As filed with the Securities and Exchange Commission on April 30, 1997

                                                            File No. 33-78956-A


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                               ________________

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                               ________________

                                 Aquagenix, Inc.
               (Exact name of issuer as specified in its charter)

              Delaware                                        65-0419263
    (State or other jurisdiction                          (I.R.S. Employer
  of incorporation or organization)                      Identification No.)

        6500 N.W. 15th Avenue
      Fort Lauderdale, Florida                                   33309
(Address of principal executive offices)                       (Zip Code)


                        CONSULTING AGREEMENT WITH ADVISOR
                            (Full title of the plan)

                          Andrew P. Chesler, President
                              6500 N.W. 15th Avenue
                         Fort Lauderdale, Florida 33309
                          Telephone No.: (954) 975-7771
                     (Name and address of agent for service)

                                    Copy to:
                             Roxanne K. Beilly, Esq.
                      Atlas, Pearlman, Trop & Borkson, P.A.
                     200 East Las Olas Boulevard, Suite 1900
                            Fort Lauderdale, FL 33301
                                 (954) 763-1200







<PAGE>



                         CALCULATION OF REGISTRATION FEE

================================================================================
                                         Proposed       Proposed
                                         maximum        maximum
                                         offering       aggregate   Amount of
Title of securities    Amount to be      price per      offering    registration
 to be registered      registered        share(1)       price(1)    fee (1)
================================================================================

Common Stock
($.01 par value)       100,000 shares    $5.00          $500,000    $151.52

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

(1)   Estimated   solely  for  the  purpose  of  computing  the  amount  of  the
      registration  fee in accordance  with Rule 457 under the Securities Act of
      1933, as amended (the "Securities Act").






























<PAGE>


                                 AQUAGENIX, INC.

         CROSS REFERENCE SHEET REQUIRED BY ITEM 501(b) OF REGULATION S-K

         Form S-8 Item Number
             and Caption                       Caption in Prospectus

 1.      Forepart of Registration          Facing Page of Registration Statement
         Statement and Outside Front       and Cover Page of Prospectus
         Cover Page of Prospectus

 2.      Inside Front and Outside Back     Inside Cover Page of Prospectus and
         Cover Pages of Prospectus         Outside Cover Page of Prospectus

 3.      Summary Information, Risk         Not Applicable
         Factors and Ratio of Earnings
         to Fixed Charges

 4.      Use of Proceeds                   Not Applicable

 5.      Determination of Offering Price   Not Applicable

 6.      Dilution                          Not Applicable

 7.      Selling Security Holder           Sales by Selling Security Holder

 8.      Plan of Distribution              Cover Page of Prospectus and Sales by
                                           Selling Security Holder

 9.      Description of Securities to be   Description of Securities;
         Registered                        Consulting Agreements

10.      Interests of Named Experts        Legal Matters
         and Counsel

11.      Material Changes                  Not Applicable

12.      Incorporation of Certain          Incorporation of Certain Documents
         Information by Reference          by Reference

13.      Disclosure of Commission          Indemnification of Directors and 
         Position on Indemnification for   Officers; Undertakings
         Securities Act Liabilities











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<PAGE>



PROSPECTUS
                                 AQUAGENIX, INC.

                         100,000 Shares of Common Stock
                                ($.01 par value)

                   Issued Pursuant to the Company's Agreement
                        with First Taconic Capital Corp.

      This  Prospectus  is  part of a  Registration  Statement  which  registers
100,000 shares of Common Stock, $.01 par value (such shares being referred to as
the "Shares"),  of Aquagenix,  Inc. (the "Company" or "Aquagenix")  which may be
issued  pursuant to the  exercise of  warrants,  as set forth  herein,  to First
Taconic  Capital  Corp.,  a  consultant  to  the  Company  ("First  Taconic"  or
"Consultant")  pursuant to a written  consulting  agreement  (the "First Taconic
Consulting Agreement" or "Agreement")  providing for the issuance of warrants to
purchase 100,000 Shares. The Consultant, in its capacity as selling shareholder,
is sometimes  hereafter referred to as the "Selling Security Holder." All of the
Shares are being issued to the Consultant  pursuant to a written agreement.  The
Company has been advised by the Selling  Security Holder that it may sell all or
a portion of the Shares  from time to time in the  over-the-counter  market,  in
negotiated transactions, directly or through brokers or otherwise, and that such
Shares will be sold at market prices  prevailing at the time of such sales or at
negotiated  prices,  and the Company  will not receive  any  proceeds  from such
sales.

      No person has been authorized by the Company to give any information or to
make any representation other than as contained in this Prospectus, and if given
or made, such  information or  representation  must not be relied upon as having
been authorized by the Company.  Neither the delivery of this Prospectus nor any
distribution  of the Shares  issuable  under the terms of the  Agreement  shall,
under any circumstances, create any implication that there has been no change in
the affairs of the Company since the date hereof.


THESE  SECURITIES  HAVE NOT BEEN APPROVED OR  DISAPPROVED  BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.


THIS  PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH STATE.

                 The date of this Prospectus is April 30, 1997.




<PAGE>



                              AVAILABLE INFORMATION

      The Company is subject to the informational requirements of the Securities
Exchange  Act of 1934,  as amended  (the  "Exchange  Act"),  and, in  accordance
therewith,  files  reports,  proxy  statements  and other  information  with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other  information  filed with the Commission can be inspected and copied at
the public  reference  facilities of the  Commission at 450 Fifth Street,  N.W.,
Washington,  D.C.  20549.  Copies  of this  material  can  also be  obtained  at
prescribed  rates from the Public  Reference  Section of the  Commission  at its
principal  office  at 450  Fifth  Street,  N.W.,  Washington,  D.C.  20549.  The
Company's  Common Stock is traded on the NASDAQ SmallCap Market under the symbol
"AQUX."  Electronic  Reports and other  information found through the Electronic
Data Gathering,  Analysis & Retrieval System are probably  available through the
Commission's website (http://www.sec.gov.).

      The Company has filed with the Commission a Registration Statement on Form
S-8 (the "Registration  Statement") under the Securities Act of 1933, as amended
(the  "Act"),  with respect to the resale of up to an aggregate of up to 100,000
shares of the Company's  Common Stock,  which may be issued to the Consultant of
the Company pursuant to the written Agreement which provides for the issuance of
Warrants to  purchase  100,000  Shares at an exercise  price of $5.00 per Share.
This Prospectus,  which is Part I of the Registration  Statement,  omits certain
information  contained in the Registration  Statement.  For further  information
with respect to the Company and the shares of the Common  Stock  offered by this
Prospectus,  reference  is made to the  Registration  Statement,  including  the
exhibits  thereto.  Statements  in this  Prospectus  as to any  document are not
necessarily  complete,  and  where  any  such  document  is an  exhibit  to  the
Registration  Statement  or is  incorporated  by  reference  herein,  each  such
statement  is qualified  in all  respects by the  provisions  of such exhibit or
other  document,  to which reference is hereby made, for a full statement of the
provisions thereof. A copy of the Registration Statement,  with exhibits, may be
obtained from the Commission's office in Washington, D.C. (at the above address)
upon  payment  of the  fees  prescribed  by the  rules  and  regulations  of the
Commission, or examined there without charge.


                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

      The  following  documents  filed by the Company  with the  Securities  and
Exchange Commission are incorporated herein by reference and made a part hereof:

      (a)   The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996.

      (b)   The  Company's  Quarterly  Reports on Form 10-QSB for the  quarterly
period ended March 31, 1996, June 30, 1996 and September 30, 1996.





                                        2



<PAGE>



      (c)   The Company's current reports on Form 8-K dated March 8, 1996, April
25, 1996, June 7, 1996, June 12, 1996, December 7, 1996 and December 31, 1996.

      (d)   All reports and documents  filed by the Company  pursuant to Section
13, 14 or 15(d) of the  Exchange  Act,  prior to the filing of a  post-effective
amendment which  indicates that all securities  offered hereby have been sold or
which  deregisters all securities then remaining  unsold,  shall be deemed to be
incorporated  by  reference  herein and to be a part hereof from the  respective
date of filing of such documents. Any statement incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this  Prospectus to
the extent that a statement  contained herein or in any other subsequently filed
document,  which also is or is deemed to be  incorporated  by reference  herein,
modifies or supersedes  such  statement.  Any  statement  modified or superseded
shall not be deemed, except as so modified or superseded,  to constitute part of
this Prospectus.

      The Company  hereby  undertakes to provide  without charge to each person,
including  any  beneficial  owner,  to whom a copy of the  Prospectus  has  been
delivered,  on the written or oral request of any such person,  a copy of any or
all of the documents referred to above which have been or may be incorporated by
reference in this  Prospectus,  other than exhibits to such  documents.  Written
requests for such copies should be directed to Corporate  Secretary,  Aquagenix,
Inc., 6500 N.W. 15th Avenue, Fort Lauderdale, Florida 33309.




























                                        3



<PAGE>



                                   THE COMPANY

Description of Business
-----------------------

      (a)   Background
            ----------

      Aquagenix,  Inc.,  a Delaware  corporation  (the  "Company"),  through its
wholly-owned subsidiaries, provides aquatic and industrial vegetation management
services to governmental and commercial customers.  The Company provides aquatic
and industrial vegetation management services in the States of Florida, Georgia,
North and South Carolina,  Arizona,  Alabama and Tennessee. The Company offers a
variety  of  aquatic  and  industrial   vegetation  management  and  maintenance
services, consisting primarily of the control of aquatic weeds, algae and exotic
plants,  brush and noxious  tree  control,  wetland  planting  and  restoration,
installation of fountains and aeration systems and the stocking of fish for game
and plant and insect control.

      The  Company was  incorporated  under the laws of the State of Delaware in
May 1993 to acquire all of the issued and outstanding capital stock of Aquagenix
Land-Water Technologies, Inc. ("ALWT"), formerly known as Environmental Waterway
Management,  Inc.  and Florida  Underground  Petroleum  Tank  Contractors,  Inc.
("FUPTC").  Prior to their acquisition by the Company,  ALWT had been engaged in
the  aquatic  management  business,  primarily  aquatic  weed,  algae  and plant
control,  since its  formation in October 1990.  In February  1995,  the Company
acquired Haas Environmental Services ("HES") now known as AmerAquatic, Inc. Both
FUPTC  and HES had  been  engaged  in the  environmental  remediation  business,
primarily  remediation  of petroleum  contaminated  soil and ground  water.  The
operations of FUPTC and HES have been  discontinued  since November 1995. Unless
the context requires otherwise, the "Company" refers to Aquagenix,  Inc. and its
consolidated  subsidiaries,  ALWT, Aquagenix Land-Water Technologies of Arizona,
Inc. ("ALWTA") and Right of Way Control,  Inc. ("ARC"),  Aquatic Dynamics,  Inc.
("ADI"),  Aquagenix Land-Water  Technologies of Georgia, Inc. (formerly known as
Good Shepherd, Inc. d/b/a Green Pastures, Inc., "GPI"), FUPTC and HES.

      In order to raise capital,  in September 1994, the Company  consummated an
underwritten  initial  public  offering  (the "IPO") of 1,250,000  shares of its
common stock,  $.01 par value (the "Common  Stock"),  and  1,437,500  redeemable
warrants  (the   "Warrants"),   for  aggregate  net  proceeds  of  approximately
$5,541,000  (after deduction of the underwriting  discounts and before deduction
of other expenses of the IPO). In October 1994, the Company realized  additional
net proceeds of  approximately  $815,000 from the sale of an additional  187,500
shares  of  Common   Stock  upon  the  exercise  by  the   underwriter   of  its
over-allotment option.






                                        4



<PAGE>



      (b)   Business Overview
            -----------------

      The  Company  offers  a  variety  of  aquatic  and  industrial  vegetation
management services, consisting primarily of the control of aquatic weeds, algae
and exotic  plants,  industrial  vegetation  management,  wetland  planting  and
restoration,  installation of fountains and aeration systems and the stocking of
fish for game and pest and plant control. The Company's services are intended to
assist in flood  control,  maintain  the  health,  beauty,  quality  and natural
balance of life in aquatic and terrestrial  environments  and in some instances,
to maintain  reasonable access to critical utility and other right of way areas.
They  are  designed  to  suit  individual  customer  requirements,  many of whom
maintain  waterways  and  lands in  compliance  with  federal,  state  and local
environmental laws and regulations.

      Lakes, canals, ponds, rivers and wetlands have become increasingly popular
forms of aesthetic and recreational components in cities, golf courses,  country
clubs, commercial and residential developments, apartment complexes and parks in
and throughout the United States.  Waterways provide facilities for recreational
use,  such as fishing and water sports,  and are  important  for flood  control,
drainage,  wildlife  preservation  and as a source of water for  industrial  and
residential use. As a result of natural and other factors,  including overgrowth
of noxious weeds, algae and exotic plants, which deplete oxygen and restrict the
flow of water, waterways and wetlands require ongoing management to preserve and
maintain their functional use, biological health and aesthetic value.

      In the Sunbelt states of Florida, Georgia, South Carolina, North Carolina,
Tennessee, Mississippi,  Missouri, Louisiana, Texas, New Mexico, Arizona, Nevada
and  California,  there are over 5,500 golf courses and country  clubs , most of
which require aquatic  management  services;  and as a result of the climate and
topography  within the Sunbelt  states,  the majority of real estate  developers
have water features which require maintenance. The market for aquatic management
services on private land in Florida alone is estimated to exceed $100 million.

      There  is  also a  growing  trend  toward  privatization  of  aquatic  and
industrial  vegetation management services carried out on public lands by public
works personnel of governmental  agencies as they come under  increasing  fiscal
pressures to reduce costs. The South Florida Water Management  District,  one of
the Company's customers,  had performed its own vegetation management work years
ago and had subsequently  awarded work to the Company.  The potential market for
such services on public land in Florida is estimated to exceed $500 million.

        Additionally,  because  extensive land development in the Sunbelt states
and other  coastal  states has  depleted  natural  wetlands,  federal  and state
legislation has been enacted to preserve  wetlands by requiring  property owners
and  developers  to restore  portions of developed  properties  to their natural





                                      5



<PAGE>


state,  in what is known as a "no net loss" policy.  In May 1994, a $700 million
restoration  project  for  Florida's  Everglades  was  adopted  by the  State of
Florida,  which contemplates that the federal  government,  the State of Florida
and a group of landowners will jointly fund restoration of portions of Florida's
Everglades.  The Company will seek to capitalize on perceived demand for aquatic
management services, particularly wetlands planting and restoration services.

      With annual revenues of approximately $11,500,000 for 1996, the Company is
currently the largest provider of aquatic and industrial  management services in
the United States.  In 1996, with the  acquisition of two businesses  engaged in
industrial vegetation  management services (see below - "Recent  Acquisitions"),
the Company has increased its revenues  from such services  which  accounted for
17% of total  revenues as compared to only 3% for 1995. In 1996, the Company has
begun  creating  a niche for  itself  in the  industrial  vegetation  management
business,  with the acquisitions  providing the springboard from which marketing
efforts are targeted at electric  and power  utilities,  telephone  and railroad
companies,  transportation  departments and industrial sites throughout Florida,
Georgia and Alabama. In 1997, the Company  anticipates  securing more industrial
vegetation  contracts  which are  generally  larger in value as  compared to the
aquatic vegetation contracts.

      (c)   Business of Issuer
            ------------------

COMPANY SERVICES

      Aquatic Weed,  Algae and Exotic Plant  Control.  The term  "aquatic  weed"
encompasses  a large,  diverse  group of plant types,  consisting  of four basic
groups which pose a problem to waterways: floating aquatics, submersed aquatics,
emergent and ditchbank weeds and grasses.  Algae, a fifth  classification,  is a
lower form of  submersed  plant  life and is the cause of "scum" on the  water's
surface.  Left unattended,  aquatic weeds, algae and plants appear and propagate
in  excessive  amounts  and  interfere  with the aquatic  environment's  natural
balance.  Thick masses of aquatic  weeds can disrupt boat  traffic,  fishing and
other water sports, lower the oxygen levels of water resulting in fish kills and
create water flow problems.  Noxious weeds generate foul odors,  visual eyesores
and create breeding grounds for mosquitos and other pests.  Most noxious aquatic
weeds,  exotic  plants  and trees have been  imported  into the  Sunbelt  States
without natural enemies and have proceeded to displace  natural and native plant
life.  While  beneficial  plants are  essential to creating a properly  balanced
aquatic  ecosystem  and provide  food and  shelter for various  species of fish,
birds and  animals,  dense  infestations  of  aquatic  weeds  and algae  prevent
sunlight from entering the water, potentially endangering all living inhabitants
of aquatic environments.

      The Company's aquatic management services consist primarily of the control
of aquatic weeds,  algae and exotic plants.  The Company  establishes  treatment
programs for lakes, canals, ponds, reservoirs,  rivers, estuaries,  marine areas
and wetlands by assessing  ambient water quality and vegetation and the specific





                                      6



<PAGE>


needs of individual customers. The Company maintains a data base of computerized
water analysis  information and property  management control and service records
designed to provide  customers  with a  comprehensive  aquatic  treatment  plan.
Company-trained   and  licensed   applicators  utilize  approved  algicides  and
herbicides and special spraying  equipment to disperse  algicides and herbicides
in water and on adjacent land to control the growth of aquatic weeds,  algae and
exotic  plants.  The Company  typically  uses small boats equipped with tanks to
hold liquid  formulations and spray arms for spraying from the water.  Similarly
equipped  four-wheel drive  all-terrain  vehicles are utilized for spraying from
the shoreline.  Significant  reduction in the growth of aquatic weeds, algae and
exotic plants is usually  achieved within three to four weeks. The customers for
these services  typically  agree to annual  contracts  which provide for monthly
service and payment.

      In addition to the regular  application of algicides and  herbicides,  the
Company  utilizes  harvesting  methods to control  aquatic weeds.  Harvesting is
performed either manually or mechanically,  depending upon the nature and extent
of the growth of undesirable aquatic weeds and plants.  Mechanical harvesting is
typically  expensive  but  achieves  immediate  results.   The  Company  engages
third-party  contractors which utilize barges equipped with special  attachments
to  cut,   gather   and   crop   aquatic   weeds.   Harvesting   is  done  on  a
project-by-project basis.

      The Company also controls  submersed  aquatic weeds,  algae and insects by
introducing   several   species   of  fish,   the   Triploid   Grass   Carp,   a
genetically-engineered weed-eating fish which may consume as much as three times
its body weight each day, and the Gambusia,  or Mosquitofish,  which may consume
up to its  weight in  mosquito  larvae  and pupae  each day.  Additionally,  the
Company stocks  different  types of Tilapia in the Western United States for the
control of toxic algae formations. The Company, when required, obtains necessary
permits from state governmental authorities to use biological control methods on
a project basis.

      For the years ended  December 31, 1995 and 1996,  aquatic weed,  algae and
exotic  plant  control  services   accounted  for  approximately  93%  and  77%,
respectively, of the Company's revenues from continuing operations.

      Industrial Vegetation Management.  The Company provides professional right
of  way  weed  control  along  utility  lines,  pipelines,  transmission  lines,
distribution lines, railroads,  power substations,  canals, ditches, bridges and
other industrial sites for private and public sector customers.

      The Company  inspects  target  areas to determine  environmental  factors,
safety factors,  geographic  criteria  surrounding  plant life and combines this
information  with input from the customers.  The Company  subsequently  provides
precision low volume  application weed, brush and tree control to the designated
system(s).  The  Company's  services  are  varied and may be  "bundled"  to meet





                                      7



<PAGE>


specific customer needs. It maintains a large inventory of application equipment
at peak  performance  condition  and has the most  complete  array of  equipment
available for each job.

      Distribution  power lines are serviced by ground  application  techniques.
Equipment in service for these applications includes:  four-wheel drive, one-ton
spray  trucks,  track  equipment and ATVs.  In addition,  vegetation  control is
achieved with personnel using backpack  sprayers.  Transmission  power lines are
managed from the air by helicopters and aerial TVB spray equipment. Safety guard
rails  and  transportation  right of ways are  serviced  by  highly  specialized
vehicles,  equipped with computer  injection  systems designed  specifically for
these functions.

      For the years  ended  December  31, 1995 and 1996,  industrial  vegetation
management services accounted for approximately 3% and 17%, respectively, of the
Company's total revenues from continuing operations.

      WETLAND  PLANTING AND  RESTORATION.  The  preservation  and propagation of
wetland areas has become  recognized  as an important  part of  maintaining  the
ecosystem.  Aquatic and wetland plants are critical components of healthy ponds,
lakes or waterways,  inasmuch as these plants form a base for an important  link
between the  beginnings of the  food-chain  and higher forms of plant and animal
life. The Company believes that the quality of water is directly attributable to
the balance of the water's and shoreline's vegetation.

      The Company offers wetland planting, restoration and maintenance services,
which involve the movement of soil and the planting of  beneficial  native plant
life to create or recreate  wetlands in the form in which they naturally  occur.
The Company  currently  engages in wetland planting  utilizing its personnel and
equipment and, to the extent  necessary,  third-party  equipment.  Revenues from
such services  comprised 4% of total revenues from aquatic  management  business
for 1995 and 1996. With the "no net loss"  governmental  policy and the State of
Florida's  Everglades  restoration project, the Company anticipates that wetland
planting and restoration  services will account for an increasing portion of the
Company's revenues in the future.

      DESERT  RAIN(TM)  FOUNTAINS.  The  Company  offers  an  extensive  line of
decorative  floating fountains,  trademarked  "Desert Rain(TM)",  to enhance the
visual  appeal and beauty of waterways,  while  providing  ecological  benefits,
including increased  circulation,  reduced stagnation and the reduction of odors
caused by  algae.  The  Company's  fountains  feature a unique,  interchangeable
nozzle  which  allows  the  customer  to select  from  several  different  spray
patterns.  Fountains are fabricated using quality waterproof materials which are
treated  to  resist  corrosion.   Nozzle   assemblies  are  manufactured   using
high-density polyurethane, epoxy, brass and stainless steel for durability.

      AERATION  SYSTEMS.  The Company also offers aeration  systems  designed to
permit waterways to digest organic  sediments which deplete oxygen,  trap gasses





                                      8



<PAGE>


and result in general  degradation  of water  quality.  The  Company's  aeration
systems are custom  designed  systems  consisting  of a pattern of porous stones
which are laid on the bottom of a lake and a  relatively  silent air  compressor
mounted on the shore. When air is injected from the compressor  through pipes to
the  stones,  air rises  through the water  oxygenating  and  cleansing  it. The
Company's  aeration  systems are designed to minimize  fish kills and foul odors
and  to  facilitate  lake  management  and  the  operations  of  wastewater  and
aquaculture  industries.  To date,  revenues  derived from fountain and aeration
system installation services have not been material.

      FISH  STOCKING.  The  Company  offers a  variety  of  species  of fish for
stocking lakes and ponds for  recreational  and biological  purposes,  including
Triploid Grass Carp (Amur), Tilapia,  Gambusia (Mosquitofish),  Smallmouth Bass,
Largemouth Bass,  Bluegill,  Black Crappie,  Warmouth Perch and Channel Catfish.
The Company's personnel perform salinity,  Ph and oxygen tests,  conduct surveys
of existing fish  population and create aquatic  sanctuaries for successful fish
habitation.  The  Company  obtains  its  requirements  of fish  from a number of
suppliers.  To date,  revenues derived from fish stocking services have not been
material.  However,  the Company is presently expanding this line of business in
the Western United States through its subsidiary, ALWTA, in Arizona.

OPERATIONS

      Headquartered in Fort Lauderdale,  Florida,  the operations of the Company
are  decentralized  with eleven customer  service  offices,  one in each of Fort
Lauderdale, West Palm Beach, Orlando, Sarasota, Tampa, Jacksonville, Fort Myers,
Daytona Beach (all in Florida),  Myrtle Beach (South Carolina),  Tempe (Arizona)
and Athens (Georgia). Each customer service office is headed by a branch manager
and supported by sales representatives. As a result of maintaining decentralized
operations,  the Company is able to reduce  transit  time and per diem  expenses
while  providing  better  services to a larger customer base. The branch offices
can also be utilized to integrate  acquisitions  within its geographic region of
operations  and are easily  expandable  to handle  increased  levels of business
without a meaningful increase in administrative expenses. This was the case with
the Jacksonville, Tampa and Fort Lauderdale operations acquired from Aquatic and
Right  of  Way  Control,  Inc  and  AmerAquatic,   Inc.  (see  below  -  "Recent
Acquisitions").  Each  office has the same basic  set-up,  systems  and  general
operations  which  is a key  aspect  in  the  implementation  of  the  Company's
expansion strategy in that branch offices can be quickly established in multiple
geographical  areas in a proven company format.  Offices are fully  computerized
with established customer service protocol.  This enables the Company's services
to be efficient, professional and responsive to the client base.






                                      9



<PAGE>



EXPANSION STRATEGY

      The  Company   believes  that   continuing   initiatives  of  governmental
authorities   relating  to  environmental   problems  as  well  as  the  gradual
privatization of in-house  governmental and utility based aquatic and industrial
vegetation  management contracts have resulted in significant  opportunities for
its business,  through internal growth and  acquisitions.  Management  estimates
that only 30% of the aquatic  and  vegetation  management  industry is served by
commercial  companies.  The  Company's  expansion  strategy  is:  (I) to acquire
similar  businesses and integrate their operations into the existing business so
as to create economies of scale;  (ii) to intensify  marketing  efforts and open
additional  decentralized  branch  offices  that allow the Company to expand its
geographic  markets while maintaining  quality service and minimizing  operating
expenses; and (iii) to achieve critical mass and increase operating leverage and
efficiency so that the Company can pursue larger  contracts  from the 70% of the
industry that traditionally sources contracts in-house.  The proceeds of the IPO
have enabled the Company to finance increased levels of accounts  receivable and
satisfy significant bonding  requirements in connection with its operations.  It
has also  enabled the Company to  establish  substantial  bonding and  insurance
capabilities,  thereby  permitting  the  Company  to bid on  and  secure  larger
contracts,  especially  government and utility work. In addition,  over the past
three years,  the Company has made  significant  investment  in building  middle
management in order to provide the appropriate  infrastructure  to integrate the
acquisitions planned for under its growth strategy.

      The Company intends to  aggressively  apply its growth strategy in several
stages  in  the  following   geographic  markets  which  it  perceives  to  have
significant  growth potential:  (I) Georgia,  South Carolina and North Carolina;
(ii)  California,  Arizona  and  Nevada;  and  (iii)  Texas,  Louisiana  and the
remainder of the Southern United States.

      The GPI, ADI, ARC, AmerAquatic,  and L&L Acquisitions (see below - "Recent
Acquisitions")  were  consummated as part of the Company's goal of expanding its
operations.  Consistent  with its  strategy of growth,  the Company will seek to
expand its operations  through further  acquisitions.  The Company believes that
the aquatic and industrial  vegetation management industry is highly fragmented,
consisting  principally of small privately-owned  companies with limited capital
resources,  bonding capabilities and documentation systems. The Company believes
that  with  further   additions  to  its  existing   infrastructure,   including
improvements  to  its  information  and  documentation  systems,   coupled  with
increased  bonding  capabilities,  this will  enable the  Company to out-bid its
smaller  competitors  and  position  the  Company  to  acquire  smaller  service
providers in new geographic markets. However, there can be no assurance that the
Company  will be able to  obtain  the  required  financing  to fund the costs of
purchasing  capital  equipment  and to build its  infrastructure  or to make the
acquisitions  to  expand  its  operations  or that the  Company  will be able to
successfully integrate into its operations any acquired business.






                                      10



<PAGE>



RECENT ACQUISITIONS

      On December 31,  1996,  the Company  acquired  100% of the common stock of
Good Shepherd, Inc. d/b/a Green Pastures, Inc. ("GPI Acquisition"), now known as
Aquagenix Land-Water Technologies of Georgia, Inc., pursuant to a Stock Exchange
Agreement,  dated as of December  31, 1996,  by and among the  Company,  GPI and
Garry Seitz and Jan Seitz (the "Selling Shareholders"), the shareholders of GPI.
The  aggregate  purchase  price was  $600,000  which was paid by the issuance of
96,000 shares of the  Company's  common stock to the Selling  Shareholders.  The
assets  acquired from GPI  comprised  mainly of high-tech  roadside  application
equipment and recurring service contracts.

      GPI, a  Georgia-based  private  company  founded in 1988, is a provider of
roadside  vegetation  management  services throughout the state of Georgia using
high-tech computer controlled application systems along roadsides and has annual
revenues of approximately $960,000. This acquisition has been accounted for as a
pooling of interests and the Company intends to continue and further develop the
existing business of GPI as part of ALWT.

      On December 7, 1996,  the Company,  through its wholly  owned  subsidiary,
merged with Aquatic  Dynamics,  Inc.  (the "ADI  Acquisition")  with the Company
becoming  the  surviving  entity,  pursuant  to the  terms  of a Stock  Exchange
Agreement  and Plan of Merger,  dated as of December  7, 1996,  by and among the
Company, Aquagenix Land- Water Technologies of Arizona, Inc., ADI and Pat Church
and Stephen Church,  the  shareholders of ADI. The aggregate  purchase price was
$1,000,000,  of which (I) $750,000 was paid by the issuance of 133,333 shares of
the Company's common stock to the former  shareholders of ADI; (ii) $200,000 was
paid by the issuance of an  installment  note due on January 15,  1997,  bearing
interest  at 7% and (iii)  $50,000  was paid in cash.  The  installment  note of
$200,000  has since been paid in full.  The cash  portion  was funded out of the
proceeds of certain private equity placements which took place in June 1996. The
assets  acquired from ADI comprised  mainly of vehicles and equipment,  accounts
receivable, marketable securities and recurring service contracts.

      In  connection  with the ADI  Acquisition,  the Company  has entered  into
two-year  employment  agreements  with the  former  shareholders  of ADI who are
participating in the management of the Company's western operations.

      ADI, an Arizona-based  private company founded in 1974, was a full-service
aquatic vegetation  management firm whose experience and services span the gamut
of surface water management needs, including residential, commercial, industrial
and governmental projects, irrigation and effluent reuse water systems, lake and
pond  management  and  ongoing  waterway  maintenance.  ADI has  been a  leading
provider of aquatic vegetation  management  services  throughout Arizona and the
southwestern United States with annual revenues of approximately $1,600,000. The





                                      11



<PAGE>


ADI  Acquisition   has   established  the  Company's   market  presence  in  the
southwestern  United  States with ADI serving as the hub of  operations  in that
region.  The Company  intends to  continue  and  further  develop  the  existing
business of ADI under its new name, namely, Aquagenix Land-Water Technologies of
Arizona, Inc.

      On June 7, 1996,  the Company  acquired 100% of the voting common stock of
Aquatic and Right of Way Control, Inc. ("ARC Acquisition") pursuant to the terms
of a Stock  Exchange  Agreement,  dated as of June 7,  1996,  by and  among  the
Company,  ARC and Ray A. Spirnock and Shirley J. Spirnock,  the  shareholders of
ARC. The aggregate  purchase price was $1,500,000,  of which $1,350,000 was paid
by the  issuance  of 270,000  shares of the common  stock of the  Company to the
former  shareholders  of ARC and $150,000 was paid in cash. The cash portion was
funded out of cash flows from operations. The assets acquired from ARC consisted
mainly of  recurring  service  contracts,  accounts  receivable  and  industrial
vegetation  application equipment.  In connection with the ARC Acquisition,  the
Company entered into a two-year employment agreement with Ray A. Spirnock.

      With  annual  revenues  of  approximately  $1,350,000,  ARC was a  leading
provider of industrial  vegetation and utility right of way management  services
in Florida,  Georgia and Alabama.  These services include the control of noxious
weeds in the right of way areas adjacent to distribution and transmission  power
lines. The Company intends to operate the existing  business as part of ALWT and
is  further  developing  the  industrial  vegetation  and  utility  right of way
management business previously conducted by ARC.

      On November 17, 1995, ALWT acquired (the "L&L Acquisition") certain of the
equipment and customer  contracts of L&L Mosquito & Pest Control,  Inc., a South
Carolina  corporation  ("L&L"),  used in its  aquatic  weed  and  algae  control
business,  pursuant  to the terms of an Asset  Purchase  Agreement,  dated as of
November 17, 1995, by and among ALWT,  L&L and the sole  shareholder of L&L. The
aggregate  purchase  price  paid by ALWT for the assets of L&L was  $150,000  in
cash.  The Company is  continuing  to operate the aquatic weed and algae control
business  previously  conducted  by L&L.  The L&L  Acquisition  has  provided an
established foothold for the Company in Hilton Head, South Carolina.

      On  October  31,  1995,  ALWT  acquired  ("the  AmerAquatic  Acquisition")
substantially  all of the assets and  assumed  certain  of the  liabilities,  of
AmerAquatic, Inc., a Florida corporation ("AmerAquatic"),  pursuant to the terms
of an Asset Purchase Agreement, dated as of October 19, 1995, by and among ALWT,
the Company,  AmerAquatic  and Thomas Latta and C. Elroy  Timer,  the  principal
shareholders of AmerAquatic.  The aggregate  purchase price paid by ALWT for the
assets of  AmerAquatic  was  $4,291,084,  subject to  adjustment  under  certain
circumstances,  of which (I)  $3,791,084  was paid in cash and (ii) $500,000 was
paid  through the  issuance by ALWT of a  seven-month  promissory  note  bearing
interest at a rate of 9.75% per annum,  which note was guaranteed by the Company





                                      12



<PAGE>


and  subsequently  paid in full.  AmerAquatic  was  engaged in the  business  of
providing lake management  services,  including aquatic and terrestrial weed and
algae  control,  melaleuca  and other exotic plant  control,  wetland and upland
restoration  and  other  related  services.  They  were  the  Company's  largest
competitor  in  this  business  in  Florida  with  over  1,000  customers.   The
AmerAquatic  Acquisition  expanded the Company's  geographic reach into northern
Georgia,   North  Carolina  and  South  Carolina  and  initiated  the  Company's
penetration into its second  strategic  market,  the South Atlantic states.  The
Company  is  continuing  to operate  the lake and  wetland  management  business
previously conducted by AmerAquatic as part of ALWT.

      In connection  with the  AmerAquatic  Acquisition,  the Company,  ALWT and
AmerAquatic  entered  into a Private  Label  Agreement,  pursuant  to which ALWT
agreed to purchase  sixty  specialized  vehicles known as  "Spra-Buggies",  used
among other things, to provide lake management services,  over a period of three
years  commencing  on October 31, 1995,  for a purchase  price of  approximately
$25,000  each.  ALWT has the  exclusive  right to  purchase,  use and sell these
highly-efficient and durable Spra- Buggies within the aquatics industry.

      In connection with the AmerAquatic  Acquisition,  the Company, ALWT and C.
Elroy Timmer entered into a one-year employment agreement.

      The Company  funded the cash portion of the purchase  price for the assets
of  AmerAquatic  from the proceeds of the issuance and sale of (I) the Company's
12.50%  Senior  Secured Note due  February  28, 1996 (the "Bridge  Note") in the
principal  amount of  $5,000,000,  and (ii) warrants (the "Bridge  Warrants") to
purchase an aggregate of 168,166 shares of the Company's Common Stock,  pursuant
to a Senior Secured Note and Warrant Purchase Agreement, dated as of October 31,
1995 (the  "Bridge  Note  Purchase  Agreement"),  between  the  Company  and The
Equitable Life Assurance Society of the United States ("Equitable"). In December
1995, the Company  issued to Equitable the Company's  12.50% Senior Secured Note
due October 31, 2003 (the  "Senior  Secured  Note") in the  principal  amount of
$5,000,000  and warrants  (the  "Warrants")  to purchase an aggregate of 351,197
shares of the  Company's  Common  Stock,  subject to  adjustment  under  certain
circumstances,  in  substitution  for the Bridge  Note and the Bridge  Warrants,
respectively,  pursuant  to an Amended  and  Restated  Senior  Secured  Note and
Warrant  Purchase  Agreement,  dated as of December 15, 1995 (the "Note Purchase
Agreement"),  between the  Company and  Equitable.  The Senior  Secured  Note is
subordinated  to all  indebtedness  of the  Company  to its bank  lender  and is
secured  by  substantially  all  of  the  Company's  assets.  The  Warrants  are
exercisable  at any time until  December 31, 2000 at an exercise  price of $7.38
per share, subject to adjustment under certain circumstances.










                                      13



<PAGE>



CUSTOMERS

      The Company provides  surface water  management and industrial  vegetation
management  services to utilities,  golf  courses,  country  clubs,  real estate
owners  and  developers,  homeowners  and  condominium  associations,  apartment
complexes and various municipal,  state and federal governmental authorities and
taxing districts,  many of which maintain waterways and lands in compliance with
local environmental laws and regulations. The Company currently provides aquatic
and industrial  vegetation  management services to approximately 48 customers in
the public sector and  approximately  2,299  customers with whom the Company has
annual aquatic and industrial vegetation management contracts. Substantially all
of the Company's  contracts  for aquatic and  industrial  vegetation  management
services are recurring in nature and for the year ended December 31, 1996,  this
comprised 73% of total revenues (1995:  77%).  These recurring  annual contracts
provide  for  monthly  payments  and are  automatically  renewable.  The  annual
contracts for industrial  vegetation  management  services are usually renewable
for a term of up to three  years and provide  for  payments  based on a cost per
acre or mile of land under management.

      For the year ended  December  31, 1996,  19% of its revenues  were derived
from governmental customers as compared to 34% for 1995.  Governmental customers
which  formerly  provided  aquatic or  vegetation  management  services  through
government  employees have accounted for a significant  portion of the Company's
revenues.  It is anticipated that a substantial  portion of the Company's future
revenues will be derived from  governmental  and  quasi-governmental  customers.
Government contracts are subject to special risks,  including delays in funding;
lengthy   review   processes  for  awarding   contracts;   non-renewal;   delay,
termination,  reduction or  modification of contracts in the event of changes in
the government's policies or as a result of budgetary constraints; and increased
or unexpected costs resulting in losses.

      Historically,  the  Company  has been  dependent  on a  limited  number of
contracts  for a  significant  portion  of its  revenues.  For the  years  ended
December 31, 1996 and 1995,  the Company's  five largest  customers with whom it
has annual contracts  accounted for approximately 6.5% and 21.2%,  respectively,
of the  Company's  revenues.  In 1995,  Northern Palm Beach County Water Control
District,  the customer with which the Company has the largest annual  contract,
accounted for  approximately  14.0% of the Company's  revenues while in 1996, it
only  accounted  for 2.2% of the total  revenues  for 1996.  For the year  ended
December  31,  1996,  the Company has  broadened  its  customer  base and no one
customer accounts for more than 5% of the Company's total revenues.

      There  can  be no  assurance  that  the  Company  will  obtain  additional
contracts for projects similar in scope to those  previously  obtained or retain
existing  customers or attract and retain new customers or that the Company will
not remain largely dependent on non-recurring  contracts with a limited customer
base, which will constitute a significant portion of the Company's revenues.





                                      14



<PAGE>




INSURANCE AND BONDING

      The  Company  carries  insurance  coverage  which  the  Company  considers
sufficient  to meet  applicable  regulatory  and  customer  requirements  and to
protect the Company's assets and operations.  The Company's  insurance  coverage
currently includes $2 million of comprehensive  general liability insurance,  up
to $1  million  of  pollution  liability  insurance  and $8  million  of  excess
liability  insurance.  The  Company  attempts to operate in a  professional  and
prudent  manner  and  to  reduce  its  liability  risks  through  specific  risk
management efforts,  including employee training.  Nevertheless,  a partially or
completely  uninsured claim against the Company, if successful and of sufficient
magnitude, could have a material adverse effect on the Company and its financial
condition. In addition, the inability to obtain insurance of the type and in the
amounts  required  could impair the Company's  ability to obtain new  contracts,
which are, in certain  instances,  conditioned upon the availability of adequate
insurance coverage.

      The  aquatic  and  industrial   vegetation  management  business  involves
potentially significant risks of statutory, contractual and common law liability
for  environmental  damage and  personal  injury.  The  Company,  and in certain
instances,  its  officers,  directors  and  employees,  may be subject to claims
arising from the Company's  on-site or off-site  services,  including  chemicals
used in its operations,  and  environmental  contamination  by the Company,  its
contracted  transporters  or disposal  site  operators.  All such persons may be
liable for site investigation,  site cleanup costs and natural resource damages,
which costs could be substantial,  regardless of whether they exercised due care
and complied with all relevant laws and  regulations.  There can be no assurance
that the Company will not face claims  resulting in  substantial  liability  for
which the Company is uninsured,  that hazardous  substances or materials are not
or will not be present at the Company's  facilities or that the Company will not
incur liability for environmental impairment.

      The Company is required, in most instances, to post bid and/or performance
bonds in connection with contracts or projects with government  entities and, to
a lesser extent, private sector customers. To date, the Company has been able to
obtain  bonds in amounts of up to  approximately  $4 million per bond.  However,
there is no assurance that this will continue.  The Company  anticipates that in
the future it will continue to be required to post bid and/or  performance bonds
in connection  with  contracts or projects with  government  entities and, to an
increasing  extent,  private  sector  customers.  In  addition,  new or proposed
legislation  in various  jurisdictions  require or will  require  the posting of
substantial  bonds  or  require  other  financial  assurances  with  respect  to
particular projects.  There can be no assurance that the Company will be able to
obtain bonds in the amounts required.






                                      15



<PAGE>



MARKETING

      To date,  marketing has principally been conducted  through the efforts of
the Company's management and sales personnel. The Company uses various marketing
methods,  including direct mailings,  in-person solicitation,  print advertising
and  participation  in trade  shows  and  conventions,  and  periodically  mails
attractive,  full-color  sales brochures and advertises in trade  journals.  The
Company's  sales  force  consist  of  approximately   sixteen  people,  who  are
responsible for soliciting  potential  customers in their respective  geographic
markets,  receive  salaries  plus a  percentage  of gross  profits  derived from
Company services. The Company also obtains customers through recommendations and
referrals from existing  customers and environmental  engineers and consultants.
The Company's  executive officers devote significant time and effort to maintain
continuing customer relationships.

      The  Company  typically  obtains  private  and  public  contracts  for its
services  through the process of competitive  bidding.  The Company's  marketing
efforts  include  subscribing  to several bid reporting  services and monitoring
trade  journals  and other  industry  sources for bid  solicitations  by various
entities,  including government authorities and related  instrumentalities,  and
responding to such bid  solicitations,  which include requests for proposals and
requests  for  qualifications.   In  response  to  a  request  for  proposal  or
qualification,  the  soliciting  entity  generally  requires a written  response
within a set period of time. Generally, in the case of a request for a proposal,
a bidder  submits a proposal  detailing its  qualifications,  the services to be
provided and the cost of the services to the soliciting entity which then, based
on its  evaluation  of the  proposals  submitted,  awards  the  contract  to the
successful  bidder.  Generally,  in the case of a request for  qualification,  a
bidder submits a response  describing its  experience  and  qualifications,  the
soliciting entity then selects the bidder believed to be the most qualified, and
then  negotiates  all the  terms  of the  contract,  including  the  cost of the
services.

      The Company  believes that accurate  bidding is important to the Company's
business.  Accordingly,  the Company utilizes a computerized  bidding system and
engages  personnel  at  potential  sites  to  determine  cost  factors  used  in
submitting bids.  Public contracts are usually  longer-term (two to three years)
and may  periodically  be put up for bid even though the  Company  has  provided
quality services and has formed a strong relationship with the customer. While a
bid price is an important  factor in obtaining  contracts,  the Company believes
that potential customers also consider reputation, experience, safety record and
the  financial  condition  of  bidders  in  awarding  contracts.  Because of its
familiarity  with the  nature of the  contracts  and the basis on which they are
awarded,  the Company is often able to retain contracts that are put up for bid.
In the past, the Company has been able to retain  approximately 85% of contracts
which  fall into this  category.  However,  there can be no  assurance  that the
Company  will  continue  to be  successful  in  having  its bids  accepted.  The
competitive  bidding  process  is  typically  lengthy  and often  results in the
expenditure of significant  sums and allocation of resources in connection  with





                                      16



<PAGE>


bids that may be  rejected.  Additionally,  inherent in this process is the risk
that actual  performance  costs may exceed the  projected  costs,  especially in
relation to disputes on the  performance  of services,  upon which the submitted
bids or contract prices are based.

COMPETITION

      The aquatic and vegetation management industry is highly competitive.  The
Company faces competition from several hundred companies  throughout the Sunbelt
States.  In recent years,  government  authorities have implemented an extensive
regulatory framework directed toward alleviating various environmental problems.
The complex  nature of  government  regulation  has  resulted  in  significantly
increased   sophistication  and  costs  of  aquatic  and  industrial  vegetation
management,   handling  and  disposal   methods,   facilities   and   equipment.
Consequently,  the  industry  has  become  increasingly  capital  intensive  and
competitive.

      The Company believes that the principal competitive factors in the aquatic
and  industrial  vegetation   management  industry  are  reputation,   technical
proficiency,  managerial expertise, financial assurance capability (particularly
as it relates to  bonding),  price and  breadth of services  offered,  including
documentation   capabilities.   With  its   internal   growth   and  its  recent
acquisitions,  the  Company is  currently  the  largest  commercial  provider of
aquatic and vegetation management services in the United States. With its highly
credible  track  record,  substantial  bonding and insurance  capabilities,  its
investment  in managerial  expertise,  equipment  and  computerized  operations,
management  believes  that  the  Company  does  have a  competitive  edge in the
business. The Company has developed a customized software package which provides
individual job budgets,  branch work schedules,  integrated customer service and
sales activity tracking and collaborative  communications.  All these allows the
Company to provide  quality  service,  improve  efficiency and costs control and
provide  competitive  yet  profitable  bids.  In  addition,  the Company is also
committed to purchasing highly  specialized  proprietary  equipment to remain in
the forefront of technology.  This equipment is intended to be used for weed and
algae control both in water and on land ('amphibian' in nature). They may result
in high efficiency and accuracy including the reduction of the cost of labor per
acre of weed control,  allowing the Company to use the finest treatment products
for its customers and projects.

      Competition in the aquatic and industrial  vegetation  management industry
is,  however,  expected to increase in the  foreseeable  future.  A  significant
number of aquatic management projects continue to be performed "in house" by the
major water management  districts,  many of which may have substantially greater
financial and other resources than the Company.  The Company also expects that a
significant  number  of new  market  entrants  will  seek to bid on new  aquatic
management  projects  for the  Everglades.  There can be no  assurance  that the
Company will be able to compete successfully in its markets.






                                      17



<PAGE>



SUPPLIERS AND SUBCONTRACTORS

      The Company is dependent on third-party  suppliers and  manufacturers  for
all of its  requirements of algicides and herbicides,  fish and aeration systems
used in its aquatic management  business.  Although the Company purchases all of
these supplies from numerous suppliers and believes that alternative  sources of
supply are available, failure by such suppliers and manufacturers to continue to
supply the Company with products on commercially reasonable terms, or at all, in
the absence of readily available  alternate sources,  would adversely affect the
Company's  ability to deliver  products  and  provide  services  on a timely and
competitive  basis. The Company is dependent on the ability of its suppliers and
manufacturers,   among  other  things,  to  satisfy  performance,   quality  and
regulatory  specifications  and  dedicate  sufficient  production  capacity  for
supplies  within  scheduled  delivery  times.  The  Company  does  not  maintain
contracts  with any of its suppliers or  manufacturers  and  purchases  supplies
pursuant to purchase  orders placed from time to time in the ordinary  course of
business.  In  addition,  the Company  currently  does not own or lease  certain
specialized  equipment,  including  mechanical  harvesting  or certain  planting
equipment and is dependent upon third-party  subcontractors to provide necessary
equipment, know-how,  transportation and other facilities on a project basis. In
the event  such  subcontractors  were to become  unavailable  to the  Company at
acceptable  cost levels,  or at all, the Company's  business could be materially
adversely affected.

GOVERNMENT REGULATION

      The aquatic and  industrial  vegetation  management  services  business is
subject to extensive and frequently  changing federal,  state and local laws and
substantial regulation under these laws by governmental agencies,  including the
United States Environmental  Protection Agency (the "EPA") and the United States
Occupational  Safety and Health  Administration  ("OSHA").  Among other  things,
these regulatory  authorities  impose  requirements which regulate the handling,
transportation  and disposal of hazardous  and  non-hazardous  materials and the
health and safety of workers, and require the Company and, in certain instances,
its employees,  to obtain and maintain  licenses and permits in connection  with
its  operations.   This  extensive   regulatory  framework  imposes  significant
compliance burdens and risks on the Company. The Company is currently subject to
the  requirements  of the Resource  Conservation  and  Recovery Act of 1976,  as
amended,  the Federal  Water  Pollution  Control  Act,  as amended,  the Federal
Insecticide,  Fungicide,  and Rodenticide  Act, the Florida Weed Control Act and
the  Occupational  Safety and Health Act of 1970.  The following is a summary of
these  regulations  and other  material  governmental  regulations  which may be
applicable to the Company.

      The Federal Water  Pollution  Control Act, as amended by the Federal Water
Pollution  Control  Act  Amendments  of 1979  and the  Clear  Water  Act of 1977
(collectively  "CWA"),  create the federal  statutory scheme for water pollution
control and management.






                                      18



<PAGE>



The  principal  objective of the CWA is to restore and maintain the integrity of
the nation's waters.  In addition,  the CWA provides for: (I) the development of
pollutant  discharge  standards  and  limitations;  (ii) a permit and  licensing
system to enforce these discharge standards;  (iii) federal funding to assist in
the construction of publicly owned and privately owned treatment works; and (iv)
research and development of pollution control technologies and strategies.

      Congress  also  created the federal  Safe  Drinking  Water Act ("SDWA") to
ensure the quality and safety of drinking water supplies. To protect underground
sources  of  drinking  water  from  contamination,  SDWA  regulates  underground
injection  wells used for waste  disposal and  establishes a permit  program for
such  practices.  The SDWA also  establishes  procedures for the development and
implementation  of programs for aquifer  protection  areas located  within areas
designated as source aquifers for drinking water.

      Even though the EPA has nationwide  authority to implement CWA, authorized
states  may  implement  various  aspects  of the  National  Pollutant  Discharge
Elimination  System  ("NPDES") and pretreatment  programs,  among other areas of
responsibility.  In  addition  to the  option  of  administering  the CWA  under
authority  delegated by the EPA,  states may develop their own  regulations  for
water pollution control, which generally parallel federal CWA requirements.

      As a complement to the regular NPDES program, the United States Army Corps
of Engineers must issue a special permit (commonly  referred to as a Section 404
permit) prior to the discharge of dredge-and-fill material into navigable waters
of the  United  States,  including  "wetlands"  as defined  under the CWA.  As a
condition of obtaining such  dredge-and-fill  permits, the permittee is required
to mitigate  the impacts of such  dredge-  and-fill  activities  (often times by
creating new wetlands), resulting in "no net loss" of wetlands or an increase in
wetlands  areas.  As  is  the  case  in  Florida,   many  states  implement  the
dredge-and-fill  permit criteria under a consolidated federal and state program.
The Company  from time to time may be engaged in wetlands  mitigation  projects,
which may subject the Company to the  provisions  of the CWA and its  permitting
programs.

      Originally  adopted  in 1947,  the  Federal  Insecticide,  Fungicide,  and
Rodenticide Act ("FIFRA") constitutes the federal regulatory framework governing
pesticides,  including  algicides  and  herbicides.  FIFRA  imposes a variety of
licensing, permitting, classification, and registration requirements, along with
various  constraints  imposed  upon  the  application,   use,  and  handling  of
pesticides.  FIFRA  mandates that all restricted use of pesticides be applied by
or under the direct  supervision  of an applicator  certified  only under FIFRA.
Although  FIFRA dictates  certification  for  applications  of restricted use of
pesticides,  many states,  including Florida,  require the certification  and/or
registration  of commercial  applicators  for  applications  of both general and
restricted use pesticides.






                                      19



<PAGE>



      FIFRA  expressly  authorizes  states  to  regulate  the  sale  or use of a
federally registered pesticide or device under certain circumstances, but defers
to state regulations employing stricter standards.  A state may also require the
registration of federally  registered  pesticides for additional uses consistent
with special local needs. As a general rule,  state laws  regulating  pesticides
parallel the federal  scheme.  Many states  supplement the federal  requirements
with their own regulations.

      The  Toxic  Substance  Control  Act of 1975  ("TSCA")  gives the EPA broad
authority to regulate the manufacture, processing, distribution in commerce, use
and disposal of chemical substances and mixtures. The EPA may require testing of
chemical  substances  that may  present  an  unreasonable  risk to health or the
environment. If testing reveals an unreasonable risk, the EPA must take steps to
reduce the risk.  Options available to the EPA range from labeling  requirements
prohibiting manufacture of the harmful chemical to mandating the manner in which
it must be disposed.  The Company from time to time may be engaged in the future
to remediate certain  contaminated  sites, which may involve the use or disposal
of chemical  substances and mixtures.  To the extent that the Company handles in
the future those chemical substances and mixtures regulated by TSCA, the Company
could be subject to liability under TSCA. The Company does not anticipate that a
material portion of its environmental  remediation activities in the future will
consist of the  remediation  of sites  requiring the use or disposal of chemical
substances or materials regulated by TSCA.

      The Florida Aquatic Weed Control Act ("FAWCA")  creates a state regulatory
framework for the preservation and maintenance of the state's  waterways.  Under
FAWCA, no person or public agency shall eradicate, remove or otherwise alter any
aquatic  weeds or  plants  in  waters of the  state  unless  the  Department  of
Environmental Protection ("DEP") or its designee issues a permit or the activity
is exempted.  The Florida Legislature also established the Florida Nonindigenous
Aquatic Control Act, which is designed to control  nonindigenous  aquatic plants
primarily  by means of  maintenance  programs.  In  connection  with its aquatic
management  activities,  the  Company is subject to the  permitting  criteria of
FAWCA and the Florida  Nonindigenous Aquatic Control Act, which the Company does
not anticipate will have a material impact on its aquatic management business.

      The Company may also be subject to a variety of environment-related worker
and  community  safety  laws.  The  Occupational  Safety  and Health Act of 1970
("OSHA")  mandates general  requirements for safe work places for all employees.
In particular,  OSHA calls for special  procedures and measures for the handling
of  certain  hazardous  and  toxic  substances.  In  addition,  specific  safety
standards  have  been  promulgated  for  workplaces  engaged  in the  treatment,
disposal or storage of hazardous waste.  Moreover,  under the Federal  Emergency
Planning and Right-to-Know Act of 1986,  facilities handling specified extremely
hazardous  materials must notify local  emergency  planning  committees of their





                                      20



<PAGE>


activities and comply with the provisions of local emergency plans. Requirements
under state law, in some  circumstances,  may mandate  additional  measures  for
facilities handling specified extremely dangerous materials.

      The  Company  believes  that  it is in  substantial  compliance  with  all
material federal,  state and local laws and regulations governing its operations
and has obtained all material  licenses and permits  necessary for the operation
of its  business.  However,  amendments  to existing  statutes and  regulations,
adoption of new statutes and  regulations  and the Company's  expansion into new
jurisdictions and aquatic and vegetation  management  services could require the
Company  to  continually  alter  methods  of  operations  at costs that could be
substantial.  There  can be no  assurance  that the  Company  will be able,  for
financial or other reasons,  to comply with  applicable  laws,  regulations  and
permitting  requirements,  particularly  as it seeks to enter into new  markets.
Failure to comply with  applicable  laws,  rules or  regulations  or  permitting
requirements  could subject the Company to civil  remedies,  including fines and
injunctions, as well as possible criminal sanctions, which would have a material
adverse effect on the Company.

      Notwithstanding  the burdens of compliance,  the Company believes that its
business  prospects  are  significantly  enhanced  by the  continuing  stringent
enforcement of the comprehensive  regulatory  framework by government  agencies.
Any significant relaxation of the regulatory  requirements governing the aquatic
and vegetation  management  services  industry  could also adversely  affect the
Company.

PERMITS AND LICENSES

      The Company  and, in certain  instances,  its  employees  are  required to
obtain and maintain licenses and permits in connection with its operations.  The
Company's  employees currently hold the necessary permits for application of the
algicides  and  herbicides  utilized by the  Company in its  aquatic  management
business.  The  Company  is  required  to obtain  permits  from  state and local
governments for the harvesting and planting of aquatic plants in connection with
its wetlands  planting  activities on a project  basis.  The Company may also be
required  to  obtain  surface  water  permits  in  connection  with its  aquatic
management  activities on a project basis depending on the nature of the body of
water.

      The Company  anticipates  that it will be required to obtain and  maintain
additional  licenses  in  geographic  areas in which it  intends  to expand  its
operations.  The  Company  believes,  based  upon the level of  training  of its
employees and past experience,  that it will be able to obtain all such required
licenses, although there is no assurance that it will be able to do so.






                                      21



<PAGE>



EMPLOYEES

      As of March 12, 1997, the Company had  approximately  150 employees  other
than  executives,  all of  whom  are  full-time  employees,  which  includes  30
administrative staff, 12 branch managers, 13 sales personnel, 75 applicators and
20 laborers.  The Company is not currently a party to any collective  bargaining
agreement. The Company believes that its employee relations are satisfactory.

DISCONTINUED OPERATIONS

      The  Company's  Board of  Directors  in November  1995  approved a plan to
dispose  of the  environmental  remediation  business  segment  in  view  of the
continued  losses  of  the  environmental   remediation  services  division  and
operational  problems  associated  with it. In 1996,  management has implemented
various  cost-cutting  measures  including  the  reduction of officers and other
personnel,  the  sale  of  under-utilized  equipment  and the  consolidation  of
accounting and  administrative  functions.  The Company's  remediation  services
which are being discontinued include remediation of petroleum  contaminated soil
and ground  water and the  removal,  disposal and  installation  of  underground
petroleum storage tanks and fuel dispensing systems.

      On April 25, 1996,  the Company sold  substantially  all of the assets and
liabilities of HES to Heart Environmental  Services,  Inc. (the "Buyer"),  a New
Jersey  corporation  for  a  total   consideration  of  $1,907,021.   The  total
consideration  comprises (I) $681,000 in cash, (ii) a three-year promissory note
of $600,000 (the " Promissory Note") issued by the Buyer, bearing interest at 9%
per annum and  collaterized  by the pledge of 499 shares of the  Buyer's  Common
Stock  pursuant to a Stock Pledge  Agreement,  (iii) the  cancellation  of total
obligations  due to H&H  Investments  Corporation,  Mr.  Eugene  M. Haas and Mr.
Robert E. Haas (collectively known as the "Haas Shareholders") which amounted to
$626,021.  The Company originally  incurred these obligations in connection with
the HES  acquisition  in February 1995. As a result of the HES sale, the Company
has agreed not to pursue any claims against the Haas  Shareholders in connection
with the Haas  acquisition  in February  1995.  All of the above items have been
satisfied with the exception of (ii)  pertaining to the  Promissory  Note. As of
December 31, 1996, the Company  determined  that there may  be a  collectibility
problem in relation to the  Promissory  Note and as a result,  a full  valuation
allowance has been made.

      In relation to FUPTC,  the  Company has not been  successful  in finding a
buyer for it and the net book values of the remaining  assets of FUPTC have been
written down to its net realizable  values.  As at December 31, 1996,  FUPTC has
fulfilled all of its remaining contractual obligations.  All equipment have been
sold  on a  piece-meal  basis  and  the  net  liabilities  of  the  discontinued
environmental  remediation  entities  consist  mainly  of  accounts  receivable,
accounts  payable and amounts payable to Robert A. Radler,  the former President
of the  Company,  under a  settlement  agreement  entered  into in 1996 with the





                                      22



<PAGE>


Company.  The Company is  continuing  its  collection  efforts for the remaining
accounts receivables in relation to its discontinued  operations so as to settle
the remaining accounts payable.


DESCRIPTION OF PROPERTY

      The Company maintains a corporate  headquarters for its aquatic management
and environmental  remediation  businesses,  consisting of approximately  17,350
square feet, located in Fort Lauderdale,  Florida,  under a five-year four-month
lease which  commenced on January 1, 1994.  The Company has the option to extend
the term of the lease for an additional five years.  The Company's  annual lease
payments for the remaining two years of the lease will be approximately  $89,790
and $93,370. Thereafter, the Company's annual lease payments will increase by 5%
each year. In addition to its lease  payments,  the Company is required to pay a
proportionate  share of the  operating  expenses,  as  defined  in the  lease to
include,  among other things,  property taxes,  hazard  insurance and all public
utility services aside from electric,  incurred by the lessor in connection with
its management and maintenance of the property  subject to the lease.  Under the
terms of the lease,  the Company's  operating  expenses may not increase by more
than 5% each year.

      In addition  to its  corporate  headquarters,  the  Company  conducts  its
aquatic and  industrial  vegetation  management  business  out of the  following
branch offices:

      The Company's office in West Palm Beach, Florida consists of approximately
3,450 square feet, under a two-year lease which commenced on September 23, 1992.
The Company has extended the lease for an additional  three-year term, including
the rental of additional space of  approximately  1,150 square feet. The Company
has the option to renew the lease for an additional  year.  Annual lease payment
is  approximately  $35,200,  which amounts  include the cost of property  taxes,
hazard  insurance,   and  public  utility  services  but  exclude  the  cost  of
maintaining  exterior  walls,  roof areas and the  structural  integrity  of the
leased building, a portion of which costs the Company may be assessed to pay.

      The Company  rents an  approximately  3,200 square foot office in Orlando,
Florida under a three-year  one-month lease which commenced on June 1, 1994. The
Company  has the  option to extend the term of the lease for an  additional  two
years.  The  Company's  annual  lease  payments for the three years of the lease
(excluding  the first  month) are  approximately  $17,440,  $17,965 and $18,500,
excluding taxes, insurance and utilities.






                                      23



<PAGE>



      The Company's office in Sarasota,  Florida consists of approximately 4,000
square  feet.  The  Company  leases  this  office  under a one-year  lease which
commenced on January 1, 1997.  The Company has the option to renew the lease for
four  additional  one-year  terms.  The annual  lease  payment is $24,000  which
excludes taxes, insurance and utilities.

      The  Company  rents an  approximately  4,500  square foot office in Tampa,
Florida  under a  five-year  lease  effective  May 1, 1995.  The Company has the
option  to  extend  the term of the  lease  for an  additional  two  years.  The
Company's  annual lease  payment is $24,000  except for the first year where the
rent is  specifically  waived for a period of five months which amount  includes
water  services,  but excludes the cost of all other  public  utility  services,
insurance, taxes and maintenance.

      The Company's office in Fort Myers,  Florida is approximately 4,200 square
foot in size and is under a two-year lease which  commenced on December 1, 1995.
The annual lease payment is $19,200  excluding  taxes,  insurance and utilities.
The  Company  has the  option to renew the lease for three  additional  one-year
terms.

      On March 1996, the Company  entered into a lease for  approximately  2,625
square feet of space in Jacksonville, Florida, with a term of one year effective
April 1,  1996.  The  Company  has the  option  to renew  the  lease  for  three
additional  one-year  terms.  The  Company's  annual  lease  payment is $13,200,
excluding taxes, insurance and utilities.

      The  Company's  office  in  Myrtle  Beach,   South  Carolina  consists  of
approximately  2,000  square  feet and is leased  on a month to month  basis for
approximately $600 per month.

      The Company's office in Tempe, Arizona, is approximately 5,900 square feet
in size and is under a month to month  lease which  commenced  December 7, 1996.
The monthly lease payment is $2,000 in addition to all expenses  borne by triple
net lease terms,  including,  but not limited to, real estate taxes. The Company
intends  to enter  into a two year  lease  agreement  including  yearly  renewal
options, with a monthly lease payment of approximately $3,250 for this office.

      In connection with the GPI  Acquisition,  the Company entered into a month
to month lease for approximately  2,800 square feet of space in Athens,  Georgia
at a monthly lease payment of $1,000.


                       SALES BY SELLING SECURITY HOLDER

      The following  table sets forth the name of the Selling  Security  Holder,
the amount of shares of Common Stock held directly or indirectly or to be issued





                                      24



<PAGE>


to the  Selling  Security  Holder,  the  number of shares to be  offered  by the
Selling Security  Holder,  the amount of Common Stock to be owned by the Selling
Security Holder following sale of such shares of Common Stock and the percentage
of shares of Common Stock to be owned by the Selling  Security Holder  following
completion  of such offering  (based on 4,230,791  shares of Common Stock of the
Company outstanding at April 15, 1997).

                                                  Estimated       Percentage
                                                  Shares to be    to be Owned
Name of Selling     Number of       Shares to     Owned After        After
Security Holder     Shares Owned    be Offered      Offering        Offering
---------------     ------------    ----------    ------------    -----------

First Taconic
 Capital Corp.         100,000        100,000           -0-           0%


                           DESCRIPTION OF SECURITIES

      The Company is currently  authorized to issue up to  10,000,000  shares of
Common  Stock,  $.01 par  value  per  share,  of  which  4,230,791  shares  were
outstanding  as of April 15,  1997.  The  Company is  authorized  to issue up to
1,000,000  shares of Preferred  Stock,  $.01 par value per share,  none of which
were outstanding as of April 15, 1997.

COMMON STOCK

      The holders of Common  Stock are  entitled to one vote for each share held
of record on all matters to be voted on by stockholders.  There is no cumulative
voting  with  respect to the  election  of  directors,  with the result that the
holders of more than 50% of the shares voted for the  election of directors  can
elect all of the directors.  The holders of Common Stock are entitled to receive
dividends  when,  as and if  declared  by the  Board of  Directors  out of funds
legally available therefor. In the event of liquidation,  dissolution or winding
up of the Company,  the holders of Common Stock are entitled to share ratably in
all  assets  remaining  available  for  distribution  to them  after  payment of
liabilities  and after  provision has been made for each class of stock, if any,
having  preference over the Common Stock.  Holders of shares of Common Stock, as
such, have no conversion, preemptive or other subscription rights, and there are
no redemption  provisions applicable to the Common Stock. All of the outstanding
shares of Common Stock are, and the shares of Common Stock offered hereby,  will
be duly authorized, validly issued, fully paid and nonassessable.

         The  Company's  Common  Stock and  Warrants  are  quoted on the  NASDAQ
National Market System under the symbols "AQUX" and "AQUXW",  respectively.  The
following  table sets forth,  for the period since  September 13, 1994, the high
and low closing  sales  prices for the Common Stock and the Warrants as reported
by NASDAQ.





                                      25



<PAGE>




                                          Common Stock             Warrants
                                          High     Low          High      Low
                                          ----     ---          ----      ---
1994
Third Quarter
   (beginning September 13, 1994).....   $6-1/2    $5-3/8      $2-1/4   $1-1/8
Fourth Quarter........................    6-7/8     5-5/8       2-1/4    1-1/2

1995
First Quarter.........................    7-1/4     6-1/2       2-1/8    1-15/32
Second Quarter........................    7-3/8     5-1/2       2-1/4    1
Third Quarter.........................    8-1/8     6-1/2       2-1/2    1-5/8
Fourth Quarter........................    8-1/16    6-5/8       2-1/2    1-3/4

1996
First Quarter.........................    6-7/8     3-1/4       2        11/16
Second Quarter .......................    5-1/4     4-1/4       1-1/8    11/16
Third Quarter.........................    5-3/16    4-1/2       1          1/2
Fourth Quarter........................    6-3/8     4-11/16     1-1/8      1/2

1997
First Quarter
   (through April 15, 1997)...........    8-1/8     4-7/8       2-1/2    15/16

      As of April 15, 1997, there were 48 record holders of the Company's Common
Stock.  There are in excess of 1,009  beneficial  owners of the Company's Common
Stock.

      The Company has not paid any cash dividends on its Common Stock other than
S  corporation  dividends  prior to its  initial  public  offering  and does not
currently intend to declare or pay cash dividends in the foreseeable future. The
Company  intends to retain any earnings  that may be generated to provide  funds
for the operation and  expansion of its  business.  In addition,  certain of the
Company's  loan  agreements  with its lenders  prohibit  the Company from paying
dividends.

PREFERRED STOCK

      The Company is authorized  to issue  1,000,000  shares of Preferred  Stock
with such designation,  rights and preferences as may be determined from time to
time by the Board of  Directors  none of which were  outstanding  as of the date
hereof.  Accordingly,  the Board of Directors is empowered,  without stockholder
approval,  to issue  Preferred  Stock with  dividend,  liquidation,  conversion,
voting or other  rights that could  adversely  affect the voting  power or other
rights  of the  holders  of the  Common  Stock.  In the event of  issuance,  the
Preferred Stock could be utilized,  under certain circumstances,  as a method of
discouraging, delaying or preventing a change in control of the Company.






                                      26


<PAGE>



WARRANTS

      As of the date  hereof,  the Company  has  1,437,500  Warrants  issued and
outstanding.  The  Warrants  were  issued  in  registered  form  pursuant  to an
agreement  (the  "Warrant  Agreement")  between the Company and  American  Stock
Transfer & Trust Company,  as Warrant  Agent.  Reference is made to said Warrant
Agreement for a complete  description of the terms and  conditions  therein (the
description  herein  contained  being  qualified  in its  entirety by  reference
thereto).

      Each Warrant entitles the registered  holder thereof to purchase one share
of  Common  Stock,  at a price  of  $6.00,  subject  to  adjustment  in  certain
circumstances,  at any time until September 12, 1999. After the expiration date,
the Warrantholders shall have no further rights.

      The Warrants are redeemable by the Company,  with the consent of the Whale
Securities Co., L.P., the Underwriter for the Company's initial public offering,
at any  time,  upon  notice  of not less  than 30  days,  at a price of $.10 per
Warrant,  provided  that the closing bid price of the Common  Stock on all 20 of
the  trading  days ending on the third day prior to the day on which the Company
gives notice has been at least 130% (currently $7.80,  subject to adjustment) of
the then effective  exercise price of the Warrants.  Any redemption shall be for
all  outstanding  Warrants.  All  warrantholders  have exercise rights until the
close of business on the date fixed for redemption.

      The  exercise  price  and  number  of  shares  of  Common  Stock  or other
securities  issuable on exercise of the  Warrants are subject to  adjustment  in
certain   circumstances,   including   in  the   event  of  a  stock   dividend,
recapitalization,  reorganization,  merger  or  consolidation  of  the  Company.
However,  such  warrants are not subject to  adjustment  for issuances of Common
Stock at a price  below  the  exercise  price  of the  Warrants,  including  the
issuance of shares of Common Stock pursuant to the Company's stock option plans.

      The Warrants may be exercised upon surrender of the Warrant certificate on
or prior to the  expiration  date  (September  12,  1999) at the  offices of the
Warrant  Agent,  with the exercise  form on the reverse side of the  certificate
completed and executed as indicated, accompanied by full payment of the exercise
price and  transfer  tax (by  certified  check  payable to the  Company)  to the
Warrant Agent for the number of Warrants being exercised.  The warrantholders do
not have the rights or privileges of holders of Common Stock.

      No Warrant will be exercisable  unless at the time of exercise the Company
has an effective Registration Statement on file with the Commission covering the
shares of Common Stock  issuable  upon  exercise of such Warrant and such shares
have been  registered  or qualified or deemed to be exempt under the  securities
laws of the state of residence of the holder of such  Warrant.  The Company will





                                      27



<PAGE>

use its best  efforts to have all such shares so  registered  or qualified on or
before the exercise date and to maintain a current  prospectus  relating thereto
until the  expiration  of the  Warrants,  subject  to the  terms of the  Warrant
Agreement.  While it is the Company's  intention to do so, there is no assurance
that it will be able to do so.

      No  fractional  shares  will be  issued  upon  exercise  of the  Warrants.
However, if a warrantholder  exercises all Warrants then owned of record by him,
the  Company  will pay to such  warrantholder,  in lieu of the  issuance  of any
fractional  share which is  otherwise  issuable,  an amount in cash based on the
market  value of the Common  Stock on the last trading day prior to the exercise
date.

      Additionally,  pursuant  to the terms of the Underwriting  Agreement,  the
Company  sold  the  Underwriter,   for  an  aggregate  of  $125,  warrants  (the
"Underwriter's  Warrants")  to  purchase  up to 125,000  shares of Common  Stock
and/or  125,000  Warrants at an exercise  price of $8.25 per share and $.165 per
Warrant.  The  Underwriter's  Warrants are exercisable  until September 14, 1999
(the  "Warrant  Exercise  Term").  The Warrants  issuable  upon  exercise of the
Underwriter's  Warrants are exercisable to purchase one share of Common Stock at
a price equal to $6.00 per share.

      The  Company also has  outstanding  Options and Warrants to purchase up to
an aggregate of 1,277,546 shares of Common Stock at exercise prices ranging from
$5.00 to $7.50,  substantially  all of which  are  presently  exercisable  until
expiration dates ranging from October 1997 to October 2002.

DIVIDEND POLICY

      Holders of Common Stock are  entitled to receive such  dividends as may be
declared  and paid  from  time to time by the  Board of  Directors  out of funds
legally available  therefor.  The Company intends to retain any earnings for the
operation  and  expansion of its business  and does not  anticipate  paying cash
dividends in the foreseeable future. Any future  determination as to the payment
of cash  dividends  will  depend upon future  earnings,  results of  operations,
capital  requirements,  the Company's financial condition and such other factors
as the Board of Directors may consider.

CERTAIN PROVISIONS OF THE COMPANY'S CERTIFICATE OF INCORPORATION

      Section 102 of the Delaware General  Corporation Law ("DGCL") authorizes a
Delaware  corporation to include a provision in its Certificate of Incorporation
limiting  or  eliminating  the  personal  liability  of  its  directors  to  the
corporation and its  stockholders  for monetary damages for breach of directors'
fiduciary duty of care. The duty of care requires that, when acting on behalf of
the corporation,  directors  exercise an informed business judgment based on all
material  information  reasonably  available  to them.  Absent  the  limitations
authorized by such  provision,  directors are  accountable to  corporations  and
their   stockholders  for  monetary  damages  for  conduct   constituting  gross
negligence  in the exercise of their duty of care.  Although  Section 102 of the
DGCL does not change a director's duty of care, it enables corporations to limit
available  relief  to  equitable  remedies  such as  injunction  or  rescission.
Pursuant to such provision,  the Company Certificate of Incorporation limits the
personal  liability of the Company directors (in their capacity as directors but

                                28

<PAGE>

not in their  capacity as  officers) to the Company or its  stockholders  to the
fullest extent  permitted by the DGCL.  Specifically,  a director of the Company
will not be personally  liable to the Company or its  stockholders  for monetary
damages for breach of fiduciary duty as a director, except for (i) any breach of
the director's duty of loyalty to the Company or its stockholders,  (ii) acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation  of law,  (iii)  unlawful  payments of  dividends  or  unlawful  stock
repurchases,  redemptions or other distributions,  and (iv) any transaction from
which the director derived an improper personal benefit.

      The  inclusion  of this  provision  may have the  effect of  reducing  the
likelihood  of derivative  litigation  against  directors and may  discourage or
deter  stockholders or management from bringing a lawsuit against  directors for
breach of their duty of care, even though such an action,  if successful,  might
otherwise  have  benefitted  the  Company  and its  stockholders.  However,  the
inclusion of this provision together with a provision which requires the Company
to indemnify its officers and directors against certain liabilities, is intended
to enable the Company to attract  qualified  persons to serve as  directors  who
might otherwise be reluctant to do so.

DELAWARE ANTI-TAKEOVER LAW

      The Company is governed by the  provisions  of Section 203 of the DGCL. In
general,  the law  prohibits a public  Delaware  corporation  from engaging in a
"business  combination"  with an "interested  stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
"Business  combination"  includes  mergers,  asset sales and other  transactions
resulting in a financial benefit to the stockholder. An "interested stockholder"
is a person who,  together with affiliates and associates,  own (or within three
years, did own) 15% or more of the corporation's voting stock.

OVER-THE-COUNTER MARKET

      The Company's  Common Stock is traded on the NASDAQ National Market System
under the symbols "AQUX" and "AQUXW," respectively.

TRANSFER AGENT

      The Transfer  Agent for the  Company's  shares of Common Stock is American
Stock Transfer & Trust Company, 40 Wall Street, New York, New York 10005.


                                  LEGAL MATTERS

      Certain  legal  matters in connection  with the  securities  being offered
hereby will be passed upon for the Company by Atlas,  Pearlman,  Trop & Borkson,
P.A., Counsel for the Company, Fort Lauderdale, Florida.


                                 INDEMNIFICATION

      Section  145 of the  General  Corporation  Law of  Delaware,  under  which
jurisdiction  the Company is  incorporated,  empowers a corporation to indemnify
any  person  who was or is a party  or is  threatened  to be made a party to any



                                       29

<PAGE>


threatened,  pending or completed  action,  suit or  proceeding,  whether civil,
criminal,  administrative  or investigative by reason of the fact that he or she
is or was a director, officer, employee or agent of the corporation or is or was
serving at the request of the  corporation as a director,  officer,  employee or
agent of another corporation or enterprise.  A corporation may indemnify against
expenses (including  attorneys' fees) and, other than in respect of an action by
or in the right of the corporation, against judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with such action, suit
or proceeding if the person  indemnified  acted in good faith and in a manner he
or she reasonably  believed to be in or not opposed to the best interests of the
corporation,  and with  respect to any  criminal  action or  proceeding,  had no
reasonable  cause to believe his or her conduct was unlawful.  In the case of an
action by or in the right of the corporation, no indemnification of expenses may
be made in respect to any claim,  issue or matter as to which such person  shall
have been adjudged to be liable to the corporation unless and only to the extent
that the Court of Chancery  or the court in which such action was brought  shall
determine that, despite the adjudication of liability, such person is fairly and
reasonably  entitled to indemnity for such  expenses  which the court shall deem
proper.  Section 145 of the General Corporation Law of Delaware further provides
that to the extent a director, officer, employee or agent of the corporation has
been  successful in the defense of any action,  suit or  proceeding  referred to
above or in the defense of any claim,  issue or matter therein,  he or she shall
be  indemnified  against  expenses  (including  attorneys'  fees)  actually  and
reasonably incurred by him or her in connection therewith.

      The  Restated  Certificate  of  Incorporation  and  By-Laws of the Company
require the  Company to  indemnify  its  Directors  and  officers to the fullest
extent permitted by the General Corporation Law of the State of Delaware.

      The Company maintains  directors and officers liability  insurance,  which
covers the Company's subsidiaries and the respective directors and officers.

















                                       30



<PAGE>



                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.     Incorporation of Documents by Reference

      The  documents  listed  in (a)  through  (c)  below  are  incorporated  by
reference in the Registration Statement. All documents subsequently filed by the
Registrant  pursuant to Section  13(a),  13(c),  14 and 15(d) of the  Securities
Exchange Act of 1934, as amended (the "Exchange Act"),  prior to the filing of a
post-effective  amendment which indicates that all securities  offered have been
sold or which deregisters all securities then remaining unsold,  shall be deemed
to be  incorporated  by reference in the  Registration  Statement and to be part
thereof from the date of filing of such documents.

            (a)   The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1996.

            (b)   The  Company's  Quarterly  Reports  on  Form  10-QSB  for  the
quarterly period ended March 31, 1996, June 30, 1996 and September 30, 1996.

            (c)   The Company's current reports on Form 8-K dated March 8, 1996,
April 25, 1996, June 7, 1996,  June 12, 1996,  December 7, 1996 and December 31,
1996.

            (d)   All other reports filed  pursuant to Section 13(a) or 15(d) of
the Exchange  Act since the end of the fiscal year  covered by the  Registrant's
document referred to in (a) above.

            (e)   The  description  of the Common Stock of the Company  which is
contained in a Registration  Statement  filed under the Exchange Act,  including
any amendment or report filed for the purpose of updating such description.

Item 4.     Description of Securities

      A description  of the Company's  securities is set forth in the Prospectus
incorporated as a part of this Registration Statement.

Item 5.     Interests of Named Experts and Counsel

      Not Applicable.












                                      II-i



<PAGE>



Item 6.     Indemnification of Directors and Officers

      Section  145 of the  General  Corporation  Law of  Delaware,  under  which
jurisdiction  the Company is  incorporated.  empowers a corporation to indemnify
any  person  who was or is a party  or is  threatened  to be made a party to any
threatened,  pending or completed  action,  suit or  proceeding,  whether civil,
criminal,  administrative  or investigative by reason of the fact that he or she
is or was a director, officer, employee or agent of the corporation or is or was
serving at the request of the  corporation as a director,  officer,  employee or
agent of another corporation or enterprise.  A corporation may indemnify against
expenses (including  attorneys' fees) and, other than in respect of an action by
or in the right of the corporation, against judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with such action, suit
or proceeding if the person  indemnified  acted in good faith and in a manner he
or she reasonably  believed to be in or not opposed to the best interests of the
corporation,  and with  respect to any  criminal  action or  proceeding,  had no
reasonable  cause to believe his or her conduct was unlawful.  In the case of an
action by or in the right of the corporation, no indemnification of expenses may
be made in respect to any claim,  issue or matter as to which such person  shall
have been adjudged to be liable to the corporation unless and only to the extent
that the Court of Chancery  or the court in which such action was brought  shall
determine that, despite the adjudication of liability, such person is fairly and
reasonably  entitled to indemnity for such  expenses  which the court shall deem
proper.  Section 145 of the General Corporation Law of Delaware further provides
that to the extent a director, officer, employee or agent of the corporation has
been  successful in the defense of any action,  suit or  proceeding  referred to
above or in the defense of any claim,  issue or matter therein,  he or she shall
be  indemnified  against  expenses  (including  attorneys'  fees)  actually  and
reasonably incurred by him or her in connection therewith.

      The  Restated  Certificate  of  Incorporation  and  By-Laws of the Company
require the  Company to  indemnify  its  Directors  and  officers to the fullest
extent permitted by the General Corporation Law of the State of Delaware.

      The Company maintains  directors and officers liability  insurance,  which
covers the Company's subsidiaries and the respective directors and officers.

Item 7.     Exemption from Registration Claimed

      Inasmuch  as the  Consultant  who  received  the Shares of the Company was
knowledgeable,   sophisticated  and  had  access  to  comprehensive  information
relevant to the Company,  such  transaction  was  undertaken  in reliance on the
exemption from registration  provided by Section 4(2) of the Act. As a condition
precedent to such grant,  the  Consultant  was required to express an investment
intent  and  consent to the  imprinting  of a  restrictive  legend on each stock





                                    II-ii



<PAGE>


certificate  to be received from the Company  except upon sale of the underlying
Shares of Common Stock pursuant to a registration statement.

Item 8.     Exhibits
-------     --------

Exhibit     Description
-------     -----------

(5)         Opinion of Atlas,  Pearlman,  Trop & Borkson,  P.A.  relating to the
            issuance of shares of  securities  pursuant to the above  Consulting
            Agreement

(10.1)      Consulting  Agreement  dated October 5, 1996 between the Company and
            First Taconic

(23.1)      Consent of Atlas,  Pearlman,  Trop & Borkson,  P.A.  included in the
            opinion filed as exhibit (5) hereto

(23.2)      Consents of independent certified public accountants
__________________________


Item 9.     Undertakings

      (1)   The undersigned Registrant hereby undertakes:

            (a)   To file,  during  any period in which  offerings  or sales are
being made, a post-effective amendment to this Registration Statement 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;

            (b)   That, for the purposes of determining  any liability under the
Act, 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; and

            (c)   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.

      (2)   The undersigned  Registrant  hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's  annual
report  pursuant to Section  13(a) or Section  15(d) of the  Exchange  Act (and,







                                    II-iii



<PAGE>


where  applicable,  each  filing of an employee  benefit  plan's  annual  report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement 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)   Insofar as indemnification for liabilities arising under the Act may
be permitted to Directors,  officers and  controlling  persons of the Registrant
pursuant to the foregoing  provisions,  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  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 or  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, 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 Act and will be governed by the final adjudication of
such issue.































                                      II-iv



<PAGE>

                                   SIGNATURES

      Pursuant to the  requirements  of the  Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the  requirements  for  filing  on  Form  S-8 and has  duly  caused  this
Registration Statement to be signed on its behalf by the undersigned,  thereunto
duly authorized, in the City of Fort Lauderdale and the State of Florida, on the
29th day of April, 1997.

                                        AQUAGENIX, INC.


                                       By:/s/Andrew P. Chesler
                                          --------------------------------------
                                           Andrew P. Chesler
                                           Chairman of the Board and President

      Pursuant to the  requirements  of the  Securities Act of 1933, as amended,
this  Registration  Statement  has been signed by the  following  persons in the
capacities and on the dates indicated.

      Signature                         Title                         Date
      ---------                         -----                         ----
                            
                                Chairman of the Board,
                                Chief Executive Officer
                                and President (Principal
/s/Andrew P. Chesler            Executive Officer                 April 29, 1997
----------------------------
Andrew P. Chesler           
                            
                                Chief Financial Officer
/s/Helen Chia                   (Principal Accounting
----------------------------    Officer)                          April 29, 1997
Helen Chia                      
                            
                            
/s/Abraham S. Fischler          Director                          April 29, 1997
----------------------------
Abraham S. Fischler         
                            
                            
/s/Fred S. Katz                 Director                          April 29, 1997
----------------------------
Fred S. Katz                
                            
                            
/s/Allen H. Stern               Director                          April 29, 1997
----------------------------
Allen H. Stern              
                            
                            
/s/Jeffrey T. Katz              Director                          April 29, 1997
----------------------------
Jeffrey T. Katz             

                                     II-v


<PAGE>




                                INDEX TO EXHIBITS


Exhibit Number         Description
--------------         -----------

(5)                    Opinion of Atlas, Pearlman, Trop & Borkson, P.A. relating
                       to  the  issuance of shares of securities pursuant ot the
                       above Consulting Agreement

(10.1)                 Consulting  Agreement  dated October 5, 1997 between  the
                       Company and First Taconic

(23.2)                 Consents of independent certified public accountants

































                                      II-vi
[{"type": "S-8", "sequence": "1", "description": "AQUAGENIX, INC.", "secsgml_size_bytes": 108944}]
{"company-data": {"conformed-name": "AQUAGENIX INC/DE", "cik": "0000923604", "assigned-sic": "4950", "irs-number": "650419263", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-26335", "film-number": "97593496"}, "business-address": {"street1": "6500 NW 15TH AVE", "city": "FORT LAUDERDALE", "state": "FL", "zip": "33309", "phone": "9549757771"}, "mail-address": {"street1": "6500 NORTHWEST 15 AVE", "city": "FORT LAUDERDALE", "state": "FL", "zip": "33309"}, "former-company": {"former-conformed-name": "AQUATERRA INC", "date-changed": "19940523"}}
As filed with the Securities and Exchange Commission on April 30, 1997

                                                            File No. 33-78956-A

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                               ________________

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                               ________________

                                 Aquagenix, Inc.
               (Exact name of issuer as specified in its charter)

              Delaware                                        65-0419263
    (State or other jurisdiction                          (I.R.S. Employer
  of incorporation or organization)                      Identification No.)

        6500 N.W. 15th Avenue
      Fort Lauderdale, Florida                                   33309
(Address of principal executive offices)                       (Zip Code)

                        CONSULTING AGREEMENT WITH ADVISOR
                            (Full title of the plan)

                          Andrew P. Chesler, President
                              6500 N.W. 15th Avenue
                         Fort Lauderdale, Florida 33309
                          Telephone No.: (954) 975-7771
                     (Name and address of agent for service)

                                    Copy to:
                             Roxanne K. Beilly, Esq.
                      Atlas, Pearlman, Trop & Borkson, P.A.
                     200 East Las Olas Boulevard, Suite 1900
                            Fort Lauderdale, FL 33301
                                 (954) 763-1200
CALCULATION OF REGISTRATION FEE

================================================================================
                                         Proposed       Proposed
                                         maximum        maximum
                                         offering       aggregate   Amount of
Title of securities    Amount to be      price per      offering    registration
 to be registered      registered        share(1)       price(1)    fee (1)
================================================================================

Common Stock
($.01 par value)       100,000 shares    $5.00          $500,000    $151.52

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

(1)   Estimated   solely  for  the  purpose  of  computing  the  amount  of  the
      registration  fee in accordance  with Rule 457 under the Securities Act of
      1933, as amended (the "Securities Act").
AQUAGENIX, INC.

         CROSS REFERENCE SHEET REQUIRED BY ITEM 501(b) OF REGULATION S-K

         Form S-8 Item Number
             and Caption                       Caption in Prospectus

 1.      Forepart of Registration          Facing Page of Registration Statement
         Statement and Outside Front       and Cover Page of Prospectus
         Cover Page of Prospectus

 2.      Inside Front and Outside Back     Inside Cover Page of Prospectus and
         Cover Pages of Prospectus         Outside Cover Page of Prospectus

 3.      Summary Information, Risk         Not Applicable
         Factors and Ratio of Earnings
         to Fixed Charges

 4.      Use of Proceeds                   Not Applicable

 5.      Determination of Offering Price   Not Applicable

 6.      Dilution                          Not Applicable

 7.      Selling Security Holder           Sales by Selling Security Holder

 8.      Plan of Distribution              Cover Page of Prospectus and Sales by
                                           Selling Security Holder

 9.      Description of Securities to be   Description of Securities;
         Registered                        Consulting Agreements

10.      Interests of Named Experts        Legal Matters
         and Counsel

11.      Material Changes                  Not Applicable

12.      Incorporation of Certain          Incorporation of Certain Documents
         Information by Reference          by Reference

13.      Disclosure of Commission          Indemnification of Directors and 
         Position on Indemnification for   Officers; Undertakings
         Securities Act Liabilities

                                        i
PROSPECTUS
                                 AQUAGENIX, INC.

                         100,000 Shares of Common Stock
                                ($.01 par value)

                   Issued Pursuant to the Company's Agreement
                        with First Taconic Capital Corp.

      This  Prospectus  is  part of a  Registration  Statement  which  registers
100,000 shares of Common Stock, $.01 par value (such shares being referred to as
the "Shares"),  of Aquagenix,  Inc. (the "Company" or "Aquagenix")  which may be
issued  pursuant to the  exercise of  warrants,  as set forth  herein,  to First
Taconic  Capital  Corp.,  a  consultant  to  the  Company  ("First  Taconic"  or
"Consultant")  pursuant to a written  consulting  agreement  (the "First Taconic
Consulting Agreement" or "Agreement")  providing for the issuance of warrants to
purchase 100,000 Shares. The Consultant, in its capacity as selling shareholder,
is sometimes  hereafter referred to as the "Selling Security Holder." All of the
Shares are being issued to the Consultant  pursuant to a written agreement.  The
Company has been advised by the Selling  Security Holder that it may sell all or
a portion of the Shares  from time to time in the  over-the-counter  market,  in
negotiated transactions, directly or through brokers or otherwise, and that such
Shares will be sold at market prices  prevailing at the time of such sales or at
negotiated  prices,  and the Company  will not receive  any  proceeds  from such
sales.

      No person has been authorized by the Company to give any information or to
make any representation other than as contained in this Prospectus, and if given
or made, such  information or  representation  must not be relied upon as having
been authorized by the Company.  Neither the delivery of this Prospectus nor any
distribution  of the Shares  issuable  under the terms of the  Agreement  shall,
under any circumstances, create any implication that there has been no change in
the affairs of the Company since the date hereof.

THESE  SECURITIES  HAVE NOT BEEN APPROVED OR  DISAPPROVED  BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THIS  PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY STATE TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH STATE.

                 The date of this Prospectus is April 30, 1997.
AVAILABLE INFORMATION

      The Company is subject to the informational requirements of the Securities
Exchange  Act of 1934,  as amended  (the  "Exchange  Act"),  and, in  accordance
therewith,  files  reports,  proxy  statements  and other  information  with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other  information  filed with the Commission can be inspected and copied at
the public  reference  facilities of the  Commission at 450 Fifth Street,  N.W.,
Washington,  D.C.  20549.  Copies  of this  material  can  also be  obtained  at
prescribed  rates from the Public  Reference  Section of the  Commission  at its
principal  office  at 450  Fifth  Street,  N.W.,  Washington,  D.C.  20549.  The
Company's  Common Stock is traded on the NASDAQ SmallCap Market under the symbol
"AQUX."  Electronic  Reports and other  information found through the Electronic
Data Gathering,  Analysis & Retrieval System are probably  available through the
Commission's website (http://www.sec.gov.).

      The Company has filed with the Commission a Registration Statement on Form
S-8 (the "Registration  Statement") under the Securities Act of 1933, as amended
(the  "Act"),  with respect to the resale of up to an aggregate of up to 100,000
shares of the Company's  Common Stock,  which may be issued to the Consultant of
the Company pursuant to the written Agreement which provides for the issuance of
Warrants to  purchase  100,000  Shares at an exercise  price of $5.00 per Share.
This Prospectus,  which is Part I of the Registration  Statement,  omits certain
information  contained in the Registration  Statement.  For further  information
with respect to the Company and the shares of the Common  Stock  offered by this
Prospectus,  reference  is made to the  Registration  Statement,  including  the
exhibits  thereto.  Statements  in this  Prospectus  as to any  document are not
necessarily  complete,  and  where  any  such  document  is an  exhibit  to  the
Registration  Statement  or is  incorporated  by  reference  herein,  each  such
statement  is qualified  in all  respects by the  provisions  of such exhibit or
other  document,  to which reference is hereby made, for a full statement of the
provisions thereof. A copy of the Registration Statement,  with exhibits, may be
obtained from the Commission's office in Washington, D.C. (at the above address)
upon  payment  of the  fees  prescribed  by the  rules  and  regulations  of the
Commission, or examined there without charge.

                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

      The  following  documents  filed by the Company  with the  Securities  and
Exchange Commission are incorporated herein by reference and made a part hereof:

      (a)   The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996.

      (b)   The  Company's  Quarterly  Reports on Form 10-QSB for the  quarterly
period ended March 31, 1996, June 30, 1996 and September 30, 1996.

                                        2
(c)   The Company's current reports on Form 8-K dated March 8, 1996, April
25, 1996, June 7, 1996, June 12, 1996, December 7, 1996 and December 31, 1996.

      (d)   All reports and documents  filed by the Company  pursuant to Section
13, 14 or 15(d) of the  Exchange  Act,  prior to the filing of a  post-effective
amendment which  indicates that all securities  offered hereby have been sold or
which  deregisters all securities then remaining  unsold,  shall be deemed to be
incorporated  by  reference  herein and to be a part hereof from the  respective
date of filing of such documents. Any statement incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this  Prospectus to
the extent that a statement  contained herein or in any other subsequently filed
document,  which also is or is deemed to be  incorporated  by reference  herein,
modifies or supersedes  such  statement.  Any  statement  modified or superseded
shall not be deemed, except as so modified or superseded,  to constitute part of
this Prospectus.

      The Company  hereby  undertakes to provide  without charge to each person,
including  any  beneficial  owner,  to whom a copy of the  Prospectus  has  been
delivered,  on the written or oral request of any such person,  a copy of any or
all of the documents referred to above which have been or may be incorporated by
reference in this  Prospectus,  other than exhibits to such  documents.  Written
requests for such copies should be directed to Corporate  Secretary,  Aquagenix,
Inc., 6500 N.W. 15th Avenue, Fort Lauderdale, Florida 33309.

                                        3
THE COMPANY

Description of Business
-----------------------

      (a)   Background
            ----------

      Aquagenix,  Inc.,  a Delaware  corporation  (the  "Company"),  through its
wholly-owned subsidiaries, provides aquatic and industrial vegetation management
services to governmental and commercial customers.  The Company provides aquatic
and industrial vegetation management services in the States of Florida, Georgia,
North and South Carolina,  Arizona,  Alabama and Tennessee. The Company offers a
variety  of  aquatic  and  industrial   vegetation  management  and  maintenance
services, consisting primarily of the control of aquatic weeds, algae and exotic
plants,  brush and noxious  tree  control,  wetland  planting  and  restoration,
installation of fountains and aeration systems and the stocking of fish for game
and plant and insect control.

      The  Company was  incorporated  under the laws of the State of Delaware in
May 1993 to acquire all of the issued and outstanding capital stock of Aquagenix
Land-Water Technologies, Inc. ("ALWT"), formerly known as Environmental Waterway
Management,  Inc.  and Florida  Underground  Petroleum  Tank  Contractors,  Inc.
("FUPTC").  Prior to their acquisition by the Company,  ALWT had been engaged in
the  aquatic  management  business,  primarily  aquatic  weed,  algae  and plant
control,  since its  formation in October 1990.  In February  1995,  the Company
acquired Haas Environmental Services ("HES") now known as AmerAquatic, Inc. Both
FUPTC  and HES had  been  engaged  in the  environmental  remediation  business,
primarily  remediation  of petroleum  contaminated  soil and ground  water.  The
operations of FUPTC and HES have been  discontinued  since November 1995. Unless
the context requires otherwise, the "Company" refers to Aquagenix,  Inc. and its
consolidated  subsidiaries,  ALWT, Aquagenix Land-Water Technologies of Arizona,
Inc. ("ALWTA") and Right of Way Control,  Inc. ("ARC"),  Aquatic Dynamics,  Inc.
("ADI"),  Aquagenix Land-Water  Technologies of Georgia, Inc. (formerly known as
Good Shepherd, Inc. d/b/a Green Pastures, Inc., "GPI"), FUPTC and HES.

      In order to raise capital,  in September 1994, the Company  consummated an
underwritten  initial  public  offering  (the "IPO") of 1,250,000  shares of its
common stock,  $.01 par value (the "Common  Stock"),  and  1,437,500  redeemable
warrants  (the   "Warrants"),   for  aggregate  net  proceeds  of  approximately
$5,541,000  (after deduction of the underwriting  discounts and before deduction
of other expenses of the IPO). In October 1994, the Company realized  additional
net proceeds of  approximately  $815,000 from the sale of an additional  187,500
shares  of  Common   Stock  upon  the  exercise  by  the   underwriter   of  its
over-allotment option.

                                        4
(b)   Business Overview
            -----------------

      The  Company  offers  a  variety  of  aquatic  and  industrial  vegetation
management services, consisting primarily of the control of aquatic weeds, algae
and exotic  plants,  industrial  vegetation  management,  wetland  planting  and
restoration,  installation of fountains and aeration systems and the stocking of
fish for game and pest and plant control. The Company's services are intended to
assist in flood  control,  maintain  the  health,  beauty,  quality  and natural
balance of life in aquatic and terrestrial  environments  and in some instances,
to maintain  reasonable access to critical utility and other right of way areas.
They  are  designed  to  suit  individual  customer  requirements,  many of whom
maintain  waterways  and  lands in  compliance  with  federal,  state  and local
environmental laws and regulations.

      Lakes, canals, ponds, rivers and wetlands have become increasingly popular
forms of aesthetic and recreational components in cities, golf courses,  country
clubs, commercial and residential developments, apartment complexes and parks in
and throughout the United States.  Waterways provide facilities for recreational
use,  such as fishing and water sports,  and are  important  for flood  control,
drainage,  wildlife  preservation  and as a source of water for  industrial  and
residential use. As a result of natural and other factors,  including overgrowth
of noxious weeds, algae and exotic plants, which deplete oxygen and restrict the
flow of water, waterways and wetlands require ongoing management to preserve and
maintain their functional use, biological health and aesthetic value.

      In the Sunbelt states of Florida, Georgia, South Carolina, North Carolina,
Tennessee, Mississippi,  Missouri, Louisiana, Texas, New Mexico, Arizona, Nevada
and  California,  there are over 5,500 golf courses and country  clubs , most of
which require aquatic  management  services;  and as a result of the climate and
topography  within the Sunbelt  states,  the majority of real estate  developers
have water features which require maintenance. The market for aquatic management
services on private land in Florida alone is estimated to exceed $100 million.

      There  is  also a  growing  trend  toward  privatization  of  aquatic  and
industrial  vegetation management services carried out on public lands by public
works personnel of governmental  agencies as they come under  increasing  fiscal
pressures to reduce costs. The South Florida Water Management  District,  one of
the Company's customers,  had performed its own vegetation management work years
ago and had subsequently  awarded work to the Company.  The potential market for
such services on public land in Florida is estimated to exceed $500 million.

        Additionally,  because  extensive land development in the Sunbelt states
and other  coastal  states has  depleted  natural  wetlands,  federal  and state
legislation has been enacted to preserve  wetlands by requiring  property owners
and  developers  to restore  portions of developed  properties  to their natural

                                      5
state,  in what is known as a "no net loss" policy.  In May 1994, a $700 million
restoration  project  for  Florida's  Everglades  was  adopted  by the  State of
Florida,  which contemplates that the federal  government,  the State of Florida
and a group of landowners will jointly fund restoration of portions of Florida's
Everglades.  The Company will seek to capitalize on perceived demand for aquatic
management services, particularly wetlands planting and restoration services.

      With annual revenues of approximately $11,500,000 for 1996, the Company is
currently the largest provider of aquatic and industrial  management services in
the United States.  In 1996, with the  acquisition of two businesses  engaged in
industrial vegetation  management services (see below - "Recent  Acquisitions"),
the Company has increased its revenues  from such services  which  accounted for
17% of total  revenues as compared to only 3% for 1995. In 1996, the Company has
begun  creating  a niche for  itself  in the  industrial  vegetation  management
business,  with the acquisitions  providing the springboard from which marketing
efforts are targeted at electric  and power  utilities,  telephone  and railroad
companies,  transportation  departments and industrial sites throughout Florida,
Georgia and Alabama. In 1997, the Company  anticipates  securing more industrial
vegetation  contracts  which are  generally  larger in value as  compared to the
aquatic vegetation contracts.

      (c)   Business of Issuer
            ------------------

COMPANY SERVICES

      Aquatic Weed,  Algae and Exotic Plant  Control.  The term  "aquatic  weed"
encompasses  a large,  diverse  group of plant types,  consisting  of four basic
groups which pose a problem to waterways: floating aquatics, submersed aquatics,
emergent and ditchbank weeds and grasses.  Algae, a fifth  classification,  is a
lower form of  submersed  plant  life and is the cause of "scum" on the  water's
surface.  Left unattended,  aquatic weeds, algae and plants appear and propagate
in  excessive  amounts  and  interfere  with the aquatic  environment's  natural
balance.  Thick masses of aquatic  weeds can disrupt boat  traffic,  fishing and
other water sports, lower the oxygen levels of water resulting in fish kills and
create water flow problems.  Noxious weeds generate foul odors,  visual eyesores
and create breeding grounds for mosquitos and other pests.  Most noxious aquatic
weeds,  exotic  plants  and trees have been  imported  into the  Sunbelt  States
without natural enemies and have proceeded to displace  natural and native plant
life.  While  beneficial  plants are  essential to creating a properly  balanced
aquatic  ecosystem  and provide  food and  shelter for various  species of fish,
birds and  animals,  dense  infestations  of  aquatic  weeds  and algae  prevent
sunlight from entering the water, potentially endangering all living inhabitants
of aquatic environments.

      The Company's aquatic management services consist primarily of the control
of aquatic weeds,  algae and exotic plants.  The Company  establishes  treatment
programs for lakes, canals, ponds, reservoirs,  rivers, estuaries,  marine areas
and wetlands by assessing  ambient water quality and vegetation and the specific

                                      6
needs of individual customers. The Company maintains a data base of computerized
water analysis  information and property  management control and service records
designed to provide  customers  with a  comprehensive  aquatic  treatment  plan.
Company-trained   and  licensed   applicators  utilize  approved  algicides  and
herbicides and special spraying  equipment to disperse  algicides and herbicides
in water and on adjacent land to control the growth of aquatic weeds,  algae and
exotic  plants.  The Company  typically  uses small boats equipped with tanks to
hold liquid  formulations and spray arms for spraying from the water.  Similarly
equipped  four-wheel drive  all-terrain  vehicles are utilized for spraying from
the shoreline.  Significant  reduction in the growth of aquatic weeds, algae and
exotic plants is usually  achieved within three to four weeks. The customers for
these services  typically  agree to annual  contracts  which provide for monthly
service and payment.

      In addition to the regular  application of algicides and  herbicides,  the
Company  utilizes  harvesting  methods to control  aquatic weeds.  Harvesting is
performed either manually or mechanically,  depending upon the nature and extent
of the growth of undesirable aquatic weeds and plants.  Mechanical harvesting is
typically  expensive  but  achieves  immediate  results.   The  Company  engages
third-party  contractors which utilize barges equipped with special  attachments
to  cut,   gather   and   crop   aquatic   weeds.   Harvesting   is  done  on  a
project-by-project basis.

      The Company also controls  submersed  aquatic weeds,  algae and insects by
introducing   several   species   of  fish,   the   Triploid   Grass   Carp,   a
genetically-engineered weed-eating fish which may consume as much as three times
its body weight each day, and the Gambusia,  or Mosquitofish,  which may consume
up to its  weight in  mosquito  larvae  and pupae  each day.  Additionally,  the
Company stocks  different  types of Tilapia in the Western United States for the
control of toxic algae formations. The Company, when required, obtains necessary
permits from state governmental authorities to use biological control methods on
a project basis.

      For the years ended  December 31, 1995 and 1996,  aquatic weed,  algae and
exotic  plant  control  services   accounted  for  approximately  93%  and  77%,
respectively, of the Company's revenues from continuing operations.

      Industrial Vegetation Management.  The Company provides professional right
of  way  weed  control  along  utility  lines,  pipelines,  transmission  lines,
distribution lines, railroads,  power substations,  canals, ditches, bridges and
other industrial sites for private and public sector customers.

      The Company  inspects  target  areas to determine  environmental  factors,
safety factors,  geographic  criteria  surrounding  plant life and combines this
information  with input from the customers.  The Company  subsequently  provides
precision low volume  application weed, brush and tree control to the designated
system(s).  The  Company's  services  are  varied and may be  "bundled"  to meet

                                      7
specific customer needs. It maintains a large inventory of application equipment
at peak  performance  condition  and has the most  complete  array of  equipment
available for each job.

      Distribution  power lines are serviced by ground  application  techniques.
Equipment in service for these applications includes:  four-wheel drive, one-ton
spray  trucks,  track  equipment and ATVs.  In addition,  vegetation  control is
achieved with personnel using backpack  sprayers.  Transmission  power lines are
managed from the air by helicopters and aerial TVB spray equipment. Safety guard
rails  and  transportation  right of ways are  serviced  by  highly  specialized
vehicles,  equipped with computer  injection  systems designed  specifically for
these functions.

      For the years  ended  December  31, 1995 and 1996,  industrial  vegetation
management services accounted for approximately 3% and 17%, respectively, of the
Company's total revenues from continuing operations.

      WETLAND  PLANTING AND  RESTORATION.  The  preservation  and propagation of
wetland areas has become  recognized  as an important  part of  maintaining  the
ecosystem.  Aquatic and wetland plants are critical components of healthy ponds,
lakes or waterways,  inasmuch as these plants form a base for an important  link
between the  beginnings of the  food-chain  and higher forms of plant and animal
life. The Company believes that the quality of water is directly attributable to
the balance of the water's and shoreline's vegetation.

      The Company offers wetland planting, restoration and maintenance services,
which involve the movement of soil and the planting of  beneficial  native plant
life to create or recreate  wetlands in the form in which they naturally  occur.
The Company  currently  engages in wetland planting  utilizing its personnel and
equipment and, to the extent  necessary,  third-party  equipment.  Revenues from
such services  comprised 4% of total revenues from aquatic  management  business
for 1995 and 1996. With the "no net loss"  governmental  policy and the State of
Florida's  Everglades  restoration project, the Company anticipates that wetland
planting and restoration  services will account for an increasing portion of the
Company's revenues in the future.

      DESERT  RAIN(TM)  FOUNTAINS.  The  Company  offers  an  extensive  line of
decorative  floating fountains,  trademarked  "Desert Rain(TM)",  to enhance the
visual  appeal and beauty of waterways,  while  providing  ecological  benefits,
including increased  circulation,  reduced stagnation and the reduction of odors
caused by  algae.  The  Company's  fountains  feature a unique,  interchangeable
nozzle  which  allows  the  customer  to select  from  several  different  spray
patterns.  Fountains are fabricated using quality waterproof materials which are
treated  to  resist  corrosion.   Nozzle   assemblies  are  manufactured   using
high-density polyurethane, epoxy, brass and stainless steel for durability.

      AERATION  SYSTEMS.  The Company also offers aeration  systems  designed to
permit waterways to digest organic  sediments which deplete oxygen,  trap gasses

                                      8
and result in general  degradation  of water  quality.  The  Company's  aeration
systems are custom  designed  systems  consisting  of a pattern of porous stones
which are laid on the bottom of a lake and a  relatively  silent air  compressor
mounted on the shore. When air is injected from the compressor  through pipes to
the  stones,  air rises  through the water  oxygenating  and  cleansing  it. The
Company's  aeration  systems are designed to minimize  fish kills and foul odors
and  to  facilitate  lake  management  and  the  operations  of  wastewater  and
aquaculture  industries.  To date,  revenues  derived from fountain and aeration
system installation services have not been material.

      FISH  STOCKING.  The  Company  offers a  variety  of  species  of fish for
stocking lakes and ponds for  recreational  and biological  purposes,  including
Triploid Grass Carp (Amur), Tilapia,  Gambusia (Mosquitofish),  Smallmouth Bass,
Largemouth Bass,  Bluegill,  Black Crappie,  Warmouth Perch and Channel Catfish.
The Company's personnel perform salinity,  Ph and oxygen tests,  conduct surveys
of existing fish  population and create aquatic  sanctuaries for successful fish
habitation.  The  Company  obtains  its  requirements  of fish  from a number of
suppliers.  To date,  revenues derived from fish stocking services have not been
material.  However,  the Company is presently expanding this line of business in
the Western United States through its subsidiary, ALWTA, in Arizona.

OPERATIONS

      Headquartered in Fort Lauderdale,  Florida,  the operations of the Company
are  decentralized  with eleven customer  service  offices,  one in each of Fort
Lauderdale, West Palm Beach, Orlando, Sarasota, Tampa, Jacksonville, Fort Myers,
Daytona Beach (all in Florida),  Myrtle Beach (South Carolina),  Tempe (Arizona)
and Athens (Georgia). Each customer service office is headed by a branch manager
and supported by sales representatives. As a result of maintaining decentralized
operations,  the Company is able to reduce  transit  time and per diem  expenses
while  providing  better  services to a larger customer base. The branch offices
can also be utilized to integrate  acquisitions  within its geographic region of
operations  and are easily  expandable  to handle  increased  levels of business
without a meaningful increase in administrative expenses. This was the case with
the Jacksonville, Tampa and Fort Lauderdale operations acquired from Aquatic and
Right  of  Way  Control,  Inc  and  AmerAquatic,   Inc.  (see  below  -  "Recent
Acquisitions").  Each  office has the same basic  set-up,  systems  and  general
operations  which  is a key  aspect  in  the  implementation  of  the  Company's
expansion strategy in that branch offices can be quickly established in multiple
geographical  areas in a proven company format.  Offices are fully  computerized
with established customer service protocol.  This enables the Company's services
to be efficient, professional and responsive to the client base.

                                      9
EXPANSION STRATEGY

      The  Company   believes  that   continuing   initiatives  of  governmental
authorities   relating  to  environmental   problems  as  well  as  the  gradual
privatization of in-house  governmental and utility based aquatic and industrial
vegetation  management contracts have resulted in significant  opportunities for
its business,  through internal growth and  acquisitions.  Management  estimates
that only 30% of the aquatic  and  vegetation  management  industry is served by
commercial  companies.  The  Company's  expansion  strategy  is:  (I) to acquire
similar  businesses and integrate their operations into the existing business so
as to create economies of scale;  (ii) to intensify  marketing  efforts and open
additional  decentralized  branch  offices  that allow the Company to expand its
geographic  markets while maintaining  quality service and minimizing  operating
expenses; and (iii) to achieve critical mass and increase operating leverage and
efficiency so that the Company can pursue larger  contracts  from the 70% of the
industry that traditionally sources contracts in-house.  The proceeds of the IPO
have enabled the Company to finance increased levels of accounts  receivable and
satisfy significant bonding  requirements in connection with its operations.  It
has also  enabled the Company to  establish  substantial  bonding and  insurance
capabilities,  thereby  permitting  the  Company  to bid on  and  secure  larger
contracts,  especially  government and utility work. In addition,  over the past
three years,  the Company has made  significant  investment  in building  middle
management in order to provide the appropriate  infrastructure  to integrate the
acquisitions planned for under its growth strategy.

      The Company intends to  aggressively  apply its growth strategy in several
stages  in  the  following   geographic  markets  which  it  perceives  to  have
significant  growth potential:  (I) Georgia,  South Carolina and North Carolina;
(ii)  California,  Arizona  and  Nevada;  and  (iii)  Texas,  Louisiana  and the
remainder of the Southern United States.

      The GPI, ADI, ARC, AmerAquatic,  and L&L Acquisitions (see below - "Recent
Acquisitions")  were  consummated as part of the Company's goal of expanding its
operations.  Consistent  with its  strategy of growth,  the Company will seek to
expand its operations  through further  acquisitions.  The Company believes that
the aquatic and industrial  vegetation management industry is highly fragmented,
consisting  principally of small privately-owned  companies with limited capital
resources,  bonding capabilities and documentation systems. The Company believes
that  with  further   additions  to  its  existing   infrastructure,   including
improvements  to  its  information  and  documentation  systems,   coupled  with
increased  bonding  capabilities,  this will  enable the  Company to out-bid its
smaller  competitors  and  position  the  Company  to  acquire  smaller  service
providers in new geographic markets. However, there can be no assurance that the
Company  will be able to  obtain  the  required  financing  to fund the costs of
purchasing  capital  equipment  and to build its  infrastructure  or to make the
acquisitions  to  expand  its  operations  or that the  Company  will be able to
successfully integrate into its operations any acquired business.

                                      10
RECENT ACQUISITIONS

      On December 31,  1996,  the Company  acquired  100% of the common stock of
Good Shepherd, Inc. d/b/a Green Pastures, Inc. ("GPI Acquisition"), now known as
Aquagenix Land-Water Technologies of Georgia, Inc., pursuant to a Stock Exchange
Agreement,  dated as of December  31, 1996,  by and among the  Company,  GPI and
Garry Seitz and Jan Seitz (the "Selling Shareholders"), the shareholders of GPI.
The  aggregate  purchase  price was  $600,000  which was paid by the issuance of
96,000 shares of the  Company's  common stock to the Selling  Shareholders.  The
assets  acquired from GPI  comprised  mainly of high-tech  roadside  application
equipment and recurring service contracts.

      GPI, a  Georgia-based  private  company  founded in 1988, is a provider of
roadside  vegetation  management  services throughout the state of Georgia using
high-tech computer controlled application systems along roadsides and has annual
revenues of approximately $960,000. This acquisition has been accounted for as a
pooling of interests and the Company intends to continue and further develop the
existing business of GPI as part of ALWT.

      On December 7, 1996,  the Company,  through its wholly  owned  subsidiary,
merged with Aquatic  Dynamics,  Inc.  (the "ADI  Acquisition")  with the Company
becoming  the  surviving  entity,  pursuant  to the  terms  of a Stock  Exchange
Agreement  and Plan of Merger,  dated as of December  7, 1996,  by and among the
Company, Aquagenix Land- Water Technologies of Arizona, Inc., ADI and Pat Church
and Stephen Church,  the  shareholders of ADI. The aggregate  purchase price was
$1,000,000,  of which (I) $750,000 was paid by the issuance of 133,333 shares of
the Company's common stock to the former  shareholders of ADI; (ii) $200,000 was
paid by the issuance of an  installment  note due on January 15,  1997,  bearing
interest  at 7% and (iii)  $50,000  was paid in cash.  The  installment  note of
$200,000  has since been paid in full.  The cash  portion  was funded out of the
proceeds of certain private equity placements which took place in June 1996. The
assets  acquired from ADI comprised  mainly of vehicles and equipment,  accounts
receivable, marketable securities and recurring service contracts.

      In  connection  with the ADI  Acquisition,  the Company  has entered  into
two-year  employment  agreements  with the  former  shareholders  of ADI who are
participating in the management of the Company's western operations.

      ADI, an Arizona-based  private company founded in 1974, was a full-service
aquatic vegetation  management firm whose experience and services span the gamut
of surface water management needs, including residential, commercial, industrial
and governmental projects, irrigation and effluent reuse water systems, lake and
pond  management  and  ongoing  waterway  maintenance.  ADI has  been a  leading
provider of aquatic vegetation  management  services  throughout Arizona and the
southwestern United States with annual revenues of approximately $1,600,000. The

                                      11
ADI  Acquisition   has   established  the  Company's   market  presence  in  the
southwestern  United  States with ADI serving as the hub of  operations  in that
region.  The Company  intends to  continue  and  further  develop  the  existing
business of ADI under its new name, namely, Aquagenix Land-Water Technologies of
Arizona, Inc.

      On June 7, 1996,  the Company  acquired 100% of the voting common stock of
Aquatic and Right of Way Control, Inc. ("ARC Acquisition") pursuant to the terms
of a Stock  Exchange  Agreement,  dated as of June 7,  1996,  by and  among  the
Company,  ARC and Ray A. Spirnock and Shirley J. Spirnock,  the  shareholders of
ARC. The aggregate  purchase price was $1,500,000,  of which $1,350,000 was paid
by the  issuance  of 270,000  shares of the common  stock of the  Company to the
former  shareholders  of ARC and $150,000 was paid in cash. The cash portion was
funded out of cash flows from operations. The assets acquired from ARC consisted
mainly of  recurring  service  contracts,  accounts  receivable  and  industrial
vegetation  application equipment.  In connection with the ARC Acquisition,  the
Company entered into a two-year employment agreement with Ray A. Spirnock.

      With  annual  revenues  of  approximately  $1,350,000,  ARC was a  leading
provider of industrial  vegetation and utility right of way management  services
in Florida,  Georgia and Alabama.  These services include the control of noxious
weeds in the right of way areas adjacent to distribution and transmission  power
lines. The Company intends to operate the existing  business as part of ALWT and
is  further  developing  the  industrial  vegetation  and  utility  right of way
management business previously conducted by ARC.

      On November 17, 1995, ALWT acquired (the "L&L Acquisition") certain of the
equipment and customer  contracts of L&L Mosquito & Pest Control,  Inc., a South
Carolina  corporation  ("L&L"),  used in its  aquatic  weed  and  algae  control
business,  pursuant  to the terms of an Asset  Purchase  Agreement,  dated as of
November 17, 1995, by and among ALWT,  L&L and the sole  shareholder of L&L. The
aggregate  purchase  price  paid by ALWT for the assets of L&L was  $150,000  in
cash.  The Company is  continuing  to operate the aquatic weed and algae control
business  previously  conducted  by L&L.  The L&L  Acquisition  has  provided an
established foothold for the Company in Hilton Head, South Carolina.

      On  October  31,  1995,  ALWT  acquired  ("the  AmerAquatic  Acquisition")
substantially  all of the assets and  assumed  certain  of the  liabilities,  of
AmerAquatic, Inc., a Florida corporation ("AmerAquatic"),  pursuant to the terms
of an Asset Purchase Agreement, dated as of October 19, 1995, by and among ALWT,
the Company,  AmerAquatic  and Thomas Latta and C. Elroy  Timer,  the  principal
shareholders of AmerAquatic.  The aggregate  purchase price paid by ALWT for the
assets of  AmerAquatic  was  $4,291,084,  subject to  adjustment  under  certain
circumstances,  of which (I)  $3,791,084  was paid in cash and (ii) $500,000 was
paid  through the  issuance by ALWT of a  seven-month  promissory  note  bearing
interest at a rate of 9.75% per annum,  which note was guaranteed by the Company

                                      12
and  subsequently  paid in full.  AmerAquatic  was  engaged in the  business  of
providing lake management  services,  including aquatic and terrestrial weed and
algae  control,  melaleuca  and other exotic plant  control,  wetland and upland
restoration  and  other  related  services.  They  were  the  Company's  largest
competitor  in  this  business  in  Florida  with  over  1,000  customers.   The
AmerAquatic  Acquisition  expanded the Company's  geographic reach into northern
Georgia,   North  Carolina  and  South  Carolina  and  initiated  the  Company's
penetration into its second  strategic  market,  the South Atlantic states.  The
Company  is  continuing  to operate  the lake and  wetland  management  business
previously conducted by AmerAquatic as part of ALWT.

      In connection  with the  AmerAquatic  Acquisition,  the Company,  ALWT and
AmerAquatic  entered  into a Private  Label  Agreement,  pursuant  to which ALWT
agreed to purchase  sixty  specialized  vehicles known as  "Spra-Buggies",  used
among other things, to provide lake management services,  over a period of three
years  commencing  on October 31, 1995,  for a purchase  price of  approximately
$25,000  each.  ALWT has the  exclusive  right to  purchase,  use and sell these
highly-efficient and durable Spra- Buggies within the aquatics industry.

      In connection with the AmerAquatic  Acquisition,  the Company, ALWT and C.
Elroy Timmer entered into a one-year employment agreement.

      The Company  funded the cash portion of the purchase  price for the assets
of  AmerAquatic  from the proceeds of the issuance and sale of (I) the Company's
12.50%  Senior  Secured Note due  February  28, 1996 (the "Bridge  Note") in the
principal  amount of  $5,000,000,  and (ii) warrants (the "Bridge  Warrants") to
purchase an aggregate of 168,166 shares of the Company's Common Stock,  pursuant
to a Senior Secured Note and Warrant Purchase Agreement, dated as of October 31,
1995 (the  "Bridge  Note  Purchase  Agreement"),  between  the  Company  and The
Equitable Life Assurance Society of the United States ("Equitable"). In December
1995, the Company  issued to Equitable the Company's  12.50% Senior Secured Note
due October 31, 2003 (the  "Senior  Secured  Note") in the  principal  amount of
$5,000,000  and warrants  (the  "Warrants")  to purchase an aggregate of 351,197
shares of the  Company's  Common  Stock,  subject to  adjustment  under  certain
circumstances,  in  substitution  for the Bridge  Note and the Bridge  Warrants,
respectively,  pursuant  to an Amended  and  Restated  Senior  Secured  Note and
Warrant  Purchase  Agreement,  dated as of December 15, 1995 (the "Note Purchase
Agreement"),  between the  Company and  Equitable.  The Senior  Secured  Note is
subordinated  to all  indebtedness  of the  Company  to its bank  lender  and is
secured  by  substantially  all  of  the  Company's  assets.  The  Warrants  are
exercisable  at any time until  December 31, 2000 at an exercise  price of $7.38
per share, subject to adjustment under certain circumstances.

                                      13
CUSTOMERS

      The Company provides  surface water  management and industrial  vegetation
management  services to utilities,  golf  courses,  country  clubs,  real estate
owners  and  developers,  homeowners  and  condominium  associations,  apartment
complexes and various municipal,  state and federal governmental authorities and
taxing districts,  many of which maintain waterways and lands in compliance with
local environmental laws and regulations. The Company currently provides aquatic
and industrial  vegetation  management services to approximately 48 customers in
the public sector and  approximately  2,299  customers with whom the Company has
annual aquatic and industrial vegetation management contracts. Substantially all
of the Company's  contracts  for aquatic and  industrial  vegetation  management
services are recurring in nature and for the year ended December 31, 1996,  this
comprised 73% of total revenues (1995:  77%).  These recurring  annual contracts
provide  for  monthly  payments  and are  automatically  renewable.  The  annual
contracts for industrial  vegetation  management  services are usually renewable
for a term of up to three  years and provide  for  payments  based on a cost per
acre or mile of land under management.

      For the year ended  December  31, 1996,  19% of its revenues  were derived
from governmental customers as compared to 34% for 1995.  Governmental customers
which  formerly  provided  aquatic or  vegetation  management  services  through
government  employees have accounted for a significant  portion of the Company's
revenues.  It is anticipated that a substantial  portion of the Company's future
revenues will be derived from  governmental  and  quasi-governmental  customers.
Government contracts are subject to special risks,  including delays in funding;
lengthy   review   processes  for  awarding   contracts;   non-renewal;   delay,
termination,  reduction or  modification of contracts in the event of changes in
the government's policies or as a result of budgetary constraints; and increased
or unexpected costs resulting in losses.

      Historically,  the  Company  has been  dependent  on a  limited  number of
contracts  for a  significant  portion  of its  revenues.  For the  years  ended
December 31, 1996 and 1995,  the Company's  five largest  customers with whom it
has annual contracts  accounted for approximately 6.5% and 21.2%,  respectively,
of the  Company's  revenues.  In 1995,  Northern Palm Beach County Water Control
District,  the customer with which the Company has the largest annual  contract,
accounted for  approximately  14.0% of the Company's  revenues while in 1996, it
only  accounted  for 2.2% of the total  revenues  for 1996.  For the year  ended
December  31,  1996,  the Company has  broadened  its  customer  base and no one
customer accounts for more than 5% of the Company's total revenues.

      There  can  be no  assurance  that  the  Company  will  obtain  additional
contracts for projects similar in scope to those  previously  obtained or retain
existing  customers or attract and retain new customers or that the Company will
not remain largely dependent on non-recurring  contracts with a limited customer
base, which will constitute a significant portion of the Company's revenues.

                                      14
INSURANCE AND BONDING

      The  Company  carries  insurance  coverage  which  the  Company  considers
sufficient  to meet  applicable  regulatory  and  customer  requirements  and to
protect the Company's assets and operations.  The Company's  insurance  coverage
currently includes $2 million of comprehensive  general liability insurance,  up
to $1  million  of  pollution  liability  insurance  and $8  million  of  excess
liability  insurance.  The  Company  attempts to operate in a  professional  and
prudent  manner  and  to  reduce  its  liability  risks  through  specific  risk
management efforts,  including employee training.  Nevertheless,  a partially or
completely  uninsured claim against the Company, if successful and of sufficient
magnitude, could have a material adverse effect on the Company and its financial
condition. In addition, the inability to obtain insurance of the type and in the
amounts  required  could impair the Company's  ability to obtain new  contracts,
which are, in certain  instances,  conditioned upon the availability of adequate
insurance coverage.

      The  aquatic  and  industrial   vegetation  management  business  involves
potentially significant risks of statutory, contractual and common law liability
for  environmental  damage and  personal  injury.  The  Company,  and in certain
instances,  its  officers,  directors  and  employees,  may be subject to claims
arising from the Company's  on-site or off-site  services,  including  chemicals
used in its operations,  and  environmental  contamination  by the Company,  its
contracted  transporters  or disposal  site  operators.  All such persons may be
liable for site investigation,  site cleanup costs and natural resource damages,
which costs could be substantial,  regardless of whether they exercised due care
and complied with all relevant laws and  regulations.  There can be no assurance
that the Company will not face claims  resulting in  substantial  liability  for
which the Company is uninsured,  that hazardous  substances or materials are not
or will not be present at the Company's  facilities or that the Company will not
incur liability for environmental impairment.

      The Company is required, in most instances, to post bid and/or performance
bonds in connection with contracts or projects with government  entities and, to
a lesser extent, private sector customers. To date, the Company has been able to
obtain  bonds in amounts of up to  approximately  $4 million per bond.  However,
there is no assurance that this will continue.  The Company  anticipates that in
the future it will continue to be required to post bid and/or  performance bonds
in connection  with  contracts or projects with  government  entities and, to an
increasing  extent,  private  sector  customers.  In  addition,  new or proposed
legislation  in various  jurisdictions  require or will  require  the posting of
substantial  bonds  or  require  other  financial  assurances  with  respect  to
particular projects.  There can be no assurance that the Company will be able to
obtain bonds in the amounts required.

                                      15
MARKETING

      To date,  marketing has principally been conducted  through the efforts of
the Company's management and sales personnel. The Company uses various marketing
methods,  including direct mailings,  in-person solicitation,  print advertising
and  participation  in trade  shows  and  conventions,  and  periodically  mails
attractive,  full-color  sales brochures and advertises in trade  journals.  The
Company's  sales  force  consist  of  approximately   sixteen  people,  who  are
responsible for soliciting  potential  customers in their respective  geographic
markets,  receive  salaries  plus a  percentage  of gross  profits  derived from
Company services. The Company also obtains customers through recommendations and
referrals from existing  customers and environmental  engineers and consultants.
The Company's  executive officers devote significant time and effort to maintain
continuing customer relationships.

      The  Company  typically  obtains  private  and  public  contracts  for its
services  through the process of competitive  bidding.  The Company's  marketing
efforts  include  subscribing  to several bid reporting  services and monitoring
trade  journals  and other  industry  sources for bid  solicitations  by various
entities,  including government authorities and related  instrumentalities,  and
responding to such bid  solicitations,  which include requests for proposals and
requests  for  qualifications.   In  response  to  a  request  for  proposal  or
qualification,  the  soliciting  entity  generally  requires a written  response
within a set period of time. Generally, in the case of a request for a proposal,
a bidder  submits a proposal  detailing its  qualifications,  the services to be
provided and the cost of the services to the soliciting entity which then, based
on its  evaluation  of the  proposals  submitted,  awards  the  contract  to the
successful  bidder.  Generally,  in the case of a request for  qualification,  a
bidder submits a response  describing its  experience  and  qualifications,  the
soliciting entity then selects the bidder believed to be the most qualified, and
then  negotiates  all the  terms  of the  contract,  including  the  cost of the
services.

      The Company  believes that accurate  bidding is important to the Company's
business.  Accordingly,  the Company utilizes a computerized  bidding system and
engages  personnel  at  potential  sites  to  determine  cost  factors  used  in
submitting bids.  Public contracts are usually  longer-term (two to three years)
and may  periodically  be put up for bid even though the  Company  has  provided
quality services and has formed a strong relationship with the customer. While a
bid price is an important  factor in obtaining  contracts,  the Company believes
that potential customers also consider reputation, experience, safety record and
the  financial  condition  of  bidders  in  awarding  contracts.  Because of its
familiarity  with the  nature of the  contracts  and the basis on which they are
awarded,  the Company is often able to retain contracts that are put up for bid.
In the past, the Company has been able to retain  approximately 85% of contracts
which  fall into this  category.  However,  there can be no  assurance  that the
Company  will  continue  to be  successful  in  having  its bids  accepted.  The
competitive  bidding  process  is  typically  lengthy  and often  results in the
expenditure of significant  sums and allocation of resources in connection  with

                                      16
bids that may be  rejected.  Additionally,  inherent in this process is the risk
that actual  performance  costs may exceed the  projected  costs,  especially in
relation to disputes on the  performance  of services,  upon which the submitted
bids or contract prices are based.

COMPETITION

      The aquatic and vegetation management industry is highly competitive.  The
Company faces competition from several hundred companies  throughout the Sunbelt
States.  In recent years,  government  authorities have implemented an extensive
regulatory framework directed toward alleviating various environmental problems.
The complex  nature of  government  regulation  has  resulted  in  significantly
increased   sophistication  and  costs  of  aquatic  and  industrial  vegetation
management,   handling  and  disposal   methods,   facilities   and   equipment.
Consequently,  the  industry  has  become  increasingly  capital  intensive  and
competitive.

      The Company believes that the principal competitive factors in the aquatic
and  industrial  vegetation   management  industry  are  reputation,   technical
proficiency,  managerial expertise, financial assurance capability (particularly
as it relates to  bonding),  price and  breadth of services  offered,  including
documentation   capabilities.   With  its   internal   growth   and  its  recent
acquisitions,  the  Company is  currently  the  largest  commercial  provider of
aquatic and vegetation management services in the United States. With its highly
credible  track  record,  substantial  bonding and insurance  capabilities,  its
investment  in managerial  expertise,  equipment  and  computerized  operations,
management  believes  that  the  Company  does  have a  competitive  edge in the
business. The Company has developed a customized software package which provides
individual job budgets,  branch work schedules,  integrated customer service and
sales activity tracking and collaborative  communications.  All these allows the
Company to provide  quality  service,  improve  efficiency and costs control and
provide  competitive  yet  profitable  bids.  In  addition,  the Company is also
committed to purchasing highly  specialized  proprietary  equipment to remain in
the forefront of technology.  This equipment is intended to be used for weed and
algae control both in water and on land ('amphibian' in nature). They may result
in high efficiency and accuracy including the reduction of the cost of labor per
acre of weed control,  allowing the Company to use the finest treatment products
for its customers and projects.

      Competition in the aquatic and industrial  vegetation  management industry
is,  however,  expected to increase in the  foreseeable  future.  A  significant
number of aquatic management projects continue to be performed "in house" by the
major water management  districts,  many of which may have substantially greater
financial and other resources than the Company.  The Company also expects that a
significant  number  of new  market  entrants  will  seek to bid on new  aquatic
management  projects  for the  Everglades.  There can be no  assurance  that the
Company will be able to compete successfully in its markets.

                                      17
SUPPLIERS AND SUBCONTRACTORS

      The Company is dependent on third-party  suppliers and  manufacturers  for
all of its  requirements of algicides and herbicides,  fish and aeration systems
used in its aquatic management  business.  Although the Company purchases all of
these supplies from numerous suppliers and believes that alternative  sources of
supply are available, failure by such suppliers and manufacturers to continue to
supply the Company with products on commercially reasonable terms, or at all, in
the absence of readily available  alternate sources,  would adversely affect the
Company's  ability to deliver  products  and  provide  services  on a timely and
competitive  basis. The Company is dependent on the ability of its suppliers and
manufacturers,   among  other  things,  to  satisfy  performance,   quality  and
regulatory  specifications  and  dedicate  sufficient  production  capacity  for
supplies  within  scheduled  delivery  times.  The  Company  does  not  maintain
contracts  with any of its suppliers or  manufacturers  and  purchases  supplies
pursuant to purchase  orders placed from time to time in the ordinary  course of
business.  In  addition,  the Company  currently  does not own or lease  certain
specialized  equipment,  including  mechanical  harvesting  or certain  planting
equipment and is dependent upon third-party  subcontractors to provide necessary
equipment, know-how,  transportation and other facilities on a project basis. In
the event  such  subcontractors  were to become  unavailable  to the  Company at
acceptable  cost levels,  or at all, the Company's  business could be materially
adversely affected.

GOVERNMENT REGULATION

      The aquatic and  industrial  vegetation  management  services  business is
subject to extensive and frequently  changing federal,  state and local laws and
substantial regulation under these laws by governmental agencies,  including the
United States Environmental  Protection Agency (the "EPA") and the United States
Occupational  Safety and Health  Administration  ("OSHA").  Among other  things,
these regulatory  authorities  impose  requirements which regulate the handling,
transportation  and disposal of hazardous  and  non-hazardous  materials and the
health and safety of workers, and require the Company and, in certain instances,
its employees,  to obtain and maintain  licenses and permits in connection  with
its  operations.   This  extensive   regulatory  framework  imposes  significant
compliance burdens and risks on the Company. The Company is currently subject to
the  requirements  of the Resource  Conservation  and  Recovery Act of 1976,  as
amended,  the Federal  Water  Pollution  Control  Act,  as amended,  the Federal
Insecticide,  Fungicide,  and Rodenticide  Act, the Florida Weed Control Act and
the  Occupational  Safety and Health Act of 1970.  The following is a summary of
these  regulations  and other  material  governmental  regulations  which may be
applicable to the Company.

      The Federal Water  Pollution  Control Act, as amended by the Federal Water
Pollution  Control  Act  Amendments  of 1979  and the  Clear  Water  Act of 1977
(collectively  "CWA"),  create the federal  statutory scheme for water pollution
control and management.

                                      18
The  principal  objective of the CWA is to restore and maintain the integrity of
the nation's waters.  In addition,  the CWA provides for: (I) the development of
pollutant  discharge  standards  and  limitations;  (ii) a permit and  licensing
system to enforce these discharge standards;  (iii) federal funding to assist in
the construction of publicly owned and privately owned treatment works; and (iv)
research and development of pollution control technologies and strategies.

      Congress  also  created the federal  Safe  Drinking  Water Act ("SDWA") to
ensure the quality and safety of drinking water supplies. To protect underground
sources  of  drinking  water  from  contamination,  SDWA  regulates  underground
injection  wells used for waste  disposal and  establishes a permit  program for
such  practices.  The SDWA also  establishes  procedures for the development and
implementation  of programs for aquifer  protection  areas located  within areas
designated as source aquifers for drinking water.

      Even though the EPA has nationwide  authority to implement CWA, authorized
states  may  implement  various  aspects  of the  National  Pollutant  Discharge
Elimination  System  ("NPDES") and pretreatment  programs,  among other areas of
responsibility.  In  addition  to the  option  of  administering  the CWA  under
authority  delegated by the EPA,  states may develop their own  regulations  for
water pollution control, which generally parallel federal CWA requirements.

      As a complement to the regular NPDES program, the United States Army Corps
of Engineers must issue a special permit (commonly  referred to as a Section 404
permit) prior to the discharge of dredge-and-fill material into navigable waters
of the  United  States,  including  "wetlands"  as defined  under the CWA.  As a
condition of obtaining such  dredge-and-fill  permits, the permittee is required
to mitigate  the impacts of such  dredge-  and-fill  activities  (often times by
creating new wetlands), resulting in "no net loss" of wetlands or an increase in
wetlands  areas.  As  is  the  case  in  Florida,   many  states  implement  the
dredge-and-fill  permit criteria under a consolidated federal and state program.
The Company  from time to time may be engaged in wetlands  mitigation  projects,
which may subject the Company to the  provisions  of the CWA and its  permitting
programs.

      Originally  adopted  in 1947,  the  Federal  Insecticide,  Fungicide,  and
Rodenticide Act ("FIFRA") constitutes the federal regulatory framework governing
pesticides,  including  algicides  and  herbicides.  FIFRA  imposes a variety of
licensing, permitting, classification, and registration requirements, along with
various  constraints  imposed  upon  the  application,   use,  and  handling  of
pesticides.  FIFRA  mandates that all restricted use of pesticides be applied by
or under the direct  supervision  of an applicator  certified  only under FIFRA.
Although  FIFRA dictates  certification  for  applications  of restricted use of
pesticides,  many states,  including Florida,  require the certification  and/or
registration  of commercial  applicators  for  applications  of both general and
restricted use pesticides.

                                      19
FIFRA  expressly  authorizes  states  to  regulate  the  sale  or use of a
federally registered pesticide or device under certain circumstances, but defers
to state regulations employing stricter standards.  A state may also require the
registration of federally  registered  pesticides for additional uses consistent
with special local needs. As a general rule,  state laws  regulating  pesticides
parallel the federal  scheme.  Many states  supplement the federal  requirements
with their own regulations.

      The  Toxic  Substance  Control  Act of 1975  ("TSCA")  gives the EPA broad
authority to regulate the manufacture, processing, distribution in commerce, use
and disposal of chemical substances and mixtures. The EPA may require testing of
chemical  substances  that may  present  an  unreasonable  risk to health or the
environment. If testing reveals an unreasonable risk, the EPA must take steps to
reduce the risk.  Options available to the EPA range from labeling  requirements
prohibiting manufacture of the harmful chemical to mandating the manner in which
it must be disposed.  The Company from time to time may be engaged in the future
to remediate certain  contaminated  sites, which may involve the use or disposal
of chemical  substances and mixtures.  To the extent that the Company handles in
the future those chemical substances and mixtures regulated by TSCA, the Company
could be subject to liability under TSCA. The Company does not anticipate that a
material portion of its environmental  remediation activities in the future will
consist of the  remediation  of sites  requiring the use or disposal of chemical
substances or materials regulated by TSCA.

      The Florida Aquatic Weed Control Act ("FAWCA")  creates a state regulatory
framework for the preservation and maintenance of the state's  waterways.  Under
FAWCA, no person or public agency shall eradicate, remove or otherwise alter any
aquatic  weeds or  plants  in  waters of the  state  unless  the  Department  of
Environmental Protection ("DEP") or its designee issues a permit or the activity
is exempted.  The Florida Legislature also established the Florida Nonindigenous
Aquatic Control Act, which is designed to control  nonindigenous  aquatic plants
primarily  by means of  maintenance  programs.  In  connection  with its aquatic
management  activities,  the  Company is subject to the  permitting  criteria of
FAWCA and the Florida  Nonindigenous Aquatic Control Act, which the Company does
not anticipate will have a material impact on its aquatic management business.

      The Company may also be subject to a variety of environment-related worker
and  community  safety  laws.  The  Occupational  Safety  and Health Act of 1970
("OSHA")  mandates general  requirements for safe work places for all employees.
In particular,  OSHA calls for special  procedures and measures for the handling
of  certain  hazardous  and  toxic  substances.  In  addition,  specific  safety
standards  have  been  promulgated  for  workplaces  engaged  in the  treatment,
disposal or storage of hazardous waste.  Moreover,  under the Federal  Emergency
Planning and Right-to-Know Act of 1986,  facilities handling specified extremely
hazardous  materials must notify local  emergency  planning  committees of their

                                      20
activities and comply with the provisions of local emergency plans. Requirements
under state law, in some  circumstances,  may mandate  additional  measures  for
facilities handling specified extremely dangerous materials.

      The  Company  believes  that  it is in  substantial  compliance  with  all
material federal,  state and local laws and regulations governing its operations
and has obtained all material  licenses and permits  necessary for the operation
of its  business.  However,  amendments  to existing  statutes and  regulations,
adoption of new statutes and  regulations  and the Company's  expansion into new
jurisdictions and aquatic and vegetation  management  services could require the
Company  to  continually  alter  methods  of  operations  at costs that could be
substantial.  There  can be no  assurance  that the  Company  will be able,  for
financial or other reasons,  to comply with  applicable  laws,  regulations  and
permitting  requirements,  particularly  as it seeks to enter into new  markets.
Failure to comply with  applicable  laws,  rules or  regulations  or  permitting
requirements  could subject the Company to civil  remedies,  including fines and
injunctions, as well as possible criminal sanctions, which would have a material
adverse effect on the Company.

      Notwithstanding  the burdens of compliance,  the Company believes that its
business  prospects  are  significantly  enhanced  by the  continuing  stringent
enforcement of the comprehensive  regulatory  framework by government  agencies.
Any significant relaxation of the regulatory  requirements governing the aquatic
and vegetation  management  services  industry  could also adversely  affect the
Company.

PERMITS AND LICENSES

      The Company  and, in certain  instances,  its  employees  are  required to
obtain and maintain licenses and permits in connection with its operations.  The
Company's  employees currently hold the necessary permits for application of the
algicides  and  herbicides  utilized by the  Company in its  aquatic  management
business.  The  Company  is  required  to obtain  permits  from  state and local
governments for the harvesting and planting of aquatic plants in connection with
its wetlands  planting  activities on a project  basis.  The Company may also be
required  to  obtain  surface  water  permits  in  connection  with its  aquatic
management  activities on a project basis depending on the nature of the body of
water.

      The Company  anticipates  that it will be required to obtain and  maintain
additional  licenses  in  geographic  areas in which it  intends  to expand  its
operations.  The  Company  believes,  based  upon the level of  training  of its
employees and past experience,  that it will be able to obtain all such required
licenses, although there is no assurance that it will be able to do so.

                                      21
EMPLOYEES

      As of March 12, 1997, the Company had  approximately  150 employees  other
than  executives,  all of  whom  are  full-time  employees,  which  includes  30
administrative staff, 12 branch managers, 13 sales personnel, 75 applicators and
20 laborers.  The Company is not currently a party to any collective  bargaining
agreement. The Company believes that its employee relations are satisfactory.

DISCONTINUED OPERATIONS

      The  Company's  Board of  Directors  in November  1995  approved a plan to
dispose  of the  environmental  remediation  business  segment  in  view  of the
continued  losses  of  the  environmental   remediation  services  division  and
operational  problems  associated  with it. In 1996,  management has implemented
various  cost-cutting  measures  including  the  reduction of officers and other
personnel,  the  sale  of  under-utilized  equipment  and the  consolidation  of
accounting and  administrative  functions.  The Company's  remediation  services
which are being discontinued include remediation of petroleum  contaminated soil
and ground  water and the  removal,  disposal and  installation  of  underground
petroleum storage tanks and fuel dispensing systems.

      On April 25, 1996,  the Company sold  substantially  all of the assets and
liabilities of HES to Heart Environmental  Services,  Inc. (the "Buyer"),  a New
Jersey  corporation  for  a  total   consideration  of  $1,907,021.   The  total
consideration  comprises (I) $681,000 in cash, (ii) a three-year promissory note
of $600,000 (the " Promissory Note") issued by the Buyer, bearing interest at 9%
per annum and  collaterized  by the pledge of 499 shares of the  Buyer's  Common
Stock  pursuant to a Stock Pledge  Agreement,  (iii) the  cancellation  of total
obligations  due to H&H  Investments  Corporation,  Mr.  Eugene  M. Haas and Mr.
Robert E. Haas (collectively known as the "Haas Shareholders") which amounted to
$626,021.  The Company originally  incurred these obligations in connection with
the HES  acquisition  in February 1995. As a result of the HES sale, the Company
has agreed not to pursue any claims against the Haas  Shareholders in connection
with the Haas  acquisition  in February  1995.  All of the above items have been
satisfied with the exception of (ii)  pertaining to the  Promissory  Note. As of
December 31, 1996, the Company  determined  that there may  be a  collectibility
problem in relation to the  Promissory  Note and as a result,  a full  valuation
allowance has been made.

      In relation to FUPTC,  the  Company has not been  successful  in finding a
buyer for it and the net book values of the remaining  assets of FUPTC have been
written down to its net realizable  values.  As at December 31, 1996,  FUPTC has
fulfilled all of its remaining contractual obligations.  All equipment have been
sold  on a  piece-meal  basis  and  the  net  liabilities  of  the  discontinued
environmental  remediation  entities  consist  mainly  of  accounts  receivable,
accounts  payable and amounts payable to Robert A. Radler,  the former President
of the  Company,  under a  settlement  agreement  entered  into in 1996 with the

                                      22
Company.  The Company is  continuing  its  collection  efforts for the remaining
accounts receivables in relation to its discontinued  operations so as to settle
the remaining accounts payable.

DESCRIPTION OF PROPERTY

      The Company maintains a corporate  headquarters for its aquatic management
and environmental  remediation  businesses,  consisting of approximately  17,350
square feet, located in Fort Lauderdale,  Florida,  under a five-year four-month
lease which  commenced on January 1, 1994.  The Company has the option to extend
the term of the lease for an additional five years.  The Company's  annual lease
payments for the remaining two years of the lease will be approximately  $89,790
and $93,370. Thereafter, the Company's annual lease payments will increase by 5%
each year. In addition to its lease  payments,  the Company is required to pay a
proportionate  share of the  operating  expenses,  as  defined  in the  lease to
include,  among other things,  property taxes,  hazard  insurance and all public
utility services aside from electric,  incurred by the lessor in connection with
its management and maintenance of the property  subject to the lease.  Under the
terms of the lease,  the Company's  operating  expenses may not increase by more
than 5% each year.

      In addition  to its  corporate  headquarters,  the  Company  conducts  its
aquatic and  industrial  vegetation  management  business  out of the  following
branch offices:

      The Company's office in West Palm Beach, Florida consists of approximately
3,450 square feet, under a two-year lease which commenced on September 23, 1992.
The Company has extended the lease for an additional  three-year term, including
the rental of additional space of  approximately  1,150 square feet. The Company
has the option to renew the lease for an additional  year.  Annual lease payment
is  approximately  $35,200,  which amounts  include the cost of property  taxes,
hazard  insurance,   and  public  utility  services  but  exclude  the  cost  of
maintaining  exterior  walls,  roof areas and the  structural  integrity  of the
leased building, a portion of which costs the Company may be assessed to pay.

      The Company  rents an  approximately  3,200 square foot office in Orlando,
Florida under a three-year  one-month lease which commenced on June 1, 1994. The
Company  has the  option to extend the term of the lease for an  additional  two
years.  The  Company's  annual  lease  payments for the three years of the lease
(excluding  the first  month) are  approximately  $17,440,  $17,965 and $18,500,
excluding taxes, insurance and utilities.

                                      23
The Company's office in Sarasota,  Florida consists of approximately 4,000
square  feet.  The  Company  leases  this  office  under a one-year  lease which
commenced on January 1, 1997.  The Company has the option to renew the lease for
four  additional  one-year  terms.  The annual  lease  payment is $24,000  which
excludes taxes, insurance and utilities.

      The  Company  rents an  approximately  4,500  square foot office in Tampa,
Florida  under a  five-year  lease  effective  May 1, 1995.  The Company has the
option  to  extend  the term of the  lease  for an  additional  two  years.  The
Company's  annual lease  payment is $24,000  except for the first year where the
rent is  specifically  waived for a period of five months which amount  includes
water  services,  but excludes the cost of all other  public  utility  services,
insurance, taxes and maintenance.

      The Company's office in Fort Myers,  Florida is approximately 4,200 square
foot in size and is under a two-year lease which  commenced on December 1, 1995.
The annual lease payment is $19,200  excluding  taxes,  insurance and utilities.
The  Company  has the  option to renew the lease for three  additional  one-year
terms.

      On March 1996, the Company  entered into a lease for  approximately  2,625
square feet of space in Jacksonville, Florida, with a term of one year effective
April 1,  1996.  The  Company  has the  option  to renew  the  lease  for  three
additional  one-year  terms.  The  Company's  annual  lease  payment is $13,200,
excluding taxes, insurance and utilities.

      The  Company's  office  in  Myrtle  Beach,   South  Carolina  consists  of
approximately  2,000  square  feet and is leased  on a month to month  basis for
approximately $600 per month.

      The Company's office in Tempe, Arizona, is approximately 5,900 square feet
in size and is under a month to month  lease which  commenced  December 7, 1996.
The monthly lease payment is $2,000 in addition to all expenses  borne by triple
net lease terms,  including,  but not limited to, real estate taxes. The Company
intends  to enter  into a two year  lease  agreement  including  yearly  renewal
options, with a monthly lease payment of approximately $3,250 for this office.

      In connection with the GPI  Acquisition,  the Company entered into a month
to month lease for approximately  2,800 square feet of space in Athens,  Georgia
at a monthly lease payment of $1,000.

                       SALES BY SELLING SECURITY HOLDER

      The following  table sets forth the name of the Selling  Security  Holder,
the amount of shares of Common Stock held directly or indirectly or to be issued

                                      24
to the  Selling  Security  Holder,  the  number of shares to be  offered  by the
Selling Security  Holder,  the amount of Common Stock to be owned by the Selling
Security Holder following sale of such shares of Common Stock and the percentage
of shares of Common Stock to be owned by the Selling  Security Holder  following
completion  of such offering  (based on 4,230,791  shares of Common Stock of the
Company outstanding at April 15, 1997).

                                                  Estimated       Percentage
                                                  Shares to be    to be Owned
Name of Selling     Number of       Shares to     Owned After        After
Security Holder     Shares Owned    be Offered      Offering        Offering
---------------     ------------    ----------    ------------    -----------

First Taconic
 Capital Corp.         100,000        100,000           -0-           0%

                           DESCRIPTION OF SECURITIES

      The Company is currently  authorized to issue up to  10,000,000  shares of
Common  Stock,  $.01 par  value  per  share,  of  which  4,230,791  shares  were
outstanding  as of April 15,  1997.  The  Company is  authorized  to issue up to
1,000,000  shares of Preferred  Stock,  $.01 par value per share,  none of which
were outstanding as of April 15, 1997.

COMMON STOCK

      The holders of Common  Stock are  entitled to one vote for each share held
of record on all matters to be voted on by stockholders.  There is no cumulative
voting  with  respect to the  election  of  directors,  with the result that the
holders of more than 50% of the shares voted for the  election of directors  can
elect all of the directors.  The holders of Common Stock are entitled to receive
dividends  when,  as and if  declared  by the  Board of  Directors  out of funds
legally available therefor. In the event of liquidation,  dissolution or winding
up of the Company,  the holders of Common Stock are entitled to share ratably in
all  assets  remaining  available  for  distribution  to them  after  payment of
liabilities  and after  provision has been made for each class of stock, if any,
having  preference over the Common Stock.  Holders of shares of Common Stock, as
such, have no conversion, preemptive or other subscription rights, and there are
no redemption  provisions applicable to the Common Stock. All of the outstanding
shares of Common Stock are, and the shares of Common Stock offered hereby,  will
be duly authorized, validly issued, fully paid and nonassessable.

         The  Company's  Common  Stock and  Warrants  are  quoted on the  NASDAQ
National Market System under the symbols "AQUX" and "AQUXW",  respectively.  The
following  table sets forth,  for the period since  September 13, 1994, the high
and low closing  sales  prices for the Common Stock and the Warrants as reported
by NASDAQ.

                                      25
Common Stock             Warrants
                                          High     Low          High      Low
                                          ----     ---          ----      ---
1994
Third Quarter
   (beginning September 13, 1994).....   $6-1/2    $5-3/8      $2-1/4   $1-1/8
Fourth Quarter........................    6-7/8     5-5/8       2-1/4    1-1/2

1995
First Quarter.........................    7-1/4     6-1/2       2-1/8    1-15/32
Second Quarter........................    7-3/8     5-1/2       2-1/4    1
Third Quarter.........................    8-1/8     6-1/2       2-1/2    1-5/8
Fourth Quarter........................    8-1/16    6-5/8       2-1/2    1-3/4

1996
First Quarter.........................    6-7/8     3-1/4       2        11/16
Second Quarter .......................    5-1/4     4-1/4       1-1/8    11/16
Third Quarter.........................    5-3/16    4-1/2       1          1/2
Fourth Quarter........................    6-3/8     4-11/16     1-1/8      1/2

1997
First Quarter
   (through April 15, 1997)...........    8-1/8     4-7/8       2-1/2    15/16

      As of April 15, 1997, there were 48 record holders of the Company's Common
Stock.  There are in excess of 1,009  beneficial  owners of the Company's Common
Stock.

      The Company has not paid any cash dividends on its Common Stock other than
S  corporation  dividends  prior to its  initial  public  offering  and does not
currently intend to declare or pay cash dividends in the foreseeable future. The
Company  intends to retain any earnings  that may be generated to provide  funds
for the operation and  expansion of its  business.  In addition,  certain of the
Company's  loan  agreements  with its lenders  prohibit  the Company from paying
dividends.

PREFERRED STOCK

      The Company is authorized  to issue  1,000,000  shares of Preferred  Stock
with such designation,  rights and preferences as may be determined from time to
time by the Board of  Directors  none of which were  outstanding  as of the date
hereof.  Accordingly,  the Board of Directors is empowered,  without stockholder
approval,  to issue  Preferred  Stock with  dividend,  liquidation,  conversion,
voting or other  rights that could  adversely  affect the voting  power or other
rights  of the  holders  of the  Common  Stock.  In the event of  issuance,  the
Preferred Stock could be utilized,  under certain circumstances,  as a method of
discouraging, delaying or preventing a change in control of the Company.

                                      26
WARRANTS

      As of the date  hereof,  the Company  has  1,437,500  Warrants  issued and
outstanding.  The  Warrants  were  issued  in  registered  form  pursuant  to an
agreement  (the  "Warrant  Agreement")  between the Company and  American  Stock
Transfer & Trust Company,  as Warrant  Agent.  Reference is made to said Warrant
Agreement for a complete  description of the terms and  conditions  therein (the
description  herein  contained  being  qualified  in its  entirety by  reference
thereto).

      Each Warrant entitles the registered  holder thereof to purchase one share
of  Common  Stock,  at a price  of  $6.00,  subject  to  adjustment  in  certain
circumstances,  at any time until September 12, 1999. After the expiration date,
the Warrantholders shall have no further rights.

      The Warrants are redeemable by the Company,  with the consent of the Whale
Securities Co., L.P., the Underwriter for the Company's initial public offering,
at any  time,  upon  notice  of not less  than 30  days,  at a price of $.10 per
Warrant,  provided  that the closing bid price of the Common  Stock on all 20 of
the  trading  days ending on the third day prior to the day on which the Company
gives notice has been at least 130% (currently $7.80,  subject to adjustment) of
the then effective  exercise price of the Warrants.  Any redemption shall be for
all  outstanding  Warrants.  All  warrantholders  have exercise rights until the
close of business on the date fixed for redemption.

      The  exercise  price  and  number  of  shares  of  Common  Stock  or other
securities  issuable on exercise of the  Warrants are subject to  adjustment  in
certain   circumstances,   including   in  the   event  of  a  stock   dividend,
recapitalization,  reorganization,  merger  or  consolidation  of  the  Company.
However,  such  warrants are not subject to  adjustment  for issuances of Common
Stock at a price  below  the  exercise  price  of the  Warrants,  including  the
issuance of shares of Common Stock pursuant to the Company's stock option plans.

      The Warrants may be exercised upon surrender of the Warrant certificate on
or prior to the  expiration  date  (September  12,  1999) at the  offices of the
Warrant  Agent,  with the exercise  form on the reverse side of the  certificate
completed and executed as indicated, accompanied by full payment of the exercise
price and  transfer  tax (by  certified  check  payable to the  Company)  to the
Warrant Agent for the number of Warrants being exercised.  The warrantholders do
not have the rights or privileges of holders of Common Stock.

      No Warrant will be exercisable  unless at the time of exercise the Company
has an effective Registration Statement on file with the Commission covering the
shares of Common Stock  issuable  upon  exercise of such Warrant and such shares
have been  registered  or qualified or deemed to be exempt under the  securities
laws of the state of residence of the holder of such  Warrant.  The Company will

                                      27
use its best  efforts to have all such shares so  registered  or qualified on or
before the exercise date and to maintain a current  prospectus  relating thereto
until the  expiration  of the  Warrants,  subject  to the  terms of the  Warrant
Agreement.  While it is the Company's  intention to do so, there is no assurance
that it will be able to do so.

      No  fractional  shares  will be  issued  upon  exercise  of the  Warrants.
However, if a warrantholder  exercises all Warrants then owned of record by him,
the  Company  will pay to such  warrantholder,  in lieu of the  issuance  of any
fractional  share which is  otherwise  issuable,  an amount in cash based on the
market  value of the Common  Stock on the last trading day prior to the exercise
date.

      Additionally,  pursuant  to the terms of the Underwriting  Agreement,  the
Company  sold  the  Underwriter,   for  an  aggregate  of  $125,  warrants  (the
"Underwriter's  Warrants")  to  purchase  up to 125,000  shares of Common  Stock
and/or  125,000  Warrants at an exercise  price of $8.25 per share and $.165 per
Warrant.  The  Underwriter's  Warrants are exercisable  until September 14, 1999
(the  "Warrant  Exercise  Term").  The Warrants  issuable  upon  exercise of the
Underwriter's  Warrants are exercisable to purchase one share of Common Stock at
a price equal to $6.00 per share.

      The  Company also has  outstanding  Options and Warrants to purchase up to
an aggregate of 1,277,546 shares of Common Stock at exercise prices ranging from
$5.00 to $7.50,  substantially  all of which  are  presently  exercisable  until
expiration dates ranging from October 1997 to October 2002.

DIVIDEND POLICY

      Holders of Common Stock are  entitled to receive such  dividends as may be
declared  and paid  from  time to time by the  Board of  Directors  out of funds
legally available  therefor.  The Company intends to retain any earnings for the
operation  and  expansion of its business  and does not  anticipate  paying cash
dividends in the foreseeable future. Any future  determination as to the payment
of cash  dividends  will  depend upon future  earnings,  results of  operations,
capital  requirements,  the Company's financial condition and such other factors
as the Board of Directors may consider.

CERTAIN PROVISIONS OF THE COMPANY'S CERTIFICATE OF INCORPORATION

      Section 102 of the Delaware General  Corporation Law ("DGCL") authorizes a
Delaware  corporation to include a provision in its Certificate of Incorporation
limiting  or  eliminating  the  personal  liability  of  its  directors  to  the
corporation and its  stockholders  for monetary damages for breach of directors'
fiduciary duty of care. The duty of care requires that, when acting on behalf of
the corporation,  directors  exercise an informed business judgment based on all
material  information  reasonably  available  to them.  Absent  the  limitations
authorized by such  provision,  directors are  accountable to  corporations  and
their   stockholders  for  monetary  damages  for  conduct   constituting  gross
negligence  in the exercise of their duty of care.  Although  Section 102 of the
DGCL does not change a director's duty of care, it enables corporations to limit
available  relief  to  equitable  remedies  such as  injunction  or  rescission.
Pursuant to such provision,  the Company Certificate of Incorporation limits the
personal  liability of the Company directors (in their capacity as directors but

                                28
not in their  capacity as  officers) to the Company or its  stockholders  to the
fullest extent  permitted by the DGCL.  Specifically,  a director of the Company
will not be personally  liable to the Company or its  stockholders  for monetary
damages for breach of fiduciary duty as a director, except for (i) any breach of
the director's duty of loyalty to the Company or its stockholders,  (ii) acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation  of law,  (iii)  unlawful  payments of  dividends  or  unlawful  stock
repurchases,  redemptions or other distributions,  and (iv) any transaction from
which the director derived an improper personal benefit.

      The  inclusion  of this  provision  may have the  effect of  reducing  the
likelihood  of derivative  litigation  against  directors and may  discourage or
deter  stockholders or management from bringing a lawsuit against  directors for
breach of their duty of care, even though such an action,  if successful,  might
otherwise  have  benefitted  the  Company  and its  stockholders.  However,  the
inclusion of this provision together with a provision which requires the Company
to indemnify its officers and directors against certain liabilities, is intended
to enable the Company to attract  qualified  persons to serve as  directors  who
might otherwise be reluctant to do so.

DELAWARE ANTI-TAKEOVER LAW

      The Company is governed by the  provisions  of Section 203 of the DGCL. In
general,  the law  prohibits a public  Delaware  corporation  from engaging in a
"business  combination"  with an "interested  stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
"Business  combination"  includes  mergers,  asset sales and other  transactions
resulting in a financial benefit to the stockholder. An "interested stockholder"
is a person who,  together with affiliates and associates,  own (or within three
years, did own) 15% or more of the corporation's voting stock.

OVER-THE-COUNTER MARKET

      The Company's  Common Stock is traded on the NASDAQ National Market System
under the symbols "AQUX" and "AQUXW," respectively.

TRANSFER AGENT

      The Transfer  Agent for the  Company's  shares of Common Stock is American
Stock Transfer & Trust Company, 40 Wall Street, New York, New York 10005.

                                  LEGAL MATTERS

      Certain  legal  matters in connection  with the  securities  being offered
hereby will be passed upon for the Company by Atlas,  Pearlman,  Trop & Borkson,
P.A., Counsel for the Company, Fort Lauderdale, Florida.

                                 INDEMNIFICATION

      Section  145 of the  General  Corporation  Law of  Delaware,  under  which
jurisdiction  the Company is  incorporated,  empowers a corporation to indemnify
any  person  who was or is a party  or is  threatened  to be made a party to any

                                       29
threatened,  pending or completed  action,  suit or  proceeding,  whether civil,
criminal,  administrative  or investigative by reason of the fact that he or she
is or was a director, officer, employee or agent of the corporation or is or was
serving at the request of the  corporation as a director,  officer,  employee or
agent of another corporation or enterprise.  A corporation may indemnify against
expenses (including  attorneys' fees) and, other than in respect of an action by
or in the right of the corporation, against judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with such action, suit
or proceeding if the person  indemnified  acted in good faith and in a manner he
or she reasonably  believed to be in or not opposed to the best interests of the
corporation,  and with  respect to any  criminal  action or  proceeding,  had no
reasonable  cause to believe his or her conduct was unlawful.  In the case of an
action by or in the right of the corporation, no indemnification of expenses may
be made in respect to any claim,  issue or matter as to which such person  shall
have been adjudged to be liable to the corporation unless and only to the extent
that the Court of Chancery  or the court in which such action was brought  shall
determine that, despite the adjudication of liability, such person is fairly and
reasonably  entitled to indemnity for such  expenses  which the court shall deem
proper.  Section 145 of the General Corporation Law of Delaware further provides
that to the extent a director, officer, employee or agent of the corporation has
been  successful in the defense of any action,  suit or  proceeding  referred to
above or in the defense of any claim,  issue or matter therein,  he or she shall
be  indemnified  against  expenses  (including  attorneys'  fees)  actually  and
reasonably incurred by him or her in connection therewith.

      The  Restated  Certificate  of  Incorporation  and  By-Laws of the Company
require the  Company to  indemnify  its  Directors  and  officers to the fullest
extent permitted by the General Corporation Law of the State of Delaware.

      The Company maintains  directors and officers liability  insurance,  which
covers the Company's subsidiaries and the respective directors and officers.

                                       30
PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.     Incorporation of Documents by Reference

      The  documents  listed  in (a)  through  (c)  below  are  incorporated  by
reference in the Registration Statement. All documents subsequently filed by the
Registrant  pursuant to Section  13(a),  13(c),  14 and 15(d) of the  Securities
Exchange Act of 1934, as amended (the "Exchange Act"),  prior to the filing of a
post-effective  amendment which indicates that all securities  offered have been
sold or which deregisters all securities then remaining unsold,  shall be deemed
to be  incorporated  by reference in the  Registration  Statement and to be part
thereof from the date of filing of such documents.

            (a)   The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1996.

            (b)   The  Company's  Quarterly  Reports  on  Form  10-QSB  for  the
quarterly period ended March 31, 1996, June 30, 1996 and September 30, 1996.

            (c)   The Company's current reports on Form 8-K dated March 8, 1996,
April 25, 1996, June 7, 1996,  June 12, 1996,  December 7, 1996 and December 31,
1996.

            (d)   All other reports filed  pursuant to Section 13(a) or 15(d) of
the Exchange  Act since the end of the fiscal year  covered by the  Registrant's
document referred to in (a) above.

            (e)   The  description  of the Common Stock of the Company  which is
contained in a Registration  Statement  filed under the Exchange Act,  including
any amendment or report filed for the purpose of updating such description.

Item 4.     Description of Securities

      A description  of the Company's  securities is set forth in the Prospectus
incorporated as a part of this Registration Statement.

Item 5.     Interests of Named Experts and Counsel

      Not Applicable.

                                      II-i
Item 6.     Indemnification of Directors and Officers

      Section  145 of the  General  Corporation  Law of  Delaware,  under  which
jurisdiction  the Company is  incorporated.  empowers a corporation to indemnify
any  person  who was or is a party  or is  threatened  to be made a party to any
threatened,  pending or completed  action,  suit or  proceeding,  whether civil,
criminal,  administrative  or investigative by reason of the fact that he or she
is or was a director, officer, employee or agent of the corporation or is or was
serving at the request of the  corporation as a director,  officer,  employee or
agent of another corporation or enterprise.  A corporation may indemnify against
expenses (including  attorneys' fees) and, other than in respect of an action by
or in the right of the corporation, against judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with such action, suit
or proceeding if the person  indemnified  acted in good faith and in a manner he
or she reasonably  believed to be in or not opposed to the best interests of the
corporation,  and with  respect to any  criminal  action or  proceeding,  had no
reasonable  cause to believe his or her conduct was unlawful.  In the case of an
action by or in the right of the corporation, no indemnification of expenses may
be made in respect to any claim,  issue or matter as to which such person  shall
have been adjudged to be liable to the corporation unless and only to the extent
that the Court of Chancery  or the court in which such action was brought  shall
determine that, despite the adjudication of liability, such person is fairly and
reasonably  entitled to indemnity for such  expenses  which the court shall deem
proper.  Section 145 of the General Corporation Law of Delaware further provides
that to the extent a director, officer, employee or agent of the corporation has
been  successful in the defense of any action,  suit or  proceeding  referred to
above or in the defense of any claim,  issue or matter therein,  he or she shall
be  indemnified  against  expenses  (including  attorneys'  fees)  actually  and
reasonably incurred by him or her in connection therewith.

      The  Restated  Certificate  of  Incorporation  and  By-Laws of the Company
require the  Company to  indemnify  its  Directors  and  officers to the fullest
extent permitted by the General Corporation Law of the State of Delaware.

      The Company maintains  directors and officers liability  insurance,  which
covers the Company's subsidiaries and the respective directors and officers.

Item 7.     Exemption from Registration Claimed

      Inasmuch  as the  Consultant  who  received  the Shares of the Company was
knowledgeable,   sophisticated  and  had  access  to  comprehensive  information
relevant to the Company,  such  transaction  was  undertaken  in reliance on the
exemption from registration  provided by Section 4(2) of the Act. As a condition
precedent to such grant,  the  Consultant  was required to express an investment
intent  and  consent to the  imprinting  of a  restrictive  legend on each stock

                                    II-ii
certificate  to be received from the Company  except upon sale of the underlying
Shares of Common Stock pursuant to a registration statement.

Item 8.     Exhibits
-------     --------

Exhibit     Description
-------     -----------

(5)         Opinion of Atlas,  Pearlman,  Trop & Borkson,  P.A.  relating to the
            issuance of shares of  securities  pursuant to the above  Consulting
            Agreement

(10.1)      Consulting  Agreement  dated October 5, 1996 between the Company and
            First Taconic

(23.1)      Consent of Atlas,  Pearlman,  Trop & Borkson,  P.A.  included in the
            opinion filed as exhibit (5) hereto

(23.2)      Consents of independent certified public accountants
__________________________

Item 9.     Undertakings

      (1)   The undersigned Registrant hereby undertakes:

            (a)   To file,  during  any period in which  offerings  or sales are
being made, a post-effective amendment to this Registration Statement 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;

            (b)   That, for the purposes of determining  any liability under the
Act, 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; and

            (c)   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.

      (2)   The undersigned  Registrant  hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's  annual
report  pursuant to Section  13(a) or Section  15(d) of the  Exchange  Act (and,

                                    II-iii
where  applicable,  each  filing of an employee  benefit  plan's  annual  report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement 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)   Insofar as indemnification for liabilities arising under the Act may
be permitted to Directors,  officers and  controlling  persons of the Registrant
pursuant to the foregoing  provisions,  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  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 or  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, 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 Act and will be governed by the final adjudication of
such issue.

                                      II-iv
SIGNATURES

      Pursuant to the  requirements  of the  Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the  requirements  for  filing  on  Form  S-8 and has  duly  caused  this
Registration Statement to be signed on its behalf by the undersigned,  thereunto
duly authorized, in the City of Fort Lauderdale and the State of Florida, on the
29th day of April, 1997.

                                        AQUAGENIX, INC.

                                       By:/s/Andrew P. Chesler
                                          --------------------------------------
                                           Andrew P. Chesler
                                           Chairman of the Board and President

      Pursuant to the  requirements  of the  Securities Act of 1933, as amended,
this  Registration  Statement  has been signed by the  following  persons in the
capacities and on the dates indicated.

      Signature                         Title                         Date
      ---------                         -----                         ----
                            
                                Chairman of the Board,
                                Chief Executive Officer
                                and President (Principal
/s/Andrew P. Chesler            Executive Officer                 April 29, 1997
----------------------------
Andrew P. Chesler           
                            
                                Chief Financial Officer
/s/Helen Chia                   (Principal Accounting
----------------------------    Officer)                          April 29, 1997
Helen Chia                      
                            
                            
/s/Abraham S. Fischler          Director                          April 29, 1997
----------------------------
Abraham S. Fischler         
                            
                            
/s/Fred S. Katz                 Director                          April 29, 1997
----------------------------
Fred S. Katz                
                            
                            
/s/Allen H. Stern               Director                          April 29, 1997
----------------------------
Allen H. Stern              
                            
                            
/s/Jeffrey T. Katz              Director                          April 29, 1997
----------------------------
Jeffrey T. Katz             

                                     II-v
INDEX TO EXHIBITS

Exhibit Number         Description
--------------         -----------

(5)                    Opinion of Atlas, Pearlman, Trop & Borkson, P.A. relating
                       to  the  issuance of shares of securities pursuant ot the
                       above Consulting Agreement

(10.1)                 Consulting  Agreement  dated October 5, 1997 between  the
                       Company and First Taconic

(23.2)                 Consents of independent certified public accountants

                                      II-vi