Edgar Filing: U S INDUSTRIAL SERVICES INC

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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB

(Mark One)

[X] Annual report under section 13 or 15(d) of the Securities Exchange Act of
1934 for the fiscal year ended September 30, 2000.

[ ] Transition report under section 13 or 15(d) of the Securities Exchange Act
of 1934 for the transition period from ____________ to ____________.

COMMISSION FILE NUMBER 0-22388
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US INDUSTRIAL SERVICES, INC.
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(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

Delaware 99-0273889
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

40 Skokie Boulevard, Suite 110, Northbrook, Illinois 60062
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(Address of principal executive offices) (Zip Code)

Issuer's telephone number (847) 509-8500
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Securities to be registered under Section 12(g) of the Act:
(Title of class)
Common Stock, $.01 par value
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Name of exchange on which registered
OTC Bulletin Board
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Securities to be registered under Section 12(g) of the Act: None

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(Title of Class)

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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB [ ]

State issuer's revenues for its most recent fiscal year.
$13,511,000

State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as
of a specified date within the past 60 days.
$4,900,000 as of February 14, 2001

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.

Documents incorporated by reference.
None

TRANSITIONAL SMALL BUSINESS DISCLOSURE
Format (Check one):
Yes [ ] No [X]
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US INDUSTRIAL SERVICES, INC.

Table of Contents

PART I
Item 1. Description of Business 3
Item 2. Description of Property 8
Item 3. Legal Proceedings 8
Item 4. Submission of Matters to a Vote of Security Holders 8

PART II
Item 5. Market for Common Equity And Related Stockholder Matters 9
Item 6. Management's Discussion and Analysis of Plan 9
Item 7. Financial Statements 12
Item 8. Changes In and Disagreements with Accountants on Accounting and Financial Structure 28

PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with
Section 16 (A) of the Exchange Act 29
Item 10. Executive Compensation 29
Item 11. Security Ownership of Certain Beneficial Owners and Management 30
Item 12. Certain Relationships and Related Transactions 30
Item 13. Exhibit and Reports on Form 8-K 32

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PART I

ITEM 1. DESCRIPTION OF BUSINESS

Organization and Recent Developments

US Industrial Services, Inc. a Delaware corporation (the "Company" or "USIS"),
is the successor to EIF Holdings, Inc., a Hawaii corporation ("EIFH"). In May
1998, the EIFH shareholders approved a merger with and into USIS, a newly-formed
wholly owned subsidiary of EIFH. The merger, which became effective in June
1998, resulted in a change in name and in the state of incorporation and also in
a 1-for-10 reverse stock split of the outstanding Common Stock. All share
information in this report gives effect to the reverse stock split.

Subsequent to the May 1998 reincorporation and recapitalization (the
"Reincorporation"), the Company affected a conversion of a substantial portion
of its unsecured debt to equity, disposed of most operating businesses and is
seeking to refocus its activities in other industries.

In November 1997, the Company completed the acquisition of J.L. Manta, Inc. an
Illinois corporation ("Manta"), which provided specialty coatings and industrial
maintenance services. The consideration paid by the Company included $4,725,321
of cash and $2,235,312 of convertible promissory notes, payable in installments,
with the final payment due on November 18, 2000. The Company also entered into
Retention Bonus Agreements with key Manta managers providing for bonus payments
aggregating $900,000 to be amortized by the company over a six year period and
issued 50,000 options to purchase 50,000 shares of USIS Common Stock, with a
life of three years and an exercise price of $3.40. In connection with the
acquisition, Manta entered into a $10.0 million credit facility.

In November 1998, the Company sold the assets and liabilities of Manta,
including the credit facility, to Kenny Industrial Services, L.L.C. ("Kenny"),
for $23.0 million, consisting of a combination of $3.0 million of cash, a short
term note of $15.0 million, which was paid December 15, 1998, and $5.0 million
in notes due as follows: $1 million in November 1999, $1 million in November
2000, $1 million in November 2001 and $2 million in November 2002; together with
interest at 5%.

On December 31, 1998, the Company sold the assets and liabilities of P.W.
Stephens Residential Inc. ("Residential") American Temporary Sanitation Inc. for
$2.4 million, consisting of $1 million in cash and a five year promissory note
for $1.4 million, payable in equal quarterly installments through 2004, together
with interest at the Prime Rate plus 2.5% per annum.

Upon the Reincorporation, American Eco Corporation, an Ontario, Canada
corporation ("American Eco"), acquired 1,000,000 shares of the Company's Common
Stock pursuant to a February 1996 Stock Purchase Agreement. The closing had been
delayed pending the Recapitalization. At that time, American Eco held certain
promissory notes (the "Notes") of the Company consisting of outstanding
principal and interest in the aggregate amount of $17.9 million. The outstanding
amount of the Notes had been reduced by $1 million, representing the purchase
price for the 1,000,000 shares. In 1996, American Eco had provided the Company a
$5.2 million line of credit, which line of credit was convertible into shares of
the Company's Common Stock at a price equal to 85.0% of the five day weighted
average price of such shares immediately preceding the conversion date.

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As of July 24, 1998, American Eco sold the Notes to USIS Acquisition, L.L.C.
(the "Holder") for $5.0 million in cash and a secured promissory note for $12.9
million repayable on January 29, 1999. The Holder converted the Notes into
5,295,858 shares of the Company's Common Stock, and secured its promissory note
to American Eco with a pledge of the 5,295,858 shares. In November 1998, the
Holder advised American Eco that the Holder would not be able to pay its note at
maturity, and American Eco took ownership of the pledged shares in discharge of
the Holder's note. In November 1998, American Eco owned 7,175,858 shares of the
Company's Common Stock representing 81.9% of the outstanding shares. The Company
was a majority-owned subsidiary of American Eco Corporation ("AEC") through July
21, 2000 at which time control was obtained by Deere Park Capital, L.L.C.
("Deere Park") Deere Park acquired approximately 81.9% of the Company's common
stock. On December 21, 2000 Deere Park sold 50% of its interest to an individual
and currently the Company is not a majority owned subsidiary of any entity. As
noted below, the Company sold substantially all of its operating assets on
September 29, 2000.

Effective June 22, 1998, the Company completed a recapitalization and
reincorporation through a merger with USIS, a newly formed Delaware corporation,
and wholly owned subsidiary of EIF Holdings, Inc. USIS became the surviving
company, and all outstanding shares of EIF common stock were exchanged on a
one-for-one basis for shares of USIS common stock.

On September 29, 2000 the Company sold its holdings in P.W. Stephens
Environmental, Inc., P.W. Stephens Contractors, Inc., P.W. Stephens Services,
Inc. and P.W. Stephens Northwest, Inc. to Spruce MacIntyre Holding Corp.
("Spruce"). The company also assigned to Spruce its interest in a note
receivable from American Temporary Sanitation Inc., with a face value of
$1,220,000. Total consideration for the sale and assignment is $1,650,000. The
assets sold comprise substantially all of the Company's operating assets and
liabilities and operations for the year ended September 30, 2000.

Historical

EIF Holdings, Inc. was formed in the State of Hawaii in 1989, and migrated to
Delaware in 1998 and in connection therewith changed its name to U.S. Industrial
Services, Inc. Until late 1997, the Company was primarily engaged in
environmental construction related industries, more specifically, asbestos
abatement, both commercial and residential, lead removal, and soil and
groundwater remediation. The Company was also involved, to a limited extent, in
the energy management business. These activities, in particular the commercial
asbestos abatement business, involved a high percentage of relatively large,
fixed-price contracts under which the Company assumed significant financial
risks. The Company incurred substantial losses on a number of major contracts
and consequently reported substantial operating losses during the three-year
period ended September 30, 1997.

In May 1997, the Company changed its focus to the specialized maintenance
industry, an industry characterized by a predominance of cost-plus contracts,
creditworthy industrial customers and significant repeat business. Management
also sought to eliminate unprofitable operations, reduce the Company overhead
costs, recapitalize the Company's balance sheet, and effect acquisitions in the
specialized maintenance industry. The acquisition of Manta was a result of this
strategy.

The primary businesses of the Company have been acquired through a series of
acquisitions. In January 1993, the Company acquired P.W. Stephens Contractors,
Inc., ("P.W. Stephens") which was engaged in the environmental contracting
industry, primarily focusing on the removal of materials containing asbestos,
but also offering lead hazard removal, insulation and other hazardous materials
clean-up services. Services were offered to the commercial, industrial and
institutional markets, primarily in the states of California, Hawaii and Nevada.
These operations were conducted out of seven branch offices located throughout
the service area. Services were offered to the residential market in California
through Residential, a California corporation, and a wholly-owned subsidiary of
P. W. Stephens. As previously mentioned, Residential was sold as of December 31,
1998. In the fourth quarter of 1996, the Company assumed the assets of QHI,
Inc., a California corporation out of bankruptcy, which provided

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asbestos abatement services to the commercial, industrial and institutional
markets.

The commercial asbestos operations of P. W. Stephens had generated operating
losses over each of the years from 1995 to 1997. As part of management's efforts
to eliminate unprofitable operations, all of the operations of P. W. Stephens,
with the exception of Residential, were discontinued by the Company in May 1997.

In August 1994, the Company acquired VonGuard Holdings, Inc. ("Vonguard"), and
its subsidiaries. VonGuard was formed as a Missouri corporation in 1992, as a
holding company to acquire FCA Services, Inc. ("FCA") and Remediation Services,
Inc. ("RSI"). FCA had been in business since 1987 and RSI since 1989. In June
1996, VonGuard and Enstar-North American, Inc., a subsidiary of VonGuard, were
merged into FCA and the name of the entity was changed to P. W. Stevens
Services, Inc., a Missouri corporation. At the same time, Select Abatement,
Inc., a subsidiary of VonGuard, was merged into RSI and the name of that entity
was changed to P. W. Stephens Contractors, Inc., a Missouri corporation. P.W.
Stephens Services, Inc. and P. W. Stephens Contractors, Inc. (Missouri) are
collectively referred to as "P. W. Stephens - St. Louis" or "St. Louis". P. W.
Stephens - St Louis provides industrial cleaning and remediation services,
including soil and groundwater remediation, hazardous materials management and
clean-up, asbestos abatement and lead hazard removal service, to clients,
primarily located in the states of Illinois, Iowa, Missouri, Nebraska and
Washington.

In December 1994, the Company acquired Kelar Controls, Inc., a California
corporation ("Kelar"). Kelar primarily installed new or retrofitted energy
management controls and conservation equipment for large storage and warehouse
facilities. Management of the Company determined that the business of Kelar was
not consistent with the strategic direction of the Company and sold Kelar to
Regal Oak Properties, Inc., effective June 30, 1997, for a one-year 10%
interest-bearing note in the principal amount of $2.5 million. This note,
including interest, was satisfied in August of 1998.

Services Provided By Continuing Subsidiaries

Environmental Remediation Services

Asbestos Abatement

From 1910 until 1978, asbestos was a common ingredient in building materials due
primarily to its ability to retard fire, absorb heat from friction, provide
insulation from heat and cold, resist corrosion and add tensile strength. The
Environmental Protection Agency, ("EPA"), began to ban the use of asbestos in
construction products in 1973, in response to evidence that asbestos causes
certain forms of cancer and poses other health hazards. The first Federal
regulations requiring the removal of asbestos, however, did not appear until
1986 when Congress passed the Asbestos Hazard Emergency Response Act ("AHERA").
This legislation required all public schools to identify materials containing
asbestos and develop management programs. An increase in awareness of asbestos
hazards led to an increased demand for abatement. However, since 1990, there has
been a trend toward management in place rather than removal where possible. The
EPA now recommends abatement only when other options, such as management in
place, will not work, or when renovation will disturb the material and cause a
potential health risk to workers. Although there are currently no laws requiring
the removal of asbestos from buildings, there are numerous federal, state and
local regulations which govern the removal or disturbance of asbestos through
demolition, renovation, remodeling, or repairs.

Strategy

In November 1998, the Company adopted a strategic plan to sell off all
industrial service and environmental companies with the goal of rebuilding the
Company with a clean balance sheet and engaging in a line of business related to
another industry. The implementation of this strategy began when the Company
sold the assets and liabilities of Manta on November 30, 1998. The second step
was completed on December 31, 1998 when the

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Company sold the assets and liabilities of Residential. Management is continuing
to evaluate strategic alternatives. On September 29, 2000 the Company sold its
holdings in P.W. Stephens Environmental, Inc., P.W. Stephens Contractors, Inc.,
P.W. Stephens Services, Inc. and P.W. Stephens Northwest, Inc. to Spruce
MacIntyre Holding Corp. ("Spruce"). The company also assigned to Spruce its
interest in a note receivable from American Temporary Sanitation Inc., with a
face value of $1,220,000. Total consideration for the sale and assignment is
$1,650,000. The assets sold comprise substantially all of the Company's
operating assets and liabilities and operations for the year ended September 30,
2000.

Government Regulation

The Company's industrial clean-up operation, particular those operations related
to environmental and asbestos removal, are strictly regulated by statutes and
regulations administered by several federal, state and local agencies. These
statutes and regulations cover all aspects of the environmental health and
safety industry as well as the construction industry in general. The Company's
operations and compliance with statutes and regulations are reviewed by various
governmental agencies and, from time to time, these agencies may make requests
for information or issue citations for noncompliance.

Federal Regulation

Asbestos abatement operations are subject to regulation by federal, state, and
local governmental authorities, including OSHA, EPA and the United States
Department of Transportation ("DOT"). In general, OSHA regulations set the
maximum asbestos fiber exposure levels applicable to employees and the EPA
regulations provide asbestos fiber emission control standards. The EPA requires
use of accredited persons for both inspection and abatement. OSHA has
promulgated regulations specifying airborne asbestos fiber exposure standards
for workers, engineering and administrative controls, workplace practices, and
medical surveillance and worker protection requirements. OSHA's construction
standards require companies removing asbestos fibers to conduct air monitoring,
to provide decontamination units and to appropriately supervise the operations.
Transportation and disposal activities are also regulated. The DOT sets
standards for management of the packaging and transportation of asbestos.

Lead hazard removal is currently regulated by OSHA and the EPA. In general, OSHA
regulations set the permissible lead exposure level for construction workers and
EPA regulates emission of lead into the air and soil. Disposal of lead
containing material is regulated under the Resource Conservation Recovery Act
(RCRA). The EPA has been mandated by Title X (the Residential Housing Act of
1992) to have contractor training and certification requirements in place during
1994. These interim training guidelines were implemented on November 1, 1994. On
September 29, 2000 the Company sold its holdings in P.W. Stephens Environmental,
Inc., P.W. Stephens Contractors, Inc., P.W. Stephens Services, Inc. and P.W.
Stephens Northwest, Inc. to Spruce MacIntyre Holding Corp. ("Spruce"). The
company also assigned to Spruce its interest in a note receivable from American
Temporary Sanitation Inc., with a face value of $1,220,000. Total consideration
for the sale and assignment is $1,650,000. The assets sold comprise
substantially all of the Company's operating assets and liabilities and
operations for the year ended September 30, 2000.

State and Local Regulations

P.W. Stephens St. Louis provided services in the states of Illinois, Iowa,
Missouri, Nebraska and Washington. Each state has its own local laws and
regulations to supplement the federal laws. A number of states have promulgated
regulations setting forth such requirements as registration or licensing of
asbestos abatement contractors, training courses and licensing for workers,
notification of intent to undertake abatement projects and requires approvals
from certain state agencies. Management believes the Company holds all necessary
licenses and permits required by these states for business operation.

On September 29, 2000 the Company sold its holdings in P.W. Stephens
Environmental, Inc., P.W. Stephens

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Contractors, Inc., P.W. Stephens Services, Inc. and P.W. Stephens Northwest,
Inc. to Spruce MacIntyre Holding Corp. ("Spruce"). The company also assigned to
Spruce its interest in a note receivable from American Temporary Sanitation
Inc., with a face value of $1,220,000. Total consideration for the sale and
assignment is $1,650,000. The assets sold comprise substantially all of the
Company's operating assets and liabilities and operations for the year ended
September 30, 2000.

Other Laws

The Company's activities are subject to various federal environmental protection
and similar laws, including, without limitation, the Clean Air Act, the
Hazardous Materials Transportation Act and the Toxic Substances Control Act.
Many states, also have adopted laws for the protection of the environment which
may affect the Company, including laws governing the generation, handling,
transportation and disposition of hazardous substances as well as laws governing
the investigation and clean-up of, and liability for, contaminated sites. Some
of these state provisions are broader and more stringent than existing federal
laws and regulations. The failure of the Company to comply and conform its
operations to the requirements of any of these federal or state laws could
subject the Company to substantial liabilities which could have a material
adverse affect on the Company, its operations and financial condition. The
Company cannot predict the extent to which it may be affected by any law or rule
that may be enacted or enforced in the future, or any new or different
interpretations of existing laws or rules.

Compliance

The Company believes that it is in substantial compliance with all local, state
and federal regulations relating to its operations. To insure such compliance
the Company has developed and maintains its own quality control program. As one
aspect of this program, the Company's quality control officers perform random
inspections before, during, and after project operations. Categories of
inspection include isolation barriers, decontamination units, protective
equipment, negative pressure, work practices, general housekeeping, air
monitoring, disposal, detail and final clean-up, demobilization and enforcement
of state regulations.

Research and Development

Research and development activities for the fiscal years ended September 30,
1999 and 1998 have not been material and the Company has had no customer
sponsored research activities during each of these periods. Employees As of
January 31, 2001, the Company had 3 full-time personnel employed as executives,
directors, administrative and clerical support.

Seasonality

The Company's business is subject to variations in revenues and results of
operations for interim periods and from year to year. Increased revenues may not
always result in a corresponding increase in results of operations. These
conditions are due to a number of characteristics shared by the Company to
varying degrees with most other members of the industry, including the
following: (1) its business is seasonal (typically less activity in the winter
months) and is affected by the scheduling of work at commercial properties and
outages at utilities and other

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industrial facilities; (2) its business is labor intensive; (3) its performance
on a given project is often dependent on the performance of other contractors,
who are working on the same job, over which the Company has no control; and (4)
costs ultimately incurred by the Company on a job may be materially affected by
such risks as technical problems, labor shortages and disputes, time extensions,
weather, delays caused by external timing of large contracts, especially if all
or a substantial part of the performance of such contracts occurs within one or
two quarters. Accordingly, quarterly results or other interim results should not
be considered indicative of results to be expected for any other quarter or for
the full fiscal year.

Royalties, Patents and Trademarks

The Company does not currently own any patents, royalties, trademarks, licenses,
franchises or concessions which are material to its business.

ITEM 2. DESCRIPTION OF PROPERTY

The Company's principal corporate office is located at 40 Skokie Blvd., Suite
110, Northbrook, Illinois which consists of office space shared with Deere Park
Capital, L.L.C. at no incremental cost to the Company.

ITEM 3. LEGAL PROCEEDINGS

The nature and scope of the Company's business operations bring it into regular
contact with the general public, a variety of businesses and government
agencies. These activities inherently subject the Company to the hazards of
litigation, which are defended in the normal course of business. Management
believes that such proceedings are either adequately covered by insurance, or if
uninsured, by the estimated losses it has recorded to date. The resolution of
such claims, however, could have a material effect on the Company's results of
operations or cash flows..

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

The Company did not submit any matter to a vote of shareholders during the last
quarter of fiscal 2000.

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PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Prices

The Common Stock of the Company is traded in the over-the-counter
market. Quotations are published in the National Quotation Bureau "Pink Sheets"
and the OTC Bulletin Board under the symbol USIS.OB. The following table sets
forth, for the fiscal quarters indicated, the range of the high ask and low bid
quotations for the Company's Common Stock as reported by the National Quotation
Bureau, Inc. The quotations presented are between broker-dealers and do not
include retail mark-ups, mark-downs, or other fees and commissions. As a result,
the following quotations may no reflect actual transactions.

Fiscal Year ended September 30, 2000: HIGH ASK LOW ASK
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Quarter ended September 30, 2000 2.63 0.63
Quarter ended June 30, 2000 2.13 0.53
Quarter ended March 31, 2000 4.75 0.31
Quarter ended December 31, 1999 3.00 0.44

Fiscal Year ended September 30, 1999: HIGH ASK LOW ASK
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Quarter ended September 30, 1999 19.00 2.63
Quarter ended June 30, 1999 11.06 0.31
Quarter ended March 31, 1999 1.70 0.38
Quarter ended December 31, 1998 0.58 0.38

Stockholders

As of December 31, 2000, the Company had approximately 79 record
holders of its Common Stock, as reflected on the books of the Company's transfer
agent. A significant number of shares are held in street names and as such the
Company believes the actual number of beneficial owners is higher.

Dividends

The Company has not established a policy concerning payment of regular
dividends nor has it paid any dividends on its Common Stock to date. Any payment
of dividends in the future will be determined by the Board of Directors in light
of conditions then existing, including the Company's earnings, financial
condition, capital requirements and debt covenants.

Recent sales of Unregistered Securities

Not applicable.

Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN

General

On September 29, 2000 the Company sold its holdings in P.W. Stephens
Environmental, Inc.("PWSE"), P.W. Stephens Contractors, Inc. ("PWSC"),P.W.
Stephens Services, Inc.("PWSS") and P.W. Stephens Northwest, Inc.("PWSN") to
Spruce MacIntyre Holding Corp. ("Spruce"). The company also assigned to Spruce
its interest in a note receivable from American Temporary Sanitation Inc., with
a face value of $1,220,000. Total consideration for the sale and assignment is
$1,650,000. The assets sold comprise substantially all of the Company's
operating assets and liabilities and operations for the year ended September 30,
2000.

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Revenue:

Revenue for the year ended September 30, 2000 increased 34.4% to
$13,511,000 from $10,050,000 for the same period in 1999. The increase in
revenue can be attributed to performance under a significant contract for soil
remediation at the Hanford Nuclear Project in Hanford, Washington, that began in
March 1999.

Gross Profit:

Gross profit for the year ended September 30, 2000 increased 21.0% to
$2,706,000 from $2,236,000 for the same period in 1999. The increase in the
gross profit margin can be attributed to the increased sales activity. Gross
profit margins decreased from 22.2% to 20.0% primarily due to lower margins
relating to the soil remediation contract at the Hanford Nuclear Project.

Selling, General and Administrative Expenses:

Selling, general and administrative expenses for the year ended
September 30, 2000 were $5,796,000 compared to $2,267,000 for the same period in
1999. Approximately $360,000 of this increase is attributable to management fees
charged by AEC.

Other Income (Expenses):

Other income (expenses) for the years ended September 30, 2000 and 1999
were $402,000 and $(5,388,000), respectively. The income in 2000 is attributable
primarily to the gain on the sale of PWSE, PWSC, PWSS and PWSN. The expenses in
1999 were due primarily to write-offs of certain notes receivable, the loss on
disposal of certain securities and financing fees.

Provision for Income Tax

In fiscal 1998 the Company recognized $3,842,000 of income tax benefits
of the Company's net operating loss carryforwards. The Company reserved
$3,537,000 and $1,038,000 in 2000 and 1999, respectively, of it not operating
loss carryforwards.

Discontinued Operations

Discontinued operation income for the year ended September 30, 1999 is
primarily related to the recognition of a gain of $3,345,000 upon the sale of
Manta.

Liquidity and Capital Resources

The Company's existing capital resources as of September 30, 2000
consists of cash and notes totaling $6,079,000 compared to $6,346,000 for the
year ended September 30, 1999. The Company believes that the proceeds from the
sale of assets and the financing arrangements the Company currently has in place
will be sufficient throughout the next twelve months to finance its working
capital needs, planned capital expenditures, debt service and the outstanding
obligations from the Company's discontinued operations. Implementation of the
Company's strategic plan of expanding its operation may require additional
capital.

During fiscal year 2000 the Company utilized net cash in operating
activities of $129,000, including a net loss of $6,225,000.

The Company's investing activities provided $443,000, primarily due to
collections from notes receivable from the sale of Manta.

The Company's financing activities utilized $582,000, primarily due to
payments on long-term debt.

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Information Regarding Forward Looking Statements

This Form 10-KSB includes forward looking statements within the meaning
of section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements included statements concerning
plans, objectives, goals, strategies, future events or performance and
underlying assumptions and other statements which are other that statements of
historical facts. Forward looking statements involve risks and uncertainties
which could cause actual results or outcomes to differ materially. The Company's
expectations and beliefs are expressed in good faith and are believed by the
Company to have a reasonable basis but there can be no assurance that
management's expectations, beliefs or projections will be achieved or
accomplished. In addition to other factors and matters discussed elsewhere
herein, the following are important factors that, in view of the Company could
cause actual results to differ materially from those discussed in the
forward-looking statements: the availability of debt or equity capital to fund
the Company to manage its operations effectively, the collection and realization
of its investments and notes receivable, the economic conditions that could
affect demand for the Company's services, the adverse outcome of litigation and
proceedings, the ability of the Company to complete projects profitably and the
severe weather conditions that could delay projects.

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ITEM 7. FINANCIAL STATEMENTS

INDEX

PAGE
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INDEPENDENT AUDITORS' REPORT 13

CONSOLIDATED BALANCE SHEETS 14

CONSOLIDATED STATEMENTS OF OPERATIONS 15

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY 16

CONSOLIDATED STATEMENTS OF CASH FLOWS 17

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 18-28

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INDEPENDENT AUDITORS' REPORT

TO THE BOARD OF DIRECTORS
U.S. INDUSTRIAL SERVICES, INC.:

We have audited the accompanying consolidated balance sheet of U.S. Industrial
Services, Inc. as of September 30, 2000, and the consolidated statements of
operations, stockholders' equity and cash flows for each of the two years then
ended. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of U.S.
Industrial Services, Inc. as of September 30, 2000, and the consolidated results
of its operations and its cash flows for each of the two years then ended in
conformity with generally accepted accounting principles.

MERDINGER, FRUCHTER, ROSEN & CORSO, P.C.
Certified Public Accountants

New York, New York
February 2, 2001

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U. S. INDUSTRIAL SERVICES, INC.
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2000
(In Thousands)

ASSETS
CURRENT ASSETS
Cash $ 12
Receivable on sale of assets 100
Notes receivable, current portion 2,550
----------
Total current assets 2,662

OTHER ASSETS
Notes receivable, less current portion 3,417
----------

TOTAL ASSETS $ 6,079
==========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 529
Other payables 1,370
----------
Total current liabilities 1,899
----------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
Common stock, $.01 par value, 25,000 shares
authorized 8,764 shares issued and outstanding 88
Additional paid-in capital 23,177
Accumulated deficit (19,085)
----------
Total stockholders' equity 4,180
----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 6,079
==========

The accompanying notes are an integral part of these consolidated financial
statements.

14
15
U. S. INDUSTRIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
SEPTEMBER 30, 2000 AND 1999
(In Thousands except for per share amounts)

2000 1999
-------- --------

REVENUE $ 13,511 $ 10,050
-------- --------
COSTS AND EXPENSES
Direct costs of revenue 10,805 7,814
Selling, general and administrative expenses 5,796 2,267
-------- --------
16,601 10,081
-------- --------
OPERATING LOSS (3,090) (31)
-------- --------
OTHER INCOME (EXPENSE)
Write-off of notes receivable -- (1,204)
Loss on disposal of securities -- (1,298)
Financing fees -- (2,849)
Gain on sale of subsidiary 379 --
Interest income (expense), net 23 (37)
-------- --------
Total other income (expense) 402 (5,388)
-------- --------
LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (2,688) (5,419)

INCOME TAX PROVISION 3,537 1,038
-------- --------
LOSS FROM CONTINUING OPERATIONS (6,225) (6,457)
-------- --------
DISCONTINUED OPERATIONS (NET OF INCOME
TAX EFFECT OF $-0-)
Earnings from operations of residential asbestos business -- 224
Loss from operations of industrial maintenance business -- (208)
Gain from sale of industrial maintenance business -- 3,345
-------- --------
Total earnings from discontinued operations -- 3,361
-------- --------
NET LOSS $ (6,225) $ (3,096)
======== ========
BASIC AND DILUTED EARNINGS (LOSS)
PER COMMON SHARE
Loss from continuing operations $ (0.71) $ (0.74)
Earnings from discontinued operations -- 0.39
-------- --------
Net earnings (loss) per common share (0.71) (0.35)
======== ========
WEIGHTED AVER NUMBER OF SHARES USED IN
COMPUTING EARNINGS (LOSS) PER COMMON SHARE
Basic and diluted 8,764 8,764
======== ========

The accompanying notes are an integral part of these consolidated financial
statements.

15
16
U. S. INDUSTRIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
SEPTEMBER 30, 2000 AND 1999
(In Thousands)

Accumulated
Common Shares Additional Other Total
Shares Dollar Paid-in Comprehensive Accumulated Shareholders'
Outstanding Amount Capital Income Deficit Equity
----------- ------------ ------------ --------------- ------------- ------------

Balance September 30, 1998 8,764 $ 88 $ 22,636 $ (888) $ (9,764) $ 12,072

Realized loss on securities, net -- -- -- 888 -- 888
Issuance of warrants -- -- 48 -- -- 48
Net loss -- -- -- -- (3,096) (3,096)
-------- -------- -------- -------- -------- --------

Balance, September 30, 1999 8,764 88 22,684 -- (12,860) 9,912
Issuance of warrants -- -- 493 -- -- 493
Net loss -- -- -- -- (6,225) (6,225)
-------- -------- -------- -------- -------- --------

Balance September 30, 2000 8,764 $ 88 $ 23,177 $ -- $(19,085) $ 4,180
======== ======== ======== ======== ======== ========

The accompanying notes are an integral part of these financial statements.

16
17
U. S. INDUSTRIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
SEPTEMBER 30, 2000 AND 1999
(In Thousands)

2000 1999
-------- --------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (6,225) $ (3,096)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 680 582
Allowance for doubtful accounts (81) --
Gain on sale (379) (3,345)
Loss on disposal of machinery and equipment -- 6
Change in deferred income tax 3,537 871
Write-off of securities available for sale -- 1,298
Write-off of notes receivable 336 904
Issuance of warrants 493 48
Change in accounts receivable (87) (1,527)
Change in notes receivable - accrued interest (208) (232)
Change in costs and estimated earnings in excess of
billings on jobs in progress 321 (248)
Change in prepaid expenses and other current assets (211) (85)
Change in other assets 34 (48)
Change in accounts payable and accrued liabilities 1,515 (8,458)
Change in other payables and due to affiliates (534) 842
Change in billings in excess of costs and estimated earnings
on jobs in progress 680 862
-------- --------
Net cash used in operating activities (129) (11,625)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from notes receivable 1,000 15,066
Advances for notes receivable -- (760)
Divestiture of cash (421) 3,282
Capital expenditures (136) (418)
-------- --------
Net cash provided by investing activities 443 17,170
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long-term debt (582) (7,778)
Proceeds from long-term debt -- 164
-------- --------
Net cash used in financing activities (582) (7,778)
-------- --------
NET DECREASE IN CASH (268) (2,069)

CASH AT BEGINNING OF YEAR 280 2,349
-------- --------
CASH AT END OF YEAR $ 12 $ 280
======== ========
Supplemental disclosures of cash flow information Cash paid for:
Interest $ 217 $ 37
Income Taxes -- 60
Supplemental schedule of non-cash investing and financing activities:
Machinery and equipment acquired through capital lease obligations $ 2,190 $ 1,631

The accompanying notes are an integral part of these financial statements.

17
18
U. S. INDUSTRIAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Company Description and Nature of Operations
U.S. Industrial Services, Inc. and its wholly owned subsidiaries (the
"Company" or "USIS"), (formerly "EIF Holdings, Inc.") has been a
multi-state service company, specializing in industrial cleaning
services, including soil and groundwater remediation, hazardous
materials management and clean-up, asbestos abatement and lead hazard
removal services, to its customers located primarily in the states of
Illinois, Iowa, Missouri, Nebraska and Washington. The Company was a
majority-owned subsidiary of American Eco Corporation ("AEC") through
July 21, 2000 at which time control was obtained by Deere Park
Capital, L.L.C. ("Deere Park") Deere Park acquired approximately
81.9% of the Company's common stock. On December 21, 2000 Deere Park
sold 50% of its interest to an individual and currently the Company
is not a majority owned subsidiary of any entity. As noted below, the
Company sold substantially all of its operating assets on September
29, 2000.

Effective June 22, 1998, the Company completed a recapitalization and
reincorporation through a merger with USIS, a newly formed Delaware
corporation, and wholly owned subsidiary of EIF Holdings, Inc. USIS
became the surviving company, and all outstanding shares of EIF
common stock were exchanged on a one-for-one basis for shares of USIS
common stock.

On September 29, 2000 the Company sold its holdings in P.W. Stephens
Environmental, Inc., P.W. Stephens Contractors, Inc., P.W. Stephens
Services, Inc. and P.W. Stephens Northwest, Inc. to Spruce MacIntyre
Holding Corp. ("Spruce"). The company also assigned to Spruce its
interest in a note receivable from American Temporary Sanitation
Inc., with a face value of $1,220. Total consideration for the sale
and assignment is $1,650. The assets sold comprise substantially all
of the Company's operating assets and liabilities and operations for
the year ended September 30, 2000.

Principles of Consolidation
The accompanying consolidated financial statements include the
accounts of the Company and its wholly owned subsidiaries. All
significant intercompany transactions and balances have been
eliminated in consolidation.

Fair Value of Financial Instruments
The Company measures its financial assets and liabilities in
accordance with generally accepted accounting principles. For certain
of the Company's financial instruments, including cash, receivables,
notes receivable, accounts payable and other payables, the carrying
amounts approximate fair value due to their short maturities.

18
19
U. S. INDUSTRIAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from these estimates.

Concentration of credit risk
Financial instruments, which potentially subject the company to
concentrations of credit risk, consist of cash and notes and other
receivables. The company places its cash with high quality financial
institutions and at times may exceed the FDIC $100,000 insurance
limit. The company offered its services predominately in the states
of Illinois, Missouri, Nebraska and Washington, and it extends credit
based on an evaluation of a customer's financial condition, generally
without collateral. Exposure to losses on accounts receivable is
principally dependent on each customer's financial condition. The
Company monitors its exposure for credit losses and maintains
allowances for anticipated losses, if required.

Securities Available Sale
Equity securities are classified as "available for sale" as defined
by Financial Accounting Standards Board ("FASB") Statement of
Financial Accounting Standard (SFAS") No. 115, "Accounting for
Certain Investments in Debt and Equity Securities". In accordance
with that Statement, they are reported at aggregate fair value with
unrealized losses excluded from earnings and reported as other
comprehensive income, net of deferred taxes. The cost of securities
sold is determined by the average cost method.

Property Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation of
plant and equipment is provided over the estimated useful lives of
the respective assets using the straight-line method, generally from
five to ten years. Leasehold improvements are amortized over the life
of the lease.

Goodwill
Goodwill is amortized on a straight-line basis over 20 years.
Management reviews, on an annual basis, the carrying value of
goodwill in order to determine whether an impairment has occurred.
Impairment is based on several factors including the Company's
projection of future undiscounted operating cash flows. If an
impairment of the carrying value were to be indicated by this review,
the Company would adjust the carrying value of goodwill to its
estimated fair value.

19
20
U. S. INDUSTRIAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Long-Lived Assets
Long-lived assets to be held and used are reviewed for impairment
whenever events or changes in circumstances indicate that the related
carrying amounts may not be recoverable. When required, impairment
losses on assets to be held and used are recognized based on the fair
value of the assets and long-lived assets to be disposed of are
reported at the lower of carrying amount or fair value less cost to
sell.

Revenue Recognition
The Company recognizes revenues and profits on contracts using the
percentage-of-completion method. Under the percentage-of-completion
method, contract revenues are accrued based upon the percentage that
accrued costs to date bear to total estimated costs. As contracts can
extend over more than one accounting period, revisions in estimated
total costs and profits during the course of work are reflected
during the period in which the facts requiring such revisions become
known. Losses on contracts are charge to income in the period in
which such losses are first determined.

The percentage-of completion method of accounting can result in the
recognition of either costs and estimated profits in excess of
billings or billings in excess of costs and estimated profits on
contracts in progress, which are classified as current assets and
liabilities, respectively, in the accompanying balance sheet. The
current asset account represents costs incurred and profits earned
that have not been billed to the customer on uncompleted construction
contracts. The current liability account represents deferred income
on uncompleted construction contracts. Generally accepted accounting
principles for percentage-of-completion accounting require the
classifications as current assets and liabilities. Revenues from time
and material contracts are recognized currently as the work is
performed.

Stock Based Compensation
The Company uses the intrinsic value method of accounting for
stock-based compensation in accordance with Accounting Principles
Board Opinion ("APB") No. 25, "Accounting for Stock Issued to
Employees" and related interpretations. See Note 10 for pro forma
disclosure of net loss and loss per share under the fair value method
of accounting for stock-based compensation as proscribed by SFAS No.
123, "Accounting for Stock-Based Compensation".

Income Taxes
Income taxes are provided for based on the liability method of
accounting pursuant to SFAS No. 109, "Accounting for Income Taxes".
Deferred income taxes, if any, are recorded to reflect the tax
consequences on future years of differences between the tax bases of
assets and liabilities and their financial reporting amounts at each
year-end.

20
21
U. S. INDUSTRIAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Per Share Data
The Company calculates earnings per share in accordance with SFAS No.
128, "Earnings Per Share", which requires presentation of basic
earnings per share ("BEPS") and diluted earnings per share ("DEPS").
The computation of BEPS is computed by dividing income available to
common stockholders by the weighted average number of outstanding
common shares during the period. DEPS gives effect to all dilutive
potential common shares outstanding during the period. The
computation of DEPS does not assume conversion, exercise or
contingent exercise of securities that would have an antidilutive
effect on earnings. As of September 30, 2000, the Company had the
following securities that would effect loss per share if they were to
be dilutive:

Options 1,030
Warrants 392
--------
1,422
========

Comprehensive Income
The Company has adopted SFAS No. 130, "Reporting Comprehensive
Income". SFAS 130 establishes standards for reporting and display of
comprehensive income and its components in a full set of
general-purpose financial statements.

NOTE 2 - NOTE RECEIVABLE

Kenny Industrial Services, L.L.C., due November 2002,
interest at 5%, secured by assets sold $ 1,000
Kenny Industrial Services, L.L.C., due in equal annual
installments November 2000 through 2002, interest at 5%,
secured by assets sold 3,000
Spruce MacIntyre Holding Corp. due in three installments
through June 15, 2001 and bearing interest on the unpaid
principal balance at 9.5%, secured by assets sold and by
certain assets of the purchaser 1,550
Other - interest on Kenny Industrial Services, L.L.C. notes 417
--------
Total 5,967
Less: current portion 2,550
--------
Long-term portion $ 3,417
========

The above notes receivable from Kenny Industrial Services, L.L.C.
("Kenny") resulted from a sale of certain assets and liabilities to
Kenny, as described in Note 4 under the caption "JL Manta, Inc.". The
$1,000 payment due from Kenny in November, 2000 has not been paid as
of the date of this report. The Company has informally agreed to
extend the due date until Kenny has completed a refinancing of its
debt; however, Kenny technically is in default of the notes.

On October 27, 2000, attorneys for Kenny notified the Company that
Kenny is seeking indemnification for breaches of representations and
warranties made in connection with the sale of those certain assets
and liabilities referred to above. No damages are identified or
described. The Company denies that it breached its representations or
warranties and no further action has been taken by Kenny as of the
date of this report.

21
22

U. S. INDUSTRIAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

NOTE 3 - PROPERTY, PLANT AND EQUIPMENT

For the years ended September 30, 2000 and 1999, depreciation expense
was $633 and $530, respectively. The Company has sold the assets and
operations which resulted in this expense.

NOTE 4 - BUSINESS COMBINATIONS AND DISPOSITIONS

JL Manta, Inc.
Effective October 31, 1997, the Company completed its acquisition of
JL Manta, Inc. ("Manta"), an Illinois corporation which provided
specialized maintenance services for clients in the industrial,
environmental and low-level nuclear sectors. Pursuant to the terms of
a Stock Purchase Agreement, the Company acquired all the issued and
outstanding common stock of Manta (the "Manta Stock") from the
stockholders of Manta (the "Manta Stockholders") for consideration of
$4,725 in cash and $2,235 in convertible promissory notes of the
Company. Concurrent with the closing of the Acquisition, certain
Manta stockholders and key employees entered into Retention Bonus
Agreements with the Company providing for bonus payments in the
aggregate amount of $900 to be amortized by the Company over a six
year period of which $763 remained as prepaid expense as of September
30, 1998. The purchase price and expenses associated with the
acquisition exceed the fair value of net assets acquired by
approximately $2,000.

In November 1998 the Company sold the assets and liabilities of Manta
to Kenny Industrial Services, L.L.C. for $23,000, consisting of a
combination of $3,000 of cash, a short term note of $15,000, which
was paid December 15, 1998, and $5,000 in notes. At this time, the
name of the Company's subsidiary was changed to Atnam, Inc. This
divestiture resulted in the payment or transfer to the purchaser of
all amounts previously due to Manta Stockholders.

PW Stephens Residential
On December 31, 1998 the Company sold the assets and liabilities of
P.W. Stephens Residential, Inc. ("Residential") to American Temporary
Sanitation, Inc. for $2,400, consisting of $1,004 in cash and a
promissory note for $1,396 payable quarterly through 2004, together
with interest at prime rate plus 2.5% per annum. Since the purchaser
is a highly leveraged entity and its liabilities consist of the
amounts due to the Company and funds borrowed from a third party to
finance the down payment, recognition of the gain on this sale has
been deferred in accordance with Staff Accounting Bulletin Topic 5-U
"Gain Recognition on the Sale of a Business or Operating Assets to a
Highly Leveraged Entity". This note has been assigned pursuant to the
sale described below.

22
23
U. S. INDUSTRIAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

NOTE 4 - BUSINESS COMBINATIONS AND DISPOSITIONS (Continued)

P.W. Stephens Environmental, Inc. (PWSE"), P.W. Stephens Contractors,
Inc. ("PWSC"), P.W. Stephens Service, Inc., ("PWSS"), P.W. Stephens
Northwest, Inc. ("PWSN")

On September 29, 2000, the Company sold its holdings in PWSE, PWSC,
PWSS and PWSN to Spruce MacIntyre Holding Corp. Also, the Company
assigned its interest in a note receivable from American Temporary
Sanitation, Inc. with a face amount of $1,220 (see Residential
above). The consideration for the sale and assignment is $1,650,
consisting of a cash payment of $100 and a note receivable in the
aggregate amount of $1,550. The note is due and payable $100 on
December 29, 2000, $450 on February 28, 2001 and $1,000 on June 15,
2001. The note bears interest at 9.5% per year on the outstanding
principal balance. The Company has recorded a gain on the sale of
$310.

The assets sold comprise substantially all of the Company's operating
assets and all of its revenue generating activity.

NOTE 5 - LEASES

For the years ended September 30, 2000 and 1999 rent expense was
approximately $51 and $44, respectively. The Company has sold the
operations which occupied these premises and incurred this expense.

The Company's principal corporate office is located in Northbrook,
Illinois, which consists of office space shared with a principal
stockholder at no incremental cost to the Company. The fair value of
the rental is approximately $500 per month.

NOTE 6 - SECURITIES AVAILABLE FOR SALE

Securities available for sale consisted of 180 shares of common stock
of AEC as of September 30, 1998. Theses shares were issued to the
Company in lieu of cash in conjunction with the Amendment dated
September 30, 1997 to the existing line of credit, which increased
the maximum borrowing amount under the line to $20,000. These
securities reflected a value of $2.28 per share as of September 30,
1998 on the consolidated balance sheet, which was the market value.
The Company intended to sell these securities to settle certain of
the company's existing obligations.

Proceeds and gross realized losses from the sale of securities
classified as available for sale for the year ended September 30,
1999 are as follows:

Gross proceeds $ -
Gross realized loss (1,298)

23
24
U. S. INDUSTRIAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

NOTE 7 - FEDERAL INCOME TAX

The components of the provisions (benefit) for income taxes are as
follows for the years ended September 30, 2000 and 1999:

2000 1999
------ ------
Current tax expense:
U.S. Federal $ - $ -
State and local - 38
------ ------

Total current - 38
------ ------
Deferred tax expense
U.S. Federal 3,537 1,000
State and local - -
------ ------

Total deferred 3,537 1,000
------ ------

Total tax provision from continuing operations $3,537 $1,038
====== ======

The reconciliation of the effective income tax rate to the Federal
statutory rate is as follows for the years ended September 30, 2000
and 1999:

2000 1999
------ ------

Federal income tax rate (34.0)% (34.0)%
State and local income tax rate - -
Effect of reversal of deferred tax valuation
allowance 165.6 -
Effect of deferred tax valuation allowance - 53.2
------ ------
Effective income tax rate 131.6 19.2
====== ======

Deferred tax assets and liabilities reflect the net tax effect of
temporary differences between the carrying amount of asset and
liabilities for financial reporting purposes and amounts used for
income tax purposes. Significant components of the Company's deferred
tax assets are as follows as of September 30, 2000:

Deferred tax assets
Loss carryforwards $ 3,993
Less: valuation allowance (3,993)
--------

Net deferred tax assets $ -
========

24
25
U. S. INDUSTRIAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

NOTE 7 - FEDERAL INCOME TAX (Continued)

At September 30, 2000, the Company had net carryforward losses of
approximately $11,744. Net operating loss carryforwards expire
starting in 2016 through 2020. Per year availability may be subject
to change of ownership limitation under Internal Revenue Code Section
382.

NOTE 8 - LITIGATION, COMMITMENTS AND CONTINGENCIES

The nature and scope of the Company's business operations bring it
into regular contact with the general public, a variety of businesses
and government agencies. These activities inherently subject the
Company to potential litigation, which are defended in the normal
course of business. At September 30, 2000, there were various claims
and disputes incidental to the business. The Company believes that
the disposition of all such claims and disputes, individually or in
the aggregate, should not have a material adverse affect upon the
Company's financial position, results of operations or cash flows. As
of September 30, 2000, the Company has not been named as a
responsible party for any environmental issues under the Federal
Superfund Law.

AEC has commenced a Chapter 11 proceeding in the United States
Bankruptcy Court. AEC has filed an adversarial complaint against the
Company regarding certain fees and advances which AEC claims are due
it. The Company intends to vigorously defend against these
allegations. These amounts have been recorded in the financial
statements (see Note 9).

On October 27, 2000, attorneys for Kenny Industrial Services, L.L.C.
("Kenny") notified the Company that Kenny is seeking indemnification
for breaches of representations and warranties made in connection
with the sale of certain assets and liabilities as described in Note
4 under the caption "JL Manta, Inc.". No damages are identified or
described. The Company denies that it breached its representations or
warranties and no further action has been taken by Kenny as of the
date of this report.

NOTE 9 - RELATED PARTY TRANSACTIONS

The Company is involved in various related party transactions. These
transactions are summarized as follows:

Pursuant to a Management Services Agreement effective May 1, 1999,
between AEC and the Company, AEC had agreed to provide certain
services to the Company in exchange for a management fee to the
paid on a monthly basis. The services include providing the
Company with management guidance in addition to guaranteeing
certain of the Company's obligations with its creditors, in order
to allow the Company to receive favorable terms with its
creditors. The agreement provided for a monthly payment of $40.
For the years ended September 30, 2000 and 1999, total management
fees recorded were $280 and $200, which are included in other
payables in the consolidated balance sheet, as further described
below. The Company believes that AEC did not perform its
responsibilities under the management agreement and, although the
Company has recorded the management fees in the financial
statements, it is contesting the validity of the agreement. At
September 30, 2000 and 1999 the Company was indebted to AEC in the
amount of $1,370 and $843, respectively, including the disputed
management fees. The amounts are due on demand and included in
other payables.

25
26
U. S. INDUSTRIAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

NOTE 10 - EQUITY

Warrants
During the year ended September 30, 2000, the Company issued warrants
to purchase an aggregate of 296 shares of the Company's common stock.
The warrants are exercisable at $1.50 per share for five years. The
warrants have been valued at $493 using the Black-Scholes option
pricing model with the following weighted average assumptions: risk
free interest rate of 5%; dividend yield of 0%; volatility of 238%;
and an expected life of 5 years.

During the year ended September 30, 1999, the Company issued
warrants, related to financing fees, for the purchase of 96 shares of
the Company's common stock at $1.50 price per share, for 5 years. The
warrants had an aggregate fair value at date of grant of $48. The
fair value for the warrants was estimated at the date of grant using
the Black-Scholes option pricing model with the following
weighted-average assumptions: risk-free interest rate of 6.1%;
dividend yield of 9%; volatility of 183%; expected life of 2.5 years.

Stock Options
The Company's board of directors approved the 1998 Stock Option Plan
(the "Plan"). The Plan covers two types of options: incentive stock
options and non-qualified stock options. The aggregate number of
shares that may be issued pursuant to the Plan may not exceed 1,000
shares. The exercise price for the options shall be determined by the
Plan administrator at the date of grant, but shall not be less than
the fair market value of the stock at the date of grant. The option
period can be no more than 10 years and the options will vest over a
period of time determinable by the board.

Pro forma information regarding net income and earnings per share is
required by SFAS No. 123, "Accounting for Stock-Based Compensation",
and has been determined as if the Company had accounted for its
employee stock options under the fair value method of that Statement.
The weighted average fair values at date of grant for options granted
during 2000 and 1999 were $0.73 and $0.31, and were estimated at the
date of grant using the Black-Scholes option pricing model with the
following respective weighted average assumptions for 2000 and 1999:
interest rates of 5% and 6.1%; dividend yields of 0%; volatility of
238% and 183%; and a weighted average expected life of the option of
5 and 2.5 years.

This option valuation model requires input of highly subjective
assumptions. Because the Company's employee stock options have
characteristics significantly different from those of traded options,
and because changes in the subjective input assumptions can
materially affect the fair value estimate, in management's opinion,
the existing model does not necessarily provide a reliable single
measure of the fair value of its employee stock options.

26
27
U. S. INDUSTRIAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

NOTE 10 - EQUITY (Continued)

The Company has adopted only the disclosure provisions of SFAS No.
123. It applies Accounting Principles Bulletin ("APB") Options No.
25, "Accounting for Stock Issued to Employees", and related
interpretations in accounting for its plans and does not recognize
compensation expense for its stock-based compensation plans other
than for stock and other equity instruments issued to outside third
parties. If the Company had elected to recognize compensation expense
based on the fair value at the grant date for awards under these
plans consistent with the methodology prescribed by SFAS 123, the
Company's net loss would be increased by approximately $359 and $534
for the years ended September 30, 2000 and 1999, respectively, to the
pro forma amounts indicted below.

2000 1999
-------- --------
Pro forma
As reported $ (6,225) $ (3,096)
Pro forma $ (6,584) $ (3,630)
Pro forma loss per share $ (0.75) $ ( 0.41)

The following summarizes the Company's stock option transactions
under the stock option plan:

Weighted
Average
Share Options Exercise
Outstanding Price
------------- ---------

Outstanding, September 30, 1998 240 $ 4.46
Granted 655 0.44
------

Outstanding, September 30, 1999 895
Granted at an exercise of price $4.74 10 4.74
Granted at exercise price if $0.75 125 $ 0.75
------

Outstanding, September 30, 2000 1,030
======

Options exercisable, September 30, 1999 815 $ 1.23
Options exercisable, September 30, 2000 895 1.33

27
28

U. S. INDUSTRIAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

NOTE 10 - EQUITY (Continued)

The following table summarizes the outstanding and exercisable
options grouped by range of exercise prices as of September 30, 2000:

Weighted
Average Range of Weighted
Remaining Exercise Average
Life Prices Exercise Price
--------------------- --------------------- -----------------

2.4 $0.41 to $1.10 $0.49
.5 $3.40 to $4.74 4.47

NOTE 11 - RETIREMENT PLANS

A majority of the Company's former laborers were covered by union
sponsored, collectively bargained multi-employer pension plans. The
administrators do not provide sufficient information to enable the
Company to determine its share, if any, of unfunded vested benefits.
The Company has sold the assets and operations which resulted in this
expense.

NOTE 12 - DISCONTINUED OPERATIONS

Residential
In December 1998, the Company sold the assets and liabilities of
Residential to American Temporary Sanitation, Inc. The results of
operations for the respective periods presented are reported as a
component of discontinued operations in the consolidated statement of
operations. The following table summarizes results of operations for
Residential for the year ended September 30, 1999.

Net revenues $ 1,690
Operating earnings 146
Earnings from discontinued operations 224

Manta
In November 1998, the Company sold the assets and liabilities of
Manta to Kenny Industrial Services, L.L.C. The results of operations
for the respective periods presented are reported as a component of
discontinued operations in the consolidated statement of operations.
The following table summarizes results of operations for Manta for
the year ended September 30, 1999.

Net revenues $ 11,220
Operating earnings (253)
Earnings from discontinued operations (208)

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

None

29
PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

As of January 31, 2001, the directors and executive officers of the
Company were:

NAME AGE POSITION WITH COMPANY

Frank J. Fradella 45 Director, President and CEO
James Chatz 63 Director
Allen S. Gerrard 65 Chairman of the Board
Richard M. Lancaster 58 Director

The terms of the Board of Directors will expire annually at the next
stockholders meeting. The Company's officers are elected by the Board of
Directors and hold office at the will of the Board. There is no family
relationship between any of the officers or directors.

Executive Officers

FRANK J. FRADELLA has served as the Company's president, chief
executive officer and a director since July 27, 2000, the same positions he
served the Company during 1997 and 1998. Mr. Fradella served as chief operating
officer of American Eco Corporation, an industrial construction and
environmental maintenance services company. He served as president and chief
executive officer of NSC Corporation, formerly the Brand Companies, a provider
of environmental remediation services, from 1994 through 1996.

JAMES CHATZ has served as a director of the Company since July 27,
2000. Mr. Chatz is a senior partner with the Chicago law firm of Kamensky &
Rubenstein, specializing in the fields of commercial insolvency and creditors
rights. Mr. Chatz is a former director of Divi Hotels, Inc., Miami, Florida. Mr.
Chatz received his Bachelor of Science degree and his Juris Doctor, in 1958,
from Northwestern University.

ALLEN S. GERRARD has served as Chairman of the Board of the Company
since July 27, 2000. Since 1996, Mr. Gerrard has served as a director of Deere
Park Capital, L.L.C., an investment and merchant banking firm, and since April
1998 he has served as vice chairman of such company. Mr. Gerrard has served as a
director of BPI Packaging Technologies, Inc., a publicly traded manufacturing
company, since January 1999. Since February 1999, Mr. Gerrard has served as a
director of Fortune Financial Systems, Inc. Mr. Gerrard was a principal in the
law firm of Allen S. Gerrard & Associates from 1978 to 1999. Mr. Gerrard
received his Bachelor of Arts degree in Political Science from the University of
Illinois in Champaign-Urbana and his Juris Doctor degree from the University of
Michigan Law School.

RICHARD M. LANCASTER is a Registered Electrical Engineer, Professional
Engineer and attended the University of South Carolina School of Law.

Item 10. EXECUTIVE COMPENSATION

Compensation

The following table discloses the compensation awarded to or earned by
the Chief Executive Officer and the other most highly compensated executive
officer of the Company as of the end of fiscal 2000 whose annual salary plus
other forms of compensation exceeded $100,000 ("Names Executive Officers"):

Name and Other Annual
Position Salary Bonus Compensation
--------------------------------------------------------------------------------

Frank J. Fradella -0- -0- -0-
President, CEO

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30

No other officers received compensation during fiscal year 2000.

Employment contracts
There are no employment agreements with any executive officers.

Stock Options

The following table provided information with respect to stock options
granted to the Named Executive Officers during fiscal 2000.

STOCK OPTIONS GRANTED
IN FISCAL YEAR ENDED SEPTEMBER 30, 2000

Market
% of Total Value of
Options Securities
Securities Granted to Underlying
Under Employees in Options on
Options Financial Exercise the Date of Expiration
Name Granted Year Price Grant Date
---- ---------------------------------------------------------------------------

Frank Fradella 250,000 100% $0.65 $162,500 07/27/05

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial
ownership of the Common Stock of the Company as of January 31, 2001 concerning
(i) persons know to the Company to be the beneficial owners of more that 5% of
the outstanding Common Stock, (ii) by each director and (iii) by all directors
and officers as a group.

STATUS OF AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) PERCENT
------------------------ ---------------- -------------------------------------

Deere Park Capital, L.L.C. Beneficial owner of more 3,587,929 40.9%
than 5% of Common Stock

Frank J. Fradella Director, President & CEO 4,840,207(2) 55.2%

(1) Unless otherwise noted, all of the shares shown are held by
individuals or entities possessing sole voting and investment
power with respect to such shares. The number of shares
beneficially owned includes shares which each beneficial owner has
the right to acquire within 60 days of January 31, 2001.
(2) Includes 3,337,929 shares subject to an option exercisable by
Frank J. Fradella within 60 days of hereof.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Pursuant to a Management Services Agreement effective May 1, 1999, between
American Eco Corporation ("AEC") and the Company, AEC had agreed to provide
certain services to the Company in exchange for a management fee to the paid on
a monthly basis. The services include providing the Company with management
guidance in addition to guaranteeing certain of the Company's obligations with
its creditors, in order to allow the Company to receive favorable terms with its
creditors. The agreement provided for a monthly payment of $40,000. For the
years ended September 30, 2000 and 1999, total management fees recorded were
$280,000 and $200,000. The Company believes that AEC did not perform its
responsibilities under the management agreement and, although

30
31

the Company has recorded the management fees in the financial statements, it is
contesting the validity of the agreement. At September 30, 2000 and 1999 the
Company was indebted to AEC in the amount of $1,370,000 and $843,000,
respectively, including the disputed management fees. The amounts are due on
demand.

31
32
ITEM 13. EXHIBIT AND REPORTS ON FORM 8-K

(a) Exhibits

Regulation S-B
Exhibit Number Description of Exhibit
-------------- ----------------------
2.1 Exchange of Stock Agreement and Plan of Reorganization between
EIF Holdings, Inc. and P.W. Stephens Contractors, Inc. [filed
as an Exhibit to the Current Report of the Company on Form 8-K
for the Date of Event January 31, 1993 and incorporated herein
by reference].
2.2 Acquisition Agreement between EIF and Von Guard Holdings, Inc.
and its subsidiaries [filed as an Exhibit to the Current
Report of the Company on Form 8-K for the Date of Event August
2, 1994 and incorporated herein by reference].
2.3 Sale of Stock Agreement by and between EIF, Kelar Controls,
Inc. and its shareholders [filed as an Exhibit to the Annual
Report of the Company on Form 10-KSB for the fiscal year ended
December 31, 1994 and incorporated herein by reference].
2.4 Agreement and Plan of Merger, dated March 2, 1998 between USIS
and EIF Holdings [filed as Exhibit 10.1 to the Current Report
on form 8-K for the Date of Event June 18, 1998 and
incorporated herein by reference].
3.1 Certificate of Incorporation [filed as Exhibit 3.1 to the
Current Report on form 8-K for the Date of Event June 19, 1998
and Incorporated herein by reference].
3.2 By-Laws [filed as Exhibit 3.2 to the Current Report on form
8-K for the Date of Event June 19, 1998 and Incorporated
herein by reference].
4.1 1998 Stock Option Plan.
10.1 Promissory Note Line of Credit Agreement, dated March 1, 1996,
with American Eco Corporation ("American Eco") [filed as an
Exhibit to the Annual Report of the Company on Form 10-KSB for
the year ended September 30, 1996 and incorporated herein by
reference].
10.2 Agreement, dated February 2, 1996, between EIF and American
Eco [filed as an Exhibit to the Current Report of the Company
on Form 8-K for the Date of Event February 2, 1996 and
incorporated herein by reference].
10.3 Management Agreement effective October 1, 1996 between the
Company and American Eco [incorporated by reference to Exhibit
10.1 to the Registrant's Form 10-QSB for the quarter ended
December 31, 1996].

10.4 Settlement Agreement and Mutual Release, dated April 4, 1996,
among Kelar, Kelly McMahon, and Larry Thomas (as plaintiffs) and
EIF and the other defendants [filed as an Exhibit to the Annual
Report of the Company on Form 10-KSB for the year ended September
30, 1996 and incorporated herein by reference].
10.5 Agreement and General Release, dated as of November 8, 1996, among
Richard Austin, EIF, PW Stephens and American Eco [filed as an
Exhibit to the Annual Report of the Company on Form 10-KSB for the
year ended September 30, 1996 and incorporated herein by
reference].
10.6 Lease Agreement, dated January 9, 1997, between Aetna Life

32
33

Insurance Company and EIF, for premises in Anaheim, California
[filed as an Exhibit to the Annual Report of the Company on Form
10-kSB for the year ended September 30, 1996 and incorporated
herein by reference].
10.7 Promissory Note dated December 13, 1996 between the Company and
Truman Harty. [incorporated by reference to Exhibit 10.2 to the
Registrant's Form 10-QSB for the quarter ended December 31, 1996].
10.8 Revolving Line of Credit dated September 1, 1996 between the
Company and Turner Holdings, Inc. [incorporated by reference to
Exhibit 10.3 to the Registrant's Form 10-QSB for the quarter ended
December 31, 1996].
10.9 Acquisition Agreement by and between the Company and Regal Oak
Properties, Inc. dated June 30, 1997 for the sale of Kelar
Controls, Inc. [incorporated by reference to Exhibit 10.1 to
the Registrant's Form 10-QSB for the quarter ended June 30,
1997].
10.10 Secured Promissory Note between the Company and Regal Oak
Properties, Inc. dated June 30, 1997. [incorporated by
reference to Exhibit 10.2 to the Registrant's Form 10-QSB for
the quarter ended June 30, 1997].
10.11 Security Agreement Pledge between the Company and Regal Oak
Properties, Inc. dated June 30, 1997. [incorporated by
reference to Exhibit 10.3 to the Registrant's Form 10-QSB for
the quarter ended June 30, 1997].
10.12 Renewal, Extension and Enlargement Promissory Note between the
Company and Truman Harty dated April 4, 1997. [incorporated by
reference to Exhibit 10.4 to the Registrant's Form 10-QSB for
the quarter ended June 30, 1997].
10.13 Stock Purchase Agreement, dated September 30, 1997, among EIF and
each of the stockholders of JL Manta, Inc. [incorporated by
reference to Exhibit 10.1 to the Registrant's Form 8-K for the
date of event November 19, 1997].
10.14 $6.5 Million Convertible Promissory Note issued by EIF to
Deere Park Capital Management, Inc., as nominee for EIFH Joint
Venture, L.L.C. and Certain Reg. D Hedge Funds. [incorporated
by reference to Exhibit 10.2 to the Registrant's Form 8-K for
the date of event November 19, 1997].
10.15 $2.5 Million Convertible Promissory Note from EIF to Deere
Park Capital Management, Inc. ("Deere Park"). [incorporated by
reference to Exhibit 10.3 to the Registrant's Form 8-K for the
date of event November 19, 1997].
10.16 Convertible Promissory Note of EIF, issued to Leo J. Manta.
[incorporated by reference to Exhibit 10.4 to the Registrant's
Form 8-K for the date of event November 19, 1997].
10.17 Pledge Agreement by and among EIF, Deere Park Equities, L.L.C.
and Deere Park Capital Management, Inc., as nominee for EIFH
Joint Venture, L.L.C. and certain Reg. D Hedge Funds,
regarding $6.5 Million Promissory Note from EIF. [incorporated
by reference to Exhibit 10.13 to the Registrant's Form 8-K for
the date of event November 19, 1997].
10.18 Security Agreement executed by the Company in favor of Harris
[incorporated by reference to Exhibit 10.14 to the Registrant's
Form 8-K for the date of event November 19, 1997].
10.19 Subordination Agreement between Harris and Deere Park Capital
Management, Inc. [incorporated by reference to Exhibit 10.15

33
34

to the Registrant's Form 8-K for the date of event November
19, 1997].
10.20 Subordination Agreement between Harris and EIF. [incorporated
by reference to Exhibit 10.16 to the Registrant's Form 8-K for
the date of event November 19, 1997].
10.21 Security Agreement between Deere Park and EIF. [incorporated
by reference to Exhibit 10.17 to the Registrant's Form 8-K for
the date of event November 19, 1997].
10.22 Registration Rights Agreement between EIF and each of the
Sellers. [incorporated by reference to Exhibit 10.18 to the
Registrant's Form 8-K for the date of event November 19,
1997].
10.23 Employment Agreement between EIF and Michael J. Chakos.
[incorporated by reference to Exhibit 10.19 to the Registrant's
Form 8-K for the date of event November 19, 1997].
10.24 Form of Registration Rights Agreement. [incorporated by
reference to Exhibit 10.20 to the Registrant's Form 8-K for
the date of event November 19, 1997].
10.25 Form of Guaranty. [incorporated by reference to Exhibit 10.21
to the Registrant's Form 8-K for the date of event November
19, 1997].

10.26 Renewal, Extension and Modification Revolving Line of Credit Note
effective July 1, 1997 between EIF and American Eco Corporation
[incorporation by reference to Exhibit 10.37 to the Registrant's
Form 10-KSB for the year ended September 30, 1997 and
incorporated herein by reference].
10.27 Second Amendment Revolving Line of Credit Note effective
September 30, 1997 between EIF and American Eco [incorporated by
reference to Exhibit 10.38 to the Registrant's Form 10-KSB for
the year ended September 30, 1997 and incorporated herein by
reference].
10.28 Asset Purchase Agreement, dated November 30, 1998, among USIS and
Kenny Industrial Services, L.L.C. and Manta [incorporated by
reference to Exhibit 2 to the Registrant's Form 8-K for an event
of November 30, 1998].
10.29 Form 8-K for an event of July 27, 1998 to report a change in
control and conversion of debt.
10.30 Form 8-K for an event of December 29, 1999 to report a reduction
in the number of authorized shares in the Preferred Stock.
10.31 Form 8-K for an event of November 23, 1999 to report a change
in auditors from Karlins, Arnold & Corbitt P.C. to Merdinger,
Fruchter, Rosen & Corso, P.C.
*10.32 Asset Purchase Agreement between American Temporary
Sanitation, Inc. and P.W. Stephens Residential, Inc. dated
December 4, 1998.
*21 Subsidiaries of the Registrant
*27 Financial Data Schedule

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

* Filed herewith
(b) Reports on Form 8-K

34
35
The Company filed a Current Report on 8-K for an event of December 29, 1999 to
report a reduction in the number of authorized shares in the Preferred Stock.
The Company filed a Current Report on 8-K for an event of November 23, 1999 to
report a change in auditors from Karlins, Arnold & Corbitt P.C. to Merdinger,
Fruchter, Rosen & Corso, P.C.

SIGNATURES

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

US INDUSTRIAL SERVICES, INC.
(Registrant)

By: /s/ Frank J. Fradella
----------------------
Frank J. Fradella
Chief Executive Officer

Dated: February 21, 2001

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

By: /s/ Frank J. Fradella Dated: February 21, 2001
-----------------------
Frank J. Fradella
Director, CEO & President

By: /s/ Kathleen L. Harris Dated: February 21, 2001
-----------------------
Kathleen L. Harris
CFO

EXHIBIT INDEX
Exhibit
Number Description
------- -----------

EXHIBIT 21 - LIST OF SUBSIDIARIES
Subsidiary
Jurisdiction of Incorporation
----------
-----------------------------
None
This list does not include inactive, sold or discontinued subsidiaries.