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 December 31, 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 February 2, 1998: 4,555,540 shares.

<PAGE>
                                                            Page No.


     Part I. Financial Information

     Item 1. Consolidated Financial Statements

     Consolidated  Statements of Income (Unaudited)
     for the Three Months Ended
     December 31, 1997 and December 31, 1996                     3

     Consolidated Balance Sheets -
     December 31, 1997 and September 30, 1997                    4

     Consolidated  Statements of Cash Flows
     for the Three Months Ended  December
     31, 1997 and December 31, 1996                              5

     Notes to Consolidated Financial Statements                  6

     Item 2.  Management's  Discussion and Analysis of 
     Financial  Condition and Results of Operations              7-9

     Part II. Other Information                                  10

     Signatures                                                  11
 



<PAGE>

                         Part I - FINANCIAL INFORMATION
                          Item 1. Financial Statements




                        SYSCOMM INTERNATIONAL CORPORATION
                        Consolidated Statements of Income
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED
                                            12/31/97                              12/31/96
<S>                                         <C>                                   <C>

Net sales                                   $ 28,062,283                          $ 21,282,537
Cost of sales                                 25,248,026                            18,643,039
                                            -------------                         -------------
     Gross profit                              2,814,257                             2,639,498
                                            -------------                         -------------

Selling & administrative expenses              2,005,201                             1,364,003
                                            -------------                         -------------

Income from operations                           809,056                             1,275,495
                                            -------------                         -------------

Other income (expense)
   Interest expense                             (247,794)                            (313,778)
   Other                                           2,506                                  625
                                            -------------                         -------------
   Total other expense                          (245,288)                            (313,153)
                                            -------------                         -------------

   Income from operations before
      income taxes                               563,768                              962,342

Provision for income taxes                       247,000                              402,700
                                            -------------                         ------------

Net income                                   $   316,768                         $    559,642
                                            =============                         ============

Net income per common share:
         Basic                              $       0.07                         $       0.18
         Diluted                            $       0.06                         $       0.16


Weighted average number of common shares outstanding:
         Basic                                  4,555,540                           3,170,540
         Diluted                                4,996,244                           3,428,660




The accompanying notes are an integral part of these statements.
</TABLE>




<PAGE>



                                    SYSCOMM INTERNATIONAL CORPORATION
                                       CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>

                                                      December 31, 1997             September 30, 1997
                                                        (Unaudited)                     (Audited)
<S>                                                   <C>                           <C>
                        ASSETS

Cash and cash equivalents                             $      527,496                  $       437,594
Accounts and note receivable, net                         23,977,487                       23,209,156
Inventory                                                  8,475,856                       12,644,343
Other                                                        315,314                          275,307
                                                      ---------------                 ----------------
     Total current assets                                 33,296,153                       36,566,400
                                                      ---------------                 ----------------
Property, plant and equipment, net                         1,724,492                        1,201,549
Other assets                                                 342,120                          336,087
                                                      ---------------                 ----------------
     Total assets                                     $   35,362,765                  $    38,104,036
                                                      ===============                 ================

                  LIABILITIES AND
               STOCKHOLDERS' EQUITY

Supplier credit facility                              $   6,637,764                   $    10,614,838
Accounts payable and accrued liabilities                 16,294,430                        15,052,319
Income taxes payable                                        186,617                           499,214
Other current liabilities                                    44,101                            43,613
                                                      --------------                  ----------------
     Total current liabilities                           23,162,912                        26,209,984
Long-term liabilities                                        55,449                            66,416
                                                      --------------                  ----------------
     Total liabilities                                   23,218,361                        26,276,400
                                                      --------------                  ----------------
Stockholders' Equity:
   Preferred stock, no par value                               -                                 -
   Common stock, $.01 par value                              50,172                            50,172
   Additional paid-in capital                             5,610,452                         5,610,452
   Unrealized loss on available-for-
     sale securities                                        (60,716)                          (60,716)
   Retained earnings                                      6,686,666                         6,369,898
   Less: Treasury stock (at cost)                          (142,170)                         (142,170)
                                                      --------------                  ----------------
     Total stockholders' equity                          12,144,404                        11,827,636
                                                      --------------                  ----------------
     Total liabilities and
        stockholders' equity                          $  35,362,765                    $   38,104,036
                                                      ==============                  ================




The accompanying notes are an integral part of these statements.
</TABLE>




<PAGE>



                                    SYSCOMM INTERNATIONAL CORPORATION
                                  CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                       Three Months Ended December 31
                                                                          1997                   1996
<S>                                                              <C>                     <C>

Cash Flows From Operating Activities
  Net Income                                                     $      316,768          $     559,642
  Adjustments to reconcile net income to net cash
      provided by operating activities
         Depreciation and amortization                                   68,400                 40,718
         Gain on disposition of fixed assets                             - 0 -                  (2,570)
         Changes in assets and liabilities
         Accounts and note receivable                                  (768,331)             3,856,409
         Inventory                                                    4,168,487             (1,700,773)
         Prepaid expenses                                               (40,007)              (165,775)
         Other assets                                                    (6,033)                (8,071)
         Accounts payable and accrued liabilities                     1,242,111               (225,561)
         Income taxes payable                                          (312,597)              (766,032)
                                                                 ---------------         -------------- 
            Net Cash Provided by Operating Activities                 4,668,798              1,587,987
                                                                 ---------------         --------------

Cash Flows from Investing Activities
   Purchase of fixed assets                                            (591,343)              ( 81,752)
   Proceeds from disposition of fixed assets                             -0-                     7,300
                                                                 ---------------         --------------
            Net Cash Used in Investing Activities                      (591,343)              ( 74,452)
                                                                  --------------         --------------

Cash Flows From Financing Activities
   Net payments under supplier credit facility                       (3,977,074)              (462,878)
   Payments of long-term liabilities                                    (10,479)                (7,942)
                                                                 ---------------         --------------
            Net Cash Used by Financing Activities                    (3,987,553)              (470,820)
                                                                 ---------------         --------------

            Net Increase in Cash and Cash Equivalents                    89,902              1,042,715

Cash and Cash Equivalents at Beginning of Period                        437,594              1,180,680
                                                                 ---------------         --------------

Cash and Cash Equivalents at End of Period                       $      527,496          $   2,223,395
                                                                 ===============         ==============
 
Supplemental Disclosures of Cash Flow Information
   Cash paid during the year for:
        Income taxes                                             $      559,740          $   1,168,562
        Interest                                                        247,794                313,778

Supplemental Schedules of Non-cash Investing and
   Financing Activities
   Acquisition of equipment:
        Cost of Equipment                                        $       -0-              $     25,631
           Less: Equipment financed                                      -0-                   (25,631)
                                                                 ---------------          -------------
                Cash Paid for Capital Expenditures               $       -0-              $      - 0 -
                                                                 ===============          =============
</TABLE>






<PAGE>



SYSCOMM INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     1. The condensed consolidated financial statements of SysComm International
Corporation  (the  "Company")  are  unaudited  (except  for  the  balance  sheet
information  as of  September  30,  1997,  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  Annual  Report.  The results of  operations  for the
three  months  ended  December 31, 1997 are not  necessarily  indicative  of the
results for the entire  fiscal year ending  September  30,  1998,  or any future
interim period.

     2. Commitments and Contingencies

     (A) 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 1998 as follows:  John H. Spielberger will receive
a base salary of $160,000 plus a bonus based on a percentage of pre-tax earnings
of the Company based on sales volume; Thomas J. Baehr will receive $160,000 plus
a bonus of a percentage of pre-tax earnings based on sales volume of Information
Technology Services, Inc. ("InfoTech");  the Company's wholly-owned  subsidiary;
Dennis R. Wilson will receive $140,000 plus a discretionary  bonus determined by
the Compensation  Committee;  and Norman M. Gaffney will receive $140,000 plus a
bonus of 1% of the  gross  profit  dollars  of  InfoTech  and 1% of the  pre-tax
earnings of InfoTech.  These annual performance incentive plans will be reviewed
during  the  fiscal  year and new  incentive  plans  may be  implemented  by the
Company's  Compensation  Committee for the fiscal year 1999,  and  thereafter as
applicable.

     (B) 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.



<PAGE>


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

     Results of  Operations:  Three Months Ended December 31, 1997 Compared with
Three Months Ended December 31, 1996

     Net income for the three months ended  December 31, 1997  decreased  43% to
$316,768  compared to $559,642 for the same period last year. Basic earnings per
share  decreased  61% to $.07 for the  three  months  ended  December  31,  1997
compared to $0.18 for the same period last year.

     Revenues:  Sales  for  the  three  months  ended  December  31,  1997  were
$28,062,283 compared to $21,282,537 for the same period last year an increase of
approximately  32%.  Approximately  $4,100,000 of the sales increase  relates to
sales  generated by the Company's new  locations in  Connecticut  and New Jersey
which  began  operations  in January  1997 and  Buffalo,  New York,  which began
operations in October 1997.  Additionally,  sales in the Company's Massachusetts
location increased  approximately  $2,000,000 due to an increase in the sales of
RS/6000 products.

     Gross Profit:  Gross Profit as a percentage of sales decreased to 10.0% for
the three months ended  December 31, 1997  compared to 12.4% for the same period
last year.  The decrease in gross profit  percentage  is primarily due to a more
competitive  market in both the personal  computer  and open  systems i.e.  UNIX
markets,  which has  forced  the  Company  to lower  selling  prices in order to
compete for business.

     Selling &  Administrative  Expenses:  Selling and  administrative  expenses
increased by $641,198 or 47% to  $2,005,201  from  $1,364,003 in the same period
last year.  Approximately $200,000 of the increases represents expenses relating
to the opening of new offices, $140,000 relates to additional commissions on the
increased  sales volume and the balance  relates to payroll and payroll  related
expenses due to the hiring of 19 additional personnel.

     Interest Expense:  Interest expense for the three months ended December 31,
1997 decreased  $65,984 or 21% to $247,794 from $313,778 in the same period last
year.  This decrease in interest costs is primarily  attributable to a reduction
in debt as a result  of the use of  proceeds  from  the  Company's  1997  public
offering  coupled  with the  constant  monitoring  of  accounts  receivable  and
inventory  levels.  In addition,  the Company uses all available funds to reduce
its outstanding loan balance on a daily basis.


<PAGE>



     Income from Operations  before Income Taxes: Income from operations before
income  taxes  decreased  $398,574 or 41% to $563,768 for the three months ended
December 31, 1997 from  $962,342 for the same period last year.  The decrease is
primarily attributable to the decrease in gross profit percentage along with the
increases in selling and administrative expenses.

     Taxes: The Company's effective tax rate is 43.8% for the three months ended
December 31, 1997 as compared to 41.8% for the same period last year.

     Liquidity and Capital  Resources:  The Company's  current ratio at December
31, 1997 and 1996 was 1.43 and 1.15,  respectively.  Working capital at December
31, 1997 was  $10,133,241  an increase of  $6,213,532  over the same period last
year.  The  increase  was due to the proceeds of the  Company's  initial  public
offering in 1997 and the Company's earnings.

     Cash  provided by  operating  activities  was  $4,668,798  and  $1,587,987,
respectively,  for the three  months  ended  December  31,  1997 and  1996.  The
increase  in 1997 and 1996  was due to  reductions  in  inventory  and  accounts
receivable,  respectively.  Cash used in investing  activities  was $591,343 and
$74,452 for the three months ended December 31, 1997 and 1996, respectively, and
was used to finance  the  building  of the  Company's  new  facility in 1997 and
computer equipment,  leasehold  improvements and furniture and fixtures in 1996.
Cash used by  financing  activities  was  $3,987,553  and $470,820 for the three
months ended December 31, 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 regular
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 December 31, 1997, interest
on outstanding  borrowings was prime or prime plus 6.5%, should the Company fail
to meet certain  collateral  requirements.  Throughout fiscal 1997 and the first
quarter of fiscal 1998, the Company has been in a positive  collateral  position
with IBM Credit and has had the ability to draw down against its current line of
credit whenever needed.

     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.


<PAGE>




     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 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

     None.

     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)



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



                                    By:/s/----------------------------
                                       Dennis R. Wilson
                                       Vice President, Chief Financial Officer
                                       And Secretary


         Dated: February 11, 1998