UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q/A

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

                  For the Quarterly Period Ended June 30, 1996

                         Commission File Number 0-19378

                           LIUSKI INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)

                     Delaware                              11-3065217
          (State or other jurisdiction of               (I.R.S. Employer
          incorporation or organization)               Identification No.)

      6585 Crescent Drive, Norcross, Georgia                  30071
     (Address of principal executive offices)               (Zip Code)

     Registrant's telephone number, including area code: (770) 447-9454


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 ___

As of June 30, 1996, the Registrant had 4,380,525  shares of Common Stock,  $.01
par value per share outstanding.

<PAGE>
                         PART I - FINANCIAL INFORMATION



Item 1.  Financial Statements.


      INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                      Page
        Consolidated Financial Statements:

         Balance sheets as of June 30, 1996 (as restated) 
         (unaudited) and December 31, 1995......................      3

         Statements of income for the three months and 
         six months ended June 30, 1996 (as restated) and
         June 30, 1995 (unaudited)..............................      4

         Statements of cash flows for the six months ended
         June 30, 1996 (as restated) and June 30, 1995 
         (unaudited)............................................      5

         Notes to Condensed Consolidated Financial Statements...      6

         Management's Discussion and Analysis of Financial 
         Condition and Results of Operations....................      9

                                       2

<PAGE>
                   LUISKI INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET

                                                       June 30,     December 31,
                                                         1996          1995
                                                     -----------    ------------
                                                      (Restated)
                                                      (unaudited)

ASSETS

CURRENT
      Cash                                          $    974,193    $    200,989
      Accounts Receivable, net of allowance
      for doubtful accounts of $2,275,000
      and $1,050,000 as of 1996 and 1995,
      respectively                                    39,002,682      33,013,943
      Inventories                                     45,181,338      43,295,440
      Prepaid Expenses and Other Current Assets        4,270,325       3,840,889
                                                    ------------   -------------
      TOTAL CURRENT ASSETS                            89,428,538      80,351,261

FURNITURE, AUTOS, AND EQUIPMENT, at cost,
less Accumulated Depreciation and
Amortization of $3,369,374 and $2,645,806
as of 1996 and 1995, respectively                      2,959,033       3,101,973

OTHER ASSETS                                             253,785         254,828
                                                    ------------   -------------
      TOTAL ASSETS                                  $ 92,641,356   $  83,708,062
                                                    ============   =============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
      Accounts Payable:  Affiliate                  $ 14,269,316   $   9,245,742
      Accounts Payable:  Trade                        21,568,025      24,491,010
      Accrued Expenses and Other Current
      Liabilities                                      2,107,075       1,964,893
                                                    ------------   -------------
      TOTAL CURRENT LIABILITIES                       37,944,416      35,701,645

REVOLVING CREDIT LOAN                                 28,729,606      20,965,263

CAPITAL LEASE OBLIGATIONS                                519,904         702,114
                                                    ------------   -------------
      TOTAL LIABILITIES                               67,193,926      57,369,022

COMMITMENTS AND CONTINGENCIES                              -                -

STOCKHOLDERS' EQUITY
      Preferred Stock, $.01 par value; 1,000,000
      shares authorized; none issued                       -                - 
      Common Stock, $.01 par value; 7,000,000
      shares authorized; 4,380,525 issued
      and outstanding                                    43,806           43,806
      Additional Paid-in Capital                     18,435,164       18,435,164
      Retained Earnings                               6,968,460        7,860,070
                                                   ------------    -------------
      TOTAL STOCKHOLDERS' EQUITY                     25,447,430       26,339,040
                                                   ------------    -------------
      TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY   $ 92,641,356    $  83,708,062
                                                   ============    =============

            See notes to condensed consolidated financial statements

                                       3
<PAGE>

                   LUISKI INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)

                          Three months ended            Six months ended
                               June 30,                       June 30,
                        (Restated)                  (Restated)
                      --------------------------   ----------------------------
                           1996           1995         1996            1995
                      ------------  ------------   -------------  -------------

Net Sales           $ 101,556,939   $ 93,560,395   $ 200,184,274  $ 197,380,950

Cost of Sales          95,417,967     87,356,484     186,168,305    831,091,427
                    -------------   ------------   -------------  -------------

  Gross Profit          6,138,972      6,203,911      14,015,969     14,289,523

Selling, General,
 and Administra-
 tive Expenses          7,509,739      7,663,011      14,072,308     14,967,918
                    -------------   ------------    ------------  -------------

Income from Opera-
  tions                (1,370,767)    (1,459,100)        (56,339)      (678,395)

Other Charges (Net)       484,326        434,279         977,271        932,474
                    -------------   ------------    ------------  -------------
  Income before
  Income Taxes         (1,855,093)    (1,893,379)     (1,033,610)    (1,610,869)

Income Taxes             (454,000)      (722,880)       (142,000)      (612,130)
                    -------------   ------------    ------------  -------------
Net Income/(Loss)   $  (1,401,093)  $ (1,170,499)  $    (891,610)  $   (998,739)
                    =============   ============   =============   ============ 

Earnings per Common
and Common Equiva-
lent Shares Out-
standing:  Primary
and Fully Diluted   $       (0.32)  $      (0.27)  $      (0.20)   $      (0.23)
                    =============   ============   =============   ============
Weighted Average
number of Common and
Common Equivalent
shares Outstanding:
Primary and Fully
Diluted                 4,380,525      4,380,525      4,380,525       4,380,525
                    =============   ============   =============   ============



            See notes to condensed consolidated financial statements

                                       4
<PAGE>

                   LUISKI INTERNATIONAL, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
                                   (Unaudited)

                                                           Six months ended
                                                               June 30,
                                                     (Restated)
                                                        1996           1995
                                                    -----------      -----------

CASH FLOWS FROM OPERATING ACTIVITES
Net Loss                                            $  (891,610)     $ (998,739)
                                                    -----------      -----------
  Adjustments to reconcile Net Income to Net
   Cash provided (used) by operating activities
    Depreciation and Amortization                       463,195         439,668

  Changes in Operating Assets
    Accounts Receivable                              (5,988,739)       (783,568)
    Inventories                                      (1,885,898)       (446,702)
    Prepaid Expenses and Other                         (429,436)     (2,175,145)
    Other Assets                                          1,043          21,278
  Changes in Operating Liabilities
    Accounts Payable:  Affiliate                      5,023,574      (2,875,730)
    Accounts Payable and Accrued Expenses            (2,780,803)      9,445,784
                                                     ----------       ---------
Total Adjustments                                    (5,597,064)      3,625,585
                                                     ----------       ----------
  Net Cash provided (used) by Operating Activities   (6,488,674)      2,626,846
                                                     ----------       ----------

CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures                                   (320,255)       (562,709)
                                                     ----------       ----------

CASH FLOWS FROM FINANCING ACTIVITIES
 Proceeds from Revolving Credit Loan                  7,764,343      (2,225,977)
 Repayment of Capital Lease Obligations                (182,210)       (167,098)
                                                     ----------      -----------
   Net Cash provided (used) by Financing
   Activities                                         7,582,133      (2,393,075)

INCREASE/(DECREASE) IN CASH AND
  CASH EQUIVALENTS                                      773,204        (328,938)
CASH AND CASH EQUIVALENTS: BEGINNING                    200,989         834,355
                                                     ----------      -----------
CASH AND CASH EQUIVALENTS: ENDING                    $  974,193      $  505,417
                                                     ==========      ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION
    Cash paid during period for Interest             $  997,581      $1,018,219 
                                                     ==========      ===========

    Cash paid during period for Interest             $      -        $       -  
                                                     ==========      ===========

 


          See notes to condensed consolidated financial statements

                                       5
<PAGE>

                   LIUSKI INTERNATIONAL, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)



Note 1. Consolidated Financial Statements

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Rule 10-01 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of Management,  all adjustments (consisting
of only normal recurring accruals)  considered necessary for a fair presentation
have been  included.  Operating  results for the six month period ended June 30,
1996 are not necessarily  indicative of the results that may be expected for the
year ending December 31, 1996. For further information refer to the consolidated
financial  statements  and footnotes  thereto in the Company's  Annual Report on
Form 10-K for the year  ended  December  31,  1995,  which are  incorporated  by
reference herein.

Note 2. Restatement of Interim Financial Information

                                                  June 30, 1996
                                   As Previously
                                     Reported          Adjusted        Restated
                                   -------------       --------        --------

ASSETS

Current assets                     $89,462,087       $  (33,549)     $89,428,538
Fixed Assets                         2,959,033              -          2,959,033
Other Assets                           253,785              -            253,785
  Total Assets                      92,674,905          (33,549)      92,641,356

LIABILITES

Current Liabilities                 36,175,980        1,768,436       37,944,416
Long-Term Liabilities               26,249,510              -         29,249,510
  Total Liabilities                 65,425,490        1,768,436       67,193,926

SHOCKHOLDER'S EQUITY                27,249,415       (1,801,985)      25,447,430

TOTAL LIABILITIES AND EQUITY       $92,674,905       $  (33,549)     $92,641,356




                                       6

<PAGE>

                                            Six Months Ended June 30, 1996

                                       As Previously  
                                         Reported      Adjusted      Restated
                                       -------------   --------      --------

Net Sales                              $200,184,274   $   -        $200,184,274
COGS                                   $184,592,519   $ 1,575,786   186,168,305
                                       ------------   -----------   -----------

Gross Profit                           $ 15,591,755   $(1,575,786)  $14,015,969

Operating Expenses & Other Charges       14,124,380       925,199    15,049,579
                                       ------------   -----------   -----------

Net Income Before Income Taxes            1,467,375    (2,500,985)   (1,033,610)
Income Taxes                                557,000      (699,000)     (142,000)
                                       ------------   -----------   ----------- 
NET INCOME/(LOSS)                      $    910,375   $(1,801,985)   $ (891,610)
                                       ============   ===========   =========== 

                                           Six Months Ended June 30, 1996

                                       As Previously    
                                         Reported      Adjusted      Restated 
                                       -------------   --------      -------- 


Net Income / (Loss)                      $  910,375   $(1,801,985)  $  (891,610)
Adjustments to Net Income for
Operating Activities                     (7,399,049)    1,801,985)   (5,597,064)
Activities

Net Cash from Investments and 
 Fin Act                                  7,261,878        -          7,261,878
                                          ---------                  -----------
Inc / (Dec) in Cash & Equivalents           773,204        -            773,204
Beginning Cash Balance                      200,989             0      200,989
                                        -----------    ----------   ------------
Ending Cash Balance                     $   974,193    $        0   $   974,193
                                        ===========    ==========   ============


     The  above  restatement   adjustments  relate  primarily  to  increases  to
allowances for doubtful customer and vendor receivables. Due to its expansion of
extending  credit and growth in  receivables  in total and in age,  the  Company
re-examined  its methods of assessing and  estimating the adequacy of allowances
and  determined  that such  allowances  were  inadequate as of June 30, 1996 and
needed to be increased. During the three months ended June 30, 1996, the Company
experienced  some  difficulties  with its  receivables  systems and tracking and
monitoring  the  collection  of  accounts.   The  Company's  conversion  of  its
computerized   management   information   system   software  during  March  1996
contributed to these  difficulties  as well as turnover  issues in the Company's
credit department.


                                       7

<PAGE>

Note 3. Revolving Credit Loan

         In  June  1995,  the  Company  signed  a  $50,000,000  credit  facility
replacing  the  Company's  existing   $25,000,000   revolving  credit  loan  and
$14,000,000 line for the  floorplanning of inventory.  The new facility provides
for revolving  borrowings of up to  $35,000,000  and  $15,000,000  for inventory
floorplanning.  Amounts  available on the  revolving  credit loan are based on a
formula of the sum of up to 85% of eligible receivables and the lesser of 50% of
the eligible inventory or $15,000,000.  Outstanding  borrowings bear interest at
1/4% per annum above the  lending  banks  prime rate or 125 basis  points  above
LIBOR rates and mature in June,  1998. The debt is  collateralized  by a lien on
all of the Company's  assets.  As of June 30, 1996, the Company owed $28,729,606
under its revolving credit loans.


Note 4. Contingencies

     In March  1994,  several  shareholders  of the Company  filed class  action
lawsuits in the United  States  District  Court for the Eastern  District of New
York  against the Company and certain of its  officers  asserting  violation  of
Section 10(b) of the Securities Exchange act of 1934 and Rule 10(b)5 promulgated
thereunder.  These actions,  since consolidated into a single action, purport to
be based on statements  contained in a press release and SEC Form 10-Q issued by
the  Company  in the  latter  part  of  1993  and  is  entitled  "In  re  Liuski
International,  Inc.  Securities  Litigation," Civil Action No. 94-CV-1045.  The
plaintiffs'  consolidated amended complaint asserts that the Company's purported
omissions or  misrepresentations  falsely  inflated  the value of the  Company's
stock.  The plaintiffs  seek to represent  purchasers who acquired the Company's
common stock during various periods, the earliest of which commenced on November
8, 1993 and ended on March 4, 1994.  No class has been  certified  to this date.
The complaint demands damages in an unspecified amount. In September,  1995, the
plaintiffs filed and served a second amended and consolidated complaint.


     On December 4, 1995,  the Company and its named  officers filed a motion to
dismiss  the action for  failure to state a cause of action and failure to plead
fraud with  particularity.  That motion has been fully briefed by both sides and
submitted to the court.  To date,  no decision has been made on the motion.  The
Company also moved for a stay of discovery  pending  determination of the motion
to dismiss.  That motion was  granted by  Magistrate  Judge Boyle by order dated
December 13, 1995. The Company and its named officers intend to defend this suit
vigorously.


                                       8

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
         RESULTS OF OPERATIONS


GENERAL
 
The following discussion and analysis should be read in conjunction with
the Condensed Consolidated Financial Statements and Notes thereto.

RESULTS OF OPERATIONS

Six months ended June 30, 1996 and 1995

     Net  Sales:  Net  sales  for  the six  months  ended  June  30,  1996  were
$200,184,274 representing an increase of $2,803,324 (1.4%) from $197,380,950 for
the six months ended June 30, 1995. Sales from the  distribution  centers in the
following regions changed as follows:  Southeast region, 48.2%; Northeast region
(including  Canadian  distribution  center),  -23.4%; Mid- and Southwest region,
-39.1%; Western region, 5.7%; Pacific region, -73.3% and Mail Order, 28.0%. Part
of the  decrease in the  Northeast  and  Southwest  regions and  increase in the
Southeast region was caused by crediting corporate sales previously allocated to
New York to  Georgia in  conjunction  with the  relocation  of  corporate  sales
personnel to the Georgia office.

     At the  beginning  of March,  1996,  the Company  changed its  computerized
management  information  systems software.  As a result of this transition,  the
Company  experienced  problems  that had an adverse  impact  upon its ability to
process orders and ship products,  which negatively impacted sales in the second
quarter.  Another factor which  contributed to a reduction in the level of sales
was an increase in pricing in order to allow for the recovery of shipping  costs
related to certain heavy low margin products.  To a lesser extent,  sales during
the six months ended June 30, 1996 were negatively affected by the shortages the
Company experienced with respect to certain multimedia kits.

     Sales of the Company's  Magitronic brand of personal computers and notebook
computers for the six months ended June 30, 1996 increased to $43,256,614 (21.6%
of net sales)  from  $31,801,248  (16.1% of net sales) for the six months  ended
June 30, 1995. The Company believes that the increase in sales of these products
was due to the success of the Company's high end notebook computers, competitive
pricing,  fast delivery of custom-made systems as well as the growing acceptance
of the  Company's  Magitronic  brand  in  the  market.  In  addition,  sales  of
Magitronic  computers  for the six months  ended June 30,  1995 were  negatively
affected  by  production  problems  associated  with  relocating  the  Company's
assembly operations from Melville,  New York to Norcross,  Georgia.  Included in
Magitronic  personal computers are private-label and brand-name  components that
the Company also sells separately in its distribution business. In addition, the
company also sells  components  separately under the Magitronic name. To enhance
the visibility of Magitronic products,  in January,  1996, the Company created a
separate Magitronic division that will focus on distributing Magitronic products
through new  distribution  channels  including third party mail order businesses
and other  distributors.  Sales of this division  through these new distribution
channels was  $1,358,823  for the six months  ended June 30,  1996.  Because the
Company is  attempting  to  distribute  products  through third party mail order
businesses, the Company discontinued its own mail order efforts in June, 1996.


                                       9

<PAGE>

     While the Company  distributes  products from more than 70 U.S.  suppliers,
the loss of major  suppliers or a shortage in a particular  product could have a
material  adverse impact on the Company  during the relatively  brief period the
Company  believes  it would  need to  establish  alternate  sources of supply at
required volume levels.  Although the Company's business is not highly seasonal,
the  second  calendar  quarter  is  generally  a period of  weaker  net sales in
comparison to the rest of the year.

     Gross Profit:  Gross profit  decreased by $273,554 to $14,015,969  (7.0% of
net sales) for the six months ended June 30, 1996 from $14,289,523  (7.2% of net
sales)  for the six months  ended June 30,  1995.  The lower  gross  margin as a
percentage of net sales was primarily a result of adjustments  made to reserves.
The Company  re-examined its methods of assessing and estimating the adequacy of
allowances for doubtful  vendor  receivables and determined that such allowances
were  inadequate  and  needed  to be  increased.  The  lower  gross  margin as a
percentage  of net sales was  primarily a result of  increases  in reserves  and
writeoffs with respect to vendor related  receivables such as rebates,  returns,
price protection and co-operative  advertising in the amount of $1,575,786 (.8%
of net sales). These increases in reserves and writeoffs were somewhat offset by
increased  levels  of  sales  of  Magitronic  personal  computers  and  notebook
computers,  which  generally have higher margins.  Over the last few years,  the
computer  industry has  experienced  intense price  competition  and  Management
believes that the price competitive conditions in the industry will continue.

     Selling,   General  and  Administrative  Expenses:  In  1995,  the  Company
initiated  and  completed a strategic  streamlining  program  that  included the
relocation of the Company's  corporate  headquarters and assembly  operations as
well  as the  restructuring  and  consolidation  of the  Company's  distribution
system.  Prior to the  streamlining  program,  the  Company's  headquarters  and
primary  assembly  facility  were  located in  Melville  (NY) and the  Company's
products were supplied from ten distribution  centers.  During 1995, the Company
moved its  headquarters  and primary  assembly  operations  to Norcross (GA) and
consolidated  its   distribution   centers  from  ten  to  four.  The  strategic
streamlining program was implemented to provide the Company with the opportunity
to improve operating efficiencies and economies of scale.

     For the six months ended June 30, 1996, selling, general and administrative
expenses  decreased  by  $895,610  to  $14,072,308  (7.0%  of  net  sales)  from
$14,967,918  (7.6% of net  sales) for the six months  ended June 30,  1995.  The
decrease  is  primarily  due to  efficiencies  from the  strategic  streamlining
program  and the  nonrecurrance  of $761,000  in costs  incurred  during 1995 to
implement the Company's strategic  streamlining  program.  Additional savings of
approximately  $200,000 were achieved through reductions of rent,  telephone and
other office expenses.  This decrease was offset by an increase to the allowance
for doubtful accounts receivables. Due to it's expansion of extending credit and
growth in accounts  receivables in total and in age the Company  re-examined its
method of  assessing  the  adequacy  of it's  allowance  for  doubtful  accounts
receivables  and  determined  that such  allowance  needed to be increased.  The
allowance  increased by $1,225,000 (0.6% of net sales).  During the three months
ended  June  30,  1996,  the  Company  experienced  some  difficulties  with its
receivables systems and tracking and monitoring the collection of accounts.  The
Company's conversion of it's computerized management information system software
during March 1996  contributed to these  difficulties as well as turnover issues
in the Company's  credit  department.  Salaries,  employment  taxes and employee
benefits for the six months ended June 30, 1996  decreased  to  $8,477,960  from
$9,303,656 for the six months ended June 30, 1995


                                       10
<PAGE>

     Other  Charges:  Net  interest  expense  increased  to $986,838 for the six
months ended June 30, 1996 from  $819,170 for the first half of 1995 as a result
of increased  borrowings,  which was  partially  offset by decreases in interest
costs due to the Company's new revolving  credit loan. The interest rate paid by
the Company under its revolving  credit loan was 1/4% over the prime rate or 125
basis points over LIBOR.

     Net Loss:  Net loss  decreased by $107,129 to $891,610  (0.4% of net sales)
for the six months  ended June 30, 1996 from a net loss of $998,739  (.5% of net
sales) for the six months ended June 30, 1995.

Three months ended June 30, 1996 and 1995

     Net  Sales:  Net  sales  for the  three  months  ended  June 30,  1996 were
$101,556,939  representing an increase of $7,996,544 (8.5%) from $93,560,395 for
the three months ended June 30, 1995. Sales from the distribution centers in the
following regions changed as follows:  Southeast region, 51.4%; Northeast region
(including  Canadian  distribution  center),  -3.4%;  Mid- and Southwest region,
-35.6%; Western region, 5.7%; Pacific region, -72.9% and Mail Order, -66.8%. The
mail order business was  discontinued in June, 1996. Part of the decrease in the
Northeast and Southwest  regions and increase in the Southeast region was caused
by  crediting  corporate  sales  previously  allocated to New York to Georgia in
conjunction  with the  relocation  of corporate  sales  personnel to the Georgia
office.  Although  the  Company's  business is not highly  seasonal,  the second
quarter is generally a period of weaker net sales in  comparison  to the rest of
the year.

     At the  beginning  of March,  1996,  the Company  changed its  computerized
management  information  systems software.  As a result of this transition,  the
Company  experienced  problems  that had an adverse  impact  upon its ability to
process orders and ship products,  which negatively impacted sales in the second
quarter.  Another factor which  contributed to a reduction in the level of sales
was an increase in pricing in order to allow for the recovery of shipping  costs
related to certain heavy low margin products.  To a lesser extent,  sales during
the six months ended June 30, 1996 were negatively affected by the shortages the
Company experienced with respect to certain multimedia kits.


                                       11

<PAGE>

     Sales of the Company's  Magitronic brand of personal computers and notebook
computers  for the three  months ended June 30, 1996  increased  to  $20,588,640
(20.3% of net sales) from $13,276,158  (14.2% of net sales) for the three months
ended June 30, 1995.  Sales of Magitronic  personal  computers during the second
quarter  of 1995  were  affected  by  production  problems  resulting  from  the
relocation of the assembly facilities from New York to Georgia. These production
problems included longer delivery times and quality control issues.

     Gross Profit:  Gross profit decreased by $64,939 to $6,138,972 (6.0% of net
sales) for the three  months  ended June 30, 1996 from  $6,203,911  (6.6% of net
sales) for the three  months ended June 30, 1995.  The Company  re-examined  its
methods of assessing  and  estimating  the adequacy of  allowances  for doubtful
vendor  receivables  and determined  that such  allowances  were  inadequate and
needed to be increased.  The lower gross margin as a percentage of net sales was
primarily a result of increases in reserves and writeoffs with respect of vendor
related receivables such as rebates,  returns, price protection and co-operative
advertising  in the amount of  $1,575,786  (1.6% of net sales).  The increase in
reserves  and  writeoffs  was somewhat  offset by  increased  levels of sales of
Magitronic  personal  computers and notebook  computers,  which  generally  have
higher margins.  Over the last few years, the computer  industry has experienced
intense price  competition  and Management  believes that the price  competitive
conditions in the industry will continue. 

     Selling,  General and Administrative  Expenses: As previously mentioned, in
1995, the Company initiated and completed a strategic  streamlining program that
included the  relocation of the Company's  corporate  headquarters  and assembly
operations  as well as the  restructuring  and  consolidation  of the  Company's
distribution  system.  During the three months ended June 30, 1995,  the Company
incurred $356,000 of expenses related to this program.

     For  the  three  months  ended  June  30,   1996,   selling,   general  and
administrative  expenses decreased by $153,272 to $7,509,739 (7.7% of net sales)
from  $7,663,011  (8.2% of net sales) for the three  months ended June 30, 1995.
This small decrease is due primarily to offsetting changes. Due to its expansion
of extending  credit and growth in accounts  receivables in total and in age the
Company  re-examined  its method of assessing  the adequacy of its allowance for
doubtful  accounts  receivables and determined that such allowance  needed to be
increased. The allowance increased by $1,225,000 (1.2% of net sales). During the
three months ended June 30, 1996, the Company experienced some difficulties with
its  receivables  system and tracking and monitoring the collection of accounts.
The  Company's  conversion of its  computerized  management  information  system
software during March 1996 contributed to these difficulties as well as turnover
issues in the Company's credit department. This increase was, however, offset by
the efficiencies generated by the strategic streamlining program, as well as the
nonrecurrance  of $995,000 in costs incurred through June 30, 1995, to implement
this program.  Salaries,  employment  taxes and employee  benefits for the three
months ended June 30, 1996 decreased to $4,260,960 from $4,928,701 for the three
months ended June 30, 1995



                                       12
<PAGE>

     Other  Charges:  Net interest  expense  increased to $523,951 for the three
months  ended June 30, 1996 from  $373,850  for the second  quarter of 1995 as a
result of the increased  borrowings,  which was partially offset by decreases in
interest costs due to the Company's new revolving credit loan. The interest rate
paid by the Company under its revolving credit loan was 1/4% over the prime rate
or 125 basis points over LIBOR.

     Net Loss: Net loss increased by $230,594 to $1,401,093  (1.4% of net sales)
for the three months ended June 30, 1996 from a net loss of $1,170,499  (1.3% of
net sales) for the three months ended June 30, 1995.

IMPACT OF INFLATION

     The  Company  has  not  been  adversely   affected  by  inflation   because
technological  advances and competition  within the microcomputer  industry have
generally caused prices of products sold by the Company to decline.  The Company
has flexibility in its pricing because it has no long-term contracts with any of
its  customers  and,  accordingly,   could,  if  necessary,   and  depending  on
competitive factors, pass along price changes to its customers.

LIQUIDITY AND CAPITAL RESOURCES

     The Company  finances its growth  through  borrowings  under its  revolving
credit loan,  equity capital and credit terms from its major  suppliers.  In the
six months  ended  June 30,  1996,  net cash used by  operating  activities  was
$6,488,674  compared to net cash provided by operating  activities of $2,626,846
for the six  months  ended  June 30,  1995.  The  change  in net cash  flow from
operating  activities  between  the six months  ended June 30, 1996 and June 30,
1995,  in the  amount of  $9,115,520,  was  primarily  due to  higher  growth in
accounts receivable and inventories.  In addition,  one of the Company's vendors
provided a special discount to pay early for a large purchase of inventory.  The
Company may experience  shifts in cash flow in the future,  particularly  if its
suppliers  provide more restrictive  credit terms than the Company  currently is
afforded.  For the six month periods ended June 30, 1996 and June 30, 1995,  the
Company generally paid its suppliers  approximately  35-40 days from the date of
invoice.  Terms  vary from 1 day to 60 days.  The  Company  takes most early pay
discounts when offered.

     Working  capital was  $51,484,122 as of June 30, 1996 and $44,649,616 as of
December  31,  1995.  On June 23,  1995,  the  Company  signed a new three  year
$50,000,000 credit facility replacing its existing $25,000,000  revolving credit
loan and a $14,000,000  line for  floorplanning  of inventory.  The new facility
provides for revolving cash  borrowings of up to $35,000,000 and $15,000,000 for
inventory  floorplanning.  Borrowings  under  the  revolving  credit  loan  bear
interest  at 125 basis  points  over LIBOR or the prime rate plus 1/4%.  Amounts
available  under the revolving  credit loan are based on a formula of the sum of
up to 85% of eligible  receivables  and 50% of eligible  inventory not to exceed
$15,000,000.  At  June  30,  1996  and  December  31,  1995,  the  Company  owed
$28,729,606 and $20,965,263, respectively, under its revolving credit loans. The
Company was obligated  under letters of credit in the amount of $742,800 on June
30,  1996 and had no such  obligations  outstanding  as of  December  31,  1995,
leaving an  availability  under its revolving  credit loan of $5,527,594 on June
30, 1996 and $14,034,737 on December 31, 1995.



                                       13
<PAGE>

ASSET MANAGEMENT

     Inventory:   Management  attempts  to  maximize  product  availability  and
delivery while  minimizing  inventory levels so as to lessen the risk of product
obsolescence and price  fluctuations.  Most products are stocked to provide a 30
to 45-day supply.  The Company often reduces prices of products in its inventory
in order to improve its turnover  rate.  The Company  turned its inventory on an
average every 44 days during the first six months of 1996 and 1995.  The Company
takes a physical  inventory  every  month  which is  compared  to its  perpetual
inventory and monitors inventory levels daily according to sales made by product
and distribution center.

     Most of the Company's U.S.  suppliers provide price  protection,  by way of
credits,  against  price  reductions  by the  supplier  between  the time of the
initial  sale to the  Company  and the  subsequent  sale by the  Company  to its
customer.  Such suppliers accept defective  merchandise returned within 12 to 15
months  after  shipment to the Company and some permit the Company to rotate its
inventory by returning slow moving inventory for other inventory.

     Accounts  Receivable:  The Company  primarily sells its products on a cash,
C.O.D. or terms of up to 30 days basis,  however,  the Company has expanded it's
extension  of  credit  terms.   The  Company's   average  days'  receivable  was
approximately  33 days  for  the six  month  period  ended  June  30,  1996  and
approximately  20 days  for the six  month  period  ended  June 30,  1995.  This
increase in the average days sales receivable results from the Company extending
credit to more of its customers.

MANAGEMENT ESTIMATES

     Financial   statements  prepared  in  conformity  with  generally  accepted
accounting principles  necessitates the use of management estimates.  Management
has estimated  reserves for inventory  obsolescence and  uncollectible  accounts
receivable  based upon  historical and developing  trends,  aging of items,  and
other   information   it  deems   pertinent  to  estimate   collectibility   and
realizability. It is possible that these reserves will change within a year, and
the  effect  of the  change  could be  material  to the  Company's  consolidated
financial statements.

RECENT ACCOUNTING PRONOUNCEMENTS

     Stock Based  Compensation:  The Financial  Accounting  Standards  Board has
issued  Statement of Financial  Accounting  Standards No. 123,  "Accounting  for
Stock-Based  Compensation",  which establishes financial and reporting standards
for stock-based  employee  compensation plans. The Company intends to adopt this
statement  during its year  ending  December  31,  1996.  Other than  additional
disclosures in the financial statements regarding stock options granted pursuant
to the Company's 1991 and 1994 Stock Option Plans,  this statement will not have
an effect on the Company's consolidated financial statements.



                                       14

<PAGE>

Long-Lived Assets: The Financial Accounting Standards Board has issued Statement
of Financial  Accounting  Standards No. 121,  "Accounting  for the impairment of
Long-Lived  Assets and for Long-Lived  Assets to be Disposed of", which requires
that long-lived assets and certain identifiable  intangibles to be held and used
by  an  entity  be  reviewed  for  impairment  whenever  events  or  changes  in
circumstances  indicate  that  the  carrying  amount  of an  asset  may  not  be
recoverable.  The Company intends to adopt this statement during the year ending
December  31,  1996.  Management  does not believe  this  statement  will have a
material impact on the Company's consolidated financial statements.

FORWARD-LOOKING INFORMATION MAY PROVE INACCURATE

     This report contains  forward-looking  statements and information  that are
based on management's  beliefs,  as well as assumptions made by, and information
currently  available  to,  management.  When  used in this  document,  the words
"anticipate,"  "believe,"  "estimate" and "expect," and similar  expressions are
intended to  identify  forward-looking  statements.  Such  statements  involve a
number of risks and uncertainties. Among the factors that could cause results to
differ  materially  are the  following:  business  conditions  and growth in the
industry,  general  economic  conditions,   rapid  or  unexpected  technological
changes,  product development,  inventory risks due to shifts in product demand,
competition,  domestic  and  foreign  government  regulations,  fluctuations  in
foreign  exchange  rates,  rising  costs for  components  or  unavailability  of
components,  the timing of orders booked,  and the risk factors listed from time
to time in the Company's SEC reports.




                                       15

<PAGE>



                          PART II - OTHER INFORMATION


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

     The Company held its Annual Meeting of  Stockholders  on June 28, 1996. The
Company's  stockholders elected Manuel C. Tan and Kenny Liu as Class 2 directors
and ratified the  appointment of BDO Seidman,  LLP as the Company's  Independent
Auditors  for the calendar  year ending  December  31,  1996,  by the  following
stockholders' vote:

         (a)   Election of Directors

                                   Votes received                 Votes
                    Name      (Net of all votes withheld)       withheld
                    ----      ---------------------------       --------
               Manuel C. Tan          4,056,733                  24,113
               Kenny Liu              4,057,783                  23,063


         (b)   Ratification of the appointment of 
               Independent Public Accountants:

                      For                               4,062,084
                      Against                              11,211
                      Withheld                              7,551


Item 6.  Exhibits and Reports on Form 8-K


     (a) (i) Exhibit 11 (statement concerning computation of per share earnings)
and exhibit 15 (letter concerning  unaudited interim financial  information) are
each hereby  incorporated  by reference  from "Notes to  Condensed  Consolidated
Financial  Statements"  of Part I -  Financial  Information,  Item 1 - Financial
Statements, contained in this Form 10-Q.

     (ii) Exhibit 27 (financial data schedule for the first six months of 1996)

     (b) No reports on Form 8-K were filed by the  Registrant  during the period
ended June 30, 1996.





                                       16

<PAGE>


                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant has duly caused this amended report to be signed on its behalf by the
undersigned thereunto duly authorized.


Dated: November 20, 1996


                         LIUSKI INTERNATIONAL, INC.




                         By: /s/Hsing-Yen Liu
                            ------------------------
                            Hsing-Yen Liu
                            Chairman and Acting Principal
                              Accounting Officer





                                       17


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