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

                                FORM 10-QSB



             Quarterly Report Pursuant to Section 13 or 15(d)
                  Of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 1999   Commission File Number 000-25257

                            ELLIGENT CONSULTING GROUP, INC.
                            -------------------------------
                (Exact name of registrant as specified in its charter)

      Nevada                                             87-0453842
      ------                                             ----------
(State or other jurisdiction of                     (I. R. S. Employer
incorporation or organization)                      Identification No.)

                     152 West 57th Street, 40th Floor
                           New York, N. Y. 10019
                           ---------------------
                 (Address of principal executive offices)

Registrant's current telephone number, including area code: (212) 765 - 2915


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.

  [ Item - 1 ]   Yes [ X ]    No [ ] [ Item - 2 ]   Yes [ X ]   No [     ]

Indicate  the number of shares  outstanding  of each  class of the  Registrant's
Common Stock.

The  Registrant has only one class of Common Stock  outstanding.  As of June 30,
1999, there were 14,879,226 shares of the Registrant's Common Stock outstanding.

Transitional Small Business Disclosure Format (check one): Yes [   ]   No [ X ]




<PAGE>




                      ELLIGENT CONSULTING GROUP, INC.

                                FORM 10-QSB

               For the quarterly period ended June 30, 1999



                             TABLE OF CONTENTS




PART  I.    FINANCIAL INFORMATION

Item  1.    Financial Statements

            Consolidated Balance Sheet as of June 30, 1999 (unaudited)

            Consolidated  Statement of  Operations  for the three months and six
            months ended June 30, 1999 (unaudited)

            Consolidated  Statement of  Stockholders'  Equity for the six months
            ended June 30, 1999 (unaudited)

            Consolidated  Statement  of Cash Flows for the six months ended June
            30, 1999 (unaudited)

            Notes to Consolidated Financial Statements (unaudited)

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


PART  II.   OTHER INFORMATION

Item  2.    Changes in Securities and Use of Proceeds

Item  6.    Exhibits and Reports on Form 8-K


INDEX TO EXHIBITS




<PAGE>



PART  I.    FINANCIAL INFORMATION

Item  1.    Financial Statements



ELLIGENT CONSULTING GROUP, INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEET AS OF JUNE 30,1999 [Unaudited]




Assets
Current assets:
  Cash                                                               $   130,256
  Trade accounts receivable, net of allowance
   for doubtful accounts of $150,260                                   3,733,224
  Deferred taxes receivable                                              151,400
  Other assets                                                            26,094
                                                                     -----------

  Total current assets                                                 4,040,974
                                                                       ---------

Property and equipment, net                                              376,772
                                                                         -------

Goodwill, net                                                         11,465,585
                                                                      ----------

Other Assets:
  Customer list, net                                                     408,333
  Security deposits                                                      117,723
  Due from employees                                                      13,301
  Due from stockholders                                                    8,550
  Due from affiliates                                                    338,957
                                                                     -----------

  Total other assets                                                     886,864
                                                                         -------

  Total assets                                                      $ 16,770,195
                                                                    ============




See Accompanying Notes to Consolidated Financial Statements.


                                         1

<PAGE>



ELLIGENT CONSULTING GROUP, INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1999 [Unaudited]



Liabilities and Stockholders' Equity
Current liabilities:
  Cash overdraft                                                    $   425,678
  Accounts payable                                                    1,555,062
  Accrued expenses and other liabilities                                128,917
  Accrued expenses -- stockholders                                      414,667
   Notes & leases payable - current                                   2,244,984
  Notes payable - stockholders                                        4,642,378
  Taxes payable                                                         107,831
  Advances from stockholders                                          4,794,928
                                                                    -----------

  Total current liabilities                                          14,314,445
                                                                     ----------

Long-term liabilities:
  Notes and leases payable - long-term                                  102,673
                                                                    -----------

Commitment and contingencies                                                 --

Stockholders' equity:
  Common stock--$0.001 par value; 50,000,000 shares authorized
   14,879,226 shares issued                                              14,879
  Capital in excess of par value                                      4,992,444
  Unearned Compensation                                                (283,500)
  Accumulated deficit                                                (2,004,734)
                                                                    ------------

   Subtotal                                                           2,719,089

  Treasury stock - 61,002 shares at cost                               (366,012)
                                                                    ------------

Total stockholders' equity                                            2,353,077
                                                                      ---------

Total liabilities and stockholders' equity                          $16,770,195
                                                                    ===========





See Accompanying Notes to Consolidated Financial Statements.


                                         2

<PAGE>



ELLIGENT CONSULTING GROUP, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 [Unaudited]



                                           Three months ended Six months ended
                                              June 39, 1999     June 30, 1999
                                               [Unaudited]       [Unaudited]
                                               -----------       -----------
Income:
  Revenue                                     $  6,245,577       $11,835,024
  Cost of services                               4,124,051         7,796,902
                                              ------------       -----------

   Gross profit                                  2,121,526         4,038,122
                                              ------------       -----------

Costs and expenses:
  General and administrative                     2,416,042         4,643,129
  Depreciation                                      54,964            95,222
  Amortization                                     172,535           347,704
                                              ------------       -----------

   Total Costs and Expenses                      2,643,541         5,086,055
                                              ------------       -----------

   Operating loss                                 (522,015)       (1,047,933)
                                              -------------      ------------

Other expense:
  Interest - other                                 (73,786)         (136,014)
  Interest - stockholders                         (150,677)         (272,494)
                                              -------------      ------------

  Total Other Expense                             (224,463)         (408,508)
                                              -------------      ------------

Loss before income taxes                          (746,478)       (1,456,441)
Income tax benefit                                (124,400)         (283,600)
                                              -------------      ------------

  Net loss                                    $   (622,078)      $(1,172,840)
                                              ============       ===========


Basic and Diluted Loss Per Share              $      (0.04)      $     (0.08)
                                              ============       ===========

Weighted Average Number of
  Shares Outstanding                            14,858,930        14,765,162
                                              ============        ==========

As more fully  described in the  Company's  December  31,  1998,  report on Form
10-KSB, 1998 operations are not meaningful.

See Accompanying Notes to Consolidated Financial Statements.


                                         3

<PAGE>



ELLIGENT CONSULTING GROUP, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1999 [Unaudited]


<TABLE>


                                               Capital in                                        Total
                            Common Stock       Excess of    Unearned  Treasury   Accumulated Stockholders'
                          Shares    Amount     Par Value  Compensation  Stock      Deficit      Equity
                          ------    ------     ---------  ------------  -----      -------      ------

Balance - December 31,
<S>                     <C>         <C>       <C>         <C>         <C>        <C>           <C>
  1998                  14,544,225  $ 14,544  $2,992,518  $       --  $      --  $  (831,894)  $2,175,168

Common Stock Issued
  on January 21, 1999      250,001       250   1,499,750          --         --           --    1,500,000

Common Stock Issued
  On April 15, 1999 in
  payment for services      63,000        63     377,937    (378,000)        --           --           --

Treasury Stock Purchased
  61,002 shares on
  June 30, 1999                 --        --          --          --   (366,012)          --     (366,012)

Stock Options Exercised
  on June 30, 1999          22,000        22       1,078          --         --           --        1,100

Imputed Interest [8]            --        --     121,162          --         --           --      121,162

Amortization of Unearned
  Compensation                  --        --          --      94,500         --           --       94,500

Net Loss for the six
  Months Ended
  June 30, 1999                 --        --          --          --         --   (1,172,840)  (1,172,840)
                         ---------  --------  ----------   ---------  ---------  -----------   -----------

  Balance - June 30,
   1999                 14,879,226 $  14,879  $4,992,444  $(283,500)  $(366,012) $(2,004,734) $2,353,077
                        ========== =========  ==========  =========   =========  ===========  ==========
  </TABLE>






See Accompanying Notes to Consolidated Financial Statements.


                                               4

<PAGE>



ELLIGENT CONSULTING GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR SIX MONTHS ENDED JUNE 30, 1999 [Unaudited]

Cash Flows From Operating Activities
  Net loss                                                      $(1,172,840)
                                                                -----------
  Adjustments to reconcile net income
   to cash provided by operating activities:
     Depreciation                                                    95,222
   Amortization                                                     347,704
   Imputed interest                                                 272,493
   Deferred income tax benefit                                     (283,600)
   Increase in allowance for doubtful allowances                     50,000
   Non-cash consideration for marketing services                    378,000
  Change in Assets and Liabilities:
  [Increase] decrease in:
   Accounts receivable                                              128,565
   Other current assets                                            (291,721)
   Due from employees                                                (6,054)
   Due from affiliates                                             (316,478)
  Increase [decrease] in:
   Accounts payable                                                (165,991)
   Accrued expenses                                                 (60,942)
   Accrued expenses-stockholders                                    183,116
   Income taxes payable                                             (81,669)
                                                                -----------
  Total adjustments                                                 248,645
                                                                    -------
  Net cash - operating activities                                  (924,195)
                                                                   --------

Investing Activities
  Payments for Property and Equipment                               (67,090)
                                                                    -------

Financing Activities
  Increase in cash overdraft                                         28,550
  Due to affiliates                                                (497,068)
  Advances from stockholders                                      2,548,871
  Proceeds from Notes Payable                                       200,000
  Payments on notes and leases payable                              (44,501)
  Payment on notes payable - stockholders                          (750,000)
  Acquisition of Treasury Stock                                    (366,012)
  Proceeds from Issuance of common stock                              1,100
                                                                -----------
Net cash - financing activities                                   1,120,940
                                                                -----------
Net Increase in Cash                                                129,656
Cash at Beginning of Period                                             600
                                                                -----------
Cash at End of Period                                           $   130,256
                                                                ===========

As more fully  described in the  Company's  December  31,  1998,  report on Form
10-KSB, 1998 operations are not meaningful.

Supplemental Schedule of Non-Cash Investing and Financing Activities:
  During the six months ended June 30, 1999,  the Company  issued 250,001 shares
of common stock valued at  $1,500,000  to related  parties in  settlement of the
January 21, 1999,  installment  of notes payable  related to the  acquisition of
CSI.

  On April 15, 1999, the Company issued 63,000 shares of restricted common stock
in  connection  with an  agreement  to  obtain  marketing  services.  The  value
associated with the issuance of these shares was $378,000.

See Accompanying Notes to Consolidated Financial Statements.

                                         5

<PAGE>




ELLIGENT CONSULTING GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS [Unaudited]

[1] Organization and Business

Elligent Consulting Group, Inc., [the "Company"] was incorporated in February of
1987 under the laws of the state of Nevada as Coronado Ventures, Inc. During the
period  commencing  in  1990  through  1992,  the  Company  acquired   Tahoeview
Cablevision,  Inc.  ["Tahoe"] and Weststar Group North ["North"] and changed its
name to Weststar Group, Inc.  Subsequently,  Tahoe and North became subject to a
bankruptcy  proceeding,  which,  on July 31, 1996, was concluded by an Order and
Judgment from the Court regarding the Final  Distribution of Proceeds of Sale of
Assets  by the  Receiver.  The  Company  was not  named  as a  defendant  in the
bankruptcy  and was not  involved  in any  manner,  except  that it was the sole
shareholder of Tahoe and North. The conclusion of the aforementioned proceedings
resulted  in the Company  emerging  without any  business  operations  and being
deemed to be a new entity for financial statement  reporting purposes.  As such,
the Company was considered to be a development  stage  company.  Pursuant to the
order and Judgment of the Court, Tahoe and North were ordered dissolved.

In July of 1997, the Company changed its name to Arena Group, Inc. and began the
process of locating a business  venture  with which the  Registrant  could enter
into a Reorganization.

On July 23, 1998,  the  Registrant,  through its wholly owned  subsidiary  Patra
Acquisition, Inc., a Delaware corporation ["Patra Acquisition"],  entered into a
Non-Binding Letter of Intent [the "Letter of Intent"] with Patra Capital Ltd., a
Delaware  corporation  ["Patra Capital"].  The Letter of Intent provided for the
execution of a definitive merger agreement [the "Merger Agreement"]. Pursuant to
the Merger  Agreement,  Patra Capital  merged with Patra  Acquisition  and Patra
Capital,  the  surviving  corporation  of the  merger,  became  a  wholly  owned
subsidiary  of  the   Registrant   [the   "Reorganization"].   As  part  of  the
Reorganization,  the Registrant  changed its name to Elligent  Consulting Group,
Inc. and Patra Capital  changed its name to Conversion  Services  International,
Inc.  On  September  3, 1998,  with an  effective  date of August 1,  1998,  for
accounting  purposes,  the Registrant issued 12,950,000 shares of its restricted
common stock to the then current  shareholders  of Patra Capital in exchange for
all of the issued and outstanding  common stock of Patra Capital.  At that time,
the management of Patra Capital became the management of the Company. The merger
was  accounted  for as a  Recapitalization  of the  Company  with  Patra  as the
acquiror [See Note 12].

On September 21, 1998,  effective August 1, 1998, for accounting  purposes,  the
Company through its wholly owned subsidiary, Patra Capital, purchased Conversion
Services International,  Inc. ["CSI"] and Doorways, Inc. ["Doorways"].  Doorways
is a  wholly-owned  subsidiary  of CSI. The  operations  of CSI and Doorways are
included in the Company's  results of  operations  commencing on August 1, 1998.
The  purchase  price  was  $12,298,885  consisting  of  1,100,000  shares of the
Company's  common stock  [valued at  $2,640,000],  cash  payments of  $1,500,000
delivered at the closing and notes payable of $8,500,000,  less amounts due from
stockholders  acquired in the transaction of $582,399.  The net discounted value
of the  consideration,  net of the  acquired  loan  from the  stockholders,  was
$7,561,292.

CSI is in the business of providing information  technology consulting services.
CSI provides  high-end project  management,  applications  implementation,  data
warehousing,  consulting,  Internet and information  technology  ["IT"] staffing
services.  CSI has recently  expanded its  operation to  accommodate  additional
consultant/employees  and new in-house  training  facilities.  CSI currently has
approximately 180 employees and consultants, and expects that number to increase
as its business  grows.  Operations  for the six months ended June 30, 1999, are
primarily those of CSI.

In prior years,  the Company was considered a development  stage company and the
operations were not meaningful.


                                        6

<PAGE>



ELLIGENT CONSULTING GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #2 [Unaudited]


[2] Summary of Significant Accounting Policies

[A]  Principles  of  Consolidation  - The  accompanying  consolidated  financial
statements   include  the  accounts  of  the  Company,   and  its   wholly-owned
subsidiaries, Conversion Services International, Inc. ["CSI"] and Doorways, Inc.
All significant  intercompany  transactions and balances have been eliminated in
the consolidation.

[B] Revenue Recognition - Revenue from consulting and professional  services are
recognized  at  the  time  the  services  are  provided.  Revenue  from  systems
integration and software  development  are recognized  based on the terms of the
contracts.  Revenue under maintenance  contracts is recognized  ratably over the
life of the contract.  Revenue under fixed price  contracts is recognized on the
percentage of completion.

[C] Property  and  Equipment - Property  and  equipment  are stated at cost less
accumulated  depreciation  and  amortization  and includes  equipment held under
capital  lease  agreements.   Depreciation  and  amortization,   which  includes
amortization of leased equipment,  are computed using the  straight-line  method
over the estimated useful lives of the respective assets. Estimated useful lives
range from one to ten years.  When the assets are sold or retired,  the cost and
accumulated  depreciation  are removed from the accounts and any gain or loss is
included in operations.

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

[E] Intangibles - Goodwill is recognized in business combinations  accounted for
under the  purchase  method  of  accounting  and  represents  the  excess of the
purchase price over the fair value of identifiable net assets acquired. Goodwill
is amortized on a  straight-line  basis over twenty  years,  which is the period
during  which the  Company  expects to  receive  benefits.  A  customer  list is
recorded  at cost and  amortized  on a  straight-line  basis over its  estimated
useful life of five years.

[F]  Concentrations  of Credit Risk - Financial  instruments  which  potentially
subject  the  Company to  concentrations  of credit  risk are cash and  accounts
receivable  arising from its normal business  activities.  The Company routinely
assesses the financial strength of its customers, based upon factors surrounding
their credit risk, establishes an allowance for uncollectible accounts, and as a
consequence,  believes that its accounts  receivable credit risk exposure beyond
such allowances is limited. The Company places its cash with high credit quality
financial  institutions.  The  amount on  deposit  in any one  institution  that
exceeds  federally  insured  limits is subject to credit  risk.  The Company had
$153,309 as of June 30, 1999, with financial institutions subject to credit risk
beyond the insured  amount.  The Company has not  experienced any losses in such
accounts.  The Company does not require  collateral or other security to support
financial instruments subject to credit risk.

Customers  accounting  for 10% or more of revenue for the six months  ended June
30, 1999, are as follows:
                                                 1 9 9 9
      Customer A                              $4,463,493

The above customer comprised 28% of accounts receivable at June 30, 1999.

Any  decision  by this  major  customer  to cease  or  reduce  their  use of the
Company's  services  may have an  adverse  effect on the  Company's  operations.
Further, any delay in payment or non-payment of fees owed by the Company's large
clients will have an adverse effect on the Company's results of operations.

[G] Advertising - The Company expenses advertising costs as incurred.  There was
$20,747 in advertising cost during the six months ended June 30, 1999.

                                        7

<PAGE>



ELLIGENT CONSULTING GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #3 [Unaudited]



[2] Summary of Significant Accounting Policies [Continued]

[H]  Income  Taxes - Income  taxes are  provided  based upon the  provisions  of
Statement of Financial  Accounting  Standards ["SFAS"] No. 109,  "Accounting for
Income Taxes," which requires recognition of deferred tax liabilities and assets
for the expected  future tax  consequences  of events that have been included in
the  financial  statements  or tax  returns.  Under this  method,  deferred  tax
liabilities  and assets  are  determined  based on the  difference  between  the
financial  statement and tax bases of assets and  liabilities  using enacted tax
rates in effect for the year in which the differences are expected to reverse.

[I] Cash and Cash  Equivalents  - The Company  considers  certain  highly liquid
investments  with a  maturity  of six months or less when  purchased  to be cash
equivalents. The Company has no cash equivalents at June 30, 1999.

[J] Basic and Diluted Loss per Common Share - The Company  adopted  Statement of
Financial Accounting Standards ["SFAS"] No. 128, "Earnings Per Share. Under SFAS
128," loss per common share is computed by dividing net loss available to common
stockholders by the weighted-average  number of common shares outstanding during
the period.  In the Company's  present  position,  diluted loss per share is the
same as basic loss per share.  Securities that could  potentially  dilute EPS in
the future  include the issuance of common stock in  settlement of notes payable
and the exercise of stock options [See Notes 8 and 13].

[K]  Impairment  -  Certain   long-term  assets  of  the  Company  are  reviewed
periodically as to whether their carrying value has become impaired, pursuant to
guidance established in Statement of Financial Accounting Standards ["SFAS"] No.
121,  "Accounting  for the  Impairment of Long-Lived  Assets and for  Long-Lived
Assets to be Disposed  Of."  Management  considers  assets to be impaired if the
carrying value exceeds the future  projected cash flows from related  operations
[undiscounted and without interest  charges].  If impairment is deemed to exist,
the assets will be written down to fair value or projected discounted cash flows
from related operations. Management also reevaluates the periods of amortization
to  determine  whether  subsequent  events  and  circumstances  warrant  revised
estimates  of  useful  lives.  As of June 30,  1999,  management  expects  these
remaining assets to be fully recoverable.

[L] Stock  Options  and  Similar  Equity  Instruments  - On August 1, 1998,  the
Company adopted the disclosure requirements of Statement of Financial Accounting
Standards ["SFAS"] No. 123, "Accounting for Stock-Based Compensation," for stock
options  and  similar  equity  instruments  [collectively  "Options"]  issued to
employees  and  directors,  however,  the  Company  will  continue  to apply the
intrinsic  value based  method of  accounting  for options  issued to  employees
prescribed by Accounting  Principles  Board ["APB"] Opinion No. 25,  "Accounting
for Stock  Issued to  Employees"  rather  than the fair  value  based  method of
accounting prescribed by SFAS No. 123. SFAS No. 123 also applies to transactions
in which an entity issues its equity  instruments  to acquire goods and services
from  non-employees.  Those transactions must be accounted for based on the fair
value of the consideration  received or the fair value of the equity instruments
issued, whichever is more reliably measurable.


                                        8

<PAGE>



ELLIGENT CONSULTING GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #4 [Unaudited]


[3] Property and Equipment and Depreciation and Amortization

Property and equipment and accumulated  depreciation and amortization as of June
30, 1999, are as follows:

Computers and Equipment                                    $  343,949
Furniture and Fixtures                                        142,015
Leasehold Improvements                                         60,352
Property Held Under Capital Lease                             147,623
                                                           ----------

Total - At Cost                                               546,316
Less: Accumulated Depreciation and Amortization               169,545

  Property and Equipment - Net                             $  376,772
  ----------------------------                             ==========

Depreciation expense for the six months ended June 30, 1999, was $95,222.

For property held under capital leases,  amortization expense, which is included
in depreciation expense, for the six months ended June 30, 1999, is $16,378, and
accumulated amortization is $37,378 at June 30, 1999.

[4] Intangible Assets

A breakdown of intangible assets as of June 30, 1999, is as follows:

                                   Accumulated
                                      Cost      Amortization       Net

Goodwill                            $12,013,571 $   547,986 $11,465,585
Customer List                       $   500,000 $    91,667 $   408,333

The  customer  list is  included in the  caption  "other  assets" on the balance
sheet.

Amortization  expense  for the six  months  ended  June 30,  1999,  amounted  to
$347,704.

[5] Due From Employees

The amounts due from employees of $13,301 at June 30, 1999, consist of loans and
advances which are non-interest bearing and have no stated terms of repayment.

[6] Employee Benefit Plan

The  Company  has  adopted a pension  plan  pursuant  to Section  401 [K] of the
Internal  Revenue  Code,  that  covers  substantially  all  employees.  Eligible
employees may contribute on a tax deferred basis a percentage of compensation up
to the maximum allowable amount.  Employee  contributions vest immediately.  The
Company  is  not  required  to  make  a  matching  contribution.  The  Company's
contribution to the Plan was 25% of the first $10,000 of employee  contributions
which  amounted to a charge to  operations  of $23,010 for the six months  ended
June 30, 1999.  The Company's  contributions  vest in 20%  increments  annually,
beginning  with two years of  service,  until  fully  vested  after six years of
service.


                                        9

<PAGE>



ELLIGENT CONSULTING GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #5 [Unaudited]


[7] Long-Term Debt and Capital Leases

Long-term debt at June 30, 1999, consists of the following:

Revolving line of credit (A)                                         $ 2,050,000

Revolving line of credit (B)                                             100,000

Note payable - bank, due in monthly installments of $4,167, including
  interest at the bank's prime rate plus 2%, due March 2001.  The
  note is collateralized by equipment.                                    87,500

Obligations under capital leases, collateralized by equipment originally
  costing $147,623, payable in monthly installments including
  interest at rates from 12.69% to 24.43%, through 2004.                 110,157
                                                                         -------

  Total                                                                2,347,657
  Less: Current Portion                                                2,244,984
                                                                       ---------

  Total                                                              $   102,673
  -----                                                              ===========

The revolving  line of credit (A) was due August 1, 1999,  and bears interest at
the bank's  prime rate plus 1.5%  payable  monthly.  The  Company may borrow the
lesser of 80% of eligible accounts  receivable,  as defined,  or $2,050,000.  At
June 30, 1999, the Company had no available credit under this line.

The revolving  line of credit (B) was due August 1, 1999,  and bears interest at
the bank's prime rate plus 1.5% payable  monthly.  At June 30, 1999, the Company
had no available credit under this line.

The prime rate at June 30,  1999,  was 7.75%.  For the six months ended June 30,
1999, the weighted average interest rate on short-term borrowings was 9.25%.

The following  schedule shows the future  maturities of long-term debt exclusive
of capital leases:

         Twelve Months ended
              June 30,
               2000                               $2,200,000
               2001                                   37,500
                                                  ----------
               Total                              $2,237,500
               -----                              ==========

The following  schedule  shows the minimum lease payments under capital lease as
of June 30, 1998:
         Twelve Months ended
              June 30,
               2000                               $   58,131
               2001                                   50,345
               2002                                   24,623
               2003                                    7,887
               2004                                    3,032
                                                  ----------
               Total                                 144,018
               Less: Amount Representing Interest     33,861
                                                  ----------
               Total                                 110,157
               Less: Current Portion                  44,984
                                                  ----------

               Long-Term Portion                  $   65,173
               -----------------                  ==========


                                       10

<PAGE>



ELLIGENT CONSULTING GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #6 [Unaudited]

[8] Related Party Transactions

The amount due from  stockholder  of $8,550 is  non-interest  bearing and has no
stated terms of repayment.

Amounts due from  affiliates  of $338,957  are  working  capital  loans due from
affiliated companies  controlled by a principal  stockholder of the Company. The
loans are non-interest bearing and have no stated terms of repayment.

The advances from  stockholders of $4,794,928 are working capital advances which
are non-interest bearing and have no stated terms of repayment. Imputed interest
expense of $121,162  was  recorded at 8% interest  for the six months ended June
30, 1999, and was recorded as an increase to capital in excess of par value.

Notes Payable - Stockholders represent amounts due to the former Stockholders of
CSI as a result of its  acquisition by Patra Capital.  Total notes payable as of
June 30, 1999,  are  $4,667,601,  with a  discounted  value of  $4,642,378.  The
remaining payments which have not been paid to date were due as follows:

                   $3,000,000       May 1, 1999
                   $1,667,601       August 1, 1999

The original principal value of the May 1, 1999, installment was $3,750,000. The
Company paid $750,000  related to the installment and has deferred the remaining
$3,000,000 balance.

The May 1,  1999,  and  August 1, 1999,  notes are  interest  free and have been
discounted at 8%. The imputed interest expense for the six months ended June 30,
1999, was $151,332.  All notes to stockholders are  collateralized by CSI common
stock.

[9] Commitments and Contingencies

Leases - The Company leases office space under an operating lease, which expires
March 2003. The lease  contains an option to renew for a term of five years.  In
addition to minimum rentals,  the Company is liable for additional rentals based
on its  proportionate  share of real estate  taxes and  operating  expenses,  as
defined.

The  Company  occupies  additional  office  space,  which is leased by a related
company, of which one of the stockholders is a stockholder of the Company, under
an operating lease which expires in April of 2002. Approximately 62% of the cost
of the lease is allocated to the Company.

Minimum annual rentals under the leases are as follows:

         Twelve Months ended
              June 30,
               2000                    $  462,754
               2001                       462,754
               2002                       462,754
               2003                        90,465
                                       ----------
               Total                   $1,478,727
               -----                   ==========

Total rent expense was $180,930 for the six months ended June 30, 1999.

Letter of Credit - The  Company  is  committed  under an  outstanding  letter of
credit with a bank which expires in November 1999 to secure the security deposit
on CSI office  space,  in the amount of $291,657.  The  agreement  automatically
extends for additional one year periods with a final expiration date of November
2003.


                                       11

<PAGE>



ELLIGENT CONSULTING GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #7 [Unaudited]

[9] Commitments and Contingencies [Continued]

Employment  Agreements - The Company is committed under employment agreements to
the two former  stockholders  of CSI.  The Company is  obligated to pay $250,000
each per year to the former stockholders.  The agreements terminate on August 1,
2001, and include automatic annual renewals at the end of each term.

[10] Fair Value of Financial Instruments

In assessing the fair value of these financial instruments, the Company has used
a variety of methods and  assumptions,  which were based on  estimates of market
conditions  and risks  existing  at that time.  For all  financial  instruments,
including cash, due from related  parties,  due to affiliates and  stockholders,
debt  maturing  within  one year,  it was  estimated  that the  carrying  amount
approximated fair value for these financial  instruments  because of their short
maturities.  The carrying amount of notes payable  long-term  approximates  fair
value which is based on current  rates at which the Company  could  borrow funds
with similar remaining maturities.

[11] Income Tax Benefit

The income tax benefit consists of the following:

Current Taxes:
  Federal                                                $      --
  State                                                         --
                                                         ---------

  Total                                                         --

Deferred Taxes:
  Federal                                                  219,800
  State                                                     63,810
                                                            ------

  Total                                                    283,600

  Income Tax Benefit                                     $ 283,600
  ------------------                                     =========

The tax effect of  significant  items  comprising  the  Company's  deferred  tax
liability at June 30, 1999, are as follows:

Deferred Tax Assets:
Deductibility of  Accrued Expenses                       $  80,900
Net Operating Loss Carry Forwards                           70,500
                                                         ---------

  Deferred Tax Asset                                     $ 151,400
  ------------------                                     =========

A reconciliation of income tax at the statutory rate to the Company's  effective
rate is as follows:

Statutory Federal Income Tax Rate                                (34)%
Nondeductible Amortization of Intangibles                         25%
Other                                                             (3)%
State Income Tax                                                  (6)%
                                                              ------

  Income Tax Benefit - Effective Rate                            (21)%
  -----------------------------------                         ======

[12] Common Stock

Pursuant to a reorganization and acquisition of Patra Capital and CSI, effective
as of August 1, 1998, the Company issued 12,950,000 additional common shares.

                                       12

<PAGE>



ELLIGENT CONSULTING GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #8 [Unaudited]


[13] Stock Options

An incentive stock option plan,  which was adopted by the Company,  in August of
1998,  reserves 1,500,000 shares of the Company's common stock.  Options granted
under the plan are intended to qualify as incentive stock options under existing
tax regulations.

The  following  table  summarizes  the  activity  in common  shares  subject  to
incentive stock options for the six months ended June 30, 1999:
                                                                Weighted Average
                                                  Number of SharesExercise Price

December 31, 1998 - Balance                               90,100   $    5.00

  Granted                                                173,400   $    1.60
  Exercised                                               22,000   $    0.05
  Canceled or Expired                                     12,350   $    5.00
                                                   -------------   ---------

  Options Outstanding at June 30, 1999                   229,150   $    2.90
  ------------------------------------             =============   =========

There were 100,000 options exercisable at June 30, 1999.

The following table summarizes  information  about stock options  outstanding at
June 30, 1999:

                                             Options Outstanding
                                Weighted-Average
                                 Number           Remaining     Weighted-Average
        Exercise Prices        Outstanding    Contractual Life    Exercise Price
        ---------------        -----------    ----------------    --------------

          $0.05 -8.00                229,150        9.72             $    2.90
                                ============

There was no  compensation  cost  recognized  in income for the six months ended
June 30, 1999.

Had  compensation  cost been  determined on the basis of fair value  pursuant to
FASB  Statement No. 123, net loss and loss per share would have been recorded as
follows:

                                                           1 9 9 9
Net Loss:
  As Reported                                          $ (1,172,840)
  Pro Forma                                            $ (1,188,646)
Loss Per Share:
  As Reported                                          $       (.08)
  Pro Forma                                            $       (.08)

The fair value of each option  granted is  estimated  on the grant date using an
option  pricing  model  which  takes into  account,  as of the grant  date,  the
exercise  price and the expected  life of the option,  the current  price of the
underlying stock and its expected  volatility,  expected  dividends on the stock
and the  risk-free  interest  rate  for the  expected  term of the  option.  The
following is the average of the data used for the following items:

                            Risk-Free                    Expected      Expected
                          Interest Rate  Expected Life  Volatility     Dividends
                          -------------  ------------- -----------     ---------

1999                         4.70%         3 Years         51.97%        N/A



                                       13

<PAGE>



ELLIGENT CONSULTING GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #9 [Unaudited]


[14] Subsequent Events

[A] Acquisition or Disposition of Assets - On July 27, 1999, Elligent Consulting
Group, Inc. [Elligent],  Elligent Consulting Services,  Inc. ["ECS"], a Delaware
corporation and Andreas Typaldos  ["Typaldos"] signed a Stock Purchase Agreement
providing for the acquisition of all of the issued and outstanding  common stock
of ECS in accordance  with the Delaware  General  Corporation Law ["The Delaware
Act"]. The Stock Purchase  Agreement  provides that Typaldos will receive $1.00.
Mr. Typaldos is also the President and Chief Executive Officer of Elligent.  Due
to common  ownership,  the acquisition will be accounting for at book value in a
manner similar to a pooling of interests.  In anticipation  of the  acquisition,
options to acquire common stock in ECS previously  granted to ECS employees were
converted to options to acquire common stock in Elligent at a price of $0.05 per
common stock.

[B]  Litigation  with CSI - During July 1999, a dispute arose between the former
owners of CSI and  Elligent  regarding  the future  management  of the  Company.
Resulting from that dispute,  a temporary  restraining order (TRO) was issued by
the United States District Court for the District of New Jersey. Pursuant to the
TRO,  the  former  owners  of CSI are now  running  that  company  on  behalf of
Elligent.  We expect to move the dispute to arbitration pursuant to the terms of
the original  merger  agreement dated August 1, 1998. As a result of arbitration
we anticipate that Elligent will sell CSI back to its original owners.


                                       14

<PAGE>



PART I.  FINANCIAL INFORMATION

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

During July 1999, a dispute  arose between the former owners of CSI and Elligent
regarding the future management of the Company.  Resulting from that dispute,  a
temporary restraining order (TRO) was issued by the United States District Court
for the District of New Jersey.  Pursuant to the TRO,  the former  owners of CSI
are now  running  that  company  on  behalf of  Elligent.  We expect to move the
dispute to arbitration  pursuant to the terms of the original  merger  agreement
dated August 1, 1998. As a result of  arbitration  we  anticipate  that Elligent
will sell CSI back to its original owners.

The remainder of management's discussion and analysis of financial condition and
results of operations should be read in light of the preceding disclosure.

Summary Financial Information

      The  following  table  contains  certain  selected  financial  data of the
Company and is qualified by the more detailed financial statements and the notes
thereto  provided in this report.  The  financial  data for the six months ended
June  30,  1999,  has  been  derived  from  the  Company's  unaudited  financial
statements,  which  statements  are included  elsewhere in this Report.  The pro
forma  (unaudited)  twelve month numbers provide an historic view of our revenue
growth.

Statement of Operations Data
                                         ($ in thousands)
                        Six months Twelve Months   Twelve Months Twelve Months
                           Ended      Ended           Ended         Ended
                         June 30,  December 31,    December 31,  December 31,
                          1 9 9 9    1 9 9 8         1 9 9 7       1 9 9 6
                          -------    -------         -------       -------
                          Actual    Pro Forma       Pro Forma     Pro Forma

Gross revenue           $ 11,835     $ 22,149      $  13,247      $ 9,306

Balance Sheet Data

                          As at
                        June 30, 1999
                          Actual
                      [in Thousands]

Current Assets           $  4,324
Total Assets               17,054
Current Liabilities        14,314
Long-Term Debt                103
Total Liabilities          14,417
Shareholders' Equity        2,637

Overview

      As part of a  Reorganization,  we changed our name to Elligent  Consulting
Group,  Inc. on July 31, 1998. On September 3, 1998,  with an effective  date of
August 1, 1998,  for accounting  purposes,  we issued  12,950,000  shares of its
restricted  common stock to the then current  shareholders  of Patra  Capital in
exchange for all of the issued and outstanding common stock of Patra Capital. At
that time, the management of Patra Capital became our management. The merger was
accounted for as a Recapitalization.

      On September 21, 1998,  effective August 1, 1998, for accounting purposes,
we, through our wholly owned  subsidiary,  Patra Capital,  purchased  Conversion
Services  International,  Inc. The operations of CSI are included in our results
of operations commencing on August 1, 1998. In

                                       15

<PAGE>



connection with the  acquisition of CSI, CSI's  shareholders  signed  three-year
employment agreements with us.

      The purchase price was $12,298,885  consisting of 1,100,000  shares of our
common stock (valued at  $2,640,000),  cash payments of $1,500,000  delivered at
the closing and notes payable of $8,500,000,  less amounts due from stockholders
acquired  in the  transaction  of  $582,399.  The net  discounted  value  of the
consideration,  net of the acquired loan from the stockholders,  was $7,561,292.
Interest at 8% was paid on the first two installments (November 24th and January
21st ). The  final two  payments  bear no  interest.  As of June 30,  1999,  the
remaining payments which have not been paid to date were due as follows:

      $3,000,000         May 1, 1999
      $1,667,601         August 1, 1999

      The  original  principle  value  of  the  May  1,  1999,  installment  was
$3,750,000.  The  Company  paid  $750,000  related  to the  installment  and has
deferred the remaining $3,000,000 balance.

      The May 1, 1999, and August 1, 1999, notes are interest free and have been
discounted at 8%. The imputed interest expense for the six months ended June 30,
1999, was $151,332.  All notes to stockholders are  collateralized by CSI common
stock.

      We expect to continue an acquisition  program to acquire other  technology
consulting  companies  constituting  a set of key  consulting  practice areas to
serve as a platform  ("platform") for further roll-up and consolidation  through
acquisition  of  similar  companies  in  the  future.   Through  these  platform
companies, we plan to offer our clients an enterprise-type offering of services.
These   services  will  include   management   consulting,   business   function
reengineering, mission critical application rollouts and package implementation,
database and  datawarehousing  consulting,  networking and interim and permanent
staffing or support.

      We will then continue our development  through  continued  internal growth
from the acquired platform companies and additional rollup  acquisitions  within
each of our service offering areas.  Through this expansion and growth strategy,
we plan to develop into a leading vertically  integrated IT consulting  services
company.

      We plan to enter a business segment that has significant  competition from
other much larger  companies.  We expect to offer our services to large national
and multi-national companies. We own no copyrights or patents.

      Our corporate  headquarters  are located in New York City,  New York.  CSI
maintains its offices in East Hanover, New Jersey.

      We plan to continue an expansion strategy through (i) the acquisition of a
select number of technology  consulting  companies with  complementary  areas of
expertise and (ii)  internal  growth from the acquired  operating  subsidiaries.
While there is significant risk as a result of potential external problems, lack
of available capital,  changing economic and market conditions,  and significant
competition from much larger companies, through this expansion strategy, we plan
to develop into a leading information  technology  services company.  Key to the
acquisition  strategy is the retention of the acquired company's  management and
staff.

      For the  six-month  period  ended June 30,  1999,  we had revenue of $11.8
million versus $9.9 million in the year earlier period,  an increase of 20%, and
a net loss $1.1 million.


                                       16

<PAGE>




      The major components of the six-month loss are as follows:

                                                           $ in thousands

Operating Income                                              $   136
                                                              -------

Depreciation, Amortization and Interest                           851
Income Tax Benefit                                               (284)
Management and Holding Company Expenses                           742
                                                              -------

Subtotal Acquisition Related and Other Expenses                 1,309
                                                              -------

Net Loss                                                    $  (1,173)
                                                            =========

      The management and holding company expenses represent costs related to new
acquisitions  in  progress  and  efforts  to locate  equity  and debt  financing
required to achieve our growth goals. The remaining  analysis of results focuses
on the operations of our sole subsidiary company, CSI. The unaudited information
for this transition period is not necessarily  indicative of the results for the
entire year, nor should it be used to project our operations for future dates or
periods.

      The  financial   statements   presented  herein  represent  the  financial
statements of Elligent  Consulting  Group,  Inc. and its wholly owned subsidiary
CSI. The CSI acquisition was accounted for as of August 1, 1998, on the purchase
method of accounting and therefore the financial  statements  only reflect CSI's
operations  since that  date.  In order to provide  investors  with  appropriate
historical  data,   Management's   discussion  will  include   comparative  data
reflecting  the  results of  operations  for CSI during the year  preceding  its
acquisition by us.

      CSI  has  been  in  the  business  of  providing  information   technology
consulting  services for approximately nine years. CSI provides high-end project
management, applications implementation, data warehousing,  consulting, internet
and information  technology ("IT") staffing services.  CSI has recently expanded
its operation to accommodate  additional  consultant/employees  and new in-house
training   facilities.   CSI  currently  has  approximately  180  employees  and
consultants,  and expects that number to increase as its business  grows.  CSI's
revenues for 1998 increased by 70% over 1997, and the current annual revenue run
rate is $24 million.

      For the six months ended June 30, 1999,  we had revenues of $11.8  million
from our  operating  subsidiary  CSI  reflecting  a 20%  increase  from the $9.9
million revenues during the  corresponding  period in 1998. The cost of revenues
was $7.8 million  resulting in a gross margin from operations of $4.0 million or
34%.

      The results of operations  for CSI for the six months ended June 30, 1999,
and 1998, are as follows:

                                                     [In Thousands]
                                                    Six months ended
                                                        June 30,
                                                   1 9 9 9     1 9 9 8
                                                   -------     -------

Revenue                                            $ 11,835     $  9,860
Cost of Revenue                                       7,797        6,312
                                                   --------     --------
Gross Margin                                          4,038        3,548
Operating Expense [Excluding Depreciation and
  Amortization]                                       3,902        3,344
                                                   --------     --------

  Operating Income                                 $    136     $    204
                                                   ========     ========

      CSI  continues to show  significant  growth in revenues in 1999 versus the
comparable  period a year ago.  Operating  expenses for 1999 include  additional
staffing costs to further develop business practice

                                       17

<PAGE>



and channel management  capabilities.  We expect operating expenses as a percent
of revenue to decrease during the remainder of 1999.

Liquidity and Financial Position

      As of June 30, 1999, we had a working capital deficit of $10 million.  Our
working capital  deficit  reflects (i) $2.6 million due to a bank related to the
revolving lines of credit,  collateralized by our accounts receivable, and other
loans,  (ii) accounts payable and accrued expenses of $2.1 million,  (iii) notes
payable to  stockholders  of $4.6 million related to the acquisition of CSI, and
(iv) amounts due to related parties of $4.8 million, relative to the acquisition
of CSI,  working  capital  advances  and the funding of costs  related to future
acquisitions  in  progress.  These  latter  amounts are  principally  due to our
principal stockholder and entities owned or controlled by him.

      We believe  that  sufficient  sources of funds  exist to cover the working
capital  needs of the  Company.  The  principal  sources of these  funds are (i)
projected cash flow from operations,  (ii) the revolving lines of credit,  (iii)
the personal  assets of a principal  stockholder  and related  entities owned or
controlled  by him, (iv) the issuance of the  Company's  common  stock,  and (v)
additional financing sources.

      Our principal  stockholder  has committed to providing the funds necessary
to cover the  remaining  note payments due on the purchase of CSI, to the extent
that the required funds cannot be obtained from other sources.  We are presently
engaged in  negotiations  with respect to additional  financing  sources.  These
include (i) negotiating  with four financial  institutions for a new asset-based
line of credit to replace the  current  revolving  lines of credit.  This credit
line  will  provide  the  working  capital  resources  needed  for  the  current
operations and the  requirements  that will exist after the next several planned
acquisitions;  and (ii) a private  placement of our common stock or other equity
securities  to  accredited  investors  during  1999,  that will  raise up to $20
million.  These funds will be used to provide the acquisition  capital necessary
to fund the  cash  portion  of the  purchase  price  for the  currently  planned
acquisitions.

      However, no assurance can be given that we will be successful in obtaining
such  financing,  and the  failure to obtain  necessary  financing  could have a
material adverse effect on our acquisition  timetable.  At the present time, our
management  believes that our current sources of funding are adequate to support
our growth and that of CSI. The current  sources are not adequate to support our
acquisition plans.

Inflation

      Inflation  has not had a material  effect  upon the  Company's  results of
operations to date. In the event the rate of inflation should  accelerate in the
future,  it is  expected  that costs in  connection  with the  provision  by the
Company of its  services  and products  will  increase,  and, to the extent such
increased  costs are not offset by increased  revenues,  the  operations  of the
Company may be adversely affected.

Year 2000

      General  Description  of the Year  2000  Problem.  The Year  2000  problem
concerns the inability of certain computer  systems to  appropriately  recognize
the Year  2000  when the last two  digits  of the year are  entered  in the date
field. Our date critical  functions related to the Year 2000 and beyond,  may be
adversely  affected  unless  these  computer  systems  are or  become  Year 2000
compliant.

      Our State of  Readiness.  We are a service  business  and do not use major
computer  systems in our business.  Our computer  needs are satisfied  through a
local area network  comprised of personal  computers and a server,  all of which
are Year 2000 compliant.

      Effect of Third Party  Readiness.  Our Year 2000  compliance  is partially
dependent  upon key third  parties  also being Year 2000  compliant  on a timely
basis. We provide consulting  services and we could be adversely affected by the
Year 2000 problem if computer systems of third parties such as banks,  suppliers
and  others  with whom we do  business  fail to  address  the Year 2000  problem
successfully.  For example, in the course of rendering our consulting  services,
we may be adversely  affected by, among other things,  warranty and other claims
made by our  suppliers  related  to  product  failures  caused  by the Year 2000
problem,  the  disruption  or inaccuracy of data provided to us by non-Year 2000
compliant third parties, and the failure of our service providers to become Year
2000 compliant.


                                       18

<PAGE>



      In an effort to evaluate and reduce our  exposure in this area,  we intend
to make an inquiry of vendors and other  business  partners about their progress
in identifying and addressing  problems that their computer  systems may face in
correctly  processing date information  related to the Year 2000. In particular,
we will seek to obtain  statements  from a  substantial  majority of our vendors
that  they  are Year  2000  compliant  or are  unaffected  by  "date  sensitive"
information.  We estimate that this process, including analysis of responses and
follow up interviews will be complete on or before September 30, 1999.

      Our  management  believes  that the  purchasing  patterns of customers and
prospective  customers might be affected by Year 2000 issues. Many companies may
need to modify or upgrade  their  information  systems to address  the Year 2000
problem.  The  effects of this issue and of the  efforts by other  companies  to
address it are unclear.  Many companies are expending  significant  resources to
correct  their  current  software  systems  for  Year  2000  compliance.   These
expenditures  might result in reduced funds  available to purchase  services and
products such as those that we offer.

      Risks. We have no reason to believe that our exposure to the risks or lack
of supplier and customer Year 2000 readiness is any greater than the exposure to
such risks that affect our  competitors  generally.  However,  if a  significant
number of our key vendors,  customers  and other  business  partners  experience
business  disruptions  as a result of their lack of Year 2000  readiness,  their
problems  could have a material  adverse  effect on our  financial  position and
operations.  In  addition,  if all Year 2000 issues  within our business are not
properly  identified there can be no assurance that the Year 2000 issue will not
have a  material  adverse  effect on our  results  of  operations  or  financial
position.

      Our cost  estimates  and time frames will be  influenced by our ability to
identify  Year 2000  problems,  the nature of  programming  required  to fix any
problems,  and the compliance  success of third parties.  For those reasons,  no
assurance can be given at this point that our computer  system will be Year 2000
compliant in a timely  manner or that we will not incur  significant  additional
expenses pursuing Year 2000 compliance.

Forward Looking Information

      This report contains certain  forward-looking  statements and information.
The cautionary statements made in this report should be read as being applicable
to all related forward-looking statements wherever they appear.  Forward-looking
statements, by their very nature, include risks and uncertainties.  Accordingly,
our actual results could differ  materially from those discussed  herein. A wide
variety of factors  could  cause or  contribute  to such  differences  and could
adversely impact  revenues,  profitability,  cash flows and capital needs.  Such
factors,  many of which are beyond  our  control,  include  the  following:  our
success in obtaining new contracts;  the volume and type of work orders that are
received  under such  contracts;  levels of, and  ability to,  collect  accounts
receivable; availability of trained personnel and utilization of our capacity to
complete work;  competition and competitive pressures on pricing;  availability,
cost and terms of debt or  equity  financing;  and  economic  conditions  in the
United States and in the regions served.

Quantitative and Qualitative Disclosures about Market Risk

      The  Company  is not  exposed to  material  risk  based on  interest  rate
fluctuation, exchange rate fluctuation, or commodity price fluctuation.

                                       19

<PAGE>



PART  II.   OTHER INFORMATION

Item  2.    Changes in Securities and Use of Proceeds

During the six months ended June 30, 1999,  the Company issued 250,001 shares of
common stock with a value of $1,500,000 to related  parties in settlement of the
January 21, 1999,  installment  of notes payable  related to the  acquisition of
CSI.  This  stock  issuance  represented  payment  in full  for  the  $1,500,000
installment.  The liquidation of debt resulted in an addition to Common Stock of
$250, and an increase in Paid in Capital of $1,499,750.

On April 15, 1999, the Company  issued 63,000 shares of restricted  common stock
in  connection  with an  agreement  to  obtain  marketing  services.  The  value
associated with the issuance of these shares was $378,000.


Item  6.    Exhibits and Reports on Form 8-K


                  NONE


INDEX TO EXHIBITS

                  NONE

                                       20

<PAGE>


                                   SIGNATURES


In  accordance  with  Section 13 or 15(d) of the Exchange  Act;  the  Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                             ELLIGENT CONSULTING GROUP, INC.




Date: August 23, 1999                        By: /s/ Edwin T. Brondo
---------------------                        -----------------------
                                                Edwin T. Brondo
                                                Chief Financial Officer

In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  Registrant and in the capacities and on the
dates indicated.


      Signature                           Title(s)

By:  /s/ Edwin T. Brondo                        Chief Financial Officer
---  -------------------                        -----------------------
        (Edwin T. Brondo)




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