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, 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)

                                 (516) 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 August 6, 1999: 4,744,205 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
                                               6/30/99           6/30/98         6/30/99           6/30/98
                                               -------           -------         -------           -------
<S>                                        <C>               <C>              <C>               <C>
Net sales                                  $ 14,017,525      $ 26,416,609     $ 55,701,422      $ 76,706,890
Cost of sales                                12,799,626        23,917,082       49,723,309        69,519,956
                                             ----------        ----------       ----------        ----------
     Gross profit                             1,217,899         2,499,527        5,978,113         7,186,934
                                              ---------         ---------        ---------         ---------

Selling & administrative expenses             1,994,503         2,067,453        5,449,208         6,096,657
                                              ---------         ---------        ---------         ---------

Income (loss) from operations                 (776,604)           432,074          528,905         1,090,277
                                              ---------           -------          -------         ---------

Other income (expenses)
   Interest expenses                           (35,972)         (245,456)        (217,187)         (701,324)
   Other                                        15,482          ( 34,930)          32,684          ( 28,637)
                                               --------         ---------        ---------         ---------

   Total other expenses                        (20,490)         (280,386)        (184,503)         (729,961)
                                               --------         ---------        ---------         ---------

   Income (loss) from operations
     before income taxes                      (797,094)           151,688          344,402           360,316

Provision (benefit) for income taxes          (319,000)            62,600          140,000           150,600
                                              ---------           -------          -------           -------

Net income (loss)                           $ (478,094)       $    89,088      $   204,402       $   209,716
                                            ===========       ===========      ===========       ===========

Net income (loss) per common share
         Basic                              $    (0.10)       $      0.02      $      0.04       $      0.05
         Diluted                            $    (0.10)       $      0.02      $      0.04       $      0.04

Weighted average number of common
shares outstanding
         Basic                                4,745,897         4,562,969        4,755,243         4,558,016
         Diluted                              4,745,940         4,932,794        4,755,243         4,963,031


</TABLE>

The accompanying notes are an integral part of these statements.





<PAGE>


                        SYSCOMM INTERNATIONAL CORPORATION
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>


                                                                June 30, 1999             September 30, 1998
                                                                -------------             ------------------
                                                                (Unaudited)                  (Audited)
                      ASSETS

<S>                                                           <C>                          <C>
Cash and cash equivalents                                       $    3,820,543              $      914,509
Accounts receivable, net                                             9,976,424                  19,612,934
Inventory                                                              596,164                   2,586,236
Other current assets                                                   820,336                     894,549
                                                                --------------              --------------
   Total current assets                                             15,213,467                  24,008,228
                                                                --------------              --------------
Property, plant and equipment, net                                   3,239,012                   3,509,345
Other assets                                                           358,092                     339,692
                                                                --------------              --------------
   Total assets                                                 $   18,810,571              $   27,857,265
                                                                ==============              ==============

                 LIABILITIES AND
               STOCKHOLDERS' EQUITY

Supplier credit facility                                        $        - 0 -              $    3,020,234
Accounts payable and accrued liabilities                             5,210,213                  11,578,993
Other current liabilities                                               97,518                      94,764
                                                                --------------              --------------
   Total current liabilities                                         5,307,731                  14,693,991
Long-term liabilities                                                1,634,111                   1,611,355
                                                                --------------              --------------
   Total liabilities                                                 6,941,842                  16,305,346
                                                                --------------              --------------
Stockholders' Equity:
         Preferred stock, no par value                                   - 0 -                       - 0 -
         Common stock, $.01 par value                                   55,152                      55,152
         Additional paid-in capital                                  6,486,517                   6,317,617
         Retained earnings                                           6,126,938                   5,922,536
         Less: Treasury stock (at cost)                              (799,878)                   (743,386)
                                                                --------------              --------------
   Total stockholders' equity                                       11,868,729                  11,551,919
                                                                --------------              --------------
   Total liabilities and
      stockholders' equity                                      $   18,810,571              $   27,857,265
                                                                ==============              ==============

</TABLE>



The accompanying notes are an integral part of these statements.



<PAGE>






                        SYSCOMM INTERNATIONAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                          Nine Months Ended June 30,
                                                                            1999               1998
                                                                            ----               ----
<S>                                                                <C>                <C>
Cash Flows From Operating Activities
  Net Income                                                       $     204,402      $     209,716
  Adjustments to reconcile net income to net cash
      provided by operating activities
          Depreciation and amortization                                  247,500            208,200
          Compensatory stock options issued to non-employees             168,900                -
                                                                                                0 -
          Changes in assets and liabilities
              Accounts receivable                                      9,665,946          (498,636)
              Inventory                                                1,990,072          6,174,830
              Prepaid expenses                                         (206,763)              - 0 -
              Recoverable income taxes                                   251,540              - 0 -
              Other assets                                              (18,400)          (178,464)
              Accounts payable and accrued liabilities               (6,368,780)        (3,877,241)
              Income taxes payable                                         - 0 -          (499,214)
                                                                   -------------      -------------
                 Net Cash Provided by Operating Activities             5,934,417          1,539,191
                                                                   -------------      -------------
Cash Flows From Investing Activities
   Purchase of fixed assets                                             (77,167)        (2,447,623)
                                                                        --------        -----------
        Net Cash Used in Investing Activities                           (77,167)        (2,447,623)
                                                                        --------       -----------

Cash Flows From Financing Activities
   Net proceeds from (payments under) supplier credit facility       (3,020,234)          2,106,893
   Net proceeds from term loan                                           100,000              - 0 -
   Net proceeds from government grant                                    100,000              - 0 -
   Net proceeds from the exercise of stock options                         - 0 -             19,500
   Payments of long-term liabilities                                    (74,490)           (32,277)
   Purchase of treasury stock                                           (56,492)              - 0 -
                                                                   -------------      -------------
        Net Cash Provided by (Used in) Financing Activities          (2,951,216)          2,094,116
                                                                   -------------      -------------

        Net Increase in Cash and Cash Equivalents                      2,906,034          1,185,684

Cash and Cash Equivalents at Beginning of Period                         914,509            437,594
                                                                   -------------      -------------
Cash and Cash Equivalents at End of Period                         $   3,820,543      $   1,623,278
                                                                   =============      =============

Supplemental Disclosures of Cash Flow Information
   Cash paid during the year for:
        Income taxes                                                $    205,724      $     809,910
        Interest                                                         217,187            701,324



</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,  1998,  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 nine
months ended June 30, 1999 are not necessarily indicative of the results for the
entire fiscal year ending September 30, 1999, 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.  These contracts expire on September 30,
1999. The employment  agreements  include base salary and incentive plans, which
are reviewed on an annual basis by the  Company's  Compensation  Committee.  For
fiscal  1999,  John H.  Spielberger  will  receive a base salary of $128,000 and
Dennis R. Wilson will  receive a base salary of  $112,000.  Under the  incentive
plan for  fiscal  year  1999,  John H.  Spielberger  will  receive 2 1/2% of the
earnings  before income taxes on a quarterly basis and will receive on an annual
basis an  additional  1% of the  earnings  before  taxes.  Dennis R. Wilson will
receive on an annual basis 1% of the earnings  before taxes.  In addition,  both
executives  have certain annual goals and  objectives,  which if met, could earn
them additional incentives. Thomas J. Baehr and Norman M. Gaffney, the other two
senior  executives  previously  covered by employment  agreements  are no longer
employed by the Company.



<PAGE>


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


Results of Operations:
Three Months Ended June 30, 1999  Compared with Three Months Ended June 30,
1998

The  Company  recorded a net loss for the three  months  ended June 30,  1999 of
$478,094  or $.10 per share  compared to net income of $89,088 or $.02 per share
for the same period last year. The net loss is  attributable  to the significant
decline in sales.

Revenues

     Sales for the three  months ended June 30, 1999 were  $14,017,525  compared
with  $26,416,609  for the same period last year, a decrease of  $12,399,084  or
46.9%.  This  decrease in sales is the result of what the Company  believes is a
slowdown  attributable  to customers  deferring the start of new projects due in
large measure to Y2K uncertainties.  In addition,  sales have also been affected
by the  Company's  decision to forego  business that does not meet the Company's
minimum standards of profitability.

Gross Profit

     Gross Profit as a percentage  of sales were 8.7% for the three months ended
June 30,  1999  compared  to 9.5% for the same  period  last year.  The  Company
believes  that the slight  decrease  for the  quarter was the result of the soft
market conditions that existed as a result of Y2K concerns.

Selling & Administrative Expenses

     Selling and  administrative  expenses  for the three  months ended June 30,
1999  decreased by $72,950 or 3.5% to $1,994,503  from  $2,067,453  for the same
period last year. For the three months ended June 30, 1999, the Company recorded
approximately  $170,000  for  compensation  to  non-employees  relating  to  the
issuance of stock options. In addition, the Company hired nine systems engineers
during the quarter,  expanding the size of the InfoTech  Consulting  Group.  The
cost of these additional expenses kept selling and administrative  expenses at a
high level  relative  to the reduced  sales  volume,  but were deemed  necessary
investments.

Interest Expense

     Interest  expense  for the  three  months  ended  June 30,  1999  decreased
$209,484 or 85.3% to $35,972 from  $245,456  for the same period last year.  The
decrease is  attributed to a reduction in borrowing as a result of the Company's
reduction in inventory  and accounts  receivable.  The Company had  virtually no
interest bearing debt during the third quarter of Fiscal 1999 with the exception
of the mortgage on its Shirley  facility and a $100,000 term loan. The inventory
reduction  is  due  primarily  to  the  Company's  decision  to  utilize  a  new
distributor-based  supply  arrangement.  Accounts  receivable  is  lower  due to
reduced sales levels and more stringent monitoring of collections.



Income (loss) from Operations before Income Taxes

     The loss before income tax benefit for the three months ended June 30, 1999
was  $797,094  compared to income  before  income taxes of $151,688 for the same
period last year. The decrease of $948,782 was  attributable  to the significant
decrease in sales.

Taxes

     The Company had a tax benefit of $319,000  for the three  months ended June
30, 1999,  compared to an  effective  tax rate of 41.3% for the same period last
year.

Nine Months Ended June 30, 1999 Compared With Nine Months Ended June 30, 1998

     Net income for the nine months ended June 30, 1999 was $204,402 compared to
$209,716 for the same period last year.  Basic  earnings per share were $.04 for
the nine  months  ended June 30, 1999 versus $.05 for the same period last year.
Basic  earnings  per  share  were  calculated   using  4,755,243  common  shares
outstanding  for the nine months  ended June 30, 1999 versus  4,558,016  for the
same period last year. Net income remained  virtually the same as the prior year
despite  the  significantly  lower  sales  volume due to savings in selling  and
administrative costs and reduced interest expense.

Revenues

     Sales for the nine months ended June 30, 1999  decreased by  $21,005,468 or
27.4% to  $55,701,422  from  $76,706,890  for the same  period  last year.  This
decrease   reflects  what  the  Company  believes  is  a  slowdown  due  to  Y2K
uncertainties,   which  has  customers   deferring  new  projects   until  these
uncertainties  are  resolved.  Additionally,  sales  have been  affected  by the
Company's  decision to forego  business  that cannot meet  minimum  standards of
profitability.

Gross Profit

     Gross profit as a percentage  of sales were 10.7% for the nine months ended
June 30, 1999  compared to 9.4% for the same  period  last year.  This  increase
reflects  the  Company's  strategy  to focus on  mid-range  computer  sales  and
services.  Additionally, the Company has received better pricing through its new
distributor-based supply arrangement for purchasing product.

Selling & Administrative Expenses

     Selling and administrative expenses for the nine months ended June 30, 1999
decreased  $647,449 or 10.6% to $5,449,208  from  $6,096,657 for the same period
last year.  The  decrease is due to a  company-wide  initiative  focused on cost
containment.  During  the third  quarter of Fiscal  1999,  the  Company  made an
investment  in personnel  expanding  the size and  capabilities  of its InfoTech
Consulting  Group.  In addition,  several  seasoned sales  representatives  were
hired. The Company believes that these are necessary investments aimed at making
the Company a leading provider of mid-range services.

Interest Expense

     Interest  expenses  for the  nine  months  ended  June 30,  1999  decreased
$484,137 or 69% to $217,187  compared to $701,324 for the same period last year.
The  decrease  in  interest is a direct  result of the  significant  decrease in
inventory and accounts receivable.

Income from Operations before Income Taxes

     Income from  operations  before income taxes for the nine months ended June
30,  1999 was  $344,402,  a decrease  of $15,914  from the  $360,316 in the same
period last year. The income from  operations  before income taxes for Fiscal 99
was virtually unchanged from the prior year despite the significant reduction in
sales which was offset by higher gross  profit  percentages,  lower  selling and
administrative expenses and reduced interest expense.

Taxes

     The  Company's  effective  tax rate for the nine months ended June 30, 1999
and 1998, was 40.7 and 41.8, respectively.

Liquidity and Capital Resources

     The  Company's  current  ratio at June 30, 1999 and 1998 was 2.87 and 1.63,
respectively.  Working  capital at June 30, 1999 was  $9,905,736  an increase of
$1,585,052 over the same period last year.  Working capital increased due to the
receipt of the proceeds of the mortgage taken on its Shirley facility.

     Cash provided by operating activities was $5,934,417 and $1,539,191 for the
nine  months  ended  June 30,  1999 and 1998,  respectively,  due  primarily  to
reductions  in the  Company's  inventory  and  accounts  receivable  in 1999 and
inventory in 1998. Cash used in investing  activities was $77,167 and $2,447,623
for the nine months ended June 30, 1999 and 1998, respectively,  and was used to
purchase  computer  equipment in 1999 and finance the  Company's new facility in
1998.  Cash used in financing  activities  during the nine months ended June 30,
1999 was $2,951,216 and  represented net payments made under the Supplier Credit
Facility,  long-term  debt,  the purchase of treasury stock and the net proceeds
from a term loan and government  grant. For the nine months ended June 30, 1998,
cash  provided by  financing  activities  was  $2,094,116  and  represented  net
proceeds received under the Supplier Credit Facility.

     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 up 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, 1999,  interest on
outstanding  borrowings  was prime or prime plus 6.5% should the Company fail to
meet certain collateral requirements.  Throughout fiscal 1998 and the first nine
months of fiscal 1999,  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.


Year 2000 Compliance

     The Year 2000 issue is the result of computer  programs being written using
two  digits  rather  than four to define  the  applicable  year.  The  Company's
computer  equipment,  software and devices  with  embedded  technology  that are
time-sensitive may recognize a date using "00" as the year 1900, rather than the
year 2000.  This could  result in a system  failure  or  miscalculation  causing
disruptions of operations,  including, among other things, a temporary inability
to process transactions, send invoices, or engage in normal business activities.

     The Company has undertaken various initiatives  intended to ensure that its
computer  equipment and software will function properly with respect to dates in
the year 2000 and thereafter. For this purpose, the term "computer equipment and
software"   includes  systems  that  are  commonly  thought  of  as  information
technology ("IT") systems,  including  accounting,  data processing and scanning
equipment.

     Based upon its identification  and assessment,  the Company has replaced or
modified some of its computer  equipment and software that it had  identified as
not year 2000 ready. In addition,  in the ordinary course of replacing  computer
equipment  and software,  the Company  attempts to obtain  replacements  that it
believes are Year 2000 compliant.  Utilizing  internal resources to identify and
assess  needed  Year  2000   remediation,   the  Company  began  its  Year  2000
identification, assessment, remediation, and testing efforts in October 1997. As
of June 4, 1999,  the Company has  completed  final testing and is now 100% year
2000 ready.

     The  Company  believes  that  the  cost of its  Year  2000  identification,
assessment,  remediation,  and testing efforts, as well as the anticipated costs
to be incurred by the Company with respect to Year 2000 issues of third parties,
will not be material.  The Company  presently  believes that the Year 2000 issue
will not pose significant operational problems for the Company.  However, if all
Year 2000 issues are not properly identified,  or assessment,  remediation,  and
testing are not  effected  timely with  respect to Year 2000  problems  that are
identified,  there  can be no  assurance  that  the  Year  2000  issue  will not
materially  adversely  impact the  Company's  results of operations or adversely
affect  the  Company's   relationships   with  customers,   vendors  or  others.
Additionally,  there  can be no  assurance  that the Year  2000  issues of other
entities will not have a material  adverse  impact on the  Company's  systems or
results of operations.

     The Company has not fully  developed a  comprehensive  contingency  plan to
address  situations  that may result from the year 2000. If Year 2000 compliance
issues are discovered,  the Company will evaluate the need for contingency plans
relating to such issues.

     The  costs  of  the  Company's   Year  2000   identification,   assessment,
remediation,   and  testing  efforts  are  based  upon  management's  good-faith
estimates,  which were  derived  using  numerous  assumptions  regarding  future
events,  including the continued  availability  of certain  resources,  possible
third-party remediation plans, and other factors. There can be no assurance that
these  estimates  will prove to be  accurate,  and actual  results  could differ
materially from those currently  anticipated.  Specific factors that could cause
such material  differences include, but are not limited to, the availability and
cost of personnel trained in Year 2000 issues, the ability to identify,  assess,
remediate,  and test all relevant  computer codes and imbedded  technology,  and
similar  uncertainties.  In addition,  variability  of definitions of "Year 2000
Compliant" and the myriad of different  products and services,  and combinations
thereof,  sold by the Company may lead to claims  whose impact on the Company is
not currently estimateable. No assurance can be given that the aggregate cost of
defending  and resolving  such claims,  if any,  will not  materially  adversely
affect the  Company's  results of  operations.  Although  some of the  Company's
agreements  with  manufacturers  and others from whom it purchases  products for
resale contain provisions  requiring such parties to indemnify the Company under
such  circumstances,  there  can  be  no  assurance  that  such  indemnification
arrangements  will cover all of the Company's  liabilities  and costs related to
claims by third parties related to Year 2000 issues.

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

     Effective  May 28, 1999,  Thomas J. Baehr  resigned as President  and Chief
Operating  Officer  of  Information  Technology  Services,  Inc.  and  as a Vice
President  and  Director  of SysComm  International  Corporation.  In  addition,
effective  May 20,  1999,  Norman M.  Gaffney  resigned as a Director of SysComm
International Corporation.

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



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