Form 10-Q Quarterly Report

                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                  For the quarterly period ended June 30, 1997

                                       OR

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

                         Commission File Number 0-22693


                        SYSCOMM INTERNATIONAL CORPORATION
             (Exact Name of Registrant as Specified in its Charter)


           Delaware                                11-2889809
(State or other Jurisdiction of                   (I.R.S. Employer
  Incorporation or Organization)                Identification Number)


                                275 Marcus Blvd.
                              Hauppauge, N.Y. 11788
              (Address of Principal Executive Offices and Zip Code)

                                 (516) 273-3200
              (Registrant's telephone number, including area code)


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

         Yes       X                                 No  ________

     Number of shares  outstanding of the issuer's Common Stock,  par value $.01
per share, as of August 8, 1997: 4,555,540 shares.


<PAGE>



                         Part I - FINANCIAL INFORMATION
                          Item 1. Financial Statements




                        SYSCOMM INTERNATIONAL CORPORATION
                      Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                      THREE MONTHS ENDED                       NINE MONTHS ENDED
                                                 6/30/97            6/30/96                 6/30/97            6/30/96
<S>                                        <C>                   <C>                     <C>                 <C>    

Net sales                                     $ 24,718,664        $ 33,644,269           $ 63,877,540       $ 71,687,092
Cost of sales                                   22,101,526          31,147,419             55,991,555         65,306,648
                                            --------------        ------------            -----------       ------------
     Gross profit                                2,617,138           2,496,850              7,885,985          6,380,444
                                            --------------

Selling & administrative expenses                1,544,756           1,123,525              4,501,904          3,513,221
                                            --------------          ----------            ------------        ----------

Income from operations                           1,072,382           1,373,325              3,384,081          2,867,223
                                            --------------          ----------            ------------        ----------

Other income (expenses)
   Interest expenses                              (226,558)           (361,504)              (778,702)          (995,218)
   Other                                            21,723              10,435                 79,283             18,922
                                            ----------------        ----------            ------------        -----------
   Total other expenses                           (204,835)           (351,069)              (699,419)          (976,296)
                                            ---------------         ----------            ------------        -----------

   Income from operations before
      income taxes                                 867,547           1,022,256              2,684,662          1,890,927

Provision for income taxes                          365,200            475,000              1,132,000            839,927
                                            ---------------         ----------            -----------         ----------

Net income                                   $     502,347         $   547,256          $   1,552,662      $   1,051,000
                                            ==============         ===========          =============      =============

Net income per common share                  $        0.14         $      0.16          $        0.45      $        0.32
                                            ==============         ===========          =============      =============

Weighted average number of common
 shares outstanding                              3,649,042           3,334,880              3,468,229          3,334,880
                                            ==============          ==========          =============      =============

</TABLE>


     The accompanying notes are an integral part of these statements.



<PAGE>



                        SYSCOMM INTERNATIONAL CORPORATION
                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>

                                                             June 30, 1997               September 30, 1996
                                                              (Unaudited)                     (Audited)
                      ASSETS
<S>                                                        <C>                            <C>     

Cash and cash equivalents                                  $      758,438                   $    1,180,680
Accounts receivable, net                                       19,554,133                       21,012,242
Inventory                                                       7,788,675                        8,936,845
Other                                                             255,118                          249,457
                                                          ---------------                  ---------------
   Total current assets                                        28,356,364                       31,379,224
                                                          ---------------                  ---------------
Property, plant and equipment, net                                759,333                          539,174
Other assets                                                      194,105                          184,159
                                                          ---------------                  ---------------
   Total assets                                              $ 29,309,802                    $  32,102,557
                                                          ===============                  ===============

                  LIABILITIES AND
               STOCKHOLDERS' EQUITY

Supplier credit facility                                    $   3,706,271                    $  12,483,391
Accounts payable and accrued liabilities                       14,956,926                       14,440,421
Income taxes payable                                              140,945                        1,069,197
Other current liabilities                                          41,686                           43,670
                                                          ---------------                   --------------
   Total current liabilities                                   18,845,828                       28,036,679
Long-term liabilities                                              76,839                           67,291
                                                          ---------------                   --------------
   Total liabilities                                           18,922,667                       28,103,970
                                                          ---------------                   --------------
Stockholders' Equity:
Preferred stock, $.01 par value                                   -                                  -
Common stock, $.01 par value                                       48,822                           36,322
Additional paid-in capital                                      5,017,779                          138,143
Unrealized loss on available-for-
   sale securities                                                (56,250)
Retained earnings                                               5,518,954                        3,966,292
Less: Treasury stock (at cost)                                   (142,170)                        (142,170)
                                                         ----------------                    -------------
   Total stockholders' equity                                  10,387,135                        3,998,587
                                                         ----------------                    -------------
   Total liabilities and
      stockholders' equity                                  $  29,309,802                    $  32,102,557
                                                         ================                    =============

</TABLE>



     The accompanying notes are an integral part of these statements.




<PAGE>



                        SYSCOMM INTERNATIONAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                         Nine Months Ended June 30
                                                                       1997                      1996
<S>                                                                <C>                       <C> 

Cash Flows From Operating Activities
  Net Income                                                     $   1,552,662              $   1,051,000
  Adjustments to reconcile net income to net cash
    Provided by operating activities
    Depreciation and amortization                                      123,107                    101,903
    Gain on disposition of fixed assets                                 (2,570)                     - 0 -
    Changes in assets and liabilities
      Accounts receivable                                            1,458,109                (23,949,377)
      Note receivable                                                    - 0 -                     21,939
      Inventory                                                      1,148,170                 (1,822,731)
      Prepaid expenses                                                 (78,955)                    12,473
      Other assets                                                      (9,946)                    13,967
      Accounts payable and accrued liabilities                         516,505                 34,605,541
      Income taxes payable                                            (928,252)                   644,230
                                                                 --------------              ------------
        Net Cash Provided by Operating Activities                    3,778,830                 10,678,945
                                                                 -------------               ------------

Cash Flows from Investing Activities
   Purchase of fixed assets                                           (298,871)                  (135,545)
   Proceeds from disposition of fixed assets                             7,300                    - 0 -
                                                                 --------------               -----------
        Net Cash Used in Investing Activities                         (291,571)                  (135,545)
                                                                 -------------                -----------

Cash Flows From Financing Activities
   Net payments under supplier credit facility                      (8,777,120)              (10,797,111)
   Net proceeds from initial public offering of common stock         4,892,136                     - 0 -
   Payments of long-term liabilities                                   (24,517)                   (8,651)
                                                                 ---------------              -----------
        Net Cash Used by Financing Activities                       (3,909,501)              (10,805,762)
                                                                 --------------               -----------

        Net Decrease in Cash and Cash Equivalents                     (422,242)                 (262,362)

Cash and Cash Equivalents at Beginning of Period                     1,180,680                 1,064,949
                                                                 --------------               -----------

Cash and Cash Equivalents at End of Period                       $     758,438              $    802,587
                                                                 =============                ===========

Supplemental Disclosures of Cash Flow Information 
  Cash paid during the year for:
        Income taxes                                             $   2,060,279              $    202,447
        Interest                                                       778,702                   995,218

Supplemental Schedules of Non-cash investing and
   Financing Activities
   Acquisition of equipment:
        Cost of Equipment                                        $      79,245              $     78,472
           Less: Equipment financed                                    (79,245)                  (78,472)
                                                                 --------------               -----------
                Cash Paid for Capital Expenditures               $      -0-            $            - 0 -
                                                                 ==============               ===========
</TABLE>







<PAGE>




     SYSCOMM INTERNATIONAL CORPORATION
     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     The condensed  consolidated  financial statements of SysComm  International
Corporation  (the  "Company")  are  unaudited  (except  for  the  balance  sheet
information  as of  September  30,  1996,  which is derived  from the  Company's
audited  financial  statements) and reflect all adjustments  (consisting only of
normal recurring adjustments) which are, in the opinion of management, necessary
for a fair presentation of the financial  position and operating results for the
interim periods. The condensed  consolidated financial statements should be read
in conjunction  with the  consolidated  financial  statements and notes thereto,
contained  in the  Company's  Prospectus  dated June 17,  1997.  The  results of
operations  for the  nine  months  ended  June  30,  1997  are  not  necessarily
indicative of the results for the entire fiscal year ending  September 30, 1997,
or any future interim period.

     Stockholders' Equity

     On June 17,  1997,  the Company  completed  an initial  public  offering of
1,250,000  shares of the Company's  common stock at $5.00 per share. On July 21,
1997,  the Company  sold an  additional  135,000  shares of common  stock to its
underwriters at the initial public offering price to cover  over-allotments.  In
connection  with the  public  offering,  125,000  warrants  were  granted to the
Company's representative  underwriter.  The fair value was estimated at $.52 per
warrant using the Black-Scholes  pricing model. The fair value of these warrants
were offset  against  the  offering  proceeds at the time of the initial  public
offering.

     On April 21, 1997, a special meeting of the  stockholders was held to amend
the Certificate of Incorporation to increase the aggregate of authorized  shares
of common stock from  5,000,000  shares of common stock to 40,000,000  shares of
common stock and to authorize  1,000,000  shares of preferred stock. The Company
has no current plans to issue any preferred stock. The preferred stock's rights,
preferences and characteristics  will be determined by the Board of Directors at
such time the preferred stock is issued.

     On March 31,  1997,  the  Company  effected a  two-for-one  split of common
stock.  All  references in the  accompanying  condensed  consolidated  financial
statements and notes relating to common stock and  additional  paid-in  capital,
stock  options,  per share and share data have been  retroactively  adjusted  to
reflect the two-for-one stock split.


<PAGE>




     Commitments and Contingencies

     Employment Agreements

     Effective  June 17,  1997,  the Company  entered into  two-year  employment
agreements  with four  senior  executives.  The  employment  agreements  include
compensation plans for fiscal 1997 as follows:  John H. Spielberger will receive
a base  salary of  $140,000  plus a bonus of 3% of all  pre-tax  earnings of the
Company;  Thomas J.  Baehr  will  receive  $150,000  plus a bonus of 3.5% of all
pre-tax earnings of Information  Technology  Services,  Inc.  ("InfoTech"),  the
Company's wholly-owned subsidiary, Dennis R. Wilson will receive $120,000 plus a
discretionary  bonus  determined by the  Compensation  Committee;  and Norman M.
Gaffney will receive  $125,000 plus a bonus of 1.5% of the gross profit  dollars
of InfoTech.  These annual  performance  incentive plans will be reviewed during
the fiscal year and new  incentive  plans will be  implemented  by the Company's
Compensation Committee for the fiscal year 1998, and thereafter as applicable.

     Litigation

     The Company is a defendant in a lawsuit which alleges wrongful  termination
of employment.  The action has been in the discovery state since 1992. While the
results  of  litigation  cannot  be  predicted  with any  certainty,  management
believes  that the final  outcome  of such  litigation  will not have a material
adverse  effect on the Company's  consolidated  financial  position,  results of
operations or cash flows. Changes in assumptions,  as well as actual experience,
could cause the estimates made by management to be altered.

     Restatement of Financial Statements

     The  financial  statements  for the fiscal  year ended  September  30, 1996
originally  reflected an unrealized loss on  available-for-sale  securities as a
separate  component of stockholders'  equity.  The financial  statements for the
year ended  September  30, 1996 have been restated to reflect a realized loss on
available-for-sale  securities,  since the decline in value was determined to be
other-than-temporary  as of that  date.  The  effect of this  adjustment  was to
reduce retained earnings and unrealized loss on available-for-sale securities as
of September 30, 1996, and net income for the year then ended by $843,750, which
is net of income  taxes in the amount of  $562,500.  In  addition,  earnings per
common  share was reduced from $0.48 to $0.25 for the year ended  September  30,
1996.



<PAGE>




     Item 2.  Management's  Discussion and Analysis of Financial  Conditions and
Results of Operations.

     Results of Operations: 
     Three Months Ended June 30, 1997  Compared with Three Months Ended June 30,
1996

     Net income for the three months ended June 30, 1997 decreased 8% or $44,909
to $502,347  compared to $547,256  for the same period last year.  Earnings  per
share  decreased  13% to $0.14 for the three months ended June 30, 1997 compared
to $0.16 for the three months ended June 30, 1996.

     Revenues 

     Sales for the three months ended June 30, 1997 were $24,718,664 compared to
$33,644,269 for the comparable period last year a decrease of approximately 27%.
The  decrease  in  sales  for  the  current  three  month  period  is  primarily
attributable to the fact that during the comparable period of the prior year the
Company had an unusually large sale of one system, which represented $11,000,000
of revenue.  Putting aside this unusual sale in the prior year, revenues for the
three months ended June 30, 1997 would have increased by  approximately  9% over
the corresponding period last year.

     Gross Profit

     Gross  Profit as a  percentage  of sales  increased  to 10.6% for the three
months ended June 30, 1997  compared to 7.4% for the three months ended June 30,
1996.  The major  reason for the increase was that during the three months ended
June 30, 1996, the Company had an $11,000,000 sale, which produced a lower gross
profit  margin,  thereby  reducing the overall gross profit  percentage  for the
quarter.  In addition,  during the three months ended June 30, 1997, the Company
increased the revenue it generated from its service  business,  which  generally
produces a higher gross profit percentage.

     Selling & Administrative Expenses

     Selling  and  administrative  expenses  increased  by  38% or  $421,231  to
$1,544,756 in the three months ended June 30, 1997 from $1,123,525 for the three
months ended June 30, 1996. The primary  increase in expenses was in payroll and
payroll related  expenses  associated  with the hiring of additional  personnel.
Additionally,  the Company incurred higher costs relating to the move of its New
York City sales  office as well as the opening of new  offices in  Marlton,  New
Jersey and North Haven, Connecticut.

     Interest Expense

     Interest  expense  for the  three  months  ended  June 30,  1997  decreased
$134,946 or 37% to $226,558  from  $361,504  for the three months ended June 30,
1996. The Company believes that its constant  monitoring of accounts  receivable
has helped to keep interest  costs at a minimum as well as the fact that it uses
all  available  funds to reduce its  outstanding  loan balance on a daily basis.
Additionally,  the  Company  used the  proceeds  of its  recent  initial  public
offering to reduce its outstanding indebtedness.


<PAGE>




     Income from Operations before Income Taxes

     Income from  operations  before income taxes  decreased  $154,709 or 15% to
$867,547 for the three months ended June 30, 1997 from  $1,022,256 for the three
months  ended June 30, 1996.  This  decrease is  primarily  attributable  to the
decrease in sales from the prior year.

     Taxes

     The  Company's  effective tax rate is 42.1% for the three months ended June
30, 1997 as compared to 46.5% for the three months ended June 30, 1996.

     Nine Months  Ended June 30, 1997  Compared  With Nine Months Ended June 30,
1996.

     Net income for the nine months  ended June 30, 1997  increased  $501,662 or
48% to  $1,552,662  from  $1,051,000  for the nine months  ended June 30,  1996.
Earnings  per share  increased  41% to $0.45 for the nine months  ended June 30,
1997 compared to $0.32 for the three months ended June 30, 1996. The increase in
net income is attributable to the increase in gross profit percentage during the
nine months ended June 30, 1997.

     Revenues

     Sales for the nine months ended June 30, 1997  decreased  $7,809,552 or 11%
to $63,877,540 from $71,687,092 for the corresponding  period of the prior year.
This  decrease  in sales is  attributable  to the fact that the  Company  had an
unusually large sale of one system,  which  represented  $11,000,000 of revenue.
Putting aside this unusual sale in the prior year, revenues would have increased
approximately 5% over the corresponding period of the prior year.

     Gross Profit

     Gross  profit  as a  percentage  of sales  increased  to 12.3% for the nine
months  ended June 30, 1997 as  compared to 8.9% for the nine months  ended June
30, 1996.  This  increase is due in part to the Company  taking lower volume but
higher margin business.  Generally,  the Company generates a higher gross profit
percentage on orders aggregating less than $1 million,  and conversely,  a lower
profit  percentage  on customer  orders  greater than $1 million,  regardless of
product mix. In addition,  the Company  increased the revenue it generates  from
the sale of services,  which includes the on-site billings of systems engineers,
and the sale of IBM warranties and leases.

     Selling & Administrative Expenses

     Selling  and  administrative  expenses  increased  by  28% or  $988,683  to
$4,501,904 for the nine months ended June 30, 1997 as compared to $3,513,221 for
the nine months ended June 30, 1996. Approximately $500,000 of the increases was
for payroll and payroll related  expenses and $100,000 related to an increase in
the Company's bad debt expense.


<PAGE>




     Interest Expense

     Interest  expense  for the  nine  months  ended  June  30,  1997  decreased
approximately  22% or  $216,516 to $778,702  from  $995,218  for the nine months
ended June 30,  1996.  Approximately  $70,000 of the  decrease was the result of
credits received from IBM Credit Corporation  relating to two lease transactions
for which the  Company's  payment had been  delayed.  In  addition,  the Company
believes  that its  constant  monitoring  of accounts  receivable  has helped to
reduce  interest  costs.  The  Company  uses all  available  funds to reduce its
outstanding loan balance on a daily basis.

     Income from Operations before Income Taxes

     Income from  operations  before income taxes  increased  $793,735 or 42% to
$2,684,662 for the nine months ended June 30, 1997 as compared to $1,890,927 for
the nine  months  ended June 30,  1996.  The  increase  is  attributable  to the
increase in gross profit percentage over the prior year.

     Taxes

     The  Company's  effective  tax rate is 42.2% for the nine months ended June
30, 1997 as compared to 44.4% for the nine months ended June 30, 1996.

     Liquidity and Capital Resources

     The  Company's  current ratio at June 30, 1997 and 1996 were 1.50 and 1.12,
respectively.  Working  capital at June 30, 1997 was  $9,510,536  an increase of
$6,167,991  over the prior year. This increase was primarily due to the proceeds
from the  Company's  initial  public  offering  on June 17,  1997 as well as the
Company's increased earnings.

     Cash  provided by operating  activities  was  $3,778,830  and  $10,678,945,
respectively,  for the nine months  ended June 30,  1997 and 1996.  Cash used in
investing  activities  was  $291,571 and $135,545 for the nine months ended June
30, 1997 and 1996,  respectively,  and was used to finance capital  expenditures
including computer equipment, leasehold improvements, furniture and fixtures and
telephone  systems.  Cash  used  by  financing  activities  was  $3,909,501  and
$10,805,762 for the nine months ended June 30, 1997 and 1996,  respectively  and
included net payments made under the Financing Agreement.

     The Company has a credit arrangement with IBM Credit  Corporation  pursuant
to  which  it may  borrow  up to 85% of its  eligible  receivables  and  100% of
eligible  inventory to a maximum of  $27,500,000.  In addition to the  permanent
credit line,  there are various credit line uplifts  during the year,  which can
increase  the line of  credit by as much as 50%.  As of June 30,  1997 and 1996,
interest  on   outstanding   borrowings   was  prime  plus  1.375%  and  1.625%,
respectively,  or prime  plus  6.5%,  should the  Company  fail to meet  certain
collateral requirements.


<PAGE>




     The  Company  believes  that its  present  line of credit  with IBM  Credit
Corporation  coupled with its current earnings  capacity and the proceeds of its
initial public  offering will be sufficient to meet its capital and  operational
requirements  for at least the next twelve months,  including but not limited to
establishing  a  new  headquarters,   distribution  and  assembly  facility  and
inventory and accounts receivable financing.

     The  Internal  Revenue  Service  is  currently  conducting  an audit of the
Company's  Federal  Income Tax return for the fiscal  year ended  September  30,
1995. In addition, New York State is conducting a sales tax audit for the period
June 1, 1994  through  February 28, 1997.  Management  believes  that both these
audits are within the  ordinary  course of business and will not have a material
adverse effect on the Company.

     Forward-Looking Statements

     Certain  information  contained  in this  Quarterly  Report  on Form  10-Q,
including,  without  limitation,  information  appearing  under  Part I, Item 2,
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations," are  forward-looking  statements (within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities  Exchange Act of
1934).  Factors set forth in the Company's Prospectus filed June 17, 1997, or in
the Company's other Securities and Exchange Commission filings, could affect the
Company's  actual results and could cause the Company's actual results to differ
materially from those expressed in any forward-looking statements made by, or on
behalf of, the Company in this Quarterly Report on Form 10-Q.


<PAGE>



                            PART II-OTHER INFORMATION


     Item 1. Legal Proceedings

     The Company is involved in a legal  proceeding  that is  incidental  to the
conduct of its business.  This  proceeding is not, in the opinion of management,
material.  In the ordinary course of its business,  the Company is, from time to
time, subject to litigation. The Company does not believe that any litigation to
which the  Company  is  currently  subject  is  likely,  individually  or in the
aggregate,  to have a material adverse effect on the financial  condition of the
Company.

     Item 2. Changes in Securities

     None.

     Item 3. Defaults Upon Senior Securities

     None.

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

     (a)  On  April  21,  1997,  the  Company  held  a  special  meeting  of its
Stockholders (the "Meeting").

     (b) At the  Meeting,  the  Stockholders  of the  Company  elected  John  H.
Spielberger  and Thomas Baehr as Class I directors,  Norman  Gaffney and John C.
Spielberger as Class II directors and Dennis Wilson as a Class III director.

     (c) In addition to electing  directors at the Meeting,  the Stockholders of
the Company amended the Company's  Certificate of  Incorporation to increase the
number of authorized  shares from 5,000,000 shares to 41,000,000,  consisting of
40,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock.

     (d) The  following  sets forth the results of voting on each  matter  voted
upon at the meeting:

     1. Election of Directors                    For                Against

        John H. Spielberger                    3,050,000             0
        Thomas Baehr                           3,050,000             0
        Norman M. Gaffney                      3,050,000             0
        John C. Spielberger                    3,050,000             0
        Dennis Wilson                          3,050,000             0

     2. Amendment of the Company's Certificate of Incorporation

                                                 For                Against

                                               3,050,000             0

     Item 5. Other Information

     None.

     Item 6. Exhibits and Reports on Form 8-K

     (a) Exhibits

                  *3.1     Amended and Restated Certificate of Incorporation
                  *3.2     Amended and Restated By-Laws
                  *4.1     Form of Common Stock Certificate
                  *4.2     Form of Representative Warrant
                    11     Statement Re: Computation of Per Share Earnings
                    27     Financial Data Schedule

     (b) Reports on Form 8-K

     None.

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

     * Incorporated by reference from the Registrant's Registration Statement on
Form S-1, Registration No. 333-25593






<PAGE>



                                   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.


                                 SYSCOMM INTERNATIONAL CORPORATION
                                 (Registrant)


                                 /s/John H. Spielberger
                                 ------------------------------------------
                                 John H. Spielberger
                                 President and Chief Executive Officer


                                 /s/Dennis R. Wilson
                                 ------------------------------------------
                                 Dennis R. Wilson
                                 Vice President, Chief Financial Officer
                                        and Secretary

     Dated:____________________