U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

(Mark One)

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

     For the quarterly period ended September 30, 1999

( )  TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
     ACT OF 1943 (No Fee Required)

     For the transition period from___________to_____________

                        Commission File number 33-18174-D

SIEMANN EDUCATIONAL SYSTEMS, INC.
--------------------------------------------------------------------------------
(Name of small business issuer in its charter)

              Colorado                                           84-1067172
---------------------------------------------                -------------------
(State or other jurisdiction of incorporation                (I.R.S. Employer
or organization)                                             Identification No.)

           405 S. Platte River Drive, Suite 3A, Denver, Colorado 80223
           -----------------------------------------------------------
                    (Address of principal executive offices)

                                  303/733-9673
                      -------------------------------------
                            Issuer's telephone number

     Check whether the issuer (1) filed all reports 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 _____

     State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date.

4,207,702 shares of common stock were outstanding as of November 15, 1999.
--------------------------------------------------------------------------------

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Part One. FINANCIAL INFORMATION

     Item 1. Financial Statements

                  SIEMANN EDUCATIONAL SYSTEMS, INC. AND SUBSIDIARIES
                              CONSOLIDATED BALANCE SHEETS

                                        Assets


                                                            September 30,  December 31,
                                                                 1999           1998
                                                            ---------------------------
                                                             (Unaudited)     (Audited)

Current assets:
<S>                                                          <C>           <C>
   Cash                                                      $   164,150   $ 1,035,920
   Student accounts and notes receivable, net                  3,731,671     2,886,909
   Inventory                                                     112,324       105,634
   Receivable, related party                                        --          12,149
   Receivable, other                                                --         175,000
   Prepaid and other                                              95,636        63,944
                                                             -------------------------
      Total Current Assets                                     4,103,781     4,279,556
   Student accounts and notes receivable, long-term            1,338,091       704,026
   Property and equipment, net of accumulated depreciation     1,232,374       794,534
   Intangibles, net                                            8,125,002     8,316,398
   Deferred financing costs, net                                 141,028       148,096
   Perkins matching funds                                         70,000        70,000
   Other                                                          46,593        46,593
                                                             -------------------------
      Total assets                                           $15,056,869   $14,359,203
                                                             =========================


</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                  SIEMANN EDUCATIONAL SYSTEMS, INC. AND SUBSIDIARIES
                              CONSOLIDATED BALANCE SHEETS
                                      (Continued)

                         Liabilities and Stockholders' Equity

                                                          September 30,    December 31,
                                                              1999             1998
                                                          -----------------------------
                                                          (Unaudited)       (Audited)

Current liabilities:
<S>                                                       <C>             <C>
   Accounts payable                                       $    440,530    $    427,502
   Student refunds payable and credit balances                  18,301          31,927
   Accrued liabilities and income taxes                      1,239,327         540,456
   Deferred tuition income                                   2,945,994       2,056,196
   Common stock repurchase commitment                          570,627         415,000
   Current maturities of capital leases                        244,946         168,290
   Current maturities of long-term debt                      1,472,160       3,299,735
                                                          ----------------------------
      Total current liabilities                              6,931,885       6,939,106
Rent payable, related party                                    132,902         140,401
Capital leases, net of current maturities                      477,697         218,229
Long-term debt, net of current maturities and discount       4,024,530       3,781,921
Note payable - stockholder, net of discount                  2,993,800       2,178,676
                                                          ----------------------------
      Total liabilities                                     14,560,814      13,258,333
                                                          ----------------------------

Redeemable warrants                                            482,197         361,635

Stockholders' equity:
   Preferred stock, $.10 par value, 10,000,000 shares
      authorized, none outstanding                                --              --
   Common stock, $.10 par value, 100,000,000 shares
      authorized, 4,207,702 (1999) and 3,868,750 (1998)
      shares issued and outstanding                            420,770         386,875
   Common stock repurchase commitment                         (570,626)       (415,000)
   Additional paid-in capital                                1,319,009       1,352,904
   Retained earnings (deficit)                              (1,155,295)       (585,544)
                                                          ----------------------------
      Total stockholders' equity                                13,858         739,235
                                                          ----------------------------

Total liabilities and stockholders' equity                $ 15,056,869    $ 14,359,203
                                                          ============================

</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                          SIEMANN EDUCATIONAL SYSTEMS, INC. AND SUBSIDIARIES
                                 CONSOLIDATED STATEMENTS OF OPERATIONS
                                               (Unaudited)


                                                    Three Months Ended              Nine Months Ended
                                                       September 30,                   September 30,
                                                   1999            1998             1999           1998
                                               ------------------------------------------------------------
                                                                (Restated)                      (Restated)
Revenue:
<S>                                            <C>             <C>             <C>             <C>
   Tuition revenue                             $  3,114,579    $  2,892,504    $  9,587,458    $  6,634,862
   College supply and cafeteria sales               143,801         110,358         331,781         241,605
   Other                                             62,520          42,255          86,976          93,446
                                               ------------------------------------------------------------
      Total revenue                               3,320,900       3,045,117      10,006,215       6,969,913

Operating expenses:
   Educational services and facilities            1,274,685       1,332,055       3,708,243       2,950,882
   Cost of college supply and cafe sales            154,397          99,866         344,528         260,536
   Selling and promotion                            633,660         375,022       1,789,288         816,060
   General and administrative                     1,059,216         700,309       3,203,337       1,858,176
   Depreciation and amortization                    149,188         217,872         434,951         473,725
   Bad debt expense                                  47,400          24,844         142,200         102,287
                                               ------------------------------------------------------------
      Total operating expenses                    3,318,546       2,749,968       9,622,547       6,461,666
                                               ------------------------------------------------------------

      Income (loss) from operations                   2,354         295,149         383,668         508,247

Other income (expense):
   Interest income                                   21,433          28,822          59,046          67,570
   Interest expense                                (333,421)       (297,248)       (969,438)       (667,276)
                                               ------------------------------------------------------------
      Income (loss) before income taxes            (309,634)         26,723        (526,724)        (91,459)

Provision for income taxes                            4,568          36,256          43,027          76,705
                                               ------------------------------------------------------------

Net (loss)                                     $   (314,202)   $     (9,533)   $   (569,751)   $   (168,164)
                                               ============================================================

Net (loss) per common share
   Basic and fully diluted                     $       (.07)   $       (.00)   $       (.14)   $       (.04)
                                               ============================================================

Weighted number of common shares outstanding
   Basic and fully diluted                        4,207,702       3,765,000       4,104,651       3,776,583
                                               ============================================================


</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                  SIEMANN EDUCATIONAL SYSTEMS, INC. AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      (Unaudited)

                                                          Nine Months Ended September 30,
                                                                1999           1998
                                                          -------------------------------
                                                                            (Restated)
Cash flows from operating activities:
<S>                                                         <C>            <C>
   Net (loss)                                               $  (569,751)   $  (168,164)
   Cash provided (used) by operating activities:
      Depreciation and amortization                             434,951        473,725
      Amortization of discount on debt                           69,030         46,020
      Accretion of put liability                                120,561         51,500
      Contributed assets                                           --          (25,838)
   Changes in operating assets and liabilities:
      Student accounts and notes receivable                  (1,291,678)    (1,457,521)
      Inventory                                                  (6,690)           538
      Prepaid expenses and other assets                         (55,984)        13,506
      Accounts payable                                           13,028        (43,814)
      Student refunds payable and credit balances               (13,626)          (658)
      Accrued liabilities                                       698,871        452,907
      Rent payable, related party                                (7,499)         5,625
      Deferred tuition revenue                                  889,798        867,365
                                                            --------------------------
         Net cash provided (used) by operating activities       281,011        215,191
                                                            --------------------------

Cash flows from investing activities:
   Investment in acquisition of business                           --       (3,521,100)
   Loans to related parties                                        --           (7,000)
   Collection on loans to related parties                          --          148,300
   Purchases of property and equipment                         (150,676)       (92,079)
                                                            --------------------------
         Net cash (used) by investing activities               (150,676)    (3,471,879)
                                                            --------------------------

Cash flows from financing activities:
   Proceeds from debt                                         2,420,553      3,257,979
   Payments of debt and capital leases                       (4,212,242)    (1,580,115)
   Proceeds from related party debt                             789,584      2,127,500
   Payments of related party debt                                  --          (75,000)
   Deferred stock offering costs                                   --          (82,125)
   Loan acquisition fees                                           --           (8,751)
                                                            --------------------------
         Net cash (used) by financing activities             (1,002,105)     3,639,488
                                                            --------------------------

         Net (decrease) in cash                                (871,770)       382,800
         Cash, beginning of period                            1,035,920         18,830
                                                            --------------------------
         Cash, end of period                                $   164,150    $   401,630
                                                            ==========================
Supplemental disclosure of cash flow information:
   Cash payments for interest                               $   917,228    $   470,992
                                                            ==========================
   Cash payments for income taxes                           $     2,000    $    36,135
                                                            ==========================

<PAGE>

               SIEMANN EDUCATIONAL SYSTEMS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                   (Continued)

                                                         Nine Months Ended September 30,
                                                                1999         1998
                                                         -------------------------------
Non-cash transactions:
Investment in acquisition of business exchanged for stock          --            --
                                                            -------------------------
Acquisition of leased equipment                             $   499,359   $   145,517
                                                            -------------------------


Non-cash investing and financing transactions in
connection with the acquisition of DPT:
      Fair value of net assets acquired                            --     $ 9,052,532
      Future stock issuance                                        --        (750,000)
      Note payable to prior owner                                  --      (4,340,000)
      Earnest money from prior periods applied                     --        (100,000)
      Cash acquired with acquisition                               --        (341,432)
                                                            -------------------------
      Net cash paid to acquire subsidiary                          --     $ 3,521,100
                                                            =========================

      Loan fees and costs                                          --     $   174,916
      Loan discounts                                               --        (146,165)
      Deposit from prior periods applied                           --         (20,000)
                                                            -------------------------
      Net cash paid for loan fees and costs                        --     $     8,751
                                                            =========================

      Value of warrants issued                                     --     $   460,195
                                                            =========================

</TABLE>
<PAGE>


               SIEMANN EDUCATIONAL SYSTEMS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               September 30, 1999

1. BASIS OF PRESENTATION AND ORGANIZATION

The balance sheet as of September 30, 1999, the statements of operations for the
three and nine months ended September 30, 1999 and 1998, and the statements of
cash flows for the nine months ended September 30, 1999 and 1998, have been
prepared by the Company. In the opinion of management, all adjustments (which
include normal recurring adjustments) necessary to present fairly the financial
position, results of operations, and changes in cash flows at September 30,
1999, and for all periods presented, have been made. The balance sheet as of
September 30, 1998 and the statements of operations for the three months ended
September 30, 1998, have been restated to include additional expenses in the
total amount of $154,908. The restatements consist of the following elements:
increase to accrued officer compensation - $30,000; increase to amortization
expense resulting from a reclass of DPT acquisition intangible assets from
goodwill to categories with shorter lives - $77,400; accrual of interest expense
associated with the put options described below- $26,800; increase in the tax
provision for DPT's separate company state and local income tax - $12,200; other
- $8,500. The effect of this change on the consolidated statement of operations
for the three months ended September 30, 1998 is a decrease from the originally
reported net income of $145,375 to a net loss of ($9,533). The cumulative effect
of the expense increases for the first to third quarters on the consolidated
statement of operations for the nine months ended September 30, 1998, is to
present a net loss of $(168,164), rather than net income of $112,418.

Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is recommended that these financial
statements be read in conjunction with the financial statements and notes
thereto included in the Company's December 31, 1998 10-KSB report. The results
of operations for the three months and nine months ending September 30, 1999 and
1998 are not necessarily indicative of the operating results for the full year.

2. ACQUISITION OF SUBSIDIARY AND RELATED DEBT

The Company acquired Data Processing Trainers, Inc. ("DPT") on March 24, 1998,
for a purchase price of $9,030,624. DPT, now a wholly-owned subsidiary of the
Company, is an accredited school offering a variety of vocational training
programs with two locations in Philadelphia, Pennsylvania. The majority of
students are drawn from the surrounding metropolitan area.

The purchase price was comprised of: $3,940,624 in cash (including 59,782 shares
in repurchased common stock valued at $119,564 and $100,000 in earnest money
paid in 1997), a $4,340,000 promissory note, and $750,000 in future stock. The
promissory note, dated March 24, 1998, required quarterly payments beginning in
June, 1998, of $542,500 in principal plus accrued interest at 7% per annum. The
note was due March 24, 2000, and was secured by a Security Agreement-Stock
Pledge and a Guaranty and Security Agreement. As of May 4, 1999, the Company
obtained a bank loan, the proceeds of which have been used to pay off the
remaining note balance of $2,170,000. The new bank loan is for a period of two
years, with monthly payments of $99,043 (including interest at 8.9% per annum)
commencing in June, 1999. The $750,000 stock payable in the transaction was
satisfied by the Company issuing on March 24, 1999, 338,952 shares of its
non-registered common stock.

<PAGE>


The acquisition has been accounted for as a purchase with a substantial portion
of the purchase price being allocated to goodwill and other intangible assets.
The intangible assets are being amortized over various lives ranging from .75 to
40 years; the assets being amortized over 40 years constitute 93% of the total
assets recorded.

In order to fund the purchase price, the Company borrowed $2,000,000 from its
president and majority stockholder, and $2,900,000 from an outside financing
source. The debt of $2,000,000 to the president bears 12% interest, payable
monthly, and the full principal balance of the note is due on March 24, 2003.
The president also received a warrant to purchase 732,360 shares of the
Company's restricted common stock for an aggregate exercise price of $100 for
the period ending March 24, 2003. The debt of $2,900,000 to the outside source
is payable interest-only quarterly, at 12% per annum, and the principal balance
and any remaining accrued interest is due on March 24, 2003. This lender
received a warrant to purchase 1,268,486 shares of the Company's restricted
common stock for a total exercise price of $100 beginning March 24, 2001 and
ending six years after the payment of all obligations pursuant to the debt.

The warrants were valued at issue at approximately $460,000, which is presented
on the balance sheet as a discount from the debt; the discount is being
amortized over the term of the related notes payable. The costs of obtaining the
financing have been deferred and are also being amortized over the term of the
notes payable. In accordance with an amendment to the warrant and debt
agreements, the warrants or any portion of shares obtained by exercise of these
warrants, will become subject to cash redemption at the discretion of the
warrant or share holder beginning January 31, 2003 if the Company does not
complete a public offering by January 31, 2000 (or immediately if control of the
Company or DPT is sold or transferred through the end of the exercise period).
To recognize the potential cash redemption, the Company has accreted
approximately $190,500 to the warrant liability. The potential maximum accretion
for the five-year period ending March 2003, based on current circumstances, is
approximately $1,544,700.

3. STOCK REPURCHASE AGREEMENT

The Company sold 103,750 shares of stock for $4 per share in December, 1998,
under an agreement containing a one-time "put right", exercisable on or before
December 24, 1999, at a price of $6 per share. The put liability is being
accreted on a straight-line basis over the twelve months beginning January 1,
1999.

4. SEGMENT AND RELATED INFORMATION

The Company's two operating business units have separate management teams and
infrastructures that offer related products and services. The business units
have been separated into two reportable segments (DADC and DPT) based on
geographical location.

     DADC: Denver Automotive and Diesel College, Inc. is the sole business unit
     reported in this segment. The principal markets for this segment include
     the Denver, Colorado metropolitan areas and surrounding states.

<PAGE>


     DPT: Data Processing Trainers Company, acquired in 1998, is the sole
     business unit reported in this segment. The principal markets for this
     segment include the Philadelphia, Pennsylvania metropolitan area and
     surrounding states.

Summarized financial information concerning the Company's reportable segments is
shown in the following table. The "Corporate" column includes corporate-related
items, and income and expenses not allocated to reported segments.

<TABLE>
<CAPTION>

                                     DADC            DPT           CORPORATE        TOTAL
                                ------------------------------------------------------------
Nine months ended
September 30, 1999
<S>                             <C>             <C>                             <C>
   Revenues                     $  2,457,143    $  7,549,072            --      $ 10,006,215
   Segment profit (loss)            (278,206)       (108,756)       (182,789)       (569,751)
   Total assets                    3,360,919       3,418,622       8,277,328      15,056,869

Nine months ended
September 30, 1998 (Restated)
   Revenues                        2,357,377       4,612,536            --         6,969,913
   Segment profit (loss)             (20,362)        (44,044)       (103,758)       (168,164)
   Total assets                    3,323,331       3,213,495       8,775,959      15,312,785

</TABLE>


DPT segment revenues and losses for September 30, 1998 include only the period
from March 24, 1998 (date of acquisition) to September 30, 1998. DADC and DPT
segment revenues and assets as a per cent of total revenues and assets are
generally comparable to those for the year ended December 31, 1998. Interest,
amortization, and general and administrative expenses allocated to DPT for the
first three quarters of the current fiscal year by the parent company exceed
such allocations in the same periods of the previous year by approximately
$53,000 per quarter.

5. CONTINGENCIES

The company is a defendant in an arbitration claim filed by a firm it contracted
with to locate equity and debt funding sources. The claim asks for damages of
$287,000. The company has counter-claimed, believes the suit is completely
without merit, and intends to vigorously defend its position. No communication
has been received from the respondent on the counter-claim.

6. SUBSEQUENT EVENTS

The Company is currently negotiating with its primary shareholder regarding the
issuance of new warrants to him in connection with additional funds he has
loaned the Company in 1999, as well as new leases and bank loans for which he
has signed with the Company as co-maker or guarantor. The warrants will likely
be issued at an exercise price equivalent to the stock bid price as of August
20, 1999, which was $.25 per share. The issuance of these warrants should not
result in a charge to earnings. The number of warrants to be issued and the
length of the option period have yet to be determined.

<PAGE>


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

The following discussion of the results of operations and financial condition of
the Company should be read in conjunction with the Company's Consolidated
Financial Statements and Notes thereto appearing elsewhere herein.

The discussion below contains certain forward-looking statements (as such term
is defined in Section 21E of the Securities Exchange Act of 1934) that are based
on the beliefs of the Company's management, as well as assumptions made by, and
information currently available to, the Company's management. The Company's
actual growth, results, performance and business prospects and opportunities in
1999 and beyond could differ materially from those expressed in, or implied by,
any such forward-looking statements. See "Special Note Regarding Forward-Looking
Statements" for a discussion of risks and uncertainties that could cause or
contribute to such material differences.

Background and Overview

Siemann Educational Systems, Inc. ("SES") operates two private for-profit
post-secondary vocational schools: Denver Automotive and Diesel College ("DADC")
and Data Processing Trainers, Inc. ("DPT"). DADC, located in Denver, Colorado,
provides training in automotive and diesel mechanics; the school had 371
enrolled students as of September 30, 1999. The school has been designated a
"Master Certified Automotive School" by the National Automotive Technicians
Education Foundation, and offers several associate degree and non-degree
programs. DPT, acquired by the Company on March 24, 1998 as more fully discussed
below under "Acquisitions", consists of two campuses in the Philadelphia,
Pennsylvania, area providing training in the areas of computer programming,
business computer applications, medical office administration, and English as a
second language. DPT's two Pennsylvania campuses had enrollment of approximately
1,119 students on September 30, 1999. Additionally, DPT has commenced a small
program operating out of the Company's corporate office location in Denver,
Colorado, which had an enrollment of 23 students on September 30, 1999. DADC's
enrollment is 26% higher than it was on September 30, 1998, as its increased
marketing efforts have begun to have an effect. DPT's enrollment has increased
by approximately 14% from September 30, 1998, primarily due to the expansion of
the Northeast Philadelphia campus (further discussed below). Both schools have
long histories, dating to 1963 (DADC) and 1987 (DPT). DADC has been operated by
the Company since August 31, 1997, and, as noted above, DPT was acquired by the
Company in March, 1998. For the period November, 1993 to August 31, 1997, DADC
was operated by an S corporation owned by the Company's current CEO and primary
stockholder.

DPT's northeast Philadelphia campus moved to a new, larger facility as of
February, 1999. This expansion will result in the ability to increase the
student body at that campus from the current 590 to approximately 1,400. Current
tuition revenue is approximately $900 per month per student. Rent expense for
the new facility (including shared costs) is approximately $16,000 per month
higher than at the old facility.

The Company's principal sources of revenues are tuition, related fees, and book
sale charges collected from its students. Both schools record tuition at the
start of each academic term as deferred tuition income, a current liability.

<PAGE>


During the term, the applicable portion of deferred tuition income is recognized
as revenue each month based on aggregate number of credit hours taken by
students during the term. The year is divided into terms, which are determined
by start dates that vary by school and program. Payment of each term's tuition
may be made by full cash payment, financial aid, and/or an installment payment
plan. If a student withdraws from school prior to the completion of the term,
the Company refunds a portion of the tuition already paid which is attributable
to the uncompleted period of the term. The Company's campuses charge tuition at
varying amounts depending on both the school and the type of program and
curriculum. Each of the Company's campuses typically implements one or more
tuition increases annually; DADC increased tuition by approximately 6.2% on July
1, 1999, and DPT implemented an approximate 6.5% increase effective June 1, 1999
for some programs and August 1, 1999 for other programs. For both DADC and DPT,
the highest student body levels generally occur during the fall terms, beginning
in August/September.

The Company's expenses consist of educational and facilities costs, selling and
promotional expense, general and administrative expense, depreciation and
amortization, and bad debt expense.

Education costs generally consist of salaries and related expenses for faculty,
instructional support, academic administration, educational materials, and
related expenditures. Facility costs include leasing and maintenance of campus
facilities, and other building occupancy expenses.

Selling and promotional expenditures include the costs of advertising and
promotional materials, as well as salaries and benefits for recruitment and
marketing personnel.

General and administrative expense includes salaries and benefits of accounting,
and school and corporate administrative personnel.

Depreciation and amortization consists of depreciation of purchased and
capital-leased computer equipment, automotive training equipment, and furniture
and fixtures. Amortization of intangible assets consists primarily of the costs
of goodwill acquired in the purchase of DPT, and loan fees associated with that
purchase.

The corporate parent allocates direct expenses incurred on behalf of the
individual schools to those business segments.

Uncollectible student receivables are written off to bad debt expense on a
pro-rata basis through out the year. DADC experienced a period of ineligibility
for federal financial aid programs during 1996 and 1997; as a consequence, the
school substantially increased the level of tuition being financed by students
under installment payment plans. Bad debt expense has been approximately 4%-6%
of DADC revenues in 1999 and 1998. DPT has experienced bad debts of less than 1%
of revenue in 1999 and 1998.

As a result of the S Corporation status of DADC until August 31, 1997, DADC was
not subject to federal and state income taxes until its acquisition by the
Company. The Company's operations from September 1, 1997 to December 31, 1997
resulted in a net operating loss carry-forward of approximately $118,000, of
which approximately $104,000 was utilized in 1998. Although the Company incurred
a net loss in 1998, the acquisition of DPT was structured as a stock purchase,
and, consequently, amortization of the intangible assets acquired in the
purchase is not deductible for federal and state income tax purposes. DPT is
subject on an individual company basis to state and city income and business
privilege taxes.

<PAGE>


Acquisition

On March 24, 1998, the Company acquired all of the outstanding stock of DPT for
a purchase price of $9,030,624; additional direct costs of acquisition of
approximately $21,900 were also capitalized. The acquisition was accounted for
as a purchase. The purchase price was determined through arms-length negotiation
with the independent third-party owner based on historical and projected future
cash flow and earnings. DPT had minimal tangible assets, and the difference
between the purchase price and the assets and liabilities assumed was recorded
primarily as goodwill (82%) and trade name (11%); the balance was attributed to
student contracts, curriculum and non-compete covenant.

The purchase price consisted of cash payments of $3,599,192 (net of cash
acquired), a $4,340,000 note payable to DPT's former owner, and $750,000 in
future stock to be issued. Funds used for the acquisition were borrowed from the
company's president (in the amount of $2,000,000) and a financing subsidiary of
a brokerage firm (in the amount of $2,900,000). Warrants to purchase 2,000,846
shares of the Company were issued in connection with this debt; the warrants
were valued and recorded at $460,195. The warrants issued to the financing
source are subject to a cash redemption requirement more fully discussed in the
Company's 10-KSB at December 31, 1998.

The acquisition of DPT resulted in the following balance sheet additions:
$1,452,689 to student accounts/notes receivable, $77,857 to book and materials
inventories, $308,206 to tangible fixed assets, $64,478 to prepaid and other
assets, $287,021 to accounts payable, $195,150 to capital lease obligations, and
$1,430,711 to deferred tuition liabilities. Cash of $341,432 was acquired, and
goodwill and other intangible assets of $8,720,752 were recorded.

As a result of the acquisition, amortization expense is expected to be
approximately $255,000 annually for the years 1999 through 2002, and
approximately $215,000 thereafter through the 40-year goodwill amortization
period. The loans from the shareholder and financing subsidiary are due in five
years, and interest expense at 12% will approximate $588,000 annually until
maturity. Additionally, amortization of the debt discount associated with
issuance of warrants in the transaction is expected to be approximately $100,000
per year, and accretion of the financing subsidiary put option will impact
interest expense by about $160,000 annually through 2002. The note payable to
the former owner of DPT was paid off via bank debt refinancing in May, 1999; the
new bank debt carries an interest rate of 8.9% over a term of 24 months.
Interest on this loan will be approximately $100,000 in 1999; principal payments
required during the remainder of 1999 will be approximately $258,000, or
$285,000 less than would have been required under the note to the former owner.

Liquidity and Capital Resources
-------------------------------

September 30, 1999 as Compared to December 31, 1998

The Company finances its operating activities and capital requirements,
including debt repayments, principally from cash provided by operating
activities and borrowings on lines of credit. The Company's cash balance
decreased by $871,770 over December 31, 1998, primarily due to debt principal
payments to the former owner of DPT, which were $1,085,000 during the first
quarter of 1999. As discussed below, DPT generally experiences a slowing of
accounts receivable collections as their agency customers approach their fiscal
year-ends on June 30, which results in abnormally low cash collections during

<PAGE>


the period from late May through approximately July. This period of slower than
normal cash collections coincides with the lowest enrollment periods of the
year. DPT's cash balances at September 30, 1999 were $126,000, compared to
$551,500 at December 31, 1998, and $65,000 at June 30, 1999. DADC's cash
balances at September 30, 1999 have declined by approximately $30,000 from the
level at December 31, 1998. Cash provided by operating activities of $281,011
for the period ended September 30, 1999 compares to $215,191 for the period
ended September 30, 1998, an increase of approximately 30%.

Student accounts and installment notes receivable increased by $1,291,678 over
December 31, 1998 balances; on a segment basis, the increases were 19% for DADC
and 56% for DPT. DPT's accounts receivable level represents a 2% increase over
the same date for the prior year, while DADC's level constitutes a 9% decrease.
Because the fall start dates tend to produce the highest seasonal enrollment
levels, accounts receivable are normally at their highest level for the year at
September 30. Additionally, Title IV funds, which account for more than half of
all revenue sources at both DADC and DPT, are affected by a fiscal year-end
payment slow-down, to the extent that payments generally reach the schools
approximately a week later than normal at this period end. State and local
agency placements, which are approximately 25% of DPT's enrollment, have a June
30 fiscal year end with a longer payment slowdown period. By October or
November, the federal, as well as the state and local agencies, have generally
caught up their delayed payments in full. Deferred tuition liabilities, which
represent the unearned portion of current academic year receivables, increased
by $234,751, or 9%; the change results from normal inter-period start date
timing fluctuations as well as the seasonal high enrollment levels.

Capital expenditures unrelated to the acquisition were approximately $150,600
and $92,000 in the first nine months of 1999 and 1998, respectively. An
additional $499,359 in capital lease obligations were also incurred during the
period. DADC replaced much of its computer and instructional equipment in May
1999 via new capital leases of approximately $277,000. Principal payments on
capital lease obligations were $163,235 during the period.

Accrued liabilities and income taxes increased from $540,456 at December 31,
1998 to $1,239,327 at September 30, 1999. The increase was greatest at DPT,
where liabilities rose to $637,822 at September 30 from approximately $136,000
at December 31. The combination of increased expenses associated with DPT's move
and expansion in Philadelphia and opening of a Denver branch, and the cash flow
issues described above were the primary causation factors for the overall
liability increase. Management expects the Company's cash position and level of
current liabilities to improve by October, concurrent with the highest
enrollment periods of the year, and the resumption of normal payment patterns by
agency customers.

The Company has reduced its outside current and long-term debt at September 30,
1999 by $1,585,000 from the level at December 31, 1998, but increased its
borrowing from its principal shareholder by $815,000 during the same period. Net
overall principal reductions were $770,000. Expense increases, revenue decreases
(discussed below), and seasonal high accounts receivable levels required
additional cash infusions from the principal shareholder.

A stock repurchase commitment of $415,000 was recorded in December, 1998 in
conjunction with a stock sale that included a put option back to the Company at
a price in excess of the issue price. The additional repurchase liability is
being accreted evenly over the twelve months ending December, 1999, at which
time the put option is exercisable. The liability accretion was $155,625 for the
current period; $51,875 will be recorded for the remaining quarter of 1999.

<PAGE>


Based on preliminary discussions with the shareholder, it is likely the put due
date will be extended beyond December 24, with additional interest likely to be
paid from the due date until the extended put payment date.

Results of Operation
--------------------
September 30, 1999 as Compared to September 30, 1998

The following table summarizes the Company's operating results as a percentage
of net revenue for the periods indicated:

                                           Three Months Ended  Nine Months Ended
                                              September 30,      September 30,
                                              1999     1998     1999      1998
                                           -------------------------------------
     Net revenues                            100.0    100.0    100.0    100.0
     Educational services and facilities     (38.4)   (43.7)   (37.1)   (42.3)
     Cost of college supplies/sales           (4.7)    (3.3)    (3.4)    (3.7)
     Selling and promotion                   (19.1)   (12.3)   (17.9)   (11.7)
     General and administrative              (31.9)   (23.0)   (32.0)   (26.7)
     Depreciation and amortization            (4.4)    (7.2)    (4.4)    (6.8)
     Bad debt expense                         (1.4)     (.8)    (1.4)    (1.5)
                                             ---------------------------------
     Income from operations                     .1      9.7      3.8      7.3
     Interest expense - net                   (9.5)    (8.9)    (9.1)    (8.6)
     Provision for income taxes                (.1)    (1.2)     (.4)    (1.1)
                                             ---------------------------------
     Net income                               (9.5)     (.4)    (5.7)    (2.4)
                                             =================================

Total revenues. The Company's total revenues increased by $3,036,302 to
$10,006,215, for the nine months ended September 30, 1999 over the same period
of 1998. Revenues include $7,549,072 attributable to DPT's operations. (For the
1998 quarters, DPT operations are included for only the period March 24 to June
30.) DADC's revenues increased by $99,766, or 4%, over the previous year's first
nine months; although the student population is up 26% at September 30, 1999
compared to 1998, the increase is recent and will take some time to be reflected
in revenue. DPT revenues for the third quarter of 1999 decreased by
approximately $175,000 from average quarterly revenue for the first and second
quarters of 1999. Mainframe programming training, which has in the past
accounted for approximately 12% of revenue, has dropped to negligible levels
since June, 1999. The low demand for such training reflects local employers'
belief that their Year 2000 problems have been corrected, and/or their
intentions to wait until after January 1 to further address the issue. DPT has
recently developed customized training programs for the Philadelphia Private
Industry Council, which has generated some replacement revenue. The Company
estimates that mainframe revenue declined by approximately $400,000 for the
year-to-date, and that approximately $200,000 in replacement program revenue has
been generated.

Educational facilities and services. Educational services and facilities costs
were constant at approximately 37% of revenue for the first three quarters of
1999. They are somewhat lower as a percent of revenue from the prior year due
partially to the fact that DADC's expenses per student are higher than DPT's
(the prior year includes DPT's operations from only March 24 to June 30). DPT's
expenses constituted 35% of revenue, while DADC's were approximately 43% of
revenue.

<PAGE>


Selling and promotion expense. Selling and promotion expense as a percent of
revenue increased significantly over the previous year, from 11.7% of revenue to
17.9% of revenue. DADC is continuing to struggle to attract students in the low
unemployment environment Denver has been experiencing for some time. To begin to
address the problem, four new national recruiters were hired approximately 15
months ago, which has resulted in approximately $280,000 of higher marketing
expenses for the period ended September 30, 1999 than for the same period in
1998. These expenditures are the primary cause of the $258,000 increased loss
for this year compared to last year. Because such national marketing efforts to
attract out-of-area students generally require a period of two years to produce
full results, the expenditures have not yet led to any significant revenue
increases, although the student population levels at September 30, 1999 are up
over the prior year, as discussed previously. DPT has also significantly
increased expenditures in this area in conjunction with its Northeast
Philadelphia campus move and expansion, which it must now attract enough
students to operate at full capacity. Although local recruiting efforts produce
faster results than national campaigns, the expenditures still occur somewhat in
advance of revenues. DPT's marketing expenses through September 30, 1999 are
approximately $71,000 higher than for the same period of 1998.

General and administrative. DADC's general and administrative expenses have
increased from approximately $496,000 in the 1998 period to $635,000 for the
current year-to-date; print shop expenses, administrative salaries, student
services expenses and property taxes have all increased, among other
miscellaneous categories. Although DPT's quarterly average expense is $705,000
this year, compared to $373,000 last year (reflecting the campus move and
expansion noted above), DPT's general and administrative expense for the most
recent quarter was $486,000. The majority of the increase is in student services
salaries and related expenses (placement, student relations, financial aid)
associated with gearing up to handle the larger student population which will
result from the expansion; again, such expenses are incurred in advance of their
associated revenue. DPT has opened a small Denver branch; Department of
Education approvals were finalized in August, and an initial class of 17
students was enrolled on August 16. Enrollment was 23 on September 30, 1999, and
has subsequently increased to 45.

Depreciation and amortization. Quarterly amortization expenses, primarily for
goodwill and other intangible assets acquired in the DPT purchase, decreased by
approximately 50% over 1998; the student contracts acquired with DPT were fully
amortized as the end of 1998.

Bad debt expense. Bad debt expense has remained relatively constant at a blended
rate of approximately 1.5% since the acquisition of DPT.

Income from operations. Income from operations for the quarter ended September
30, 1999 decreased by approximately $290,000 from the same quarter of 1998. The
increases in selling/promotion, and general/administrative expenses, as well as
the mainframe programming revenue decrease, were the primary causative factors.

Interest expense. Interest expense has remained at a fairly constant percent of
revenue since the acquisition of DPT; interest on acquisition indebtedness
accounts for approximately 80% of total interest expense for the Company.

Net loss. The Company's net loss was $(569,751), compared to $(168,164) for the
first nine months of the prior year. In addition to the revenue and expense
change factors discussed above, interest expense at September 30, 1998 was
inclusive of DPT acquisition indebtedness for only two quarters, while 1999
includes three quarters.

<PAGE>


Year 2000. The Company relies on internal computer systems for accounting and
student record-keeping purposes, and, in the case of DPT, for provision of
training to students. DADC has installed new computer hardware that has been
determined to be Year 2000 compliant by the vendor; the replacement would have
been necessary without Year 2000 issues, and the cost is consequently not
directly related to Year 2000 compliance. Its student record-keeping system
software has been upgraded by the vendor to Year 2000 compliance, and has been
installed on the new hardware. The accounting system has also been upgraded
during 1999; the system is off-the-shelf, and did not require significant cost
for installation or conversion. DPT's MIS managers and programmers regularly
update the software and hardware utilized for student training, and believe the
systems are currently Year 2000 compliant. DPT primarily uses standard
off-the-shelf spreadsheet software for student record-keeping purposes, and has
purchased a newer version at minor cost. DPT has recently purchased and
installed accounting software that the vendor has confirmed is Year 2000
compliant.

The Company has initiated formal communications with all of its significant
systems providers to determine the extent to which the Company is vulnerable to
third parties' failure to remediate their Year 2000 issues. The primary
third-party computer systems on which the Company relies are student loan
processing and record-keeping, payroll processing, and banking. All of the
Company's service providers in those areas have been contacted, and all have
responded with written documentation to the Company that the systems they are
using externally or have provided to the Company are Year 2000 compliant.

Special Note Regarding Forward-Looking Statements. This Form 10Q contains
certain statements which reflect the Company's expectations regarding its future
growth, results of operations, performance, and business prospects and
opportunities. Wherever possible, words such as "anticipate", "believe", "plan",
"expect", and similar expressions have been used to identify these
"forward-looking" statements. These statements reflect the Company's current
beliefs and are based on information currently available to the Company.
Accordingly, these statements are subject to risks and uncertainties which could
cause the Company's actual growth, results, performance and business prospects
and opportunities to differ from those expressed in, or implied by, these
statements. These risks and uncertainties include implementation of the
Company's operating and growth strategy, risks inherent in operating private
for-profit post-secondary education institutions, risks associated with general
economic and business conditions, charges and costs related to acquisitions, and
the Company's ability to successfully integrate its acquired institutions,
attract and retain students at its institutions, meet regulatory and accrediting
agency requirements, compete with other institutions in its industry, and
attract and retain key employees and faculty. The Company is not obligated to
update or revise these forward-looking statements to reflect new events or
circumstances.

<PAGE>


PART II

Item 1. LEGAL PROCEEDINGS.

None.

Item 2. CHANGE IN SECURITIES

Per the DPT purchase agreement, 338,952 shares, representing a value of
$750,000, were issued to the seller of DPT on March 24, 1999.

Item 3. DEFAULTS ON 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). Exhibit No.       Description

             27             Financial Data Schedule

     (b). Reports on Form 8-K:

             None


SIGNATURES

Pursuant to the requirement 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.

SIEMANN EDUCATIONAL SYSTEMS, INC.
(Registrant)


                                       By: /s/ PAUL T. SIEMANN
                                       -----------------------
                                       Paul T. Siemann, President and CEO