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 September 30, 1998

                                       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.

   4400 West Sample Road, Coconut Creek, Florida            33073
      (Address of Principal Executive Office)             (Zip Code)

                                  954-968-2080
               (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 September 30, 1998 was 12,911,977 shares.


<PAGE>



                   TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARY

                                   FORM 10-QSB

                                      INDEX

                                                                            Page
                                                                          Number

PART I - FINANCIAL INFORMATION:

         Item 1.  Financial Statements

                  Consolidated Balance Sheet --
                       September 30, 1998....................................  1

                  Consolidated Statement of Operations --
                       For the Nine and Three Months Ended
                       September 30, 1998 and 1997...........................  2

                  Consolidated Statement of Cash Flows --
                       For the Nine and Three Months Ended
                       September 30, 1998 and 1997...........................  3

                  Notes to Financial Statements...........................   4-6

         Item 2.  Management's Discussion and Analysis.....................  7-8


PART II - OTHER INFORMATION..................................................  9

SIGNATURES..................................................................  10



<PAGE>

                                 PART 1 - FINANCIAL INFORMATION



Item 1. Financial Statements

                         

<TABLE>

                  TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                                   (Unaudited)




                                     ASSETS
                                                                  September 30,
                                                                      1998
                                                                 ---------------

<S>                                                              <C>
CURRENT ASSETS:
     Cash and cash equivalents                                    $     278,013
     Accounts receivable, net of allowance for doubtful
         accounts of $160,000                                         1,569,181
     Inventory                                                           35,957
     Prepaid expenses                                                    51,372
     Deferred tax asset                                                 263,000
                                                                 ---------------
         TOTAL CURRENT ASSETS                                         2,197,523

EQUIPMENT                                                               246,200

GOODWILL                                                              3,074,488

DEFERRED TAX ASSET                                                      130,000

OTHER ASSETS                                                          1,380,068
                                                                 ---------------

                                                                  $   7,028,279
                                                                 ===============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable and accrued expenses                        $     876,257
     Deferred revenue                                                   303,420
     Due to stockholders                                                 50,000
     Deferred tax liability                                              34,000
     Current portion of note payable                                    400,000
                                                                 ---------------
         TOTAL CURRENT LIABILITIES                                    1,663,677

NOTE PAYABLE                                                            850,000

DEFERRED TAX LIABILITY                                                  133,000

STOCKHOLDERS' EQUITY:
     Common stock, $.001 par value,
         authorized 50,000,000 shares: 12,911,977
         issued and outstanding                                          12,912
     Additional paid-in capital                                       5,409,516
     Accumulated deficit                                               (939,676)
     Stock subscription receivable                                      (25,050)
     Deferred compensation                                              (76,100)
                                                                 ---------------
         TOTAL STOCKHOLDERS' EQUITY                                   4,381,602
                                                                 ---------------

                                                                  $   7,028,279
                                                                 ===============


</TABLE>

                       See notes to financial statements.
                                     





<PAGE>


<TABLE>

                  TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF OPERATIONS

                                   (Unaudited)

                                                                     Three months ended                    Nine months ended
                                                                        September 30,                        September 30,
                                                             ----------------------------------    ---------------------------------
                                                                   1998               1997               1998              1997
                                                             ---------------    ---------------    ---------------   ---------------

<S>                                                          <C>                <C>                <C>               <C>
SALES                                                        $    2,411,727     $    1,487,382     $    6,286,172    $    4,076,340

COST OF SALES                                                       723,793            409,302          1,181,737         1,034,444
                                                             ---------------    ---------------    ---------------   ---------------

GROSS PROFIT                                                      1,687,934          1,078,080          5,104,435         3,041,896

SELLING, GENERAL AND ADMINISTRATIVE
     EXPENSES                                                     2,014,084            749,567          4,503,232         2,218,402

PRODUCT DEVELOPMENT                                                 162,313              --               162,313             --
 
NON-CASH IMPUTED COMPENSATION EXPENSE                                47,390             23,420            146,670            64,840

AMORTIZATION OF GOODWILL                                             57,275             18,604            123,445            66,816
                                                             ---------------    ---------------    ---------------   ---------------


INCOME (LOSS) FROM OPERATIONS                                      (593,128)           286,489            168,775           691,838

INTEREST EXPENSE                                                     24,959             30,760             87,867            83,544

RESTRUCTURING EXPENSE                                                60,000              --                60,000             --

NON-RECURRING CHARGES ASSOCIATED
     WITH ACQUISITIONS                                                --                 --               151,200             --
                                                             ---------------    ---------------    ---------------   ---------------

INCOME (LOSS) FROM CONTINUING OPERATIONS
     BEFORE MINORITY INTEREST AND TAX PROVISION                    (678,087)           255,729           (130,292)          608,294

MINORITY INTEREST                                                     --               (13,935)             --               58,968

TAX PROVISION                                                      (107,000)             --                 --                --

                                                             ---------------    ---------------    ---------------   ---------------

NET INCOME/(LOSS) FROM CONTINUING OPERATIONS                       (571,087)           269,664           (130,292)          549,326

(LOSS) FROM DISCONTINUED OPERATIONS                                (289,162)             --              (220,000)            --
                                                             ---------------    ---------------    ---------------   ---------------

NET INCOME/(LOSS)                                            $     (860,249)    $      269,664     $     (350,292)   $      549,326
                                                             ===============    ===============    ===============   ===============

NET INCOME PER SHARE:
     Basic                                                   $        (0.07)    $         0.03     $        (0.03)   $         0.07
                                                             ===============    ===============    ===============   ===============
     Diluted                                                 $        (0.06)    $         0.02     $        (0.02)   $         0.06
                                                             ===============    ===============    ===============   ===============

NUMBER OF SHARES USED IN COMPUTATION:
     Basic                                                       13,015,073          9,330,665         11,638,225         7,766,832
                                                             ===============    ===============    ===============   ===============
     Diluted                                                     15,470,437         11,042,176         14,093,589         9,478,343
                                                             ===============    ===============    ===============   ===============


</TABLE>


                       See notes to financial statements.
                                                                  

<PAGE>

<TABLE>

                  TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF CASH FLOWS

                                   (Unaudited)

                                                                                           Nine months ended
                                                                                             September 30,
                                                                                    --------------------------------
                                                                                          1998             1997
                                                                                    ---------------   --------------

<S>                                                                                 <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income (loss)                                                              $    (350,292)    $    549,326
     Adjustment to reconcile net income (loss) to net cash
         provided by operating activities:
             Depreciation                                                                  90,568           75,766
             Amortization of goodwill                                                     123,445           66,816
             Non-cash imputed compensation                                                146,670           64,840
             Minority interest                                                                --            58,968

     Changes in assets and liabilities:
             Increase in accounts receivable                                             (790,626)        (156,805)
             Increase in inventory                                                        (35,957)            --
             Increase in prepaid expenses                                                 (36,883)          18,690
             Increase in other assets                                                    (777,115)        (186,317)
             Increase in accounts payable and accrued expenses                            472,003          244,194
             Decrease in deferred revenue                                                 (87,505)           2,764
                                                                                    ---------------   --------------

CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                        (1,245,692)         738,242
                                                                                    ---------------   --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Cash paid for acquisition                                                           (484,942)            --
     Purchase of equipment                                                               (182,279)         (94,222)
                                                                                    ---------------   --------------

CASH USED IN INVESTING ACTIVITIES                                                        (667,221)         (94,222)
                                                                                    ---------------   --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Payment of note payable                                                             (350,000)        (125,000)
     Proceeds from sale of common stock                                                  1,525,316         260,750
     Payment of dividends                                                                     --            (5,891)
     Decrease in stock subscription receivable                                            501,250             --
     Other                                                                                    --            17,753
     Purchase of treasury stock                                                           (10,649)        (233,000)
                                                                                    ---------------   --------------

CASH PROVIDED BY FINANCING ACTIVITIES                                                   1,665,917          (85,388)
                                                                                    ---------------   --------------

NET INCREASE (DECREASE) IN CASH                                                          (246,996)         558,632

CASH - BEGINNING OF PERIOD                                                                525,009          200,264
                                                                                    ---------------   --------------

CASH - END OF PERIOD                                                                $     278,013     $    758,896
                                                                                    ===============   ==============

</TABLE>


                       See notes to financial statements.
                                                      


<PAGE>





                          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
presentation  (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 nine
month period ended  September  30, 1998 are not  necessarily  indicative  of the
results that may be expected for the year ending  December 31, 1998. 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, 1997.

     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. The earnings per share for
the prior period have been  restated to conform with the  Company=s  adoption of
FAS No. 128.

     3. STOCKHOLDERS' EQUITY

     During the three months ended  September 30, 1998, an individual  exercised
stock  options  resulting in the  issuance of 20,000  shares of common stock and
proceeds of $17,500.

     During the three months ended  September  30, 1998 the Company sold 296,712
shares of common stock resulting in proceeds of $596,957.

     4. ACQUISITIONS

     During May 1998, the Company acquired all of the outstanding  capital stock
of Credit Bureau  Services,  Inc.,  EJG Services,  Inc.,  Florida Credit Bureau,
Inc., and Multitask Computer Systems,  Inc. These companies were acquired by the
Company  for an  aggregrate  of  (i)$250,000  in  immediately  available  funds,
(ii)promissory  notes in the  principal  amount of  $100,000,  and  (iii)630,000
shares of the Company=s  common stock.  The  acquisition 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 values which
approximates book value. The purchase prices,  including acquisition costs, less
the companies= book values totaled $1,558,229 which was recorded as goodwill.

     The  following  schedule  combines  the  unaudited  pro  forma  results  of
operations  of the Company  and these  acquisitions  for the nine  months  ended
September  30, 1998 and 1997 as if the  acquisition  had  occurred on January 1,
1998 and 1997 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  acquisition  not occurred or the results that
would have been  obtained had the  acquisition  actually  occurred on January 1,
1997.


<TABLE>
                                                 Nine Months Ended June 30,
                                          --------------------------------------
                                                1998                  1997
                                          ----------------       ---------------

<S>                                        <C>                   <C>
Net sales                                  $  7,063,838          $    5,773,180

Net income                                 $   (365,013)         $      570,760

Net income per share:

    Basic                                  $       (.03)         $          .07

    Diluted                                $       (.03)         $          .06

Shares used in computation:
 
    Basic                                    11,638,225               8,396,832

    Diluted                                  14,093,589              10,108,343



</TABLE>



     5. DISCONTINUED OPERATIONS

     During May 1998, the Company  acquired all the outstanding  stock of Trimax
Systems Corporation. This company was acquired by the Company for 270,000 shares
of the Company=s common stock. In September 1998, the Company decided to rescind
the   acquisition   resulting  in  the   cancellation  of  the  270,000  shares.
Accordingly,  the financial statements have been restated showing the operations
of TriMax as  discontinued  operations.  For the nine months ended September 30,
1998, TriMax had revenues of $152,000.




     6. SUBSEQUENT EVENT - FINANCING

     In October  1998,  the Company  completed a financing  of  $1,500,000  with
Waterside Capital Corporation.  Waterside has agreed to purchase shares of Class
C Preferred  stock and  warrants to  purchase  shares of common  stock at prices
ranging from $2.15 to $3.00 per share.

<PAGE>


           Management's Discussion and Analysis of Financial Condition


Forward Looking Statements

     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  risks and
uncertainties  that are described from time to time in the Company's reports and
registration statements filed with the Securities and Exchange Commission.

                Three months ended September 30, 1998 compared to
                    the three months ended September 30, 1997

     Triangle Imaging Group's, Inc. (the "Company") total revenues for the third
quarter of 1998 were $2,411,727,  which is an increase of 62% over the Company's
third quarter 1997 revenues of $1,487,382.  The increase resulted from the sales
from new acquisitions, increased reoccurring revenues, and the sale of services,
which can be attributed  to an increase in the Company's  sales force as well as
the addition of new companies to the Triangle family.

     Engineered  Business  Systems,  Inc.,  (EBS),  a wholly  owned  subsidiary,
contributed sales for the third quarter 1998 in the amount of $1,689,167. Of the
EBS sales,  reoccurring  revenues in the  CRIS(TM) and  ACES(TM)  product  lines
constituted  67% of EBS's revenues in the third quarter 1998.  Revenues from the
ACES(TM) product line contributed 67% of the reoccurring  revenues for the third
quarter 1998 while the  remaining  33% of revenues  contributed  to  reoccurring
revenues  were derived  from the CRIS(TM)  product  line.  Reoccurring  revenues
consist of annual software  maintenance  contracts,  technical support revenues,
software  purchased on a per report basis and monthly  software rental programs.
New  sales of  CRIS(TM)  products  constituted  1% of EBS's  revenues  for third
quarter 1998 and new sales of ACES(TM)  products  comprised 11% of the revenues.
Outsourcing  revenues accounted for approximately 36% of EBS's revenues in third
quarter 1998, while consulting and education  accounted for  approximately 8% of
EBS's revenue. Other income,  including interest income, comprised the remaining
3% of revenues for the third quarter 1998.

     QuickCREDIT Corp., (QCC), a wholly owned subsidiary,  contributed sales for
the third quarter of 1998 in the amount of $527,821.  Of the QCC sales,  100% of
the revenues were derived from the sale of individual and business credit report
products.  They  primarily  consisted of merged in-file credit reports and RMCRs
(Residential Mortgage Credit Reports.)

     MultiTask Computer Systems, Inc.,  (MultiTask),  a wholly owned subsidiary,
contributed  sales for the third  quarter of 1998 in the amount of $194,738.  At
MultiTask,  sales of computer and network  hardware  consisted of $122,344 while
$72,394 was due to sale of consulting services and installation charges.

     The cost of revenues  was  $723,793  in third  quarter  1998,  which was an
increase from the Company's third quarter 1997 costs of $409,302.  Gross profit,
$1,687,934,  as a  percentage  of  revenues  was 70% in  third  quarter  1998 as
compared to the 72%, or $1,078,080,  for the third quarter 1997. The increase in
costs and  decrease in gross  profit as a  percentage  resulted  primarily  from
hardware  purchases,  cost of  increased  amounts  of  credit  reports  and from
increased labor costs associated with the outsourcing business.

     Selling,  general and administrative  expenses were $2,014,084 in the third
quarter 1998 compared to $749,567 in the 1997 comparable  period, an increase of
$1,264,517 and a cost of revenues increase of 43%.  Management believes that the
monetary increase in selling,  general and  administrative  expenses were due to
the increased  number in the sales force as the Company prepared for the release
of its  industry  leading  ACES 98 and  DESC  software  products.  The  increase
included the additional  one-time costs of  consolidating  and integrating  five
acquisitions  which  were  accomplished  in the second  quarter  of 1998,  while
continuing the  investment in its expanding  software  product lines.  Adding to
that increase were the additional costs  associated with the professional  sales
force at EBS and the unforseen time delays  associated  with the  development of
the new software offerings.  Non-cash imputed compensation expense for the third
quarter 1998 was $47,390, compared to $23,420 for third quarter 1997.

     During the quarter,  the Company incurred several one-time  expenses.  They
included  moving  expenses at both  MultiTask  and Credit Bureau  Services,  the
closing of the Florida Credit Bureau,  while consolidating its business into the
Jacksonville  office. Also included was a new computer system and the associated
software cost, installation, and operations training for our Jacksonville office
and a R&D charge at EBS of approximately $100,000 for the development of DESC.

     The Company's net income in third quarter 1998 includes  non-cash  expenses
of approximately  $57,275 as compared to non-cash  expenses of $18,604 for third
quarter  1997.  Such  expenses  were  incurred as a result of  depreciation  and
amortization  of  assets  acquired  with the  acquisition  of EBS as well as the
goodwill  created in the  acquisition of all of the Triangle  subsidiaries.  The
increase of the non-cash expenses was again primarily  attributable to increased
monetary cost of revenues.

     Interest expense was $24,959, in third quarter 1998, compared to $30,760 in
the  third  quarter  1997,  reflecting  interest  paid on a  promissory  note of
$1,600,000.  The promissory note,  which is an 8.25%,  plus $25,000 per month of
principal,  with a $775,000 balloon payment due February 1, 2000, is held by the
selling  shareholders  of EBS,  created during the sale of stock to the Company.
Minority  interest  for the third  quarter  1998 was  eliminated  by the Company
acquiring the  remaining 5% of the  outstanding  shares of  Engineered  Business
Systems, Inc. The acquisition completed on December 31,1997 involved the Company
purchasing the remaining 5% of the shares of Engineered  Business Systems,  Inc.
from minority interest holders using a combination of cash and stock.

     The Company's net loss from  continuing  operations  for third quarter 1998
was $571,087,  compared to a gain of $269,664 from the third quarter 1997.  This
was due to the cost of acquiring and supporting an expanded  professional  sales
organization to sell the ACES 98 and DESC software products,  which were delayed
in their release to the  marketplace.  This delay also  precipitated  additional
corresponding development costs which occurred during the quarter. Also included
in the charge was the cost of software  amortization  of $67,000 for the quarter
and a charge for an increase in the allowance for doubtful accounts of $80,000.

     During the third quarter,  the Company rescinded the TriMax Systems,  Inc.,
(TriMax)  acquisition  and  reported  a loss  from  discontinued  operations  of
$289,162.  This  rescission was  precipitated  by material  information  learned
during the third  quarter  with regard to operating  TriMax as a viable  entity.
TriMax was an IBM Reseller of mid-range  computer  hardware,  which was the main
attraction  to  Triangle.  It was learned  that IBM was  beginning a  compliance
investigation   into  the  sales  practices  of  TriMax  with  regard  to  their
requirements of providing value-added services on each sale made by TriMax. This
investigation  resulted  in TriMax  being  terminated  from the IBM  program and
dismissed as a re-seller of IBM hardware and software  products.  Because  these
violations occurred prior to the acquisition of TriMax by Triangle,  the Company
rescinded the acquisition by agreement with TriMax.  All shares of Triangle that
were issued in the TriMax acquisition were returned to the Company and canceled.
Total net income (loss) for the third quarter 1998,  totaled  $860,249  versus a
gain of $269,664 for the third quarter of 1997.

     The Company has established a provision for a restructuring  reserve in the
amount of $58,000 to cover severance  expenses  associated with the reduction in
force.  As a result of this  action,  the  Company  will  realize an  annualized
reduction  in  expenses  of  approximately  $360,000.  At the  end of the  third
quarter,  the Company  reduced  expenses  and head count by reducing the Company
staff by 9%; eliminating  several temporary technical  positions;  discontinuing
the  guaranteed  compensation  of the  sales  organization;  and  returning  the
on-going  software  development and maintenance to our own development team with
the completion of the outside software development efforts.

Liquidity and Capital Resources

     The Company has funded the vast majority of its working capital and capital
expenditure  requirements  with cash provided from  operations  and from private
funds  raised  from the sale of  Restricted  Common  Stock to  employees  of the
Company.  The primary  source of cash  receipts is from  payments for  CRIS(TM),
ACES(TM),  and outsourcing revenues and accounts receivables.  The management of
the Company believes cash flows from continuing operations will be sufficient to
fund expenditures into the foreseeable future.

     As of September  30, 1998,  the Company had working  capital of $533,846 an
increase from the working  capital  balance of $82,818 as of September 30, 1997.
The September  30, 1998 working  capital was derived from  accumulated  sales of
private  placement  shares of common stock to employees of the Company  totaling
$1,525,316  for the nine months ended  September 30, 1998.  Cash  resources were
used to fund  QuickCREDIT  Corp.,  following the  acquisitions  of Credit Bureau
Services,  Inc., Florida Credit Bureau, Inc., and EJG Services, Inc., as well as
for working capital for TriMax Systems,  Inc., and MultiTask  Computer  Systems,
Inc.

     In  October,  the  Company  completed a  financing  for $1.5  million  with
Waterside  Capital  Corporation,  (Waterside)  a  Virginia  based  (SBIC)  small
business  investment  company.  The Company has agreed to issue 1,500  shares of
Class C Preferred Stock with a dividend rate of 12.5% per annum.  The shares are
redeemable by the Company at any time without penalty. The preferred shares will
be  redeemed  by the  Company at the end of a  five-year  period.  Additionally,
500,000 warrants were issued to Waterside.  Each warrant  entitles  Waterside to
purchase one share of common  stock in the Company at prices  ranging from $2.15
to $3.00  per  share.  In light of the  fact  that the  Company  was not able to
lawfully  assign rights and  preferences to a class of preferred stock under its
Articles of  Incorporation,  the Company  issued to Waterside a promissory  note
(Note) in the  aggregate  principal  amount of $1,500,000 in lieu of issuing the
preferred  stock at  closing.  The Note  bears  interest  at the rate of 14% per
annum; provided,  however, that should the Company issue to Waterside the shares
of the Company's Series C Preferred Stock  contemplated in the transaction prior
to January 15, 1998, all of the Company's  obligations under the Note, including
without limitation its obligation to pay interest, shall terminate.  Each of the
Company's  subsidiaries  has guaranteed the Note. The proceeds of this financing
were used to reduce the outstanding  note payable to the former owners of EBS by
an amount of  $375,000,  and the  balance  was used for  working  capital and to
accelerate the development of our current software development projects.

     In early November, the latest releases of ACES 98, DESC and our QuickCREDIT
for Windows software  programs were all released and fully paid for and reported
in good working order.

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
they all are.  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.

<PAGE>




                                                   
                           PART II - OTHER INFORMATION



Item 2. Changes in Securities and Use of Proceeds

     During the three months ended  September 30, 1998, the Company sold 296,712
shares of common  stock  resulting  in  proceeds of  $596,957.  During the three
months ended September 30, 1998,  20,000 stock options were exercised  resulting
in the issuance of 20,000 shares of common stock and proceeds of $17,500.

Item 6. Exhibit and Reports on Form 8-K

     A. Exhibits

     None.

     B. Report on Form 8-K

     Form 8-K dated April 30, 1998.


<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: 11/30/1998               By: /s/  Vito Bellezza
                                    Vito Bellezza
                                        President, Chairman of the Board,
                                        Chief Financial Officer, Chief Executive
                                            Officer and Director