SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                    FORM 10-Q

(MARK ONE)

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

For the quarterly period ended July 31, 1999 or

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

Commission file number 1-10366

                          LASER RECORDING SYSTEMS, INC.
                 (Name of Small Business Issuer in Its Charter)

                   NEW JERSEY                          22-2582847

         (State or Other Jurisdiction of            (I.R.S. Employer
         Incorporation or Organization)            Identification No.)

              1359 New York Avenue
          Huntington Station, New York                    11746
    (Address of Principal Executive Offices)           (Zip Code)
                                 (800) 786-1352
              (Registrant's Telephone Number, Including Area Code)


Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 7,800,000 shares of the
Company's Common Stock, no par value, were outstanding as of December 31, 1999.
<PAGE>

Item 1 Financial Statements

                          LASER RECORDING SYSTEMS, INC.
                                  BALANCE SHEET

ASSETS                                                             January 31,
                                                July 31, 1999         1999
                                                -------------      -----------
CURRENT ASSETS:
Cash and Cash Equivalents                        $     8,707       $    10,498
                                                 -----------       -----------
   Total Current Assets                          $     8,707       $    10,498
                                                 -----------       -----------
      Total Assets                               $     8,707       $    10,498
                                                 ===========       ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accrued Expenses                                 $        --       $        --
   Total Current Liabilities                              --                --
Loan Payable--Stockholder                                 --                --
                                                 -----------       -----------
      Total Liabilities                          $        --       $        --
                                                 -----------       -----------

Stockholders' Equity
Preferred Stocks - 2,200,7 to 9 Preferred
Shares; 225,321 Class B Cumulative
Preferred Shares; 1,080,000 Class C
Convertible Preferred Shares issued and
outstanding on January 31, 1998
 Common Stocks - 10,000,000 shares
authorized, 5,825,592 issued and
outstanding on Jan. 31, 1999; 4,798,815
issued and outstanding on Jan. 31, 1998            7,408,910         7,408,910
 Paid-in Capital                                          --
Retained Earnings                                 (7,400,203)       (7,398,412)
   Total Stockholders' Equity                          8,707            10,498
                                                 -----------       -----------
Total Liabilities and Stockholders' Equity       $     8,707       $    10,498
                                                 ===========       ===========

    The accompanying notes are an integral part of the financial statements.
<PAGE>

                          LASER RECORDING SYSTEMS, INC.
              STATEMENT OF REVENUES, EXPENSES AND RETAINED EARNINGS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                     Three Months Ended                    Six Months Ended
                                                                           July 31                              July 31
                                                                  1999               1998               1999               1998
                                                                  ----               ----               ----               ----
<S>                                                            <C>                <C>                <C>                <C>
Revenue:

Interest Income                                                $        29        $        31        $        58        $        63
Recovery of Bad Debts                                                   --                 --                 --                 --
                                                               -----------        -----------        -----------        -----------
Total Revenues                                                 $        29        $        31        $        58        $        63
                                                               -----------        -----------        -----------        -----------

Expenses:

Professional Fees                                                       --              1,973                 --              1,973
Administrative Expenses                                                674                                   674
Taxes                                                                1,110                                 1,110                 --
Bank Charges                                                            33                 10                 65                238
                                                               -----------        -----------        -----------        -----------
Total Expenses                                                       1,817              1,983              1,849              2,211
                                                               -----------        -----------        -----------        -----------
Net Loss                                                            (1,788)            (1,952)            (1,791)            (2,148)
Net loss per share                                             $     (0.00)       $     (0.00)       $     (0.00)       $     (0.00)
                                                               -----------        -----------        -----------        -----------
Shares used in computing net loss per share                      7,800,000          4,798,815          7,800,000          4,798,815
                                                               ===========        ===========        ===========        ===========
</TABLE>

    The accompanying notes are an integral part of the financial statements.
<PAGE>

                          LASER RECORDING SYSTEMS, INC.
                        ANALYSIS OF STOCKHOLDERS' EQUITY
                                    JULY 31,

<TABLE>
<CAPTION>
                                                                   1999             1998
                                                                   ----             ----
<S>                                                             <C>            <C>
Preferred Stocks -- 2,200,729 Preferred Shares; 225,321 Class
B Cumulative Preferred Shares; 1,080,000 Class C
Cumulative Convertible Preferred Shares issued and
outstanding                                                                    $ 2,507,364

Paid in Capital                                                                     92,775

Conversion of all Preferred  Stocks to Common Stocks            $ 2,507,364
Conversion of Liabilities to Common Stocks                          233,906
Conversion of Paid in Capital to Common Stock                        92,775
Common Stocks at the beginning of year                            4,574,865      4,574,865
                                                                -----------
7,800,000 Common Stock issued and outstanding                   $ 7,408,910
                                                                ===========

Retained Earnings at the beginning of the year                  $(7,398,412)   $(7,396,194)
Net Income/(Loss)                                                    (1,791)          (197)
                                                                -----------    -----------
Retained Earnings at the end of the year                        $(7,400,203)   $(7,396,391)
                                                                -----------    -----------

Total Stockholders' Equity                                      $     8,707    $  (221,387)
                                                                ===========    ===========
</TABLE>

    The accompanying notes are an integral part of the financial statements.
<PAGE>

                          LASER RECORDING SYSTEMS, INC.
                             STATEMENT OF CASH FLOWS

                                                              Six Months Ended
                                                                  July 31
                                                                (Unaudited)
                                                             1999        1998
                                                             ----        ----
Cash flows from operating activities:
Net Income                                                 $     --    $     --
                                                           --------    --------

Cash flows from financing activities:
Maintaining of the Corporate Entity                          (1,791)     (2,148)
                                                           --------    --------

Net cash provided by (used in) financing activities          (1,791)     (2,148)
                                                           --------    --------
Increase (Decrease) in Cash                                  (1,791)     (2,148)
Cash -- Beginning of period                                  10,498      13,245
                                                           --------    --------
Cash -- End of period                                      $  8,707    $ 11,097
                                                           ========    ========

    The accompanying notes are an integral part of the financial statements.
<PAGE>

                          LASER RECORDING SYSTEMS INC.
                        NOTES TO THE FINANCIAL STATEMENTS
                               AS OF JULY 31, 1999

GENERAL

Laser Recording Systems, Inc. (the Company) was organized in 1985 as the
successor to several other businesses by the original founder. In 1988, Poly
Ventures, Limited Partnership held approximately 70% of the outstanding voting
shares and maintained a controlling interest in the Company until 1998. In 1998
several investors acquired the remaining interest from Poly Ventures.

As reported in form 10- Q, on October 31st 1993, the Company ceased operations
and laid off all its employees on August 16 1993 . The Company handed over
projects to their customers on that date. Since October 31st 1993, the Company
did not file any reports with the Securities and Exchange Commission.

BASIS OF PRESENTATION

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles and reflect all adjustments, which in
the opinion of management are necessary for a fair presentation of the results
for the periods shown. The results of operations for such periods are not
necessarily indicative of the results expected for the full fiscal year or for
any future period.

The accompanying financial statements should be read in conjunction with the
audited financial statements of Laser Recording Systems, Inc. for the fiscal
year ended January 31, 1999 and the notes thereto contained in Laser Recording
System, Inc. Annual report on Form 10-K, filed with the Securities and Exchange
Commission.

Note 1

In 1998 several investors purchased from Poly Ventures 1,975,408 Common Shares,
2,200,729 Preferred Shares, 225,321 Class B Cumulative Preferred Shares and
1,080,000 Class C Cumulative Preferred Shares. Included in the purchased were
two notes for the total of $190,000.

In 1999 all classes of the preferred shares, accrued dividends and interest,
paid-in capital and loans payable were converted to capital stock. As a result
the Company's board of Directors on January 15, 1999 authorized issuing
3,001,185 Common Shares for all liabilities and preferred stocks.

Note 2

The Company discontinued operation on August 16, 1993, however the Company
maintain certain functions to continue the existence of the Corporation.
Stockholders services and maintaining of records were handled on an ongoing
basis. In 1999, the Company filed all necessary tax returns for the years of
February 1, 1993 to January 31, 1999. For financial statement purposes all
revenues and expenses are considered non-operating transactions from February 1,
1994 to the present.
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

Results of Operations

The Company has no sources of revenue. Expenses reflect only the minimum cost of
maintaining the Company's operations and miscellaneous expenses associated with
seeking a merger partner. In view of these limited operations, management does
not believe that a comparison of specific line items from period to period it
would be meaningful.

Liquidity and Capital Resources

The Company's financial statements have been prepared assuming that it will
continue as a going concern. As shown in the financial statements, at July 31,
1999 the Company had total assets of $7,597 and an accumulated deficit of
$7,400,203. The Company obtains its entire financial support from loans from the
Company's majority shareholder. As January 15, 1999 all outstanding shareholder
loans, as well as all outstanding preferred stock, were converted into common
stock. However, it is likely that additional loans from that shareholder will be
necessary if the Company is to pursue its plans to merge with an operating
enterprise. These factors, among other things, raise substantial doubt about its
ability to continue as a going concern. The financial statements do not include
any adjustments relating to the recoverability and classification of recorded
asset amounts or the amounts or classification of liabilities that might be
necessary should the Company be unable to continue in operation.

PART II -- OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibit No.
-----------

27    Financial Data Schedule.

                                   SIGNATURES

      Pursuant to the requirements 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.


                                    LASER RECORDING SYSTEMS, INC.
                                    (Registrant)

Date: January 6, 2000
<PAGE>

                                    /s/ Walter Hinchcliffe
                                    --------------------------------------------
                                    Walter Hinchcliffe
                                    President

Date: January 6, 2000

                                    /s/ Carl Lanzisera
                                    --------------------------------------------
                                    Carl Lanzisera
                                    Chief Financial Officer
                                    (Principal Financial and Accounting Officer)