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 June 30, 2000

    [ ]     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 Identification No.
incorporation or organization)


1501 Lincoln Ave., Holbrook, New York                               11741
-------------------------------------              -----------------------
(Address of principal executive offices)

(516) 588 - 8000
--------------------------------------------------------------------------------
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
----                      -----                        ------------------

8/2/00                    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
    June 30, 2000 (unaudited) and December 31, 1999                          1

   Condensed consolidated statements of operations (unaudited) for the
    six months ended June 30, 2000 and 1999                                  2

   Condensed consolidated statements of cash flows (unaudited) for the
    six months ended June 30, 2000 and 1999                                  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
<TABLE>

                        EGAN SYSTEMS, INC. AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<CAPTION>
                                                            June 30,                   December 31,
ASSETS                                                        2000                       1999
                                                           -----------              -----------------
                                                          (Unaudited)
Current Assets
<S>                                                    <C>                        <C>

  Cash                                                  $       265,782             $        449,990
  Accounts receivable                                            47,364                      111,837
  Inventory                                                      13,350                        8,910
  Prepaid expenses and other current assets                       7,663                        8,764
                                                        ---------------             ---------------
      Total Current Assets                                      334,159                      579,501
                                                        ---------------             ----------------

Property and Equipment - net                                    165,285                      189,302
                                                        ---------------             ----------------

Other Assets

  Computer software development costs - net                     795,053                      803,030
  Security deposits                                               3,126                        3,126
                                                        ---------------             ---------------
      Total Other Assets                                        798,179                      806,156
                                                        ---------------             ----------------

      Total Assets                                      $     1,297,623           $        1,574,959
                                                        =================           ==================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

 Account payable                                        $       175,917             $        175,917
 Accrued expenses and other current liabilities                  63,580                       50,544
                                                        ---------------             ---------------

      Total Current Liabilities                                 239,497                      226,461
                                                        ---------------             ----------------

Stockholders' Equity

 Common stock - $.05 par value,
  shares authorized - 30,000,000
  shares,  issued and outstanding, 19,646,652
  in 2000 and 18,646,652 in 1999                                932,333                      932,333
 Additional paid-in capital                                   4,877,201                    4,877,201
 Deficit                                                     (4,388,908)                  (4,098,536)
                                                        ------------------          -------------------
                                                              1,420,626                    1,710,998
 Notes receivable - stock purchase                             (362,500)                    (362,500)
                                                        ----------------            -----------------

      Total Stockholders' Equity                              1,058,126                    1,348,498
                                                        -----------------           ------------------

      Total Liabilities and Stockholders' Equity        $     1,297,623           $        1,574,959
                                                        =================           ==================
</TABLE>


The condensed  consolidated  balance sheet at December 31, 1999 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                       Six Months Ended
                                              June 30,                                 June 30,
                                              2000             1999                    2000             1999
                                              ----             ----                    ----             ----
<S>                                     <C>              <C>                 <C>            <C>

Net product sales                        $      158,888  $      482,384      $      401,214  $      691,382
Custom services income                         -                -                  -                442,030
                                         --------------  --------------      --------------  --------------

                                                158,888         482,384             401,214         1,133,412
                                         --------------  --------------      --------------  ----------------

Cost and expenses:
  Cost of goods sold                             (4,186)         29,174               9,285         189,418
  Research and development costs                 53,589          49,411             117,031         139,314
  Selling, shipping,
   general and administrative                   162,467         227,737             324,891         377,735
  Interest income                                (4,120)        (13,296)             (8,558)        (15,012)
  Royalties                                       6,200          15,390              22,566          15,390
  Promotion and advertising                    -                    100               3,941          27,711
  Interest expense                             -                -                  -                    252
  Consulting                                    111,215         126,885             222,430         218,905
                                         --------------  --------------      --------------  --------------

                                                325,165         435,401             691,586         953,713
                                         --------------  --------------      --------------  --------------


Net (loss) income                        $     (166,277) $       46,983      $     (290,372) $      179,699
                                         ==============  ==============      ==============  ==============


Net (loss) income per common share:

  Basic                                  $           (0.01)     $            0.00  $         (0.02) $
                                         =================      =================  ===============  =
0.01

  Fully diluted                          $     -         $            0.00   $     -         $            0.01
                                         ==============  =================   ==============  =================

  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 CASH FLOWS

                           INCREASE (DECREASE) IN CASH
                                   (UNAUDITED)

<TABLE>
<CAPTION>


                                                                   Six Months Ended
                                                                   June30,
                                                                   2000                         1999
                                                                   ----                         ----
<S>                                                         <C>                         <C>


Net cash provided by (used in) operating activities          $         6,228             $        (154,006)
                                                             ---------------             -----------------


Cash flows from investing activities:

  Purchase of property and equipment                                  (3,624)                      (31,764)
  Computer software development costs                               (186,812)                     (200,452)
                                                             ----------------            -----------------

      Net cash used in investing activities                         (190,436)                     (232,216)
                                                             ----------------            -----------------


Net decrease in cash                                                (184,208)                     (386,222)


Cash - beginning of period                                           449,990                     1,036,429
                                                             ---------------             ------------------


Cash - end of period                                         $       265,782             $         650,207
                                                             ===============             ================


Supplemental cash flows information:

Taxes paid                                                   $         2,047             $             950
                                                             ===============             =================

Interest paid                                                $       -                   $             252
                                                             ===============             =================

</TABLE>


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 June 30, 2000 and the results of their
operations and cash flows for the six months ended June 30, 2000 and 1999.

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 19,223,575 and 18,646,652 in 2000 and 1999, 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  19,423,575  and  23,707,652  in 2000 and 1999,
respectively.  Fully  diluted  earnings  per share  amounts do not  include  the
effects of dilutive securities for 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, 1999.

The  results  of  operations  for the six  months  ended  June 30,  2000 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 six months ended June 30, 2000 and 1999,  accumulated  amortization amounted
to  approximately  $1,363,000  and  $1,038,000,  and  amortization  of  computer
software development costs charged to operations was approximately  $195,000 and
$200,000, 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 six  months  ended  June  30,  2000  and  1999,  the  Company  incurred
contribution expense of approximately $3,000 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.  However,  the  Company  believes it will be
successful  in its  negotiations  and that the software  vendor will  ultimately
allow these costs to be applied to other software for future use by the Company.
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 - SIX MONTHS ENDED JUNE 30, 2000 AND 1999

NET SALES:

For the six months  ended June 30,  2000 and 1999,  total  revenue  approximated
$401,000 and $1,133,000,  respectively.  Revenue has declined for the six months
ended June 30,  2000 versus the same period in the prior year due to the absence
in 2000 of custom  service  work such as client  software  migration,  Year 2000
assessment and  remediation,  consulting  and custom  software  generation  work
performed  on  behalf  of new and some  existing  customers.  Additionally,  the
decline  is  attributed  to a  reduction  in  demand  for some of the  Company's
existing  products to new users.  In February 2000,  the Company  released a new
product  called  "CGI"  COBOL"  which  is  designed  to  enable  existing  cobol
programmers to create web server application software without the programmers to
create web server  application  software  without the need to learn and employ a
new  software  language.  Initial  sales of the product  commenced in the second
quarter of 2000 and interest in the product is high.  In June 2000,  the Company
released a new upgraded product called  "Interactive Cobol 3". The Company feels
that this new enhanced  featured  product will  convince  existing  customers to
purchase an upgrade of the product and also  attract new  customers  to purchase
the new product.

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 six  months  ended  June  30,  2000  and 1999  were
approximately  $9,000 and $189,000 and gross profit percents were  approximately
98% and 83%,  respectively.  The lower gross profit  margin in 1999 results from
the combination of high gross margins achieved on sales of the Company's regular
software  products  and lower  gross  margins  achieved  on a portion of the new
custom services  income.  Cost of goods sold for the three months ended June 30,
2000  declined  when  compared  to the six  month  period  ended  June 30,  2000
substantially  as a result of an increase in inventory  levels as  calculated by
the Company at June 30, 2000.

Research and development costs were approximately  $117,000 and $139,000 for the
six months ended June 30, 2000 and 1999,  respectively.  The reduction is due to
the  Company  reducing  the  number of  employees  and  expenditures  related to
research and development in 2000 in conjunction  with the reduction in revenues.
The Company continues to expend significant  amounts of its 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 six
months  ended June 30, 2000 and 1999 were  approximately  $325,000  and $377,000
respectively.  The capitalization of computer software development costs for the
six months ended June 30, 2000 and 1999 reduced SG&A  expenses by  approximately
$187,000  and  $200,000  respectively.  The  decrease  in  capitalized  computer
software  development  costs  was  attributed  primarily  to  the  reduction  in
employees and  expenditures in the Company's  software  development  facility in
conjunction with the reduction in revenues.

PROMOTION  AND ADVERTISING EXPENSE:

For the six  months  ended June 30,  2000 and 1999,  advertising  and  promotion
expense was approximately $4,000 and $28,000, respectively. The decrease in 2000
was directly related to the Company's  substantial efforts in 1999 to market its
new Year 2000 Impact  Assessment and Remediation  Tools and Services  product as
well as to expand the Company's  overall  visibility.  As of June 30, 2000,  the
Company is reevaluating its promotion and advertising campaign.

                                       6

<PAGE>



Item 2. MANAGEMENTS'  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 2000 AND 1999 (Cont'd):

INTEREST INCOME:

Interest  income  for  the  six  months  ended  June  30,  2000  and  1999,  was
approximately $9,000 and $15,000, respectively, and was related to cash invested
by the Company in short-term financial instruments.

DEPRECIATION AND AMORTIZATION:

Depreciation and amortization expense for the six months ended June 30, 2000 and
1999 was approximately $222,000 and $219,000, respectively. The increase in 2000
is attributed to increased amortization of capitalized computer software costs.

LIQUIDITY:

As of June  30,  2000,  the  Company's  net  cash  provided  by  operations  was
approximately $6,000 and is substantially comprised of net loss of ($290,000), a
reduction of accounts receivable of $64,000 and depreciation and amortization of
$222,000.  As of June 30, 2000,  the Company  still has $176,000 in  liabilities
related to the purchase of technology  software which is more fully described in
the  Company's  December  31, 1999  10-KSB.  The amount is reflected in accounts
payable on the balance  sheet.  This  compares to the six months  ended June 30,
1999 where net cash used in  operations  was  approximately  ($154,000)  and was
substantially comprised of net income of $180,000, depreciation and amortization
of $220,000,  an increase in acquired  technology  costs of ($1,067,000)  and an
increase in accounts payable of $528,000.

Net cash used in investing  activities during the six months ended June 30, 2000
and 1999 was  approximately  ($190,000) and ($232,000),  respectively.  This was
attributed to purchases of new computer  hardware and software of  approximately
$4,000 and $32,000 to support the  Company's  ongoing  research and  development
activities and to the  capitalization of computer software  development costs of
$187,000  and  $200,000  for the six  months  ended  June  30,  2000  and  1999,
respectively.

Management  believes that the Company has sufficient  cash resources to meet its
expected  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 June 30, 2000.

                                       8

<PAGE>


                               S I G N A T U R E S

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/Edward J. Egan
                                              -----------------
                                              Edward J. Egan (President
                                              And Chief Financial Officer)



Date:  8/2/00

                                       9


<PAGE>



                          PART ll, ITEM 6, EXHIBIT II.

                               EGAN SYSTEMS, INC.
                        COMPUTATION OF PER SHARE EARNINGS

Computation of per share earnings:

The following data show the amounts used in computing earnings per share and the
effect on (loss)  income and the weighted  average  number of shares of dilutive
potential common stock.
<TABLE>
<CAPTION>

                                                        Six Months Ended
                                                           June 30,
                                                           2000                         1999
                                                           ----                         ----

<S>                                                 <C>                         <C>


(Loss) income available to common stockholders       $       (290,372)           $        179,699
                                                     ================            ================


Weighted average number of common shares in
 primary EPS                                               19,223,575                  18,646,652

Effect of dilutive securities                                 200,000                   5,061,000
                                                     ---------------             ------------------

Weighted average number of common shares and
 dilutive potential common stock used in
 fully diluted EPS                                         19,423,575          $       23,707,652
                                                     ==================          ===================

Net (loss) income per common share:

 Basic                                               $          (0.02)         $             0.01
                                                     ==================          ==================

 Fully diluted                                       $       -                   $           0.01
                                                     ==================          ==================

</TABLE>



For 2000, the effect of dilutive securities were not included in computing fully
diluted EPS because their effects are anti-dilutive.

                                       10