UNITED STATES
                        SECURITIES AND EXCHANGE COMMISION
                             WASHINGTON, D.C. 20549
                                  FORM 10-QSB/A

(Mark One)
   [ X ]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                           SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended     June 30, 1999

   [   ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT
         For the transition period from                  to

                         Commission file number 1-14072

                             PEN INTERCONNECT, INC.
        (Exact name of small business issuer as specified in its charter)

             UTAH                                 87-0430260
(State or other jurisdiction of         (I.R.S. Employer Identification No)
incorporation or organization)

                      1601 Alton Parkway Irvine, Ca. 92606
               (Address of Principal Executive Offices) (Zip Code)

                                 (949) 798-5800
                           (Issuer's telephone number)

                                       N/A

              (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 ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

         Check whether the issuer filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the  distribution of
securities under a plan confirmed by a court.

                                                          Yes No

                      APPLICABLE ONLY TO CORPORATE ISSUERS

         As of August 3, 1999 the  issuer  had  7,976,089  shares of its  common
         stock, par value $0.01 per share, issued and outstanding.  Transitional
         Small Business Disclosure Format (check one):

                                                         Yes No X



<PAGE>



                                  FORM 10-QSB/A

                             PEN INTERCONNECT, INC.

                                Table of Contents

                                                                            Page
PART I - FINANCIAL INFORMATION

Item 1            Financial Statements

                  Financial Information                                        3

                  Balance Sheets at June 30, 1999
                  (unaudited) and September 30, 1998                         4-5

                  Statements of Operations  for the three months
                  ended June 30, 1999 and 1998 (unaudited) and                 6
                  nine month periods ended June 30, 1999 and
                  1998 (unaudited)

                  Statements of Cash Flows for the nine months
                  ended June 30, 1999 and 1998 (unaudited)                  7-10

                  Notes to Condensed Financial Statements (unaudited)      11-15

Item 2            Management's Discussion and Analysis or
                  Plan of Operation                                        16-20

PART II - OTHER INFORMATION

Item 1            Legal Proceedings                                           21

Item 2            Changes in the Securities and Use of Proceeds            21-22

Item 3            Defaults Upon Senior Securities                             22

Item 4            Submission of Matters to a Vote of Security Holders         22

Item 5            Other Information                                           22

Item 6(a).        Exhibits                                                    22

Item 6(b).        Reports on Form 8-K                                         22

Signatures                                                                    23


                                        2


<PAGE>



                             PEN INTERCONNECT, INC.

                                     PART I

                              FINANCIAL INFORMATION

ITEM 1. INTERIM CONDENSED FINANCIAL STATEMENTS


Pen  Interconnect,  Inc. (the "Company"),  has included the unaudited  condensed
balance  sheet of the Company as of June 30, 1999 and the audited  balance sheet
as of September 30, 1998 (the  Company's  most recent  fiscal  year),  unaudited
condensed  statements of operations for the three and nine months ended June 30,
1999 and 1998, and the unaudited condensed statements of cash flows for the nine
months ended June 30, 1999 and 1998,  together with  unaudited  condensed  notes
thereto. In the opinion of management of the Company,  the financial  statements
reflect  all  adjustments,  all  of  which  are  normal  recurring  adjustments,
considered  necessary  to present  fairly the  financial  condition,  results of
operations and cash flows of the Company for the interim periods presented.  The
financial  statements included in this report on Form 10-QSB/A should be read in
conjunction with the audited  financial  statements of the Company and the notes
thereto  included in the annual  report of the Company on Form  10-KSB/A for the
year ended  September 30, 1998.  The results of  operations  for the nine months
ended June 30, 1999 may not be  indicative  of the results  that may be expected
for the year ending September 30, 1999.







                                        3


<PAGE>



                             Pen Interconnect, Inc.

                                 BALANCE SHEETS

                                     ASSETS


<TABLE>
<CAPTION>
                                                                                       June 30,           September 30,
                                                                                         1999                 1998
                                                                                  ------------------   -------------------
                                                                                     (unaudited)
CURRENT ASSETS
<S>                                                                               <C>                  <C>
      Cash and cash equivalents                                                   $           26,478   $           657,777
      Receivables
      Trade accounts less allowance for
         doubtful accounts of $67,434 at June 30, 1999
         and $108,575 at September 30, 1998                                                3,831,713             3,350,970
      Current maturities of notes receivable                                                 765,390                35,675
      Investments in common stock                                                                  0               242,739
      Inventories                                                                          4,583,076             3,680,169
      Prepaid expenses and other current assets                                              345,804               261,375
      Deferred tax asset                                                                      41,324                41,324
                                                                                  ------------------   -------------------
                 Total current assets                                                      9,593,785             8,270,029


PROPERTY AND EQUIPMENT, AT COST
      Production equipment                                                                 1,288,624             2,624,513
      Furniture and fixtures                                                                 165,596               837,594
      Transportation equipment                                                                22,149                83,522
      Leasehold improvements                                                                 260,074               613,248
                                                                                  ------------------   -------------------
                                                                                           1,736,443             4,158,877
      Less accumulated depreciation                                                          219,854             1,680,266
                                                                                  ------------------   -------------------
                                                                                           1,516,589             2,478,611


OTHER ASSETS
      Notes receivable, less current maturities                                                2,066                 3,989
      Investments in common stock                                                                  0               482,220
      Deferred income taxes                                                                  725,667               725,667
      Goodwill and other intangibles, net                                                  2,012,565             2,031,685
      Assets transferred under contractual arrangement                                       454,742                     0
      Other                                                                                   14,864                98,455
                                                                                  ------------------   -------------------
                 Total other assets                                                        3,209,904             3,342,016
                                                                                  ------------------   -------------------
                                                                                  $       14,320,278   $      $ 14,090,656
                                                                                  ==================   ===================
</TABLE>



              The accompanying notes are an integral part of these
                                  statements.

                                        4


<PAGE>



                             Pen Interconnect, Inc.

                           BALANCE SHEETS - CONTINUED

                      LIABILITIES AND STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                                                       June 30,           September 30,
                                                                                         1999                 1998
                                                                                  ------------------   -------------------
                                                                                     (unaudited)
CURRENT LIABILITIES
<S>                                                                               <C>                  <C>
      Subordinated debentures                                                     $                0   $         1,401,429
      Line of credit                                                                       3,531,814             4,064,361
      Current maturities of long-term obligations                                          1,527,499             1,132,538
      Current maturities of capital leases                                                   109,054                69,621
      Dividends payable                                                                      146,148                     0
      Accounts payable                                                                     3,029,974             2,926,797
      Accrued liabilities                                                                    174,941               389,889
                                                                                  ------------------   -------------------
                 Total current liabilities                                                 8,519,430             9,984,635

LONG TERM OBLIGATIONS, less current
      maturities                                                                              10,086                51,965

CAPITAL LEASE OBLIGATIONS, less
      current maturities                                                                     286,594                22,333

LIABILITIES TRANSFERRED UNDER
      CONTRACTUAL ARRANGEMENTS                                                               514,813                     0

DEFERRED INCOME TAXES                                                                        165,755               165,755
                                                                                  ------------------   -------------------
                 Total liabilities                                                         9,496,678            10,224,688

STOCKHOLDERS' EQUITY
       Series A and  Series B  Preferred  stock,  $0.01  par  value
            authorized 5,000,000 shares, 2,800
            issued and outstanding at June 30, 1999                                               28                     0
       Common stock, $0.01 par value,
            authorized 50,000,000 shares, issued and
            outstanding 7,976,089 shares at June 30,
            1999 and 5,018,437 at September 30, 1998                                          79,761                50,184
       Additional paid-in capital                                                         16,324,193            10,890,022
       Accumulated deficit                                                               (11,580,382)           (7,074,238)
                                                                                  ------------------   -------------------
                 Total stockholders' equity                                                4,823,600             3,865,968
                                                                                  ------------------   -------------------
                                                                                  $       14,320,278   $        14,090,656
                                                                                  ==================   ===================
</TABLE>





              The accompanying notes are an integral part of these
                                  statements.

                                        5


<PAGE>



                             Pen Interconnect, Inc.

                            STATEMENTS OF OPERATIONS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                        Three months ended                      Nine months ended
                                               --------------------------------------     -----------------------------------
                                                    June 30,            June 30,              June 30,           June 30,
                                                      1999                1998                  1999               1998
                                               ------------------   -----------------     ----------------   ----------------
<S>                                            <C>                  <C>                   <C>                <C>
Net sales                                      $        5,098,525   $       4,510,112     $     12,684,442   $     12,113,556
Cost of sales                                           4,205,910           3,534,452           11,221,572          9,431,973
                                               ------------------   -----------------     ----------------   ----------------

      Gross profit                                        892,615             975,660            1,462,870          2,681,583

Operating expenses
      Sales and marketing                                  22,002             192,071              159,413            261,476
      Research and development                             41,148              49,675              303,651            243,044
      General and administrative                          517,517             477,792            2,543,826          1,475,420
      Depreciation and amortization                        81,952             122,288              303,159            364,225
                                               ------------------   -----------------     ----------------   ----------------
                 Total operating expenses                 662,619             841,826            3,310,049          2,344,165
                                               ------------------   -----------------     ----------------   ----------------

      Operating income (loss)                             229,996             133,834           (1,847,179)           337,418

Other income (expense)
      Interest expense                                    (96,947)           (217,556)            (482,722)          (703,613)
      Loss on disposal of a division                            0                   0             (948,312)                 0
      Loss on impairment of investment
       in stock                                          (724,959)                  0             (724,959)                 0
      Other income (expense), net                        (124,325)             84,318             (356,824)           118,655
                                               ------------------   -----------------     ----------------   ----------------
                 Total other income (expense)            (946,231)           (133,238)          (2,512,817)          (584,958)
                                               ------------------   -----------------     ----------------   ----------------

Earnings (loss) before income taxes                      (716,235)                596           (4,359,996)          (247,540)

Income tax expense (benefit)                                    0                 238                    0            (21,562)
                                               ------------------   -----------------     ----------------   ----------------

Net earnings (loss)                            $         (716,235)  $             358     $     (4,359,996)  $       (225,978)
                                               ==================   =================     ================   ================

Earnings (loss) per common share
      Basic                                    $            (0.19)  $            0.00     $          (0.78)  $          (0.05)
      Diluted                                  $            (0.19)  $            0.00     $          (0.78)  $          (0.05)

Weighted average common shares outstanding
         Basic                                          7,693,650           4,586,962            6,538,820          4,452,312
         Diluted                                        7,693,650           5,121,153            6,538,820          4,452,312
</TABLE>



              The accompanying notes are an integral part of these
                                  statements.

                                        6


<PAGE>



                             Pen Interconnect, Inc.

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                             Nine months ended
                                                                                     ------------------------------------
                                                                                         June 30,           June 30,
                                                                                           1999               1998
                                                                                     -----------------  -----------------
Increase (decrease) in cash and cash equivalents
  Cash flows from operating activities
<S>                                                                                  <C>                <C>
        Net loss                                                                     $      (4,359,996) $        (225,978)
        Adjustments to reconcile net loss to net cash
           used in operating activities
                Depreciation and amortization                                                  301,898            364,225
                Bad debts                                                                       99,625              3,420
                Stock issued in exchange for services                                          524,377                  0
                Interest on debenture conversion                                               104,861            336,506
                Loss on disposal of a division                                                 948,312                  0
                Loss on impairment of investment in stock                                      724,959                  0
                Deferred taxes                                                                       0             27,112
                Contingent stock San Jose agreement                                                  0            (40,000)
                Loss on disposal of equipment                                                        0             16,534
                Changes in assets and liabilities
                     Trade accounts receivable                                              (1,065,998)        (1,632,294)
                     Inventories                                                            (1,471,476)        (2,305,763)
                     Prepaid expenses and other assets                                          82,239           (327,681)
                     Accounts payable                                                          159,684            974,725
                     Accrued liabilities                                                      (181,530)          (254,795)
                                                                                     -----------------  -----------------
                        Total adjustments                                                      226,951         (2,838,011)
                                                                                     -----------------  -----------------
                        Net cash used in
                           operating activities                                             (4,133,045)        (3,063,989)
                                                                                     -----------------  -----------------

  Cash flows from investing activities
        Purchase of property and equipment                                                    (751,860)          (202,353)
        Proceeds from the disposal of a division                                             1,075,000            389,250
        Issuance of notes receivable                                                          (611,169)           (89,195)
        Collections on notes receivable                                                              0             22,800
                                                                                     -----------------  -----------------
                        Net cash provided by (used in)
                           investing activities                                               (288,029)           120,502
                                                                                     -----------------  -----------------
</TABLE>



                                   (Continued)

                                        7


<PAGE>



                             Pen Interconnect, Inc.

                      STATEMENTS OF CASH FLOWS - CONTINUED
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                             Nine months ended
                                                                                     ------------------------------------
                                                                                         June 30,           June 30,
                                                                                           1999               1998
                                                                                     -----------------  -----------------
Cash flows from financing activities
<S>                                                                                  <C>                 <C>
  Net change in line of credit                                                                (160,991)         1,557,851
  Proceeds from long-term obligations                                                        1,303,547                  0
  Proceeds from issuance of subordinated debentures                                                  0          1,910,000
  Proceeds from issuance of capital leases                                                     395,648            500,000
  Proceeds from sale of common stock and exercise of warrants                                  400,999            705,058
  Proceeds from issuance of preferred stock                                                  2,800,000                  0
  Principal payments on long-term obligations                                                 (900,000)        (1,007,173)
  Principal payments on capital leases                                                         (49,428)                 0
                                                                                     -----------------  -----------------
                        Net cash provided by
                           financing activities                                              3,789,775          3,665,736
                                                                                     -----------------  -----------------
Net increase (decrease) in cash and cash equivalents                                          (631,299)           722,249
Cash and cash equivalents at beginning of period                                               657,777            272,148
                                                                                     -----------------  -----------------
Cash and cash equivalents at end of period                                           $          26,478  $         994,397
                                                                                     =================  =================

Supplemental  disclosures of cash flow  information
Cash paid during the period
 for:
    Interest                                                                         $         380,576  $         370,028
    Income taxes                                                                     $               0  $               0
</TABLE>


Noncash investing and financing activities
During the first nine months of FY 99 $1,401,429 of subordinated debentures were
converted  into 1,942,914  shares of common stock.  Along with the conversion on
the debentures,  $104,861 of unamortized interest on the subordinated debentures
was charged to interest expense.

During the third quarter of FY 99 675,000  shares of common stock were issued to
outside  consultants for services performed or to be performed.  Of this amount,
$524,377  has been  charged to expense  and the  balance  of  $232,110  has been
included in prepaid  expenses to be written off during the next three  months as
the service is provided. At the date of issuance,  the market value of the stock
issued was $756,487.




                                   (Continued)

                                        8


<PAGE>



                             Pen Interconnect, Inc.

                      STATEMENTS OF CASH FLOWS - CONTINUED
                                   (Unaudited)


Disposal of Divisions

The letter of intent for the sale of the MotoSat  division  to James  Pendleton,
Pen's  Chairman and former CEO,  states that all assets and  liabilities  of the
MotoSat  division  will be  transferred  to Mr.  Pendleton  in exchange  for the
elimination  of any future  obligations  to pay  retirement  benefits  under Mr.
Pendleton's  employment contract.  If the transaction had been closed as of June
30,  1999 it would have  yielded a gain of $60,071,  representing  the excess of
liabilities over assets to be transferred (see Note A).

Assets acquired and liabilities  assumed by Mr. Pendleton's  purchase of MTI are
as follows:

  Trade accounts receivables                                  $         180,896
  Notes receivable                                                       33,377
  Inventories                                                           206,689
  Property and equipment                                                 33,780
                                                              -----------------
    Assets transferred under contractual arrangements                   454,742

  Accounts payable                                                       56,507
  Accrued liabilities                                                    36,285
  Line of credit                                                        371,556
  Long-term obligations                                                  50,465
                                                              -----------------
    Liabilities transferred under contractual arrangements              514,813
                                                              -----------------
    Potential gain to Company                                 $          60,071
                                                              =================






                                   (Continued)

                                        9


<PAGE>



                             Pen Interconnect, Inc.

                      STATEMENTS OF CASH FLOWS - CONTINUED
                                   (Unaudited)


During the second quarter of FY 99 the Company disposed of the Cable division by
selling certain assets and  liabilities to Cables To Go Inc. (CTG).  The Company
transferred  net  assets  totaling   $878,372  to  CTG  for  total  proceeds  of
$1,075,000. The Company then determined the remaining Cable division assets, not
sold to CTG, to be  impaired as they had no market  value and could no longer be
utilized in current operations.  The impairment resulted in the write off of the
remaining Cable division assets with a net book value totaling  $1,144,940.  The
combined  sale to CTG and  write  off of  assets  resulted  in a net loss on the
disposal of the Cable division of $948,312.  Assets sold and liabilities assumed
by CTG were as follows:

     Accounts receivable (net of allowance)                   $         310,467
     Inventories                                                        361,880
     Property and equipment                                             398,551
     Capital leases                                                     (42,526)
                                                              -----------------
         Net assets sold                                              1,028,372

     Proceeds received                                                1,075,000
     Notes receivable received                                          150,000
                                                              -----------------
         Gain on assets sold to CTG                                     196,628
     Write off of remaining Cable division assets                    (1,144,940)
                                                              -----------------
         Total loss on disposal of Cable division             $        (948,312)
                                                              =================

Investments

The Company has an investment in the publicly  traded stock of another  company.
The stock was received in satisfaction of notes  receivable and has a guaranteed
minimum value of $7.4532 per share.  At September 30, 1998,  the market value of
the stock was approximately  $2.25 per share. During the third quarter of FY 99,
a  determination  was made the investment in TMCI stock with a net book value of
$724,959 was  permanently  impaired when the major lender of TMCI  foreclosed on
their  loan for  failure  to comply  with loan  covenants.  The  balance of this
investment was written off during the quarter ended June 30, 1999.




              The accompanying notes are an integral part of these
                                  statements.

                                       10



<PAGE>


                             PEN INTERCONNECT, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)




NOTE A - ACQUISITIONS/DISPOSITIONS

       Laminating Technologies Inc.

       On December 23, 1998, the Company signed a definitive  agreement to merge
       with Laminating Technologies Inc. (LTI). On April 2, 1999 the Company and
       LTI mutually terminated this definitive agreement to merge.

       Cables To Go Inc.

       On January 29,  1999 the  Company  signed an  agreement  to sell  certain
       assets and transfer certain liabilities of the Cable division to CTG. CTG
       purchased certain of the receivables,  inventory, machinery and equipment
       and assumed capital lease  liabilities for a purchase price of $1,075,000
       thus  yielding the Company a gain on the sale of $196,628.  Concurrently,
       the Company  determined  that assets  relating to the Cable division that
       were not purchased by CTG had no future value and were therefore  written
       off.  The book  value of the  assets  written  off was  $1,144,940.  When
       combined with the gain on the sale of assets that were sold the resulting
       net loss related to the disposition of the Cable division was $948,312.

       Mobile Technology Inc.

       On  February  1, 1999 the  Company  signed a letter of intent with Mobile
       Technology  Inc. (MTI) to sell all assets and  liabilities of the MotoSat
       division.  MTI's principal owner is James Pendleton,  Chairman and former
       CEO of the  Company.  The  letter of intent  calls for MTI to assume  all
       assets and liabilities of the MotoSat  division.  If the transaction were
       closed as of June 30,  1999,  it would yield a gain to the Company on the
       sale of $60,071 that is being deferred until the transaction is complete.
       Pending  the  closing of the sale,  the  Company  has agreed to  maintain
       and/or  provide a $300,000  credit  facility  for MTI with the  Company's
       major lender. The Company anticipates closing the transaction when MTI is
       able to secure independent sources of financing.  In the interim, MTI has
       assumed  operational  control of the  MotoSat  division  but the  Company
       retains  ownership of the MotoSat  division's  receivables  and inventory
       which are collateral for the Company's credit  facility.  As of September
       1, 1999 MotoSat has not yet secured its own lending source which is still
       expected to be occur in the month of September. When the credit agreement
       between MotoSat and their lender is finalized, the risk of ownership will
       pass to MotoSat's new owners and the sale will be recorded.

       Inasmuch  as the  Company is still at risk for the credit  facility  made
       available  to MTI,  on the  receivables  and  inventory  currently  being
       submitted to finance the current  operations of MotoSat,  the Company has
       recorded the position of financial  condition of the MotoSat  division as
       of the date of the  letter of  intent  (February  1,  1999).  Assets  and
       liabilities  have been  reclassified as  "Assets/Liabilities  Transferred
       Under Contractual Arrangements" on the balance sheet at June 30, 1999. In
       addition,  the Company  has  advanced  $96,367 to MTI at 11.75%  interest
       which is  included  in notes  receivable  which  will be repaid  when MTI
       secures its own lender and source of funding.

                                       11

<PAGE>


                             PEN INTERCONNECT, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)




NOTE A - ACQUISITIONS/DISPOSITIONS - CONTINUED

       Transdigital Communications Inc.

       The Company  signed a  definitive  agreement  to merge with  Transdigital
       Communications,  Inc. (TCC) in July of 1999.  The agreement,  which would
       result in a reverse merger with TCC management becoming the management of
       the new company,  stipulated  various closing conditions for both Pen and
       TCC.  As of  this  date,  it is  doubtful  that  the  closing  conditions
       stipulated  in the  agreement  will be met and both parties have mutually
       agreed to terminate the agreement,  although a writing to this effect has
       not been completed.


NOTE B - INVENTORIES

       Inventories consist of the following:
                                          June 30,            September 30,
                                           1999               1998
                                      ---------------     ------------------
Raw materials (net of allowance)            2,558,829              2,252,933
Work-in-process                             1,944,591              1,391,664
Finished goods                                 79,656                 35,572
                                      ---------------     ------------------
                                            4,583,076              3,680,169
                                      ===============     ==================


NOTE C - NOTES RECEIVABLE

       In connection with the merger  negotiations with TCC the Company advanced
       TCC approximately  $516,000.  The advance is secured by a promissory note
       at an interest  rate of 8.00 percent to be repaid when TCC obtains a line
       of  credit  or  other  financing.   The  remaining  balance  of  $265,000
       represents  amounts  advanced  to MotoSat of  approximately  $96,000  and
       $150,000 from CTG for the guaranteed  royalty in connection with the sale
       (see Note A).

NOTE D - BRIDGE LOANS

       During the 1st  quarter of FY 1999 the Company  secured two bridge  loans
       both of which were to be repaid with funds to be received from the merger
       with LTI. The term of each loan was 90 days and carried an interest  rate
       of 8 percent.  One bridge loan was secured in November  for  $500,000 and
       the other in December for $400,000.  Both bridge loans were  subsequently
       repaid from proceeds  received from the issuance of preferred stock. (See
       Note G)



                                       12

<PAGE>


                             PEN INTERCONNECT, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)




NOTE E - WARRANTS AND OPTIONS TO PURCHASE COMMON STOCK

       During the first nine  months of FY 1999 the Company  issued  warrants to
       purchase  1,230,000  shares of the Company's  common stock.  All warrants
       were issued at an  exercise  price which was equal to or above the market
       price at the time of issuance.  The following table outlines the features
       of these warrants:

   Number of               Exercise                 Expiration
   Warrants                 Price                      Date
----------------       ----------------       ----------------------
150,000                     $1.000                     October 2002
125,000                     $0.875                     October 2002
215,000                     $0.875                    November 2001
100,000                    $1.3700                    February 2002
125,000                    $0.0875                     October 2003
160,000                    $1.2800                    February 2002
160,000                    $0.8600                       April 2002
 25,000                    $0.8000                         May 2001
 20,000                    $1.0000                        June 2003
 25,000                    $1.0000                        June 2002
125,000                    $0.8000                      August 2004


       During the first nine months of FY 1999 the Company  issued non qualified
options to employees to purchase  335,000  shares of common  stock.  All options
granted  were at an exercise  price which was equal to or above the market price
at the time of  issuance.  The  following  table  outlines the features of these
options:


   Number of               Exercise                 Expiration
   Warrants                 Price                      Date
----------------       ----------------       ----------------------
          60,000             $0.8000                      March 2004
         250,000             $0.8000                      April 2004
          25,000             $1.0000                       June 2004



NOTE F - CREDIT FACILITY

       As of June 30, 1999,  the Company has been in violation of certain of the
       covenants of their credit  facility  with Finova.  At June 30, 1999,  the
       Company has  notified  the lender of the  violations  and is  negotiating
       modifications to the loan agreement with the lender. As of June 30, 1999,
       the Company has not received a waiver from the lender and all obligations
       under this  credit  facility  are payable on demand of the lender and are
       classified as current liabilities in the balance sheet.


                                       13


<PAGE>


                             PEN INTERCONNECT, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)




NOTE G - PREFERRED STOCK

       The Company has issued two series of Preferred Stock. Series A was issued
       in February 1999  consisting of 1,800 shares,  par value $0.01 per share,
       for $1,000 per share. Series B was issued in April 1999 at the same price
       and par value but only 1,000 shares were issued.  As mentioned in Note D,
       part of the  issuance  of this stock was used to repay the  bridge  loans
       made earlier in the fiscal year.  After repayment of the bridge loans and
       paying $234,500 in fees and expenses,  the net cash raised by the Company
       was  $1,665,500.  Both  series  of  Preferred  Stock  carry a 16  percent
       dividend rate which is paid quarterly. If and when the Company's stock is
       listed again on NASDAQ the dividend rate will drop to 8 percent.

       Both  issuances of  Preferred  Stock are  convertible  into shares of the
       Company's  Common  Stock.  Each  share  of  Series A  Preferred  Stock is
       convertible  into an amount of shares of Pen Common Stock equal to $1,000
       divided  by the  average  of the two  lowest  closing  bid prices for Pen
       Common Stock during the period of 22 consecutive trading days ending with
       the last  trading day before the date of  conversion,  after  discounting
       that market price by 15 percent  (the  "Conversion  Price").  The maximum
       Conversion Price for the Series A Preferred Stock is $1.17 per share. The
       shares of Series B Preferred Stock are  convertible  into Common Stock at
       the same  Conversion  Price as the Series A Preferred  Stock except for a
       maximum Conversion Price of $0.79 per share.  Warrants to acquire 320,000
       shares of Common  Stock at prices  ranging  from $0.86 to $1.28 per share
       were also issued to the purchasers of the Series A and Series B Preferred
       Stock.  The Warrants expire three years from date the Preferred Stock and
       warrants were initially issued.


NOTE H - EARNINGS (LOSS) PER SHARE

       Basic  earnings  (loss) per common  share is  computed  by  dividing  net
       earnings (loss) available to common  shareholders by the weighted average
       number of common shares outstanding during each period.  Diluted earnings
       (loss)  per  common  share  are  similarly  calculated,  except  that the
       weighted  average  number of common shares  outstanding  includes  common
       shares  that may be issued  subject  to  existing  rights  with  dilutive
       potential  except  for  periods  when  such  calculations  would  be anti
       dilutive.

       For the three and nine months  ended June 30, 1999,  net earnings  (loss)
       attributable to common  shareholders  includes  accrued  dividends at the
       stated  dividend  rate  from  date of  issuance  and a  non-cash  imputed
       dividend  to  the  preferred   shareholders  related  to  the  beneficial
       conversion feature on the 1999 Series A and B Preferred Stock and related
       warrants.  (See Note G). The beneficial conversion feature is computed as
       the  difference  between the market  value of the common stock into which
       the  Series  A and B  Preferred  Stock  can be  converted  and the  value
       assigned to the Series A and B Preferred Stock in the private  placement.
       The imputed  dividend is a one-time  non-cash charge against the earnings
       (loss) per common share.  The calculation of earnings (loss) per share is
       included in Exhibit 11.


                                       14

<PAGE>


                             PEN INTERCONNECT, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)




NOTE I - SUBSEQUENT EVENTS

       Effective  September  1, 1999 the  Company has  entered  into  consulting
       agreements  with three  individuals  for the purpose of receiving  advice
       concerning  overall  management,  strategic planning and marketing of the
       Company's  business.  The consulting  agreements call for the issuance of
       options to purchase  3,326,667  shares of common stock at $0.30 per share
       as compensation for the consulting  services.  The consulting  agreements
       are to be included in a Form S-8 Registration  Statement to be filed with
       the SEC to  register  the shares  being  optioned.  If the  options  were
       exercised on September 8, 1999 with a market price of $0.54 per share for
       the Company's stock, the exercise of the options would result in a charge
       of $798,400 of additional expense effecting the Company's fourth quarter.
       The exercise of the options  would also  generate  $998,000 of additional
       cash  proceeds  to the  Company  which is  intended to be used to finance
       operations.


                                       15

<PAGE>





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

Forward-Looking Statements

This report contains certain  forward-looking  statements  within the meaning of
section 27A of the  Securities  Act of 1933 as  amended,  and section 21E of the
Securities   Exchange  Act  of  1934,   as  amended,   that  involve  risks  and
uncertainties.  In  addition,  the  Company  may  from  time to time  make  oral
forward-looking statements.  Actual results are uncertain and may be impacted by
the following factors.  In particular,  certain risks and uncertainties that may
impact the accuracy of the forward-looking  statements with respect to revenues,
expenses and operating  results include without  limitation,  cycles of customer
orders,  general  economic and  competitive  conditions  and  changing  consumer
trends,  technological  advances  and  the  number  and  timing  of new  product
introductions,  shipments of products and components from foreign suppliers, and
changes in the mix of products  ordered by  customers.  As a result,  the actual
results  may differ  materially  from  those  projected  in the  forward-looking
statements.

Because  of these and other  factors  that may affect  the  Company's  operating
results,  past  financial  performance  should not be considered an indicator of
future performance, and investors should not use historical trends to anticipate
results or trends in future periods.

The following  discussion and analysis  provides certain  information  which the
Company's  management believes is relevant to an assessment and understanding of
the Company's  results of operations  and financial  condition for the three and
nine months  ended June 30,  1999 and 1998.  This  discussion  should be read in
conjunction  with the  audited  financial  statements  of the  Company and notes
thereto  included in the Annual  Report of the Company on Form  10-KSB/A for the
year ended September 30, 1998.

General

Pen  Interconnect,  Inc. is a provider of contract  manufacturing  services  for
original  equipment  manufacturers.  It builds electronic systems and subsystems
for  customers  in  a  range  of  industries   including   computers,   consumer
electronics,  industrial and medical instrumentation,  avionics, communications,
and semiconductor applications.  In addition, the Company provides custom design
and  manufacturing of battery chargers,  power supplies and uninterrupted  power
supply  systems.   Pen  Interconnect's   services  include  product  design  and
prototyping, systems assembly, software duplication, packaging, and warehousing.

Pen  Interconnect,  Inc.  provides the total  manufacturing  solution  including
circuit  design,  board design from  schematic,  mechanical and product  design,
prototype  assembly,   volume  board  assembly,  system  services  and  end-user
distribution.  The Company was incorporated  under the laws of the State of Utah
on  September  30,  1985.  Pen  Interconnect,  Inc.  has  support  manufacturing
facilities in California, Utah and China.


                                       16

<PAGE>





During the three  months  ending June 30,  1999 the  Company's  InCirt  division
secured  contracts  with  two  new  customers.  One  contract  is  with  Imaging
Technologies  Corp.  (Itec) and the other is with Xtend Micro  Systems  (Xtend).
Itec  manufactures and sells printers to national and  international  companies.
The  Company's  contract  with Itec is to assemble  the  controller  board which
operates the printer,  install the controller  board and then provide  packaging
and shipping  services.  Xtend provides the  distribution of battery charges and
adapter  modules for laptop PC's.  At present,  the Company  would  assemble the
circuit boards for the chargers and adapter  modules and then provide  packaging
and  shipping  services.  The  packaging  and  shipping  services are new to the
Company's InCirt division but are part of the overall contract of being the sole
manufacturer for both of these new customers.

Merger and Acquisitions

The  Company   signed  a  definitive   agreement  to  merge  with   Transdigital
Communications, Inc. (TCC) in July of 1999. The agreement, which would result in
a reverse merger with TCC management becoming the management of the new company,
stipulated  various closing conditions for both Pen and TCC. As of this date, it
is doubtful that the closing conditions  stipulated in the agreement will be met
and both parties have  mutually  agreed to terminate the  agreement,  although a
writing to this effect has not been completed.

Results of Operations

Net sales.  Net sales for the Company  increased  $588,413 or  approximately  13
percent for the three month  period  ended June 30, 1999 as compared to the same
period in the prior year. This increase resulted primarily from sales related to
two new contracts acquired by the InCirt division during the third quarter of FY
99 of  approximately  $1,851,000.  These  sales more than  offset the decline in
sales of  $1,174,411  related  to the sale of the  Cable and  MotoSat  divisions
during the third quarter of the prior year. Sales for the nine months ended June
30, 1999 were  $570,886  or 5 percent  more than during the same period from the
prior fiscal year.  This increase was also primarily due to sales related to the
acquisition of two new contracts by the InCirt division during the third quarter
of  FY 99 of  $1,851,000  and  increases  in  sales  on  existing  contracts  of
approximately  $800,000  which  were  in  excess  of the  decline  in  sales  of
$2,041,630 due to the sale of the Cable and MotoSat divisions.

Cost of sales.  Cost of sales as a  percentage  of net sales have  increased  to
approximately 82 percent for the three months ended June 30, 1999 as compared to
78 percent for the same period in the prior year. This increase is due primarily
to an  increase  in fixed  manufacturing  costs in support of the new  contracts
acquired  by the  InCirt  division.  As sales for these  contracts  reach  their
projected  levels in the fourth  quarter of FY 99 the  Company  expects to see a
drop in the  percent  of cost of sales  to sales  ratio  inasmuch  as these  new
contracts  have more  favorable  margins than the existing  customer  base.  The
increase is also attributable to a decline in margins on an existing contract at
the  InCirt  division  which  were  necessary  to  accept  in  order  to  remain
competitive and retain the contract.  Cost of sales as a percentage of sales was
88 percent  for the nine months  ended June 30, 1999  compared to 78 percent for
the same period from the prior fiscal year.  This increase is also  attributable
to the increase in fixed  manufacturing  costs associated with the new contracts
acquired  by the  InCirt  division  and the  decrease  in  margins  on  existing
contracts mentioned previously.


                                       17

<PAGE>





Operating expenses.  Operating expenses decreased $179,207 or 21 percent for the
three  months  ended June 30,  1999  compared  to the same period of time in the
prior fiscal year. For the nine months ended June 30, 1999,  operating  expenses
increased  $965,884  or 41 percent  compared  to the same  period in fiscal year
1998.  This  increase  was mostly  associated  with an  increase  in general and
administrative   expenses  of   $1,068,406.   The   increases   in  general  and
administrative  expenses  occurred  mostly during the second quarter and include
(1) $208,599 in professional  fees associated with the issuance of the Company's
Series A and B preferred  stock,  the negotiation of proposed merger  agreements
and  agreements  for the sale of the Cable and  Motosat  divisions,  and  Nasdaq
compliance hearings, (2) $567,365 for financial representation services, and (3)
$97,000 in  supplemental  payroll  expenses  associated  with the termination of
employees with the sale of the Cable division. Research and development costs at
the  PowerStream  division  were $8,527 lower during the three months ended June
30, 1999 as compared to the same period in 1998 but were $60,607  higher for the
nine  months of 1999 as  compared to 1998.  These  costs  represent  ongoing new
product development at the PowerStream division.

Other income and expenses.  Other expenses increased $812,993 or 610 percent for
the three months ended June 30, 1999 compared to the same three-month period for
the  prior  fiscal  year.  This  increase  is  mostly  due to a write off of the
Company's  investment  in  the  stock  of  Touche  Manufacturing  Inc.  totaling
$724,959.  Other expenses also  increased due to interest  income in fiscal year
1998  which  does not  exist  in  fiscal  year  1999 and  $124,325  in  expenses
associated  with the  issuance  of  Series  B  Preferred  Stock  in 1999.  These
increased  expenses are offset by higher interest expense related to a favorable
conversion feature associated with subordinated debentures which was recorded in
fiscal  year 1998  which  does not exist in fiscal  year  1999.  Other  expenses
increased  $1,927,859  or 330 percent  for the nine  months  ended June 30, 1999
compared to the same period for the prior fiscal year.  In addition to the items
discussed  for the  third  quarter,  the  Company  also  recorded  a loss on the
impairment  of  assets  pertaining  to the sale of the Cable  division  totaling
$1,144,940  and incurred  expenses  associated  with the issuing of the Series A
preferred stock totaling $150,000 in the second quarter of 1999.

Net earnings  (loss) and earnings  (loss) per share.  The net loss for the third
fiscal quarter ended June 30, 1999 totaled ($716,235) or ($0.09) per basic share
before  accrued  dividends on preferred  stock,  compared with a gain of $358 or
$0.00 per basic share for the third quarter of fiscal 1998. Included in the loss
per  share for the  third  quarter  of 1999 is a loss per share of $0.09 for the
write off of the  investment  of stock in TMCI stock.  For the nine months ended
June 30, 1999 the net loss of $4,359,996 resulted in a loss per share of ($0.67)
before the accrual for dividends on preferred stock compared to a loss per share
of ($0.05) on a loss of $225,978  for the same period in the prior  fiscal year.
The increase in the loss per share of ($0.62)  includes  ($0.18)  related to the
write down of impaired  assets,  ($0.16)  related to the increase in general and
administrative expenses, ($0.19) related to the decline in margins on sales, and
($0.15) related to the loss on the disposal of the Cable division.

                                       18


<PAGE>





Liquidity and Capital Resources

The Company has positive working capital of $1,074,355 at June 30, 1999 compared
to a working capital  deficit of ($429,423),  ($2,164,821)  and  ($1,714,606) at
March 31, 1999,  December 31, 1998 and at September 30, 1998  respectively.  The
increase in working  capital has resulted  from  increased  sales and  inventory
related to two new contracts  secured by the Company during the third quarter of
fiscal year 1999.

During the third quarter of fiscal year 1999, the Company achieved earnings from
operations of $229,996.  These  earnings were then impacted by a write off of an
investment  in the stock of Touche  Manufacturing  Inc. of $724,959.  During the
first  quarter of fiscal  year 1999 TMCI was  forced  into  receivership  by its
lender for non compliance with loan covenants.  The Company made an unsuccessful
attempt to use its shares as a means of acquiring all or part of the business of
TMCI. After this unsuccessful bid, it was determined that the investment in TMCI
stock was of no value and was therefore written off.

In conjunction  with the Company's  definitive  agreement to merge with TCC, the
Company advanced  approximately $516,000 to assist TCC in funding its operations
until  completion  of the  merger.  TCC has  signed a  promissory  note with the
Company to repay all funds advanced with interest at eight percent.  The note is
be repaid from future funding sources acquired by TCC.

The Company issued it's A series and B series of Preferred Stock in February and
April 1999  respectively.  The issuance of the Series A Preferred  Stock was for
$1,800,000  and  consisted  of 1,800  shares at $1,000 per  share.  The Series B
Preferred  Stock was for $1,000,000 and consisted of 1,000 shares also at $1,000
per share. Both issuances raised,  net of expenses  associated with the issuance
and repayment of bridge loans,  $1,665,500 to the Company which was used to fund
ongoing operations.

Management  believes that the new contracts secured at the InCirt division along
with new  contracts  expected  in the near  future  should  result in  continued
profitable  operations;  however,  there  can be no  assurance  that  additional
contracts can be secured or that the new contracts  which have been secured will
continue to perform as anticipated.

Although the improvement in earnings from operations for the current fiscal year
is good news the Company still faces tight cash  constraints with its growth due
to vendors'  requiring  advanced  payments or low credit limits.  The Company is
looking to raise  additional  funds in the  capital  markets to assist  with the
working capital  requirements to fund this growth.  Pen's  management  estimates
that  approximately  $1 million  may have to be raised to sustain  the growth in
operations.  With the raising of this additional  capital,  management  believes
that the cash  supplied  from  operations  in the future will be  sufficient  to
sustain operations and reduce the dependency the Company has had on raising cash
in the capital markets to sustain operations.

Inflation and Seasonality

The Company does not believe that it is significantly impacted by inflation. The
Company has been marginally  influenced  with  seasonality of sales in the past.
With the sale of the Cable  and  MotoSat  divisions,  the  Company  is even less
impacted by seasonality than before.

                                       19


<PAGE>





Year 2000 Readiness

In general,  the Year 2000 issue  relates to computers  and other  systems being
unable to  distinguish  between  the years  1900 and 2000  because  they use two
digits,  rather than four, to define the applicable  year.  Systems that fail to
properly recognize such information will likely generate erroneous data or cause
a system to fail possibly resulting in a disruption of operations. The Company's
products do not incorporate such date coding so the Company's efforts to address
the Year  2000  issue  fall in the  following  three  areas:  (i) the  Company's
information  technology ("IT") systems; (ii) the Company's non-IT systems (i.e.,
machinery,  equipment and devices which utilize  technology  which is "built in"
such as embedded microcontrollers); and (iii) third-party suppliers. The Company
has completed  its  evaluation of its IT systems and believes that these systems
are Year 2000 compliant. The Company's non-IT systems are not date sensitive and
therefore pose no risk in relation to Year 2000 issues.

Third party  suppliers  and  customers  present a different  problem in that the
Company  cannot  control  the  efforts  of such  third  parties  to be Year 2000
compliant..  The Company is currently  requesting  confirmations  from  critical
third party suppliers that they are year 2000 compliant to avoid  disruptions of
services  and  supplies.  At present  the Company has  received  responses  from
approximately  40 percent of its critical  vendors and is  continuing to solicit
responses from the rest.  However,  any failure on the part of such companies to
be year 2000 compliant on a timely basis may adversely  affect the operations of
the  Company.  Costs  incurred to date to achieve the  Company's  readiness  for
potential  Y2K risk have not been  material.  Management  also believes that any
additional costs necessary to complete the evaluation of supplier readiness will
not be material.

                                       20

<PAGE>





                                     PART II

                                OTHER INFORMATION



Item 1.           Legal Proceedings.

From time to time the  Company  has been a party to  various  legal  proceedings
arising in the ordinary course of business. The Company has had a judgement made
against it pertaining to an obligation of $79,000 to YC Intl. which has not been
paid.  Agreements  made  with the legal  counsel  of YC Intl.  call for  monthly
payments of $10,000 to be made. To date the Company has made payments of $50,000
towards this obligation.

Item 2.           Changes in the Securities and Use of Proceeds.

1.     In April 1999, Pen Interconnect  Inc. issued 153,000 shares of its common
       stock to Richard S. Carpenter in  consideration of common stock issued as
       payment for services.
2.     In April 1999, Pen Interconnect  Inc. issued 147,000 shares of its common
       stock to Jeffery M. Lamberson in  consideration of common stock issued as
       payment for services.
3.     In April 1999, Pen Interconnect  Inc. issued 281,250 shares of its common
       stock to Liviakis  Financial  Communications,  Inc. in  consideration  of
       common stock issued as payment for services.
4.     In April 1999, Pen  Interconnect  Inc. issued 93,750 shares of its common
       stock to Robert  B.  Prag in  consideration  of  common  stock  issued as
       payment for services.
5.     In May 1999,  Pen  Interconnect  Inc.  issued 15,000 shares of its common
       stock to James  Pendleton  in  consideration  of common  stock  issued as
       compensation.
6.     In May 1999,  Pen  Interconnect  Inc.  issued 20,000 shares of its common
       stock to Dave  Livingston  in  consideration  of common  stock  issued as
       payment for services.
7.     In May 1999,  Pen  Interconnect  Inc.  issued 10,000 shares of its common
       stock to Corporate  Development  Group in  consideration  of common stock
       issued as payment for services.
8.     In May 1999,  Pen  Interconnect  Inc.  issued  7,000 shares of its common
       stock to Network Investor Communications in consideration of common stock
       issued as payment for services.
9.     In May 1999,  Pen  Interconnect  Inc.  issued  1,500 shares of its common
       stock to Robert  Albrecht  in  consideration  of common  stock  issued as
       compensation.
10.    In May 1999,  Pen  Interconnect  Inc.  issued  2,167 shares of its common
       stock to  Stephen  Fryer in  consideration  of  common  stock  issued  as
       compensation.
11.    In May 1999,  Pen  Interconnect  Inc.  issued  2,500 shares of its common
       stock to Mehrdad  Mobasseri  in  consideration  of common stock issued as
       compensation.
12.    In May 1999,  Pen  Interconnect  Inc.  issued  1,000 shares of its common
       stock  to  Owen  Marsh  in   consideration  of  common  stock  issued  as
       compensation.
13.    In May 1999,  Pen  Interconnect  Inc.  issued  1,000 shares of its common
       stock  to  Bill  Day  in   consideration   of  common   stock  issued  as
       compensation.

                                       21


<PAGE>





14.    In May 1999,  Pen  Interconnect  Inc.  issued  1,000 shares of its common
       stock  to  Steve  Ngo  in   consideration   of  common  stock  issued  as
       compensation.
15.    In May 1999,  Pen  Interconnect  Inc.  issued  1,000 shares of its common
       stock to  Rafael  Batista  in  consideration  of common  stock  issued as
       compensation.
16.    In May 1999, Pen Interconnect  Inc. issued 400 shares of its common stock
       to Ronda Barboa in consideration of common stock issued as compensation.
17.    In May 1999, Pen Interconnect  Inc. issued 400 shares of its common stock
       to  Heather   Hungate  in   consideration   of  common  stock  issued  as
       compensation.
18.    In May 1999, Pen Interconnect  Inc. issued 400 shares of its common stock
       to Irene Tafulu in consideration of common stock issued as compensation.
19.    In May 1999, Pen Interconnect  Inc. issued 400 shares of its common stock
       to Lien Hoang in consideration of common stock issued as compensation.
20.    In May 1999, Pen Interconnect  Inc. issued 400 shares of its common stock
       to  Waldemar  Dziurzynski  in  consideration  of common  stock  issued as
       compensation.
21.    In May 1999, Pen Interconnect Inc. issued 171,195 of its shares of common
       stock  to  BNC  Bach  in  consideration  of  conversion  of  $100,000  of
       subordinated debentures.
22.    In June 1999, Pen  Interconnect  Inc. issued 200,889 shares of its common
       stock  to  BNC  Bach  in  consideration  of  conversion  of  $125,000  of
       subordinated debentures.

Item 3.   Defaults Upon Senior Securities.  None.

Item 4.   Submission of Matters to a Vote of Security Holders.
          None during the quarter.

Item 5.   Other Information.   None

Item 6.   Exhibits and Reports on Form 8-K.

A.        Exhibits

          11  Calculation of earnings (loss) per share

          27  Financial Data Schedule.

B.        Reports on Form 8-K.  None


                                       22


<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.


Date: September 14, 1999


                                  PEN INTERCONNECT, INC.

                                  By:  /s/ Stephen J Fryer
                                  Stephen J. Fryer
                                  President and CEO


                                  By: /s/ Robert J. Albrecht
                                  Robert J. Albrecht
                                  CFO, Principal Accounting
                                  Officer and Vice-President


                                       23


<PAGE>


                                                                    Exhibit 11

                             Pen Interconnect, Inc.

                    CALCULATION OF EARNINGS (LOSS) PER SHARE
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                 Three months         Three months          Nine months         Nine months
                                                Ended June 30,       Ended June 30,      Ended June 30,        Ended June 30,
                                                     1999                 1998                 1999                 1998
                                              ------------------   ------------------   -------------------  -------------------
<S>                                           <C>                  <C>                  <C>                  <C>
Net earnings (loss)                           $         (716,235)  $              358   $        (4,359,996) $          (225,978)
Preferred dividends                                     (109,063)                   0              (146,148)                   0
Imputed dividend from beneficial
   conversion feature of Preferred Stock                (626,262)                   0              (626,262)                   0
                                              ------------------   ------------------   -------------------  -------------------
Net earnings (loss) attributable to
   common shareholders                        $       (1,451,560)  $              358   $        (5,132,406) $          (225,978)
                                              ==================   ==================   ===================  ===================
        Basic EPS
Common shares outstanding entire
   period                                              6,865,517            4,384,987             5,018,437            4,072,863
Weighted average common shares issued                    828,133              201,975             1,520,383              379,449
                                              ------------------   ------------------   -------------------  -------------------
Weighted average commons shares
   outstanding during period                           7,693,650            4,586,962             6,538,820            4,452,312
                                              ==================   ==================   ===================  ===================
   Earnings (loss) per common share - basic   $            (0.19)  $             0.00   $             (0.78) $             (0.05)
                                              ==================   ==================   ===================  ===================
        Diluted EPS
Weighted average common shares
   outstanding during period - basic                   7,693,650            4,586,962             6,538,820            4,452,312
Dilutive effect of stock options and
   warrants                                                    0              534,191                     0                    0
                                              ------------------   ------------------   -------------------  -------------------
Weighted average common shares
   outstanding during period - diluted                 7,693,650            5,121,153             6,538,820            4,452,312
                                              ==================   ==================   ===================  ===================
Earnings (loss) per common share -
   diluted                                    $            (0.19)  $             0.00   $             (0.78) $             (0.05)
                                              ==================   ==================   ===================  ===================

</TABLE>