================================================================================

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

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

                For the quarterly period ended December 31, 1998

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

                         Commission File Number 0-27102

                                  RomTech, Inc.
             (Exact name of registrant as specified in its charter)

         PENNSYLVANIA                                          23-2694937
(State or other jurisdiction of                              (IRS Employer
incorporation or organization)                            Identification Number)

                      2000 Cabot Boulevard West, Suite 110
                            Langhorne, PA 19047-1833
                    (address of Principal executive offices)

          Issuer's Telephone Number, Including Area Code: 215-750-6606

                                 Not Applicable
                     (Former name, former address and former
                   fiscal year, if changed since last report.)

     Check whether the issuer (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 ( )

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

     Indicate by check mark whether the  registrant  has filed all documents and
reports  required  to be filed by  Sections  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.

                                 Yes ( ) No ( )

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares  outstanding of each of the issuer's  classes of
common equity,  as of the latest  practicable  date:  9,359,300 shares of common
stock,  no par value per  share,  as of  February  8, 1999.  Transitional  Small
Business Disclosure Format (check one):

                                 Yes ( ) No (X)

================================================================================
<PAGE>

                                  RomTech, Inc.

                                      INDEX

                                                                           Page
                                                                           ----
Part I.        Financial Information

Item 1.        Financial Statements:

               Consolidated Balance Sheet as of December 31, 1998........    3

               Consolidated Statements of Operations for the three 
                  and six months ended December 31, 1998 and 1997........    4

               Consolidated Statements of Cash Flows for the six months 
                  ended December 31, 1998 and 1997 ......................    5

               Notes to Consolidated Financial Statements................   6-8

Item 2.        Management's Discussion and Analysis of Financial
                   Condition and Results of Operations ..................   9-13

Part II.       Other Information

Item 6.        Exhibits and Reports on Form 8-K..........................    14

Signatures     ..........................................................    15

Exhibit Index  ..........................................................    16

Exhibits       ..........................................................    17




                                     Page 2
<PAGE>

                                 RomTech, Inc.

Item 1.  Financial Statements

                           Consolidated Balance Sheet
                                   (Unaudited)

                                                                    December 31,
                                                                       1998
                                                                    -----------
                                     ASSETS

Current assets:
   Cash and cash equivalents                                        $   282,142
   Restricted cash                                                       17,039
   Accounts receivable, net of allowances - $333,031                  4,104,277
   Inventory                                                          1,241,035
   Prepaid expenses                                                     181,692
                                                                    -----------
          Total current assets                                        5,826,185

Furniture and equipment, net                                            391,356
Goodwill and other assets                                               571,885
                                                                    -----------
          Total assets                                              $ 6,789,426
                                                                    ===========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Notes payable                                                    $   234,680
   Accounts payable                                                   1,514,472
   Accrued expenses                                                     792,788
   Capital lease obligations                                             23,209
                                                                    -----------
          Total current liabilities                                   2,565,149

Capital lease obligations net of current portion                         40,130
Notes payable-long term portion                                         222,725
Convertible subordinated debt                                           150,000
                                                                    -----------
          Total liabilities                                           2,978,004

Stockholders' equity:

   Common stock, no par value (40,000,000 shares authorized;
     9,506,200 issued)                                                8,389,826
   Additional paid in capital                                         1,148,550
   Accumulated deficit                                               (5,480,389)
   Treasury stock, at cost  - 144,900 shares                           (247,534)
   Accumulated other comprehensive income                                   969
                                                                    -----------
          Total stockholders' equity                                  3,811,422
                                                                    -----------
          Total liabilities and stockholders' equity                $ 6,789,426
                                                                    ===========




        See accompanying notes to the consolidated financial statements.


                                     Page 3
<PAGE>

                                 RomTech, Inc.

                      Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                             Three months ended            Six months ended
                                                 December 31,                 December 31,
                                          -------------------------    -------------------------
                                             1998          1997           1998          1997
                                          -----------   -----------    -----------   -----------
<S>                                       <C>           <C>            <C>           <C>        
Net sales                                 $ 3,611,126   $ 2,855,626    $ 6,117,326   $ 4,391,184
Cost of sales                               1,136,731     1,022,828      2,017,308     1,636,624
                                          -----------   -----------    -----------   -----------
Gross profit                                2,474,395     1,832,798      4,100,018     2,754,560

Operating expenses:
    Product development                       236,965        52,967        442,632       139,538
    Selling, general and administrative     1,318,861     1,153,823      2,298,503     1,810,108
                                          -----------   -----------    -----------   -----------
        Total operating expenses            1,555,826     1,206,790      2,741,135     1,949,646

Operating income                              918,569       626,008      1,358,883       804,914

Interest expense, net                          13,632        12,584         24,281        24,010
                                          -----------   -----------    -----------   -----------
Income before taxes                           904,937       613,424      1,334,602       780,904

Provision for income taxes                     57,967           -0-         84,267         1,165
                                          -----------   -----------    -----------   -----------

Net income                                    846,970       613,424      1,250,335       779,739

Accretion of beneficial conversion
    feature on preferred stock                    -0-       (12,550)           -0-      (117,991)
                                          -----------   -----------    -----------   -----------
Net income attributable
    to common stock                       $   846,970   $   600,874    $ 1,250,335   $   661,748
                                          ===========   ===========    ===========   ===========
Net income per common share:
            - Basic                       $      0.09   $      0.07    $      0.13   $      0.08
            - Diluted                     $      0.09   $      0.06    $      0.13   $      0.07

Weighted average common shares
     outstanding - Basic                    9,469,031     8,965,224      9,455,680     8,106,082

Dilutive effect of common
     stock equivalents                        189,156       658,183        171,234     1,401,752

Weighted average common shares
       outstanding - Diluted                9,658,187     9,623,407      9,626,914     9,507,834
</TABLE>

        See accompanying notes to the consolidated financial statements.


                                     Page 4
<PAGE>

                                 RomTech, Inc.

                      Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                     Six months ended
                                                                       December 31,
                                                               --------------------------
                                                                   1998           1997
                                                               -----------    -----------
<S>                                                            <C>            <C>        
Cash flows from operating activities:
    Net income                                                 $ 1,250,335    $   779,739
    Adjustment to reconcile net income to net cash
        provided by operating activities:
    Depreciation and amortization                                  187,138         93,500
    Changes in items affecting operations net of effect
        from acquired business:
             Restricted  cash                                          508         10,000
             Accounts receivable                                (1,946,243)    (1,475,956)
             Prepaid expenses                                       35,232         73,633
             Inventory                                            (286,555)      (392,550)
             Accounts payable                                      363,767        794,757
             Accrued expenses                                      283,327         95,816
                                                               -----------    -----------
Net cash used in operating activities                             (112,490)       (21,061)
                                                               -----------    -----------

Cash flows from investing activities:
    Acquisition, net of cash acquired                              (12,428)           -0-
    Purchase of furniture and equipment                           (122,790)       (86,864)
    Purchase of software rights and other assets                   (54,490)      (130,560)
    Loan to related party                                              -0-          1,500
                                                               -----------    -----------
Net cash used in investing activities                             (189,708)      (215,924)
                                                               -----------    -----------

Cash flows from financing activities:

    Purchase of treasury stock                                    (247,534)           -0-
    Proceeds from exercise of warrants                                 -0-        234,200
    Repayment of notes payable                                     (85,581)       (18,949)
    Repayment of lease obligations                                 (36,694)       (15,859)
                                                               -----------    -----------
Net cash (used in) provided by financing activities               (369,809)       199,392
                                                               -----------    -----------

Effect of exchange rate changes on cash and cash equivalents           501            -0-
                                                               -----------    -----------

Net decrease in cash and cash equivalents                         (671,506)       (37,593)

Cash and cash equivalents:
   Beginning of period                                             953,648        445,474
                                                               -----------    -----------
   End of period                                               $   282,142    $   407,881
                                                               ===========    ===========

Supplemental cash flow information:

Cash paid for interest                                         $    36,835    $    27,898
                                                               ===========    ===========

Cash paid for income taxes                                     $    72,500    $     1,165
                                                               ===========    ===========

Non cash investing and financing activities:

    Capital lease additions                                    $    24,915    $       -0-
                                                               ===========    ===========


    150,000 shares of Common Stock issued in
         connection with an acquisition                        $   213,000    $       -0-
                                                               ===========    ===========
</TABLE>

        See accompanying notes to the consolidated financial statements.


                                     Page 5
<PAGE>

                                  RomTech, Inc.

                   Notes to Consolidated Financial Statements

1.   Summary of Significant Accounting Policies

Basis of Presentation

     The accompanying  unaudited interim consolidated  financial statements were
prepared in accordance with generally accepted accounting principles for interim
financial information.  Accordingly,  they do not include all of the information
and footnotes required by generally accepted accounting  principles for complete
financial statements. The Notes to Consolidated Financial Statements included in
the Form  10-KSB for the  fiscal  year  ended  June 30,  1998  should be read in
conjunction  with the  accompanying  statements.  These  statements  include all
adjustments  the Company  believes are necessary for a fair  presentation of the
statements.  The interim operating results are not necessarily indicative of the
results for a full year.

Description of Business

     RomTech, Inc. (the "Company"),  a Pennsylvania  corporation incorporated in
July 1992, develops, publishes, markets and sells a diversified line of personal
computer  software  primarily for consumer  entertainment  and small office/home
office  applications.  In October 1995, the Company completed its initial public
offering  coincident with its  acquisition of Applied Optical Media  Corporation
("AOMC"),  a developer of educational and reference  software  titles.  In April
1996, the Company  acquired  Virtual  Reality  Laboratories,  Inc.  ("VRLI"),  a
software developer of landscape  generation,  space exploration,  scheduling and
business forms manipulation  programs.  In August 1998, the Company acquired all
of the  outstanding  stock of  Software  Partners  Publishing  and  Distribution
Limited ("Software Partners"),  a U.K. distributor of personal computer software
for consumer  entertainment  and small  office/home  office  applications.  As a
result  of  these  acquisitions,   together  with  the  Company's  own  internal
development   efforts,   the  Company  offers   software  titles  in  the  game,
personal/business  productivity,  education, reference and lifestyle markets for
use at home and in the office.  The  Company's  product line enables it to serve
customers who are seeking a broad range of high-quality, value priced software.

Consolidation

     The consolidated  financial  statements include the accounts of the Company
and its  wholly-owned  subsidiaries,  Virtual  Reality  Laboratories,  Inc.  and
Software  Partners.  All  inter-company  balances  and  transactions  have  been
eliminated.

2.   Preferred Stock

     During the quarter and six months  ended  December  31,  1997,  the Company
amortized to  accumulated  deficit  $12,550 and  $117,991,  respectively  in the
accretion of the beneficial  conversion  feature of the Company's  Class Two and
Class Three  Convertible  Preferred  Stock,  which  negatively  impacted the net
income for that  period.  During the quarter and six months  ended  December 31,
1998, there was no Convertible Preferred Stock outstanding.


                                     Page 6
<PAGE>

                                 RomTech, Inc.

             Notes to Consolidated Financial Statements (continued)

3.   Acquisition

     On August 14, 1998, the Company  acquired all of the outstanding  shares of
Software Partners Publishing and Distribution Limited ("Software Partners"),  in
exchange  for  150,000  shares  of  the  Company's   Common  Stock,   valued  at
approximately  $213,000,  which was the fair value of the Company's Common Stock
on the closing date of the acquisition.  This acquisition was accounted for as a
purchase and the  corresponding  goodwill in the approximate  amount of $308,000
will be  amortized  over five years.  For the quarter  ended  December  31, 1998
Software Partners  contributed $719,000 in net sales and $158,000 in net income,
and for the six months ended  December 31, 1998  Software  Partners  contributed
$1,020,000 in net sales and $264,000 in net income.

     The following  summarized  unaudited pro-forma financial  information gives
effect to the Software  Partners'  acquisition as though it had occurred on July
1, 1997, after giving effect to certain  adjustments,  primarily the elimination
of  inter-company  sales and amortization of goodwill.  The pro-forma  financial
information,  which is for  informational  purposes  only, is based upon certain
assumptions  and  estimates  and does not  necessarily  reflect the results that
would have  occurred  had the  acquisition  taken place at the  beginning of the
period  presented,  nor are they necessarily  indicative of future  consolidated
results.

<TABLE>
<CAPTION>
                                                      Pro-Forma Financial Information
                    
                                             Three Months Ended         Six Months Ended
                                                December 31,              December 31,
                                          -----------------------   -----------------------
                                             1998         1997         1998         1997
                                          ----------   ----------   ----------   ----------
<S>                                       <C>          <C>          <C>          <C>       
Net sales                                 $3,611,000   $3,262,000   $6,175,000   $5,118,000
Net income attributable to common stock   $  847,000   $  508,000   $1,142,000   $  518,000
Net income per diluted share              $     0.09   $     0.05   $     0.12   $     0.05
</TABLE>


4.   Comprehensive Income

     On July 1, 1998 the  Company  adopted  SFAS 130,  "Reporting  Comprehensive
Income".  This  Statement  requires  that  all  items  that are  required  to be
recognized under accounting  standards as components of comprehensive  income be
reported in a financial  statement that is displayed with the same prominence as
other financial statements. Comprehensive income is computed as follows:

<TABLE>
<CAPTION>
                                                Three Months Ended         Six Months Ended
                                                    December 31,              December 31,
                                             ------------------------   -----------------------
                                                1998          1997         1998         1997
                                             ----------    ----------   ----------   ----------
<S>                                          <C>           <C>          <C>          <C>       
Net income attributable to common stock      $  846,970    $  600,874   $1,250,335   $  661,748
Other comprehensive income:
   Foreign currency translation adjustment       (5,443)          -0-          969          -0-
                                             ----------    ----------   ----------   ----------
Comprehensive income                         $  841,527    $  600,874   $1,251,304   $  661,748
                                             ==========    ==========   ==========   ==========
</TABLE>


                                     Page 7
<PAGE>

                                 RomTech, Inc.

             Notes to Consolidated Financial Statements (continued)

5.   Common Stock

     On October 26,  1998,  the  Company's  Board of  Directors  authorized  the
Company to purchase up to $1,000,000 of its shares of Common Stock in the Nasdaq
SmallCap Market.  As of February 2, 1999,  161,900 shares at an approximate cost
of $278,000 had been acquired by the Company pursuant to the repurchase program.

6.   Subsequent Event

     On February 2, 1999, the Company  announced that its Board of Directors had
approved a change in the name of the Company to eGames, Inc., effective March 1,
1999. The Company  currently  trades on the Nasdaq  SmallCap Market System under
the  ticker  symbol  ROMT,  and will be traded  under  the  ticker  symbol  EGAM
effective March 1, 1999.



                                     Page 8
<PAGE>

                                 RomTech, Inc.

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

     The accompanying  consolidated financial statements as of December 31, 1998
include  the  accounts  of  RomTech,  Inc.,  ("RomTech"),  and its wholly  owned
subsidiaries,  Virtual Reality Laboratories, Inc. ("VRLI") and Software Partners
Publishing and Distribution Limited ("Software Partners").

Results of Operations

Three Months Ended December 31, 1998 and 1997

     Net sales for the three  months  ended  December  31, 1998 were  $3,611,000
compared  to  $2,856,000   for  the  three  months  ended   December  31,  1997,
representing  an increase of $755,000 or 26.4%.  This increase  resulted from an
increase  of  $1,031,000  in the sales of the  Company's  Galaxy of Games,  Game
Master Series, Galaxy of Arcade,  Galaxy of Home Office Help, VistaPro,  and Fun
and Learning (the "Galaxy  Software")  brands,  which were partially offset by a
decrease  of  $276,000 in sales of certain  discontinued  products.  The largest
sales  increase came from the Company's  "full release"  software  titles in the
Game Master Series and Galaxy of Arcade  products,  which  combined had sales of
$1,795,000  or 50% of net sales for the three  months  ended  December 31, 1998,
compared to no sales of these  products for the same period last year.  Sales of
the Company's Galaxy of Games series amounted to $1,257,000 or 35% of net sales,
a decrease of $619,000 from the same period last year, and reflect the Company's
continuing transition from providing  predominantly  shareware software products
to the full release level of software  titles.  Software  Partners,  acquired on
August 14, 1998,  accounted for $719,000 in net sales for the three months ended
December 31, 1998.

     The Company  primarily  distributes its Galaxy  Software  products in North
America through a large national  distributor,  Slash Corporation  ("Slash"),  a
division of GT Interactive Software Corporation.  The Company's product sales to
Slash  accounted for 80% and 83% of the Company's net sales for the three months
ended December 31, 1998 and 1997,  respectively.  The Company  believes that for
the year ending June 30, 1999,  sales to Slash could  account for 85% or more of
the Company's net sales.  The  Company's  agreement  with Slash does not specify
minimum purchase  requirements and can be terminated at any time by Slash. In an
effort to diversify the Company's distribution channels,  including distribution
via the  Internet,  the Company has added  features to its existing  web-site to
facilitate  on-line  orders and launched a new web-site  offering  demonstration
versions of the Company's products, that can be downloaded from the Internet.

     Cost of sales for the three months ended December 31, 1998 were  $1,137,000
compared  to  $1,023,000   for  the  three  months  ended   December  31,  1997,
representing an increase of $114,000 or 11.1%. This increase resulted  primarily
from the  $112,000  increase  in  royalty  expense  related to the sales of full
release  products.  The Company's gross profit margin  increased to 68.5% in the
three  months  ended  December  31, 1998 from 64.2% for the three  months  ended
December 31, 1997. The primary causes of this increase were the increased  sales
derived from the higher  margin Game Master  Series and cost  reductions  due to
higher production volumes and improved third party manufacturing processes.

     Product  development  expenses for the three months ended December 31, 1998
were $237,000  compared to $53,000 for the three months ended December 31, 1997,
an increase  of  $184,000  or 347.2%.  This  increase  was  primarily  due to an
increase in outside developer costs resulting from increased product development
efforts  incurred to improve the Company's full release product  offerings.  The
largest component of the Company's  increased  development  efforts reflects the
Company's transition from distributing primarily shareware-based software titles
to distributing a growing  percentage of full release software  titles,  such as
the  Company's  Game  Master  Series  and  Galaxy  of  Arcade  products.   Also,
significant  employment  costs  have been  incurred  relating  to the  Company's
concerted  effort to improve  the  quality  assurance  process of the  Company's
development effort.



                                     Page 9
<PAGE>

                                 RomTech, Inc.

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

     Selling,  general and  administrative  expenses  for the three months ended
December 31, 1998 were  $1,319,000  compared to $1,154,000  for the three months
ended  December 31, 1997,  representing  an increase of $165,000 or 14.3%.  This
increase  was  primarily  due to the  operating  expenses  associated  with  the
Software Partners operations based in the United Kingdom,  which was acquired on
August 14, 1998.

     Net  interest  expense for the three  months  ended  December  31, 1998 was
$14,000  compared to $13,000  for the three  months  ended  December  31,  1997,
representing an increase of $1,000.

Results of Operations

Six Months Ended December 31, 1998 and 1997

     Net  sales for the six  months  ended  December  31,  1998 were  $6,117,000
compared  to  $4,391,000   for  the  three  months  ended   December  31,  1997,
representing an increase of $1,726,000 or 39.3%.  This increase resulted from an
increase  of  $2,170,000  in the sales of the  Company's  Galaxy of Games,  Game
Master Series, Galaxy of Arcade,  Galaxy of Home Office Help, VistaPro,  and Fun
and Learning (the "Galaxy  Software")  brands,  which were partially offset by a
decrease  of  $444,000 in sales of certain  discontinued  products.  The largest
sales increase came from the Company's full release  software titles in the Game
Master  Series  and  Galaxy  of Arcade  products,  which  combined  had sales of
$2,759,000  or 45% of net sales for the six  months  ended  December  31,  1998,
compared to no sales of these  products for the same period last year.  Software
Partners, acquired on August 14, 1998, accounted for $1,020,000 in net sales for
the six months ended December 31, 1998.

     The Company  primarily  distributes its Galaxy  Software  products in North
America through a large national  distributor,  Slash Corporation  ("Slash"),  a
division of GT Interactive Software Corporation.  The Company's product sales to
Slash  accounted  for 76% and 80% of the  Company's net sales for the six months
ended December 31, 1998 and 1997,  respectively.  The Company  believes that for
the year ending June 30, 1999,  sales to Slash could  account for 85% or more of
the Company's net sales.  The  Company's  agreement  with Slash does not specify
minimum purchase  requirements and can be terminated at any time by Slash. In an
effort to diversify the Company's distribution channels,  including distribution
via the  Internet,  the Company has added  features to its existing  web-site to
facilitate  on-line  orders and launched a new web-site  offering  demonstration
versions of the Company's products, that can be downloaded from the Internet.

     Cost of sales for the six months ended  December  31, 1998 were  $2,017,000
compared to $1,637,000 for the six months ended December 31, 1997,  representing
an increase of $380,000 or 23.2%.  This  increase  resulted  primarily  from the
$195,000  increase  in  royalty  expense  related  to the sales of full  release
products and the $65,000  increase in the provision for inventory  obsolescence.
The  Company's  gross profit  margin  increased to 67.0% in the six months ended
December  31, 1998 from 62.7% for the six months ended  December  31, 1997.  The
primary causes of this increase were the increased sales derived from the higher
margin Game Master Series and cost reductions due to higher  production  volumes
and improved third party manufacturing processes.

     Product  development  expenses for the six months  ended  December 31, 1998
were $443,000  compared to $140,000 for the six months ended  December 31, 1997,
an increase  of  $303,000  or 216.4%.  This  increase  was  primarily  due to an
increase in outside developer costs resulting from increased product development
efforts  incurred to improve the Company's full release product  offerings.  The
largest component of the Company's  increased  development  efforts reflects the
Company's transition from distributing primarily shareware-based software titles
to distributing a growing  percentage of full release software  titles,  such as
the Company's Game Master Series and Galaxy of Arcade products.



                                    Page 10
<PAGE>


                                 RomTech, Inc.

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

Also,  significant employment costs have been incurred relating to the Company's
concerted  effort to improve  the  quality  assurance  process of the  Company's
development effort.

     Selling,  general  and  administrative  expenses  for the six months  ended
December  31, 1998 were  $2,299,000  compared to  $1,810,000  for the six months
ended  December 31, 1997,  representing  an increase of $489,000 or 27.0%.  This
increase  was  primarily  due to the  operating  expenses  associated  with  the
Software Partners operations based in the United Kingdom,  which was acquired on
August 14,1998.

     Net interest expense for each of the six months ended December 31, 1998 and
1997 was $24,000.

Liquidity and Capital Resources

The financial information presented reflects the Company's financial position at
December 31, 1998.

     As of December 31, 1998,  the Company's cash and working  capital  balances
were  $282,142  and  $3,261,036,   respectively.  Net  cash  used  in  operating
activities for the six months ended December 31, 1998 and 1997 were $112,490 and
$21,061,  respectively.  The $112,490 net cash used in operating  activities for
the six months  ended  December  31, 1998 was caused  primarily  by increases in
accounts  receivable  and inventory,  which were partially  offset by profitable
results of operations and increases in accounts payable and accrued expenses.

     Net cash used in investing activities for the six months ended December 31,
1998 and 1997 were $189,708 and $215,924,  respectively.  Purchases of furniture
and equipment  totaled  $122,790 for the six months ended  December 31, 1998. On
August 14, 1998, the Company acquired all of the outstanding  shares of Software
Partners, in exchange for 150,000 shares of the Company's Common Stock valued at
approximately $213,000. Acquisition costs, net of cash received, were $12,428.

     Net cash used in financing activities was $369,809 for the six months ended
December 31, 1998,  and net cash provided by financing  activities  was $199,392
for the six months ended  December 31, 1997. On October 26, 1998,  the Company's
Board of Directors  authorized  the Company to purchase up to  $1,000,000 of its
shares of Common Stock in the Nasdaq  SmallCap  Market.  As of February 8, 1999,
161,900  shares at an  approximate  cost of  $278,000  had been  acquired by the
Company pursuant to the repurchase program.

     The Company's  ability to achieve positive cash flow depends upon a variety
of factors,  including the  timeliness and success of developing and selling its
products,  the costs of  developing,  producing and marketing  such products and
various other factors, some of which may be beyond the Company's control. In the
future,  the Company's  capital  requirements  will be affected by each of these
factors.  The  Company  believes  cash  and  working  capital  balances  will be
sufficient to fund the Company's operations for the foreseeable future. However,
there can be no assurances that the Company will achieve a positive cash flow or
that  additional  financing  will be  available  if and  when  required  or,  if
available, will be on terms satisfactory to the Company.


                                    Page 11
<PAGE>

                                 RomTech, Inc.

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

Year 2000

The Company's State of Readiness

     The Company has  reviewed its  critical  information  systems for Year 2000
compliance.  The  compliance  review  revealed that all but one of the Company's
critical  information systems were Year 2000 compliant due to the fact that most
of the  Company's  network  hardware and operating  systems are  "off-the-shelf"
products from third parties with Year 2000 compliant versions.  The one critical
information  system that  required an upgrade to become Year 2000  compliant was
upgraded during December 1998.

     The Company has determined that there should be no Year 2000 issues for the
products  it has  already  sold  since the  Company's  products  contain no date
sensitive software.

     As part of the Company's Year 2000 compliance review, the Company is in the
process of  contacting  its  primary  vendors,  distributors  and  customers  to
determine the extent to which the Company is  vulnerable to such third  parties'
failures to address their Year 2000 compliance issues. The Company will continue
to work to obtain  sufficient  information  and assurances  from its significant
vendors,  distributors and customers as part of its Year 2000 compliance review.
However,  there can be no guarantee  that third  parties on which the  Company's
business relies will adequately address their Year 2000 compliance issues nor is
there any guarantee  that the failure by such third  parties to adequately  deal
with such issues would not have a material adverse effect on the Company and its
operations.

The Cost to Address the Company's Year 2000 Issues

     The Company  estimates  that the cost of its Year 2000  compliance  review,
including the upgrading of its critical information  systems,  will be less than
$15,000 and is not expected to be material to the Company's  financial position,
cash flow or results of operations.

The Risks Associated with the Company's Year 2000 Compliance

     The  Company  believes  that the  risks  associated  with its own Year 2000
compliance  primarily  relates  to the  failure of third  parties  upon whom the
Company's  business relies to timely address their Year 2000 issues.  Failure by
third  parties to  adequately  address their Year 2000 issues in a timely manner
could result in  disruptions  in the  Company's  supply of parts and  materials,
late, missed or unapplied  payments,  temporary  disruptions in order processing
and other general problems related to the Company's daily operations.  While the
Company  believes its Year 2000  compliance  review  procedures  will adequately
address the  Company's  internal  Year 2000 issues,  until the Company  receives
responses from all of its significant vendors,  distributors and customers,  the
overall risks associated with the Year 2000 issue remain difficult to accurately
describe and quantify,  and there can be no guarantee that such uncertainty will
not have a material adverse effect on the Company's business,  operating results
and financial position.

The Company's Contingency Plan

     The Company has not, to date, implemented a Year 2000 contingency plan. The
Company  intends to develop and implement a contingency  plan by the end of June
1999. It is the Company's  intention to devote whatever  resources are necessary
to assure that all of its Year 2000 compliance issues are resolved.


                                    Page 12
<PAGE>

                                 RomTech, Inc.

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

Forward-Looking Statements

     This report contains statements that are  forward-looking,  as that term is
defined  by the  Private  Securities  Litigation  Reform  Act of 1995 and by the
Securities and Exchange  Commission in rules,  regulations  and releases.  These
statements include, but are not limited to, statements regarding:  the projected
percentage of sales of the Company's  products to Slash  Corporation  during the
1999 fiscal year; the Company's  efforts in developing  "full-release"  software
titles;  the Company's  Internet  marketing  strategy;  the  sufficiency  of the
Company's cash and working capital balances to fund the Company's  operations in
the future; and the Company's expectations and cost estimates regarding its Year
2000 compliance  efforts.  All  forward-looking  statements are based on current
expectations  regarding  significant  risk  factors,  and  the  making  of  such
statements  should not be  regarded  as a  representation  by the Company or any
other person that the results expressed in this report will be achieved.

     The following  important factors,  among others,  could cause the Company's
actual results to differ materially from those indicated by the  forward-looking
statements contained in this report: the success of the Galaxy branding strategy
and market acceptance of the Company's Galaxy Series titles in the United States
and  international  markets;  the  allocation  of  adequate  shelf space for the
Company's products in major retail chain stores; successful sell-through results
for the  Company's  products  at retail  stores;  the  continued  success of the
distribution  relationship  between  the  Company  with Slash  Corporation;  the
continued expansion of the computer in homes in North America and the world; the
ability  to  deliver  products  in  response  to  orders  within a  commercially
acceptable  time  frame;   downward  pricing  pressure;   fluctuating  costs  of
developing,   producing  and  marketing  the  Company's   products;   access  to
alternative  distribution  channels and the success of the Company's  efforts to
develop and  implement its Internet  marketing  strategy;  consumers'  continued
demand for  value-priced  software;  increased  competition in the  value-priced
software category; the ability of the Company and its key distributors,  vendors
and suppliers to effectively  address Year 2000 compliance  issues;  and various
other factors,  many of which are beyond the Company's control. The Company does
not  undertake to update any  forward-looking  statement  made in this report or
that may be made from time to time by or on behalf of the Company.


                                    Page 13
<PAGE>

                                 RomTech, Inc.

Part II. Other Information

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

         Exhibit No.                       Description of Exhibit
         -----------                       ----------------------

           27.1                            Financial Data Schedule



(b)  Reports on Form 8-K

On January 21,  1999,  the  Company  filed a report on Form 8-K  announcing  the
Company's unaudited results for the second quarter and six months ended December
31, 1998.



                                    Page 14
<PAGE>

                                 RomTech, Inc.

                                   SIGNATURES


     In accordance  with the  requirements  of the Exchange Act, the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



                                  RomTech, Inc.
                                  (Registrant)




Date:  February 10, 1999                      /s/  Gerald W. Klein
                                              ----------------------------------
                                              Gerald W. Klein, President, Chief
                                              Executive Officer, Chief
                                              Financial Officer and Director


Date: February 10, 1999                       /s/ Thomas W. Murphy
                                              ----------------------------------
                                              Thomas W. Murphy, Controller and
                                              Chief Accounting Officer



                                    Page 15
<PAGE>

                                  Exhibit Index



Exhibit No.                       Description of Exhibit            Page Number
-----------                       ----------------------            -----------

  27.1                           Financial Data Schedule








                                    Page 16