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, 1999

                                       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 January 27, 2000: 4,682,894 shares.






<PAGE>




                         Part I - FINANCIAL INFORMATION
                          Item 1. Financial Statements




                        SYSCOMM INTERNATIONAL CORPORATION
                      Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                             THREE MONTHS ENDED
                                                          12/31/99         12/31/98
                                                          --------         --------

<S>                                                      <C>             <C>
Net sales ............................................   $ 11,725,000    $ 27,329,000
Cost of sales ........................................     10,443,000      24,490,000
                                                         ------------    ------------
     Gross profit ....................................      1,282,000       2,839,000
                                                         ------------    ------------

Selling & administrative expenses ....................      2,234,000       1,901,000
                                                         ------------    ------------

(Loss)/income from operations ........................       (952,000)        938,000
                                                         ------------    ------------

Other income (expense)
   Interest expense ..................................        (46,000)       (102,000)

   Other .............................................        - 0 -            16,000
                                                         ------------    ------------
   Total other expense ...............................        (46,000)        (86,000)
                                                         ------------    ------------

(Loss)/income before income taxes ....................       (998,000)        852,000

(Benefit from)/provision for income taxes ............       (250,000)        341,000
                                                         ------------    ------------
Net (loss)/income ....................................   $   (748,000)   $    511,000
                                                         ============    ============

Net (loss)/income per common share
         Basic .......................................         $(0.16)          $0.11
         Diluted .....................................          (0.16)           0.11

Weighted average number of common
     shares outstanding
         Basic .......................................      4,688,346       4,767,190
         Diluted .....................................      4,688,346       4,767,190


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



<PAGE>


                        SYSCOMM INTERNATIONAL CORPORATION
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>


                                                               December 31, 1999         September 30, 1999
                                                               -----------------         ------------------
                                                                     (Unaudited)               (Audited)
                      ASSETS

<S>                                                                  <C>                        <C>
Cash and cash equivalents                                            $ 3,473,000                $ 2,263,000
Accounts receivable, net                                               9,353,000                 11,401,000
Inventory                                                                707,000                    742,000
Other                                                                    692,000                  1,156,000
                                                                   -------------                -----------
   Total current assets                                               14,225,000                 15,562,000
                                                                   -------------                -----------
Property, plant and equipment, net                                     3,288,000                  3,315,000
Other assets                                                             252,000                    424,000
                                                                   -------------                -----------
   Total assets                                                     $ 17,765,000                $19,301,000
                                                                   =============                ===========

                  LIABILITIES AND
               STOCKHOLDERS' EQUITY

Supplier credit facility                                              $    - 0 -                 $    - 0 -
Accounts payable and accrued liabilities                               5,512,000                  6,378,000
Income taxes payable                                                       3,000                     10,000
Other current liabilities                                                244,000                     96,000
                                                                   -------------                -----------
   Total current liabilities                                           5,759,000                  6,484,000
Long-term liabilities                                                  1,604,000                  1,610,000
                                                                   -------------                -----------
   Total liabilities                                                   7,363,000                  8,094,000
                                                                   -------------                -----------
Stockholders' Equity:
         Preferred stock, no par value                                         -                          -
         Common stock, $.01 par value                                     55,000                     55,000
         Additional paid-in capital                                    6,474,000                  6,474,000
         Retained earnings                                             4,774,000                  5,522,000
         Less: Treasury stock (at cost)                                (901,000)                  (844,000)
                                                                   -------------                -----------
   Total stockholders' equity                                         10,402,000                 11,207,000
                                                                   -------------                -----------
      stockholders' equity                                         $  17,765,000               $ 19,301,000
                                                                   =============               ============




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




<PAGE>


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

                                                                          Three Months Ended December 31
                                                                          ------------------------------
                                                                           1999                   1998
                                                                           ----                   ----

<S>                                                                     <C>                   <C>
Cash Flows From Operating Activities
  Net (loss)/income                                                     $  (748,000)          $  511,000
  Adjustments to reconcile net (loss)/income to net cash
    provided by operating activities
         Depreciation and amortization                                        75,000              83,000
         Changes in assets and liabilities
                   Accounts receivable                                     2,048,000         (2,660,000)
                   Inventory                                                  35,000           1,403,000
              Prepaid expenses                                                24,000              73,000
              Recoverable income taxes                                       340,000              82,000
              Other assets                                                   172,000            (12,000)
              Accounts payable and accrued liabilities                     (599,000)           1,564,000
              Income taxes payable                                           (7,000)             393,000
                                                                        -----------            ---------
                   Net Cash Provided by Operating Activities              1,340,000            1,437,000
                                                                        -----------            ---------

Cash Flows from Investing Activities
   Purchase of fixed assets                                                 (48,000)             (13,000)
                                                                        -----------            ---------
                   Net Cash Used in Investing Activities                    (48,000)             (13,000)
                                                                        -----------            ---------

Cash Flows From Financing Activities
   Net payments under supplier credit facility                                     -            (178,000)
   Payments of long-term debt                                               (25,000)             (27,000)
   Purchase of treasury stock                                               (57,000)             (24,000)
                                                                        -----------            ---------
                   Net Cash Used in Financing Activities                    (82,000)            (229,000)
                                                                        -----------            ---------
                   Net Increase in Cash and Cash Equivalents              1,210,000            1,195,000


Cash and Cash Equivalents at Beginning of Period                          2,263,000              914,000
                                                                        -----------            ---------
Cash and Cash Equivalents at End of Period                              $ 3,473,000          $ 2,109,000
                                                                        ===========          ===========

Supplemental  Disclosures of Cash Flow Information  Cash paid (received)  during
    the period for:

        Income taxes                                                     $ (350,000)         $ (204,000)
        Interest                                                             46,000             102,000



The accompanying notes are an integral part of these statements.
</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, 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 three months ended December 31, 1999 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 Condition and Results
of Operations.

Results of Operations:
Three Months Ended December 31, 1999 Compared to Three Months Ended December 31,
1998.

Net loss for the three months ended December 31, 1999 was $748,000 compared to a
net profit of  $511,000  for the same  period  last year.  This  decrease in net
income was the result  primarily of lower sales  volume.  Diluted loss per share
was $.16 for the three  months ended  December 31, 1999  compared to earnings of
$.11 for the same period last year.

Revenues:
Revenues for the three months ended December 31, 1999 were $11,725,000  compared
to  $27,329,000  for the same period last year,  a decrease  of  $15,604,000  or
approximately  57.1%.  The overall decrease in sales is the result of a delay in
customer  commitments  to new  projects  until  the  effects  of Y2K  are  fully
understood   and  the  effect  of  the  Company's   decision  to  terminate  its
participation in the IBM Authorized Assembler Program in April 1999.

Gross Profit:
Gross  profit as a percentage  of sales  increased to 10.9% for the three months
ended  December  31, 1999  compared to 10.4% for the same period last year.  The
improvement  in gross profit over the prior year is primarily  the result of the
Company's strategic emphasis on serving the information  technology  marketplace
with  mid-range  systems and  increasing  demand for the  Company's  value-added
services.

Selling and Administrative Expenses:
Selling and administrative expenses increased by $333,000 or approximately 17.5%
to  $2,234,000  for the three  months  ended  December  31,  1999 as compared to
$1,901,000 for the same period last year.  This increase is primarily the result
of the Company's  emphasis to increase the training and skill levels of our work
force to better serve the mid-range marketplace and provide a full compliment of
e-business solutions and consulting services.

Interest Expense:
Interest expense for the three months ended December 31, 1999 decreased  $56,000
or  approximately  55% to $46,000  from  $102,000 for the same period last year.
This decrease is due to a reduction in borrowings  against the Company's  Credit
Facility as a result of the  Company's  reduction in inventory to $707,000  from
$1,183,000 for the same period last year and the associated cost to finance this
inventory.


<PAGE>



Income Before Income Taxes:
Loss  before  income  taxes for the three  months  ended  December  31, 1999 was
$998,000  compared  to income of $852,000  for the same  period last year.  This
decrease of  $1,850,000  was  attributable  to the  Company's  decrease in sales
volume.

Taxes:
The Company's  effective tax rate was 25.0% for the three months ended  December
31, 1999 compared to 40.0% for the same period last year.

Liquidity and Capital Resources:
The  Company's  current  ratio at December  31, 1999 and 1998 was 2.47 and 1.60,
respectively. Working capital at December 31, 1999 was $8,466,000, a decrease of
$1,371,000  from the same period last year.  The decrease in working  capital is
the result of the losses  sustained by the Company in fiscal 1999 and reductions
in current assets relative to current liabilities.

Cash  provided  by  operating   activities  was   $1,340,000   and   $1,437,000,
respectively,  for the three  months  ended  December  31,  1999 and  1998.  The
decrease was  attributable  primarily to reductions  in the Company's  inventory
levels. Cash used in investing  activities was $48,000 and $13,000 for the three
months ended December 31, 1999 and 1998, respectively,  and was used to purchase
furniture  and fixtures and office  computer  equipment.  Cash used in financing
activities  during the three months ended December 31, 1999 and 1998 was $82,000
and $229,000,  respectively,  and represented payments of long-term debt and the
purchase of treasury stock during such periods and net payments of $178,000 made
under the Supplier Credit Facility in 1998.

Year 2000 Compliance

The Company  believes  its computer  equipment  and software are fully year 2000
compliant  based on its review of  transactions  since the close of the calendar
year ended December 31, 1999. No discernable year 2000 compliance-related issues
or problems  have occurred  since  December 31, 1999.  The Company  believes any
possible  occurrences that may develop are likely to be minor and inexpensive to
correct.

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

On January 27, 2000,  the Company held its Annual Meeting of  Stockholders  (the
"Meeting").  At that  Meeting,  the  following  matters  were  voted by proxy as
follows:

(1)  John H. Spielberger and Lowell A. Shulman were elected as Class I directors
     of the Company based on the following voting:

         Director                   Votes For                  Votes Against
         --------                   ---------                  -------------
         John H. Spielberger        4,327,744                      192,810
         Lowell A. Shulman          4,327,744                      192,810

(2)  The amendment to the Company's 1998 Stock Option Plan to increase the total
     number of shares of common stock available for issuance from 500,000 shares
     to 1,000,000 shares was approved based upon the following voting:

                           Votes For:                3,037,311
                           Votes Against:               91,817

(3)  The firm of Albrecht,  Viggiano,  Zureck & Company, P.C. was reappointed as
     the Company's  auditors for the fiscal year ended  September 30, 2000 based
     upon the following voting:

                           Votes For:                4,517,843
                           Votes Against:                1,916


Item 5.   Other Information

         None


<PAGE>



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
                  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.






<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



 Date: February 3, 2000           By:/s/ Thomas F. Belleau
                                     ---------------------
                                     Thomas F. Belleau
                                     Vice President, Chief Financial Officer
                                     and Secretary