US SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                   FORM 10-QSB/A


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

                 For the quarterly period ended January,31 1999.
                        Commission File Number: 0-27382.


                            SC&T International, Inc.
           ----------------------------------------------------------
           (Exact name of small business as specified in its charter)


         Arizona                                             86-0737579
-------------------------------                    -----------------------------
(State or other jurisdiction of                    (IRS Employer Identification)
incorporation or organization)


          7625 East Redfield Road, Suite 200, Scottsdale, Arizona 85260
          -------------------------------------------------------------
                    (Address of principal executive offices)


                                 (602) 368-9490
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


                 15695 North 83rd Way, Scottsdale, Arizona 85260
                 -----------------------------------------------
                 (Former name, former address and former fiscal
                       year, if changed since last report)

         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 for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.Yes [X] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

         State the number of shares  outstanding of each of the issuer's classes
of common equity as of March 9, 1999 latest practicable date:  44,118,268 shares
of Common Stock, par value $0.01 per share.

    Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
<PAGE>
                            SC&T INTERNATIONAL, INC.
                                 AND SUBSIDIARY


                                                                            Page
                                                                            ----
PART I FINANCIAL INFORMATION

  Item 1. Financial Information

         Consolidated Balance Sheet as of January 31, 1999                   3

         Consolidated Statements of Operations for the Three Months
             Ended January 31, 1999 and January 31, 1998                     5

         Consolidated Statement of Shareholders' Equity for the Three
             Months Ended January 31, 1999                                   6

         Consolidated Statements of Cash Flows for the Three Months
             Ended January 31, 1999 and January 31,1998                      7

         Notes to Consolidated Financial Statements                          8

  Item 2. Management's Discussion and Analysis                              10

PART II OTHER INFORMATION

  Item 1. Litigation                                                        14

  Item 2. Change in Securities                                              14

  ITEM 3. Defaults Upon Senior Securities                                   14

  Item 4. Submission of Matters to a Vote of Security-Holders               14

  Item 5. Other Information                                                 15

  Item 6. Exhibits & Reports on Form 8-K                                    15


                                       2
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                            SC&T INTERNATIONAL, INC.
                                 AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEET
                                 January 31,1999


                                     ASSETS

Current assets:
   Cash                                                               $   50,919
   Receivables                                                         1,841,718
   Inventory                                                           1,491,665
   Other current assets                                                  236,964
                                                                      ----------
       Total Current Assets                                            3,621,266

Property and equipment, less accumulated
 depreciation of $455,292                                                512,929

Other assets                                                             149,038
                                                                      ----------
       Total Assets                                                   $4,283,233
                                                                      ==========

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

                                       3
<PAGE>
                            SC&T INTERNATIONAL, INC.
                                 AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEET
                                 January 31,1999

                      LIABILITIES AND SHAREHOLDERS' EQUITY


Current liabilities:
   Accounts payable                                                 $ 2,131,780
   Common stock payable                                                 103,130
   Advances From Factor                                                 215,443
   Accrued expenses                                                     268,125
                                                                    -----------

      Total current liabilities                                       2,718,478

Commitments and contingencies Deferred Income-Long Term                 175,808

   Contingent Liability                                                 113,069

Shareholders' equity:
  Common stock, $0.01 par; authorized 75,000,000 shares;
   26,118,268 shares issued and outstanding                             261,183

  Series A preferred stock, $0.01 par; authorized
   5,000,000 shares; 16 shares issued and outstanding

  Series B preferred stock, $100,000 Stated Value, 15 shares
   issued and outstanding                                             1,500,000

   Additional paid-in capital                                        13,250,382

   Currency translation                                                (123,755)

   Accumulated deficit                                              (13,611,932)
                                                                    -----------

      Total shareholders' equity                                      1,275,878
                                                                    -----------

      Total Liabilities and Equity                                  $ 4,283,233
                                                                    ===========

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

                                       4
<PAGE>
                            SC&T INTERNATIONAL, INC.
                                 AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS
              For the Three Months Ended January 31, 1999 and 1998

                                                       1999            1998
                                                   ------------    ------------
Net sales                                          $  1,067,454    $  2,375,262

Cost of goods sold                                      587,004       1,519,916
                                                   ------------    ------------

Gross profit                                            480,450         855,346

Selling, general and administrative expenses:
    Payroll and payroll taxes                           327,099         335,740
    Selling and promotion                               182,832         294,018
    Office and administrative                           272,291         364,779
    Research and development                             19,111          55,974
    Consulting fees                                      16,669          33,828
    Other                                               241,358         105,485
                                                   ------------    ------------

Total Operating Expenses                              1,059.360       1,189,824

Loss from operations                                   (578,910)       (334,478)
Gain from sale of assets                                  5,919
Other income (expense)
    Royalty income                                       21,659
    Interest income/(expense)                           (65,475)         (3,826)
                                                   ------------    ------------
Income(Loss) before extraordinary items                (616,807)       (338,304)

Prior Period Adjustment                                      --              --
                                                   ------------    ------------

Net loss                                           $   (616,807)   $   (338,304)
                                                   ============    ============

Net loss from operations per common share          $       (.02)   $       (.01)
                                                   ============    ============

Net loss per common share                          $       (.02)   $       (.01)
                                                   ============    ============

   Weighted average common shares outstanding        26,024,967      23,135,263
                                                   ============    ============

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

                                       5
<PAGE>
                            SC&T INTERNATIONAL, INC.
                                 AND SUBSIDIARY

                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                   For the Three Months Ended January 31,1999
<TABLE>
<CAPTION>
                                   Common Stock        Preferred Stock     Additional
                               --------------------   -----------------     paid-in
                                 Shares     Amount    Shares     Amount     capital
                                 ------     ------    ------     ------     -------

<S>                           <C>         <C>         <C>    <C>           <C>
Balance at  October 31,1998    25,903,684  $259,037     15    $1,500,000   $13,280,028
Adjustment prior quarter               --        --     --            --            --

Preferred stock issuance costs         --        --     --            --            --

Issuance of common stock          214,584     2,146     --            --        (2,146)

Preferred stock conversion             --        --     --            --       (27,500)

Currency translation                   --        --     --            --            --

Net loss                               --        --     --            --            --
                               ----------  --------     --    ----------   -----------

Balance at  January 31,1999    26,118,268  $261,183     15    $1,500,000    13,250,382
                               ==========  ========     ==    ==========   ===========

                                 Treasury Stock
                                ----------------      Currency     Accumulated
                                Shares    Amount     translation     deficit
                                ------    ------     -----------     -------

Balance at  October 31,1998       --      $  --      $  54,275    $(13,186,518)
Adjustment prior quarter          --         --       (191,391)        191,391

Preferred stock issuance costs    --         --             --              --

Issuance of common stock          --         --             --              --

Preferred stock conversion                   --             --              --

Currency translation              --         --         13,361              --

Net loss                          --         --             --        (616,807)
                                  --      -----      ---------    ------------

Balance at  January 31,1999       --      $  --      $(123,755)   $(13,611,932)
                                  ==      =====      =========    ============
</TABLE>
                 The accompanying notes are an integral part of
                    these consolidated financial statements.

                                       6
<PAGE>
                            SC&T INTERNATIONAL, INC.
                                 AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               For the Three Months Ended January 31,1999 and 1998

                                                            1999         1998
                                                            ----         ----
Cash flows from operating activities:
 Net Profit (loss)                                       $(616,807)   $(338,304)
 Adjustments to reconcile net loss to net cash
 used in operating activities:
  Depreciation and amortization                             52,010       55,655
  (Increase) decrease in accounts receivable               120,352     (281,117)
  (Increase) Decrease in allowance for
    doubtful accounts                                                  (111,996)
  (Increase)decrease in inventories                        273,587      320,269
  (Increase) decrease in advances on purchases
    of inventory                                                       (160,536)
  (Increase)decrease in other current assets
  Loan amortization
  (Increase) Decrease in prepaid expenses                   99,636     (177,811)
  Increase( Decrease) in contingent liabilities                          11,069
  Increase (Decrease) in accounts payable                  (11,739)     910,195
  Increase (Decrease)in accrued expenses                    82,690     (157,531)
                                                         ---------    ---------
     Net cash used in operating activities                    (271)      69,893
                                                         ---------    ---------
Cash flows from investing activities:
 Purchase of property and equipment                                    (110,522)
 Development costs                                                       (6,345)
 Revaluation of fixed assets                                17,911
 Loans to related parties                                               (10,509)
                                                         ---------    ---------
     Net cash used in investing activities                  17,911     (127,376)
                                                         ---------    ---------
Cash flows from financing activities:
Currency translation                                        29,081     (119,096)
Reclassification of Payable to Contingent Liability        113,069

Repayments to factor                                      (183,868)
     Net cash (used in)provided by financing activities    (41,718)    (119,096)
                                                         ---------    ---------
Net (decrease)increase in cash                             (24,078)    (176,579)

Cash, beginning of period                                   74,997      462,874
                                                         ---------    ---------
Cash, end of period                                      $  50,919    $ 286,295
                                                         =========    =========

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

                                       7
<PAGE>
                            SC&T INTERNATIONAL, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1. Interim financial reporting:

The  accompanying   unaudited   Consolidated   Financial   Statements  for  SC&T
International,  Inc. (the  "Company")  have been prepared in accordance with the
generally accepted accounting  principles for interim financial  information and
the  instructions  to Form 10-QSB.  Accordingly,  they do not include all of the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements. In the opinion of management, all adjustments
(which include only normal  recurring  adjustments)  necessary to present fairly
the financial  position,  results of operations,  and cash flows for the periods
presented  have been made.  The results of operations for the three month period
ended January 31, 1999 is not  necessarily  indicative of the operating  results
that may be expected for the entire fiscal year ending April 30,1999.

   Reclassification:

Certain prior period  amounts have been  reclassified  to conform to the current
period presentation.

2. Common Stock:

On October 22, 1997,  the  Company's  shares of common  stock,  which was traded
under the symbol SCTI,  were  delisted  from the Nasdaq  Small cap market.  This
action was taken as a direct result of the Company's  failure to meet the filing
requirement as stated in marketplace Rule  4310(c)(14).  The failure to meet the
filing  requirement was the result of the untimely  resignation of the Company's
accounting firm,  Toback & Company.  The Company has complied with all reporting
requirements  in a timely  manner  since  retaining  Evers & Company in October,
1997.  The  company  has  completed  and filed its 10K report for the year ended
April 30,1998.

The Company has entered into  agreements with the holders of 99% of the Series A
Preferred  Stock  hereby  all of their  shares of Series A  Preferred  Stock are
tendered for  conversion  at a fixed  conversion  price of $1.00 per share ( the
"Fixed  Conversion").  The holders of Series A  Preferred  Stock waive all other
conversion rights which they may have pursuant to any agreement.  In addition to
the fixed  conversion  price,  the holders of the Series A Preferred  Stock will
also receive  warrants to purchase  one-third of the number of shares which they
receive  pursuant  to the Fixed  Conversion  price at a price of $1.75 per share
subject to  ordinary  anti-dilution  provisions  ( the  "Warrant  Shares").  The
Company  did not have an  adequate  number  of  authorized  shares  to cover the
warrants,  employee stock options and the remaining preferred  shareholders.  In
order to allow the Company to have sufficient shares for these transactions, the
President  of the  Company  returned  1,648,444  of his  shares to the  Company.
Subsequent  to year end,  the Board of  Directors  approved  the  issuance of 15
shares of Series B  Preferred  Stock at $100,000  stated  value per share to the
President  in  exchange  for  1,500,000  shares of common  stock  returned.  The
preferred  shares are convertible into common stock at the rate of 12 shares for
every $1 of face  value of the  Series  B  Preferred  stock.  In  addition,  the
President  received $150,000 in cash for the additional 148,444 shares returned.
The transaction has been retroactively applied to the 1998 financial statements.
Mr.  Copland and his affiliates  have recently  converted the Series B Preferred
stock into common stock. Mr. Copland and his affiliates have been issued a total
of 18,000,000 common shares.

                                       8
<PAGE>
3. Proxy Approval

In July, 1998  shareholders of the Company  approved two motions.  The first, to
increase the number of  authorized  shares by  50,000,000  bringing the total to
75,000,000. The second motion approved was to authorize a reverse split. At this
time the  Company  has not set a date for a  reverse  split,  but does  expect a
reverse split in the near future.

4. Commitments and Contingencies - Operating Lease

In February,  1999 the Corporate Headquarters were relocated.  The Company has a
three year lease for office and warehouse space located at Scottsdale Airpark in
Scottsdale,  Arizona.  The  lease  commenced  on March 1,  1999 and  expires  on
February 28, 2002.

5. Third Quarter - Extraordinary Expenses

Despite very successful  efforts to reduce its global  operating  expenses,  the
company  experienced  unforeseen costs not anticipated for the quarter,  many of
which were a direct  result of the Asia  economic  problems of late 1998.  These
costs should not be considered reoccurring.  Management was not pleased with the
Company's third quarter  financial  results,  which were caused primarily due to
the following factors:

1.   The Company was forced to utilize air freight (versus sea shipping) to ship
     its customers  Christmas  orders.  Air freight costs exceeded $200,000 USD.
     Despite this action,  some products did not make the  customers  shelves in
     time for Christmas sales.
2.   Product returns of nearly $350,000 were  experienced  primarily in January,
     1999 and  were  due to our  late  Fall  shipments  to  customers.  This was
     predicated  by SC&T's  inability  to get  product out of the orient via sea
     containers  in time to meet  customers  commitments.  These returns and the
     lost sales had an adverse impact on the companies profit objectives.
3.   Late deliveries caused the company to offer price concessions/reductions to
     maintain shelf space that amounted to $160K during this period.
4.   The Company's factoring charges increased  dramatically for the quarter due
     to delayed payments by retailers. The Company is looking into alternate and
     lower financing sources.
5.   The Company's  start up expenses for the Asian operation were taken in full
     during the third quarter and amounted to $153,000.

In summary,  if the Company had not been  confronted  with the above  costs,  it
would certainly have posted its second  consecutive  quarterly profit.  Based on
these  resullts,  management  is  implementing  plans that are intended to avoid
similar situations in the future.

                                       9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS

The  statements  contained  in this  report on form  10-QSB  that are not purely
historical are forward-looking  statements within the meaning of the Section 27A
of the  Securities  Act of 1933 and Section 21E of the  Securities  Act of 1934,
including  statements  regarding the Company's " expectations,"  "anticipation,"
"intentions," "beliefs," or "strategies," regarding the future.  Forward-looking
statements include statements regarding revenue,  margins, expenses and earnings
analysis  for the  remainder  of the  fiscal  year 1999 and  thereafter;  future
products or product  development  strategy;  and liquidity and anticipated  cash
needs and availability. All forward looking statements included in this document
are based on  information  available  to the Company on the date of this report,
and the  Company  assumes  no  obligation  to  update  any such  forward-looking
statement.  It is  important to note that the  Company's  actual  results  could
differ materially from those in such forward-looking statements.

OVERVIEW

SC&T  International,  Inc. (the  "Company") was formed in June 1993. The company
develops  and markets  accessory  and  peripheral  products for the computer and
video game industries under its PLATINUM SOUND and PER4MER registered trademarks
and its AIR RACER  trademark.  The company's  products  include  sub-woofer  and
speaker sound enhancement  systems,  headphone & microphone  accessory items, PC
volume  controllers,  and the largest  assortment  of PC and video arcade racing
wheels and game controller products for Nintendo, Sony Playstation and IBM-PC's.

SC&T,s  Per4mer line has expanded and now  comprises  products  that offer Force
Feed Back, Optical and Tilt technologies.  It has also successfully launched its
Air Racer controller, an innovative item which is a racing wheel, fight yoke and
game  controller,  all in one. SC&T plans to take a very aggressive  positioning
for its line of Per4mer products in 1999.

The Company's  multimedia  keyboards  line has been  discontinued  in favor of a
second  generation  product  targeted  at  the  corporate  market.  This  second
generation product,  which,  features an enhanced Voice Recognition product, has
been  completed,  but at this  time has not  been  introduced  into the  market.
However,  the company is entering into license  agreements  with other  keyboard
manufacturers   which  will  provide  SC&T  with  additional   income  from  the
U.S.technology patents it holds for this technology.

The Company  continues to reduce  operating  costs,  while  increasing  both its
distribution  base and gross margins on products sold. Over the past 2-3 months,
new an  improved  retail  and  reseller  alliances  have  been  made both by the
company's North American and European operations.  SC&T Is very optimistic about
adding more customers and  increasing  the number of products  currently sold by
these customers.  In January of 1999 the company's  chairman  officially assumed
the sales  responsibilities  for the company's North and South American markets.
SC&T Believes his involvement will have a significant  impact on revenues during
1999.

The Company,  in an effort to reduce its European operating costs,  consolidated
its European  distribution  operations into one central  facility located in the
United Kingdom, in May 1997. The company formed SC&T Europe Limited,  located in
Portsmouth England.  The Belgium office was closed in August,  1998. All current
marketing and distribution operations, including a United Kingdom domestic sales
force, is now being handled out of the United Kingdom operations.

                                       10
<PAGE>
OPERATING RESULTS OF THE COMPANY FOR THE THREE MONTH PERIOD ENDED
JANUARY 31, 1999 AND 1998.

NET SALES

See detailed comments provided in the Notes to Consolidated Financial Statements
on page 9 Item number five.

GROSS PROFIT

The Company gross profit  percentage for the three months ended January 31, 1999
was $480,000 or 45% in contrast to a gross  profit of 36% for the quarter  ended
January 31, 1998.  This was due to the release of new,  higher margin,  products
and the Company's  ongoing and  successful  program to reduce its product costs.
Gross profit margins are affected by several factors,  including the product mix
between the company's products. Typically, products sell at gross profit margins
ranging  from  20% to 40%.  The  Company  anticipates  that  new  products  will
initially  sell  at  higher  gross  profit  margins.  However,  there  can be no
assurance that higher margins will be maintained over the life of the product.

PAYROLL AND PAYROLL TAXES

The Company's payroll and payroll tax expense  decreased  slightly from $335,000
to $ 327,000 for the three  months  ended  January 31,  1999.  The Company  will
continue to reduce  staffing  where  possible  in its ongoing  efforts to reduce
operating costs.

SELLING AND PROMOTION

The  Company's  selling and  promotion  expenses  decreased  from  approximately
$294,000 for the three months ended January 31, 1998 to  approximately  $182,000
for the three months ended January 31, 1999, or a decrease of approximately 38%.
Approximately  80% of the decrease was in travel  expense and trade show expense
and the balance was due to the  discontinuance  of sponsorship  expenses of CART
Fed X Kool  Toyota  Racing  Series.  The Company  maintains a personal  services
agreement  with its driver  which  allows the  Company to utilize his figure and
involvement  in motor sports racing on its line of Per4mer racing  products.  In
1999,  the Company will  allocate  funds only to areas where it can see a viable
return on its investment. Carte Blanche advertising has been eliminated.

OFFICE AND ADMINISTRATION

The Company's office and  administrative  expenses  decreased from approximately
$365,000 for the three months ended  January 31 1998 to  approximately  $272,000
for the three months ended January 31, 1999, or  approximately  25%.  Major cost
reductions were made in legal expense and general office overhead expenses.

DEVELOPMENT COST AMORTIZATION

Development cost amortization decreased from approximately $37,000 for the three
months  ended  January  31, 1998 to $19,000  for the three  month  period  ended
January 31, 1999. Development cost amortization represents amortization of costs
associated with development of new products.  Such costs are amortized over a 12
month period commencing with the first sale of the product. 

                                       11
<PAGE>
OTHER EXPENSE

Other  expenses  increased  $136,000  due to start up cost  associated  with the
Company's Asia office.

NET PROFIT

The Company experienced operating losses of $617,000 for the third quarter. This
is an increase of $330K over the operating  results for the period ended January
31, 1998. The  increase  is due to the  reduction  in sales  and the  unforeseen
expenses  as  described  in  item  5 in  the  Notes  to  Consolidated  Financial
Statements, page 9.

LIQUIDITY AND CAPITAL RESOURCES

As a result of the Company's initial public offering,  and its private placement
of Series A Preferred Stock in June 1996, the Company's working capital improved
to  approximately  $3,635,084 at September 30, 1997.  The Company is required to
pay the costs of stocking inventory before the Company receives orders and payme
from its customers.  Typically,  the Company's  customers do not pay the Company
for its products until  approximately 60 days following delivery and billing. As
a result,  the  receipt of cash from  operations  typically  lags  substantially
behind the  payment of the costs for  purchase  and  delivery  of the  Company's
products.

Through July 1996,  the Company  financed  operations  by  factoring  its United
States  receivable.  Historically,  the Company's European  subsidiary  financed
operations  through a line of credit of  approximately  $182,000  denominated in
Belgian francs.  In addition,  to raise funds to meet its expenses,  the Company
obtained  inventory  financing  in  April  and  May  1995  for an  aggregate  of
$1,000,000,  completed  a private  placement  in April  1995 of  $1,500,000  for
2,000,000  shares of Common  Stock,  completed a private  placement in September
1995 of $875,000 of 8%  Subordinated  Debentures.  In December 1995, the Company
used  approximately  $1,875,000 of the $4,500,000  gross proceeds of its initial
public  offering  to  repay  the  inventory  financing  and the 8%  Subordinated
Debentures.  In June 1996 the Company received gross proceeds of $10,510,000 for
an  issuance  of  1,051  shares  of  Series A  Preferred  Stock.  The  preferred
shareholders earn 8% accretion per annum up to the date of conversion.

BUSINESS OUTLOOK AND RISK FACTORS

SC&T  implemented  major cost reductions  during the latter part of 1998,  which
will be  continued  into  1999.  These  reductions  have  already  improved  the
Company's  financial   operations.   Management  believes  there  is  a  growing
acceptance in the global  marketplace for the Company's  expanding product line.
SC&T Products are  currently  sold in over 25 countries  worldwide.  The Company
plans  four to six new  product  introductions  by the end of 1999,  which  will
expand its current line up of Per4mer and Platinum Sound products. Management is
working on new programs  designed to reduce operating  expenses while increasing
profit  opportunities  for its  customers.  SC&T is hopeful  these  efforts will
enhance  revenues and continue to reduce operating  expenses.  The Company's new
manufacturing alliances has helped reduce product costs, and the company expects
ongoing cost reductions  throughout 1999. Total revenue and product mix could be
materially  and adversely  affected by many factors some of which are beyond the
control of the Company.  Those factors include, but are not limited to, turnover
in the  Company's  sales  force,  competition  from  existing  or new  products,
production  delays,  the Company's  ability to penetrate new markets and attract
new customers,  unexpected  postponement or cancellation of significant  orders,
lack of market acceptance of the Company's products,  manufacturing  defects and
seasonally of sales and general economic conditions.

                                       12
<PAGE>
The Company  believes the  accessory  and  peripheral  products  markets for the
personal  computer and video gaming industries has a strong outlook for 1999, as
both the PC and Video  gaming  categories  continue to grow.  These  markets are
characterized by sales growth, rapid technological change, frequent introduction
of new products,  product upgrades and evolving industry standards.  The Company
strives to provide  market-leading  solutions that address the personal computer
user  interested  in  upgrading  existing  equipment.  Due to the  risk  factors
discussed and to other factors that generally affect high technology  companies,
there  can be no  assurance  that  the  Company  will be  able  to  successfully
penetrate these markets in the future.

The  Company's  10-K report for the year ended April 30, 1998  contained a going
concern qualification. The Company does not dispute this qualification.  Without
a substantial  increase in revenues the Company will require  additional working
capital through external sources to continue to fund its operations.  Management
plans  to  actively  explore  debt  and  equity  financing  as well  as  holding
discussions with potential merging partners to obtain required financing.

                                       13
<PAGE>
                           PART II - OTHER INFORMATION

ITEM 1. LITIGATION

Pending or Threatened Litigation

A. Home Arcade v. SC&T

In 1997, Home Arcade filed suit for breach of a license agreement,  a suit which
alleges bad faith and fraud  claims.  Home Arcade has amended its  complaint  to
assert that SC&T has violated Home Arcade's trade name to performer wheel.  SC&T
has vigorously  asserted that the trade name was  transferred to SC&T along with
the sale of the  tooling.  The  compliant  seeks  damages in excess of $900,000,
however,  the  principal  amounts are far less.  The requested  relief  includes
trebling and punitive damages. Management has positively evaluated the issues of
breach  and  strongly  disputes  the  principal  amount.  Management  intends to
vigorously defend the case. Further, management has filed counterclaims alleging
that SC&T, among other things,  actually incurred significant losses as a result
of Home Arcade's  misrepresentations and breach of the licensing agreement.  The
litigation  is  pending  in Santa  Clara  County,  San Jose,  California.  It is
expected to last approximately two years.

B. SC&T v. Brian Johnson

In 1998 SC&T filed suit  against a former  sales  person for  recovery of moving
expenses  pursuant to the moving expense  agreement.  These expenses  became due
when Mr. Johnson  resigned  prior to one year from the  agreement.  SC&T , also,
alleges  that Mr.  Johnson  submitted  fraudulent  reimbursement  vouchers.  Mr.
Johnson  filed a  counterclaim  alleging  he did not receive  full  compensation
during his tenure. Management has evaluated the claims and intends to vigorously
prosecute its claims against Mr. Johnson and expects a positive  judgment within
one year.

C. Jack of All Games v. SC&T

In June,  1997  Jack of All  Games  Entertainment,  Inc.,  sued the  Company  in
Hamilton  County,  Ohio for breach of contract  regarding  the purchase of 5,000
steering wheel accessories.  Jack of All Games is seeking approximately $180,000
in  damages.   Plaintiff  claims  the  steering  wheels  it  received  were  not
merchantable  for the  purpose  for which they were  intended  The  Company  has
answered the compliant and denied all material  allegations.  It is  anticipated
that the litigation of these issues will be concluded within one year.

ITEM 2. CHANGES IN SECURITIES

         None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

         None

ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY-HOLDERS

In July, 1998 Shareholders  approved a motion to issue an additional  50,000,000
common stock from  25,000,000 to 75,000,000  and to allow the Company to reverse
common stock outstanding at a time deemed necessary by the Board of Directors.

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<PAGE>
ITEM 5. OTHER INFORMATION

1.Year 2000 Readiness Statement

The  year  2000  (Y2K)  is an  issue  putting  at  risk  systems,  products  and
specialized  hardware  utilizing date sensitive  computer chips or software with
two-digit  date  fields  will fail to  properly  recognize  the year 2000.  Such
failures  could result in  interruptions  of the Company's  business which could
have a material adverse impact on the Company. In response to the Y2K issue, The
Company  will  upgrade its current  Platinum  System 4.1A to 4.5A.  The upgraded
system is fully Y2K ready and will be installed by June 30, 1999.

2. Change in Company stock symbol

In December, 1999 the NASD changed the company's stock exchange symbol from SCTI
to SCTU.  This change was made without  prior  notification  to the company.  We
apologize for any inconvenience this may have caused our stockholders.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

On June 17, 1998 the registrant filed with the Securities Exchange Commission to
change its fiscal year from March 31 to April 30.

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<PAGE>
                                   SIGNATURES

In accordance  with the  Securities  Exchange Act of 1934,  this report has been
signed below by the  following  persons on behalf of the  registrant  and in the
capacities and on the date indicated.


SC&T INTERNATIONAL, INC.


     Signature                         Capacity                        Date
     ---------                         --------                        ----


/s/ James L. Copland              Chairman of the Board           March 16, 1999
---------------------------       and Chief Executive Officer




/s/ Richard W. Elwood             Director of Finance             March 16, 1999
---------------------------

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