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, 2002

|_|      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, NC                       27606
 (Address of principal executive offices)

(919) 851 - 2239
Registrant's telephone number

--------------------------------------------------------------------------------
         (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
----                            -----                  ------------------
11/10/02                     Common Stock                  19,046,652



<PAGE>

                        EGAN SYSTEMS, INC. AND SUBSIDIARY

                                TABLE OF CONTENTS

                                                                        Page No.

PART I. FINANCIAL INFORMATION

  Item 1.  Financial statements

   Condensed consolidated balance sheet as of
    September 30, 2002 (unaudited)                                          1

   Condensed consolidated statements of operations (unaudited)
    for the three months and nine months ended September
    30, 2002 and 2001                                                       2

   Condensed consolidated statements of cash flows (unaudited)
    for the nine months ended September 30, 2002 and 2001                   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 - 8

  Item 4.  Controls and Procedures                                          9

PART II - OTHER INFORMATION

  Item 6.  Exhibits and reports on Form 8-K                                10

SIGNATURES                                                                 11

   CERTIFICATIONS                                                          12

EXHIBITS                                                                   13


<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                        EGAN SYSTEMS, INC. AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEET

                                                    September 30,
                      ASSETS                             2002
                                                     -----------
                                                     (Unaudited)
Current Assets
  Cash                                               $    24,121
  Accounts receivable - net of allowance for
   doubtful accounts of $10,000 in 2002                   52,375
  Inventory                                                4,000
                                                     -----------
      Total Current Assets                                80,496
                                                     -----------

Property and Equipment - net                              47,808
                                                     -----------

Other Assets
  Computer software development costs - net              108,286
  Security deposits                                          966
                                                     -----------
      Total Other Assets                                 109,252
                                                     -----------

      Total Assets                                   $   237,556
                                                     ===========

        LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
 Account payable                                     $   175,917
 Accrued expenses and other current liabilities           12,522
                                                     -----------

      Total Current Liabilities                          188,439
                                                     -----------

Stockholders' Equity
 Common stock - $.05 par value, shares
  authorized - 30,000,000 shares,
  issued and outstanding, 19,046,652
  in 2002                                                952,333
 Additional paid-in capital                            4,551,201
 Deficit                                              (5,397,917)
                                                     -----------
                                                         105,617
Notes receivable - stock purchase                        (56,500)
                                                     -----------
      Total Stockholders' Equity                          49,117
                                                     -----------

      Total Liabilities and Stockholders' Equity     $   237,556
                                                     ===========

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,
                                      2002         2001        2002          2001
                                      ----         ----        ----          ----
<S>                                <C>          <C>          <C>          <C>
Net sales                          $ 124,059    $ 114,993    $ 350,810    $ 402,676
                                   ---------    ---------    ---------    ---------

Cost and expenses:
  Cost of goods sold                   6,289        1,325       17,128        9,513
  Research and development costs      19,533       14,920       51,360       72,545
  Selling, shipping,
   general and administrative         44,191       56,214      119,077      188,017
  Royalties                            8,094           --       18,899       10,000
  Depreciation and amortization       82,212      128,829      243,923      366,090
                                   ---------    ---------    ---------    ---------

                                     160,319      201,288      450,387      646,165
                                   ---------    ---------    ---------    ---------

Net loss                           $ (36,260)   $ (86,295)   $ (99,577)   $(243,489)
                                   =========    =========    =========    =========

Net loss per common share:

  Basic and diluted                $  (0.002)   $  (0.004)   $  (0.005)   $  (0.012)
                                   =========    =========    =========    =========

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,
                                                        -----------------------
                                                          2002           2001
                                                          ----           ----
Net cash provided by operating activities               $ 82,172      $ 121,323
                                                        --------      ---------

Cash flows from investing activities:

  Computer software development costs                    (68,694)      (117,134)
                                                        --------      ---------

        Net cash used in investing activities            (68,694)      (117,134)
                                                        --------      ---------

Net increase in cash                                      13,478          4,189

Cash - beginning of period                                10,643         12,688
                                                        --------      ---------

Cash - end of period                                    $ 24,121      $  16,877
                                                        ========      =========

Supplemental cash flows information:

Taxes paid                                              $  1,760      $     955
                                                        ========      =========

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 a fair presentation of the financial
position of Egan Systems, Inc. and Subsidiary as of September 30, 2002 and the
results of their operations and cash flows for the nine months ended September
30, 2002 and 2001.

Basic 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 was 19,421,652 and 19,646,652 in 2002 and 2001, respectively.
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
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 diluted
earnings per share were 19,421,652 and 19,646,652 in 2002 and 2001,
respectively. Diluted earnings per share amounts do not include the effects of
dilutive securities for 2002 and 2001 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, 2001.

The results of operations for the nine months ended September 30, 2002 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 two years. As of and for
the nine months ended September 30, 2002 and 2001, accumulated amortization
amounted to approximately $2,448,000 and $2,120,000, and amortization of
computer software development costs charged to operations was approximately
$208,000 and $321,000, 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.

NOTE 4. COMMON STOCK/NOTES RECEIVABLE - STOCK PURCHASE:

During the nine months ended September 30, 2002, as required by the terms of
their original agreements, certain former employees holding 600,000 shares of
the Company's issued $.05 par value common stock, have returned the outstanding
shares to the Company. The Company has retired these shares and has adjusted the
equity accounts accordingly.


                                       4
<PAGE>

NOTE 5. GOING CONCERN

The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles, which contemplates
continuation of the Company as a going concern. However, the Company has
sustained substantial operating losses in recent years and periods. In addition,
the Company has used substantial amounts of working capital in its operations.
Further, as of September 30, 2002, current liabilities exceed current assets by
$107,943.

Management of the Company has taken certain steps to reduce operating expenses
and restore the Company to a positive cash flow from operations. The ability of
the Company to continue as a going concern is dependent upon the continued
success of these actions. The consolidated financial statements do not include
any adjustments that might be necessary if the Company is unable to continue as
a going concern.




                                       5
<PAGE>

Item 2. MANAGEMENTS' DISCUSSION AND ANALYSIS FOR PLAN OF OPERATIONS - NINE
MONTHS ENDED SEPTEMBER 30, 2002 AND 2001:

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.

Nine Months ended September 30, 2002:

NET SALES:

For the nine months ended September 30, 2002 and 2001, total revenue
approximated $351,000 and $403,000, respectively. Revenue has declined for the
nine months ended September 30, 2002 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 and
new product releases to benefit the Company in future periods.

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, 2002 and 2001 were
approximately $17,000 and $10,000 and gross profit percents were approximately
95% and 97%, respectively.

Research and development costs were approximately $51,000 and $73,000 for the
nine months ended September 30, 2002 and 2001, respectively. The decrease is due
to the reduction of employees and expenditures related to research and
development in 2002 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 rehired a former employee in
2002 and engaged an outside consultant in 2001 to supplement the Company's
research and development projects.

Selling, shipping and general and administrative expenses (SG&A) for the nine
months ended September 30, 2002 and 2001 were approximately $119,000 and
$188,000, respectively. The capitalization of computer software development
costs for the nine months ended September 30, 2002 and 2001 reduced SG&A
expenses by approximately $69,000 and $117,000, 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 and to the closing of the company's New York office in
the fall of 2001.

DEPRECIATION AND AMORTIZATION:

Depreciation and amortization expense for the nine months ended September 30,
2002 and 2001 was approximately $208,000 and $366,000, respectively. The
decrease in depreciation and amortization expense for the nine months ended
September 30, 2002 is due to the decline in amortization expense in conjunction
with the reduced capitalized computer software development costs.


                                       6
<PAGE>

Item 2. MANAGEMENTS' DISCUSSION AND ANALYSIS FOR PLAN OF OPERATIONS - NINE
MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (Cont'd):

Three Months ended September 30, 2002:

NET SALES:

For the three months ended September 30, 2002 and 2001, total revenue
approximated $124,000 and $115,000, respectively. Revenue has increased slightly
for the three months ended September 30, 2002 versus the same period in the
prior year due to sales by the Company of its recent product upgrades in the
current period compared with the prior period. The Company expects increases in
technology spending by customers and new product releases to benefit the Company
in future periods.

COST AND EXPENSES:

Cost of goods sold for the three months ended September 30, 2002 and 2001 were
approximately $6,000 and $1,000 and gross profit percents were approximately 95%
and 99%, respectively.

Research and development costs were approximately $20,000 and $15,000 for the
three months ended September 30, 2002 and 2001, respectively. The slight
increase is due to the rehiring of a former employee in the current period. The
Company continues to expend funds developing new software and to remain
competitive in its specific field of expertise.

Selling, shipping and general and administrative expenses (SG&A) for the three
months ended September 30, 2002 and 2001 were approximately $44,000 and $56,000,
respectively. The capitalization of computer software development costs for the
three months ended September 30, 2002 and 2001 reduced SG&A expenses by
approximately $25,000 and $23,000, respectively. The reduction 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 and to the closing of the company's New York office in the fall of
2001.

DEPRECIATION AND AMORTIZATION:

Depreciation and amortization expense for the three months ended September 30,
2002 and 2001 was approximately $82,000 and $129,000, respectively. The decrease
in depreciation and amortization expense is due to the decline in amortization
expense in conjunction with the reduced capitalized computer software
development costs.


                                       7
<PAGE>

Item 2. MANAGEMENTS' DISCUSSION AND ANALYSIS FOR PLAN OF OPERATIONS - NINE
MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (Cont'd):

LIQUIDITY:

As of September 30, 2002, the Company's net cash provided by operations was
approximately $82,000 and is substantially comprised of a net loss of
$(100,000), a decrease in accrued expenses of $(50,000) and depreciation and
amortization of $244,000. This compares to the nine months ended September 30,
2001 where net cash provided by operations was approximately $121,000 and was
substantially comprised of a net loss of $(243,000), a reduction in accounts
receivable of $47,000 and depreciation and amortization of $366,000.

Net cash used in investing activities during the nine months ended September 30,
2002 and 2001 was approximately ($69,000) and ($117,000), respectively, and was
attributed to the capitalization of computer software development costs.

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 for
capitalization of computer software development costs 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 significantly impact its
business. The Company does not believe its business is subject to fluctuations
due to seasonality.


                                       8
<PAGE>

ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. Based on their evaluation as
of a date within 90 days of the filing date of this Quarterly Report on Form
10-Q, our President and chief financial officer has concluded that our
disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c)
of the Securities Exchange Act of 1934) are effective to ensure that information
required to be disclosed by us in reports that we file or submit under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in Securities and Exchange Commission rules and forms.

CHANGES IN INTERNAL CONTROLS. There were no significant changes in our internal
controls or in other factors that could significantly affect these controls
subsequent to the date of their evaluation, nor were there any significant
deficiencies or material weaknesses in our internal controls. Accordingly, no
corrective actions were required or undertaken.


                                       9
<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, 2002


                                       10
<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 and
                                         Chief Financial Officer)


Date: 11/10/02
      --------

                                       11
<PAGE>

                                  CERTIFICATION

I, Ralph Jordan, President and Chief Financial Officer of Egan Systems, Inc.,
certify that:

1.    I have reviewed this quarterly report of Form 10-Q of Egan Systems, Inc.;

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the registrant as of, and for, the periods presented in this
      quarterly report;

4.    The registrant's other certifying officers and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
      have:

            a)    designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;

            b)    evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

            c)    presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.    The Registrant's certifying officer has disclosed, based on his most
      recent evaluation, to the registrant's auditors and the audit committee of
      registrant's board of directors (or persons performing the equivalent
      function):

            a)    all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

            b)    any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.    The registrant's other certifying officer has indicated in this quarterly
      report whether or not there were significant changes in internal controls
      or in other factors that could significantly affect internal controls
      subsequent to the date of our most recent evaluation, including any
      corrective actions with regard to significant deficiencies and material
      weaknesses.


Date: November 10, 2002

/s/ Ralph Jordan
----------------
Ralph Jordan
President and Chief Financial Officer


                                       12