SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549




                                  FORM 10-QSB

              (X)       Quarterly  Report Pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1934

                      For the quarterly period ended    October 31, 1997

                                       or

              ( )     Transition Report Pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1939

                      For the transition period from              to


Commission File Number:  33-5820-LA




                               SEMICON TOOLS, INC.
      (Exact name of small business issuer as specified in its charter)




          Nevada                                77-0082545
(State or other jurisdiction of            (I.R.S. Employer
incorporation or organization)             Identification Number)


                 111 Business Park Drive, Armonk, New York 10504

                    (Address of principal executive offices)


Issuer's telephone number, including area code:            (914) 273-1400
                                                          -----------------


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the Registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.

                                                  Yes X   No


Indicate the number of Shares  outstanding  of each of the  Issuer's  classes of
common stock, as of the latest practicable date.


            Class                            Outstanding at October 31, 1997

Common Stock, par value $.001
 per share                                               9,867,500




<PAGE>





























                                      INDEX


Part I.   Financial Information


   Item 1.  Condensed consolidated financial statements:

         Balance sheet as of October 31, 1997                            F-2

         Statement of income for the nine and three
           months ended October 31, 1997 and 1996                        F-3

         Statement of cash flows for the nine months ended
           October 31, 1997 and 1996                                     F-4

         Notes to condensed consolidated financial statements        F-5 - F-11


   Item 2.  Management's discussion and analysis of
                 financial condition



Part II.  Other information


   Signatures







<PAGE>



                      SEMICON TOOLS, INC. AND SUBSIDIARIES

             CONDENSED CONSOLIDATED BALANCE SHEET - OCTOBER 31, 1997
                                   (UNAUDITED)





                                     ASSETS





Current assets:
  Cash                                                           $   57,972
  Accounts receivable, less allowance
   for doubtful accounts of $6,500                                  271,370
  Inventory                                                         409,798
  Prepaid expenses and other assets                                  81,475
  Deferred tax asset, current portion                                32,964
                                                                  ----------

    Total current assets                                            853,579
                                                                    -------

Property and equipment                                              399,311

Other assets:
   Security deposits                                                 15,685
   Goodwill, net of amortization                                     99,720
   Deferred tax asset, net of current portion                        20,186
                                                                  ----------

                                                                    135,591
                                                                 -----------

                                                                 $1,388,481
                                                                 ==========



                      LIABILITIES AND SHAREHOLDERS' EQUITY


Current liabilities:
  Current portion of long-term debt                             $   35,944
  Notes payable, bank                                               50,000
  Accounts payable                                                  94,605
  Accrued interest                                                 125,086
  Accrued expense and payroll taxes payable                         12,691
                                                                 ----------

   Total current liabilities                                       318,326
                                                                   -------

Long-term debt, net of current portion                             214,374 
                                                                ----------

Commitments and contingencies

Shareholders' equity:
  Common stock par value $.001; 100,000,000
   shares authorized; 9,867,500 shares issued and
   outstanding                                                      9,868
  Additional paid in capital                                    2,517,945
  Retained earnings (deficit)                                 ( 1,672,032)
                                                               ----------

                                                                  855,781
                                                               ----------

                                                               $1,388,481
                                                               ==========


     See notes to condensed consolidated financial statements.
                                                                           F-2


<PAGE>



                      SEMICON TOOLS, INC. AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENT OF INCOME

              NINE AND THREE MONTHS ENDED OCTOBER 31, 1997 AND 1996
                                   (UNAUDITED)









                              

                             Nine months ended             Three months ended
                               October 31,                     October 31,
                             1997        1996                1997       1996
                             ----        ----                ----       ----

Net sales               $1,491,823  $1,111,072          $  557,043   $ 364,070

Cost of sales              497,013     287,396             183,934      77,594
                        ----------   ----------           ---------- ----------

Gross profit               994,810     823,676             373,109     286,476

Selling, general and
 administrative expenses   817,536     700,938             286,320     257,993
                          ---------- ----------           ---------- ----------

Income from operations     177,274     122,738              86,789      28,483

Other charge, interest
 expense                    27,667      26,078               8,548       8,176
                         ----------  ----------            ---------- ----------

Income before income
 taxes                     149,607      96,660              78,241      20,307
                         ----------  ----------            ---------- ----------

Income tax expense
 (benefit):
  Current                               32,864                           6,904
  Deferred                  40,600  (   32,864)             14,036    (  6,904)
                         ----------  ---------             ---------- ----------
                            40,600          0               14,036
                         ----------  ---------             ---------- ---------

Net income              $  109,007  $  96,660             $ 64,205 $    20,307
                         ==========  =========              ==========  =======

Income per common share    $  0.01  $    0.01            $     0.00    $   0.00
                         ========== =========               ==========  =======

Weighted average number
 of common shares
 outstanding           13,742,500   7,026,898            13,867,500   8,570,489
                       ==========   =========            ==========  ==========











     See notes to condensed consolidated financial statements
                                                                            F-3
<PAGE>



                      SEMICON TOOLS, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

                   NINE MONTHS ENDED OCTOBER 31, 1997 AND 1996
                                   (UNAUDITED)




<TABLE>
<CAPTION>
<S>                                                                                     <C>                <C> 
                                                                                        1997               1996
                                                                                        ----               ----

Operating activities:
  Net income                                                                          $109,007           $ 96,660
  Adjustments to reconcile net income to
   cash provided from operating activities:
     Depreciation and amortization                                                      31,949             11,012
     Compensatory stock issued                                                                             30,000
     Changes in other operating assets and
      liabilities:
        Accounts receivable                                                         ( 108,931)         (  75,465)
        Inventories                                                                 (  70,246)         (  42,485)
        Prepaid expenses and other current assets                                       40,768         (  28,327)
        Accounts payable, accrued expenses and
         payroll taxes payable                                                      (  40,756)         ( 187,225)
                                                                                     --------           --------

        Net cash used in operating  activities                                      (  38,209)         ( 195,830)
                                                                                     --------           --------

Investing activities:
  Increase in other assets                                                          (     800)
  Purchase of property and equipment                                                (  50,646)         (  10,503)
                                                                                     --------           --------

        Net cash used in investing activities                                       (  51,446)         (  10,503)
                                                                                     --------           --------

Financing activities:
  Proceeds from financing                                                              217,349
  Proceeds from issuance of common stock                                                   500            328,125
  Decrease in notes payable, shareholders'                                          (  84,462)         (  31,649)
  Payment of debt                                                                   ( 102,094)         (  34,695)
                                                                                     --------           --------

        Net cash provided by financing activities                                       31,293            261,781
                                                                                      --------           --------

Net increase (decrease) in cash                                                     (  58,362)             55,448

Cash, beginning of period                                                              116,334             38,866
                                                                                      --------           --------

Cash, end of period                                                                   $ 57,972           $ 94,314
                                                                                      ========           ========

Supplemental disclosure:
  Cash paid during the period for:
    Interest                                                                          $ 22,761           $  2,597
                                                                                      ========           ========
    Income taxes                                                                      $      0           $      0
                                                                                      ========           ========

Supplemental schedule of non-cash investing and financing activities:
  Issuance of common stock for purchase of
   subsidiary                                                                                            $125,048
  Issuance of common stock for conversion of debt,
   agreements, services and payment of interest                                                            36,000
                                                                                                         --------
                                                                                                         $161,048
                                                                                                         ========




</TABLE>



     See notes to condensed consolidated financial statements.
                                                                            F-4


<PAGE>



                      SEMICON TOOLS, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS







1.  The accompanying unaudited financial statements have been prepared in
    accordance with generally accepted accounting principles for interim
    financial information and with the instructions to Form 10-QSB.
    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 have been included.  The
    results of operations for the three months ended is not necessarily
    indicative of the results to be expected for the full year. For further
    information, refer to the consolidated financial statements and footnotes
    thereto included in the Company's annual report for the year ended
    January 31, 1997 included in its Annual Report filed on Form 10-KSB.


2. Organization of the Company:

    Semicon Tools, Inc. (the "Company"), a Nevada corporation, is primarily in
    the business of selling small precision disposable diamond tools used to
    manufacture electronic components and devices.

    One of the Company's  wholly-owned  subsidiaries,  East Coast Sales Company,
    Inc.  ("ECS")  is  a  Connecticut   corporation  which  distributes  and
    fabricates   technical  ceramic  products  and  distributes  clean  room
    supplies  and tools.  This  Company,  which was  acquired on January 26,
    1990,  was accounted for in a manner similar to the pooling of interests
    method of accounting.  The total cost of the acquisition,  $309,000, was
    paid for by the issuance of a $300,000 note, bearing interest at 10% per
    annum, and the issuance of 9,000,000 shares (60,000 shares,  as restated
    - see Note 10) of the  Company's  $.001 par value common stock (see also
     Note 5).

    The Company's other wholly-owned  subsidiary,  DTI Technology,  SDN BHD is a
    Malaysian  company which  manufactures a product line similar to that of
    Semicon  Tools,  Inc.  Semicon  Tools,  Inc.  acquired the assets of DTI
    Technology, SDN BHD on June 22, 1996. The total cost of the acquisition,
    $125,048,  was  paid  for by  the  issuance  of  300,000  shares  of the
    Company's  $.001 par value common stock with a negotiated  fair value of
    $.42 per share.



3. Property and equipment:

    Major classifications of property and equipment are as follows:

                  Manufacturing equipment                         $618,538
                  Other equipment                                  277,984
                  Office equipment                                  20,535
                                                                   --------
                                                                   917,057
                  Less accumulated depreciation                    517,746
                                                                   -------

                                                                  $399,311
                                                                  ========







                                                                         F-5


<PAGE>



                      SEMICON TOOLS, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS











4.  Goodwill:

    On  January 26, 1990,  the Company  acquired  East Coast Sales  Company (its
    wholly-owned  subsidiary)  for a cost of $309,000.  The  purchase  price
    exceeded  the fair  value of the  assets by  $134,281  which  amount was
    assigned to goodwill,  and is being amortized on a  straight-line  basis
    over  forty  years.  Accumulated  amortization  of  goodwill  aggregated
    $34,561 as of October 31, 1997.




5. Commitments and contingencies:

    The Company is currently  obligated  under a lease  agreement for office and
    manufacturing  facilities.  This lease,  which  expires on May 31, 1998,
    requires future minimum rental payments of $22,498.

    Rent expense for the nine months ended  October 31, 1997 and 1996 amounted
    to $28,923.

    The Company  also leases five  vehicles  under  operating  leases with terms
    expiring  through 2000.  Total lease expense was $27,538 and $11,895 for
    the nine months ended October 31, 1997 and 1996, respectively.

      Future minimum rentals are as follows:



                           October 31, 1998                 $35,567
                           October 31, 1999                  35,567
                           October 31, 2000                  21,796
                                                            -------

                                                            $92,930
                                                            =======


      The Company has entered into written sales  agreements with two employees.
      The  agreements  are on a year to year basis and call for the payment of
      commissions,  varying  from 1 to 4  percent,  on the  sale  of  selected
       products.














                                                                         F-6


<PAGE>



                      SEMICON TOOLS, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS










5.  Commitments and contingencies (continued):

    On March 6, 1996,  the Company  entered into an investment  agreement for a
    three year term.  The consultant  shall assist  management in broadening
    the Company's exposure to the financial community and securing necessary
    funding to meet its needs  according to the terms of the agreement.  The
    consultant  shall be  compensated by having the option to purchase up to
    6,000,000 of the Company's  common shares at prices varying from $.10 to
    $1.75 during the period commencing on March 6, 1996 and ending September
    30, 1996.  Either party may terminate  this agreement upon notice to the
    other.  As of April  30,  1996,  $825,000  shares  had been  issued  for
    $82,500.  On September 30, 1996,  after 2,550,000 shares had been issued
    for $240,000, this agreement was cancelled.

   On April 8,  1996,  the  Company  reached a  settlement  with  their  prior
   accountants  of fees due from  the  Company.  The  agreement  calls  for
   monthly  installments of $4,000  commencing  April 1, 1996 and ending on
   September 1, 1996 for a total $24,000.  The balance reflected at January
   31, 1996 on the Company's accounts payable was $28,068.

    On  May 1, 1996, the Company  entered into  employment  agreements  with its
    President and Vice  President.  The terms of the  agreements  covers one
    five year period expiring on January 31, 2001.  Compensation is set at a
    base of  $100,000  and  $75,000 for the  President  and Vice  President,
    respectively,  with  each  getting  a  bonus  of 5% of the  increase  in
    consolidated  income from the previous year. Each employee also received
    2,000,000  stock  options  at  $.10.  None of  these  options  had  been
    exercised as of October 31, 1997.



6. Long-term debt:
                                              Long-term     Current
                                      Rate     Portion      Portion    Maturity


     Note payable, shareholder   (a)   10%      $114,374    $35,944      2001

     Note payable, shareholders  (b) 13.5%-15%   100,000                 1998
                                                --------    -------
                                                $214,374   $35,944
                                                ========   =======















                                                                          F-7


<PAGE>



                      SEMICON TOOLS, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS












6.  Long-term debt (continued):


      (a)     On April 23, 1997,  the Company  renegotiated  an existing loan
              with  a  certain  shareholder  resulting  in a  new  obligation
              payable in monthly installments of $2,648 including interest at
              10%.

      (b)     Notes payable to two  shareholders  in the aggregate  amount of
              $125,000.  These notes are  subordinate  to the borrowing  from
              Citibank  and  will  become  due when the bank is paid in full.
              Both shareholders have waived their demand rights on the notes.


      The maturities of these loans are as follows:


                           October 31, 1998                           $ 35,944
                           October 31, 1999                            139,707
                           October 31, 2000                             43,866
                           October 31, 2001                             30,801
                                                                      --------

                                                                      $250,318
                                                                      ========



7. Income taxes:

    As of October 31, 1997 the Company had net  operating  loss  carryovers  of
    approximately $620,000 expiring in various years through 2008.

    Effective February 1, 1993, the Company adopted Statement of Financial
    Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No.
    109"), the cumulative effect of which was not material to the
    consolidated financial statements and is therefore not presented
    separately.  Under the asset and liability method of SFAS No. 109,
    deferred tax assets and liabilities are recognized for the future tax

















                                                                          F-8


<PAGE>



                      SEMICON TOOLS, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS











7.  Income taxes (continued):

     consequences   attributable  to  the  differences   between  the  financial
statement  carrying  amounts  of  existing  assets  and  liabilities  and  their
respective tax bases and operating loss and tax credit  carryforwards.  Deferred
tax assets and  liabilities  are measured  using  enacted tax rates  expected to
apply to taxable  income in the year in which those  temporary  differences  are
expected to be recovered or settled.  Under SFAS No. 109, the effect on deferred
tax assets and  liabilities  of a change in tax rates is recognized in income in
the period that includes the enactment date;  this effect was immaterial  during
the year  ended  January  31,  1997 and 1996.  The  deferred  tax asset less the
deferred tax liabilities has been reduced by a valuation  allowance equal to the
net tax benefit in excess of the estimated  taxable  profits over the next three
years.



      Provision for income taxes (benefit):


                                                       1997              1996
                                                       ----              ----

            Current                                                   $32,864
            Deferred                                 $40,600         ( 32,864)
                                                    -------            -------
                 Total benefit                       $40,600          $     0
                                                     =======           =======



      A reconciliation of the income tax provision at the federal statutory rate
        to the income tax provision at the effective tax rate is as follows



                                                                1997      1996
                                                                ----      ----
            Computed tax at the expected
              statutory rate                                  $40,770       0
            Foreign (income) loss                            (    170)
                                                               -------

            Income tax expense                                $40,600       0
                                                               =======      =
















                                                                          F-9


<PAGE>



                      SEMICON TOOLS, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS









7.  Income taxes (continued):


      The  components  of  deferred  tax assets and  liabilities  consist of the
     following:

            Deferred tax asset:

              Net operating loss carryforward          $498,150        $570,000
                                                       --------        --------

                 Total deferred tax asset               498,150         570,000

                 Valuation allowance                  ( 445,000)      ( 570,000)
                                                       --------        --------

                                                       $ 53,150          $    0
                                                       ========        ========



8. Computation of earnings per share:

                                                Nine months        Three months
                                                   ended              ended
                                                 October 31,        October 31,
                                                    1997               1996

         Weighted average number of common
           shares outstanding                    9,742,500          9,867,500

         Assumed conversion stock options        4,000,000          4,000,000
                                                ----------         ----------

         Weighted average number of common
           shares outstanding                   13,742,500         13,867,500
                                                ==========         ==========




9. Modification of shareholders' loans:

    On April 23, 1997,  the Company  modified the terms of two notes payable to
    a certain shareholder. The shareholder has agreed to reduce the interest
    rates from 14% to 10%. The new note balance includes  previously  unpaid
    principal and interest with the new payments beginning May 1, 1997.














                                                                          F-10


<PAGE>



                      SEMICON TOOLS, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS










10. Subsequent events:

      Acquisition of Teik Tatt Holding Co. Sdn Bhd:

      On November  6, 1997,  the  Company  purchased  100% of the  outstanding
      common shares of Teik Tatt Holding Co. Sdn Bhd as a  transaction  to be
      accounted for as a purchase.  The Company issued  10,000,000  shares of
      its common shares pursuant to the acquisition. The stock will be valued
      at the net book value of assets acquired at historical cost.

      Teik Tatt Holding Co. Sdn Bhd,  founded in 1979,  is a  manufacturer  of
      rope, yarn, twine and high quality rubber bands.  Teik Tatt Holding Co.
      Sdn Bhd recently  expanded its business  into the recycling of plastics
      and non ferrous metals from cable and precious  metals from  electronic
      components and circuit boards obtained from obsolete computers.

      As a result of this  acquisition,  the shareholders of Teik Tatt Holding
      Co. Sdn Bhd will own approximately 50% of the outstanding shares of the
      Company.

        The  assets  acquired  and the  liabilities  assumed  (unaudited)  as of
         October 31, 1997, the date of the financial statements, are as follows:


                    Current assets                                 $16,004,758
                    Noncurrent assets                               13,045,992
                                                                    ----------
                                                                   $29,050,750
                                                                   ===========

                    Current liabilities                            $15,633,130
                    Long-term debt                                   6,408,952
                                                                     ---------
                                                                    22,042,082
                                                                    ==========

                    Common stock                                     2,673,438
                    Retained earnings                                4,335,230
                                                                     ---------
                                                                     7,008,668
                                                                     =========

                                                                   $29,050,750
                                                                   ===========



















                                                                           F-11


<PAGE>



-                 Management's Discussion and Analysis of
                  Financial Condition and Results of Operations







1.       Financial Condition

         The Company's  financial  condition  continues to improve following its
         third quarter 1997  successful  and  profitable  operating  results.  A
         comparison  of the  Balance  Sheet at October 31, 1997 to July 31, 1997
         indicates:

                 1.   Total assets  increased by 2.9% to $1,388,481  and current
                      assets  increased  by 4.0% to $853,579,  following  instep
                      with higher sales volume and a profitable operation.

                 2.   Current  liabilities  increased  by 4.4%  mostly due to an
                      increase in a bank notes  payable  with the funds used for
                      working capital.

         Other Balance Sheet comparisons for the same periods are:

                 1.   The Company's net worth  continued to rise. At October 31,
                      it stood at  $855,781  ($.062  per share) up 8.1% or $.005
                      per share.

                 2.   Cash   decreased   by   $21,315   or  26.9%  but   remains
                      satisfactory  reflecting the Company's  balanced approach,
                      in view of the increase in sales  volume,  to handling its
                      accounts  receivable  (up 5.8%),  inventory (up 15.3%) and
                      the  aforementioned   notes  payable  increase  (see  III,
                      Liquidity  and  Capital   Resources   Cash  for  liquidity
                      comments).



II.      Results of Operations

         Net sales for the  quarter  ended  October  31,  1997 were  $557,043 as
         compared to $364,070 for the comparable  period ended October 31, 1996,
         an increase of  approximately  53.0%.  During the quarter,  the Company
         experienced  a 5.6%  increase in the sales of its  ceramic  lines and a
         38.2%  increase in its  scribes  line as the main  contributor  to this
         improvement.

         The quarter's net sales results was its highest quarter in its history.
         Management  believes,  although no  assurance  can be given,  that this
         trend will produce a record  annual sales for the current  fiscal year.
         This belief is supported by the current  relatively high bookings level
         of  $500,000,  approximately  equal  to  that  of  last  quarter  at  a
         comparable point in time.

         The  Company's  gross profit  margin for the third  quarter of 1997 was
         70.0%,  a reduction  of 11.1% as compared to the third  quarter of 1996
         when it was 78.7%.  Management  believes  the higher 1996 ratio was the
         result of an unusual  product  line sales mix and that the current 1997
         ratio is in line with normal operational expectations. Selling, general
         and  administrative  expense as a percentage of sales decreased for the
         third  quarter of 1997 by 27.5% to 51.4%,  also now in line with normal
         expectations.

         Income from  operations  during the quarter  ended October 31, 1997 was
         $86,789,  about  200%  greater  than the  1996  quarter's  of  $28,483.
         Management believes that income from operations is the key statistic in
         evaluating  the  Company's   profitability  since  the  utilization  of
         non-cash income tax deferred  benefit  distorts net income form time to
         time.



<PAGE>







         For the nine months ended  October 31, 1997 compared to the nine months
         ended  October  31,  1996,  net  sales  increased  to  $1,491,823  from
         $1,111,072  or 34.3%,  gross profit  margins  dipped by 11.2% while the
         selling, general and administrative expense ratio improved by 13.2% The
         impact  of  these   offsetting  cost  factors   increased  income  from
         operations by approximately 14.4%; namely: $177,274 for the nine months
         ended  October 31, 1997 and $122,738 for the nine months ended  October
         31, 1996.  As explained,  the $149,607  income before taxes in the 1997
         nine  month  period was  lessened  by a  non-cash  deferred  income tax
         benefit of $40,600  while the  $96,660 net income  before  taxes in the
         1996 nine month  period was not.  Nevertheless,  the current  years net
         income at 7.3% of net sales exceeded last years by 12.8%.

         For the remainder of fiscal year 1997, and based on the  aforementioned
         bookings level,  Management  anticipates that net sales and income from
         operations will continue to increase and reach record levels.


III.     Liquidity and Capital Resources

         At October 31, 1997, the Company's  current ratio (i.e.  current assets
         divided by current  liabilities) stood at 2.68:1,  virtually  unchanged
         from the favorable  level  existing at the end of the last quarter.  To
         enable the  Company to have the  ability  and  flexibility  to purchase
         larger,  more  economical  quantities  of  material  stocks  and,  more
         importantly,  to boost its production capability the Company obtained a
         $200,000 line of credit from a major New York City bank.

         On  November  26,  1997,  the  Company  acquired  all of the issued and
         outstanding  capital  stock of Teik Tatt  Holding  Co.  (1979)  Sdn Bhd
         ("TTH"), a privately held Malaysian  manufacturing  entity, in exchange
         for  10,000,000  shares of the  Company's  common  stock.  The  Company
         believes that TTH internally  generates the working capital it requires
         for its on-going operations.  However,  substantial funding is required
         in order to meet  TTH's  growth  plans.  The  Company  intends  to seek
         sources of additional capital for such purposes although it has not yet
         identified any financing  sources and there are no assurances that such
         funding will be obtained.

         During  the  quarter  ended  October  31,  1997,  the  Company  made no
         purchases of  equipment.  As at the end of the  quarter,  there were no
         immediate material comments for capital expenditures.



IV.      Inflationary Impact

         Since the  inception of  operations,  inflation  has not  significantly
         affected the operating results of the Company.  However,  inflation and
         changing  interest  rates have in the past had a significant  effect in
         the  economy in general  and,  therefore,  could  affect the  operating
         results of the Company in the future.

         "Safe Harbor" Statement under the Private Securities Litigation Reform
         Act of 1995.

         Statements  contained  in  this  Form  10-QSB/A  Report  which  are not
         historical facts are forward looking  statements that involve risks and
         uncertainties  that could  cause  actual  results to differ  materially
         include,  among others,  economic and political  events in or effecting
         Malaysia,  the Company's  dependence on the semiconductor  industry and
         other risk factors  detailed in the Company's  Securities  and Exchange
         Commission filings.