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 March 31, 2000

                                       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)

                               20 Precision Drive
                               Shirley, N.Y. 11967
              (Address of Principal Executive Offices and Zip Code)

                                 (631) 205-1000
              (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 May 12, 2000: 4,703,421 shares.

<PAGE>

                         Part I - FINANCIAL INFORMATION
                          Item 1. Financial Statements




                        SYSCOMM INTERNATIONAL CORPORATION
                      Consolidated Statements of Operations
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                THREE MONTHS ENDED                  SIX MONTHS ENDED
                                              3/31/00          3/31/99          3/31/00          3/31/99
                                              -------          -------          -------          -------

<S>                                      <C>               <C>              <C>               <C>
Net sales                                $ 9,338,000       $ 14,355,000     $ 21,063,000      $ 41,684,000
Cost of sales                              8,025,000         12,434,000       18,468,000        36,924,000
                                         ------------      -------------    -------------     -------------
     Gross profit                          1,313,000          1,921,000        2,595,000         4,760,000
                                         ------------      --------------   --------------    --------------

Selling & administrative expenses          1,848,000          1,553,000        4,082,000         3,455,000
                                         ------------      --------------   --------------    --------------

(Loss) Income from operations               (535,000)           368,000       (1,487,000)        1,305,000
                                         ------------      --------------   --------------    --------------

Other income (expenses)
   Interest expense                          (34,000)           (80,000)         (80,000)         (181,000)
   Other                                      73,000              2,000           73,000            17,000
                                         --------------    ---------------  --------------    --------------
   Total other expenses                       39,000            (78,000)          (7,000)         (164,000)
                                         --------------    ---------------  --------------    --------------
   Income (loss) from operations
     before income taxes                    (496,000)           290,000       (1,494,000)        1,141,000

Provision (benefit) for income taxes
     Income (loss) from operations           (26,000)          (118,000)        (276,000)           459,000
                                         --------------    ---------------  --------------    --------------

Net (loss) income                        $  (470,000)      $     172,000    $ (1,218,000)     $     682,000
                                         ==============    ===============  ==============    ==============

Net (loss) income per common share
         Basic                           $      (.10)      $         .04    $       (.26)     $         .14
         Diluted                         $      (.10)      $         .04    $       (.26)     $         .14

Weighted average number of common
shares outstanding
         Basic                                 4,683,120         4,752,477     4,711,523          4,759,914
         Diluted                               4,683,120         4,758,935     4,711,523          4,759,914

</TABLE>

The accompanying notes are an integral part of these statements.

<PAGE>


                        SYSCOMM INTERNATIONAL CORPORATION
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>


                                                                 March 31, 2000            September 30, 1999
                                                                 --------------            ------------------
                                                                    (Unaudited)                  (Audited)
                      ASSETS

<S>                                                                 <C>                        <C>
Cash and cash equivalents                                           $  2,630,000               $  2,263,000
Accounts receivable, net                                               7,347,000                 11,401,000
Inventory                                                                339,000                    742,000
Other                                                                    665,000                  1,156,000
                                                                      ----------                 ----------
   Total current assets                                               10,981,000                 15,562,000
                                                                      ----------                 ----------
Property, plant and equipment, net                                     3,390,000                  3,315,000
Other assets                                                             558,000                    424,000
                                                                    ------------               ------------
   Total assets                                                     $ 14,929,000               $ 19,301,000
                                                                    ============               ============

                  LIABILITIES AND
               STOCKHOLDERS' EQUITY

Accounts payable and accrued liabilities                            $  2,995,000                $ 6,378,000
Income taxes payable                                                       4,000                     10,000
Other current liabilities                                                415,000                     96,000
                                                                       ---------                  ---------
   Total current liabilities                                           3,414,000                  6,484,000
Long-term liabilities                                                  1,560,000                  1,610,000
                                                                       ---------                  ---------
   Total liabilities                                                   4,974,000                  8,094,000
                                                                       ---------                  ---------
Stockholders' Equity:
         Preferred stock, no par value                                     - 0 -                      - 0 -
         Common stock, $.01 par value                                     55,000                     55,000
         Additional paid-in capital                                    6,497,000                  6,474,000
         Retained earnings                                             4,304,000                  5,522,000
         Less: Treasury stock (at cost)                                (901,000)                  (844,000)
                                                                       ---------                 ----------
   Total stockholders' equity                                          9,955,000                 11,207,000
                                                                     -----------                -----------
   Total liabilities and
      stockholders' equity                                           $14,929,000                $19,301,000
                                                                     ===========                ===========
</TABLE>

The accompanying notes are an integral part of these statements.


<PAGE>


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

                                                                      Six Months Ended March 31,
                                                                      --------------------------
                                                                       2000              1999
                                                                       ----              ----

<S>                                                             <C>               <C>
Cash Flows From Operating Activities
  Net (Loss)/Income                                             $  (1,218,000)    $     682,000
  Adjustments to reconcile net income to net cash
      provided by operating activities
          Depreciation and amortization                               150,000           165,000
          Changes in assets and liabilities
              Accounts receivable                                   4,054,000         6,747,000
              Inventory                                               403,000         1,905,000
              Prepaid expenses                                       (235,000)           26,000
              Recoverable income taxes                                726,000           198,000
              Other assets                                           (134,000)          (24,000)
              Accounts payable and accrued liabilities             (3,064,000)       (6,019,000)
              Income taxes payable                                     (6,000)          400,000
                                                                   -----------       -----------
                 Net Cash Provided by Operating Activities            676,000         4,080,000
                                                                   -----------       -----------
Cash Flows from Investing Activities
   Purchase of fixed assets                                          (225,000)          (39,000)
                                                                   ----------        -----------
                 Net Cash Used in Investing Activities               (225,000)          (39,000)
                                                                   ----------        -----------
Cash Flows From Financing Activities
   Net proceeds of term loan                                              -0-           100,000
   Net payments under supplier credit facility                            -0-        (3,020,000)
   Payments of long-term liabilities                                  (50,000)          (50,000)
   Purchase of treasury stock                                         (57,000)          (43,000)
   Net Proceeds from Issuance of Common Stock                          23,000               -0-
                                                                   -----------       -----------
                 Net Cash Used by Financing Activities                 84,000        (3,013,000)
                                                                   -----------       -----------

        Net Increase in Cash and Cash Equivalents                     367,000         1,028,000

Cash and Cash Equivalents at Beginning of Period                    2,263,000           914,000
                                                                   -----------       -----------
Cash and Cash Equivalents at End of Period                         $2,630,000        $1,942,000
                                                                   ===========       ===========

Supplemental Disclosures of Cash Flow Information
 Cash paid during the year for:
        Income taxes                                               $    6,000        $  189,000
        Interest                                                       80,000           181,000

</TABLE>



The accompanying notes are an integral part of these statements.

<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, 1999,  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 six  months  ended  March 31,  2000 are not
     necessarily  indicative  of the results  for the entire  fiscal year ending
     September 30, 2000, or any future interim period.




<PAGE>


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


Results of Operations:

Three  Months  Ended March 31, 2000  Compared  with Three Months Ended March 31,
1999

Net loss for the three  months  ended  March 31,  2000 was  $470,000 or $.10 per
share  compared  to a net  profit  of  $172,000  or $.04 per share for the three
months  ended  March  31,  1999.  The net  loss  was  primarily  the  result  of
significantly lower sales.

Revenues

Sales  revenues  for the  three  months  ended  March 31,  2000 were  $9,338,000
compared  with  $14,355,000  for the  same  period  last  year,  a  decrease  of
$5,017,000 or 35.0%.  This  decrease in sales  revenues  reflects  significantly
higher  competition in the sales of hardware  components as well as a transition
from  participation in IBM's Authorized  Assembler  Program in the quarter ended
March 31, 1999 to a more service-oriented sales emphasis.

Gross Profit

Gross Profit as a percentage of sales was 14.1% for the three months ended March
31, 2000 compared to 13.4% for the same period last year. This increase reflects
the Company's  strategy of focusing on the more  profitable  mid-range  computer
market and consulting services.

Selling & Administrative Expenses

Selling and  administrative  expenses  for the three months ended March 31, 2000
increased by $295,000 or 19.0% to $1,848,000 from $1,553,000 for the same period
last year.  This  increase  is due  primarily  to an  increase  in  payroll  and
payroll-related  expenses  associated  with converting our operating and selling
staff from hardware sales to technical services and e-solutions selling.

Interest Expense

Interest expense for the three months ended March 31, 2000 decreased  $46,000 or
57.5% to $34,000  from  $80,000 for the same period last year.  The  decrease is
attributable to a reduction in borrowing as a result of the Company's  reduction
in accounts receivable to $7,347,000 from $12,948,000 as of the same quarter-end
last year.  The reduction in accounts  receivable is primarily  attributable  to
reduced sales levels and more aggressive management of collections.

<PAGE>

(Loss) Income from Operations before Income Taxes

Loss before  income taxes for the three months ended March 31, 2000 was $496,000
compared with a profit of $290,000 for the same period last year.  The change of
$786,000 was primarily attributable to lower sales revenues (which was partially
offset  by  increased  gross  profit  margins)  and  increases  in  selling  and
administrative expenses.

Taxes

The Company's effective tax rate for the three months ended March 31, 2000 was a
tax benefit associated with a refund received from prior years compared to a tax
provision of $118,000 or 40.7% for the same period last year.

Six Months Ended March 31, 2000 Compared With Six Months Ended March 31, 1999.

Net loss for the six months  ended March 31, 2000 was  $1,218,000  compared to a
profit of $682,000 for the same period last year.  Basic loss per share was $.26
for the six months  ended  March 31,  2000  compared to a profit of $.14 for the
same period last year.  The loss is primarily  the result of lower sales volume,
particularly  offset by higher  gross  profit  margins  and higher  selling  and
administrative expenses.

Revenues

Sales  revenues for the six months ended March 31, 2000 decreased by $20,621,000
or 49.5% to  $21,063,000  from  $41,684,000  for the same period last year.  The
decrease in sales revenue is primarily  attributed to the Company's  decision to
discontinue  low margin PC assembly  operations and focus on sales of e-business
solutions  including mid-range hardware and data and storage management software
and services.

Gross Profit

Gross profit as a  percentage  of sales was 12.3% for the six months ended March
31, 2000 compared to 11.4% for the same period last year. The increase  reflects
the Company's strategy to focus on higher margin e-business solutions, mid-range
computer sales and services.

Selling & Administrative Expenses

Selling  and  administrative  expenses  for the six months  ended March 31, 2000
increased  $627,000 or 18.2% to $4,082,000  from  $3,455,000 for the same period
last year. The increase in expenses is primarily  attributable to the commitment
of the  company  to hiring a more  technical  sales and  services  staff to more
effectively compete in the e-solutions market space.

<PAGE>

Interest Expense

Interest  expense for the six months  ended March 31, 2000  decreased to $80,000
compared to $181,000  for the same  period last year.  The  decrease in interest
expense is directly  related to the significant  decreases in both inventory and
accounts receivable.

Loss from Operations before Income Taxes

Loss from operations before income taxes for the six months ended March 31, 2000
was  $1,494,000  versus a profit of $1,141,000 in the same period last year. The
loss is attributable to the decreases in sales volume,  partially  offset by the
increase in gross profit margins and the increase in selling and  administrative
expenses.

Taxes

The  Company's  effective tax rate for the six months ended March 31, 2000 was a
tax benefit compared to 40.2% for the same period last year.

Liquidity and Capital Resources

The  Company's  current  ratio at  March  31,  2000 and 1999 was 3.22 and  2.67,
respectively.  Working  capital at March 31, 2000 was  $7,567,000  a decrease of
$2,536,000 over the same period last year.

Cash provided by operating  activities  was $676,000 and  $4,080,000 for the six
months ended March 31, 2000 and 1999, respectively,  due primarily to reductions
in the  Company's  inventory  and  accounts  receivable.  Cash used in investing
activities  was $225,000 and $39,000 for the six months ended March 31, 2000 and
1999,  respectively,  and was primarily  utilized in the acquisition of computer
hardware and software.  Cash used in financing  activities during the six months
ended  March 31, 2000 and 1999 was $84,000  and  $3,013,000,  respectively,  and
represented net payments made under the Company's  Supplier Credit Facility with
IBM and long-term debt in 2000 and 1999.

The Company maintains a credit arrangement with IBM Credit Corporation  pursuant
to which it may borrow an amount equal to up to 85% of its eligible  receivables
and 100% of eligible  inventory up to a maximum of  $22,000,000.  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 March 31,
2000, interest on outstanding borrowings was prime or prime plus 6.5% should the
Company fail to meet certain collateral requirements. Throughout fiscal 1999 and
the  first six  months  of  fiscal  2000,  the  Company  has been in a  positive
collateral  position with IBM Credit. The Company believes that its present line
of  credit  with IBM  Credit  Corporation,  coupled  with its  current  earnings
capacity,  will be sufficient to meet its capital and  operational  requirements
for at least the next twelve months.


<PAGE>


As of March 31, 2000, the Company was in default of certain covenants  contained
in its  loan  agreement  with  IBM  Credit  Corporation  and  certain  covenants
contained in the mortgage (the  "Mortgage")  on its building in Shirley,  NY. In
both cases,  a waiver and  amendment  was  received  which will allow  continued
operations.  With respect to the amendment to the IBM Credit  Corporation credit
arrangement,  (i) the  maximum  credit  line was  reduced  to  $22,000,000  from
$22,500,000  and (ii) the Net Profit  after Tax to Revenue  ratio was amended to
provide for a ratio  equal to or greater  than than  ($500,000)  for each of the
fiscal quarters ended June 30, 2000 and September 30, 2000 and $0 for the fiscal
year ended December 31, 2000 and at all times  thereafter.  All other collateral
requirements  remain unchanged.  With respect to the Mortgage,  the bank and the
Company entered into a Waiver and Fourth  Amendment to the Mortgage  pursuant to
which the bank  waived and  amended  the  quarterly  net  loss/profit  provision
contained  in the  Mortgage  to allow up to a $496,000  net loss for the quarter
ended March 31, 2000 and limited net loss to $150,000 for the quarter ended June
30, 2000 and a net profit of $125,000 for the quarter ended  September 30, 2000.
Also,  the  parties  amended  the debt  service  ratio to require the Company to
maintain the ratio,  beginning December 31, 2000, at 1.25:1.00 on a rolling four
quarters calculation throughout the term of the mortgage.

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
                  None

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
                 **10.1    1998 Incentive Stock Option Plan
                ***10.2    1999 Employee Stock Purchase Plan
                   10.3    Waiver and Fourth  Amendment to Mortgage  dated as of
                           May 11, 2000 by and between the Company and the Chase
                           Manhattan Bank.
                  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

**   Incorporated by reference from the Registrant's  definitive proxy statement
     filed with the Securities and Exchange Commission on December 27, 1999.

***  Incorporated by reference from the Registrant's  definitive proxy statement
     filed with the Securities and Exchange commission on December 29, 1998.


<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
                                   ---------------------------------------
                                   John H. Spielberger
                                   President and Chief Executive Officer



                                By:  /s/ Thomas F. Belleau
                                    ---------------------------------------
         Date: May 12, 2000         Thomas F. Belleau
                                    Vice President, Chief Financial Officer
                                    and Secretary