FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549



              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                        For Quarter Ended March 31, 1999

                                       OR

              [ ] 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: 2-96392-A

                          TRIANGLE IMAGING GROUP, INC.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)

                           Florida                                59-2493183
                 ------------------------------                ---------------
                 State or other jurisdiction of                I.R.S. Employer
                 incorporation or organization               Identification No.


          1800 NW 49th Street, Suite 100, Ft. Lauderdale, FL        33309
          ---------------------------------------------------------------
               (Address of Principal Executive Office)          (Zip Code)

                                  954-229-5100
               ---------------------------------------------------
               (Registrant's telephone number including area code)


            Indicate  by check mark  whether  the  registrant  (1) has 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 [ ]

            The number of shares of registrant's  Common Stock, $.001 par value,
outstanding as of May 7, 1999 was 14,143,791 shares.



<PAGE>


                  TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES

                                   FORM 10-QSB


                                      INDEX

                                                                      Page
                                                                      Number
                                                                      ------

PART I - FINANCIAL INFORMATION:

         Item 1.  Financial Statements

            Consolidated Balance Sheet -
                         March 31, 1999................................  3

            Consolidated Statement of Operations -

            For the Three Months Ended March 31, 1999 and 1998 ........  5

            Notes to Financial Statements..............................  7

         Item 2.  Management's Discussion and Analysis ................  9


PART II - OTHER INFORMATION ........................................... 14

SIGNATURES ............................................................ 16


                                       2

<PAGE>

                         PART 1 - FINANCIAL INFORMATION

                          Item 1. Financial Statements


                  TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                                   (Unaudited)

                                     ASSETS


                                                                 March 31, 1999
                                                                 --------------

CURRENT ASSETS
            Cash and cash equivalents                              $   59,328
            Accounts receivable, net of allowance for
               doubtful accounts of: $(96,187.50)                   1,220,332
            Prepaid expenses                                           46,177
                                                                   ----------

            TOTAL CURRENT ASSETS                                   $1,325,837

EQUIPMENT                                                             338,622

GOODWILL                                                            1,971,253

OTHER ASSETS                                                       $  489,383
                                                                   ----------

                                                                   $4,125,095
                                                                   ==========



                                       3
<PAGE>

                      LIABILITIES AND STOCKHOLDERS' EQUITY


                                                                  March 31, 1999


CURRENT LIABILITIES
              Accounts payable and accrued expenses                 $   897,230
              Deffered revenue                                          303,255
              Due to stockholders                                        50,000
              Current portion of note payable                           625,000
                                                                    -----------
                   TOTAL CURRENT LIABILITIES                        $ 1,875,485

NOTE PAYABLE                                                        $ 1,500,000

NOTES PAYABLE SUBJECT TO PUTS                                       $ 1,485,000

STOCKHOLDERS EQUITY
              Common stock, $.001 par value,                        $    13,523
              Authorized 50,000,000 shares 13,523,790 shares
                     issued and outstanding
              Additional paid-in capital
                                                                      6,410,719
              Accumulated deficit                                    (5,636,682)
              Deffered compensation                                     (37,950)
              Common stock subject to put                            (1,485,000)
                                                                    -----------
                   TOTAL STOCKHOLDERS' EQUITY                       $  (735,390)


                                                                    $ 4,125,095
                                                                    ===========

See notes to financial statements.

                                       4


<PAGE>

                  TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF OPERATIONS

                                   (Unaudited)

                                           Three months ended Three months ended
                                             March 31, 1999     March 31, 1998
                                           ------------------ -----------------

SALES                                        $     2,091,079    $     1,687,365

COST OF SALES                                        679,787            275,781
                                             ---------------    ---------------

GROSS PROFIT                                       1,411,292          1,411,584

SELLING, GENERAL & ADMIN                           1,155,316            942,770

PRODUCT DEVELOPMENT                                   62,637                 --

NON-CASH IMPUTED COMPENSATION                         10,295             49,640

AMORTIZATION OF GOODWILL                              27,415             21,665
                                             ---------------    ---------------

INCOME (LOSS) FROM OPERATIONS                        155,629            397,509

INTEREST EXPENSE                                      70,562             19,752
                                             ---------------    ---------------

INCOME (LOSS) FROM CONTINUING OPERATIONS    
            BEFORE MINORITY INTEREST & TAX            85,067            377,757

TAX PROVISION                                             --            107,000
                                             ---------------    ---------------

NET INCOME (LOSS) FROM CONTINUING                     85,067            270,757
OPERATIONS

NET INCOME (LOSS)                            $        85,067    $       270,757
                                             ===============    ===============

NET INCOME PER SHARE:
            BASIC                            $          0.01    $          0.03
                                             ===============    ===============
            DILUTED                          $          0.01    $          0.02
                                             ===============    ===============

NUMBER OF SHARES USED IN COMPUTATION:
            BASIC                                 13,312,654          9,668,160
                                             ===============    ===============
            DILUTED                               14,772,654         12,096,077
                                             ===============    ===============


See notes to financial statements.


                                       5
<PAGE>
<TABLE>
<CAPTION>

                           TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES

                               CONSOLIDATED STATEMENT OF CASH FLOWS

                                            (Unaudited)

                                                                            Three months ended
                                                                                March 31,

                                                                             1999          1998
                                                                           ---------    ---------

<S>                                                                        <C>          <C>      
CASH FLOWS FROM OPERATING ACTIVITIES:
       Net Income                                                          $  85,067    $ 270,757
       Adjustment to reconcile net income to net cash
        provided by operating activities:
            Depreciation                                                      24,848       31,419
            Amortization of goodwill                                          27,415       21,665
            Non-cash imputed compensation                                     10,295       49,640

       Changes in assets and liabilities
            Increase in accounts receivable                                 (413,091)    (295,023)
            Decrease in deferred tax asset                                        --      107,000
            (Increase)/decrease in other assets                               28,937     (285,321)
            (Increase)/decrease in accounts payable and accrued expenses    (224,479)     114,765
            Decrease in deferred revenue                                        (165)     (77,512)
                                                                           ---------    ---------

CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                             (461,173)     (62,610)
                                                                           ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchase of equipment                                                 (75,735)     (46,253)
                                                                           ---------    ---------

CASH USED IN INVESTING ACTIVITIES                                            (75,735)     (46,253)
                                                                           ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES
       Proceeds from sale of stock                                           466,813      396,411
                                                                           ---------    ---------
       Payment of debt                                                      (100,000)    (100,000)
                                                                           ---------    ---------

CASH PROVIDED FROM INVESTING ACTIVITIES                                      366,813      296,411
                                                                           ---------    ---------

NET INCREASE IN CASH                                                        (170,095)     187,548

CASH - BEGINNING OF PERIOD                                                   229,423      525,009
                                                                           ---------    ---------

CASH - END OF PERIOD                                                       $  59,328    $ 712,557
                                                                           =========    =========
</TABLE>

See notes to financial statements.

                                        6

<PAGE>


                          TRIANGLE IMAGING GROUP, INC.

                          NOTES TO FINANCIAL STATEMENTS

                                   (Unaudited)

1.   BASIS OF PRESENTATION

              The accompanying  unaudited  consolidated  financial statements of
     Triangle  Imaging  Group,  Inc.  (the  "Company")  have  been  prepared  in
     accordance  with  generally  accepted  accounting  principles  for  interim
     financial  information and with the instructions to Form 10-QSB 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 management,
     all adjustments considered necessary for a fair representation  (consisting
     of normal  recurring  accruals)  have been  included.  The  preparation  of
     financial  statements  in conformity  with  generally  accepted  accounting
     principles  requires  management  to make  estimates and  assumptions  that
     affect the reported  amounts of assets and  liabilities  and  disclosure of
     contingent  assets and liabilities at the date of the financial  statements
     and the  reported  amounts of revenues and  expenses  during the  reporting
     period. Actual results could differ from those estimates. Operating results
     for the  three  month  period  ended  March  31,  1999 are not  necessarily
     indicative of the results that may be expected for the year ending December
     31, 1999.  For further  information,  refer to the  consolidated  financial
     statements and footnotes thereto included in the Company's Annual Report on
     Form 10-KSB for the year ended December 31, 1998.

2.   EARNINGS PER SHARE

              Basic  earnings  per share are  computed on the  weighted  average
     number of common shares  actually  outstanding  during the period.  Diluted
     earnings per share  considers  potential  shares  issuable upon exercise or
     conversion of other outstanding instruments where dilution would result.


3.   STOCKHOLDERS' EQUITY

              During the period ended March 31, 1999, the Company issued 416,813
     shares  of  common  stock  for a total  value of  $416,813  and  issued  an
     additional  45,000  shares of common  stock in lieu of a cash  payment to a
     former principal of one of the acquired credit bureaus.

4.   ACQUISTIONS

              In May 1998, the Company  acquired all of the outstanding  capital
     stock of Credit  Bureau  Services,  Inc.,  EJG  Services,  Inc. and Florida
     Credit  Bureau,  Inc.  These  companies were acquired by the Company for an
     aggregate of (i) $250,000 in immediately  available funds,  (ii) promissory
     notes in the  principal  amount of $100,000  and (iii)  495,000  restricted
     shares of the Company's  common stock.  The acquisitions of these companies
     have been accounted for as a purchase and accordingly,  the assets acquired
     and  liabilities  assumed have been recorded at their estimated fair market
     values  which  approximates  book value.  The  purchase  prices,  including
     acquisition  costs,  less the  companies'  book values was recorded as good
     will.

                                        7
<PAGE>

              The following schedule combines the unaudited pro-forma results of
     operations  of the Company  and these  acquisitions  for the quarter  ended
     March 31, 1998 as if the  acquisitions  had occurred on January 1, 1998 and
     includes  such   adjustments   which  are  directly   attributable  to  the
     acquisition.  It should not be  considered  indicative  of the results that
     would have been achieved had the  acquisitions  not occurred or the results
     that would have been  obtained had the  acquisitions  actually  occurred on
     January 1, 1998.

                                                                Quarter Ended
                                                                March 31, 1998
                                                                --------------

                  Net sales                                     $   2,176,527

                  Net income                                    $     298,307

                  Net income per share:

                           Basic                                $        .03

                           Diluted                              $        .02

                  Shares used in computation:


                           Basic                                  10,163,160

                           Diluted                                12,591,077


                                        8
<PAGE>


           MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


THE FOLLOWING  DISCUSSION OF THE  COMPANY'S  FINANCIAL  CONDITION AND RESULTS OF
OPERATION SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL  STATEMENTS AND NOTES
THERETO APPEARING ELSEWHERE IN THIS DOCUMENT.

STATEMENTS IN THIS "MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS"  AND ELSEWHERE IN THIS DOCUMENT AS WELL AS STATEMENTS
MADE IN PRESS RELEASES AND ORAL STATEMENTS THAT MAY BE MADE BY THE COMPANY OR BY
OFFICERS,  DIRECTORS, OR EMPLOYEES OF THE COMPANY ACTING ON THE COMPANY'S BEHALF
THAT ARE NOT  STATEMENTS  OF  HISTORICAL  OR CURRENT  FACT  CONSTITUTE  "FORWARD
LOOKING  STATEMENTS"  WITHIN THE  MEANING OF THE PRIVATE  SECURITIES  LITIGATION
REFORM ACT OF 1995. SUCH  FORWARD-LOOKING  STATEMENTS  INVOLVE KNOWN AND UNKNOWN
RISKS,  UNCERTAINTIES,  AND OTHER  UNKNOWN  FACTORS  THAT COULD CAUSE THE ACTUAL
RESULTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM THE HISTORICAL RESULTS OR
FROM ANY FUTURE RESULTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS.
IN  ADDITION  TO   STATEMENTS   WHICH   EXPLICITLY   DESCRIBE   SUCH  RISKS  AND
UNCERTAINTIES,  READERS ARE URGED TO CONSIDER  STATEMENTS LABELED WITH THE TERMS
"BELIEVES",  "BELIEF",  "EXPECTS",  "INTENDS",  "ANTICIPATES",  OR "PLANS" TO BE
UNCERTAIN FORWARD-LOOKING  STATEMENTS.  THE FORWARD LOOKING STATEMENTS CONTAINED
HEREIN  ARE ALSO  SUBJECT  GENERALLY  TO OTHER RISK AND  UNCERTAINTIES  THAT ARE
DESCRIBED FROM TIME TO TIME IN THE COMPANY'S REPORTS AND REGISTRATION STATEMENTS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

The  following  table sets  forth  information  on  operations  for the  periods
indicated:


                                         Percentage of Net Revenues
                                             Three months ended
                                                  March 31,
CONSOLIDATED
                                        1999                       1998
                                  -----------------         ------------------
                                      $         %               $          %
                                  ----------   ----         ----------    ----
Net Sales                         $2,091,079   100%         $1,687,365    100%
Cost of Sales                     $  679,787    33%         $  275,781     16%
Operating Expenses                $1,255,663    60%         $1,014,075     60%
Income from Operations            $  155,629     7%         $  397,509     24%
Interest Expense (net)            $   70,562     3%         $   19,752      1%
Income Before Income Taxes        $   85,067     4%         $  377,757     22%
Net Income                        $   85,067     4%         $  270,757     16%


                                        9

<PAGE>



By Segment:


ENGINEERED BUSINESS SYSTEMS

                                         Percentage of Net Revenues
                                             Three months ended
                                                  March 31,

                                        1999                       1998
                                  -----------------         ------------------
                                      $         %               $          %
                                  ----------   ----         ----------    ----

Net Sales                         $1,677,999   100%         $1,687,365    100%
Cost of Sales                     $  334,754    20%         $  275,781     16%


QUICKCREDIT CORP.

                                         Percentage of Net Revenues
                                             Three months ended
                                                  March 31,

                                        1999                       1998
                                  -----------------         ------------------
                                      $         %               $          %
                                  ----------   ----         ----------    ----

Net Sales                         $ 413,080    100%         $       --     0%
Cost of Sales                     $ 345,033     84%         $       --     0%


RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31,1999 VS. THREE MONTHS ENDED MARCH 31,1998

CONSOLIDATED

Sales for the quarter ended March 31, 1999 were $2,091,079 or an increase of 24%
over the  $1,687,365 in sales for the period ended March 31, 1998.  The increase
in sales is due to several factors including  additional  revenue resulting from
the  acquisition of three credit  bureaus by QuickCREDIT  Corp., a subsidiary of
the Company ("QCC"), during the second quarter of 1998 (the "QCC Acquisitions"),
sales of the  recently  released  DESC  software  product,  new revenue from the
emerging  consulting  practice,  and  increased  sales  within  the  outsourcing
services group.  Management  believes that the demand for the Company's products
remains strong in a continued period of low interest rates,  increased  consumer
debt accumulation and steady housing and refinancing markets.

Cost of sales as a percentage  of sales  increased  17% from 16% for the quarter
ended  March 31,  1998 to 33% for the  quarter  ended  March 31,  1999.  This is
primarily a result of the additional cost associated with the revenue  generated
from the QCC Acquisitions. Gross profit as a percentage of revenue has decreased
from 84% for the first  quarter of 1998 to 78% for the first quarter of 1999 for
the same reason.

                                       10
<PAGE>

Selling,  general and  administrative  (SG&A)  expenses were  $1,155,316 for the
quarter ended March 31, 1999  representing an increase of 23% over SG&A expenses
of $942,770 for the quarter  ended March 31, 1998.  This increase in SG&A is due
to the additional  SG&A  associated  with the operation of the QCC  Acquisitions
which accounted for approximately 10% of the increase. Additionally, the Company
focused on upgrading its sales organization to expand the Company's market share
in its  existing  client  base and to create new  opportunities  in new  markets
resulting in a further  increase in sales and marketing  expenses.  Research and
Development  expense was $62,637 in the quarter ended March 31, 1999 compared to
no Research  and  Development  expense for the quarter ended March 31, 1998. The
Research and Development  expense during the first quarter of 1999 is associated
with the  development  by the Company of two new products in  connection  with a
contract  for the  marketing  and resale of such  products  entered into with an
Atlanta,  Georgia-based  company that specializes in the nationwide marketing of
products to bank credit card holders.

Non-cash imputed compensation  decreased by $39,345 from $49,640 for the quarter
ended  March 31,  1998 to $10,295  for the  quarter  ended  March 31,  1999.  In
December  1998,  the Company wrote off the balance of the deferred  compensation
associated  with the future  services  to be provided  by the  Company's  former
Chairman and Chief  Executive  Officer.  In March,  1999,  the Company's  former
Chairman  and Chief  Executive  Officer was  terminated  for  "cause"  under his
employment  agreement with the Company. The Company no longer incurs the expense
associated  with  these  services.  However,  the  Company  has  entered  into a
settlement  agreement  with the Company's  former  Chairman and Chief  Executive
Officer which requires periodic payments to him and/or his spouse. See "Part II,
Legal Proceedings."

Amortization  of  goodwill  was  $27,415  for the  quarter  ended March 31, 1999
compared to $21,665 for the quarter ended March 31, 1998, an increase of $5,750.
The increase in the  amortization  of goodwill is  attributable  to the goodwill
purchased in connection with the QCC Acquisitions.

Income from operations for the quarter ending March 31, 1999 was $155,629, which
represents a decrease of $241,880  over the income from  operations  of $377,757
for the quarter ending March 31, 1998.  Net income  decreased to $85,067 for the
quarter  ended March 31, 1999 from $270,757 for the quarter ended March 31, 1998
for the aforementioned reasons.

ENGINEERED BUSINESS SYSTEMS, INC.

Sales for  Engineered  Business  Systems  accounted for $1,677,999 or 80% of the
Company's  total  revenue  for the  quarter  ended  March 31,  1999  compared to
$1,687,365  or 100% of the  Company's  total revenue for the quarter ended March
31, 1998.  The revenue mix for the quarter ended March 31, 1999 was comprised of
recurring  revenue from the ACES product  line,  the CRIS product  line,  annual
software maintenance contracts,  technical support revenues,  revenues generated
on a  transactional  per  report  basis and  monthly  software  rental  programs
("Recurring  Revenue") (36%),  outsourcing services (35%),  software sales (22%)
and  consulting  services of (7%).  The  comparable  revenue mix for the quarter
ended March 31, 1998 was Recurring  Revenue (48%),  outsourcing  services (31%),
software  sales  (21%)  and  consulting  services  (0%).  Sales of the  recently
released DESC product,  revenue derived from the emerging  consulting  practice,
and steady growth of outsourcing  service  revenues  offset declines in the CRIS
transactional  and ACES  software  sales.  Management  believes that the lack of
growth in sales for the first  quarter of 1999 as compared to the first  quarter
of  1998  is  due  to  several  factors,  including  the  continued  merger  and
acquisition  activity within the Company's  wholesale  client base,  development
delays of network  interfaces  effecting the CRIS  transactional  base,  overall
business   disruption  brought  about  by  the  recent  move  of  the  Company's
headquarters  facility,  and the diversion of  management's  attention away from
operations  due to the legal  proceedings  resulting in the  termination  of the
Company's former Chairman and

                                       11

<PAGE>


Chief Executive Officer.  See "Legal Proceedings." Cost of sales as a percentage
of revenue  increased  from 16% for the quarter  ended March 31, 1998 to 20% for
the quarter ended March 31, 1999.  Management  believes that the increase is due
to the shift in the Company's product mix from higher margin CRIS  transactional
revenue to lower margin  outsourcing  services.  The Company's gross margins for
the quarter  ended March 31, 1999 was 80% compared to 84% for the quarter  ended
March 31, 1998.

QUICKCREDIT CORP.

QCC was formed,  under the laws of the State of Florida, on February 23,1998 for
the purpose of acquiring and operating formerly  independent credit bureaus. QCC
had no operations from its inception until the second quarter of 1998.

Total  revenues for the three months ended March 31, 1999 were $413,080 and cost
of sales was $345,033.  Gross profit as a percentage of revenues was 16% for the
three months ended March 31, 1999.  Management believes that the gross profit as
a  percentage  of revenue  for the first  quarter  was  adversely  effected by a
reduction of sales caused by several factors  including delays in the release of
software upgrades that facilitated the latest releases of the QCC software,  the
seasonality  of  the  retail  credit  business  in the  first  quarter  and  the
relocation  of the Company's  headquarters  and the legal  proceedings  with the
Company's former Chairman and Chief Executive Officer discussed above.

STOCKHOLDERS' AGREEMENT

As of April 16,  1999,  shareholders  of the  Company  beneficially  holding  an
aggregate of 6,368,454  shares of Common Stock,  or 45.8% of the total number of
shares outstanding,  entered into a Stockholders Agreement pursuant to which the
participating shareholders (the "Participating  Shareholders") agreed to certain
matters pertaining to the governance of the Company and the circumstances  under
which  the  shares  held  by  the  Participating  Shareholders  may be  sold  or
transferred. The Participating Shareholders agreed, among other things, that (i)
at any  annual or  special  meeting of  stockholders  called for the  purpose of
voting on the election of  directors,  or by consensual  action of  stockholders
with respect to the election of directors,  the Participating  Shareholders will
vote the  shares of the  Company's  Common  Stock  held  thereby in favor of the
directors nominated by Harold S. Fischer,  the Company's Chief Executive Officer
and  President,   and  (ii)  except  for  certain  permitted   transfers,   each
Participating  Shareholder  will not sell or  transfer  shares of the  Company's
Common Stock held thereby  without first granting the Company and then the other
Participating  Shareholders with a right of first offer. Although the Company is
not a party to the  Stockholders  Agreement,  certain  members of management are
Participating  Shareholders,  including  Harold S. Fischer,  the Company's Chief
Executive Officer and President.

LIQUIDITY AND CAPITAL RESOURCES

The Company has funded its working capital and capital expenditures requirements
with cash provided from operations, the private sale of the Company's stock, and
debt  financing.  In 1999  the  primary  source  of cash  receipts  will be from
payments for software and services.  The Company's management believes that cash
flows  from  continuing  operations  will  be  sufficient  to  fund  operational
expenditures in the immediate  future and that planned  expansion will be funded
with cash from  operations,  and  proceeds  from the issuance of equity and debt
financing.

Management  estimates the future  spending for capital  expenditures  during the
1999 fiscal year, will be  approximately  $300,000 and believes that the current
and future  cash flows from sales and  proceeds  from debt and equity  financing
will be sufficient to fund planned capital expenditures.

                                       12
<PAGE>

During the period ended March 31, 1999,  the Company  issued  416,813  shares of
common  stock for a total  value of  $416,813  and issued an  additional  45,000
shares of common stock in lieu of a cash payment to a former principal of one of
the  acquired  credit  bureaus.  See Part II "Changes in  Securities  and Use of
Proceeds."

At March 31,  1999,  the Company  had working  capital of $59,328 as compared to
working  capital of $712,557 at March 31, 1998. The reduction in working capital
is  attributable  primarily to expenses  associated  with the  relocation of the
Company's  headquarters,  research  and  development  costs,  and legal fees and
expenses and a reduction in revenues  during the quarter ended December 31, 1998
associated  with the  litigation  resulting in the  termination of the Company's
former Chairman and Chief Executive Officer.

YEAR 2000

     The  Company  recognizes  that a  challenging  problem  exists in that many
computer  systems  worldwide do not have the capability of recognizing  the year
2000 or the years  thereafter.  No easy  technological  "quick fix" has yet been
developed for this problem. The Company has spent a considerable sum of money to
assure that all its software  programs are year 2000 compliant and believes that
it has achieved this objective.  This "Year 2000 Computer  Problem" creates risk
for the company  from  unforeseen  problems in its own  software  and from third
parties with whom the company  deals.  Such failures of the Company and/or third
parties'  computer  systems could have a material  adverse effect on the Company
and its ability to conduct its business in the future.

INFLATION

     The Company  does not believe  that  inflation  has had a material  adverse
effect on sales or income during the past several  years.  Increases in the cost
of supplies and services,  or other operating costs,  could adversely affect the
Company's operations;  however, the Company believes it could increase prices to
offset increases in costs of goods sold or other operating costs.


                                       13
<PAGE>


PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

During the first  quarter of 1999 the  Company  was a  defendant  in the lawsuit
styled,  THOMAS  L.  BAUER,  ET AL V.  TRIANGLE  IMAGING  GROUP,  INC.,  VITO A.
BELLEZZA, JUDITH BELLEZZA A/K/A JUDITH KLOTZ, PETER BELLEZZA AND FRANZ FIDELI in
the  Circuit  Court of the 17th  Judicial  Circuit  in and for  Broward  County,
Florida filed in December 1998 by in excess of 25 of the Company's  shareholders
some of whom  are  officers  and  employees  of the  Company  (the  "Shareholder
Litigation").  The Shareholder Litigation alleges, among other things,  breaches
of fiduciary duty,  self-dealing,  stock manipulation and insider trading by Mr.
Bellezza,  the  Company's  former  Chief  Executive  Officer and Chairman of the
Board.  The lawsuit  further  alleges certain claims against Judith Bellezza for
her alleged participation in Mr. Bellezza's complained of activities, as well as
claims  against  Franz  Fideli and Peter  Bellezza  arising  from the failure to
discharge their fiduciary duties as directors of the Company when presented with
the allegations against Mr. Bellezza and Judith Bellezza.

On January 14,  1999,  a hearing  was held before the Circuit  Court for Broward
County,  Florida  with  regard to the  Shareholder  Litigation  and an order was
entered by the Court on February 22, 1999 (the "Order").

The Order,  among other things,  required the parties to submit their dispute to
non-binding  mediation.  On April 30,  1999,  the Company  attended the required
mediation  conference and entered into a settlement  agreement (the "Agreement")
with Vito A. Bellezza, the Company's former Chief Executive Officer and Chairman
of the Board of Directors,  Judith  Bellezza,  Mr.  Bellezza's wife and a former
employee of the Company,  Peter Bellezza,  Mr.  Bellezza's  brother and a former
director of the Company, and Franz Fideli, a former director of the Company. The
Agreement  includes a general  release of all claims by the parties  against all
other parties and also (i) requires Messrs. Bellezza,  Fideli and Peter Bellezza
to  surrender  for  cancellation  (a) an  aggregate  of  900,000  shares  of the
Company's  Common  Stock and (b) options to purchase an  aggregate  of 2,200,000
shares of the Company's  Common Stock at exercise  prices  ranging from $.05 per
share to $1.875 per share,  (ii) grants the  Company's  Board of  Directors  the
right to vote,  subject to  certain  limitations,  all  shares of the  Company's
Common  Stock owned by such  individuals  (presently  believed  to be  3,317,136
shares) in accordance  with the majority vote of the other  shareholders  of the
Company's Common Stock, and (iii) requires that the Company pay to Vito Bellezza
and/or Judith  Bellezza a total of $468,000 over a period of three (3) years and
to provide them with health and dental  insurance  coverage.  As a result of the
execution and delivery of the Agreement,  Mr. Bellezza and the other  defendants
in the lawsuit  will not serve as officers or  directors of the Company and will
not  otherwise be involved in the  day-to-day  activities  of the Company in any
capacity.  It is  expected  that  the  Agreement  will be  superseded  by a more
comprehensive,  definitive  settlement  agreement in the near  future;  provided
however,  that if such a definitive  settlement agreement is not executed by the
parties by May 26,  1999,  the  Agreement  remains  binding and  enforceable  in
accordance  with  its  terms.   Any  disputes  arising  from  the  drafting  and
negotiating  of the  definitive  settlement  agreement  shall be resolved by the
mediator.

In addition to the foregoing,  in January 1999,  Waterside  Capital  Corporation
("Waterside") sued the Company (the "Waterside Litigation") in the United States
District  Court for the Eastern  District of Virginia,  Civil Action No. 2:98 cv
1468,  based upon alleged defaults by the Company under a promissory note in the
original  principal  amount of  $1,500,000,  dated October 15, 1998, and alleged
breaches of contract under certain related  investment  agreements.  The Company
and  Waterside  reached a  settlement  of the  litigation  pursuant to which the
Company repriced certain stock purchase warrants previously granted to Waterside
at the time of the closing of Waterside's investment in the Company. Pursuant to
the  settlement,  the  exercise  price of the  warrants  was  reduced  from a In
addition to the  foregoing,  in January,  1999,  Waterside  Capital  Corporation
("Waterside")  filed a lawsuit against the range of $2.15 per share to $3.00 per
share down to


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<PAGE>



$.05 per  share.  In  exchange  for the  repricing  of the  warrants,  Waterside
dismissed  the  Waterside  Litigation  and delivered to the Company a contingent
general release.  The release provides that Waterside may not refile the lawsuit
with the same  claims  set  forth in the  Waterside  Litigation  unless  certain
members of management  and/or  members of the Company's  Board fail to remain in
such  positions  through the date of the second annual  meeting of  shareholders
held after the date of the settlement.

Item 2. Changes in Securities and Use of Proceeds

In January 1999,  the Company  issued  301,813 shares of Company common stock to
certain  individual  accredited  investors  for an aggregate  purchase  price of
$301,813 pursuant to Section 4(2) of the Securities Act of 1933 (the "Act").

In February  1999,  the Company issued 115,000 shares of Company common stock to
certain  individual  accredited  investors  for an aggregate  purchase  price of
$115,000 pursuant to Section 4(2) of the Act.`

During  March 1999,  the  Company  also issued an  additional  45,000  shares of
Company  common stock in lieu of certain cash  payment  obligations  to a former
principal of a credit  bureau  acquired by the Company in the second  quarter of
1998, pursuant to Section 4(2) of the Act.



Item 6. Exhibits and Reports on Form 8-K

     A. Exhibits

     None.

     B. Reports on Form 8-K

     Current Report on Form 8-K dated January 5, 1999, Item 5

     Current Report on Form 8-K dated January 21, 1999, Item 5


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<PAGE>


                                   SIGNATURES

            Pursuant  to  the  requirements  of  Section  13  or  15(d)  of  the
Securities  Exchange Act of 1934,  the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.



                                  TRIANGLE IMAGING GROUP, INC.



Dated: May 13, 1999               By:  /s/ Harold S. Fischer
                                       -----------------------------------------
                                           Harold S. Fischer, President,
                                           Chief Executive Officer and Director


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