<PAGE>

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

                                   FORM 10-QSB
-------------------------------------------------------------------------------

(Mark one)
    XX
----------              QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                        FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999

----------              TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                        EXCHANGE ACT OF 1934

            For the transition period from ___________ to ___________

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

                       Commission File Number: 33-14982-LA

                         BREAKTHROUGH ELECTRONICS, INC.
        (Exact Name of small business issuer as specified in its charter)

         NEVADA                                             88-0226208
------------------------                              ------------------------
(State of Incorporation)                              (IRS Employer ID Number)


              3179 WEST SAHARA, SUITE D-21, LAS VEGAS, NEVADA 89102
              -----------------------------------------------------
                    (Address of principal executive offices)

                                 (702) 368-0664
                                 --------------
                           (Issuer's telephone number)

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

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or 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____ NO XX

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date:

         710,536 Shares as of August 10, 1999.

Transitional Small Business Disclosure Format (check one):   YES_____   NO  XX



<PAGE>

                         BREAKTHROUGH ELECTRONICS, INC.

                Form 10-QSB for the Quarter ended March 31, 1999
<TABLE>
<CAPTION>
                                Table of Contents
<S>                                                                                           <C>
PART I - FINANCIAL INFORMATION                                                                PAGE

         Item 1.  Financial Statements                                                         3

         Item 2.  Management's Discussion and Analysis or Plan of Operation                    11


PART II - OTHER INFORMATION

         Item 1.  Legal Proceedings                                                            12

         Item 2.  Changes in Securities                                                        12

         Item 3.  Defaults Upon Senior Securities                                              12

         Item 4.  Submission of Matters to a Vote of Security Holders                          12

         Item 5.  Other Information                                                            12

         Item 6.  Exhibits and Reports on Form 8-K                                             12
</TABLE>

SIGNATURES


<PAGE>

                         BREAKTHROUGH ELECTRONICS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                              STATEMENTS OF INCOME
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                             From Inception
                                                                                            on July 31, 1986
                                                        For the Three Months                    Through
                                                           Ended March 31,                      March 31,
                                              -----------------------------------------    ------------------
                                                     1999                   1998                  1999
                                              -------------------    ------------------    ------------------
<S>                                           <C>                    <C>                   <C>
REVENUE                                       $              0.00    $             0.00    $           78,000
                                              -------------------    ------------------    ------------------
EXPENSES                                                    4,534                  0.00               887,155
                                              -------------------    ------------------    ------------------
   TOTAL EXPENSES                                           4,534                  0.00               887,155
                                              -------------------    ------------------    ------------------
NET (LOSS) OR PROFIT                          $           (4,534)    $             0.00    $        (809,155)
                                              ===================    ------------------    ==================

BASIC LOSS PER SHARE                          $              0.01    $             0.00

                                              ===================    ==================
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING                                        710,536               710,536
                                              ===================    ==================
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                        3
<PAGE>

                         BREAKTHROUGH ELECTRONICS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                       STATEMENTS OF STOCKHOLDERS' EQUITY
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                                                    Deficit
                                                                                                                  Accumulated
                                                        Common Stock                        Additional               During
                                           -----------------------------------------         Paid-In               Development
                                                 Shares                Amount                 Capital                 Stage
                                           -----------------------------------------    -------------------    ------------------
<S>                                        <C>                   <C>                    <C>                    <C>
Sale Stock - Insiders
July 31, 1986                                          11,394    $                11    $            22,777
Deficit 1986                                                                                                                (152)
                                           ------------------    -------------------    -------------------    ------------------
Balance December 31, 1986                              11,394                     11                 22,777                 (152)
                                           ==================    ===================    ===================    ==================
Sale Stock - Insiders
April 10, 1987                                          7,750                      8                 15,492

Issuance Stock - Insiders
Technology Rights                                     130,000                    130                  (130)

Sale Stock - Public
October 2, 1987                                        20,150                     20                201,480

Sale Stock - Public
November 2, 1987                                       24,500                     25                179,433

Exercise Stock Warrants
December 17, 1987                                         406                      0                  6,093

Issuance Stock - Services
December 27, 1987                                      28,000                     28                 55,972

Deficit 1987                                                                                                            (103,524)
                                           ------------------    -------------------    -------------------    ------------------
Balance December 31, 1987                             222,200                    222                481,117             (103,676)
                                           ==================    ===================    ===================    ==================
Exercise Stock Warrants
February 1, 1988                                        2,240                      2                 30,654
Deficit 1988                                                                                                            (188,157)
                                           ------------------    -------------------    -------------------    ------------------
Balance December 31, 1988                             224,440                    224                511,771             (291,833)
                                           ==================    ===================    ===================    ==================
Deficit 1989                                                                                                            (359,617)
                                           ------------------    -------------------    -------------------    ------------------
Balance December 31, 1989                             224,440                    224                511,771             (651,450)
                                           ==================    ===================    ===================    ==================
Issuance Stock
Debt Exchange                                          50,000                     50                 99,950

Deficit 1990                                                                                                              (9,108)
                                           ------------------    -------------------    -------------------    ------------------
Balance December 31, 1990                             274,440                    274                611,721             (660,558)
                                           ==================    ===================    ===================    ==================
Deficit 1991                                                                                                                (159)
                                           ------------------    -------------------    -------------------    ------------------
Balance December 31, 1991                             274,440                    274                611,721             (660,717)
                                           ==================    ===================    ===================    ==================
Deficit 1992                                                                                                                 (85)
                                           ------------------    -------------------    -------------------    ------------------
</TABLE>

               See accountants' audit report and notes to financial statements.

                                        4
<PAGE>


                         BREAKTHROUGH ELECTRONICS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                       STATEMENTS OF STOCKHOLDERS' EQUITY
                                  (UNAUDITED)
<TABLE>

<S>                                        <C>                   <C>                    <C>                    <C>
Balance December 31, 1992                             274,440                    274                611,721             (660,802)
                                           ==================    ===================    ===================    ==================
Issue Stock
Technology Acquisition                                 30,000                     30                  2,970

Issue Stock
Technology Acquisition                                  9,500                     10                    940

Issue Stock
Debt Exchange                                          50,000                     50                 49,092

Deficit 1993                                                                                                                (335)
                                           ------------------    -------------------    -------------------    ------------------
Balance December 31, 1993                             363,940                    364                664,723             (661,137)
                                           ==================    ===================    ===================    ==================
Issue Stock
Technology Acquisition                                 30,000                     30                   (30)

Insider Loans Payable Forgiven                                                                       97,253

Deficit 1994                                                                                                            (114,047)
                                           ------------------    -------------------    -------------------    ------------------
Balance December 31, 1994                             393,940                    394                761,946             (775,184)
                                           ==================    ===================    ===================    ==================
Issuance Stock
Stock Issuance
Services                                               53,000                     53                   (53)

Debt Forgiveness Insider to Paid In
Capital                                                                                              16,361

Deficit 1995                                                                                                             (11,097)
                                           ------------------    -------------------    -------------------    ------------------
Balance December 31, 1995                             446,940                    447                778,254             (786,281)
                                           ==================    ===================    ===================    ==================
Deficit 1996                                                                                                                    0
                                           ------------------    -------------------    -------------------    ------------------
Balance December 31, 1996                             446,940                    447                778,254             (786,281)
                                           ==================    ===================    ===================    ==================
Deficit 1997                                                                                                              (6,000)
                                           ------------------    -------------------    -------------------    ------------------
Balance December 31, 1997                             446,940                    447                778,254             (792,281)
                                           ==================    ===================    ===================    ==================
Stock Issuance Services                               171,198                    171                 16,949

Stock Cancellations                                 (118,139)                  (118)                    118

Deficit 1998                                                                                                             (12,340)

Balance December 31, 1998                             500,000                    500                795,321             (804,621)
                                           ==================    ===================    ===================    ==================

Stock Issuance Services                                10,536                     11                    (1)

Stock Sale                                            200,000                    200                 11,800

Balance March 31, 1999                                710,536    $               711    $           807,120    $        (809,155)
                                           ==================    ===================    ===================    ==================
</TABLE>

        See accountants' audit report and notes to financial statements.
                                       5
<PAGE>

                         BREAKTHROUGH ELECTRONICS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                               March 31,                    December 31,
                                                                                 1999                           1998
                                                                       ------------------------     -----------------------
<S>                                                                    <C>                          <C>
CURRENT ASSETS
Cash                                                                   $                  7,756     $                   780
                                                                       ========================     =======================

CURRENT LIABILITIES
Accrued Taxes                                                                             7,580                       7,580
Accounts Payable                                                                          1,500                       2,000
                                                                       ------------------------     -----------------------
TOTAL LIABILITIES                                                                         9,080                       9,580
                                                                       ========================     =======================

STOCKHOLDERS' EQUITY (DEFICIT)

Common Stock, Authorized 50,000,000 Shares at $.001
Par Value, 710,536 and 500,000 Issued and Outstanding                                       711                         500

Additional Paid In Capital                                                              807,120                     795,321

Retained Deficits                                                                     (809,155)                   (804,621)
                                                                       ------------------------     -----------------------
TOTAL STOCKHOLDERS' DEFICIT                                                             (1,324)                     (8,800)
                                                                       ========================     =======================
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                               $                  7,756     $                   780
                                                                       ========================     =======================
</TABLE>


        See accountants' audit report and notes to financial statements.
                                       6
<PAGE>

                         BREAKTHROUGH ELECTRONICS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                                     From Inception
                                                                                                    on July 31, 1986
                                                               For the Three Months                      Through,
                                                                1986 Ended March 31,                     March 31,
                                                             1999                  1998                   1999
                                                      ------------------    -------------------    -------------------
<S>                                                   <C>                   <C>                    <C>
CASH FLOWS PROVIDED BY OPERATIONS

Net Income (Loss)                                     $          (4,534)    $                 0    $         (809,155)

Increase (Decrease):

Other Assets                                                           0                      0                      0

Accrued Expenses                                                       0                      0                  7,580

Accounts Payable                                                   (500)                (6,000)                  1,500
                                                      ------------------    -------------------    -------------------
Net Cash Flow (Outlay) From Operations                           (5,034)                (6,000)              (800,075)
                                                      ==================    ===================    ===================
CASH FLOWS FROM FINANCING
ACTIVITIES

Proceeds From:

Sale of Common Stock                                                 210                      0                    711

Paid in Capital                                                   11,800                      0                807,120
                                                      ------------------    -------------------    -------------------
                                                                  12,010                      0                807,831
                                                      ==================    ===================    ===================
NET INCREASE (DECREASE) IN CASH                                    6,976                      0                  7,756

CASH AT THE BEGINNING OF PERIOD                                      780                      0                      0
                                                      ------------------    -------------------    -------------------
CASH AT END OF PERIOD                                 $            7,756    $                 0    $             7,756
                                                      ==================    ===================    ===================
</TABLE>


             See accountants' audit report and notes to financial statements.
                                       7
<PAGE>

                         BREAKTHROUGH ELECTRONICS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                       FOR THE PERIOD ENDED MARCH 31, 1999

NOTE 1 -- ACCOUNTING POLICIES

     Organization of the Company

     Breakthrough Electronics, Inc., formerly Golden Queens Mining Company,
was incorporated on July 31, 1986 under the laws of the' State of Nevada. The
Company changed its name to Breakthrough Electronics, Inc. on June 10, 1987. The
change was in response to the Company's new business focus of developing an
electronic telephone screening device then known as "Phoneguard". Phoneguard was
acquired through the issuance of common stock with no acquisition cost assigned.
The Company is still in the development stage, as it has virtually no revenue to
date.

     The Company is authorized to issue up to 50,000,000 shares of common
stock, $.001 par value. Over the years, the Company has raised capital under
both public offerings as well as private stock sales. The Company intended to
utilize capital raised to complete the research and development of Phoneguard,
and then implement a marketing plan thereafter. As of the reporting date, the
Company has expended all of the capital raised, without completing the intended
task. As of the reporting date, the Company has ceased any and all operations,
and its technology has rapidly become outdated. Currently, the Company's sole
business focus, is the contemplation of acquiring, or being acquired by, an
existing company via either purchase or merger. The Company has begun
preliminary discussions with potential candidate companies, but has not as of
the date of this report come to any contractual arrangement.

     The financial statements reflect certain capital equipment items which
have been fully expensed either from previous depreciation expense or loss on
asset abandonment. The total original expenditures for all capital equipment has
been included in losses to date, and is not segregated in the statement of cash
flows.


                                       8
<PAGE>

                         BREAKTHROUGH ELECTRONICS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                       FOR THE PERIOD ENDED MARCH 31, 1999


NOTE 2 -- COMMON STOCK PUBLIC OFFERING

     On October 2 and November 2, 1987 the Company completed a public
offering which raised $ 201,500 and $ 245,000 through the sale of 503,750 and
612,500 units respectively. Each unit consisted of 4 shares of common stock
and 1 warrant to purchase common stock. on December 17, 1987, 162,500
warrants were exercised to purchase 40,625 shares of common stock for a total
of $ 6,094. Four warrants entitled the shareholders to purchase 1 share of
common stock at $.15 per share. The Company incurred approximately $ 65,000
in costs related to this offering.

     On December 28, 1987 the Company issued a Notice of Call of Warrants to
the shareholders. The call price of the warrant was $.001 per warrant. All
warrants which were not exercised or tendered back to the Company by February 1,
1988 expired.


     On February 1, 1988, 895,976 warrants were exercised to purchase 223,994
shares of common stock for $30,656.

NOTE 3 -- INCOME TAXES

     The company has the following net operating loss and research credit
carryforwards expiring as follows:

<TABLE>
<CAPTION>

                                           Net Operating Loss                 Research Credit
<S>                                        <C>                                <C>
December 31, 2001                          $            152                   $
             2002                                   105,804
             2003                                   196,227                          8,730
             2004                                   114,047
</TABLE>

        The company has filed annual corporate tax returns through the tax year
1993 only.


                                       9
<PAGE>

                         BREAKTHROUGH ELECTRONICS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                       FOR THE PERIOD ENDED MARCH 31, 1999




NOTE 4    GENERAL INFORMATION

     The company entered into an agreement with Cipher Voice, Inc.,(CVI)
whereby it granted CVI an exclusive license to the use of the Company's
Phoneguard technology. The license agreement provided for a profit sharing
arrangement based on anticipated future sales of the Phoneguard. CVI also raised
capital through a public offering during 1994. The intent of CVI was to attempt
to complete the research and development of Phoneguard. As was the case with the
Company, CVI never completed its intended task, and expended all of its capital
and has ceased operations as of the reporting date. CVI has subsequently been
purchased by a third party unrelated company. Both the Company and CVI were
founded by Barry Rose, who at one time served as President of both CVI and the
Company.

     It is uncertain, as of the issuance date of these financial statements,
as to the marketability or value of the research and development efforts of the
Company or CVI. Management has indicated that it feels that given the rapid
advancements ongoing in the technology field, as well as the passage of time,
that there is limited or no value to the technology. If the Company were to be
acquired by another entity, consideration should be given to any residual value
of the research and development to date.

     During 1995, the company and Barry Rose agreed to an arrangement whereby
Rose returned 11,813,850 shares of common stock to the company in the form of
Treasury Stock.

     During August 1998, the Company obtained consents from a majority of
stockholders authorizing a reverse split of the Company's Common Stock, on a 1
for 100 basis. The split became effective during February 1999. All references
to shares outstanding and earnings per share have been adjusted to reflect the
effect of the reverse split on a retroactive basis.


                                       10
<PAGE>

                                 PART I - ITEM 2

         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

        (1)       CAUTION REGARDING FORWARD-LOOKING INFORMATION

         This quarterly report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of the Company
or management as well as assumptions made by and information currently available
to the Company or management. When used in this document, the words
"anticipate," "believe," "estimate," "expect" and "intend" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. Such statements reflect the current view of
the Company regarding future events and are subject to certain risks,
uncertainties and assumptions, including the risks and uncertainties noted.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described herein as anticipated, believed, estimated, expected or
intended. In each instance, forward-looking information should be considered in
light of the accompanying meaningful cautionary statements herein.

        (2)       RESULTS OF OPERATIONS

         Breakthrough Electronics, Inc. (Company) was incorporated as "Queens
Mining Company" on July 31, 1986 under the laws of the State of Nevada,
primarily for the purpose of exploration, development and production of certain
mining properties located in Esmeralda County, Nevada. In July, 1987, the
Company changed its name to "Breakthrough Electronics, Inc.," terminated its
activities in the mining business, and began efforts to develop and market
electronic products, including a telephone device designed to screen calls,
acquired from its then President.

         The Company has had no operations or significant assets or liabilities
over the past several years. Accordingly, the Company is dependent upon
management and/or significant shareholders to provide sufficient working capital
to preserve the integrity of the corporate entity during this phase. It is the
intent of management and significant shareholders to provide sufficient working
capital necessary to support and preserve the integrity of the corporate entity.

        (3)       LIQUIDITY AND CAPITAL RESOURCES

         The Company has no operations, and essentially no assets or liabilities
and, accordingly is fully dependent upon its controlling shareholder for
operating capital. During the period(s) presented herein, the Company was
dormant and no advances were made or expenses paid on the Company's behalf.

         The Company has no specific plans or future capital requirements due to
its dormant state. However, the Company will seek to enter into a business
acquisition or reorganization with an enterprise, as yet unidentified. At such
time as the Company enters into a transaction, of which there can be no
assurance, the Company will require additional capital.


                                       11
<PAGE>

                           PART II - OTHER INFORMATION

        ITEM 1 - LEGAL PROCEEDINGS

         None.

        ITEM 2 - CHANGES IN SECURITIES

         In February, 1999, the Company sold a total of 200,000 shares of
commons stock to Larry Grobstein, Secretary/Treasurer, for the sum of $10,000
cash, to provide the Company with necessary operating capital. In addition, in
February, 1999, the Company issued 5,000 shares of common stock each to Larry
Sapperstein, President and a director, and Anthony Adimey, a director, for
services on behalf of the Company. None of these transactions can be considered
the result of arms' length negotiations.

        ITEM 3 - DEFAULTS ON SENIOR SECURITIES

         None.

        ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         The Company has held no regularly scheduled, called or special meetings
         of shareholders during the reporting period.

        ITEM 5 - OTHER INFORMATION

         None.

        ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

         None.


                                       12
<PAGE>

                                   SIGNATURES

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

                                          BREAKTHROUGH ELECTRONICS, INC.


August 14, 1999                           /s/ Lawrence A. Sapperstein
                                          --------------------------------------
                                          Lawrence A. Sapperstein
                                          President and Chief Accounting Officer

                                          BREAKTHROUGH ELECTRONICS, INC.


August 14, 1999                           /s/ Lawrence Grobstein
                                          --------------------------------------
                                          Lawrence Grobstein
                                          Secretary/Treasurer


                                       13