SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                              --------------------
                                    FORM 10-Q
                              --------------------

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

                      For the Quarter Ended March 31, 2003

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                            For the Transition Period
                            from ________ to ________

                         Commission File Number 0-22710

                                ATEC GROUP, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                Delaware                               13-3673965
--------------------------------------------------------------------------------
     State or other jurisdiction of                 (I.R.S. Employer
      corporation or organization)               Identification Number)

    69 Mall Drive, Commack, New York                      11725
--------------------------------------------------------------------------------
(Address of principal executive offices)               (Zip Code)

          Issuer's telephone number, including area code (631) 543-2800

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


--------------------------------------------------------------------------------
                  Former name, former address and former fiscal
                       year, if changed since last report.

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 [ ]

       As of the close of business on March 31, 2003, there were 8,026,128
              shares of the Registrant's Common Stock outstanding.

<PAGE>

                                ATEC GROUP, INC.


TABLE OF CONTENTS


PART I   Financial Information                                              Page
------   ---------------------

Item 1.  Financial Statements .........................................      1-9

Item 2.  Managements Discussion & Analysis of
         Financial Condition and Results of Operations ................    10-14

Item 3.  Quantitative and Qualitative Disclosures about Market ........       14

Item 4.  Controls and Procedures ......................................       14

Item 4.  Forward Looking Statements and Associated Risks ..............       15


PART II  Other Information Required in Report
-------  ------------------------------------

Item 1.  Legal Proceedings ............................................       16

Item 2.  Changes in Securities and use of Proceeds ....................       16

Item 3.  Defaults Upon Senior Securities ..............................       16

Item 4.  Submission of Matters to a Vote of Security Holders ..........       16

Item 5.  Other Information ............................................       16

Item 6.  Exhibits and Report on Form 8K ...............................       16

Signatures Page .......................................................       17

Certifications ........................................................    18-20

Exhibits ..............................................................    21-24


<PAGE>

                                     PART 1

                              FINANCIAL INFORMATION

Item 1. Financial Statements.

                        ATEC GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                   UNAUDITED          AUDITED
ASSETS                                             31-Mar-03         30-Jun-02
                                                 ------------      ------------
Current Assets
     Cash and cash equivalents                   $  1,002,272      $  1,382,722
     Accounts receivable, net                       3,940,999         3,166,078
     Inventories                                      481,344           602,792
     Deferred taxes                                   401,493           401,493
     Other current assets                             807,725           858,682
                                                 ------------      ------------
          Total currrent assets                     6,633,833         6,411,767
                                                 ------------      ------------

Property and equipment, net                           188,140           290,040
Goodwill, net                                              --           864,961
Other assets                                           74,368           235,182
                                                 ------------      ------------
                                                 $  6,896,341      $  7,801,950
                                                 ============      ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
     Revolving inventory line of credit          $    520,543      $    368,292
     Accounts payable                               1,231,296         1,114,071
     Accrued expenses                                 480,898           585,795
     Deferred income                                       --            26,976
     Other current liabilities                        381,931           654,182
                                                 ------------      ------------
          Total liabilities                         2,614,668         2,749,316
                                                 ------------      ------------
Stockholders' equity
     Preferred stocks                                 806,913           835,582
     Common stock                                      86,502            73,435
     Additional paid-in capital                    12,370,863        11,815,397
     Discount on preferred stock                     (717,005)         (742,740)
     Retained earnings  (deficit)                  (7,467,733)       (6,219,452)
     Treasury stock at cost                          (797,867)         (709,588)
                                                 ------------      ------------
          Total stockholders' equity                4,281,673         5,052,634
                                                 ------------      ------------
                                                 $  6,896,341      $  7,801,950
                                                 ============      ============




                                        1

<PAGE>

                        ATEC GROUP, INC. AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                           THREE MONTHS ENDED MARCH 31

                                                         2003           2002
                                                     -----------    -----------
Net sales                                            $ 9,856,564    $10,876,246

Cost of sales                                          8,330,885      9,655,189
                                                     -----------    -----------
Gross profit                                           1,525,679      1,221,057
                                                     -----------    -----------
Operating expenses
     Selling and administrative                        1,667,445      1,698,611
                                                     -----------    -----------
          Total operating expenses                     1,667,445      1,698,611
                                                     -----------    -----------
Loss from operations                                    (141,766)      (477,554)
                                                     -----------    -----------
Other income (expense)
     Miscelleneous income                                  2,500          4,679
       Interest income                                     4,363         10,101
                                                     -----------    -----------
          Total other (expense) income                     6,863         14,780
                                                     -----------    -----------
Loss before provision for income taxes                  (134,903)      (462,774)

Provision [benefit] for income taxes                          --             --
                                                     -----------    -----------
Net loss                                             $  (134,903)   $  (462,774)
                                                     ===========    ===========
Net earnings (loss) per share-basic and diluted      $     (0.02)   $     (0.07)
                                                     ===========    ===========
 Weighted average number of shares-basic               7,770,378      6,969,344
                                                     ===========    ===========
 Weighted average number of shares-diluted             7,770,378      6,969,344
                                                     ===========    ===========





                                        2

<PAGE>

                        ATEC GROUP, INC. AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
                           NINE MONTHS ENDED MARCH 31



                                                          2003          2002
                                                      -----------   -----------
Net sales                                             $27,693,274   $30,543,770

Cost of sales                                          23,687,648    25,930,538
                                                      -----------   -----------
Gross profit                                            4,005,626     4,613,232
                                                      -----------   -----------
Operating expenses
     Selling and administrative                         4,261,516     5,216,481
     Impairment of Goodwill and other assets            1,026,961            --
                                                      -----------   -----------
          Total(loss)operating expenses                 5,288,477     5,216,481
                                                      -----------   -----------
Income (loss) from operations                          (1,282,851)     (603,249)
                                                      -----------   -----------
Other income (expense)
    Miscellaneous income                                   14,712        22,277
     Interest income                                       19,858        34,641
     Interest expense                                          --          (268)
                                                      -----------   -----------
          Total other (expense) income                     34,570        56,650
                                                      -----------   -----------
Income (loss) before provision for income taxes        (1,248,281)     (546,599)

Provision (benefit) for income taxes                           --            --
                                                      -----------   -----------
Net income (loss)                                     $(1,248,281)  $  (546,599)
                                                      ===========   ===========
Net earnings (loss) per share-basic and diluted       $     (0.16)  $     (0.08)
                                                      ===========   ===========
 Weighted average number of shares-basic                7,770,378     7,026,937
                                                      ===========   ===========
 Weighted average number of shares-diluted              7,770,378     7,026,937
                                                      ===========   ===========






                                        3

<PAGE>

                        ATEC GROUP, INC. AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
                           NINE MONTHS ENDED MARCH 31



                                                          2003          2002
                                                      -----------   -----------
Net cash provided by (used in) operating  activities  $  (643,862)  $  (423,011)
                                                      -----------   -----------
Cash flows from investing activities:
     Purchase of Treasury Stock                           (88,279)      (54,375)
     Purchase of property and equipment                    (3,560)      (29,753)
                                                      -----------   -----------
Net cash (used in) provided by investing activities       (91,839)      (84,128)
                                                      -----------   -----------

Cash flows from financing activities:
     Exercise of Stock options                            203,000            --
     Short term borrowings (repayments)                   152,251      (632,235)
                                                      -----------   -----------
Net cash (used in) provided by  financing activities      355,251      (632,235)
Net increase (decrease) in cash                          (380,450)   (1,139,374)
                                                      -----------   -----------

Cash and cash equivalents - Beginning of Period         1,382,722     1,555,020
                                                      -----------   -----------
Cash and cash equivalents - End of period             $ 1,002,272   $   415,646
                                                      ===========   ===========






                                        4

<PAGE>

<TABLE>
                                                           ATEC GROUP, INC
                                      UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                                  NINE MONTHS ENDING MARCH 31, 2003
<CAPTION>

                                                     Common          Value             Series         Value          Additional
                                                     Shares          Common          Preferred      Preferred          Paid in
                                                     Issued          Stock             Issued         Stock            Capital
                                                  ------------    ------------       ----------    ------------     ------------
<S>                                                  <C>          <C>                  <C>         <C>              <C>
Balance at June 30, 2002                             7,304,971    $     73,435         424,429     $    835,582     $ 11,815,397
Contributed Capital                                                                                                       30,082
  Stock issued for services                            980,000             926                                           361,673
  Costs related to Contributed Capital                                                                                   (30,082)
  Purchase of Treasury Stock
  Exercise of stock options and conversions of
  preferred stock                                      365,302          12,141         (29,335)         (28,669)         193,793
Net loss for the Nine months Ended
  March 31, 2003
                                                  ------------------------------------------------------------------------------
Balance at March 31, 2003                            8,650,273    $     86,502         395,094     $    806,913     $ 12,370,863
                                                  ==============================================================================

<CAPTION>

                                                  Discount on        Retained                Treasury Stock               Total
                                                   Preferred         Earnings           -------------------------     Stockholders'
                                                     Stock           (Deficit)           Shares         Amount           Equity
                                                  ------------     ------------         --------     ------------     ------------
<S>                                               <C>              <C>                  <C>          <C>              <C>
Balance at June 30, 2002                          $   (742,740)    $ (6,219,452)        (378,345)    $   (709,588)    $  5,052,634
Contributed Capital                                                                                                         30,082
  Stock issued for services                                                                                                362,599
  Costs related to Contributed Capital                                                                                     (30,082)
  Purchase of Treasury Stock                                                            (245,800)         (88,279)         (88,279)
  Exercise of stock options and conversions of
  preferred stock                                       25,735                                                             203,000
Net loss for the Nine months Ended
  March 31, 2003                                                     (1,248,281)                                        (1,248,281)
                                                  --------------------------------------------------------------------------------
Balance at March 31, 2003                         $   (717,005)    $ (7,467,733)        (624,145)    $   (797,867)    $  4,281,673
                                                  ================================================================================
</TABLE>



                                       5


<PAGE>

                        ATEC GROUP, INC. AND SUBSIDIARIES
                                    FORM 10Q
                          QUARTER ENDED MARCH 31, 2003
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1. Condensed Consolidated Financial Statements



The accompanying interim unaudited consolidated financial statements include the
accounts of Atec Group, Inc. and its subsidiaries that are hereafter referred to
as (the "Company"). All intercompany accounts and transactions have been
eliminated in consolidation.

These financial statements have been prepared in accordance with generally
accepted accounting principles in the United States of America for interim
financial information and with the instructions to Form 10-Q. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles in the United States of America for complete
financial statements. In the opinion of management, such interim statements
reflect all adjustments (consisting of normal recurring accruals) necessary to
present fairly the financial position and the results of operations and cash
flows for the interim periods presented. The results of operations for these
interim periods are not necessarily indicative of the results to be expected for
the full year. These financial statements should be read in conjunction with the
audited consolidated financial statements and footnotes included in the
Company's report on Form 10-K, as amended, for the year ended June 30, 2002.

2. Proposed Acquisition and disposition of business:

   on November 25, 2002:

1.    we entered into a Capital Stock Exchange Agreement with Interpharm, Inc.,
      a manufacturer of generic pharmaceuticals, and all of the shareholders of
      Interpharm, pursuant to which, subject to approval from our stockholders,
      we plan to acquire all of the issued and outstanding stock of Interpharm
      (the "Acquisition"); and

2.    entered into an Asset Purchase Agreement with Baar Group, an entity owned
      by most of our current management, whereby Baar Group agreed to purchase
      our assets and assume substantially all of our liabilities for a purchase
      price of $4,278,184 (the net purchase price is $2.75 million in cash and
      notes, the retention of approximately $1.2 million in cash and the
      assumption of approximately $1.7 million in liabilities), subject to
      certain adjustments at closing (the "Management Buyout").

These transactions are described in greater detail in our Definitive Proxy
Statement on Schedule 14A filed with the Securities and Exchange Commission on
May 2, 2003.


                                       6
<PAGE>

3. Equity Securities

Capital Stock


The Company's capital stock consists of the following:

                                                           Shares
                                                           Issued
                                             Shares          and
March 31, 2003                             Authorized    Outstanding     Amount
                                           ----------    -----------    --------
Preferred Stocks:
     Series A cumulative convertible           29,233         7,631     $    763
     Series B convertible                      12,704         1,458          145
     Series C convertible                     350,000       281,005      281,005
     Series J convertible                     105,000       105,000      525,000
                                                          ---------     --------

     Total preferred                                        395,094     $806,913
                                                          =========     ========

Common Stock                               70,000,000     8,650,273     $ 86,503
                                                          =========     ========


4. Computation of Earnings (Loss) Per Share

Earnings (Loss) per share are based on the weighted average number of common and
common equivalent shares outstanding.

5. Impairment of Goodwill and Deferred Compensation

The Company adopted Financial Accounting Standard Board (FASB) number 142
(SFAS142) effective July 1, 2001. SFAS142 changes the accounting for goodwill
from an amortization method to an impairment-only approach. Under SFAS142,
goodwill will be tested annually and whenever events or circumstances occur
indicating that goodwill might be impaired.

On November 25, 2002 we entered into an agreement to sell our computer
operations to an entity owned by most of our current management. Management
performed a current impairment evaluation due to the change in circumstances. As
a result of this evaluation the Company has concluded that there was an
impairment of our goodwill of $864,961. Deferred Compensation of $162,000 also
was impaired.


                                       7
<PAGE>

6. Income Taxes



      The Company's income tax provision consists of the following:

Current tax provision (benefit)                 2003         2002
                                            --------     --------
      Federal                               $     --     $     --
      State                                       --           --
                                            --------     --------
      Deferred tax provision  (benefit)
      Federal                                     --           --
      State                                       --           --
                                            --------     --------
      Income tax provision (benefit)        $     --     $     --
                                            ========     ========


      The deferred tax benefit results from differences in recognition of
expenses for tax and financial statement purposes and for minimum tax provision
for the various state and local taxing authorities where the Company and its
subsidiaries are subject to tax. The Company has deferred tax assets consisting
of the following temporary difference.

                                                       March 31,      June 30,
                                                         2003           2002
                                                      ----------     ----------
Net operating loss carry forward                      $1,879,341     $1,879,341
Allowance for bad debts                                  146,086        134,836
                                                      ----------     ----------
   Total deferred tax assets                           2,025,427      2,014,177
Less: Valuation allowance for deferred tax assets      1,623,934      1,612,684
                                                      ----------     ----------
Total                                                 $  401,493     $  401,493
                                                      ==========     ==========



                                       8
<PAGE>

7. Segment Information

      The Company is comprised of four business segments. These segments consist
of the technology integration services (TIS), Business to Business (B to B),
software and manufacturing divisions. Set forth below is net sales, net income
(loss), capital expenditures, depreciation and identifiable assets of these
segments.


                        FOR THREE MONTHS ENDING       FOR NINE MONTHS ENDING
                               MARCH 31,                     MARCH 31,

                          2003           2002           2003           2002
                      ------------   ------------   ------------   ------------
Net sales:
  TIS                 $  6,530,662   $  6,029,936   $ 16,002,082   $ 13,522,183
  B to B                 3,325,902      4,598,142     11,691,192     16,287,603
  Software                      --            152             --          1,538
  Manufacturing                 --        248,016             --        732,446
                      ------------   ------------   ------------   ------------
                      $  9,856,564   $ 10,876,246   $ 27,693,274   $ 30,543,770
                      ============   ============   ============   ============
Net income (loss):
  TIS                 $    438,682   $   (132,351)  $      4,498   $   (476,041)
  B to B                   (73,751)       265,122       (429,271)     1,549,820
  Software                      --        (10,573)            --        (54,888)
  Manufacturing                 --       (331,777)            --       (678,892)
  Corporate               (499,834)      (253,195)      (823,508)      (886,598)
                      ------------   ------------   ------------   ------------
                      $   (134,903)  $   (462,774)  $ (1,248,281)  $   (546,599)
                      ============   ============   ============   ============
Depreciation:
  TIS                 $     32,512   $     41,706   $     87,041   $    111,206
  B to B                     1,913          2,609          5,736          7,826
  Software                      --             --             --             --
  Manufacturing                 --            722             --          2,167
  Corporate                 (9,031)         1,359         12,684         12,234
                      ------------   ------------   ------------   ------------
                      $     25,292   $     46,396   $    105,461   $    133,433
                      ============   ============   ============   ============
Capital additions
   TIS                $         --         29,753            560         29,753
   B to B                       --             --                            --
   Software                     --             --                            --
   Manufacturing                --             --                            --
   Corporate                    --             --           3000             --
                      ------------   ------------   ------------   ------------
                                 0         29,753           3560         29,753
                      ============   ============   ============   ============
Identifiable
assets:
  TIS                 $  4,416,731   $  5,340,418   $  4,416,731   $  5,340,418
  B to B                 1,170,878      2,385,254      1,170,878      2,385,254
  Software                   3,853          3,853          3,853          3,853
  Manufacturing                 --        256,651             --        256,651
  Corporate              1,304,879        932,766      1,304,879        932,766
                      ------------   ------------   ------------   ------------
                      $  6,896,341   $  8,918,942   $  6,896,341   $  8,918,942
                      ============   ============   ============   ============


                                       9
<PAGE>

Item 2 - Managements Discussion and Analysis of Financial Condition and Results
         of operations.


                        ATEC Group, Inc. and Subsidiaries
Overview

      ATEC Group, Inc. ("Atec, our, we or us") is a one-stop provider of a full
line of information technology products and services to businesses,
professionals, government and educational institutions. We offer multiple
solutions to our clients that we believe generate loyalty and improve our
ability to seek higher margins. We have developed several core competencies,
including system design, software development, networking, server-based
computing, help desk, wireless telecommunications, voice over TP, high speed
bandwidth e-commerce, web-hosting, ISP, ASP and Internet/Intranet solutions.

On November 25, 2002, we:

1.    entered into a Capital Stock Exchange Agreement with Interpharm, Inc., a
      manufacturer of generic pharmaceuticals, and all of the shareholders of
      Interpharm, pursuant to which, subject to approval from our stockholders,
      we plan to acquire all of the issued and outstanding stock of Interpharm
      (the "Acquisition"); and

2.    entered into an Asset Purchase Agreement with Baar Group, an entity owned
      by most of our current management, whereby Baar Group agreed to purchase
      our assets and assume substantially all of our liabilities for a purchase
      price of $4,278,184, subject to certain adjustments at closing (the
      "Management Buyout").

These transactions are described in greater detail in our Definitive Proxy
Statement on Schedule 14A filed with the Securities and Exchange Commission on
May 2, 2003 (the "Proxy Statement").

The following discussion relates to our current business. For similar
information related to the business of Interpharm, please see "Management's
Discussions and Analysis of Financial Condition and Results of Operations"
commencing on page 25 of the Proxy Statement.


Results of Operations

Three months ended March 31, 2003, compared to three months ended March 31,
2002.

Our revenues for the third quarter ended Mach 31, 2003 were $9.8 million
compared to $10.9 million for the prior year, a decrease of approximately 10%.
Of this decrease, $1.3 million was attributable to hardware sales by our BtoB
division. That decrease was offset by an increase of $500,000 or 8% in the TIS
division. Revenues are generated by our sales of computer hardware and software,
and related support services. Gross margin for the period increased to $1.5
million for the quarter ended March 31, 2003 from $1.2 million for the
comparable 2002 quarter, a 25% increase. Gross margins as a percentage of
revenues for the quarter were 15% as compared to 11% for the prior year, when we
experienced lower margins on hardware sales.

Selling, general and administrative expenses for the three months ended, March
31, 2003 were $1.7 million as compared to $1.7 million for the comparable period
in 2002. The income tax benefit was $0 for the 2003 quarter as compared to $0
for 2002 quarter.

As a result of the above, our net loss was $134,903 for the three months ended
March 31, 2003 compared to net loss of $462,774 for the 2002 quarter. For the
March 31, 2003 quarter, net loss per share was $.02 compared to net loss of $.07
in the prior year. Average shares outstanding were 7,770,378 for 2003 and
6,969,344 for 2002.


                                       10
<PAGE>

Nine Months Ending March 31, 2003 compared to March 31, 2002.

Our revenues for the nine months ending March 31, 2003 decreased to $27.7
million from $30.5 million for the prior year, a decrease of approximately 9%.
This decrease is attributable to a significant drop in sales of $4.6 million in
our B2B division offset by a $2.5 million increase in sales in our TIS division.
Revenues are generated by the Company's sales of computer hardware and software,
and related support services. Gross margin for the period decreased to $4
million for March 31, 2003 from $4.6 million for the comparable 2002 period.
Gross margin as a percentage of revenues for the nine months ending March 31,
2003 were 14% as compared to 15% for the prior year.

Selling, general and administrative expenses for the nine months March 31, 2003
decreased $.9 million or 17% to $4.3 million as compared to $5.2 million for the
prior year. The decrease is primarily due to lower compensation expense of
$789,000 due to a reduction of 20 employees and changes in accounting estimates
for litigation claims totaling $101,000 for legal matters that were settled in
the period. During the period we incurred an impairment of our goodwill of
$864,961 and other assets of $162,000 as a result of the Asset Purchase
agreement with Baar Group.

As a result of the above, our net loss was $1,248,281 for the nine months ended
March 31, 2003 compared to net loss of $546,599 for the 2002 quarter. For the
nine months ended March 31, 2003, net loss per share was $.16 compared to net
loss per share of $.08 in the prior year. Average shares outstanding were
7,770,378 for 2003 and 7,026,937 for 2002.

Liquidity and Capital Resources

Our cash position was $1,002,272 at March 31, 2003, a decrease of $380,450 as
compared to June 30, 2002. Our working capital at March 31, 2003 was $4,019,165
as compared to a working capital of $3,662,451 at June 30, 2002. Net cash used
by operating activities was $643,862. Cash used for investing activities totaled
$91,839 for the purchase of Treasury Stock and fixed assets. During the period
employees exercised common stock purchase options that provided cash of
$203,000. We also increased our short-term borrowings $152,251.

To accommodate our financial needs for inventory financing, IBM Credit granted
us a credit line in the amount of $750,000. At March 31, 2003, our indebtedness
to IBM Credit was $520,543, an increase of $152,251, as compared to June 30,
2002.


Critical Accounting Policies

      The preparation of financial statements and related disclosures in
conformity with accounting principles generally accepted in the United States of
America requires management to make judgments, assumptions and estimates that
affect the amounts reported in the consolidated financial statements and
accompanying notes. Note 1 to the consolidated financial statements in the
amended Annual Report on Form 10-K for the fiscal year ended June 30, 2002
describes the significant accounting policies and methods used in the
preparation of the consolidated financial statements. Estimates are used for,
but not limited to, the accounting for the allowance for doubtful accounts,
inventory allowances, and goodwill impairments. Actual results could differ from
these estimates. The following critical accounting policies are impacted
significantly by judgments, assumptions and estimates used in the preparation of
the consolidated financial statements.


                                       11
<PAGE>

      The allowance for doubtful accounts is based on our assessment of the
collectibility of specific customer accounts and the aging of the accounts
receivable. If there is a deterioration of a major customer's credit worthiness
or actual defaults are higher than our historical experience, our estimates of
the recoverability of amounts due us could be adversely affected.

      Inventory purchases and commitments are based upon future demand
forecasts. If there is a sudden and significant decrease in demand for our
products or there is a higher risk of inventory obsolescence because of rapidly
changing technology and customer requirements, we may be required to increase
our inventory allowances and our gross margin could be adversely affected.

      We perform goodwill impairment tests on an annual basis and between annual
tests in certain circumstances. In assessing the recoverability of the Company's
goodwill, the Company must make various assumptions regarding estimated future
cash flows and other factors in determining the fair values of the respective
assets. As a result of the asset purchase agreement entered into between the
Company and Baar Group on November 25, 2002, we have recorded an impairment
charge of $864,961 relating to our goodwill in the period, which had a material
impact on our results of operations.

Issues And Uncertainties

      The following issues and uncertainties, among others, should be considered
in evaluating the Company's financial outlook. The following issues and
uncertainties relate to the Company's current business operations. On May 29,
2003, at the annual meeting of Stockholders, the Company's stockholders will be
requested to approve the sale of our current business and the acquisition of
Interpharm Inc., a manufacturer of generic pharmaceuticals. For issues and
uncertainties related to the Company's possible future pharmeceutical business,
see description of Interpharm commencing on page 9 of the Company's Definitive
Proxy Statement on Schedule 14A filed with the Securities and Exchange
Commission on May 2, 2003.

      The computer industry is characterized by a number of potentially adverse
business conditions, including pricing pressures, evolving distribution
channels, market consolidation and a decline in the rate of growth in sales of
personal computers. Heightened price competition among various hardware
manufacturers may result in reduced per unit revenue and declining gross profit
margins. As a result of the intense price competition within our industry, we
have experienced increasing pressure on our gross profit and operating margins
with respect to our sale of products. Our inability to compete successfully on
the pricing of products sold, or a continuing decline in gross margins on
products sold due to adverse industry conditions or competition, may have a
material adverse effect on our business, financial condition and results of
operations.

      An integral part of our strategy is to increase our value-added services
revenue. These services generally provide higher operating margins than those
associated with the sale of products. This strategy requires us, among other
things, to attract and retain highly skilled technical employees in a
competitive labor market, provide additional training to our sales
representatives and enhance our existing service management system. We cannot
predict whether we will be successful in increasing our focus on providing
value-added services, and the failure to do so may have a material adverse
effect on our business, results of operations and financial condition.

      To date, our revenues have been based primarily upon sales in the New York
Metropolitan area and Albany, New York. Our strategy, encompassing the expansion
of service offerings and the expansion of existing offices, has challenged and
will continue to challenge our senior management and infrastructure. We cannot
predict our ability to respond to these challenges. If we fail to effectively
manage our planned growth, there may be a material adverse effect on our
business, results of operations and financial condition.

      The success of our strategy depends in large part upon our ability to
attract and retain highly skilled technical personnel and sales representatives,
including independent sales representatives, in a very competitive labor market.
Our ability to grow our service offerings has been somewhat limited by a
shortage of qualified personnel, and we cannot assure you that we will be able
to attract and retain such skilled personnel and representatives. The loss of a
significant number of our existing technical personnel or sales representatives,
difficulty in hiring or retaining additional technical personnel or sales
representatives, or reclassification of our sales representatives as employees


                                       12
<PAGE>

may have a material adverse effect on our business, results of operations and
financial condition.

      The computer industry is characterized by intense competition. We directly
compete with local, regional and national systems integrators, value-added
resellers and distributors as well as with certain computer manufacturers that
market through direct sales forces and/or the Internet. The computer industry
has recently experienced a significant amount of consolidation through mergers
and acquisitions, and manufacturers of personal computers may increase
competition by offering a range of services in addition to their current product
and service offerings. In the future, we may face further competition from new
market entrants and possible alliances between existing competitors. Moreover,
additional suppliers and manufacturers may choose to market products directly to
end users through a direct sales force and/or the Internet rather than or in
addition to channel distribution, and may also choose to market services, such
as repair and configuration services, directly to end-users. Some of our
competitors have or may have, greater financial, marketing and other resources,
and may offer a broader range of products and services, than us. As a result,
they may be able to respond more quickly to new or emerging technologies or
changes in customer requirements, benefit from greater purchasing economies,
offer more aggressive hardware and service pricing or devote greater resources
to the promotion of their products and services. We may not be able to compete
successfully in the future with these or other current or potential competitors.

      Our business is dependent upon our relationships with major manufacturers
and distributors in the computer industry. Many aspects of our business are
affected by our relationships with major manufacturers, including product
availability, pricing and related terms, and reseller authorizations. The
increasing demand for personal computers and ancillary equipment has resulted in
significant product shortages from time to time, because manufacturers have been
unable to produce sufficient quantities of certain products to meet demand. In
addition, many manufacturers have adopted "just in time" manufacturing
principles that can reduce the immediate availability of a wide range of
products at any one time. We cannot predict that manufacturers will maintain an
adequate supply of these products to satisfy all the orders of our customers or
that, during periods of increased demand, manufacturers will provide products to
us, even if available, or at discounts previously offered to us. In addition, we
cannot assure you that the pricing and related terms offered by major
manufacturers will not adversely change in the future. Our failure to obtain an
adequate supply of products, the loss of a major manufacturer, the deterioration
of our relationship with a major manufacturer or our inability in the future to
develop new relationships with other manufacturers may have a material adverse
effect on our business, financial condition and results of operations. On May 3,
2002, the Hewlett-Packard Company and Compaq Computer Corporation merged. ATEC
sells the products of both companies and we believe that we have strong
relationships with both companies. While we do not believe that there will be a
material adverse effect on our business, financial condition and results of
operations as a result of this merger, there can be no assurance that such a
material adverse effect will not occur.

      The markets for our products and services are characterized by rapidly
changing technology and frequent introduction of new hardware and software
products and services. This may render many existing products and services
noncompetitive, less profitable or obsolete. Our continued success will depend
on our ability to keep pace with the technological developments of new products
and services and to address increasingly sophisticated customer requirements.
Our success will also depend upon our abilities to address the technical
requirements of our customers arising from new generations of computer
technologies, to obtain these new products from present or future suppliers and
vendors at reasonable costs, to educate and train our employees as well as our
customers with respect to these new products or services and to integrate
effectively and efficiently these new products into both our internal systems
and systems developed for our customers. We may not be successful in
identifying, developing and marketing product and service developments or
enhancements in response to these technological changes. Our failure to respond
effectively to these technological changes may have a material adverse effect on
our business, financial condition and results of operations.


                                       13
<PAGE>

      Rapid product improvement and technological change characterize the
computer industry. This results in relatively short product life cycles and
rapid product obsolescence, which can place inventory at considerable valuation
risk. Certain of our suppliers provide price protection to us, which is intended
to reduce the risk of inventory devaluation due to price reductions on current
products. Certain of our suppliers also provide stock balancing to us pursuant
to which we are able to return unsold inventory to a supplier as a partial
credit against payment for new products. There are often restrictions on the
dollar amount of inventory that we can return at any one time. Price protection
and stock balancing may not be available to us in the future, and, even if
available, these measures may not provide complete protection against the risk
of excess or obsolete inventories. Certain manufacturers have reduced the period
for which they provide price protection and stock balancing rights. Although we
maintain a sophisticated proprietary inventory management system, we cannot
assure you that we will continue to successfully manage our existing and future
inventory. Our failure to successfully manage our current or future inventory
may have a material adverse effect on our business, financial conditions and
results of operations.

      As a result of the rapid changes that are taking place in computer and
networking technologies, product life cycles are short. Accordingly, our product
offerings change constantly. Prices of products change, with generally higher
prices early in the life cycle of the product and lower prices near the end of
the product's life cycle. The computer industry has experienced rapid declines
in average selling prices of personal computers. In some instances, we have been
able to offset these price declines with increases in units shipped. There can
be no assurance that average-selling prices will not continue to decline or that
we will be able to offset declines in average selling prices with increases in
units shipped.


ITEM 3 - Quantitative and Qualitative Disclosures About Market Risk

We presently do not use any derivative financial instruments to hedge our
exposure to adverse fluctuations in interest rates, fluctuations in commodity
prices or other market risks, nor do we invest in speculative financial
instruments. Borrowings under our line of credit are at Prime plus a quarter
percent, which is adjusted monthly. Our interest income is sensitive to changes
in the general level of U.S. interest rates, particularly since the majority of
our investments are in short-term instruments.

Due to the nature of ATEC's borrowings and short-term investments, we have
concluded that there is no material risk exposure and, therefore, no
quantitative tabular disclosures are required.


ITEM 4 - Controls and Procedures

ATEC management, including the Chief Executive Officer and Chief Financial
Officer, have conducted an evaluation of the effectiveness of disclosure
controls and procedures pursuant to Exchange Act Rule 13a-14. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the disclosure controls and procedures are effective in ensuring that all
material information required to be filed in this quarterly report has been made
known to them in a timely fashion. There have been no significant changes in
internal controls, or in other factors that could significantly affect internal
controls, subsequent to the date the Chief Executive Officer and Chief Financial
Officer completed their evaluation.


                                       14
<PAGE>

FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK

Certain statements in this Report, and the documents incorporated by reference
herein, constitute "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of
1934 and the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors (collectively, "Factors") which may cause deviations in actual
results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied. Such Factors related
to our current business operations include but are not limited to:

o     risks associated with the uncertainty of future financial results;

o     additional financing requirements;

o     development of new products or mergers;

o     the continued ability to sustain integration of future acquisitions;

o     the ability to hire and retain key personnel;

o     the continued development of our technical, manufacturing, sales,
      marketing and management capabilities;

o     relationships with and dependence on third-party suppliers;

o     anticipated competition;

o     uncertainties relating to economic conditions;

o     uncertainties relating to government and regulatory policies;
      uncertainties relating to customer plans and commitments;

o     rapid technological developments and obsolescence in the industries in
      which the Company competes;

o     potential performance issues with suppliers and customers;

o     governmental export and import policies;

o     global trade policies;

o     worldwide political stability and economic growth; potential entry of new,
      well-capitalized competitors into the markets;

o     changes in the Corporate capital structure and cost of capital;

      Whether and when we complete the Acquisition and/or the Management Buyout
clearly will materially affect our forward-looking statements. For disclosure
about material Factors related to Interpharm's business operations, see
"Forward-Looking Statements" commencing on page 33 of the Proxy Statement.

      The words "believe, expect, anticipate, intend and plan" and similar
expressions identify forward-looking statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date the statement was made.


                                       15
<PAGE>

                        Atec Group, Inc. and Subsidiaries
                                      Other
                                   Information
                                 March 31, 2003

                                     PART II
                                OTHER INFORMATION


Item 1.- Legal Proceedings - None

Item 2.- Changes in Securities and use of Proceeds -  None

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

         Exhibits
         --------
         99.1       Certification of Chief Executive Officer pursuant to 18
                    U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
                    the Sarbanes-Oxley Act of 2002.

         99.2       Certification of Chief Financial Officer pursuant to 18
                    U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
                    the Sarbanes-Oxley Act of 2002

         99.3       Certification of President pursuant to 18 U.S.C. Section
                    1350, as Adopted Pursuant to Section 906 of the
                    Sarbanes-Oxley Act of 2002

         Reports on Form 8-K - None


                                       16
<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.



                                             ATEC GROUP, INC.
                                             (Registrant)





Date:  May 14, 2003

                                          By: /s/ James J. Charles
                                             ----------------------
                                             James J. Charles,
                                             Chief Financial Officer
                                             (Duly authorized to sign on
                                              behalf of registrant)








                                       17
<PAGE>

                                  CERTIFICATION


I, Balwinder Singh Bathla, Chief Executive Officer of ATEC Group, Inc. (the
"Registrant"), certify that:

1.    I have reviewed this quarterly report on Form 10-Q of the Registrant;

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the Registrant as of, and for, the periods presented in this
      quarterly report;

4.    The Registrant's other certifying officers and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we
      have:

      a)    designed such disclosure controls and procedures to ensure that
            material information relating to the Registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this
            quarterly report is being prepared;

      b)    evaluated the effectiveness of the Registrant's disclosure controls
            and procedures as of a date within 90 days prior to the filing date
            of this quarterly report (the Evaluation Date); and

      c)    presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date;

5.    The Registrant's other certifying officers and I have disclosed, based on
      our most recent evaluation, to the Registrant's auditors and the audit
      committee of Registrant's board of directors (or persons performing the
      equivalent function):

      a)    all significant deficiencies in the design or operation of internal
            controls which could adversely affect the Registrant's ability to
            record, process, summarize and report financial data and have
            identified for the Registrant's auditors any material weaknesses in
            internal controls; and

      b)    any fraud, whether or not material, that involves management or
            other employees who have a significant role in the Registrant's
            internal controls; and

6.    The Registrant's other certifying officers and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.


May 14, 2003


/s/ Balwinder Singh Bathla
---------------------------
Chief Executive Officer


                                       18
<PAGE>

                                  CERTIFICATION


I, James J. Charles, Chief Financial Officer of ATEC Group, Inc. (the
"Registrant"), certify that:

1.    I have reviewed this quarterly report on Form 10-Q of the Registrant;

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the Registrant as of, and for, the periods presented in this
      quarterly report;

4.    The Registrant's other certifying officers and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we
      have:

      a)    designed such disclosure controls and procedures to ensure that
            material information relating to the Registrant, including its
            consolidated subsidiaries, is made known to us by others within
            those entities, particularly during the period in which this
            quarterly report is being prepared;

      b)    evaluated the effectiveness of the Registrant's disclosure controls
            and procedures as of a date within 90 days prior to the filing date
            of this quarterly report (the Evaluation Date); and

      c)    presented in this quarterly report our conclusions about the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date;

5.    The Registrant's other certifying officers and I have disclosed, based on
      our most recent evaluation, to the Registrant's auditors and the audit
      committee of Registrant's board of directors (or persons performing the
      equivalent function):

      a)    all significant deficiencies in the design or operation of internal
            controls which could adversely affect the Registrant's ability to
            record, process, summarize and report financial data and have
            identified for the Registrant's auditors any material weaknesses in
            internal controls; and

      b)    any fraud, whether or not material, that involves management or
            other employees who have a significant role in the Registrant's
            internal controls; and

6.    The Registrant's other certifying officers and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.


May 14, 2003


/s/ James J. Charles
--------------------------
Chief Financial Officer


                                       19
<PAGE>

                                  CERTIFICATION


I, Ashok Rametra, President of ATEC Group, Inc. (the "Registrant"), certify
that:

1.    I have reviewed this quarterly report on Form 10-Q of the Registrant;

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the Registrant as of, and for, the periods presented in this
      quarterly report;

4.    The Registrant's other certifying officers and I are responsible for
      establishing and maintaining disclosure controls and procedures (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we
      have:

            a)    designed such disclosure controls and procedures to ensure
                  that material information relating to the Registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;

            b)    evaluated the effectiveness of the Registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the Evaluation
                  Date); and

            c)    presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.    The Registrant's other certifying officers and I have disclosed, based on
      our most recent evaluation, to the Registrant's auditors and the audit
      committee of Registrant's board of directors (or persons performing the
      equivalent function):

            a)    all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  Registrant's ability to record, process, summarize and report
                  financial data and have identified for the Registrant's
                  auditors any material weaknesses in internal controls; and

            b)    any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  Registrant's internal controls; and

6.    The Registrant's other certifying officers and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other factors that could significantly affect internal
      controls subsequent to the date of our most recent evaluation, including
      any corrective actions with regard to significant deficiencies and
      material weaknesses.


May 14, 2003


/s/ Ashok Rametra
--------------------------
President


                                       20
<PAGE>

Exhibits


Number    Description

99.1      Certification of Chief Executive Officer pursuant to 18 U.S.C. Section
          1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
          2002.

99.2      Certification of Chief Financial Officer pursuant to 18 U.S.C. Section
          1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
          2002

99.3      Certification of President pursuant to 18 U.S.C. Section 1350, as
          Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002




                                       21