SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB
                        QUARTERLY OR TRANSITIONAL REPORT

[X]            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                For The Quarterly Period Ended September 30, 2001

[_]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT


Commission file number   2-95836-NY


                               Egan Systems, Inc.
             (Exact name of registrant as specified in its charter)


                   Delaware                                      13-3250816
        (State or other jurisdiction of                       (I.R.S. Employer
         incorporation or organization)                      Identification No.


            4904 Waters Edge Drive, Suite 160, Raleigh, N.C., 27604
                    (Address of principal executive offices)


(919) 851 - 2239
Registrant's telephone number


1501 Lincoln Ave. Holbrook, New York 27604
(Former  name,  former  address  and former  fiscal  year if changed  since last
report)


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

The  number of shares  outstanding  of each of the  issuer's  classes  of common
stock, as of the latest practicable date is as follows:


  Date                      Class                       Shares Outstanding

10/31/01                Common Stock                        19,646,652

<PAGE>


                        EGAN SYSTEMS, INC. AND SUBSIDIARY


                                TABLE OF CONTENTS


                                                                        Page No.

PART I. FINANCIAL INFORMATION

  Item 1.  Financial statements

    Condensed consolidated balance sheets as of
      September 30, 2001 (unaudited) and December 31, 2000                   1

    Condensed consolidated statements of operations (unaudited) for the
      Nine months ended September 30, 2001 and 2000                          2

    Condensed consolidated statements of cash flows (unaudited) for the
      Nine months ended September 30, 2001 and 2000                          3

    Notes to condensed consolidated financial statements (unaudited)       4 - 5

  Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations                             6 - 7


PART II - OTHER INFORMATION

  Item 6.  Exhibits and reports on Form 8-K                                  8


SIGNATURES                                                                   9


EXHIBITS                                                                    10

<PAGE>


                          PART I. FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS

                        EGAN SYSTEMS, INC. AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                September 30,        December 31,
                                                                     2001                2000
                                                                 -----------         -----------
                                                                 (Unaudited)
<S>                                                              <C>                 <C>
ASSETS
Current Assets
  Cash                                                           $    16,877         $    12,688
  Accounts receivable                                                 30,928              77,937
  Inventory                                                            8,165               6,415
  Prepaid expenses and other current assets                            5,542               5,543
                                                                 -----------         -----------
      Total Current Assets                                            61,512             102,583
                                                                 -----------         -----------
Property and Equipment - net                                          92,969             137,969
                                                                 -----------         -----------

Other Assets
  Computer software development costs - net                          341,907             545,863
  Security deposits                                                    3,126               3,126
                                                                 -----------         -----------
      Total Other Assets                                             345,034             548,989
                                                                 -----------         -----------
      Total Assets                                               $   499,515         $   789,541
                                                                 ===========         ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
  Account payable                                                $   175,917         $   175,917
  Accrued expenses and other current liabilities                      74,804             121,341
                                                                 -----------         -----------
      Total Current Liabilities                                      250,721             297,258
                                                                 -----------         -----------

Stockholders' Equity
  Common stock - $.05 par value, shares authorized -
    30,000,000 shares, issued and outstanding, 19,646,652
    in 2000 and 2001                                                 982,333             982,333
  Additional paid-in capital                                       4,827,201           4,827,201
  Deficit                                                         (5,198,240)         (4,954,751)
                                                                 -----------         -----------
                                                                     611,294             854,783
  Notes receivable - stock purchase                                 (362,500)           (362,500)
                                                                 -----------         -----------
      Total Stockholders' Equity                                     248,794             492,283
                                                                 -----------         -----------
      Total Liabilities and Stockholders' Equity                 $   499,515         $   789,541
                                                                 ===========         ===========
</TABLE>

The condensed  consolidated  balance sheet at December 31, 2000 has been derived
from the audited financial statements at that date.


See notes to condensed consolidated financial statements.


                                       1
<PAGE>


                        EGAN SYSTEMS, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                               Three Months Ended                       Nine Months Ended
                                                  September 30                            September 30,
                                         -------------------------------         -------------------------------
                                             2001                2000                2001                2000
                                         -----------         -----------         -----------         -----------
<S>                                      <C>                 <C>                 <C>                 <C>
Net product sales                        $   114,993         $   164,560         $   402,676         $   565,774
Custom  service income                          --                68,734                --                68,734
                                         -----------         -----------         -----------         -----------
                                             114,993             233,294             402,676             634,508
                                         -----------         -----------         -----------         -----------
Cost and expenses:
  Cost of goods sold                           1,325              27,326               9,513              36,611
  Research and development costs              14,920              67,488              72,545             184,519
  Selling, shipping,
    general and administrative                56,214             167,536             188,017             492,427
  Interest income                               --                (3,713)               --               (12,271)
  Royalties                                     --                 3,015              10,000              25,581
  Promotion and advertising                     --                  --                  --                 3,941
  Depreciation and amortization              128,829             111,215             366,090             333,645
                                         -----------         -----------         -----------         -----------
                                             201,288             372,867             646,165           1,064,453
                                         -----------         -----------         -----------         -----------

Net loss                                 $   (86,295)        $  (139,573)        $  (243,489)        $  (429,945)
                                         ===========         ===========         ===========         ===========

Net loss per common share:

  Basic and fully diluted                $    (0.004)        $    (0.007)        $    (0.012)        $    (0.022)
                                         ===========         ===========         ===========         ===========

  Cash dividends per common share            None                None                None                None
                                         ===========         ===========         ===========         ===========
</TABLE>


See notes to condensed consolidated financial statements.


                                       2
<PAGE>


                        EGAN SYSTEMS, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


                                                       Nine Months Ended
                                                          September 30,
                                                   ---------------------------
                                                      2001              2000
                                                   ---------         ---------
Net cash provided by (used in)
  operation activities                             $ 121,323         $ (75,955)
                                                   ---------         ---------

Cash flows from investing activities:
  Purchase of property and equipment                    --              (6,893)
  Computer software development costs               (117,134)         (276,330)
                                                   ---------         ---------

      Net cash used in investing activities         (117,134)         (283,224)
                                                   ---------         ---------

Net increase (decrease) in cash                        4,189          (359,179)

Cash - beginning of period                            12,688           449,990
                                                   ---------         ---------

Cash - end of period                               $  16,877         $  90,811
                                                   =========         =========

Supplemental cash flows information:

Taxes paid                                         $     955         $   2,047
                                                   =========         =========


See notes to condensed consolidated financial statements.


                                       3
<PAGE>


                        EGAN SYSTEMS, INC. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1. STATEMENT PRESENTATION:

In the opinion of management,  the accompanying unaudited condensed consolidated
financial  statements  contain  all  adjustments   (consisting  of  only  normal
recurring  adjustments)  necessary to present  fairly the financial  position of
Egan  Systems,  Inc. and  Subsidiary as of September 30, 2001 and the results of
their operations and cash flows for the nine months ended September 30, 2001 and
2000.

Primary net income per common share is computed  based on the  weighted  average
number  of  outstanding  common  shares.  The  number  of  shares  used  in  the
computation were 19,646,652 and 19,368,874 in 2001 and 2000, respectively. Fully
diluted net income per common share is computed  based on the  weighted  average
number of  outstanding  common shares plus the shares that would be  outstanding
assuming conversion of the outstanding options and warrants. For purposes of the
fully diluted  computations,  the number of shares that would be issued from the
exercise of stock  options and warrants has been reduced by the number of shares
that could have been  purchased from the proceeds at the average market price of
the  Company's  stock.  The number of shares  used in the  computation  of fully
diluted  earnings per share were  19,646,652  and  19,368,874  in 2001 and 2000,
respectively.  Fully  diluted  earnings  per share  amounts do not  include  the
effects  of  dilutive  securities  for  2001  and 2000  because  they are  anti-
dilutive.

Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
for interim  reporting  under Form 10-QSB have been condensed or omitted.  It is
suggested  that these  condensed  consolidated  financial  statements be read in
conjunction  with the financial  statements  and notes  thereto  included in the
Company's annual report on Form 10-KSB for the year ended December 31, 2000.

The results of operations  for the nine months ended  September 30, 2001 are not
necessarily indicative of the operating results for the full year.

NOTE 2. COMPUTER SOFTWARE DEVELOPMENT COSTS:

Computer software  development costs for products are capitalized  subsequent to
the establishment of technological  feasibility.  Capitalization ceases when the
products  are  available  for  general   release  to  customers  at  which  time
amortization of the capitalized  costs begins on a straight-line  basis over the
estimated life of the product,  which is estimated at three years. As of and for
the nine months  ended  September  30, 2001 and 2000,  accumulated  amortization
amounted  to  approximately  $2,120,000  and  $1,460,000,  and  amortization  of
computer  software  development  costs charged to operations  was  approximately
$321,000 and $292,000, respectively.

NOTE 3. INVENTORY:

Inventory,  which consists primarily of miscellaneous  computer peripherals,  is
stated at the  lower of cost or  market.  Cost is  determined  by the  first-in,
first-out method.


                                       4
<PAGE>


                        EGAN SYSTEMS, INC. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 4. 401(K) SAVINGS PLAN:

In March  1999,  the  Company  adopted a 401(k)  savings  plan that  covers  all
employees of the Company. The plan is effective March 1, 1999.  Contributions to
the plan may be made by all eligible  employees  up to fifteen  percent of their
salary.   The  Company  will  match   twenty-five   percent  of  the  employee's
contributions up to four percent of each employees base salary.

For the nine months  ended  September  30, 2001 and 2000,  the Company  incurred
contribution expense of approximately $3,000 and $6,000,  respectively,  related
to this plan.

NOTE 5. ISSUANCE OF COMMON STOCK:

In 1993,  in order to assist the  Company in raising  additional  capital by the
sale of the Company's common stock, a director voluntarily surrendered 1,000,000
of his shares of the  Company's  $.05 par value  common stock to the treasury in
order to comply with certain financial requirements imposed on the Company under
the terms of the new stock sale  agreement.  In March 2000,  since the financial
terms and conditions  imposed on the Company had expired,  the Company  reissued
the 1,000,000  shares  previously  surrendered  by the  director.  The 1,000,000
shares of the  Company's  $.05 par value common stock issued to this director in
2000 was not previously  disclosed in the calculation of fully diluted  earnings
per share.  The Company has  determined  that had this  disclosure  been made it
would  have had no  material  affect  upon the  calculation  of basic  and fully
diluted earnings per share.

NOTE 6. ACQUIRED TECHNOLOGY:

In 1999 and 1998, the Company  purchased  rights for the use of certain software
to be utilized in the Company's year 2000 assessment and  remediation  services.
Certain of these  software  costs were charged in 1999 and 1998 to cost of goods
sold based on revenues from customers  contracting  with the Company for the use
of the technology.

At December 31, 1999,  the Company wrote off the remaining  costs  approximating
$1,107,000  based on its assessment of the  software's  net realizable  value at
that time.  However,  the Company is  currently  negotiating  with the  software
vendor to apply these costs to other software with  application to the Company's
products and services. As of the date of this financial statement the outcome of
these   negotiations  is  uncertain.   If  the  Company  is  successful  in  its
negotiations  and is able to apply the costs to new  software,  the Company will
recognize income in the future period to the extent of the applicable credits.


                                       5
<PAGE>


Item 2. MANAGEMENTS'  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000:


RECENT EVENTS:

In September  2001, the Company's  Chairman Mr. Edward Egan passed away. At this
time,  the Company's  current  management  does not plan to change the strategic
direction of the Company.

NET SALES:

For  the  nine  months  ended  September  30,  2001  and  2000,   total  revenue
approximated $403,000 and $635,000,  respectively.  Revenue has declined for the
nine months  ended  September  30, 2001 versus the same period in the prior year
due to the  current  poor  climate in the  economy  for  technology  spending by
customers.  The Company expects increases in technology spending by customers in
future periods to benefit the Company.

The Company is continually  evaluating new  opportunities  that management hopes
will substantially  contribute to revenue.  However,  the Company is quite small
and  remains  subject  to  technological  obsolescence  and  competitive  market
conditions.

COST AND EXPENSES:

Cost of goods sold for the nine months  ended  September  30, 2001 and 2000 were
approximately  $10,000 and $37,000 and gross profit percents were  approximately
97% and 94%,  respectively.  The higher gross profit  margin in 2001 versus 2000
results from sales of the Company's  software products which have limited direct
costs attributed to them and custom service income in 2000 which involves higher
direct costs.

Research and development costs were  approximately  $73,000 and $185,000 for the
nine months ended September 30, 2001 and 2000, respectively. The decrease is due
to  the  reduction  of  employees  and  expenditures  related  to  research  and
development in 2001 in conjunction  with the reduction in revenues.  The Company
continues to expend funds  developing new software and to remain  competitive in
its specific field of expertise.  The Company has engaged outside consultants in
2001 to continue these research and development projects.

Selling,  shipping and general and  administrative  expenses (SG&A) for the nine
months  ended  September  30,  2001 and 2000  were  approximately  $188,000  and
$492,000 respectively. The capitalization of computer software development costs
for the nine months ended  September  30, 2001 and 2000 reduced SG&A expenses by
approximately $117,000 and $276,000 respectively.  The decrease in SG&A expenses
was attributed  primarily to the reduction in employees and  expenditures in the
Company's  software  development  facility in conjunction  with the reduction in
revenues.

INTEREST INCOME:

Interest  income for the nine months  ended  September  30,  2001 and 2000,  was
approximately $-0- and $12,000,  respectively,  and was related to cash invested
by the Company in short-term financial instruments.

DEPRECIATION AND AMORTIZATION:

Depreciation  and  amortization  expense for the nine months ended September 30,
2001 and 2000 was approximately $366,000 and $334,000, respectively.  Management
is currently  amortizing  capitalized  computer  software  costs over a two year
period.


                                       6
<PAGE>


Item 2. MANAGEMENTS'  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000 (Cont'd):


LIQUIDITY:

As of September 30, 2001,  the  Company's  net cash  provided by operations  was
approximately $121,000 and is substantially comprised of net loss of $(243,000),
a reduction of accounts receivable of $47,000, a decrease in accrued expenses of
$(46,000) and depreciation  and  amortization of $366,000.  This compares to the
nine months ended  September 30, 2000 where net cash provided by operations  was
approximately  $(76,000)  and  was  substantially  comprised  of a net  loss  of
$(430,000) and depreciation and amortization of $334,000.

Net cash used in investing activities during the nine months ended September 30,
2001 and 2000 was approximately  ($117,000) and ($283,000),  respectively.  This
was   attributed  to  purchases  of  new  computer   hardware  and  software  of
approximately  $0 and  $(7,000) to support the  Company's  ongoing  research and
development   activities  and  to  the   capitalization   of  computer  software
development  costs  of  $(117,000)  and  $(276,000)  for the nine  months  ended
September 30, 2001 and 2000, respectively.

Management  believes that the Company has sufficient  cash resources to meet its
expected cash needs in the present fiscal year.  Management  does not anticipate
additional  large capital  expenditures  in the current year except as discussed
above. At present the Company does not maintain a line of credit facility with a
lending institution.

INFLATION AND SEASONALITY:

The Company  does not  anticipate  inflation  will be  significantly  impact its
business.  The Company does not believe its business is subject to  fluctuations
due to seasonality.


                                       7
<PAGE>


                           PART II - OTHER INFORMATION


Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits - Required by Item 601 of Regulation S-B.

     (11) Statement regarding computation of per share earnings.

     (27) Financial data schedule

(b)  Reports on Form 8-K - The  Company  filed no reports on Form 8-K during the
     quarter ended September 30, 2001.


                                       8
<PAGE>


                                   SIGNATURES


In accordance with the  requirements of the Exchange Act of 1934, the registrant
caused this report to be signed on its behalf of the undersigned, thereunto duly
authorized.


                                        EGAN SYSTEMS, INC.
                                        (Registrant)


                                        /s/  Ralph Jordan
                                        ---------------------------------
                                        Ralph Jordan (President)


Date: 10/31/01


                                       9