U.S. Securities and Exchange Commission
                             Washington, D.C. 20549
                                   Form 10-QSB


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

For the quarterly period ended June 30, 1998



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

For the transition period from ______________________ to _______________________

Commission file number 0-23710



                             Micro-Integration Corp.
        (Exact name of small business issuer as specified in its charter)

              Delaware                                          06-1204847
   (State or other jurisdiction of                           (I.R.S. Employer
    incorporation or organization)                        Identification Number)



           One Science Park
             Frostburg, MD                                         21532
(Address of principal executive offices)                         (Zip Code)

         Issuer's telephone number: 301-689-0800

     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 ___

     The number of shares outstanding of the issuer's classes of common stock as
of June 30, 1998:

Common Stock, $.01 Par Value --- 2,867,811 shares

Transitional Small Business Disclosure Format (check one): Yes ___  No _X_





<PAGE>



                    Micro-Integration Corp. and Subsidiaries
                                   Form 10-QSB
                                      Index





Part I       Financial Information                                         Page
                                                                           ----


Item 1.  Consolidated Balance Sheets                                          2
         Consolidated Statements of Operations                                4
         Consolidated Statements of Cash Flows                                5
         Notes to Unaudited Condensed Consolidated
             Financial Statements                                             6

Item 2.  Management's Discussion and Analysis of
             Results of Operations and Financial Condition                    8


Part II      Other Information


Item 1.  Legal Proceedings                                                   13

Item 2.  Changes in Securities and Use of Proceeds                           13

Item 3.  Defaults Upon Senior Securities                                     14

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

Item 5.  Other Information                                                   14

Item 6.  Exhibits and Reports on Form 8-K                                    14


Signatures                                                                   15



<PAGE>


Part I   Financial Information
Item 1.  Financial Statements

                    Micro-Integration Corp. and Subsidiaries
                           Consolidated Balance Sheets

                                                      June 30        March 31
                                                        1998           1998
                                                     -----------    -----------
                                                     (unaudited)
ASSETS

Current Assets
     Cash                                            $   149,028    $   176,964
     Marketable securities, available-for-sale           100,000        100,000
     Receivables
        Trade, net of allowance for doubtful
            accounts $177,456 and $153,377             1,954,765      1,650,884
        Note                                              14,891         74,880
     Inventory                                           681,549        551,565
     Prepaid expense                                     146,059        101,571
                                                     -----------    -----------

        Total Current Assets                           3,046,292      2,655,864
                                                     -----------    -----------


Property, Plant, and Equipment
     Land                                                 92,962         92,962
     Buildings                                         1,461,357      1,461,357
     Equipment                                         1,657,157      1,418,918
     Automobiles                                          74,037         54,955
     Property held for sale, net                         100,571         76,848
                                                     -----------    -----------
                                                       3,386,084      3,105,040
     Less accumulated depreciation                    (1,498,497)    (1,209,082)
                                                     -----------    -----------
                                                       1,887,587      1,895,958

Cash Surrender Value of Life Insurance
     and Other Noncurrent Assets, Net                    309,646        254,704


Intangible Assets, Net                                   932,981        468,932
                                                     -----------    -----------


                                                     $ 6,176,506    $ 5,275,458
                                                     ===========    ===========



                                       2
<PAGE>



                    Micro-Integration Corp. and Subsidiaries
                           Consolidated Balance Sheets


<TABLE>
<CAPTION>
                                                            June 30        March 31
                                                             1998           1998
                                                          -----------    -----------
                                                          (unaudited)
<S>                                                       <C>            <C>        
LIABILITIES AND SHAREHOLDER'S EQUITY

Current Liabilities
     Accounts payable                                     $   844,523    $   818,121
     Accrued expenses                                         254,898        176,199
     Demand notes payable                                     604,627        372,542
     Current portion of long-term debt and
          capital lease obligations                           184,235        130,423
                                                          -----------    -----------

          Total Current Liabilities                         1,888,283      1,497,285
                                                          -----------    -----------


Long-Term Debt, Less Current Portion                        1,251,002      1,162,987
Commitment and Contingencies                                     --             --

Shareholders' Equity
     Preferred stock - $.01 par value: authorized
          4,000,000 shares; none issued and outstanding          --             --
     Common stock - $.01 par value; authorized
          12,000,000 shares;  issued 3,017,349 and
          2,667,349 as of June 30, 1998
          and March 31, 1998, respectively; outstanding
          2,867,811 and 2,517,811 as of June 30, 1998
          and March 31, 1998, respectively                     30,173         26,673
     Additional capital                                     6,292,039      5,683,039
     Accumulated deficit                                   (2,904,097)    (2,713,632)
                                                          -----------    -----------

                                                            3,418,115      2,996,080
     Less 149,538 shares held in treasury                     380,894        380,894
                                                          -----------    -----------

                                                            3,037,221      2,615,186
                                                          -----------    -----------


                                                          $ 6,176,506    $ 5,275,458
                                                          ===========    ===========
</TABLE>

See Notes to Unaudited Condensed Consolidated Financial Statements.



                                       3
<PAGE>


                    Micro-Integration Corp. and Subsidiaries
                      Consolidated Statements of Operations


                                                   Three months ended June 30
                                                     1998              1997
                                                 -----------        -----------
                                                          (unaudited)

Revenues                                         $ 3,205,535        $ 3,358,881

Cost of goods sold                                 2,033,144          2,243,637
                                                 -----------        -----------

    Gross Profit                                   1,172,391          1,115,244

Operating Expenses
  Selling, general, and
    administrative                                 1,267,285          1,009,450
  Depreciation and
    amortization expense                              77,387             80,301
                                                 -----------        -----------
                                                   1,344,672          1,089,751

    Operating Income (Loss)                         (172,281)            25,493

Other Income (Expense)
  Interest expense                                   (37,492)           (35,785)
  Other income                                        21,184             19,154
                                                 -----------        -----------
                                                     (16,308)           (16,631)
                                                 -----------        -----------

    Income (Loss) before
       Income Taxes                                 (188,589)             8,862

    Income tax expense                                 1,876              5,228
                                                 -----------        -----------

       Net Income (Loss)                         $  (190,465)       $     3,634
                                                 ===========        ===========

Basic and Diluted Earnings
  (Loss) per Common Share                        $     (0.07)       $      --
                                                 ===========        ===========


See Notes to Unaudited Condensed Consolidated Financial Statements.





                                       4
<PAGE>


                    Micro-Integration Corp. and Subsidiaries
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                  Three months ended June 30
                                                                                     1998          1997
                                                                                   ---------    ---------
                                                                                         (unaudited)
<S>                                                                                <C>          <C>      
Cash Flows from Operating Activities
Net (loss) income                                                                  $(190,465)   $   3,634
Adjustments to reconcile net (loss) income to
     net cash (used in) provided by operating activities:
     Depreciation and amortization                                                    77,387       80,301
     Loss on sale of fixed assets                                                      2,151           --
     Increase in cash surrender value of life insurance                                   --       (9,521)
     Other                                                                            (6,262)         --
Change in operating assets and liabilities:
     Accounts receivable                                                             103,329      219,583
     Note receivable                                                                  59,989       41,944
     Inventory                                                                        26,172       11,857
     Prepaid expense                                                                  (5,540)      25,020
     Accounts payable                                                               (136,944)       5,286
     Accrued expenses                                                               (102,822)    (162,671)
     Income taxes payable                                                               (352)       4,908
                                                                                   ---------    ---------
Net cash (used in) provided by operating activities                                 (173,357)     220,341

Cash Flows from Investing Activities
     Acquisition of property, plant, and equipment                                    (7,335)      (7,383)
     Increase in other noncurrent assets                                             (15,940)     (41,603)
     Cash received in acquisition of subsidiaries                                      4,574           --
     Proceeds from sale of fixed assets                                               18,263           --
                                                                                   ---------    ---------
Net cash used in investing activities                                                   (438)     (48,986)

Cash Flows from Financing Activities:
     Issuance of notes payable and long-term debt                                    220,858           --
     Repayments of notes payable, long-term debt, and
        capital lease obligations                                                    (74,999)     (69,407)
                                                                                   ---------    ---------
Net cash provided by (used in) financing activities                                  145,859      (69,407)

Currency Adjustments:
     (Decrease) increase in cash                                                     (27,936)     101,948
     Cash at beginning of period                                                     176,964      370,598
                                                                                   ---------    ---------
     Cash at end of period                                                         $ 149,028    $ 472,546
                                                                                   =========    =========

Due to the  acquisition  of CompSource  during the quarter ending June 30, 1998,
the Company had the following noncash investing and financing activities:

     Assets acquired, excluding cash                                               $(659,068)
     Liabilities assumed                                                             573,272
     Goodwill recorded                                                              (522,130)
     Common stock issued                                                             612,500
                                                                                   ---------
     Cash acquired in acquisition                                                  $   4,574
                                                                                   =========
</TABLE>

See Notes to Unaudited Condensed Consolidated Financial Statements.





                                       5
<PAGE>

                    Micro-Integration Corp. and Subsidiaries
         Notes to Unaudited Condensed Consolidated Financial Statements


1.   Basis of Presentation

The accompanying unaudited consolidated financial statements of
Micro-Integration Corp. (the "Company") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB and article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation have been included. The
results for the three months ended June 30, 1998, and 1997, are not necessarily
indicative of financial information for the full year. The unaudited condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and footnotes thereto included in the
Company's annual report and Form 10-KSB for the year ended March 31, 1998.

For purposes of comparability, certain prior year amounts in the consolidated
financial statements have been reclassified to conform to the presentation used
for current period reporting.


2.   Marketable Securities

Available-for-sale securities are stated at fair value, with the unrealized
gains and losses, net of tax, reported as a separate component of shareholders'
equity. Realized gains and losses and declines in value judged to be
other-than-temporary on available-for-sale securities are included in investment
income. The cost of securities sold is based on the specific identification
method. Interest on securities classified as available-for-sale is included in
investment income. Available-for-sale securities include obligations of state
municipalities and are stated at fair market value of $100,000 at June 30, 1998,
and March 31, 1998. These securities mature in August 2026. There were no
unrealized gains/losses with respect to these securities during the period ended
June 30, 1998 nor 1997.


3.   Inventory

Inventory consisted of the following:

                                                 June 30           March 31
                                                   1998              1998
                                                 --------          --------

     Parts                                       $ 87,646          $156,412

     Finished goods                               593,903           395,153
                                                 --------          --------

                                                 $681,549          $551,565
                                                 ========          ========



Inventory is stated at the lower of cost or market. Cost is determined using the
first-in, first-out method.



                                       6
<PAGE>

                    Micro-Integration Corp. and Subsidiaries
         Notes to Unaudited Condensed Consolidated Financial Statements


4.   Earnings per Share

The following  table sets forth the  computation  of basic and diluted  earnings
(loss) per share:


                                                     Three months ended June 30
                                                        1998          1997
                                                      ---------    ----------
                                                            (unaudited)
     Numerator used in basic and 
        diluted loss per share:
           Net (loss) income                          $(190,465)   $    3,634
                                                      =========    ==========


     Denominator:
        Weighted average number of
           shares of common stock
           outstanding during the period              2,867,811     2,491,939
                                                      =========    ==========


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




                                       7
<PAGE>


Part I  Financial Information

Item 2. Management's  Discussion and Analysis of Results of Operations and
        Financial  Condition  for the Three Months Ended June 30, 1998, and 1997


This quarterly report on Form 10-QSB contains forward-looking statements as that
term is defined in the Private  Securities  Litigation  Reform Act of 1996.  For
this  purpose,  any  statements  contained  herein  that are not  statements  of
historical  fact may be  deemed  to be  forward-looking  statements.  Statements
regarding the intent, belief or current expectations of the Company are intended
to be forward-looking  statements which may involve risk and uncertainty.  There
are a number of factors that could cause the Company's  actual results to differ
materially from those indicated by such forward-looking  statements,  including,
but not  limited  to,  those  discussed  in  "Part I - Item 1 -  Description  of
Business - Risk  Factors" and "Part II - Item 6 -  Management's  Discussion  and
Analysis of  Financial  Condition  and Results of  Operations"  contained in the
Company's  1997-1998  Form  10-KSB,  as filed with the  Securities  and Exchange
Commission  on June 29, 1998.  In  addition,  set forth below under the headings
"Results of Operations" and "Factors  Affecting  Operating Results" is a further
discussion  of certain of those  risks as they  relate to the period  covered by
this report,  the  Company's  near term outlook  with respect  thereto,  and the
forward-looking  statements  set forth  herein;  however,  the  absence  in this
quarterly  report of a  complete  recitation  of or  update to all risk  factors
identified in the Company's  1997-1998  Form 10-KSB should not be interpreted as
modifying or superseding  any such risk factors,  except to the extent set forth
below.  Investors  should review this quarterly  report in combination  with the
Company's  1997-1998 Form 10-KSB in order to have a more complete  understanding
of the principal risks associated with an investment in the Company's stock.


Overview


Micro-Integration  Corp.  ("MI" or the  "Company")  is primarily an  Information
Technology ("IT") Services company which provides both IT services and products.
The Company's IT services include IT consulting,  network integration and design
services,  accounting and  distribution  information  systems,  process  control
information systems, and Internet web site design, programming, and hosting. The
Company also sells computers,  software and  communications  products  purchased
from  others.  The Company  provides  Internet web  hosting,  training,  desktop
management,  help-desk,  and maintenance services that complement its consulting
and  computer  and  network  software  and  equipment  sales.  In addition to IT
services and products,  the Company designs,  manufactures,  and sells a line of
products  that  provides   communications  and  connectivity   between  personal
computers ("PCs") and IBM mainframe and midrange AS/400 computers.


Results of Operations


On  April  1,  1998,  the  Company  completed  the  acquisition  of  all  of the
outstanding  stock of CompSource,  Inc. in exchange for 350,000 shares of common
stock   valued   at   $612,500.    CompSource,   Inc.   is   an   eastern-   and
central-Pennsylvania  area business  networking and software solutions provider.
The  acquisition  was  accounted  for using the purchase  method of  accounting.
Goodwill of $522,000  related to the  acquisition  is being  amortized  over its
estimated  useful life of 15 years.  In its last fiscal year,  ended October 31,
1997,  CompSource  generated  revenues of $3.3 million.  CompSource  contributed
$655,000 or 20% to Company revenues in the quarter ended June 30, 1998.



                                       8
<PAGE>

The  Company's  total  revenue was $3.2  million for the quarter  ended June 30,
1998,  a decrease of 5% or $153,000  from the quarter  ended June 30,  1997.  IT
Services revenue increased by $278,000 or 11% while PC Connectivity  product and
royalty revenue decreased $431,000 or 51%. The Company's  subsidiaries accounted
for 81% of the  Company's  total  revenue  for the  quarter  ended June 30, 1998
compared to 66% in the same quarter last year. The Company expects this trend to
continue as PC Connectivity product and royalty revenues continue to decline.

Gross profit  increased to 36.6% for the quarter ended June 30, 1998, from 33.2%
in the same period in 1997. The major contributing  factor to the improvement in
gross profit is the increase in the  percentage of IT Services  revenue  derived
from  high-margin IT services versus revenue from lower margin IT product sales.
For the quarter ended June 30, 1998, IT Services  service revenue  accounted for
$592,000 or 21% of the total IT  Services  revenue of $2.8  million  compared to
$199,000  or 8% of total IT  Services  revenue of $2.5  million  for the quarter
ended June 30, 1997.

Selling,  general,  and administrative  (SG&A) expenses increased by $258,000 in
the quarter  ended June 30,  1998,  compared  to the same  period in 1997.  As a
percentage  of  sales,  SG&A  expenses  were 40% of total  sales in the  current
quarter  compared  with 30% of total sales in the same  quarter  last year.  The
increase is primarily due to increases in salaries and benefits,  consulting and
occupancy expenses offset by a reduction in legal expenses.

The  Company's  net other income was $21,000 for the three months ended June 30,
1998,  an increase of $2,000 or 11%,  compared to $19,000 of net other income in
the same quarter last year.

For the three months ended June 30, 1998, the Company recognized a corporate tax
expense of $2,000.  At June 30,  1998,  the  Company  had a net  operating  loss
carryforward of approximately  $1.5 million  available for offset against future
operating profits.


Liquidity and Capital Resources

The Company  satisfies its cash  requirements  primarily  through cash flow from
operations,  bank borrowings, and lease financing. At June 30, 1998, the Company
had  $100,000  invested  in  available-for-sale  securities  and  an  additional
$149,000  in cash.  During the quarter  ended June 30,  1998,  cash  provided by
financing  activities  of $146,000 was  exceeded by cash used in  operating  and
investing activities of $174,000, resulting in a $28,000 decrease in cash.

The Company's working capital remained unchanged from March 31, 1998 to June 30,
1998 at 1.2 million.

At June 30, 1998,  the Company had four working  capital  credit lines with U.S.
banks. One credit line, which is payable on demand, has a $100,000 limit and had
an outstanding  balance of $100,000 as of June 30, 1998. A second line, which is
also payable on demand,  has a $600,000 limit and had an outstanding  balance of
$271,000 at June 30, 1998. The third line, also payable on demand, has a $50,000
limit and had an  outstanding  balance of $9,000 at June 30, 1998. The last line
is for $300,000, is renewable annually, and is limited to the lesser of $300,000
or 70% of  acceptable  domestic  accounts  receivable.  This line is  secured by
substantially  all of the  Company's  assets  and as of June  30,  1998,  had an
outstanding  balance of $226,000.  The Company  expects that cash generated from
operations  and  borrowings  will  satisfy  its  operating  cash  needs  for the
foreseeable future.


                                       9
<PAGE>

Factors Affecting Operating Results


Potential Fluctuations in Operating Results

The  Company  believes  that  future  operating   results  will  be  subject  to
fluctuations due to a variety of factors, many of which are beyond the Company's
control.  Such  factors may  include,  but are not  limited  to,  demand for the
Company's  services,  availability  of skilled  sales and  technical  personnel,
introduction  or  enhancements  of services  by the Company or its  competitors,
market acceptance of new service offerings,  increased  competition,  litigation
costs, results of litigation, and general economic conditions.

Since the Company recognizes services revenue only when personnel are engaged on
client projects, the relative utilization of such personnel directly affects the
Company's operating results.  In addition,  a majority of the Company's services
operating expenses,  particularly personnel and related costs, are substantially
fixed  in  advance  of  any  particular  period.  As  a  result,  variations  in
utilization of personnel may have material adverse effects on operating results.
Termination or completion of engagements in the Company's  services  business or
failure to obtain  additional  engagements in its services business could have a
material  adverse effect on the Company's  business,  financial  condition,  and
results of operations.

Uncertainty of Future Acquisitions

The Company evaluates  potential  acquisitions on an ongoing basis. No assurance
can be given as to the Company's  ability to compete  successfully for available
acquisition candidates, to complete future acquisitions, or the financial effect
on the  Company of any  acquired  businesses.  Acquisitions  by the  Company may
involve  significant  cash  expenditures  and may result in decreased  operating
income,  either of which could have a material  adverse  effect on the Company's
business,  financial condition, and results of operations.  The inability of the
Company to successfully  continue its acquisition strategy could have a material
adverse effect on the Company's business,  financial  condition,  and results of
operations.

Management of Potential Growth

The Company's recent  acquisitions have placed,  and are expected to continue to
place,  a significant  strain on its managerial and  operational  resources.  To
manage  future  potential  growth,  the Company must  continue to implement  and
improve  its  operational,  management  and  financial  systems and to train and
manage its employee base. The Company expects that its  operational,  management
and  financial  systems  will face  additional  strains as a result of  possible
acquisitions in the future.

Integration of Acquisitions

As part of its business  strategy,  the Company  expects to continue to seek out
business   combinations  with  other  IT  Services   companies.   Such  business
combinations  involve  a  number  of  risks,   including,   without  limitation,
difficulty assimilating the operations and personnel,  expenditure of management
time, expenses associated with the transactions,  additional expenses associated
with  amortization  of  acquired   intangible  assets,  the  implementation  and
maintenance of standards,  controls, procedures, and policies, the impairment of
relationships with employees and customers as a result of the integration of new
management personnel, and potential unknown liabilities associated with acquired
businesses.  There can be no assurance  that the Company will be  successful  in
addressing these risks or any other problems encountered in connection with such
business combinations.



                                       10
<PAGE>


Dependence on Key Personnel

The Company's  performance is substantially  dependent on the performance of its
senior  management and key sales and technical  personnel.  In  particular,  the
Company's  success depends  substantially on the continued efforts of its senior
management  team. The Company does not carry key person life insurance on any of
its  senior  management  personnel.  The  loss  of  the  services  of any of its
executive  officers or other key employees could have a material  adverse effect
on the business,  operating results, and financial condition of the Company. The
Company's  future success also depends on its continuing  ability to attract and
retain highly-qualified sales, technical, and managerial personnel.  Competition
for such  personnel  is intense and there can be no  assurance  that the Company
will be able to retain its key  managerial,  sales,  and technical  employees or
that it will be able to attract and retain  additional  highly-qualified  sales,
technical,  and managerial personnel in the future. The inability to attract and
retain the necessary  sales,  technical,  and managerial  personnel could have a
material adverse effect upon the Company's business,  financial  condition,  and
results of operation.

Concentration of Stock Ownership

As of June 30, 1998, the present directors,  executive officers, greater than 5%
stockholders,  and their respective affiliates  beneficially owned approximately
55% of the outstanding Common Stock of the Company. As of June 30, 1998, John A.
Parsons, the Company's Chairman and CEO, beneficially owned approximately 40% of
the outstanding Common Stock of the Company. As a result of their ownership, the
directors,   executive  officers,  greater  than  5%  stockholders,   and  their
respective  affiliates  collectively  are able to control all matters  requiring
stockholder  approval,  including  the  election of  directors  and  approval of
significant  corporate  transactions.  Such  concentration of ownership may also
have the effect of delaying or preventing a change in control of the Company.

Volatility of Stock Price

The trading price of the Company's  Common Stock has been and may continue to be
subject to wide fluctuations in response to a number of events and factors, such
as quarterly variations in operating results, changes in financial estimates and
recommendations   by  securities   analysts,   the  operating  and  stock  price
performance  of  other  companies  that  investors  may deem  comparable  to the
Company,  and news  reports  relating  to trends in the  Company's  markets.  In
addition,  the stock market,  in general,  and the market prices for IT Services
companies,  in  particular,  have  experienced  volatility  that  often has been
unrelated to the operating performance of such companies. These broad market and
industry  fluctuations  may adversely  affect the trading price of the Company's
Common Stock, regardless of the Company's operating performance.

Year 2000

The Company is in the process of assessing  the  potential  effects of the "Year
2000" millennium change on the Company's internal computer software applications
and systems,  the  Company's  product and service  offerings  and the  Company's
business in general.  The Company  believes  that some of its  internal  mission
critical  systems,  including  its  internal  and  external   telecommunications
systems, are not Year 2000 compliant, and has instituted measures to bring those
systems into  compliance  or replace them with  compliant  systems.  The Company
believes  that  the  remediation  costs  needed  to  make  all of  its  internal
applications and systems Year 2000 compliant are not material and that they will
be  implemented  prior  to  the  end  of the  first  half  of  1999.  Delays  in
implementing these remedial  measures,  failure of any new or upgraded system to
be Year 2000 compliant  despite the vendors'  assurances,  or a failure to fully
identify or remediate all Year 2000 problems in the Company's  systems which are
not being  replaced  or  upgraded  could have a material  adverse  effect on the
Company's business, financial condition or results of operations.



                                       11
<PAGE>

In addition, the Company intends to contact its significant  suppliers,  service
providers,  customers and other  contracting  parties to determine the extent to
which the Company is  vulnerable  to any such third  party's  failure to achieve
Year 2000 compliance for their own systems or products. At the present time, the
Company  does not expect  Year 2000 issues of such third  parties to  materially
effect the  Company's  services or  products.  However,  the Company can give no
assurances  that the systems or products of other companies on which the Company
relies will be Year 2000  compliant or that the failure of such third parties to
achieve  Year 2000  compliance  for such  systems  or  products  will not have a
material adverse effect on the Company.




                                       12
<PAGE>


Part II    Other Information


Item 1.    Legal Proceedings


           None.


Item 2.    Changes in Securities and Use of Proceeds


Micro-Integration Corp. has made the following unregistered sales of the
Company's Common Stock during the past three years and in the quarter ended June
30, 1998:

<TABLE>
<CAPTION>
  Transaction           Number of Shares           Name of Underwriter       Consideration         Persons or Class of Persons to
     Date               of Common Stock            or Placement Agent           Received           Whom the Securities Were Sold
----------------    -------------------------    ------------------------   -----------------   ------------------------------------
<S>                           <C>                         <C>                     <C>           <C>
   11/22/96                    97,254                     None                    (1)           Thomas M. Eversole

   12/01/97                    22,456                     None                    (2)           J. Michael Lafferty

   04/01/98                   343,884                     None                    (3)           Russell A. Hinnershitz
                                4,484                                                           Randy Engle
                                1,632                                                           A. Scott Kauffman
</TABLE>




(1) Pursuant to the  Purchase  Agreement  between  Micro-Integration  Corp.  and
Computer  One  of  Ohio,  Inc.   ("Computer   One")  dated  November  22,  1996,
Micro-Integration  Corp.  acquired  Computer One by  purchasing  all of Computer
One's assets for a common stock  issuance of 97,254 shares of  Micro-Integration
Corp.'s  common  stock and the  assumption  of Computer  One's  liabilities  and
accounted for such acquisition using the purchase method of accounting.

(2) Pursuant to the Purchase  Agreement  by and among  Micro-Integration  Corp.,
SuiteOne  Computer  Services,  Inc.  ("SuiteOne"),  and Michael  Lafferty  dated
December 1, 1997,  Micro-Integration Corp. acquired all of the outstanding stock
of SuiteOne in exchange for 22,456 shares of  Micro-Integration  Corp.'s  common
stock  and  accounted  for  such  acquisition   using  the  purchase  method  of
accounting.

(3) Pursuant to the Purchase  Agreement  by and among  Micro-Integration  Corp.,
Russell  A.   Hinnershitz,   and  A.  Scott   Kauffman   dated  April  1,  1998,
Micro-Integration  Corp.  acquired all of the  outstanding  stock of CompSource,
Inc. in exchange for 350,000  shares of  Micro-Integration  Corp.'s common stock
and accounted for such acquisition using the purchase method of accounting.

For each of the above  transactions,  the  Company  claims  the  exemption  from
registration  under Section 4(2) of the  Securities Act of 1933 (the "1933 Act")
based upon the  following  facts:  (1) no general  solicitation  or  advertising
occurred, (2) there was a limited number of purchasers, (3) purchasers purchased
with a view toward investment,  and (4) each purchaser had access to information
as would be provided by a registration statement under the 1933 Act.


                                       13
<PAGE>


Item 3.   Defaults Upon Senior Securities


          None.



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


          None.


Item 5.   Other Information


          None.


Item 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits

               27.1          Financial Data Schedule

          (b)  The Company filed a report on Form 8-K on April 15, 1998 for the
               acquisition of CompSource, Inc.





                                       14
<PAGE>

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned,  thereunto  duly  authorized  in the  city of  Frostburg,  state of
Maryland, on the 14th day of August, 1998:



Micro-Integration Corp.



By:         /s/     John A. Parsons                        
        ----------------------------------
                 John A. Parsons
        President, Chairman of the Board,
            Chief Executive Officer






By:         /s/      Terry D. Frost               
        ----------------------------------
                 Terry D. Frost
                 Chief Financial Officer



                                       15