SECURITIES AND EXCHANGE COMMISSION
                                                  Washington, D.C.  20549

                                                         FORM 10-Q


                      QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF
                            THE SECURITIES AND EXCHANGE ACT OF 1934

(Mark One)
(X)      Quarterly  report  pursuant  to section 13 or 15 (d) of the  Securities
         Exchange Act of 1934, for the quarterly period ended June 30, 1997.

( )      Transition report pursuant to section 13 or 15 (d) of the
         Securities Exchange Act of 1934, for the transition period from
                       to              .

Commission file number 333-03501

                                THE HARMAT ORGANIZATION, INC.
                   (Exact name of registrant as specified in its charter)

Delaware                                       11-2780723
(State of Incorporation)                   (I.R.S. Employer ID No.)

                            22 Old Country Road
                           Quogue, New York 11959
                                (516) 653-3303
                       (Address of Principal Executive Offices
              and Principal Place of Business and Telephone Number)

                (Former name, former address and former fiscal year,
                      if changed since last report)

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares  outstanding  of each of the  Issuer's  classes of
common stock, as of the latest practicable date.



            Class                    Outstanding at June 30, 1997

Common Stock, $.001 par value             2,612,500 shares

                                                            1

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                                               The Harmat Organization, Inc.



                                                    Index to Form 10-Q




<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                                                                                   Page
                   Item                                                                                           Number


PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements:

         Consolidated Balance Sheets -
         June 30, 1997 and June 30, 1996                                                                           3-4

         Consolidated Statement of Operations Three months and nine months ended
         June 30, 1997
         and June 30, 1996                                                                                         5

         Consolidated Statements of Cash Flow -                                                                    6
         Nine months ended June 30, 1997
          and June 30, 1996
         Consolidated Statement of Stockholder's Equity                                                            7-8

         Notes to Consolidated Financial Statements                                                                9-15

         Management's Discussion and Analysis of Financial
          Condition and Results of Operations                                                                      16-17

PART II.          OTHER INFORMATION

         Item 1.  Legal Proceedings                                                                                18
         Item 6.  Exhibits and Reports on Form 8-K                                                                 18

Signatures                                                                                                         19

</TABLE>


<PAGE>






THE HARMAT ORGANIZATION,INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET


                                      June 30, 1997             June 30, 1996
ASSETS
CURRENT ASSETS
 Cash and Cash Equivalents          $     1,042,322           $        1,747
 Marketable Securities                       11,068                  101,615
 Accounts Receivable                         61,283                  107,331
 Land and Construction Costs              2,272,660                1,016,236
 Prepaid Expenses                            81,429                   24,100

 Total Current Assets                     3,468,763                1,251,029

Property and Equipment-Net                1,232,483                1,148,218

Other Assets
 Land and Construction Costs                528,883                  709,319
 Land Held for Development                  385,000                           
 Due From Affiliated Companies               81,109                           
 Goodwill-Net                                60,314                   68,355
 Investment in Partnership                   26,447                   29,727
 Deferred Offering Costs                                             253,227
 Land Deposits                                                        75,000

 Total Other Assets                       1,081,753                1,135,628

         Total Assets                    $5,782,999               $3,534,875





                                        1

<PAGE>




THE HARMAT ORGANIZATION,INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEET



                                           June 30, 1997        June 30, 1996
 LIABILITIES & STOCKHOLDER'S EQUITY

                                                  
 CURRENT LIABILITIES

  Current Portion of Mortgage Payable    $     107,700         $    331,115

  Notes Payable-Shareholders                                        277,000

  Notes Payable-Related Parties                                     215,000

  Loans Payable-Bank                                                240,000

  Other Notes and Loans Payable                127,074              132,800

  Accounts Payable and Accrued Expenses        422,174              972,124

  Customer and Security Deposits                41,838              549,849

                                                   
  Total Current Liabilities                    698,786            2,717,888


 Other Liabilities

  Mortgages Payable-Net of Current Maturities   956,554              922,378

  Construction Loans Payable-Net of Current
     Maturities                               1,135,105                     

  Notes Payable-Related Party               


                                                   
     Total Other Liabilities                 2,091,659               922,378


 Stockholders' Equity

  Preferred Stock-.001 Par Value,5,000,000 Shares Authorized



                                        2

<PAGE>




   No Shares Issued and Outstanding                         


 Common Stock-.001 Par Value,25,000,000


 Shares Authorized 2,612,500 and 2,250,000

    Shares Issued and Outstanding at

   June 30, 1997 and June 30, 1996              2,613             2,250


  Additional Paid-in Capital -Common Stock  4,253,604            300.563


  Retained Earnings  (Deficit)             (1,263,663)          (408,204)

                                

 Total Stockholders' Equity                 2,992,554           (105,391)

                                          

 Total Liabilities and Stockholders' Equity $5,782,999         $3,534,875

                                                      

                                        3

<PAGE>





THE HARMAT ORGANIZATION,INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENT OF OPERATIONS

                                                 Three Months      Three Months
                                                     ended             ended
                                                  June 30,          June 30,
REVENUES                                            1997               1996

                                    
 Construction Sales                       $      1,254,405           $ 489,700

 Sale of Land Held for Development                                      52,000

 Rental Income                                      60,616              46,897

 Management Fee Income                                                  12,500

                                   

  Total Revenues                                  1,315,021            601,097


Cost of Sales and Direct Operating Expenses       1,173,907            516,267

                                  

                           Gross Profit             141,114             84,830


Selling,General and Administrative Expenses         418,323            197,791


Charge for Executive Compensation Capitalized                                 

                                              
               Income (Loss) from Operations       (277,209)          (112,961)


Other Income (Expense)

 Gain on Sale of Marketable Securities                8,495             11,142

 Unrealized Gain on Marketable Securities           (11,066)             4,325

 Interest and Dividend Income                        12,628               115



                                        4

<PAGE>




 Interest Expense                                  (15,323)            (43,957)

                                    

 Total Other (Expense) Income                       (5,266)            (28,375)

                                         
Net Income (Loss)                                 (282,475)           (141,336)

          Charge in Lieu of
               Income Taxes                                 


Pro Forma Net Income   (Loss)                   $ (282,475)          $(141,336)

                              
(Loss) per Share                                     (0.11)              (0.06)

                                  
 Weighted Average Number of Shares               2,585,402            2,250,000

                                                             

                                        5

<PAGE>





THE HARMAT ORGANIZATION,INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENT OF OPERATIONS

                                       Nine Months       Nine Months
                                        ended             ended
                                       June 30,          June 30,
REVENUES                                1997               1996

                         
 Construction Sales             $      1,255,881           $ 534,763

 Sale of Land Held for Development                            52,000

 Rental Income                           130,550             147,097

 Management Fee Income                                        87,500

                                             

  Total Revenues                        1,386,432            821,360


Cost of Sales and Direct 
  Operating Expenses                    1,194,213            555,910

                              

Gross Profit                              192,219            265,450


Selling,General and Administrative 
  Expenses                                948,595            417,991


Charge for Executive Compensation 
   Capitalized                                                67,250

                   

Income (Loss) from Operations            (756,376)           (219,791)


Other Income (Expense)

 Gain on Sale of Marketable Securities      62,274            151,457

 Unrealized Gain on Marketable Securities  (11,066)            41,503

 Interest and Dividend Income               65,408              5,450



                                        6

<PAGE>




 Interest Expense                         (58,602)           (126,986)

                               

 Total Other (Expense) Income              58,014              71,424

                                            

Net Income (Loss)                        (698,362)           (148,367)

Charge in Lieu of
   Income Taxes


Pro Forma Net Income (Loss)          $   (698,362)       $   (148,367)

                        
(Loss) per Share                           (0.28)             (0.07)

                               

 Weighted Average Number of Shares       2,535,589           2,000,000

                                     

                                        7

<PAGE>



THE HARMAT ORGANIZATION,INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOW

                                                    Nine Months   Nine Months
                                                      ended           ended
                                                    June 30,      June 30,
                                                    1997           1996
                                                         

Operating Activities:

 Net (Loss) Income                          $    (698,362)     $    (148,366)

                                                        
 Adjustments to Reconcile Net(Loss) Income to Net

                                                         
 Cash(Used For) Provided by Operating Activities:

  Depreciation and Amortization                    19,483             31,292

  Gain on Sale of Marketable Securities           (62,274)          (151,457)

  Change in Unrealized(Gain) Loss on Investments   11,066             15,431


  Executive Compensation Capitalized                                  67,250

Changes in Assets and Liabilities:

 Contract Receivables                             (33,689)           (92,567)


  Purchase of Marketable Securities                                 (242,148)

  Sale of Marketable Securities                    62,647            398,977

  Prepaid Expenses                                (37,931)           (22,925)

  Accounts Payable and Accrued Expenses           197,384            382,915

  Customer Deposits                                29,914            499,849


   Accrued Interest Receivables                                       (8,332)


  Total Adjustments                               186,600            878,285

                                                       
Net Cash - Operating Activites-Forward           (511,762)           729,919

                                                         

                                                          

<PAGE>




                                                       

Investing Activities:


 Advances from / to Affiliates and 
  Related Parties                                 (81,109)


  Acquisition of Property & Equipment             (99,850)           (52,099)

  Land Deposit                                                      (137,652)

  Land and Construction Cost                   (1,262,223)          (762,041)
                                      
Payment of Deferred Offering Costs                                  (223,227)


 Net Cash-Investing Activities-Forward         (1,143,182)        (1,175,019)
 

                                                          

Financing Activities:


 Repayment of Notes Payable-Related Party          (90,000)          

 Repayment of Mortgage Payable                     (71,977)          (14,764)

Proceeds of Mortgage Payable                                          (7,357)

Repayment of Other Notes & Loans Payable           (44,426)         
                            
Repayment of Notes Payable-Shareholder                                (6,560)
                              
Distribution to Shareholder                                          (65,416) 
                                             
Proceeds of Private Placement                                         500,000 






                                                          
 Net Cash-Financing Activities                  (206,403)          (405,903)

                                                          

Net Increase(Decrease) in Cash 
     and Cash Equivalents                     (2,161,347)            (39,197)

Cash and Cash Equivalents-Beginning 
     of Periods                                3,203,669               40,994

                                           


                                                                   

<PAGE>





                                
Cash and Cash Equivalents-End 
     of Periods                               $1,042,322               $1,747

 Supplemental Disclosures of Cash Flow Information:

   Cash Paid during Periods for:

                                           
     Interest                              $      68,422               $ 115,760
     Income Taxes                          $      48,620

                                               


Supplemlental Dislcosures on
Non-Cash Investing and
Financing Activities:

     For the Nine months ended June 30, 1996, the Company distributed marketable
securities with a fair value of $186,400 to its controlling stockholder.






















                                       10

<PAGE>



THE HARMAT ORGANIZATION, INC. AND SUBSIDIARIES
CONSOLIDATED  STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                            Common Stock               Additional                                 Total
                           Number of   Amount          Paid-in         Accumulated             Stockholders'
                           Shares      At Par          Capital         (Deficit)                  Equity

Balance-September 30,1996 2,612,500  $ 2,613          $4,253,604      $ (565,300)              $   3,690,917

 Net (Loss) for period                                                  (698,363)                   (698,363)

Balance-June 30,1997      2,612,500  $  2,613          $4,253,604    $(1,263,663)              $   2,992,554
</TABLE>

                                       11

<PAGE>




THE HARMAT ORGANIZATION,INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>


                                        Common Stock         Additional                         Total
                                      Number of   Amount     Paid-in       Accumulated   Stockholders'
                                        Shares    At Par     Capital        (Deficit)          Equity
                                                                    
Balance-September 30,1995            1,750,000  $ 1,750      $128,750     $ (350,455)     $  (219,955)

      Proceeds from Private Placement  500,000      500       499,500                         500,000

Transfer of S Corporation Deficit to                                                           38,026
Additional Paid-in Capital                                   (342,437)       342,437

Executive Compensation Captialized                             14,750                          14,750

 Net Income(Loss) for period                                                (148,367)        (148,367)

Stockholder Distributions                                                   (251,819)        (251,819)





                                                                    
Balance-June 30,1996                2,250,000  $   2,250     $300,563     $   (408,204)  $    (105,391)

</TABLE>
                                      





                
<PAGE>







                                                            
<PAGE>

                                            The Harmat Organization, Inc.

                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                     (UNAUDITED)



NOTE 1 -          SIGNIFICANT ACCOUNTING POLICIES

                  BASIS OF PRESENTATION


                  The interim financial statements are prepared pursuant
                  to the  requirements  for reporting on Form 10-Q. The June 30,
                  1997 and June 30, 1996  balance  sheet data was  derived  from
                  interim  financial  statements  and together  with the interim
                  financial  statements  and  notes  thereto  should  be read in
                  conjunction  with the financial  statements and notes included
                  in the  Company's  latest  annual  report on Form 10-K. In the
                  opinion of the management,  the interim  financial  statements
                  reflect all adjustments of a normal recurring nature necessary
                  for a fair statement of the results for interim  periods.  The
                  current  period  results  of  operations  are not  necessarily
                  indicative  of results which  ultimately  will be reported for
                  the full fiscal year.

                  BUSINESS

                  In November 1995, The Harmat Organization, Inc.
                  [Delaware]  [the  "Company"]  was  formed  for the  purpose of
                  offering securities to the general public and 1,750,000 shares
                  of common stock were issued to the  individual  stockholder of
                  the  Harmat  Companies.  On  March  1,  1996,  the  individual
                  stockholder of the Harmat  Companies  transferred his stock in
                  the Harmat Companies to The Harmat Organization [Delaware] for
                  a 100%  ownership  interest in the Harmat  Organization,  Inc.
                  [Delaware].

                  The June 30, 1997 and June 30, 1996 financial statements
                  reflect the  financial  position and results of  operations of
                  The  Harmat  Organization,  Inc.  and  its  subsidiaries  on a
                  consolidated  basis,  which  reflects  the  Company's  current
                  organizational   structure.   The   Company's   policy  is  to
                  consolidate all majority-owned subsidiaries.  All intercompany
                  amounts have been eliminated in consolidation.

                  The construction industry poses certain inherent risks
                  to the  Company,  such as a  shortage  of  skilled  labor.  In
                  addition,  certain  other  problems  may  arise  resulting  in
                  construction  delays such as weather delays,  cost of supplies
                  and late deliveries  and/or cost overruns that the Company may
                  have to absorb. Furthermore,  the Company may incur unexpected
                  costs with respect to warranty  service on completed  projects
                  even  though  it  carries  warranty  insurance  to cover  such
                  contingencies.   Such   construction   risks  can  affect  the
                  Company's cash flow and profits.  To date, the Company has not
                  been materially affected by such construction risks. The

                                                        

<PAGE>



                  Company  faces  competition  from a number of local  builders,
                  many of which  can  offer  either  the same or lower  building
                  costs than the Company.

                  The principal stockholder of the Company is a general
                  partner in the partnership in which The Harmat
                  Management Co., Inc. - New York has a limited
                  partnership interest.

                  The Plan for Incentive Compensation of Matthew
                  Schilowitz  [the  "Schilowitz  incentive  Plan"]  who  is  the
                  principal,  was adopted by the Board of Directors and approved
                  by the Company`s sole stockholder on March 1, 1996 and amended
                  August 3, 1996 and June 19, 1997.  Pursuant to such plan,  Mr.
                  Schilowitz  has been  granted an option to  purchase  up to an
                  aggregate  of 500,000  shares of Common  stock at an  exercise
                  price of $1.125 per share. In the event the Company`s earnings
                  before taxes first  equals or exceeds any amount  listed below
                  for any fiscal  year  ending  after the date of the  Company`s
                  initial public offering,  the shares shall be released to such
                  stockholder as follows:


                  Earnings Before Taxes          Shares to be Issued

                  $   750,000                       250,000
                  $ 1,500,000                       250,000

                  If the above earnings are achieved, the Company will recognize
                  compensation  expense equal to the difference between the fair
                  market  value  and  the   exercise   price  at  the  time  the
                  performance  conditions  are achieved.  Issuance of the shares
                  would  result  in  substantial  compensation  expense  to  the
                  Company in future years.

                  NOTE 2 -                ACCOUNTING PERIOD

                  Effective  September 30, 1996, the Company changed to a fiscal
                  year  ending on  September  30th.  Prior to 1996,  the Company
                  utilized  a  calender  year end.  The  accompanying  financial
                  statements  include the nine month  period ended June 30, 1997
                  and June 30, 1996.

                  CASH AND CASH EQUIVALENTS

                  The Company considers all highly liquid instruments  purchased
                  with  a  maturity   of  three   months  or  less  to  be  cash
                  equivalents. Cash equivalents totaled approximately $1,042,322
                  at June 30, 1997.

                  CONCENTRATION OF CREDIT RISK

                  Financial instruments which potentially subject the Company to
                  concentrations  of credit  risk are cash and cash  equivalents
                  and  accounts  receivable  arising  from the  normal  business
                  activities.  The  Company  routinely  assesses  the  financial
                  strength of its customers and

                                                          

<PAGE>



                  based  upon  factors   surrounding  the  credit  risk  of  its
                  customers,   establishes   an  allowance   for   uncollectible
                  accounts,  and as a  consequence,  believes  that its accounts
                  receivable  credit risk  exposure  beyond such  allowances  is
                  limited.  Deposits are usually required on house  construction
                  contracts.  The Company  places its cash and cash  equivalents
                  with high credit quality financial institutions. The amount on
                  deposit in any one institution that exceeds  federally insured
                  limits  is   subject   to  credit   risk.   Such   amount  was
                  approximately  $896,163 at June 30, 1997. The Company believes
                  no  significant  concentration  of  credit  risk  exists  with
                  respect to these cash equivalents.


                  NOTE 3 -               ECONOMIC DEPENDENCY

                  There were three  construction  sales recorded during the nine
                  months ended June 30, 1997. For the nine months ended June 30,
                  1997, there were three construction  contracts in process that
                  were deemed major  customers.  These contracts  represent 83%,
                  10%, 7% of  construction  in process at June 30,  1997.  There
                  were  six  construction  contracts  which  were  deemed  major
                  customers  and  accounted  for   approximately  99%  of  total
                  construction  sales for the nine months  ended June 30,  1997.
                  For the nine  months  ended  June  30,  1996,  five  contracts
                  represented   16%  each  of  total  sales  and  one   contract
                  represented 19% of total sales. Most of the Company's business
                  is of a  nonrecurring  nature.  The Company  must  continually
                  market its homes in order to attract  new  purchasers.  Unless
                  the Company is successful in attracting new purchasers for its
                  homes,  a lack of new purchasers  will have a severe  negative
                  impact to the Company in the near term.

                  MARKETABLE SECURITIES

                  The Company accounts for its investments pursuant to Statement
                  of   Financial   Accounting   Standards   ["SFAS"]   No.  115,
                  "Accounting  for  Certain   Investments  in  Debt  and  Equity
                  Securities."   SFAS  No.  115  addresses  the  accounting  and
                  reporting  for  investments  in  equity  securities  that have
                  readily  determinable  fair values and for all  investments in
                  debt securities.  Those  investments are to be classified into
                  the  following   three   categories:   held-to-maturity   debt
                  securities;   trading   securities;   and   available-for-sale
                  securities.  In  accordance  with SFAS No. 115,  prior  years'
                  financial  statements  are not to be  restated  to reflect the
                  change in adopting the new accounting method.

                  Management  determines the appropriate  classification  of its
                  investments  in debt  and  equity  securities  at the  time of
                  purchase and reevaluates  such  determination  at each balance
                  sheet  date.  At June 30,  1997 and 1996,  all of the  Company
                  investments  were  classified as trading  securities.  Trading
                  securities are securities bought

                                                         

<PAGE>



                  and held  principally  for the purpose of selling  them in the
                  near term and are  reported  at fair  value,  with  unrealized
                  gains and losses  included in operations for the current year.
                  The Company primarily uses the specific  identification method
                  for gains and losses on the sales of marketable securities.

                  EARNINGS [LOSS] PER SHARE

                  Earnings  [Loss] per share are  computed by  dividing  the net
                  income [loss] for the year by the weighted  average  number of
                  common  shares  outstanding.  Stock  options and  warrants are
                  assumed converted to common stock, when dilutive.

                  USE OF ESTIMATES

                  The  preparation  of financial  statements in conformity  with
                  generally accepted  accounting  principles requires management
                  to make  estimates  and  assumptions  that affect the reported
                  amounts of assets and liabilities and disclosure of contingent
                  assets and liabilities at the date of the financial statements
                  and the reported  amounts of revenues and expenses  during the
                  reporting  period.  Actual  results  could  differ  from those
                  estimates.

                  LAND DEVELOPMENT COSTS

                  Costs that  clearly  relate to land  development  projects are
                  capitalized.  Costs are allocated to project components by the
                  specific  identification method whenever possible.  Otherwise,
                  acquisition  costs are allocated  based on their relative fair
                  value before development,  and development costs are allocated
                  based  on their  relative  sales  value.  Interest  costs  are
                  capitalized while development is in progress.


                  REVENUE RECOGNITION

                  HARMAT HOLDING AND HARMAT HOMES

                  Harmat Holding Corp. ("Harmat Holding") and Harmat Homes, Inc.
                  ("Harmat   Homes")recognize   revenue  from  the  acquisition,
                  development  and  sale of land  and  construction  and sale of
                  houses on such land.  Pursuant to the terms of such  contracts
                  and Statement of Financial  Accounting  Standards ["SFAS"] No.
                  66,  "Accounting  for Sales of Real  Estate," the Company uses
                  the deposit method of accounting. The method provides that all
                  construction costs be recorded as incurred and monies received
                  from the  purchases  recorded as deposits  until the  purchase
                  contracts  close  when  all  revenue  costs  and  profits  are
                  recognized.

                  Harmat Holding classifies all land and construction costs that
                  are  expected  to be  completed  within  one year as a current
                  asset.  At June 30,  1997 and 1996 such land and  construction
                  costs totaled  $2,272,660 and  $1,016,236.  Customer  deposits
                  received on such

                                                          

<PAGE>



                  contracts totaled $27,837 and $549,849 at June 30, 1997
                  and 1996.


                  NORTHSIDE WOODS AND HARMAT CAPITAL

                  Rental income of Northside Woods, Inc. ("Northside
                  Woods") and Harmat Capital Corp. ("Harmat Capital") is
                  recognized as it is earned pursuant to the terms of each
                  lease on a straight line basis.  All leases have an
                  initial or remaining term of one year or less.

                  NOTE 3 -                 PROPERTY AND EQUIPMENT

                  Property and equipment are recorded at cost and depreciated 
                  by the  straight-line  method over the estimated useful
                  lives  of  the  assets  for  building  and   improvements  and
                  accelerated  methods for  furniture  and  equipment  of 5 - 40
                  years and consist of the following:



                                    June 30, 1997             June 30, 1996
                                                                           

         Land                      $ 523,330                   $ 450,495
         Buildings and
           improvements              843,246                     824,532
         Furniture and fixtures       49,902                      45,335
                                   1,416,478                   1,320,362

         Less: accumulated
           depreciation
           and amortization         183,995                      172,144
                                 $1,232,483                   $1,148,218


                  NOTE 4 -                 INCOME TAXES

                  The Company will file a consolidated federal income tax return
                  with its subsidiaries. At June 30, 1997, the Company will have
                  net operating  loss carry forwards of  approximately  $750,000
                  available to reduce future taxes.  These carry forward  losses
                  expire  in  2011.  Pursuant  to  Section  382 of the  Internal
                  Revenue  Code   regarding   substantial   changes  in  Company
                  ownership, utilization of these losses may be limited.

                  For the year ended December 31, 1995, each of the subsidiaries
                  had elected  S-corporation  status under the Internal  Revenue
                  Code and similar state statutes and, therefore,  did not incur
                  federal  or state  income  taxes  except  for a New York State
                  equalization tax on S-corporation  earnings.  Taxes are passed
                  through to the individual shareholder for S-corporations.  Pro
                  forma net income and  earnings  per share are  presented as if
                  the companies were  C-corporations.  On March 1, 1996, each of
                  the S-corporations  terminated their S-corporation  status and
                  became C-corporations.



                                                          

<PAGE>



                  NOTE 5 -                   GOODWILL

                  The cost of the newly  acquired  subsidiary,  Quick Storage of
                  Quogue, Inc., in excess of the fair value of the net assets of
                  such subsidiary has been charged to goodwill.  The Company has
                  decided to amortize  its  goodwill  over a period of up to ten
                  years under the straight-line method. Accumulated amortization
                  at June  30,  1997  and  1996  was  $12,063  and  $6,033.  The
                  Company's  policy  is to  evaluate  the  periods  of  goodwill
                  amortization   to   determine   whether   later   events   and
                  circumstances  warrant revised  estimates of useful lives. The
                  Company also evaluates  whether the carrying value of goodwill
                  has  become  impaired  by  comparing  the  carrying  value  of
                  goodwill  to the value of  projected  undiscounted  cash flows
                  from the  acquired  assets of Quick  Storage of  Quogue,  Inc.
                  Impairment  is  recognized if the Company value of goodwill is
                  less than the projected  undiscounted  cash flow from acquired
                  assets or business.

                  NOTE 6 -               PRIVATE PLACEMENT

                  In  February of 1996,  Harmat  Organization,  Inc.  [Delaware]
                  offered  500,000  units at $1.00 per unit as part of a private
                  placement  transaction.  The  units  consist  of one  share of
                  common stock,  three Series A warrants entitling the holder to
                  purchase  three  shares of common stock for $6.00 for a period
                  of four years and one Series B warrant entitling the holder to
                  purchase  one share of common  stock for $9.00 for a period of
                  four  years.  The  shares  of common  stock  and the  Series A
                  warrants  were  registered  as  part  of  the  initial  public
                  offering.  On February 22, 1996, the Company received proceeds
                  of $500,000 from the private placement.

                  The following is a schedule of warrants:

<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Date                                       No. of                                    FMV at                No. of
of                                         Warrants             Exercise             Date of               Warrants
Grant                 Type                 Issued               Price                Grant                 Exercised
February              Series A             1,500,000            $6.00                $5.75
1996
February              Series B               500,000            $9.00                $5.75
1996
TOTAL                                      2,000,000

</TABLE>







                  NOTE 7 -                     COMMON STOCK

                  CAPITAL CONTRIBUTION

                  On  August  3,  1996,  the  Company's  principal   stockholder
                  contributed  500,000  shares of the Company's  common stock to
                  the Company in lieu of an escrow of 750,000 of his

                                                          

<PAGE>



                  shares.  The escrow was part of the "earnout" agreement.
                  The 500,000 contributed shares were canceled.  The
                  contribution has been reflected retroactively in these
                  financial statements as a recapitalization.

                  NOTE 8 -            COMMITMENTS AND CONTINGENCIES

                  LAND CONTRACT

                  Pursuant  to an  agreement  dated  December  1995,  the Harmat
                  Organization,   Inc.  agreed  to  purchase  three  parcels  of
                  undeveloped   land  located  in  Westhampton,   New  York  for
                  $1,247,000.  The Harmat  Organization,  Inc. deposited $75,000
                  pursuant  to the terms of such  contract.  This  contract  was
                  finalized  by the  Company  receiving  a  commitment  for  the
                  financing  of land  acquisitions  during the period ended June
                  30, 1997.

                  LEGAL PROCEEDINGS

                  The  Company  is  involved  in  legal  proceedings  which  are
                  considered routine and incidental to its business. The Company
                  believes  that  the  legal  proceedings  which  are  presently
                  pending  have  no  potential  liability  which  would  have an
                  adverse material effect on the financial condition, operations
                  or cash flows of the Company.  Due the inherent uncertainty of
                  the legal process,  however, this assessment may be subject to
                  change in the near term.

                  COMMITMENTS AND STOCK OPTION PLAN

                  In 1996,  the Board of  Directors  adopted a stock option plan
                  providing  for the  granting  of up to  400,000  shares of the
                  Company's common stock.  This Plan granted the Company's chief
                  executive officer and principal  shareholder 300,000 shares at
                  an exercise  price of $1.125 per share. In January,  1997, the
                  Company   granted  five  year  options   under  the  Company's
                  Qualified  Stock Option Plan  providing for 10,000 shares at a
                  price  of  $2.125  per  share  to four  directors  and two key
                  employees of the Company.

                  EMPLOYMENT AGREEMENT

                  On  April  1,  1996,  the  Company  entered  into a five  year
                  employment  agreement  with the President and Chief  Executive
                  Officer, who is also the Company's principal shareholder for a
                  base salary of $105,000  with  increments of $50,000 each year
                  thereafter.  In addition,  the Officer will receive a bonus of
                  5% of pre tax  annual  earnings  and is  granted  warrants  to
                  purchase up to an aggregate  of 500,000  shares of the Company
                  common  stock for ten years  exercisable  at $1.125  per share
                  with  rights  vesting  upon  attainment  of  certain  earnings
                  levels.

                                                          

<PAGE>



                          The Harmat Organization, Inc.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


FOR THE NINE MONTHS ENDED JUNE 30, 1997 COMPARED WITH THE
NINE MONTHS ENDED JUNE 30, 1996

Net revenues increased $565,072 to $1,386,432 for the nine months ended June 30,
1997 from  $821,360  for the nine  months  ended  June 30,  1996.  Net  revenues
increased  $713,924 to $1,315,021  for the three months ended June 30, 1997 from
$601,097  for the three months  ended June 30,  1996.  The $721,118  increase in
gross sales was due  primarily to the fact that there were no sales  recorded in
the six months  ended  March 31,  1997.  The  remaining  change in net  revenues
related  primarily to a lower rental  income and a reduction in  management  fee
income in addition to the sale of Land Held for Development.

Cost of sales for the nine months ended June 30, 1997 was $1,194,213 as compared
to $555,910 for the nine months ended June 30, 1996. Cost of sales for the three
months ended June 30, 1997 was  $1,173,907 as compared to $516,267 for the three
months ended June 30, 1996. The reduction is due to the lack of sales in the six
months ended March 31, 1997 versus 1996.

Selling,  General and Administrative  expenses were $948,595 for the nine months
ended June 30, 1997 as compared to $417,991  for the nine months  ended June 30,
1996.  For  the  three  months  ended  June  30,  1997,  Selling,   General  and
Administrative  expenses were  $418,323  versus  $197,791 for the three months
ended  June  30,  1996.  The  increase  is  due  primarily  to the  addition  of
administrative staff and marketing costs in 1997 and 1996 versus 1996 and 1995.

Interest expense decreased from $126,986 for the nine months ended June 30, 1996
to $58,602 for the nine months ended June 30,  1997.  For the three months ended
June 30,  1997,  interest  expense  decreased  from $43,957 for the three months
ended  June  30,  1996 to  $15,323  primarily  as a  result  of a  reduction  in
construction  loans and the repayment of bank debt and payables to  Shareholders
and Related Parties from the public offering in September, 1996.

The net loss of $698,362  for the nine months  ended June 30, 1997  increased by
$549,995  from a net loss of $148,367  for the nine months  ended June 30, 1996.
For the three months  ended June 30, 1997 the net loss of $282,475  increased by
$141,139 from a net loss of $141,336 for the three months ended June 30, 1996.






















                                                             

<PAGE>







                          The Harmat Organization, Inc.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of liquidity have been the proceeds of its initial
public offering, cash generated from sales, and borrowings from its officers and
related parties.

During the nine months ended June 30, 1997,  the Company had negative cash flows
from  operating  activities of $511,762  versus a positive cash flow of $729,919
for the nine  months  ended June 30,  1996.  Investing  activities  used cash of
$1,443,182  in the nine months  ended June 30, 1997 and  $1,175,019  in the nine
months  ended  June  30,  1996  primarily  for  the   acquisition  of  land  and
construction costs.




                                                             

<PAGE>
Subsequent Events 



         In July of 1997, Harmat Organization, Inc. entered into an
agreement to sell its interest in the Jagger Woods Development
and certain other properties to an unaffiliated third
party for approximately $3,130,000.  It is anticipated that this
transaction will be completed prior to year end.

         During July 1997, Harmat Organization, Inc. deposited
$100,000 in escrow relating to the proposed acquisition of
certain real estate properties in Florida.  The proposed
acquisition price of the properties is approximately $5,300,000.

         At this time, it is not possible to determine the effect
that the above transactions will have on the financial statements
of Harmat Organization, Inc.





<PAGE>


                                                The Harmat Organization, Inc.

PART II               OTHER INFORMATION


ITEM 1.               Legal Proceedings


             On January 20, 1997,the Greater  Westhampton  Civic Association and
Edward  Batcheller  commenced in New York State  Supreme  Court  proceeding 
a against the Town of  Southampton  Planning  Board  pertaining  to the
approval  process of the  Jagger  Village  Subdivision,  the  Company's  41-acre
parcel. Although not named as a defendant,  the Company intervened to defend and
filed a motion to dismiss the  petition.  Oral  argument was heard on April 30,
1997 and the petition was dismissed on June 10, 1977.



ITEM 6.               Exhibits and Reports on Form 8-K

                      a.  Exhibits - None

                      b.  Reports on Form 8-K
                                                  None



                                                             

<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 hereunto duly authorized.




                                               The Harmat Organization, Inc.
                                                        (Registrant)




By: _________________________
    Matthew C. Schilowitz
    Chief Executive Officer


By: ___________________________
    Vincent E. Hunt
    Chief Financial Officer




Date: July    , 1997
<PAGE>