Page 1 of __
                                                                   Exhibit Index
                                                                   is on Page __

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark one)

[X]  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(D) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934 [NO FEE REQUIRED]

     For the fiscal year ended June 30, 1999

                                       OR

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

     For the transition period from ________ to _________

     Commission file number 33-37534-NY

                              WESTECH CAPITAL CORP.
             (Exact name of registrant as specified in its charter)

New York                                                         13-3577716
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

180 West End Avenue, Apt. 23F
New York, New York                                                    10023
(Address of principal executive offices)                             Zip Code

Issuer's telephone number (212) 873-1050

Securities registered under Section 12(b) of the Exchange Act:

                                                        Name of each exchange on
Title of each class                                     which registered

        N/A                                                        N/A

Securities registered under Section 12(g) of the Exchange Act:



<PAGE>


                                      None
                                (Title of class)

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 ___

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year.  Zero.

State the  aggregate  market  value of the voting  stock  held by  nonaffiliates
computed by reference  to the price at which the stock was sold,  or the average
bid and asked  prices of such stock,  as of a specified  date within the past 60
days.  (See definition of an affiliate in Rule 12b-2 of the Exchange Act.) Zero.
(According  to the  National  Quotation  Bureau,  Inc.  there  are no  published
quotations for the issuer's Common Stock.)

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. 182,500 shares of Common Stock, $.001
par value, outstanding as of August 9, 1999.


                   DOCUMENTS INCORPORATED BY REFERENCE - None

                                       2

<PAGE>


                                     PART I

Item 1. Description of Business.


General

     Westech Capital Corp. (the "Company" or the  "Registrant") was organized as
a New York  corporation on July 18, 1990 for the purpose of investing in any and
all types of  assets,  properties  and  businesses.  It has not  engaged  in any
business  operations.  The Company is commonly known as a "blind pool" or "blank
check".

     In connection with its initial capitalization, the Registrant issued 12,500
shares of its Common Stock to its officers and  directors  for the aggregate sum
of $2,500.  In  furtherance  of its  corporate  purpose,  on May 26,  1992,  the
Registrant  closed its initial  public  offering  of 50,000  Units at a price of
$1.00 per Unit. Each Unit consisted of one share of Common Stock,  one Class "A"
Common Stock Purchase Warrant,  and one Class "B" Common Stock Purchase Warrant.
The Warrants,  which entitled the holders to purchase additional Common Stock at
$5.00 and $10.00,  respectively,  have  expired.  To obtain  additional  working
capital,  in each of July 1997, March 1998 and December 1998, the Company raised
$10,000  from the sale of 40,000  shares of its Common  Stock at a price of $.25
per share. The Company may continue to seek to raise additional funds to augment
its cash on hand,  which  also  could be used for the  benefit  of any  business
acquisition  seeking an immediate cash infusion.  There can be no assurance that
the Company's financing efforts will be successful.

     The  Registrant  is seeking the  acquisition  of or merger with an existing
company  ("Potential  Business  Acquisitions").  Given the limited assets of the
Registrant, it is likely to acquire or merge with a company which is not seeking
immediate  substantial  amounts  of cash but one which  desires to  establish  a
public trading market for its shares.

     There are numerous  reasons why an existing  privately-held  company  would
seek to become a public  company  through a merger or  acquisition  rather  than
doing its own public  offering.  Such reasons  include  avoiding the time delays
involved in a public offering; retaining a larger share of voting control of the
publicly-held  company;  reducing the cost factors incurred in

                                       3

<PAGE>

becoming a public  company;  and avoiding any  dilution  requirements  set forth
under various states' blue sky laws.

     The  Registrant  does not  propose to  restrict  its  search for  Potential
Business  Acquisitions to any particular  industry or any particular  geographic
area and may, therefore, engage in essentially any business to the extent of its
limited resources.

     It is anticipated that knowledge of Potential Business Acquisitions will be
made known to the  Registrant  by various  sources,  including  its officers and
directors,   shareholders,   professional   advisors   such  as  attorneys   and
accountants,  securities  broker-dealers,  venture  capitalists,  members of the
financial  community,  and  others who may  present  unsolicited  proposals.  In
certain  circumstances,  the  Registrant  may agree to pay a finder's  fee or to
otherwise  compensate  such  persons for services  rendered in bringing  about a
transaction.  However,  no cash  finder's  fee shall be paid to any  officer  or
director of the Registrant or their affiliates or associates.  The amount of any
such  finder's fee or other  compensation  which may be paid to such persons for
services  rendered  in  bringing  about  a  transaction  is  subject  to  future
negotiation between the Registrant, the entity to be acquired and the finder.

Selection of Opportunities

     The analysis of new business opportunities has and will be undertaken by or
under the supervision of the officers and directors of the  Registrant,  none of
whom  is a  professional  business  analyst  or has  any  previous  training  or
experience in business analysis or in selecting or hiring business analysts. The
Registrant has, since the date of the closing of its public offering, considered
potential  acquisition  transactions  with several companies but as of this date
has not entered into any definitive agreement with any party. The Registrant has
unrestricted  flexibility in seeking,  analyzing and  participating in Potential
Business Opportunities. In its efforts to analyze potential acquisition targets,
the Registrant will consider the following kinds of factors:

     (a) Potential for growth,  indicated by new technology,  anticipated market
expansion or new products;

                                       4

<PAGE>


     (b)  Competitive  position as  compared to other firms of similar  size and
experience  within the  industry  segment as well as within  the  industry  as a
whole;

     (c) Strength and diversity of management,  either in place or scheduled for
recruitment;

     (d) Capital requirements and anticipated availability of required funds, to
be provided by the Registrant or from operations, through the sale of additional
securities,  through  joint  ventures  or  similar  arrangements  or from  other
sources;

     (e)  The  cost  of  participation  by the  Registrant  as  compared  to the
perceived tangible and intangible values and potentials;

     (f) The extent to which the business opportunity can be advanced;

     (g) The  accessibility of required  management  expertise,  personnel,  raw
materials, services, professional assistance and other required items; and

     (h) other relevant factors.

     In applying the foregoing  criteria,  no one of which will be  controlling,
management will attempt to analyze all factors in the  circumstances  and make a
determination based upon reasonable  investigative  measures and available data.
Potentially  available  business  opportunities  may  occur  in  many  different
industries and at various stages of development, all of which will make the task
of  comparative  investigation  and  analysis  of  such  business  opportunities
extremely  difficult  and  complex.  Due to  the  Registrant's  limited  capital
available for  investigation  and  management's  limited  experience in business
analysis,  the Registrant may not discover or adequately  evaluate adverse facts
about the opportunity to be acquired.

Form of Acquisition

     The manner in which the  Registrant  participates  in an  opportunity  will
depend upon the nature of the  opportunity,  the respective needs and desires of
the  Registrant  and  the  promoters  of  the  opportunity,   and  the  relative
negotiating strength of the Registrant and such promoters.

                                       5

<PAGE>


     It is likely  that the  Registrant  will  acquire  its  participation  in a
business opportunity through the issuance of common stock or other securities of
the Registrant.  Although the terms of any such transaction cannot be predicted,
it should be noted that in certain  circumstances  the criteria for  determining
whether or not an  acquisition is a so-called  "tax free"  reorganization  under
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended, depends upon
the issuance to the  shareholders of the acquired company of at least 80 percent
of  the  common  stock  of  the  combined  entities  immediately  following  the
reorganization.  If a transaction  were  structured  to take  advantage of these
provisions  rather than other "tax free" provisions  provided under the Internal
Revenue Code, all prior shareholders  would in such circumstances  retain 20% or
less  of  the  total  issued  and  outstanding  shares.  This  could  result  in
substantial  additional dilution to the equity of those who were shareholders of
the Registrant prior to such reorganization.

     The present  shareholders of the Registrant will likely not have control of
a majority of the voting  shares of the  Registrant  following a  reorganization
transaction.  As  part  of  such  a  transaction,  all  or  a  majority  of  the
Registrant's directors may resign and new directors may be appointed without any
vote by shareholders.

     In the case of an acquisition, the transaction may be accomplished upon the
sole  determination of management  without any vote or approval by shareholders.
In the case of a statutory merger or consolidation,  it will likely be necessary
to call a  shareholders'  meeting  and obtain the  approval  of the holders of a
majority of the  outstanding  shares.  The necessity to obtain such  shareholder
approval may result in delay and additional  expense in the  consummation of any
proposed  transaction  and will also give rise to  certain  appraisal  rights to
dissenting shareholders. Most likely, management will seek to structure any such
transaction so as not to require shareholder approval.

     It is anticipated that the investigation of specific business opportunities
and the negotiation,  drafting and execution of relevant agreements,  disclosure
documents and other  instruments  will require  substantial  management time and
attention and  substantial  costs for  accountants,  attorneys and others.  If a
decision is made not to  participate  in a specific  business  opportunity,  the
costs  theretofore   incurred  in  the  related   investigation   would  not  be
recoverable.  Furthermore, even if an

                                       6

<PAGE>

agreement is reached for the participation in a specific  business  opportunity,
the  failure  to  consummate  that  transaction  may  result  in the loss to the
Registrant of the related costs incurred.

Acquisition Restrictions

     The  Company  does  not  intend  to  pursue  any  business  opportunity  or
transaction which would render it an "investment company" as the term is defined
in the  Investment  Company  Act of 1940.  In this  regard,  the Company has not
engaged  and does  not  intend  to  engage  in the  business  of (1)  investing,
reinvesting,  or trading in securities as its primary business, (2) issuing face
amount  certificates  of the  installment  type or (3)  investing,  reinvesting,
owning, holding, or trading in securities nor shall it own or propose to acquire
investment  securities  having a value  exceeding 40 percent of the value of its
total  assets  (exclusive  of  government  securities  and  cash  items)  on  an
unconsolidated  basis.  Being  deemed an  "investment  company"  under such Act,
without  registration  as such,  could  result  in  certain  instances  in civil
liability  and criminal  penalties to  controlling  persons of, as well as civil
liabilities and unenforceability of contracts with regard to, the Company.

     The Company does not intend, nor does it have any authority,  to pursue any
course of business which would render it an "investment advisor" as that term is
defined in the  Investment  Advisors Act of 1940.  Regardless  of the  Company's
belief that it need not register as an "investment company",  the Securities and
Exchange  Commission  might  take the view that the  Company  is an  "investment
company",  which,  if not  registered as such,  might result in liability to the
Company and its controlling persons.

Daily Operations and Employees

     To date, the Company has had no, and until an active  business is commenced
or acquired  the  Company  will have no,  employees  or  day-to-day  operations.
Management  is unable to make any estimate as to the future  number of employees
which may be necessary, if any, to work for the Company. If an existing business
is  acquired  it is  possible  that  its  existing  staff  would be hired by the
Company.  At the present time it is the intention of management to meet or be in
telephone contact as needed to review business opportunities, evaluate potential
acquisitions and otherwise  operate the affairs of the Company.  Management will
not be compensated for these services rendered on behalf of the Company.

                                       7

<PAGE>


Item 2. Description of Property.

     The  Company  has  entered  into  an  oral  arrangement  with  Neil  Ragin,
President, Treasurer and Chairman of the Board of the Company, providing for him
to furnish the use of a portion of his business office as a temporary office for
the Company until such time as it needs additional facilities.  The Company will
not pay rent for the use of such temporary facilities.


Item 3. Legal Proceedings.

     There are no material  pending legal  proceedings to which the Company is a
party or to which any of its  property  is subject and no such  proceedings  are
known to the Company to be threatened or contemplated by or against it.

Item 4.  Submission of Matters to a Vote of Security Holders.

     No matters were  submitted to a vote of security  holders during the fiscal
year covered by this Report.

                                       8

<PAGE>

                                     PART II

Item 5. Market for Common Equity and Related Stockholder Matters.

Market Information

     There is no public market for the Company's securities.

Holders

     As of August 9, 1999,  there were 33 record holders of the Company's Common
Stock.

Common Stock

     The Company is authorized to issue  50,000,000  shares of Common Stock, par
value $.001 each. As of August 9, 1999 there were 182,500 such shares issued and
outstanding. Holders of shares of Common Stock are entitled to one vote for each
share held.  There are no  preemptive,  subscription,  conversion  or redemption
rights  pertaining  to the  shares.  Holders of the  shares of Common  Stock are
entitled to receive such  dividends as may be declared by the Board of Directors
out of assets legally  available  therefor and to share ratably in the assets of
the Company available upon liquidation.

     The  holders  of shares of Common  Stock do not have the right to  cumulate
their votes in the election of directors and,  accordingly,  the holders of more
than  50% of  all  such  shares  outstanding  can  elect  all of the  directors.
Remaining shareholders will not be able to elect any directors.

Dividends

     The  Company  has not paid cash  dividends  to date and  intends  to retain
earnings,  if any, for use in its  activities.  Payment of cash dividends in the
future  will be  wholly  dependent  upon  the  Board of  Directors  and upon the
Company's earnings,  financial condition, capital requirements and other factors
deemed  relevant by them. It is not likely that cash  dividends  will be paid in
the foreseeable future.

     In the  event  of the  acquisition  of or  merger  with a  business  by the
Company,  control of the Company and its Board of Directors

                                       9

<PAGE>


may pass to others.  In that  event,  the payment of  dividends  would be wholly
dependent upon such persons.


Item 6. Management's Discussion and Analysis or Plan of Operation.

     (a) Plan of Operation

     The Registrant was formed July 18, 1990 for the purpose of investing in any
and all types of assets,  properties  and  businesses.  In  connection  with the
initial  capitalization  of the  Company a total of 12,500  shares of its common
stock were issued to its officers and directors for the aggregate sum of $2,500.
On November 12,  1991,  the United  States  Securities  and Exchange  Commission
granted  effectiveness to a Registration  Statement on Form S-18 for an offering
of 50,000 Units of Common Stock and Warrants to purchase  shares of Common Stock
at a price of $1.00 per Unit.  The  offering  was closed in May 1992.  To obtain
additional working capital,  in each of July 1997, March 1998 and December 1998,
the Company raised $10,000 from the sale of 40,000 shares of its Common Stock at
a price of $.25 per share.

     The Registrant is implementing its plan of operation by seeking to locate a
suitable company which desires to go public through a "reverse acquisition" with
it.  Although no assurance can be given,  the Company  believes its cash on hand
will  satisfy  its cash  requirements  until  it  effects  such an  acquisition.
However,  depending on how long it takes to implement  its plan of operation the
Company may seek to raise  additional  funds to augment its cash on hand,  which
also could be used for the  benefit of any  company it acquires or with which it
merges.  There can be no assurance that the Company's  financing efforts will be
successful.  The  Company's  plan of  operation  is further  described in Item 1
hereof.

     (b) Management's Discussion and Analysis of Financial Condition and Results
of Operations

     Results of Operations.

     Since  inception the  Registrant has not any business  operations,  and its
activities  have been limited to the sale of its securities and the search for a
company to acquire or with which to merge through a "reverse  acquisition".  The
Registrant will not have any business operations until, if ever, such time as it
effects an  acquisition  or merger.  Accordingly,  no operating  income has been
generated by the Registrant since its inception.

                                       10

<PAGE>


     For the years ended June 30,  1998 and 1999,  the Company had a net loss of
($9,696)  and   ($9,028),   respectively,   or  ($.08)  and  ($.05)  per  share,
respectively.  From  inception to June 30,  1999,  the Company had a net loss of
($63,966),  or ($.92) per share. Such losses are attributable primarily to costs
associated  with  being  subject  to  the  reporting   requirements  of  federal
securities laws and the Company's attempts to identify and acquire a business.

     Liquidity and Capital Resources.

     For the years ended June 30, 1998 and 1999,  the  Registrant  had assets of
$6,218  and $6,498  (all in cash),  total  liabilities  of $4,074 and $3,382 and
total shareholders' equity of $2,144 and $3,116,  respectively.  The Company may
seek to raise additional capital in order to augment its cash on hand. There can
be no assurance that any such offering will be successful.

     Year 2000.

     Many  existing  software  programs,  computers and other types of equipment
were not designed to  accommodate  the Year 2000 and beyond.  If not  corrected,
these  computer  applications  and  equipment  could  fail or  create  erroneous
results.  For the Company,  this will have no material  adverse effect since its
sole business is to identify a suitable  acquisition  candidate and effectuate a
business  combination,  and  therefore  it does not maintain  internal  business
systems software or internal non-business  software/embedded  systems and it has
no material transactions with external vendors.

                                       11

<PAGE>


Item 7. Financial Statements.

                          Index to Financial Statements

Independent Accountants' Report

Balance Sheets

     June 30, 1999 and 1998

Statement of Operations

     Years ended June 30, 1999, 1998 and 1997

Statement of Changes in Stockholders' Equity

     Years ended June 30, 1999, 1998, 1997 and 1996

Statement of Cash Flows

     Years ended June 30, 1999, 1998 and 1997

Notes to Financial Statements

                                       12

<PAGE>

                          INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders of
Westech Capital Corp.

We have audited the  accompanying  balance  sheets of Westech  Capital  Corp. (a
development  stage  company)  as of June 30,  1999  and  1998,  and the  related
statements of operations,  and stockholders' equity and cash flows for the years
ended June 30, 1999. These financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes  examining on a test basis evidence  supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements refferred to above present fairly, in
all material  respects,  the  financial  position of Westech  Capital  Corp.  (a
development  stage  company) as of June 30, 1999 and 1998 and the results of its
operations and its cash flows for the years ended June 30, 1999,  1998, 1997 and
for the period July 18, 1990  (inception)  to June 30, 1999 in  conformity  with
generally accepted accounting principles.

Lake Success, New York
August 5, 1999


                                       13
<PAGE>


                              WESTECH CAPITAL CORP.
                          (A DEVELOPMENT STAGE COMPANY)
                                  BALANCE SHEET
                                     JUNE 30

<TABLE>
<CAPTION>
                                                               1999        1998
                                     ASSETS
<S>                                                          <C>         <C>
CURRENT ASSETS
     Cash                                                    $  6,498    $  6,218
                                                             ========    ========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
     Accrued expenses                                        $  3,382    $  4,074
                                                             --------    --------

         TOTAL LIABILITIES                                      3,382       4,074
                                                             --------    --------

STOCKHOLDERS' EQUITY
         Common stock, $.001 par value
             50,000,000 shares authorized, 182,500 and
             142,500 shares issued and outstanding                183         143
         Capital in excess of par value                        66,899      56,939
         Deficit accumulated during development stage         (63,966)    (54,938)
                                                             --------    --------

         TOTAL STOCKHOLDERS' EQUITY                             3,116       2,144
                                                             --------    --------

         TOTAL LIABILITIES AND
             STOCKHOLDERS' EQUITY                            $  6,498    $  6,218
                                                             ========    ========
</TABLE>




The accompanying notes are an integral part of these financial statements.


                                       14
<PAGE>

                              WESTECH CAPITAL CORP.
                          (A DEVELOPMENT STAGE COMPANY)
                        STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                                        Deficit
                                                                                                      Accumulated
                                                                                         Capital in      During        Total
                                                                     Common Stock        Excess of     Development  Stockholders'
                                                                 Shares       Amount     Par Value       Stage         Equity
<S>                                                              <C>         <C>          <C>           <C>           <C>
Balance, July 18, 1990  (inception)                                    0     $      0     $      0      $      0      $      0
Issuance of shares to Officer and Directors of the
  Company for cash July 23, 1990                                  12,500           13        2,487             0         2,500
Net loss from inception to June 30, 1991                               0            0            0          (962)         (962)
Proceeds of initial public offering                               50,000           50       49,950             0        50,000
Offering costs                                                         0            0      (14,627)            0       (14,627)
Net loss for the year ended June 30, 1992                              0            0            0        (5,123)       (5,123)
Offering costs                                                         0            0         (791)            0          (791)
Net loss for the year ended June 30, 1993                              0            0            0        (5,428)       (5,428)
Net loss for the year ended June 30, 1994                              0            0            0        (5,929)       (5,929)
Net loss for the year ended June 30, 1995                              0            0            0        (7,108)       (7,108)
Net loss for the year ended June 30, 1996                              0            0            0        (7,743)       (7,743)
                                                                --------     --------     --------      --------      --------

Balance, June 30, 1996                                            62,500           63       37,019       (32,293)        4,789

Net loss for the year ended June 30, 1997                              0            0            0       (12,949)      (12,949)
                                                                --------     --------     --------      --------      --------

Balance, June 30, 1997                                            62,500           63       37,019       (45,242)       (8,160)

Issuance of shares, private placement, July 9, 1997               40,000           40        9,960             0        10,000
Issuance of shares, private placement, March 2, 1998              40,000           40        9,960             0        10,000

Net loss for the year ended June 30, 1998                              0            0            0        (9,696)       (9,696)
                                                                --------     --------     --------      --------      --------

Balance, June 30, 1998                                           142,500          143       56,939       (54,938)        2,144

Issuance of shares, private placement, December 11, 1998          40,000           40        9,960             0        10,000
Net loss for the year ended June 30, 1999                              0            0            0        (9,028)       (9,028)
                                                                --------     --------     --------      --------      --------

Balance, June 30, 1999                                           182,500     $    183     $ 66,899      $(63,966)     $  3,116
                                                                ========     ========     ========      ========      ========
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                       15
<PAGE>

                              WESTECH CAPITAL CORP.
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                                         FROM INCEPTION
                                              FOR THE YEARS ENDED         JULY 18, 1990
                                                   JUNE 30                     TO
                                      1999          1998        1997      JUNE 30, 1999
<S>                                 <C>          <C>          <C>          <C>
REVENUE
         Interest                        NONE         NONE         NONE         NONE

EXPENSES
         Miscellaneous                      0           17            9          216
         Office                             0            0            0        2,415
         Professional                   6,649        4,119        8,364       40,895
         Filing and transfer fees       1,699        4,880        3,905       13,925
                                    ---------    ---------    ---------    ---------

         TOTAL                          8,348        9,016       12,278       57,451
                                    ---------    ---------    ---------    ---------

LOSS BEFORE INCOME TAXES               (8,348)      (9,016)     (12,278)     (57,451)

INCOME TAXES                              680          680          671        6,515
                                    ---------    ---------    ---------    ---------

NET LOSS                            $  (9,028)   $  (9,696)   $ (12,949)   $ (63,966)
                                    =========    =========    =========    =========

LOSS PER SHARE
         Net loss per share         $    (.05)   $    (.08)   $    (.21)   $    (.92)
                                    =========    =========    =========    =========

WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING             164,637      114,883       62,500       69,473
                                    =========    =========    =========    =========
</TABLE>





The accompanying notes are an integral part of these financial statements.


<PAGE>



                              WESTECH CAPITAL CORP.
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                       FROM INCEPTION
                                             FOR THE YEARS ENDED        JULY 18, 1990
                                                   JUNE 30                   TO
                                        1999        1998        1997    JUNE 30, 1999
<S>                                   <C>         <C>         <C>         <C>
CASH FLOWS FROM OPERATING
  ACTIVITIES
         Net loss                     $ (9,028)   $ (9,696)   $(12,949)   $(63,966)
         Increase (decrease) in
          accrued expenses                (692)     (4,250)      6,053       3,382
                                      --------    --------    --------    --------

NET CASH USED BY OPERATING
  ACTIVITIES                            (9,720)    (13,946)     (6,896)    (60,584)
                                      --------    --------    --------    --------

CASH FLOWS FROM FINANCING
 ACTIVITIES
         Issuance of common stock           40          80           0         183
         Paid in capital                 9,960      19,920           0      82,317
         Offering costs                      0           0           0     (15,418)
                                      --------    --------    --------    --------

NET CASH PROVIDED BY
  FINANCING ACTIVITIES                  10,000      20,000           0      67,082
                                      --------    --------    --------    --------

NET INCREASE (DECREASE) IN CASH            280       6,054      (6,896)      6,498

BEGINNING CASH BALANCE                   6,218         164       7,060           0
                                      --------    --------    --------    --------

ENDING CASH BALANCE                   $  6,498    $  6,218    $    164    $  6,498
                                      ========    ========    ========    ========


SUPPLEMENTAL CASH FLOWS INFORMATION

         Income taxes paid            $    680    $    688    $    704
</TABLE>





The accompanying notes are an integral part of these financial statements.


                                       16
<PAGE>

                              WESTECH CAPITAL CORP.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                            JUNE 30, 1999, 1998, 1997

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization business activity and dividend policy

The Company was incorporated under the laws of the State of New York on July 18,
1990.  The Company is in the  development  stage and has not  commenced  planned
principal operations.  The Company is seeking the acquisition of, or merger with
an existing Company.  The fiscal year of the corporation is June 30. The Company
has, at the present time,  not paid any dividends and any dividends  that may be
paid in the future will depend upon the  financial  requirements  of the Company
and other relevant factors.

Estimates

The preparation of financial  statements in conformity  with Generally  Accepted
Accounting Principles requires management to make estimates and assumptions that
affect the reported  amounts and  disclosures.  Actual results could differ from
those estimates and assumptions.

General and related party

The Company entered into an oral arrangement  with Mr. Neil Ragin,  President of
the  Company,  providing  for the use of a portion of his  business  office as a
temporary office until such time as the Company needs additional facilities. The
Company does not pay rent for the use of such facilities.

Cash and Cash Equivalents

For purposes of the  statements  of cash flows,  cash and cash  equivalents  are
considered to be all unrestricted  highly liquid  investments with maturities of
three months or less at the time of acquisition.

Income taxes

As of June 30, 1999, the Company had a $63,966 net operating  loss  carryforward
available to offset future taxable income through 2008.

NOTE 2: CAPITAL STOCK

The Company,  in order to satisfy  cash  requirements,  consummated  the sale of
40,000 shares of Common Stock,  $.001 par value, on December 11, 1998,  March 2,
1998 and July 9, 1997. Each sale was for total proceeds of $10,000.



                                       17
<PAGE>

Item  8.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure.

     N/A


                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act.

     The following table sets forth certain  information  concerning the current
directors  and  executive  officers of the  Company,  who have served  since the
inception  of the Company and will serve for one year or until their  respective
successors are elected and have qualified:

NAME                               AGE                      POSITION
----                               ---                      --------

Neil Ragin                          58               Chairman of the Board,
                                                     President and Treasurer

Michael J. Tannenholtz              42               Secretary and Director

Dr. William Esh                     49               Director

     Neil Ragin has been  Chairman of the Board,  President and Treasurer of the
Company since July 1990. Mr. Ragin is, and has been since 1974, the President of
Gartner's Hardware, Inc., a retail hardware store located in New York City. From
1988  to June  1995,  Mr.  Ragin  was  the  President  of  Ragar  Corp.,  then a
publicly-held blind pool company which acquired Carpet Barn.

     Michael J. Tannenholtz has been the Secretary and a Director of the Company
since July 1990.  Mr.  Tannenholtz  is,  and has been since  1979,  the owner of
Michael J. Tannenholtz Consulting Corp., a New York City based accounting firm.

     Dr. William Esh was appointed a director of the Company in August 1991. Dr.
Esh has been actively  engaged in the private  practice of dentistry since 1975.
From  1988 to  June  1995,  Dr.  Esh  was a  director  of  Ragar  Corp.,  then a
publicly-held blind pool company which acquired Carpet Barn.


                                       18
<PAGE>

     The Company has no significant  employees and no family relationships exist
between any of the executive officers and directors.


Item 10.  Executive Compensation.

     No officer or director of the Company has  received  remuneration  from the
Company  in  fiscal  1998  or  prior  years,  and  it is  not  anticipated  that
remuneration will be paid prior to the Company's acquisition of a business.  The
Company has no current  intent to issue shares of its common stock to management
in connection with a Business Acquisition. However, the Company may subsequently
deem the issuance of shares to  management  for services  rendered in connection
with such an Acquisition to be fair and reasonable to the Company and its public
shareholders  in light of the  services  rendered.  In the event any  shares are
issued  for  services  rendered  by  management  they shall be issued in such an
amount as the Board of Directors  deems fair and  reasonable  to the Company and
its public  shareholders  and in compliance with  management's  fiduciary duties
under  state  law.   Officers  and  directors  will  be  reimbursed  for  actual
out-of-pocket  expenses  incurred  on behalf of the  Company as  approved by the
Board of Directors.


Item 11. Security Ownership of Certain Beneficial Owners and Management.

     The  following  table sets forth  certain  information  as to the number of
shares of the  Company's  Common Stock deemed to be owned  beneficially  by each
person known by the Registrant to be deemed to be the  beneficial  owner of more
than 5% of the  outstanding  Common Stock,  each of its  executive  officers and
directors, and all of its executive officers and directors as a group, at August
9, 1999. Except as indicated in the footnote to this table, the Company believes
that the named persons have sole voting and investment power with respect to the
shares indicated:

<TABLE>
<CAPTION>
Name and Address of                           Position With                   Number of             Percentage
Beneficial Owner                              Company                         Shares                of Class
----------------                              -------                         ------                --------
<S>                                           <C>                              <C>                       <C>
Neil Ragin(1)                                 President,                       11,500                    6%
180 West End Avenue                           Treasurer,
New York, NY  10023                           Director
</TABLE>



                                       19
<PAGE>

<TABLE>
<CAPTION>
Name and Address of                           Position With                   Number of             Percentage
Beneficial Owner                              Company                         Shares                of Class
----------------                              -------                         ------                --------
<S>                                           <C>                              <C>                       <C>
Michael J. Tannenholtz(1)                     Secretary,                        1,000                    *
250 West 54th Street                          Director
Suite 703
New York, NY  10019

Dr. William Esh(1)                            Director                           -0-                    -0-
243 West End Avenue
New York, NY  10023

Lawrence Kaplan(1)                                                             120,000                  66%
17 Riverview Terrace
Smithtown, NY  11787

Executive Officers and
Directors as a Group                                                           12,500                    7
(3 persons)
</TABLE>

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

*    Less than one percent.

(1)  These  individuals  may  be  deemed  "parents"  and  the  promoters  of the
     Registrant  as  those  terms  are  defined  in the  Rules  and  Regulations
     promulgated under the Securities Act of 1933, as amended.


Item 12.  Certain Relationships and Related Transactions

     No  member  of  management  nor   controlling   shareholder   has  had  any
transactions with the Company during its past fiscal year, nor proposes any such
transactions, in which the amount involved exceeds $60,000.

     In  connection  with its initial  capitalization,  the Company  sold 12,500
shares  of its  Common  Stock  to its  founding  shareholders  for an  aggregate
consideration of $2,500 in cash.

     In December 1998 the Company sold 40,000 shares of Common Stock to Lawrence
Kaplan,  who then owned  approximately  56% of the Company's Common Stock, for a
price of $.25 per share,  which was the same price at which Mr. Kaplan purchased
a like amount of shares in March 1998 and July 1997.

     Agreement  for  Clerical  Services -  Promoter.  In fiscal 1994 the Company
retained  Stanley  Kaplan  Management  Consultants,  Inc.  ("SKMC")  to  provide
clerical  and  bookkeeping  services to the  Registrant  for a fee of $50.00 per
month.  The  agreement  between


                                       20
<PAGE>

Mr. Kaplan and the Company was oral and was  terminable at will by either party.
SKMC terminated such agreement  effective  November 23, 1994. Stanley A. Kaplan,
the president and sole  shareholder  of SKMC,  referred the Company to its legal
counsel and auditor. Mr. Kaplan is not a parent or control party of the Company.
Inasmuch as Mr. Kaplan offered  certain advice to management in connection  with
the  formation of the Company,  he may be deemed a "promoter"  of the Company as
that  term  is  defined  in  Rule  405 of  Regulation  C as  promulgated  by the
Securities and Exchange Commission.

     Mr.  Kaplan  has  been  the  president  and sole  shareholder  of SKMC,  an
accounting firm, for at least the past ten years. Since January 1987, Mr. Kaplan
has also been an officer and director of Gro-Vest, Inc., a management consulting
firm.

     On August 12, 1994, Mr. Kaplan  settled,  without  admitting or denying any
allegations,  a civil action brought  against him by the Securities and Exchange
Commission relating to Atratech, Inc. The action charged Mr. Kaplan with certain
violations of the Securities Act of 1933 and the Securities Exchange Act of 1934
(the "Exchange  Act").  As part of the  settlement,  Mr. Kaplan was  permanently
restrained and enjoined from future  violations of the  securities  laws and was
permanently  barred from acting as an officer or director of any issuer that has
a class of securities registered under Section 12 of the Exchange Act or that is
required to file reports pursuant to Section 15(d) of the Exchange Act.

     The  Company  neither  has  nor  had  any  written  or  oral  agreement  or
understanding with Mr. Kaplan or SKMC regarding his services or participation in
connection  with future  mergers or  acquisitions.  Mr.  Kaplan's  firm had been
retained  solely to provide  clerical and  bookkeeping  services.  If Mr. Kaplan
becomes  aware of a merger or  acquisition  possibility  he may or may not refer
such possibility to the Company's  management for  consideration.  If Mr. Kaplan
becomes  aware of a merger  or  acquisition  possibility  and  refers  it to the
Company,  the  Company's  management  will  review  such  merger or  acquisition
possibility  in the same manner and with the same  efforts as it reviews  merger
and acquisition  possibilities  referred to it by other persons. The Company may
agree  to pay a  finder's  fee to any  non-management  "finder",  including  Mr.
Kaplan,  in  connection  with an  acquisition  or merger.  Although  there is no
current intent,  agreement,  understanding or expectation to do so, there exists
the possibility that the Company may ultimately acquire or merge with a business
or  property  in  which  Mr.  Kaplan  or


                                       21
<PAGE>

his affiliates or associates have a beneficial interest. There is no business or
property in which Mr. Kaplan or his  affiliates or associates  have a beneficial
interest which is under consideration by the Company as a potential  acquisition
or merger candidate.


Item 13.  Exhibits and Reports on Form 8-K.

          (a)  Exhibits.

                  3(i)         Certificate of Incorporation -
                               incorporated by reference to
                               Exhibit 3.1 of Registrant's
                               Registration Statement on
                               Form S-18
                               (SEC File No. 33-37534-NY)

                  3(ii)        By-Laws - incorporated by reference to Exhibit
                               3.2 of Registrant's Registration Statement on
                               Form S-18 (SEC File No. 33-37534-NY)

                  27           Financial Data Schedule

          (b) No reports on Form 8-K were filed  during the last  quarter of the
     period covered by this report.



                                       22
<PAGE>

                                   SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                         WESTECH CAPITAL CORP.
                                              (Registrant)


                                    By  /s/ Neil Ragin
                                        -------------------------------
                                        Neil Ragin
                                        Principal Executive Officer and
                                        Principal Financial Officer

                                        Date: August 11, 1999


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  Registrant and in the capacities and on the
dates indicated.



                                        /s/ Neil Ragin
                                        -------------------------------
                                        Neil Ragin
                                        Director

                                        Date: August 11, 1999



                                        /s/ Michael J. Tannenholtz
                                        -------------------------------
                                        Michael J. Tannenholtz
                                        Director

                                        Date: August 11, 1999


                                        /s/ William Esh
                                        -------------------------------
                                        William Esh
                                        Director

                                        Date: August 11, 1999


                                       23
<PAGE>

     Supplemental  Information  to be Furnished  With Reports Filed  Pursuant to
Section 15(d) of the Exchange Act By Non-reporting Issuers

     (1) No annual report to security  holders  covering the  registrant's  last
fiscal year; and

     (2) No proxy statement,  form of proxy or other proxy soliciting,  material
has been sent to more than ten of the registrant's security holders with respect
to any annual or other meeting of security holders.



                                       24