UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                  FORM 10 - QSB

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

                     For the Quarter Ended February 28, 1999

                                       OR

            [ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE
                                  EXCHANGE ACT

             For the transition period from __________ to __________

                         Commission File Number 0-22969

                                 PALADYNE CORP.
        (Exact Name of Small Business Issuer as specified in its charter)

         Delaware                                               87-0375342
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

          615 Crescent Executive Court, Suite 128, Lake Mary, FL 32746
                    (Address of Principal Executive Offices)

                                  (407)333-2488
                           (Issuer's telephone number)

                   Synaptx Worldwide, Inc., a Utah corporation
              (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  Securities  Exchange  Act of 1934 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 the latest practicable date.

         Class                              Outstanding as of April 14, 1999
Common Stock, $ .001 par value                        6,584,342

Transitional Small Business Disclosure Format (check one):Yes     No X .
                                                             ----   ---- 

                                     1

<PAGE>

                                TABLE OF CONTENTS

                                                                       Page
                                                                       ----
           PART  I.  FINANCIAL INFORMATION

Item 1.    Condensed Consolidated Financial Statements                   3

           Condensed Consolidated Balance Sheets - February 28,
           1999 and August 31, 1998                                      4

           Condensed Consolidated Statements of Operations -
           three months ended February 28, 1999 and 1998                 5

           Condensed Consolidated Statements of Operations -
           six months ended February 28, 1999 and 1998                   6

           Condensed Consolidated Statements of Cash Flows -
           six months ended February 28, 1999 and 1998                   7

           Notes to Condensed Consolidated Financial Statements          8

Item 2.    Management's Discussion and Analysis
           and Results of Operations                                    11

           PART  II.  OTHER INFORMATION

Item 1.    Legal Proceedings                                            15

Item 2.    Changes in Securities and Use of Proceeds                    15

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

           SIGNATURES                                                   16

                                     2

<PAGE>

PART  I

ITEM 1.  FINANCIAL STATEMENTS

The following  unaudited  Condensed  Consolidated  Financial  Statements for the
three and six month periods ended  February 28, 1999 and 1998 have been prepared
by Paladyne  Corp., a Delaware  corporation.  Effective  March 5, 1999,  Synaptx
Worldwide,  Inc., a Utah  corporation,  merged with and into Paladyne Corp. in a
migratory  merger,  and Paladyne Corp. is the successor  registrant  pursuant to
Rule 12g-3 under the Securities  Exchange Act of 1934. The financial  statements
in this Report are of Synaptx Worldwide, Inc.


                                     3

CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF FEBRUARY 28, 1999 AND AUGUST 31, 1998

                                                       February 28,  August 31,
                                                          1999         1998
                                                       (Unaudited)   (Audited)
                                                       -----------   ---------
ASSETS
Current assets:
    Cash                                               $  248,624    $  126,532
    Accounts receivable (net of allowance for 
      doubtful accounts of $37,736 and $37,736)           815,848       918,785
    Prepaid expenses and deposits                         135,355        44,861
                                                       ----------    ----------
      Total current assets                              1,199,827     1,090,178
 
Property and equipment                                    452,327       462,725
Less accumulated depreciation                            (209,647)     (162,045)
                                                       ----------    ----------
      Net property and equipment                          242,680       300,680
 
Costs in excess of net assets acquired
      (net of accumulated amortization of $1,924,508 
      and $1,878,834)                                     823,207       868,881
Other assets                                               50,756        96,839
                                                       ----------    ----------
Total assets                                           $2,316,470    $2,356,578
                                                       ==========    ==========

 
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

 Accounts payable                                         575,728    $  490,726
 Accrued expenses and taxes                               236,663       438,737
 Notes payable                                            150,000       303,417
 Current portion of long-term debt                        213,888       175,521
 Deferred revenue                                         274,639       150,427
                                                       ----------     ---------
      Total current liabilities                         1,450,918     1,558,828

Long-term debt, net of current portion                    201,497       331,502

Commitments
 
Stockholders' equity

 Cumulative, convertible preferred stock; $.001 par
 value; 10,000,000 shares authorized, 137,143 issued
 and outstanding                                              137           137
 Common stock; $.001 par value; 25,000,000 shares
    authorized, 6,584,342 and 6,378,503 issued and
    outstanding                                             6,585         6,379
 Additional paid in capital                             4,546,482     4,284,534
 Deficit                                               (3,889,149)   (3,824,802)
                                                       ----------    ---------- 
   Total stockholders' equity                             664,055       466,248
                                                       ----------    ----------

 Total liabilities and stockholders' equity            $2,316,470    $2,356,578
                                                       ==========    ==========


                                     4
<PAGE>

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED FEBRUARY 28, 1999 AND 1998

                                                      1999             1998
                                                  (Unaudited)       (Unaudited)
                                                  -----------        ---------

Net sales and revenues:
 Marketing services and production               $  216,803        $  599,327
 Database services                                  618,400           409,220
 Commission income                                  785,976           447,033
 Executive placement fees                            52,000            22,000
                                                 ----------        ----------
   Total revenues                                 1,673,179         1,477,580
 
 Cost of sales and revenues                       1,235,196         1,245,653
                                                 ----------        ----------
                                              
 Gross profit                                       437,983           231,927
 
 Selling, general and administrative expenses       424,843           530,376
 Depreciation and amortization                       58,107            81,099
                                                 ----------        ----------
 (Loss) income from operations                      (44,967)         (379,548)

 Other (income) expense:
 Interest expense                                    14,065            12,741
 Gain on sale of subsidiary                         (63,501)                -
                                                 ----------        ----------
                                                    (49,436)           12,741
                                                 ----------        ----------
 Net income (loss)                                    4,469          (392,289)
 
 Cumulative convertible preferred stock
 dividend requirements                               10,200             6,800
                                                 ----------        ----------
 
 Net loss applicable to common shareholders      $   (5,731)       $ (399,089)
                                                 ==========        ==========

 Weighted average shares outstanding              6,608,080         5,377,518
                                                 ==========        ==========

 Basic and diluted net loss per share            $     0.00        $    (0.07)
                                                 ==========        ==========


                                     5
<PAGE>

SYNAPTX WORLDWIDE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1999 AND 1998


                                                     1999              1998
                                                 (Unaudited)        (Unaudited)
                                                 -----------        -----------

Net sales and revenues:

 Marketing services and production               $  595,647        $1,672,161
 Database services                                1,437,271           558,819
 Commission income                                1,638,686           712,123
 Executive placement fees                            52,000            37,330
                                                 ----------        ----------
   Total revenues                                 3,723,604         2,980,433
 
Cost of sales and revenues                        2,767,071         2,273,858
                                                 ----------        ----------

Gross profit                                        956,533           706,575

Selling, general and administrative expenses        953,552           937,916
Depreciation and amortization                       104,679           143,690
                                                 ----------        ----------

(Loss) income from operations                      (101,698)         (375,031)

Other (income) expense:
Interest expense                                     26,150            22,796
Gain on sale of subsidiary                          (63,501)                -
                                                 ----------        ----------
                                                    (37,351)           22,796
                                                 ----------        ----------

Net loss                                            (64,347)         (397,827)
 
Cumulative convertible preferred stock
dividend requirements                                20,400             6,800
                                                 ----------        ----------

Net loss applicable to common shareholders       $  (84,747)       $ (404,627)
                                                 ==========        ==========

Weighted average shares outstanding               6,516,990         5,300,864
                                                 ==========        ==========

Basic and diluted net loss per share             $    (0.01)       $    (0.08)
                                                 ==========        ==========


                                     6

<PAGE>

SYNAPTX WORLDWIDE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1999 AND 1998
 

                                                        1999          1998
                                                     (Unaudited)   (Unaudited)
                                                     -----------   -----------

Net cash (used in) provided by operating activities   (74,728)         8,987
 
Cash flows from investing activities
 Additions to property, plant and equipment           (25,755)       (52,297)
 Businesses acquired                                        -         33,452
 Reductions in (additions to) other assets             46,083       (211,520)
                                                   ----------     ----------
   Net cash provided by (used in) investing
    activities                                         20,328       (230,364)

Cash flows from financing activities

 Reductions in bank lines of credit                  (135,499)        (1,309)
 (Reductions in) additions to long-term debt         (116,005)       140,300
 Additions to (reductions in) in short-term debt       44,842         (1,837)
 Issuance of common stock-net                         383,154        148,023
                                                   ----------     ----------
Cash provided by financing activities                 176,492        285,176
                                                   ----------     ----------
Net increase in cash                                  122,092         63,799
 
Cash at beginning of period                        $  126,532     $   58,265
                                                   ----------     ----------
 
Cash at end of period                              $  248,624     $  122,064
                                                   ==========     ==========

                                     7
<PAGE>

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED

NOTE 1.  BASIS OF PRESENTATION

The  financial   information  included  herein  is  unaudited;   however,   such
information  reflects all  adjustments  (consisting  solely of normal  recurring
adjustments)  which,  in the opinion of  management,  are  necessary  for a fair
statement  of  results  for the  interim  periods.  The  accompanying  financial
statements  include  estimated  amounts and  disclosures  based on  management's
assumptions about future events. Actual results may differ from those estimates.

The results of operations for the interim periods are not necessarily indicative
of the results to be expected for the full year.  Basic and diluted earnings per
share are the same due to the anti-dilutive nature of the options.

The  condensed  consolidated  financial  statements  have been  prepared  by the
Company,  without audit, pursuant to the rules and regulations of the Securities
and Exchange  Commission.  Certain information and footnote disclosures normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles have been condensed or omitted pursuant to such rules and
regulations,  although the Company believes that the disclosures are adequate to
make information presented not misleading.

These  financial  statements  should be read in  conjunction  with the financial
statements  included  in the  Company's  Form  10-KSB for the fiscal  year ended
August 31,  1998,  as filed with the  Securities  and  Exchange  Commission  and
available under the EDGAR reporting system or from the Company.

The Company's financial statements are presented on a going concern basis, which
contemplates  the  realization of assets and  satisfaction of liabilities in the
normal course of business.  The Company's ability to continue as a going concern
is contingent upon its ability to secure additional financing,  raise additional
equity  investment,  and attain profitable  operations.  Although the Company is
pursuing  additional  private equity  investment as well as the  refinancing and
expansion of outstanding  debt,  there can be no assurance that the Company will
be able to secure financing when needed or obtain such terms satisfactory to the
Company. In addition,  the Company's ability to continue as a going concern must
be considered in light of the problems,  expenses and  complications  frequently
encountered by entrance into established markets and the competitive environment
in which the  Company  operates.  The  financial  statements  do not include any
adjustments  to reflect the possible  future effects on the  recoverability  and
classification  of assets or the amounts and  classification of liabilities that
may result  from the  possible  inability  of the Company to continue as a going
concern.

During fiscal year 1998, the Company  changed its strategy from one of acquiring
and growing  mainly  distribution  companies  to one of building  upon  internal
strengths  and  acquiring  customer   organizations   focused  on  the  customer
management segment. Customer management in the context of what the Company does,
is broadly  defined as  processes  that enable  network  and  network  equipment
providers to identify,  acquire, and maintain desirable customers. This shift is
a result of what Management feels is greater opportunity and a greater chance of
achieving profitable operations on a long-term basis.

NOTE 2. PRINCIPLES OF CONSOLIDATION

The  condensed  consolidated  financial  statements  include the accounts of the
Company and its wholly owned subsidiaries.  The subsidiaries  consist of Synaptx
Access,  Inc.  ("Access"),   acquired  in  June,  1996,  Synaptx  Impulse,  Inc.
("Impulse"),  acquired in October, 1996, WG Controls,  Inc. ("WG"),  acquired in
January,  1998, and Primus Marketing  Associates,  Inc. ("Primus"),  acquired in
June,   1998.  The  statements  also  include  the  results  of  ORAYCOM,   Inc.
("ORAYCOM"),  acquired  in June,  1997 for all  periods  presented  through  the
Company's disposition of this subsidiary as of December 1, 1998.

                                     8
<PAGE>


NOTE 3. PRIVATE PLACEMENTS

During the six months ended February 28, 1999, the Company raised $383,154,  net
of private  placement costs, as a result of selling 216,008 shares of its Common
Stock in private placements. Additionally, each share subscribed included a five
year  warrant  to  purchase  one  share of  Common  Stock at  $3.00  per  share.
Therefore, 216,008 warrants were issued in conjunction with the shares of Common
Stock.   Additionally  in  the  period,   53,573  shares  of  Common  Stock  and
corresponding  warrants  were issued to private  placement  subscribers  who had
originally  purchased shares at $2.00 per share, which was the original price of
that placement.  Due to market conditions,  the placement was re-priced at $1.75
and the Company retroactively made this price available to previous subscribers.
The Company  also issued 657 shares of its Common  Stock as  compensation  to an
unrelated  individual  who assisted in the  placement,  and issued 551 shares of
Common Stock as a result of stock options exercised.

NOTE 4:  BUSINESS DISCONTINUATION

As a result  of  repeated  and  recurring  losses  the  Company  terminated  its
operations  under the  Advantage  Technologies  name in San Jose,  CA  effective
November  30, 1998.  The Company did not incur  material  costs  related to this
closure.

Subsequent  to the close of business on November 30, 1998,  the Company sold all
the capital stock in ORAYCOM,  Inc.  ("ORAYCOM") to O. Ray Strickland and O. Ray
Strickland IRA,  (collectively,  the "Strickland  Group"). Mr. Strickland was an
employee of the Company and the General  Manager of ORAYCOM,  Inc.,  and was the
sole shareholder of ORAYCOM when the Company acquired it from him in June, 1997.
The  agreement  called for  Strickland  Group to convey to the  Company,  80,000
shares of the  Company's  Common  Stock in  exchange  for all of the  issued and
outstanding  shares of ORAYCOM and waiver of the non-compete  agreement in place
with Mr.  Strickland.  As a result,  the  Company  took a charge  in the  fourth
quarter of fiscal  1998 of $428,054  to write off the  remaining  balance of the
goodwill  related to the  purchase of  ORAYCOM.  ORAYCOM  was not  considered  a
material subsidiary to the Company's  consolidated  business.  Upon closing, the
Company recognized a gain on the transaction of $63,501 in 2Q99.

NOTE 5. SUPPLEMENTAL CASH FLOW DISCLOSURES

Cash paid for interest was approximately $ 38,000 and $ 20,000 for the six month
periods ended February 28, 1999 and 1998, respectively.

On  January 5, 1998,  the  Company  purchased  all of the  capital  stock of WG
Controls,  Inc. for approximately $1,100,000 utilizing  common stock,  preferred
stock,  and  future  cash  payouts.   In  conjunction  with  this   acquisition,
liabilities assumed were as follows:


                                    February 28, 1999         February 28, 1998
                                    -----------------         -----------------
Fair value of assets acquired       $               -         $     1,126,776
Cash acquired                                       -                  33,452
Value of stock issued                               -         $      (869,621)
                                    ------------------        ----------------  

Liabilities assumed                 $               -         $       290,607
                                    ==================        ================  

Subsequent  to the close of business on November 30, 1998,  the Company sold all
of the capital stock in ORAYCOM back to its original  owner (see Note 4 to the 
financial statements). On the date of the sale,  ORAYCOM had assets of $95,892,
liabilities  of $39,393, and stockholders' equity of  $55,499,  for which the 
Company  received  back 80,000 shares of its Common Stock valued at $120,000,
recognizing a gain of $63,501.

NOTE 6. SUBSEQUENT EVENTS

On March 3, 1999, the Company held its annual meeting of  shareholders  at which
shareholders  approved an Agreement  and Plan of Merger  between the Company and
the Company's newly formed, wholly-owned subsidiary,  Paladyne Corp., a Delaware

                                      9
<PAGE>

corporation.  The  merger  was  to  change  the  corporate  name  and  state  of
incorporation. The merger became effective on March 5, 1999.

Additionally,  shareholders  elected the  management  slate of  directors  which
included  two new  directors  to replace  two  departing  directors,  as well as
approving an increase in the number of shares of Common Stock  available  under
the Company's stock option plan to 2,500,000 shares from 1,450,000 shares.

On April 9, 1999,  the Company  entered  into a credit  agreement to replace its
prior  credit  facility.  The new  facility is  considered  adequate to fund the
Company's working capital needs in the near term. The agreement calls for a line
of credit up to $250,000 at prime rate plus 1 1/4% and is  renewable  six months
from the date of the original agreement.

                                      10

<PAGE>


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

Paladyne Corp.  (the  "Company")  through its operating  subsidiaries,  provides
customer  management  expertise  through  the  use  of  sophisticated   database
analysis,  consulting,   marketing  and  sales  services  and  executive  search
("Search")  assistance  primarily within the  telecommunications  industry.  The
Company  intends to build its business  through  internal growth as well as seek
acquisitions  of  existing  companies  exhibiting  the  potential  for growth as
telecommunications  customer management and software providers needing developed
marketing channels. Except for the acquisitions consummated,  the Company has no
agreements  or  understandings  regarding  possible  future  acquisitions.   The
Company's fiscal year ends August 31.

OVERVIEW
--------

The Company's products and services consist primarily of supporting the customer
management functions of clients in the  telecommunications,  data communications
and cable TV industries. The Company's mission of Synaptx is to help its clients
know their customers  better and manage them in a manner to more profitably grow
their businesses.  This involves using information  technology to more precisely
target their prospective  customers,  to develop and implement  customized sales
and marketing programs,  and to develop and implement unique programs to nurture
relationships with existing customers to avoid expensive customer turnover.

The other  service  being offered is sales  representation  offered  through the
following  subsidiaries:  Access, WG, and Primus.  Another sales  representative
subsidiary,  ORAYCOM,  had been included with these operations  through November
30, 1998.  ORAYCOM was not considered a significant part of the business.  These
sales  representative  operations  provide field sales and business  development
support for cable TV, and  telecommunications  (both voice and data  networking)
original equipment manufacturers (commonly referred to as OEMs). Commissions are
earned for sales  generated  for the  designated  products  within the  assigned
territories at rates ranging from  approximately  3.5% to 10%,  depending on the
sophistication of the client's products and services represented.

The Company's financial statements are presented on a going concern basis, which
contemplates  the  realization of assets and  satisfaction of liabilities in the
normal course of business.  The Company's ability to continue as a going concern
is contingent upon its ability to secure additional financing,  raise additional
equity  investment,  and attain profitable  operations.  Although the Company is
pursuing  additional  private equity  investment as well as the  refinancing and
expansion of outstanding  debt,  there can be no assurance that the Company will
be able to secure financing when needed or obtain such terms satisfactory to the
Company. In addition,  the Company's ability to continue as a going concern must
be considered in light of the problems,  expenses and  complications  frequently
encountered by entrance into established markets and the competitive environment
in which the  Company  operates.  The  financial  statements  do not include any
adjustments  to reflect the possible  future effects on the  recoverability  and
classification  of assets or the amounts and  classification of liabilities that
may result  from the  possible  inability  of the Company to continue as a going
concern.

         During fiscal year 1998,  the Company  changed its strategy from one of
acquiring  and growing  mainly  distribution  companies to one of building  upon
internal  strengths  and  acquiring   organizations   focused  on  the  customer
management segment. Customer management in the context of what the Company does,
is broadly  defined as  processes  that enable  network  and  network  equipment
providers to identify,  acquire, and maintain desirable customers. This shift is
a result of what Management feels is greater opportunity and a greater chance of
achieving profitable operations on a long-term basis.


RESULTS OF OPERATIONS
---------------------

The following table sets forth the percentage  relationship to total revenues of
principal items contained in the Company's Condensed Consolidated  Statements of
Operations  for the six months ended  February 28, 1999 and 1998,  respectively.
The percentages  discussed throughout this analysis are stated on an approximate
basis.

                                     11

<PAGE>


                                          Three Months Ended   Six Months Ended
                                              February 28,        February 28,
                                             1999      1998      1999     1998
                                              ----     ----      ----     ----
                                                       (Unaudited)

Net sales and revenues                       100%      100%      100%    100%
Cost of sales                                 72%       84%       74%     76%
                                             ----      ----      ----    ----
Gross Profit                                  28%       16%       26%     24%
Selling, general and administrative           29%       41%       28%     36%
 expenses                                    -----     -----     -----   ----

Operating (loss) income                       (1%)     (25%)      (2%)   (12%)
Interest expense                               1%        1%        1%      1%
Other income                                  (2%)       -        (1%)     -
                                             -----     -----     -----   ----
Net (loss) income                              0%      (26%)      (2%)   (13%)
                                             =====     =====     =====   ====

NET SALES AND REVENUES
----------------------

The  Company's  net  sales and  revenues  increased  by  $195,599  or 13%,  from
$1,477,580  for the three months ended February 28, 1998 ("2Q/98") to $1,673,179
for the three  months  ended  February 28, 1999  ("2Q/99"),  which  increase was
attributable  to increases of $209,180  from  Database  Services,  $338,943 from
Commission Income,  $30,000 from Executive  Placement Fees, offset by a decrease
of $382,524 from Marketing Services and Production.  The Company's net sales and
revenues  increased by $743,171 or 25%, from $2,980,433 for the six months ended
February  28, 1998 to  $3,723,604  for the six months  ended  February  28, 1999
("2Q/99"),  which  increase  was  attributable  to  increases  of $878,452  from
Database  Services,  $926,563 from  Commission  Income,  $14,670 from  Executive
Placement Fees,  offset by a decrease of $1,076,514 from Marketing  Services and
Production.

The increase in  Commission  Income is primarily  attributable  to 2Q/99 figures
having a full  three  months  of  activity  of for WG and  Primus,  while  2Q/98
revenues  included three months' activity for ORAYCOM,  two months' activity for
WG, and no activity  from  Primus.  The  increase in Database  Services  and the
decrease in Marketing  Services and Production is consistent  with the Company's
refocusing  on the  software  and  services  area and moving  away from the pure
marketing  collateral  materials  as its  primary  focus  in the  Impulse  unit.
Additionally  the  Company  has  moved  away from the media  buying  service  it
previously  provided  to  its  clients  because  it is  low  margin  and  highly
administrative in nature.  As discussed in Note 4 to the Condensed  Consolidated
Financial Statements, the ORAYCOM subsidiary was disposed of following the close
of business on November 30, 1998.

COST OF SALES
-------------

Cost of sales and revenues decreased by $10,457 in 2Q/99, or 1%, from $1,245,653
in 2Q/98 to $1,235,196 in 2Q/99.  The nominal  decrease was  attributable to the
fact that both  Advantage  Technologies  and ORAYCOM were included in prior year
results but had no results in the current year period as they had been  disposed
of at the beginning of the period.  Both units  historically  operated at low or
negative gross margins.

Cost of sales and revenues  increased by $493,213 or 22% from  $2,273,858 in the
six months  ended  February  28,  1999 to  $2,767,071  in the six  months  ended
February  28,  1998.  The  increase  was  directly  related to the growth in the
Database  Services  area  where the  Company  has  historically  outsourced  the
overwhelming  majority  of the  work.  Offsetting  the  increase  from  Database
services,   is  a  decrease   attributable  to  the  fact  that  both  Advantage
Technologies  and ORAYCOM  were  included in prior year  results but had minimal
results in the current year period as they had been disposed of at the beginning
of the  period.  Both  units  historically  operated  at low or  negative  gross
margins.

GROSS PROFIT
------------

The  Company's  gross  profit  margin,  was 26% and 16%  for  2Q/99  and  2Q/98,
respectively.  The increase in gross profit  margin of 10  percentage  points in
2Q/99 is primarily attributable to the elimination of Advantage Technologies and
ORAYCOM that historically operated at poor margins.

The  Company's  gross  profit  margin,  was 26% and 24% in the six months  ended
February 28, 1999 and 1998, respectively. The increase in gross profit margin of
2  percentage  points in the current  period is  primarily  attributable  to the
elimination of Advantage  Technologies and ORAYCOM that historically operated at
poor margins.


                                     12
<PAGE>

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
--------------------------------------------

Selling,  general  and  administrative  expenses,   including  depreciation  and
amortization,  decreased by $128,525 in 2Q/99 or 21%,  from $611,475 in 2Q/98 to
$482,950 in 2Q/99. The decrease was primarily due to 2Q/99 results having a full
three months of activity of Impulse,  Access, WG and Primus, while 2Q/98 figures
included only two months' activity for WG and no activity for Primus. Offsetting
this was the fact that  Advantage  Technologies  and  ORAYCOM  had three  months
activity in the prior year and no activity in the  current  year.  Goodwill  and
depreciation   decreased   by  $22,992   primarily  as  a  result  of  decreased
amortization  of  approximately  $19,820  as a result  of fully  amortizing  all
goodwill  related to ORAYCOM and Impulse in the fourth  quarter of fiscal  1998.
Additionally,  the Company has eliminated  approximately $200,000 per quarter in
general  overhead  spending  as a result of staff and  space  reductions,  which
phased in at various times during the first six months of fiscal 1999.

Selling,  general  and  administrative  expenses,   including  depreciation  and
amortization, decreased by $23,375 or 2% from $1,081,606 in the six months ended
February 28, 1998 to $1,058,231 in the six months ended  February 28, 1999.  The
decrease was primarily due to current period results having a full six months of
activity of Impulse,  Access, WG and Primus, while prior period figures included
only two  months'  activity  for WG and no activity  for  Primus.  Additionally,
Advantage  Technologies  and ORAYCOM had six months activity in the prior period
and three  months'  activity in the current  period.  Goodwill and  depreciation
decreased  by  $39,011  primarily  as a  result  of  decreased  amortization  of
approximately  $50,599 as a result of fully  amortizing all goodwill  related to
ORAYCOM and Impulse in the fourth  quarter of fiscal  1998,  offset by increased
depreciation as a result of the addition of the WG and Primus subsidiaries.

INTEREST EXPENSE
----------------

Interest expense increased $1,324 from 2Q/98 to 2Q/99, consistent with a similar
level of borrowing period to period.

Interest  expense  increased  by $3,354 or 15%,  from  $22,796 in the six months
ended  February 28, 1998 to $26,150 in the six months  ended  February 28, 1999.
This  increase is  attributable  to reduced  borrowings  on bank lines of credit
offset by additional interest on notes payable to related parties.

Subsequent  to the close of business on November 30, 1998,  the Company sold all
of the capital stock in ORAYCOM back to its original  owner (see Note 4 to the 
financial statements). On the date of the sale,  ORAYCOM had assets of $95,892,
liabilities  of $39,393, and stockholders' equity of  $55,499,  for which the 
Company  received  back 80,000 shares of its Common Stock valued at $120,000,
recognizing a gain of $63,501.

NET OPERATING LOSS
------------------

The Company has  accumulated  approximately  $2,000,000  of net  operating  loss
carryforwards as of February 28, 1999 which may be offset against taxable income
and  income  taxes in future  years.  The use of these  losses to reduce  future
income taxes will depend on the generation of sufficient taxable income prior to
the  expiration of the net operating  loss carry  forwards.  The carry  forwards
expire in the year  2013.  In the event of  certain  changes  in  control of the
Company,  there will be an annual limitation on the amount of net operating loss
carry  forwards  which can be used.  No tax  benefit  has been  reported  in the
financial  statements  for the three months or the six months ended February 28,
1999 because there is a 50% or greater chance that the carry forward will not be
utilized.  Accordingly,  the  potential tax benefit of the loss carry forward is
offset by a valuation allowance of the same amount.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

The Company's principal cash requirements are for operating expenses,  including
employee costs, outside consultants such as independent  contractors who provide
design,  database,  copywriting and professional  marketing and sales consulting
services,  funding of accounts  receivable,  capital expenditures and funding of
acquisitions.  The  Company's  primary  sources  of cash have been from  private
placements of the Company's Common Stock and cash derived from  operations.  The
Company is investigating various sources for additional  financing,  principally
additional  equity  placements.  There is no  assurance  that the  Company  will
consummate any additional financing or that any additional financing will not be
dilutive to shareholders.

In April 1999, the Company entered into an expanded credit facility  providing a
line of credit up to  $250,000  at prime  rate  plus 1 1/4 % and  renewable  six
months  from  the  date of the  original  agreement.  Management  believes  that
internal cash flow, the expanded credit facility and anticipated  private equity
infusions should be adequate to meet the Company's capital needs for the next 12
months.

Cash increased $122,092 from $126,532 at the beginning of the period to $248,624
at the end of the period.  Net cash used in operations was $74,728  attributable
to the net loss of $64,347,  the gain on the sale of the ORAYCOM  subsidiary  of
$63,501,  an increase in other non-current assets of $90,494,  and a decrease in
accrued  expenses of $202,995.  Offsetting  these were  non-cash  expense  items

                                     13
<PAGE>

(depreciation and amortization) of $104,679,  a decrease in accounts  receivable
of  $32,937,  an increase  in  accounts  payable of $85,002,  and an increase in
deferred revenue of $124,212.

Net cash provided by investing activities was $20,328 attributable to reductions
in other non-current  assets of $46,083,  offset by additions to fixed assets of
$25,755.


Net cash provided by financing activities was $176,492  attributable to proceeds
from  issuance of common stock of $383,154  and  additions to short term debt of
$44,842  offset by reductions in bank lines of credit of $135,499 and other long
term debt of $116,005.


YEAR 2000 ISSUE
---------------

The "Year 2000 Issue" is whether the  Company's  computer  systems will properly
recognize  date  sensitive  information  when the year changes to 2000, or "00."
Systems that do not properly recognize such information could generate erroneous
data or cause a system to fail. The Company has conducted preliminary reviews of
its computer systems and its purchased software programs  (including  accounting
software)  and does not  believe  the Year 2000 Issue will pose any  significant
operational problems for its systems or software or any significant costs to the
Company. In addition, the Company intends to make similar reviews of the systems
of potential acquisition  candidates for any financial or operational impact the
Year 2000 Issue may pose.

INFLATION
---------

In the opinion of  management,  inflation  has not had a material  effect on the
operations of the Company.

RISK FACTORS AND CAUTIONARY STATEMENTS
--------------------------------------

         Forward-looking  statements  in this  report are made  pursuant  to the
"safe harbor"  provisions  of the Private  Securities  Litigation  Reform Act of
1995.  The  Company  wishes to advise  readers  that  actual  results may differ
substantially from such forward-looking  statements.  Forward-looking statements
involve  risks and  uncertainties  that  could  cause  actual  results to differ
materially from those expressed in or implied by the statements,  including, but
not  limited  to, the  following:  the ability of the Company to provide for its
debt  obligations  and to provide  for  working  capital  needs  from  operating
revenues, and other risks detailed in the Company's periodic report filings with
the Securities and Exchange Commission.

                                     11

<PAGE>

                                     PART II

ITEM 1.    LEGAL PROCEEDINGS

There  are no  material  pending  legal  proceedings  in which  the  Company  is
involved. The Company was granted a judgement against a customer for non-payment
for  services  performed.  The Company  continues  to pursue  collection  of the
judgement.  As the  outcome  is  unknown at this  time,  the  Company  has fully
reserved the entire amount as uncollectible at February 28, 1999.

ITEM 2.    CHANGES IN SECURITIES AND USE OF PROCEEDS

(c) During the fiscal  quarter  ended  February 28, 1999 the Company  engaged in
private  placements  of its  securities  described  in  Note 3 to the  Condensed
Consolidated  Financial  Statements  elsewhere in this filing.  These placements
were claimed exempt from the registration  requirements of the Securities Act of
1933 by reason of Section 4(2) thereof.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits
     Exhibit 27 - Financial Data Schedule

(b)  Reports on Form 8-K
     None


                                     15

<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.

                                         PALADYNE CORP.


Date:   April 14, 1999                   By /s/ Ronald L. Weindruch
                                         --------------------------
                                         RONALD L. WEINDRUCH,
                                         President and Chief Executive Officer


Date:   April 14, 1999                   By /s/ William E. Morris
                                         ------------------------
                                         WILLIAM E. MORRIS,
                                         Controller



<PAGE>

                                  EXHIBIT INDEX


     Exhibit        Description
     -------        -----------

       27           Financial Data Schedule