKINGS

      (a) Pursuant to Item 512 of Regulation S-K, the undersigned registrant
hereby undertakes:

            (1) To file, during any period in which offers or sales are being
      made, a post-effective amendment to this registration statement:

                  (i) To include any prospectus required by section 10(a)(3) of
            the Securities Act of 1933;


                  (ii) To reflect in the prospectus any facts or events arising
            after the effective date the registration statement (or the most
            recent post-effective amendment thereof) which, individually or in
            the aggregate, represent a fundamental change in the information in
            the registration statement. Notwithstanding the foregoing, any
            increase or decrease in volume of securities offered (if the total
            dollar value of securities offered would not exceed that which was
            registered) and any deviation from the low or high end of the
            estimated maximum offering range may be reflected in the form of
            prospectus filed with the Commission pursuant to Rule 424(b) if, in
            the aggregate, the changes in volume and price represent no more
            than 20 percent change in the maximum aggregate offering price set
            forth in the "Calculation of Registration Fee" table in the
            effective registration statement.


                  (iii) To include any material information with respect to the
            plan of distribution not previously disclosed in the registration
            statement or any material change to such information in the
            registration statement;

            (2) That, for the purpose of determining any liability under the
      Securities Act of 1933, each such post-effective amendment shall be deemed
      to be a new registration statement relating to the securities offered
      therein, and the offering of such securities at that time shall be deemed
      to be the initial bona fide offering thereof.

            (3) To remove from registration by means of a post-effective
      amendment any of the securities being registered which remain unsold at
      the termination of the offering.

            (4) That, for the purpose of determining liability under the
      Securities Act of 1933 to any purchaser:

                  (i) If the registrant is subject to Rule 430C (ss.230.430C of
            this chapter), each prospectus filed pursuant to Rule 424(b) as part
            of a registration statement relating to an offering, other than
            registration statements relying on Rule 430B or other than
            prospectuses filed in reliance on Rule 430A ((ss.230.430A of this
            chapter), shall be deemed to be part of and included in the
            registration statement as of the date it is first used after
            effectiveness. Provided, however, that no statement made in a
            registration statement or prospectus that is part of the
            registration statement or made in a document incorporated or deemed
            incorporated by reference into the registration statement or
            prospectus that is part of the registration statement will, as to a
            purchaser with a time of contract of sale prior to such first use,
            supercede or modify any statement that was made in the registration
            statement or prospectus that was part of the registration statement
            or made in any such document immediately prior to such date of first
            use.

      (b) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described under Item 14 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer of
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered hereunder, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.


                                      II-8
<PAGE>

                                   SIGNATURES



      Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the Town of Bay Shore,
State of New York, on this 27 day of April, 2006.



                                             WINDSWEPT ENVIRONMENTAL GROUP, INC.



                                             By: /s/ Michael O'Reilly
                                                 ------------------------------
                                                 Michael O'Reilly
                                                 Chief Executive Officer



                                POWER OF ATTORNEY

      Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.


<TABLE>
<CAPTION>
Name:                                        Title:                                       Date:
-----                                        ------                                       -----
<S>                                          <C>                                          <C>

/s/ Michael O'Reilly
----------------------------------
Michael O'Reilly                             Chief Executive Officer and Director         April 27, 2006
                                             (Principal Executive Officer)

/s/ Andrew C. Lunetta
----------------------------------
Andrew C. Lunetta                            Chief Financial Officer                      April 27, 2006
                                             (Principal Accounting and Financial
                                             Officer)

            *
----------------------------------
Dr. Kevin J. Phillips                        Director                                     April 27, 2006


            *
----------------------------------
Anthony P. Towell                            Director                                     April 27, 2006


*By: /s/ Michael O'Reilly
    ------------------------------
         Michael O'Reilly                                                                 April 27, 2006
         Attorney-in-fact
</TABLE>


</TEXT>
</DOCUMENT>