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

FORM 10-Q

(Mark One)

(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 29, 2005,

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to __________.

Commission File Number: 000-17072

WINDSWEPT ENVIRONMENTAL GROUP, INC.
(Exact Name of Registrant As Specified In Its Charter)


Delaware			11-2844247
(State or other jurisdiction of			(I.R.S. Employer
incorporation or organization)			Identification No.)

100 Sweeneydale Avenue, Bay Shore, New York 11706
(Address of Principal Executive Offices)
(Zip Code)

(631) 434-1300
(Registrant ’s telephone number, including area code)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No __

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act) Yes __ No X

The number of shares of Common Stock, par value $.0001, outstanding on May 6, 2005 was 77,936,358.

PART 1 – FINANCIAL INFORMATION

Item 1. Financial Statements

WINDSWEPT ENVIRONMENTAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 29, 2005 AND JUNE 29, 2004

	March 29, 2005		June 29, 2004
	(Unaudited)
ASSETS:
CURRENT ASSETS:
Cash		$ 791,699		$ 63,562
Accounts receivable, net of allowance for doubtful accounts of $1,351,831 and $689,140, respectively		7,431,781		6,652,806
Inventory		122,420		151,270
Costs and estimated earnings in excess of billings on uncompleted contracts		104,730		608,047
Refundable income taxes		--		641,795
Prepaid expenses and other current assets		236,016		257,565
Total current assets		8,686,646		8,375,045
PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization of $6,205,905
and $5,707,705, respectively		2,342,566		2,757,463
OTHER ASSETS		166,266		198,657
TOTAL		$11,195,478		$11,331,165
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT):
CURRENT LIABILITIES:
Accounts Payable		$ 1,142,947		$ 2,309,328
Accrued expenses		1,611,273		1,101,701
Short-term notes payable to related party		5,000,000		5,000,000
Billings in excess of cost and estimated earnings on uncompleted contracts		47,152		239,511
Accrued payroll and related fringe benefits		640,295		924,725
Current maturities of long-term debt		177,887		307,224
Other current liabilities		696,104		596,527
Total current liabilities		9,315,658		10,479,016
LONG-TERM DEBT		238,322		340,104
COMMITMENTS AND CONTINGENCIES
SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK, $.01 par value; 1,300,000 shares
authorized; 1,300,000 shares outstanding at March 29, 2005 and June 29, 2004		1,300,000		1,300,000
STOCKHOLDERS' EQUITY (DEFICIT):
Series B preferred stock, $.01 par value; 50,000 shares authorized; 0 shares outstanding		--		--
Nondesignated preferred stock, no par value; 8,650,000 shares authorized; 0 shares outstanding at
March 29, 2005 and June 29, 2004		- --		- --
Common stock, $.0001 par value; 150,000,000 shares authorized; 77,936,358 shares
outstanding at March 29, 2005 and June 29, 2004		7,794		7,794
Additional paid-in-capital		33,863,517		33,922,017
Accumulated deficit		(33,529,813)		(34,717,766)
Total stockholders’ equity (defitit)		341,498		(787,955)
TOTAL		$ 11,195,478		$ 11,331,165
See notes to consolidated financial statements

WINDSWEPT ENVIRONMENTAL GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	March 29,		March 30,		March 29,		March 30,
	2005		2004		2005		2004
Revenues		$ 4,801,832		$ 3,026,183		$ 17,639,617		$ 14,809,582
Cost of revenues		3,433,054		4,650,312		12,165,045		13,489,965
Gross profit (loss)		1,368,778		(1,624,129)		5,474,572		1,319,617
Operating expenses (income):
Selling, general and administrative expenses		1,210,884		1,521,322		3,946,334		3,927,781
Expense (benefit) related to variable accounting treatment for officer options		-		103,896		-		(244,729)
Total operating expenses		1,210,884		1,625,218		3,946,334		3,683,052
Income (loss) from operations		157,894		(3,249,347)		1,528,238		(2,363,435)
Other expense (income):
Interest expense		53,577		252,681		320,033		312,328
Other, net		(29,891)		(5,407)		(31,445)		(29,367)
Total other expense		23,686		247,274		288,588		282,961
Income (loss) before provision (benefit) for income
taxes		134,208		(3,496,621)		1,239,650		(2,646,396)
Provision (benefit) for income taxes		5,449		(928,637)		51,697		(750,000)
Net income (loss)		128,759		(2,567,984)		1,187,953		(1,896,396)
Dividends On preferred stock		(19,500)		(19,500)		(58,500)		(58,500)
Net income (loss) attributable to common
shareholders		$ 109,259		$(2,587,484)		$1,129,453		$(1,954,896)	)
Basic and diluted net income (loss) per common share:
Basic		$ .00		($ .03)		$ .01		($ .03)
Diluted		$ .00		($ .03)		$ .01		($ .03)
Weighted average number of common shares
outstanding:
Basic		77,936,358		77,936,358		77,936,358		77,936,358
Diluted		78,039,266		77,936,358		78,006,537		77,936,358
See notes to consolidated financial statements

WINDSWEPT ENVIRONMENTAL GROUP, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
(UNAUDITED)

	Common Stock				Additional
	Number of		Par		Paid-in		Accumulated
	Shares		Value		Capital		Deficit		Total
Balance at June 30, 2004		77,936,358		$7,794		$33,922,017		$(34,717,766)		$(787,955)
Dividends on Series A preferred stock		-		-		(58,500)		-		(58,500)
Net income		-		-		-		1,187,953		1,187,953
Balance at March 29, 2005		77,936,358		$7,794		$33,863,517		$(33,529,813)		$341,498
See notes to consolidated financial statements

WINDSWEPT ENVIRONMENTAL GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Thirty-Nine Weeks Ended
	March 29,			March 30,
	2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	1,187,953		$	(1,896,396)
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Depreciation and amortization		498,200			442,070
Provision for doubtful accounts, net		662,691			60,894
Benefit related to officer options and redeemable common stock		--			(244,729	)
Changes in operating assets and liabilities:
Accounts receivable		(1,441,666	)		(2,338,466	)
Inventory		28,850			50,383
Costs and estimated earnings in excess of billings on uncompleted contracts		503,317			435,466
Refundable income taxes		641,795			330,186
Prepaid expenses and other current assets		21,549			(4,169	)
Other assets		32,391			(88,530	)
Accounts payable and accrued expenses		(715,309	)		396,273
Accrued payroll and related fringe benefits		(284,430	)		426,948
Other current liabilities		99,577			78,781
Billings in excess of costs and estimated earnings on uncompleted contracts		(192,359	)		(78,684	)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		1,042,559			(2,429,973	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(83,303	)		(714,701	)
NET CASH USED IN INVESTING ACTIVITIES		(83,303)			(714,701)

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments of long-term debt		(258,532	)		(323,769	)
Proceeds from long-term debt		27,413			312,533
Payment of preferred stock dividends		--			(39,000	)
Proceeds from short-term notes payable to a related party		--			3,300,000
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES		(231,119	)		3,249,764

NET INCREASE IN CASH		728,137			105,090
CASH - BEGINNING OF PERIOD		63,562			130,096

CASH - END OF PERIOD	$	791,699		$	235,186

Cash paid during the period for:
Interest	$	209,220		$	34,168
Income taxes	$	43,250		$	--

See notes to consolidated financial statements

WINDSWEPT ENVIRONMENTAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

BASIS FOR PRESENTATION – The accompanying unaudited consolidated financial statements include the accounts of Windswept Environmental Group, Inc. (the “Company”) and its wholly-owned subsidiaries, Trade-Winds Environmental Restoration Inc. (“Trade-Winds”) and North Atlantic Laboratories, Inc. The unaudited consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles”) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of the Company, all adjustments (consisting of only normal and recurring accruals) considered necessary to present fairly the financial position of the Company and its subsidiaries on a consolidated basis as of March 29, 2005, the results of operations for the thirteen and thirty-nine weeks ended March 29, 2005 and March 30, 2004 and cash flows for the thirty-nine weeks ended March 29, 2005 and March 30, 2004, have been included. Certain prior period amounts have been reclassified to conform to the March 29, 2005 presentation.

The results for the thirteen and thirty-nine weeks ended March 29, 2005 and March 30, 2004 are not necessarily indicative of the results for the entire year. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended June 29, 2004.

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

The following table illustrates the effect on net income (loss) and net income (loss) per share if the Company had applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” to stock-based employee compensation for all periods:

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	March 29,		March 30,		March 29,		March 30,
	2005		2004		2005		2004
Net income (loss)
attributable to common
shareholders as reported		$109,259		$(2,587,484)		$1,129,453		$(1,954,896)
Less: Stock-Based
employee compensation
cost determined under
the fair value method,
net of related tax effects		25,937		41,433		77,807		124,116
&

UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 10-Q

PART 1 – FINANCIAL INFORMATION

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

FORM 10-Q