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

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                           --------------------------

                                   FORM 10QSB

                           --------------------------


(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, 1998


                                       OR

     |_|  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 1-13764


                        NORTHEAST DIGITAL NETWORKS, INC.
                   (FORMERLY ELECTRONICS COMMUNICATIONS CORP.)
        (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)

                    Delaware                               11-2649088
         (STATE OR OTHER JURISDICTION OF                  (IRS EMPLOYER
         INCORPORATION OR ORGANIZATION)              IDENTIFICATION NUMBER)


              425 Broad Hollow Road
               Melville, New York                             11747
    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)               (ZIP CODE)

Registrant's telephone number, including area code: (516) 501-0466


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 [ ]

     The  number of shares of the  registrant's  common  stock  ($.60 par value)
outstanding as of August 15, 1998 was 12,555,071 shares.



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


                        NORTHEAST DIGITAL NETWORKS, INC.
          (FORMERLY ELECTRONICS COMMUNICATIONS CORP.) AND SUBSIDIARIES

                                      INDEX


     PART I. FINANCIAL INFORMATION


     ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

             Consolidated  Balance  Sheets as of June 30, 1998  (unaudited)  and
             March 31, 1998

             Consolidated  Statements of  Operations  for the three months ended
             June 30, 1998 (unaudited) and 1997 (unaudited)

             Consolidated  Statements  of Cash Flows for the three  months ended
             June 30, 1998 (unaudited) and 1997 (unaudited)

             Consolidated  Statement of Changes in Stockholders'  Equity for the
             three  months  ended June 30, 1998  (unaudited) 

             Notes to Consolidated Financial Statements

     ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

     PART II. OTHER INFORMATION

              SIGNATURE PAGE


                                       1
<PAGE>



                        NORTHEAST DIGITAL NETWORKS, INC.

          (FORMERLY ELECTRONICS COMMUNICATIONS CORP.) AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS




                                                    JUNE 30,         MARCH 31,
ASSETS                                                1998             1998
                                                   ----------       ----------
                                                  (UNAUDITED)

CURRENT ASSETS:
   Cash ....................................     $  1,087,815      $  1,767,930
   Accounts Receivable
     (Net of $71,000 Allowance for
      Doubtful Accounts at
     June 30, 1998 and March 31, 1998) .....           48,919            62,217
   Prepaid Expenses ........................           20,164            21,071
                                                 ------------      ------------
           TOTAL CURRENT ASSETS ............        1,156,898         1,851,218
                                                 ------------      ------------

PROPERTY AND EQUIPMENT:
   Property and Equipment ..................        1,655,573         1,686,122
   Accumulated Depreciation ................         (657,852)         (649,732)
                                                 ------------      ------------
           NET PROPERTY AND EQUIPMENT ......          997,721         1,036,390
                                                 ------------      ------------

OTHER ASSETS:
   PCS Licenses ............................       12,440,526        22,300,351
   Deferred Registration Costs
     and Loan Origination Fees .............           13,701            13,701
   Paging System Costs .....................          663,848           676,614
   Debt Issue Cost .........................          615,089         1,020,000
   Security Deposits and Other Assets ......          112,379           113,965
                                                 ------------      ------------
           TOTAL OTHER ASSETS ..............       13,845,543        24,124,631
                                                 ------------      ------------
TOTAL ASSETS ...............................     $ 16,000,162      $ 27,012,239
                                                 ============      ============


                See Notes to Consolidated Financial Statements.

                                       2
<PAGE>


                        NORTHEAST DIGITAL NETWORKS, INC.

          (FORMERLY ELECTRONICS COMMUNICATIONS CORP.) AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS




                                                     JUNE 30,         MARCH 31,
LIABILITIES AND STOCKHOLDERS' EQUITY                   1998             1998
                                                    ----------       ----------
                                                   (UNAUDITED)

CURRENT LIABILITIES:
   Accounts Payable and Accrued Expenses .....    $  1,429,345     $  1,316,606
   Notes Payable--Other ......................         808,177          795,677
   Current Portion of Long Term Debt .........         377,305          332,524
   Current Portion of Note Payable to FCC ....         419,871          158,670
                                                  ------------     ------------
          TOTAL CURRENT LIABILITIES ..........       3,034,698        2,603,477
                                                  ------------     ------------

LONG TERM LIABILITIES:
   Notes Payable to FCC ......................       8,639,281       18,760,307
   Long Term Debt ............................         481,762        1,087,345
                                                  ------------     ------------
          TOTAL LONG TERM LIABILITIES ........       9,121,043       19,847,652
                                                  ------------     ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
   Preferred Stock, no par value, 45
     authorized Series C Non-voting
     Convertible 30.5 Shares issued
     and outstanding at June 30, 1998
     and 45 at March 31, 1998 ................            --               --
   Common Stock, par value $.60 per share,
     40,000,000 authorized, 10,102,323
     issued and outstanding at
     June 30, 1998 and 5,531,705
     at March 31, 1998 .......................       6,118,216        3,375,845
   Additional Paid-In Capital ................      22,189,908       24,443,726
   Accumulated Deficit .......................     (22,792,177)     (21,203,461)
   Discount on Common Stock available to
     Series C Preferred Shareholders .........      (1,671,526)      (2,055,000)
                                                  ------------     ------------
          TOTAL STOCKHOLDERS' EQUITY .........       3,844,421        4,561,110
                                                  ------------     ------------
 TOTAL LIABILITIES AND
    STOCKHOLDERS' EQUITY .....................    $ 16,000,162     $ 27,012,239
                                                  ============     ============

                See Notes to Consolidated Financial Statements.

                                       3

<PAGE>



                        NORTHEAST DIGITAL NETWORKS, INC.

          (FORMERLY ELECTRONICS COMMUNICATIONS CORP.) AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                  THREE               THREE
                                              MONTHS ENDED        MONTHS ENDED
                                              JUNE 30, 1998       JUNE 30, 1997
                                              -------------       -------------
                                               (UNAUDITED)         (UNAUDITED)
                                                            
REVENUES:
   Paging & Two Way Radio ...................   $   203,339        $   545,532
   Commissions ..............................          --               95,573
   Electronics ..............................          --                9,614
                                                -----------        -----------
                                                                 
          TOTAL REVENUES.....................       203,339            650,719
                                                -----------        -----------
                                                                 
                                                                 
COST OF SALES:                                                   
   Paging & Two Way Radio ...................       171,463            347,167
   Commissions ..............................          --               85,663
   Electronics ..............................          --                9,421
                                                -----------        -----------
                                                                 
          TOTAL COST OF SALES ...............       171,463            442,251
                                                -----------        -----------
                                                                 
          GROSS PROFIT (LOSS) ...............        31,876            208,468
                                                -----------        -----------
                                                                 
                                                                 
SELLING, GENERAL AND                                             
  ADMINISTRATIVE EXPENSES:                                       
   Selling ..................................          --              542,204
   General and Administrative ...............       800,510            938,195
                                                -----------        -----------
                                                                 
          TOTAL SELLING, GENERAL AND                             
             ADMINISTRATIVE EXPENSES ........       800,510          1,480,399
                                                -----------        -----------
                                                                 
INCOME (LOSS) FROM OPERATIONS ...............      (768,634)        (1,271,931)
                                                -----------        -----------
                                                                 
                                                                 
OTHER (INCOME) EXPENSE:                                          
   Interest Expense .........................       838,800             94,263
   Interest Income ..........................       (18,718)              (430)
                                                -----------        -----------
                                                                 
          TOTAL OTHER (INCOME) EXPENSE ......       820,082             93,833
                                                -----------        -----------
                                                                 
LOSS BEFORE MINORITY INTEREST ...............    (1,588,716)        (1,365,764)
                                                -----------        -----------
                                                                 
MINORITY INTEREST IN GAIN (LOSS) OF                              
CONSOLIDATED SUBSIDIARIES ...................          --               (3,802)
                                                -----------        -----------
                                                                 
NET LOSS ....................................   $(1,588,716)       $(1,369,566)
                                                ===========        ===========
                                                             
LOSS PER COMMON SHARE .......................   $     (0.19)       $     (1.30)
                                                ===========        ===========

                See Notes to Consolidated Financial Statements.

                                       4
<PAGE>


                        NORTHEAST DIGITAL NETWORKS, INC.

          (FORMERLY ELECTRONICS COMMUNICATIONS CORP.) AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                         THREE MONTHS               THREE MONTHS
                                                                             ENDED                      ENDED
                                                                         JUNE 30, 1998              JUNE 30, 1997
                                                                         ------------               ------------
                                                                          (UNAUDITED)               (UNAUDITED)
                                                                                          
CASH FLOWS FROM OPERATING ACTIVITIES

<S>                                                                       <C>                        <C>         
   Net Loss ...................................................           $(1,588,716)               $(1,369,566)

   Adjustments to Reconcile Net Loss to
     Net Cash Used By Operations:

  Issuance of Common Stock for Interest Expense ...............                  --                       33,334

   Depreciation and Amortization ..............................                84,928                    355,481

   Provision for Bad Debts ....................................                  --                        4,404

   Non-cash Amortization of Finance Charges ...................               787,645                       --

   Marketing Service Contracts ................................                  --                      177,226

   Minority Interest in Loss (Income) .........................                  --                       (3,802)

   Changes in:

   Accounts Receivable ........................................                13,298                    (49,871)

   Inventories ................................................                  --                       70,360

   Prepayments ................................................                   907                       --

   Accounts Payable and Accrued Expenses ......................               112,673                    (45,217)

   Accrued Interest ...........................................                19,387                    416,622

   Security Deposits and Other ................................                 1,586                     (1,075)
                                                                          -----------                -----------


           TOTAL ADJUSTMENTS ..................................             1,020,424                    957,462
                                                                          -----------                -----------


NET CASH USED IN OPERATING ACTIVITIES .........................              (568,292)                  (412,104)
                                                                          -----------                -----------
</TABLE>

                See Notes to Consolidated Financial Statements.

                                       5
<PAGE>


                        NORTHEAST DIGITAL NETWORKS, INC.

          (FORMERLY ELECTRONICS COMMUNICATIONS CORP.) AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                           THREE MONTHS            THREE MONTHS
                                                                               ENDED                   ENDED
                                                                           JUNE 30, 1998           JUNE 30, 1997
                                                                           -------------           -------------
                                                                            (UNAUDITED)             (UNAUDITED) 

CASH FLOWS FROM INVESTING ACTIVITIES
<S>                                                                           <C>                    <C>         
   PCS License ................................................               $      --              $  (448,793)
                                                                        
   Additions to Property and Equipment ........................                   (32,687)                (5,524)
                                                                        
   Other Asssets ..............................................                      --                   (5,599)
                                                                              -----------            -----------
                                                                        
                                                                        
NET CASH USED IN INVESTING ACTIVITIES .........................                   (32,687)              (459,916)
                                                                              -----------            -----------
                                                                        
                                                                        
CASH FLOWS FROM FINANCING ACTIVITIES                                    
                                                                        
   Deferred Private Placement Costs ...........................                      --                  347,971
                                                                        
   Payment for Deferred Registration Costs ....................                      --                 (137,969)
                                                                        
   Net Proceeds (Payments) of Shareholder Loans ...............                      --                   20,389
                                                                        
   Private Placement Advance ..................................                      --               (1,628,254)
                                                                        
   Payments of Bank Loans .....................................                      --                 (364,059)
                                                                        
   Proceeds from Debentures Advance ...........................                      --                1,061,302
                                                                        
   Principal payments of Capital Lease Obligations ............                   (54,261)               (57,292)
                                                                        
   Proceeds from Sale of Common Stock .........................                      --                1,604,759
                                                                        
   Payments of Long Term Debt .................................                   (24,875)                  --
                                                                              -----------            -----------
                                                                        
                                                                        
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES ..............                   (79,136)               846,847
                                                                              -----------            -----------
                                                                        
                                                                        
NET INCREASE (DECREASE) IN CASH ...............................                  (680,115)               (25,173)
                                                                              -----------            -----------
                                                                        
CASH, BEGINNING OF PERIOD .....................................                 1,767,930                 48,620
                                                                              -----------            -----------
                                                                        
                                                                        
CASH, END OF PERIOD ...........................................               $ 1,087,815            $    23,447
                                                                              ===========            ===========
</TABLE>
                 See Notes to Consolidated Financial Statements.

                                       6

<PAGE>


                        NORTHEAST DIGITAL NETWORKS, INC.

          (FORMERLY ELECTRONICS COMMUNICATIONS CORP.) AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                           THREE MONTHS            THREE MONTHS
                                                                               ENDED                   ENDED
                                                                           JUNE 30, 1998           JUNE 30, 1997
                                                                           -------------           -------------
                                                                            (UNAUDITED)              (UNAUDITED)
SUPPLEMENTAL DISCLOSURE FOR CASH FLOWS

  CASH PAID DURING THE PERIOD FOR:

<S>                                                                           <C>                      <C>       
   Interest ...................................................               $   31,768               $   94,263

   Taxes ......................................................                     --                       --

SUPPLEMENTAL SCHEDULE OF NON-CASH
  INVESTING AND FINANCING ACTIVITIES

   Common Stock Issued for Payment of Loan Payable ............                     --                    375,000

   Exchange of Convertible Debt for Common Stock ..............                  448,553                     --

   Exchange of Preferred Stock for Common Stock ...............                2,077,478                     --

   Non Cash interest capitalized on Note Payable to FCC .......                  208,311                     --


</TABLE>


                 See Notes to Consolidated Financial Statements.

                                       7
<PAGE>


                        NORTHEAST DIGITAL NETWORKS, INC.

          (FORMERLY ELECTRONICS COMMUNICATIONS CORP.) AND SUBSIDIARIES

            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (UNAUDITED)


                                                                               
<TABLE>
<CAPTION>
                                        PREFERRED STOCK              COMMON STOCK    
                                      ------------------       ---------------------- 
                                       SHARES     AMOUNT        SHARES         AMOUNT 
                                      -------     ------       --------------------- 
                                                           
<S>                                     <C>         <C>        <C>         <C>     
Balance as of March 31, 1998 .....        45        --         5,531,705   $  3,375,845
                                                           
Conversion of 8% cumulative                                
  convertible debentures into                              
  Common Stock ...................        --        --         1,108,155        664,893
                                                           
Conversion of Series C Preferred                           
  Stock into Common Stock ........     (14.5)       --         3,462,463      2,077,478
                                                           
Amortization of discount on Common                         
   Stock available to Preferrred                           
   Shareholders ..................        --        --              --             --   
                                                           
Net Loss..........................
                                     -------    ------      ------------   ------------
                                                           
Balance as of June 30, 1998 ......      30.5        --        10,102,323   $  6,118,216
                                     =======    ======      ============   ============
                                                         
</TABLE>

<TABLE>
<CAPTION>


                                                                                        DISCOUNT ON                            
                                                                    NOTES RECEIVABLE      COMMON                                
                                                                      ARISING FROM        STOCK                                  
                                      ADDITIONAL                      COMMON STOCK      AVAILABLE TO                             
                                        PAID-IN      ACCUMULATED        PURCHASE          PREFERRED    N             
                                        CAPITAL        DEFICIT           WARRANT        SHAREHOLDERS          TOTAL  
                                      ----------     ------------       ---------       ------------        --------- 
<S>                                  <C>             <C>                 <C>          <C>                 <C>         
Balance as of March 31, 1998 .....   $ 24,443,726    $(21,203,461)           --        $(2,055,000)       $  4,561,110
                                                                                                         
Conversion of 8% cumulative                                                                              
  convertible debentures into                                                                            
  Common Stock ...................       (176,340)           --              --               --               488,553
                                                                                                         
Conversion of Series C Preferred                                                                         
  Stock into Common Stock ........     (2,077,478)           --              --               --                  --
                                                                                                         
Amortization of discount on Common                                                                       
   Stock available to Preferrred                                                                         
   Shareholders ..................           --              --              --            383,474             383,474
                                                                                                         
Net Loss..........................                     (1,588,716)           --               --            (1,588,716)
                                     ------------    ------------        --------     ------------        ------------
                                                                                                         
Balance as of June 30, 1998 ......   $ 22,189,908    $(22,792,177)       $   --       $ (1,671,526)       $  3,844,421
                                     ============    ============        ========     ============        ============
                                                                                                       
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                       8
<PAGE>



  NORTHEAST DIGITAL NETWORKS, INC. (FORMERLY ELECTRONICS COMMUNICATIONS CORP.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


   (A) BUSINESS ACTIVITY AND BASIS OF PRESENTATION

     In June of 1998,  Northeast Digital Networks,  Inc. (the "Company") changed
its  name  from  Electronics   Communications  Corp.  During  1994,  Electronics
Communications  Corp.  changed its name from Genetic Breeding,  Inc. to Internow
Affiliates,  Inc.  and then to  Electronics  Communications  Corp.  Effective on
January 1, 1994,  the Company  acquired  Free Trade  Distributors,  Inc.  (which
engaged  in the  wholesale  distribution  of  cellular  telephones  and  related
accessories and electronic  products) and Trade Zone  Distributors,  Inc. (which
engaged in the activation of cellular radio subscribers for  commissions),  both
serving  the New York  Metropolitan  Area.  The  Company  no longer  distributes
cellular  telephones and related accessories and electronic products nor does it
engage in the activation of cellular telephones for commissions.

     In  1995,  the  Company  formed  Electrocomm  Wireless,  Inc.,  a  Delaware
corporation, as a subsidiary, to become a radio paging and two-way radio carrier
in the New York  Metropolitan  Area and the State of New Jersey.  The Company is
presently  inactive.  In July 1995, the Company formed  Personal  Communications
Network,  Inc. ("PCN"),  a Delaware  corporation,  to participate in the Federal
Communications  Commission  ("FCC")  auction for  licenses to engage in personal
communications  services  ("PCS").  On May 8, 1996, the Company obtained six PCS
licenses for $26,452,200  entitling it to operate wireless PCS telephone systems
covering nearly 1.5 million people in five states.  On June 8, 1998, the Company
elected a debt relief option (the  "Disaggregation  Option") offered by the FCC.
The election of the  Disaggregation  Option for all six licenses  permitted  the
return of 15 MHz of the 30 MHz originally  awarded the Company in exchange for a
reduction of the debt incurred for such licenses (see Note 2). PCN is 100% owned
by the Company.

     On  March  22,  1996,  Threshold  Communications,   Inc.  ("TCI")  acquired
substantially  all of the  assets and  assumed  certain  liabilities  of General
Communications  and  Electronics,  Inc.  ("GCE").  GCE  is in  the  business  of
reselling  paging air time to corporate  clients.  TCI also  acquired as part of
this transaction 56 2/3% of the outstanding  stock of General Towers of America,
Inc.  (which  engages in the business of providing two way radio services in the
New York Metropolitan  Area). TCI and its subsidiary  General Towers of America,
Inc.  ("GTA")  are  treated as  subsidiaries  of the  Company.  During the first
quarter of fiscal 1999, GTA ceased all operations.

     On June 28, 1996, the Company  acquired 51% of TCI. On January 2, 1998, the
Company purchased the remaining 49% of TCI for a $90,000 cash payment.

     On July 31, 1997, the  Company's  board of  directors  effected  a 1 for 12
reverse stock split of its $.05 par value common stock. The new common stock has
a $.60 per share par value. On May 28, 1998, the Company's stockholders ratified
the reverse stock split at a special meeting of stockholders.  All references to
number of common shares for all periods presented  reflects the ratification and
have been  retroactively  restated for the reverse stock split.  See Note 15 for
discussion of proposed 1 for 8 reverse stock split.

     On August 11, 1997,  the Company  changed its fiscal year end from December
31 to March 31.

     The  accompanying  unaudited  consolidated  financial  statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Article 10 of
Regulation  S-X.  Accordingly,  they  do  not  necessarily  include  all  of the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements. In the opinion of management, all adjustments
(consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
presentation  have been included.  Operating  results for the three months ended
June 30, 1998 are not necessarily indicative of the results that may be expected
for the  year  ended  March  31,  1999.  The  unaudited  consolidated  financial
statements  should  be read  in  conjunction  with  the  consolidated  financial
statements and footnotes thereto included in the Company's annual report on Form
10KSB as amended for the year ended March 31, 1998.


                                       9
<PAGE>


  NORTHEAST DIGITAL NETWORKS, INC. (FORMERLY ELECTRONICS COMMUNICATIONS CORP.)
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


   (B) PRINCIPLES OF CONSOLIDATION

     The consolidated  financial statements include the accounts of the Company,
its  wholly  owned  subsidiaries,  Free  Trade  Distributors,  Inc.,  Trade Zone
Distributors,   Inc.,   Personal   Communications   Network,   Inc.,   Threshold
Communications,  Inc. and majority  owned  General  Towers of America,  Inc. All
significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation.


   (C) PROPERTY AND EQUIPMENT

     Property and equipment are recorded at cost. Depreciation is provided using
straight line and  accelerated  methods over the  estimated  useful lives of the
respective assets (5 to 7 years).


   (D) INVENTORIES

     Inventories  are valued at the lower of cost or market,  cost is determined
using the first in, first out method.


   (E) REVENUE RECOGNITION

     It is the Company's  policy to categorize  revenue into either (i) sales of
its paging and two way radio services, (ii) commissions for fees earned on sales
of cellular radio service contracts,  and (iii) sales of electronic goods. Sales
of electronic goods are recognized when they are shipped.

     Commissions are inclusive of fees earned for the sale of cellular telephone
service  contracts  and  residuals  received on those  contracts.  Revenues  and
related commissions from the sale of the service contracts are recognized at the
point of  activation.  Revenues from residuals are realized when approved by the
cellular telephone service supplier and are paid on customer usage for a maximum
of three years.

     Revenues  from paging and two-way  radio  services  are  recognized  in the
beginning of the month for which they are invoiced.


   (F) CONCENTRATION OF CREDIT RISK

     The Company  maintains  its major cash  accounts in banks in New York.  The
total cash deposits are insured by the Federal Deposit Insurance  Corporation up
to  $100,000  per  account.   Uninsured   balances  at  June  30,  1998  totaled
approximately $1,107,000.


   (G) 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 period.
Actual results could differ from those estimates.


   (H) FAIR VALUE OF FINANCIAL INSTRUMENTS

     At June 30,  and  March  31,  1998,  the  fair  values  of  cash,  accounts
receivable,  non-convertible  short term debt and current  portion of  long-term
debt and accounts  payable,  approximated  their carrying  values because of the
short-term  nature of these  instruments.  The fair value and carrying amount of
the Company's long term notes payable to the FCC with an actual interest rate of
7% and the  corresponding  PCS  Licenses  were  adjusted  to  reflect an imputed
interest rate of 14% which more closely  corresponds to the Company's  borrowing
rate.

                                       10
<PAGE>

  NORTHEAST DIGITAL NETWORKS, INC. (FORMERLY ELECTRONICS COMMUNICATIONS CORP.)
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


   (I) EARNINGS PER SHARE

     The Company  calculates  earnings per share in accordance with Statement of
Financial  Accounting  Standard  (SFAS) No. 128,  "Earnings Per Share" which was
issued in February 1997 and is effective for periods  ending after  December 15,
1997.  SFAS No. 128  replaces  the  presentation  of primary  and fully  diluted
earnings  per share.  The  Company  uses the  weighted-average  number of common
shares  outstanding  during each  period to compute  basic  earnings  per common
share. Diluted earnings per share is computed using the weighted-average  number
of common  shares and dilutive  potential  common shares  outstanding.  Dilutive
potential common shares are additional common shares assumed to be exercised.


   (J) STOCK-BASED COMPENSATION

     The Company has elected to follow  Accounting  Principles Board Opinion No.
25,   Accounting   For  Stock   Issued  To   Employees   (APB  25)  and  related
interpretations  in accounting  for its employee  stock  options.  Under APB 25,
because the exercise  price of employee stock options equals the market price of
the underlying stock on the date of grant, no compensation  expense is recorded.
The  Company  has  adopted  the  disclosure-only  provisions  of SFAS  No.  123,
"Accounting for Stock-Based Compensation".


   (K) RECLASSIFICATIONS

     Certain amounts from previous periods have been  reclassified to conform to
the current presentation.


NOTE 2 -- PCS LICENSES

     The PCS  licenses  were  awarded in a FCC "C" Block  Auction.  The  markets
awarded the Company include  Elmira-Corning,  New York;  Bangor/Lewiston-Auburn/
Waterville-Augusta,  Maine;  and  Burlington/Rutland-Bennington,   Vermont.  The
Vermont markets encompass virtually the entire state.

     The Maine markets cover a majority of the  population and most of the state
geographically.  The licenses  expire and are subject to renewal  after ten (10)
years.

                                       11
<PAGE>

  NORTHEAST DIGITAL NETWORKS, INC. (FORMERLY ELECTRONICS COMMUNICATIONS CORP.)
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 2 -- PCS LICENSES (CONTINUED)

     The Company's  total winning bids  amounted to  $26,452,200,  after the 25%
discount provided to small businesses, for which the Company qualified under the
terms of the auction.  The Company  deposited cash of $2,645,220.  The remaining
balance is payable over the next 10 years with 7% interest only during the first
six years.  On March 31, 1997,  the FCC imposed a  moratorium  on the payment of
interest  until March 31, 1998. On March 24, 1998, the FCC released an Amendment
of the Commission's Rules Regarding  Installment  Payment Financing for Personal
Communications   Services   (PCS)   Licensees,   WT  Docket   97-82,   Order  on
Reconsideration  of the Second  Report and Order  whereby the  moratorium on the
payment of interest was extended to July 31, 1998.

     On  October  16,  1997, in an effort  to bring  relief to  C-Block  license
holders, the FCC offered three options. The three options are as follows: (1) an
"Amnesty  Option"  permitting  return of the  licenses  which will result in the
forfeiture  of the  original  down payment of  $2,645,220  and the return to the
Company  of  the  previous  installments  paid  which  amount  to  approximately
$286,000; (2) a "Disaggregation Option" permitting the return of 15 megahertz of
the 30 megahertz of spectrum  awarded  under the  licenses,  back to the FCC and
reducing  the  current  note  payable to the FCC by 50%;  and (3) a  "Prepayment
Option"  permitting  the  exchange  of all  licenses in a  particular  BTA for a
partial  reduction  of the current  note payable to the FCC (equal to 70% of the
total down payments of the surrendered licenses).

     On June 8, 1998,  the  Company  elected  the  Disaggregation  Option.  As a
result,  15  MHz of the 30 MHz of  spectrum  awarded  under  the  licenses  were
returned  to the  FCC.  Accrued  and  capitalized  interest  due  to the  FCC of
$2,233,418 was reduced by $1,810,300 to $423,118 after applying a credit for 40%
of the  downpayment  forfeiture of $529,044 and a credit for 50% of the interest
payments made of $164,547.  Total accrued interest due to the FCC of $423,118 is
to be paid in eight quarterly installments of approximately  $53,000.  Quarterly
interest  payments due on the FCC notes were reduced from  $416,622 to $208,311.
The first  payments due the FCC for interest on the notes is currently  $261,200
and was due on July 31, 1998.  The Company  deferred the payment of the July 31,
1998  amounts due until  October 31,  1998.  Debt  incurred for the licenses was
reduced from  $23,806,980 to $11,903,490  ($8,342,780  when discounted  using an
imputed interest rate of 14% - see Note 1(H)).

     Included in the license  costs are certain legal fees incurred in obtaining
the license.  Capitalized  PCS interest in the amount of $423,118 and $2,233,418
is included in PCS Licenses at June 30, 1998 and March 31,  1998,  respectively,
and represents  interest  capitalized in conjunction  with these  licenses.  The
Company  has not begun  PCS  service  and will  require  substantial  additional
financing to pay the balance of the  purchase  price for the PCS licenses and to
construct the system prior to initiating PCS service.  No assurance can be given
that such financing will become available.  Assuming  inception of PCS services,
the Company  will  amortize  the  licenses  and related  costs over a forty-year
period.


NOTE 3 -- PROPERTY AND EQUIPMENT

     Property and equipment are summarized as follows:

                                                    June 30,         March 31,
                                                      1998             1998
                                                    ---------       ----------
            Paging equipment                       $1,566,571       $1,619,250
            Computer and other equipment               69,890           47,917
            Leasehold improvements,
            furniture and fixtures                     19,112           18,955
                                                   ----------       ----------
                                                    1,655,573        1,686,122
            Less: Accumulated depreciation
            and amortization                         (657,852)        (649,732)
                                                   ----------       ----------
                                                     $997,721       $1,036,390
                                                   ==========       ==========

                                       12
<PAGE>
  NORTHEAST DIGITAL NETWORKS, INC. (FORMERLY ELECTRONICS COMMUNICATIONS CORP.)
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 4 -- NOTES PAYABLE


   (A) NOTES PAYABLE -- FCC

     After applying the effects of the election of the Disaggregation  Option as
discussed  in  Note  2,  Notes  Payable--FCC  consist  of six 7% 10  year  notes
aggregating  $11,903,490  ($8,427,723 when discounted using the imputed interest
rate of 14%--see  Note 1(H)).  Accrued  interest as of June 30, 1998 amounted to
$631,429 for a total obligation of $9,059,152 of which $419,871 is current.  The
notes are payable in quarterly  installments  of interest only for the first six
years and principal plus interest  thereafter.  The notes are secured by the PCS
licenses. The interest payment due December 31, 1996 was partially paid on March
31, 1997. The Company has not made a quarterly  interest payment since March 31,
1997.  This  non-payment  is due  to an FCC  moratorium  on  quarterly  interest
payments.


   (B) NOTES PAYABLE -- OTHER

     (1) In  connection  with the Company's  acquisition  of the 51% interest in
TCI,  the  Company was  contingently  liable to pay the  difference  between the
market value at the date of  acquisition  of the Company's  common stock used as
consideration  for a portion of the  acquisition  price and the  average  market
price of the  Company's  stock during the period in which a  restriction  on the
resale of the stock expired.  This resulted in the  recognition of an obligation
for $277,567 as of March 31, 1998.

     (2) During the 1998 fiscal third  quarter,  the Company  borrowed  $300,000
from one lender and $200,000 from a lender  affiliated  with the Placement Agent
of the  Company's  August  1997  Regulation  S  Private  Placement  Offering  of
debentures (See Note 6) and of its December 1997 Regulation S Private  Placement
Offering  of shares of its 1997  Series C  Preferred  Stock  (see Note 10).  The
Company agreed to issue its 10% promissory notes to the lenders in the principal
amounts of the loans.  The notes are payable  one year after the loans  together
with  interest at a 10% annual rate  payable  semi-annually  in cash,  or at the
Company's option, in shares of Common Stock. Accrued interest on these notes was
$30,610 as of June 30, 1998.  The note  principal is convertible at the holder's
option into shares of Common Stock at a conversion  price equal to the lesser of
$1.125 per share or a Conversion  Formula  similar to the Conversion  Formula of
the Series C Preferred  Stock.  In accordance  with  Emerging  Issues Task Force
("EITF")  Abstract D-60  "Accounting  for the Issuance of Convertible  Preferred
Stock and Debt Securities with a Nondetachable  Conversion Feature", the Company
has recorded a debt issue cost and a  corresponding  increase to additional paid
in capital of  $506,000,  representing  the  difference  between the fair market
value of the Company's  common stock on the date of the loan and the  conversion
price.  The cost is being amortized over the life of the loan. In addition,  the
Company has agreed to issue  five-year  warrants to the lenders  exercisable  to
purchase  100,000  shares  of Common  Stock for each  $100,000  loan  (i.e.,  an
aggregate  500,000  shares of Common Stock) at an exercise price per share equal
to 120% of the  closing  bid  price for such  Common  Stock on the  trading  day
immediately  preceding the day of a particular loan. In accordance with SFAS No.
123, the Company has recorded a debt issue cost and a corresponding  increase to
additional  paid in capital of  $1,111,000,  representing  the fair value of the
warrants on the date of grant.  The fair value of the  warrants  were  estimated
using the Black-Scholes option pricing model with the following weighted-average
assumptions:  the  risk  free  interest  rate of 14%,  dividend  yield  of 0.0%,
volatility  factors of the  expected  market price of the  Corporation's  common
stock of 203.1% and a weighted-average expected life of the warrants of 5 years.
This cost is being amortized over the life of the loan.

     The  Black-Scholes   option  valuation  model  was  developed  for  use  in
estimating the fair value of traded  options which have no vesting  restrictions
and are fully  transferable.  In addition,  option  valuation models require the
input of highly subjective  assumptions including the expected price volatility.
Because the warrants have characteristics  significantly different from those of
normal  publicly traded  options,  and because  changes in the subjective  input
assumptions  can  materially  affect the fair value  estimate,  in  management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of the aforementioned warrants.

                                       13
<PAGE>
  NORTHEAST DIGITAL NETWORKS, INC. (FORMERLY ELECTRONICS COMMUNICATIONS CORP.)
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 5  --  PRIVATE  PLACEMENT  OF  SECURITIES  AND  8%  CUMULATIVE  CONVERTIBLE
DEBENTURES

     In April 1997,  the Company sold 205,861  units  consisting of an aggregate
205,861  shares of Common Stock and Class A warrants  exercisable to purchase an
additional  aggregate  308,792  shares of Common  Stock at an exercise  price of
$60.00 per share (subsequently  reduced to $2.25 per share). The units were sold
in a Private  Placement to a number of  unaffiliated  investors for an aggregate
$2,470,334 including cash consideration of $2,061,999 and an exchange of Company
notes payable and accrued interest  aggregating  $408,334.  The Company incurred
$562,239 of  expenses  in  connection  with the  Private  Placement.  All of the
investors  in this  Private  Placement  subsequently  exchanged  their units for
Debentures in the August 1997 Private Placement Offering hereinafter described.

     On August 7, 1997, the Company consummated a Regulation S Private Placement
Offering  directed to non "United States Persons"  pursuant to which the Company
sold  $2,500,000  principal  amount of the Company's 8%  Cumulative  Convertible
Debentures  (the  "Debentures").  The  principal  amount of the  Debentures  are
convertible  into  shares of the  Company's  common  stock at the  option of the
holder,  commencing  41 days  after  issuance,  at a price  equivalent  to a 30%
discount  from  market  based upon the five (5) day  average  daily  closing bid
price,  as  reported  on  NASDAQ,  for the five  (5)  trading  days  immediately
preceding  the  applicable  date of  conversion.  As a result of EITF D-60,  the
Company has recorded a finance  charge and a  corresponding  increase to Paid in
Capital of $1,071,429  attributable to the sale of the  Convertible  Debentures.
The Debentures  bear interest at the rate of 8% per annum payable on August 7 of
each year commencing  August 7, 1998. The Debentures are redeemable and callable
for  conversion  under  certain  circumstances  and are due June 30,  2000.  The
Company  paid a  placement  fee  equal  to 10% of the  gross  proceeds  and a 3%
non-accountable expense allowance to the Placement Agent.

     At the same time, but separate  from the  Regulation  S  Private  Placement
Offering,  $2,470,334  principal  amount of the Debentures were offered to those
persons who subscribed to and  participated  in the Company's April 1997 Private
Placement of the units. Those investors were offered the opportunity to exchange
all,  but not less than all,  of their  units for  Debentures,  on a dollar  for
dollar basis.  As a result,  effective  August 7, 1997, the holders of the April
1997 Private  Placement units exchanged their units for an aggregate  $2,470,334
principal  amount  of the 8%  Convertible  Debentures.  The  Debentures  in this
separate  offering are  convertible  at the option of the holder  commencing 180
days after  issuance.  As a result of EITF D-60,  the  Company  has  reduced the
carrying value of the Debentures and recorded an increase in Paid In Capital and
a  corresponding  finance charge of $1,058,715 on the sale of these  convertible
debentures.

     As of June 30, 1998,  $4,870,334 of the  Debentures had been converted into
5,047,597 shares of the Company's common stock.


NOTE 6 -- LONG-TERM DEBT

     A summary of long-term debt follows:

                                              Interest    June 30,     March 31,
        Description                             Rate       1998         1998
                                               -------    -------    ----------

        Convertible Debentures (Note 5)           8%     $ 111,666     $593,332
        Installment notes payable
        monthly through August 1999 (a)          12%       126,425      151,300
        Capital leases and notes (b)         Various       620,976      675,237
                                                         ---------    ---------
                                                           859,067    1,419,869
        Less: Current maturities                           377,305      332,524
                                                         ---------    ---------
                                                         $ 481,762   $1,087,345
                                                         =========    =========

     (a) In  connection  with TCI'S  acquisition  of GCE, the Company  assumed a
$350,000  non-interest  bearing note. The outstanding  principal  amount of this
non-interest  bearing  note was  $136,111  and $165,278 at June 30 and March 31,
1998, respectively,  less unamortized discount (discount is based on interest of
12%) for a net balance of $126,425 and $151,300, respectively.

                                       14
<PAGE>

  NORTHEAST DIGITAL NETWORKS, INC. (FORMERLY ELECTRONICS COMMUNICATIONS CORP.)
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 6 -- LONG-TERM DEBT (CONTINUED)

     (b) The  obligations  under  capital  leases are  collateralized  by paging
equipment with a book value of  approximately  $599,000 as of June 30, 1998. The
interest rates on the capitalized leases and notes range from 10% to 25% and the
lease  rates  are  imputed  based  on the  lower  of the  Company's  incremental
borrowing  rate at the inception of each lease or the lessor's  implicit rate of
return.

     Long-term debt at June 30, 1998 matures as follows:

                          Year Ending June 30:
                           -------------------

                                  1999                      $ 377,305
                                  2000                        319,506
                                  2001                        150,068
                                  2002                         12,188
                                                             --------
                                                             $859,067
                                                             ========
                        
NOTE 7 -- SUPPLEMENTAL DISCLOSURE OF LOSS PER SHARE

     Basic and Diluted Income (Loss) Per Common Share:

                                             Three Months        Three Months
                                                 Ended               Ended
                                             June 30, 1998       June 30, 1997
                                             -------------       -------------


     Loss per Common Share                        (0.19)               (1.30)
                                               --------            ---------
     Weighted Average Common Shares
     Outstanding                              8,153,337            1,052,820
                                              =========            =========


NOTE 8 -- CONVERTIBLE PREFERRED STOCK

     On December 24, 1997, the new Board of Directors of the Company  authorized
the  issuance  of a minimum  of 20 shares and a maximum of 45 shares of Series C
Preferred  Stock  ("Preferred  Stock") at the  aggregate  subscription  price of
$100,000 per share  pursuant to an offer and sale of such  Preferred  Stock in a
Regulation S Private  Placement  Offering.  Holders of the  Preferred  Stock are
entitled to receive a 10% cumulative  annual dividend  payable  semi-annually in
cash, or at the Company's  option,  in shares of the Company's common stock $.60
par value.  The Preferred  Stock is non-voting and is convertible in whole or in
part at any time  commencing  fifty (50) days after  issuance at the election of
the holder,  into shares of common stock at an initial conversion price equal to
a 25%  discount  from the average  closing bid price for the common stock in the
over-the-counter  market for the five trading  days  immediately  preceding  the
conversion,  said discount thereafter  increasing at the rate of 2% per calendar
month  commencing March 1, 1998 up to a maximum discount of 35% ("the Conversion
Formula").  The Company has no ability to force  conversion  but 24 months after
issuance of the initial  Preferred Stock,  any outstanding  Preferred Stock will
automatically  convert  into  shares of  Common  Stock  based on the  Conversion
Formula  then in effect.  The Company  paid a placement  fee equal to 13% of the
gross  proceeds to the  Placement  Agent.  As of December 31, 1997,  the Company
issued 30 shares of Preferred Stock and received $2,595,000,  net of $405,000 in
expenses.  In accordance  with EITF D-60, the Company has recorded an adjustment
for the discount on Common  Stock  available  to  Preferred  shareholders  and a
corresponding increase to additional paid in capital of $1,615,000, representing
the value of the 35% conversion  discount offered on the Preferred  Stock.  This
cost is being  amortized  over the period in which the maximum  discount will be
realized, commencing with the date of the issuance.


                                       15
<PAGE>
  NORTHEAST DIGITAL NETWORKS, INC. (FORMERLY ELECTRONICS COMMUNICATIONS CORP.)
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE 8 -- CONVERTIBLE PREFERRED STOCK (CONTINUED)

     On January 20, 1998, the Company  completed its December 1997  Regulation S
Private  Offering through the sale of an additional 15 shares of its 1997 Series
C  Convertible  Preferred  Stock and  received  $1,302,500  net of  $197,500  in
expenses.  In accordance  with EITF D-60, the Company has recorded an adjustment
for the discount on Common  Stock  available  to  Preferred  shareholders  and a
corresponding  increase to additional paid in capital of $808,000,  representing
the value of the 35% conversion  discount offered on the Preferred  Stock.  This
cost is being  amortized  over the period in which the maximum  discount will be
realized, commencing with the date of the issuance.

     As of June 30,  1998,  14.5  shares of the Series C  Convertible  Preferred
Stock had been converted into  3,462,463  shares of the Company's  common stock.
(See Note 15 (A)).

     As of June 30,  1998,  there were  dividends  in arrears of $152,500 on the
30.5 shares outstanding of the Series C Convertible Preferred Stock.

NOTE 9 -- INCOME TAXES

     The Company adopted the liability method of accounting for income taxes, as
set forth in SFAS No. 109,  "Accounting  for Income  Taxes." Under the liability
method,  deferred  taxes are  determined  based on the  differences  between the
financial statement and tax basis of assets and liabilities at enacted tax rates
in effect in the years in which the  differences  are  expected to  reverse.  At
December 31, 1997, the Company had federal net operating loss  carryforwards  of
approximately  $11,000,000,  which will expire  beginning in fiscal 2010.  These
losses are limited by the provisions of Section 382 of the Internal Revenue Code
due to a considered  more than 50% change in ownership  with the issuance of the
Convertible Subordinated Debentures in August 1997. Following such a change, the
utilization of tax loss  carryforwards is limited to the value of the Company on
the date of such change,  multiplied by the Federal  long-term  exempt rate (the
"annual  limitation").   To  the  extent  amounts  available  under  the  annual
limitation  are not used,  they may be carried  forward for the  remainder of 15
years  from the date the losses  were  originally  incurred.  As a result of the
change  in  ownership,   use  of  net  operating   losses  will  be  limited  to
approximately $300,000 per year subject to certain additional limitations.
     The Company has deferred tax asset of approximately  $1,500,000 at December
31, 1997,  representing  principally  the tax benefit of the loss carry forwards
under Section 382 and for periods  subsequent to the effective date of the Plan.
This  deferred  tax  asset  has been  offset by a 100%  valuation  allowance.  A
valuation  allowance  is  provided  when it is more  likely  than not that  some
portion of the deferred tax asset will not be realized.  Based on the  Company's
operating  results  to date a full  valuation  allowance  has been  recorded  at
December 31, 1997.


NOTE 10 -- STOCK OPTIONS AND WARRANTS


STOCK OPTIONS

     On October 30, 1997,  the Board of Directors of the Company (the  "Board"),
subject to shareholder approval,  adopted the October 30, 1997 Stock Option Plan
(the "1997  Plan").  The  aggregate  number and class of shares which may be the
subject of options  granted  pursuant  to the 1997 Plan is  1,000,000  shares of
Common Stock, $.60 par value, of the Company.  The options to be granted may, at
the  discretion  of the Company,  be designated to be options which will qualify
for incentive stock option treatment ("ISO's) under the Internal Revenue Code of
1986,   as  amended  (the   "Code")  or  options   which  will  not  so  qualify
("Non-ISO's").   Officers,  directors  and  key  employees  of  the  Company  or
subsidiaries  of the Company,  as determined by the Board,  shall be eligible to
receive  options  under  the  1997  Plan.  The  exercise  price  for the  Shares
purchasable  under ISOs granted pursuant to the 1997 Plan shall not be less than
100%, or, in the case of an ISO granted to a Ten Percent  Shareholder,  110%, of
the fair market value per share of the Shares  subject to the ISO under the plan
at the Date of Grant, as determined by the Board. Under the 1997 Plan, the Board
shall have absolute  discretion in determining the period during which, the rate
at which,  and the terms and  conditions  upon which any option  granted  may be
exercised.  Except as set forth in the 1997 Plan,  ISOs shall terminate upon the
date of voluntary or  involuntary  termination  of employment  regardless of the
expiration  date  specified in such ISO. No option granted under the Plan may be
sold,  pledged,  assigned or transferred in any manner except to the extent that
options may be exercised by an executor or  administrator  upon the death of the
holder.


                                       16
<PAGE>
  NORTHEAST DIGITAL NETWORKS, INC. (FORMERLY ELECTRONICS COMMUNICATIONS CORP.)
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 10 -- STOCK OPTIONS AND WARRANTS (CONTINUED)

     The 1997 Plan and any  options  granted  pursuant to the 1997 Plan prior to
May 28, 1998 received  approval of the  shareholders  at the special  meeting in
lieu of an annual meeting held on May 28, 1998.

     NON-ISO's ISSUED AND OUTSTANDING AT JUNE 30, 1998 ARE AS FOLLOWS:

                                          Shares    Exercise  Price   Expiration
                                         Issuable      Per Share         Date
                                          -------      --------        --------
   Non-ISO's Issued to
   President and CEO in October 1997      300,000         (a)           9/2007
   Non-ISO's Issued to                    145,000         (b)            (b)
   Directors in October 1997
   Non-ISO's issued to former
   Director and employee                  230,000        $2.25          9/2002
                                          -------
                                Total     675,000
                                          =======

     (a) The exercise prices for the 300,000 shares granted to the President and
CEO on 10/30/97  are as  follows:  100,000  with an  exercise  price of the mean
between  closing bid and closing asked prices on 10/30/97;  100,000 at $1.75 per
share; 100,000 at $2.00 per share. The term of all options is ten years.

     (b) The  exercise  prices  and the terms  for the  145,000  options  are as
follows: (i) five-year  non-qualified  options to purchase 100,000 shares at the
closing  mean  price  for  the  common  stock  on  10/30/97;   1/3   immediately
exercisable,  1/3  commencing  11/1/98  and 1/3  commencing  11/1/99;  and  (ii)
five-year  non-qualified  options,  exercisable to purchase 45,000 shares at the
closing mean price for the common stock on 10/30/97.

     ISO's ISSUED AND OUTSTANDING AT JUNE 30, 1998 ARE AS FOLLOWS:

                                         Shares     Exercise Price    Expiration
                                        Issuable       Per Share         Date
                                         -------       --------        --------
       ISO's issued to President         200,000       $1.453125          (c)
       & CEO in October 1997
       ISO's issued to Secretary,        100,000       $2.109375        12/2002
       Executive VP and CFO
       ISO's issued to Vice
       President of Operations            50,000          (d)           1/2003
                                         -------
           Total                         350,000
                                         =======

     (c) The exercise  prices for the 200,000  shares  issued to the President &
CEO in October 1997 are as follows:  (i) 68,817 shares purchasable upon exercise
of  incentive  stock  options at an exercise  price of  $1.453125;  (ii) 131,183
shares purchasable upon exercise of incentive stock options at an exercise price
of $1.453125  per share,  which  options are first  exercisable  in 1999 (68,817
shares) and in 2000 (62,366 shares).

     (d) The  exercise  price  equals the mean  between  the closing bid and the
closing  asked prices for the  Company's  common  stock in the  over-the-counter
market on February 19, 1998.

     On July 31, 1998,  the board of directors  approved the issuance to certain
key  employees  options  to  purchase  an  aggregate  of  100,000  shares of the
Company's Common Stock at an exercise price of $.75 per share. These options are
subject  to  shareholder  approval  of an  increase  in  the  number  of  shares
authorized under the 1997 plan.


                                       17
<PAGE>
  NORTHEAST DIGITAL NETWORKS, INC. (FORMERLY ELECTRONICS COMMUNICATIONS CORP.)
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 10 -- STOCK OPTIONS AND WARRANTS (CONTINUED)

     Options outstanding are summarized as follows:

                                          Three Months 
                                              Ended               Year Ended
                                          June 30, 1998         March 31, 1998
                                        ----------------       ----------------
  Options Outstanding at                                     
     Beginning of Year                      1,025,000                  80,000
  Options Granted                                  --               1,548,077(a)
  Options Expired                                  --                      --
  Options Exercised                                --                (523,077)
  Options Transferred                              --                      --
  Options Cancelled                                --                 (80,000)
                                         ------------             -----------
  Options Outstanding at End of Year        1,025,000               1,025,000
                                         ============             ===========
  Exercise Price per Share                 $.62-$2.29              $.62-$2.29
  Fair Value of Options Granted                 $1.66                   $1.66
                                                           
     (a)  945,000 of the  options  granted  during the year ended March 31, 1998
were under the October  30, 1997  Incentive  Stock  Option Plan  approved by the
shareholders  on May 28, 1998 ("1997 Plan") and 80,000  options were granted via
Board of Directors  approval in September  1997. The remaining  603,077  options
granted  during the year ended  March 31, 1998 were  pursuant  to the  unanimous
written consent of the Board of Directors on September 29, 1997.

     At June 30, 1998,  options to purchase  45,000  shares were  available  for
grant under the 1997 Plan.

     Proforma  results  of  operations,  had FAS 123 been  used to  account  for
stock-based  compensation  cost, would have resulted in additional  compensation
expense of approximately  $2,966,000 for the year ended March 31, 1998 resulting
in a proforma  net loss of  approximately  $13,446,000  for that same  reporting
period.

     The fair market value of the warrants  were  estimated at the date of grant
using a Black-Scholes  option pricing model with the following  weighted-average
assumptions,  respective:  risk-free  interest  rates of 14%,  dividend yield of
0.0%,  volatility  factors of the expected market price of the Company's  Common
Stock of 203% and an expected life equaling the warrants exercise periods.

     The  Black-Scholes   option  valuation  model  was  developed  for  use  in
estimating  the fair value of traded  options which have no vested  restrictions
and are fully  transferable.  In addition,  option  valuation models require the
input of highly  subjective  assumptions  including  the  expected  stock  price
volatility.  Because the Company's warrants have  characteristics  significantly
different from those of normal publicly traded stock, and because changes in the
subjective input assumptions can materially  affect the fair value estimate.  In
management's  opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock warrants.


WARRANTS

     As of June 30, 1998, there are five-year warrants  outstanding  exercisable
to purchase 500,000 shares of Common Stock that were issued in connection with a
lending transaction as discussed more fully in Note 4(B)(2).

     As of June 30, 1998, there were Class B Warrants outstanding exercisable to
purchase an aggregate 27,750 shares of the Company's common stock at an exercise
price of $1.20 per share.


NOTE 11 -- OPERATING LEASE

     On December 8, 1997 the Company  entered into a five year  operating  lease
expiring  December  31, 2002 for 1,500  square feet of office space in Melville,
Long Island,  New York.  Minimum  future rental  payments  under this  operating
lease, including electric is $35,735 per annum.



                                       18
<PAGE>


  NORTHEAST DIGITAL NETWORKS, INC. (FORMERLY ELECTRONICS COMMUNICATIONS CORP.)
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12 -- BUSINESS PLAN AND LIQUIDITY

     Management  has made the decision to discontinue  reselling  paging airtime
for Skytel, a nationwide paging carrier, and other paging carriers and focus its
sales  efforts on adding direct  subscribers  and resellers to the Company's 900
MHz Glenayre  paging system.  In connection  with this decision,  Management has
entered into a settlement agreement effective July 1, 1998 with Skytel. Pursuant
to  the  terms  of  the  settlement  agreement,  the  Company  will  pay  Skytel
approximately  $98,000 and tender its Skytel customer base and the corresponding
accounts  receivable to Skytel, who will assume all future billing,  collections
and customer service.  Skytel will apply 25% of all future cash collections from
the transferred  customer base against the remaining balance due to Skytel after
payments made under the Settlement Agreement.  Once the balance due to Skytel of
approximately  $194,000 (after applying the $98,000 payment discussed above) has
reached  $75,000,  Skytel will release the Company from any further  obligations
under the Settlement Agreement.

     On March 16, 1998,  Threshold  Communications,  Inc. ("TCI"), the Company's
wholly owned paging subsidiary, entered into a Management Service Agreement with
Paging Source of New York  ("PSNY").  Under this  Agreement,  PSNY was to, among
other things,  perform billing,  customer service and other management  services
for a monthly fee. As a result of PSNY's  subsequent  breach of this  Agreement,
TCI has internalized the management of paging  operations.  In response to this,
TCI purchased new billing software,  hired a general manager,  director of sales
and several customer service representatives and billing personnel.  TCI intends
to sell airtime through resellers and direct sales channels.

     Personal Communications Network, Inc. ("PCN"), a wholly owned subsidiary of
the Company, is currently seeking to raise funds, which may include the issuance
of equity securities,  necessary to build out a wireless communications network,
thus utilizing the Company's six PCS licenses in Vermont, Maine and a portion of
upstate New York, with certain overlap in Pennsylvania and New Hampshire.  There
can be no assurance that the Company will be able to secure financing sufficient
to cover the cost  associated  with the system build out, its operations and the
FCC licenses.

     See Note 2 for further  discussion  of debt  reduction  resulting  from the
Company's  election  of  the  Disaggregation   Option.   Based  on  management's
continuing negotiations for vendor and other third party financing,  election of
the Disaggregation Option as discussed in Note 2 should enhance PCN's ability to
secure such financing.

     The Company's financial statements for the three months ended June 30, 1998
have been prepared on a going concern basis,  which contemplates the realization
of assets and settlement of liabilities  and commitments in the normal course of
business.  The  Company  has  continued  to incur net losses  with a net loss of
$1,588,716  for the three months ended June 30, 1998.  The Company had a working
capital deficiency of $1,877,800 at June 30,1998 and its cash used by operations
during the three  months  ended June 30, 1998 was  $568,292.  If cash flows from
operations  were  assumed to be the same for the fiscal  year 1999 as 1998,  the
Company would continue to have a working capital  deficiency.  Recognizing  that
the Company must generate additional  resources or consider modifying operations
to enable it to continue  operations  with available  resources,  management has
retained a public  relations firm and certain other  independent  consultants to
assist it in taking steps to minimize  this cash  shortfall  and to assist it in
identifying  entities interested in its business.  However, no assurances can be
given  that  the  efforts  of the  Company  or that of its  consultants  will be
successful  in  raising  additional  capital.  Furthermore,   there  can  be  no
assurance,  assuming the Company raises  additional funds, that the Company will
achieve  profitability or positive cash flow. If the Company is unable to obtain
adequate  additional  financing,  the Company may be required to seek bankruptcy
protection from its creditors.


NOTE 13 -- CONTINGENT LIABILITIES

     On July 31, 1998, the Company (by order of the board of directors)  entered
into an amended and restated employment  agreement with the president.  The term
of the  agreement is for five years  commencing on November 1, 1997 and expiring
October 31, 2002 with compensation of approximately  $975,000 over the five-year
term. On July 31, 1998, the Company (by order of the board of directors) entered
into an amended  and  restated  employment  agreement  with the chief  financial
officer.  The term of the  agreement is for five years  commencing on January 2,
1998 and expiring on January 1, 2003 with compensation of approximately $815,000
over the five-year term.



                                       19
<PAGE>

  NORTHEAST DIGITAL NETWORKS, INC. (FORMERLY ELECTRONICS COMMUNICATIONS CORP.)
                                AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 14 -- PENDING LITIGATION

     On or about  October 15, 1997,  the Company was served with a Summons in an
action entitled: Motorola, Inc., Plaintiff, v. Electronics Communications Corp.,
Defendant,  in the  Superior  Court of New Jersey  Law  Division:  Union  County
Special Civil Part.  Motorola claims the Company owes it approximately  $106,000
including  interest  for  merchandise,  consisting  of various  pager  parts and
equipment,  restocking fees of approximately  $13,100,  and attorneys' fees. New
management and counsel,  after a review of the matter,  believe that Motorola is
inaccurate in its claim and has made several attempts,  which were unsuccessful,
to settle this  matter.  On or about May 15, 1998,  Motorola  filed a Motion for
Summary  Judgement  with the Superior  Court of New Jersey Law  Division,  Essex
County.  On June 19, 1998,  Motorola's  motion for summary judgement was denied.
Despite  the  Company's  lack of success in the past in  settling  this  matter,
management,  in an effort to avoid litigation and minimize attorneys' fees, will
continue its efforts to resolve this dispute on terms management  believes to be
favorable for the Company.  There can be no assurances  that the Company will be
successful in settling this dispute and avoiding litigation.

NOTE 15 -- SUBSEQUENT EVENTS

     (A) As of August 15, 1998, an  additional  4.85 shares of the 1997 Series C
Convertible  Preferred  Stock had been converted  into  2,258,161  shares of the
Company's Common Stock.

     (B) In response to a notice  that its common  stock would be delisted  from
trading  on the NASDAQ  Small Cap  Market  due to failure to  maintain a minimum
$1.00 bid price in the over-the-counter market, the Company's board of directors
approved  a 1 for  8  reverse  stock  split  of  its  common  stock  subject  to
stockholder approval. A special stockholder meeting is to be held on October 15,
1998 to consider the proposed reverse stock split.


                                       20
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following  discussion  should be read in conjunction  with the  consolidated
financial statements and notes thereto.

OVERVIEW

The  Company  through  its PCN  subsidiary,  is  licensed  by the FCC to provide
wireless  telecommunications  services,  which  include  the  ability to deliver
traditional  telephony  along  with new  digital  technologies  that  allow fax,
internet, e-mail and short message services (e.g., sports scores, weather, stock
quotes,  etc).  PCN's personal  communication  services  ("PCS")  licenses cover
nearly contiguous markets in Vermont,  Maine and a small portion of Northern New
Hampshire,  as well as a small  market in  Upstate  New York that  extends  into
Pennsylvania.  PCN's six Basic Trading Areas  ("BTA")  cover  approximately  1.5
million  potential  subscribers  ("POPs").  The  Company  is  currently  in  the
engineering   and  design  phase  for  the  build  out  of  a  wireless   mobile
communications  network  utilizing GSM as its technology  platform.  PCN is also
licensed to provide local and long distance  services in Vermont,  Maine and New
York and may incorporate  such services  through  "bundling," upon completion of
its PCS network.

The Company,  through its TCI subsidiary,  currently operates a state of the art
digital 900MHz Glenyre  satellite-based Flex paging system, which covers the New
York  Metropolitan  area and New Jersey.  Due to the recent  construction of the
Company's paging network, a significant portion of the Company's paging revenues
continues to be derived from the resale of other carrier's airtime.


RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO THREE MONTHS ENDED JUNE 30, 1997

Total sales decreased  approximately  $447,380 or 69% for the three months ended
June 30, 1998  compared to the three months  ended June 30, 1997.  There were no
Commissions  and  Electronics  Revenues for the three months ended June 30, 1998
compared to $95,573 and $9,614,  respectively,  for the three  months ended June
30, 1997. The Company  attributes  the decrease in  Electronics  revenues to its
exit from the distribution of consumer  electronics,  which was conducted at the
Company's  wholly  owned  subsidiary,  FTD.  FTD was  engaged  in the  wholesale
distribution of cellular  telephones,  related  accessories and other electronic
products.

     Commissions revenue decreased due to the loss of the Company's Master Agent
Agreement  with NYNEX Mobile  Communications,  Inc.  ("NYNEX") and Bell Atlantic
Mobile, Communications,  Inc. ("BAM"). On May 15, 1997, the Company entered into
a Settlement & Separation  Agreement (the  "Settlement  Agreement")  whereby the
Company severed its agency  relationship  with NYNEX and BAM with respect to the
solicitation  of cellular  activations.  The contract with NYNEX and BAM was the
Company's  largest  source of commission  income.  As a result of the Settlement
Agreement,  the Company's inability to establish a profitable  relationship with
another cellular carrier,  a lack of available  resources and continuing losses,
the  Company  ceased  cellular  phone  activations.  This  resulted in a related
decrease in cost of sales of approximately $85,663 for the same period.

     Paging and Two Way Radio Revenue decreased  approximately  $342,193 for the
three  months  ended June 30, 1998  compared to the three  months ended June 30,
1997.  This  decrease  was  due to  management's  redirecting  of the  Company's
resources  towards the  restructuring of the Company and its subsidiaries in the
third and fourth quarter of fiscal 1998, thus requiring a significant  reduction
of sales and marketing  personnel.  The restructuring  included a highly focused
effort to raise  additional  capital in order to settle numerous  obligations of
the  Company  and its  subsidiaries  and  re-position  the  Company  and its PCN
subsidiary  for  entry  into  the  personal   communications  service  business,
including the  preparation of a business plan for PCN and requests for proposals
that  were  sent to  various  vendors  of GSM  equipment.  This  redirection  of
resources resulted in a corresponding  decrease in Paging and Two Way Radio cost
of sales of approximately $176,000 or 32%.

     Selling,  General and Administrative  Expenses ("SGA") for the three months
ended June 30, 1998 was  $800,510  compared to  $1,480,399  for the three months
ended  June  30,  1997.  This  was  principally  attributable  to the  Company's
restructuring  and the  resulting  significant  reduction in sales and marketing
personnel,  somewhat offset by expenses incurred due to the Company's refocusing
of its efforts  towards the  build-out  of its PCS  licenses  and  provision  of
digital wireless services and the initial engineering and design of the proposed
PCS network.

Interest  expense was $838,800 for the three months ended June 30, 1998 compared
to $94,263 for the three months ended June 30, 1997.  Interest expense increased
as a result of the private  placement of 8% convertible  debentures on August 7,
1997, and the issuance of a total of $500,000 10% one year promissory  notes. In
addition,  the Company 


                                       21
<PAGE>

incurred a non-cash interest expense of $787,645 due to EITF D-60 discussed more
fully in Note 4(B), and the subsequent  amortization of deferred  finance charge
on the sale of the Company's Series C Preferred Stock.

Net Loss for the three  months  ended June 30, 1998 was  $1,588,716  compared to
$1,369,566 for the three months ended June 30, 1997.


LIQUIDITY AND CAPITAL RESOURCES

     Since its  formation  through June 30,  1998,  the Company has financed its
operations  and met its capital  requirements  primarily  through the use of its
cash flow from capital investments,  including the issuance of convertible notes
and debentures and convertible preferred stock.

The Company  incurred  net losses of  $1,588,716  and  $1,369,566  for the three
months  ended  June  30,  1998  and  the  three  months  ended  June  30,  1997,
respectively.  The Company  attributes  a portion of the increase in net loss of
$219,150 to an increase in interest  expense of  approximately  $745,000 for the
three  months ended June 30, 1998 as compared to the three months ended June 30,
1997 offset by the decrease in SGA as discussed above. The $745,000  increase is
primarily attributable to non-cash interest expense associated with the issuance
of the Series C Preferred  Stock and the related  $500,000 of Notes Payable (see
Notes 8 and 4(B)),  respectively).  See the  Results of  Operations  section for
further discussion of interest expenses.

The Company had a working capital  deficiency of $1,877,500 for the three months
ended June 30, 1998 as compared to a working  capital  deficiency of $3,571,545
for the three months ended June 30, 1997.

Net cash used in operating  activities  for the three months ended June 30, 1998
was $568,292 compared to $412,104 for the three months ended June 30, 1997.

Net cash used in investing  activities  for the three months ended June 30, 1998
was $32,687 compared to $459,916 for the three months ended June 30, 1997.

Net cash used by financing  activities  for the three months ended June 30, 1998
was $79,136  compared to net cash  provided by financing  activities of $846,847
for the three months ended June 30, 1997.

The Company's financial statements for the three months ended June 30, 1998 have
been prepared on a going concern basis,  which  contemplates  the realization of
assets and  settlement of  liabilities  and  commitments in the normal course of
business.  The  Company  has  continued  to incur net losses  with a net loss of
$1,588,716  for the three months ended June 30, 1998.  The Company had a working
capital deficiency of $1,877,500 at June 30,1998 and its cash used by operations
during the three  months  ended June 30, 1998 was  $568,292.  If cash flows from
operations  were  assumed to be the same for the fiscal  year 1999 as 1998,  the
Company would continue to have a working capital  deficiency.  Recognizing  that
the Company must generate additional  resources or consider modifying operations
to enable it to continue  operations  with available  resources,  management has
retained a public  relations firm and certain other  independent  consultants to
assist it in taking steps to minimize  this cash  shortfall  and to assist it in
identifying  entities interested in its business.  However, no assurances can be
given  that  the  efforts  of the  Company  or that of its  consultants  will be
successful  in  raising  additional  capital.  Furthermore,   there  can  be  no
assurance,  assuming the Company raises  additional funds, that the Company will
achieve  profitability or positive cash flow. If the Company is unable to obtain
adequate  additional  financing,  the Company may be required to seek bankruptcy
protection from its creditors.


YEAR 2000 ISSUE

Many  existing  computer  programs use only two digits to identify a year in the
date field.  These programs were designed and developed without  considering the
impact of the upcoming  change in the century.  If not corrected,  many computer
applications  could fail or create erroneous results by or at the Year 2000. The
Year 2000 issue affects virtually all companies and  organizations.  The Company
has reviewed its existing  computer programs and it believes that it will not be
adversely  affected by the Year 2000 Issue.  However,  there can be no assurance
that  the  Company's  suppliers,  creditors,  customers  and  financial  service
organizations  may not be  adversely  affected  by the Year 2000  issue and as a
result, there can be no assurance as to the impact of the Year 2000 issue on the
Company.


                                       22
<PAGE>


FORWARD LOOKING STATEMENTS

In addition to statements of historical  fact,  this quarterly  report  contains
forward-looking  statements  reflecting  the Company's  expectations  or beliefs
concerning future events which could materially affect the Company's performance
in the future.  The Company cautions that these and similar  statements  involve
risks noted in the  Company's  SEC  filings  which may cause  actual  results to
differ  materially.  Such risks include the possible inability of the Company to
raise  additional  financing  required  to pay the  purchase  price  for its PCS
licenses  and to build out its planned PCS network.  Forward-looking  statements
are made in the context of  information  available  as of the date  stated.  The
Company  undertakes no obligation to update or revise such statements to reflect
new circumstances or unanticipated events as they occur.


                                       23
<PAGE>




  NORTHEAST DIGITAL NETWORKS, INC. (FORMERLY ELECTRONICS COMMUNICATIONS CORP.)
                                AND SUBSIDIARIES


                                     PART II

                                OTHER INFORMATION

Item 1. Legal Proceedings

        The Company  incorporates herein the information set forth in Note 14 to
        the Financial Statements of this report.

Item 2. Changes in Securities and Use of Proceeds

        None

Item 3. Defaults Upon Senior Securities

        None

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

        See Item 4 of the  Company's  Annual  Report on Form  10KSB for the year
        ended March 31, 1998

Item 5. Other Information

        None

Item 6. Exhibit and Reports on Form 8-K

        None


                                       24
<PAGE>


  NORTHEAST DIGITAL NETWORKS, INC. (FORMERLY ELECTRONICS COMMUNICATIONS CORP.)
                                AND SUBSIDIARIES


                                   SIGNATURES

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

DATED: August 19, 1998              NORTHEAST DIGITAL NETWORKS, INC.
                                    (formerly ELECTRONICS COMMUNICATIONS CORP.)



                                    By: /s/ Joseph A. Rosio
                                    ------------------------------------
                                    Joseph A. Rosio, President,
                                    Principal Executive Officer



                                    By: /s/ Christopher J. Garcia
                                    ------------------------------------
                                    Christopher J. Garcia, Treasurer,
                                    Principal Financial and Accounting Officer




                                       25