SECURITIES & EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE                    
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 1998

[ ]  TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (No Fee Required)

                           Commission File No. 0-27210

                          Tech Electro Industries, Inc.
                 (Name of Small Business Issuer in its Charter)

            Texas                                           75-2408297
------------------------------                            ---------------
State or other jurisdiction of                            I.R.S. Employer
incorporation or organization                            Identification No.

2941 Main Street, Suite 300-B, Santa Monica, California               90405
-------------------------------------------------------              --------
       Address of principal executive office                         Zip Code

                   Issuer's telephone number: (310) 396-1782

Check  whether  the issuer has (1) filed all  reports  required by Section 13 or
15(d) of the  Exchange  Act during the past 12 months,  and (2) been  subject to
such filing requirements for the past ninety (90) days. Yes (X) No ( )

As of March 31, 1998, 3,778,176 shares of Common Stock were outstanding.





                                       -1-

<PAGE>


         THIS DOCUMENT IS PREPARED AND FILED UNDER THE REQUIREMENTS
         OF REGULATION S-B OF THE SECURITIES AND EXCHANGE COMMISSION,
         EFFECTIVE JULY 31, 1992.


                                      Index
Item                                                                       Page

Part I - Financial Statements

    Item 1 - Financial Statements (unaudited)

             Condensed Consolidated Balance Sheet at
             March 31, 1998 (unaudited) and December 31, 1997 ................3

             Consolidated Statement of Operations (unaudited)
             for the Three Months Ended March 31, 1998 and 1997...............5

             Consolidated Statements of Cash Flows (unaudited)
             for the Three Months Ended March 31, 1998 and 1997...............6

             Notes to Consolidated Financial
             Statements.......................................................7

    Item 2 - Management's Discussions and
             Analysis of Financial Condition and
             Results of Operations............................................10

Part II - Other Information

    Item 1 - Legal Proceedings................................................13

    Item 2.  Changes in Securities............................................13

    Item 3.  Defaults Upon Senior Securities..................................13

    Item 4.  Submission of Matters to a Vote of Securities Holders............13

    Item 5.  Other Information................................................13

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

Signatures....................................................................15
                                      
                                       -2-

<PAGE>



PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

                  Tech Electro Industries Inc, and Subsidiaries
                           Consolidated Balance Sheets


                                     ASSETS
                                     ------
                                   (unaudited)
                                                     Mar 31, 1998  Dec 31, 1997
                                                     ------------  ------------
CURRENT ASSETS
   Cash and cash equivalents                           $1,092,354    $1,918,754
   Marketable securities                                  125,550        94,063
   Accounts and notes receivable
     Accounts receivable trade                            942,712       974,602
     Notes                                                334,378       335,000
     Other                                                 44,291        33,942
   Inventory                                            1,695,504     1,801,035
   Prepaid expenses                                       274,039       211,351
                                                      -----------   -----------
TOTAL CURRENT ASSETS                                    4,508,828     5,368,747
                                                      -----------   -----------

NET PROPERTY & EQUIPMENT                                  305,103       308,882
                                                      -----------   -----------

OTHER ASSETS
   Investment in subsidiary (Note A)                    1,000,000       500,000
   Notes receivable                                        67,708        77,150
   Other assets                                             2,270         2,288
                                                      -----------   -----------
TOTAL OTHER ASSETS                                      1,069,978       579,438
                                                      -----------   -----------
TOTAL ASSETS                                           $5,883,909    $6,257,067
                                                      ===========   ===========


                 See Notes to Consolidated Financial Statements
          (See Note A) - Amounts do not Include US Computer Group, Inc.

                                      -3-

<PAGE>

                  Tech Electro Industries, Inc and Subsidiaries
                           Consolidated Balance Sheets


                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

                                  (unaudited)
                                                      Mar 31,1998   Dec 31,1997
                                                      -----------   -----------

Current liabilities:
   Accounts payable trade                                $498,507      $467,821
   Accrued liabilities                                     40,076       551,289
   Notes payable - banks                                  175,000       425,000
   Dividends payable                                       31,025        25,563
                                                       ----------    ----------
     Total current liabilities                            744,608     1,469,673

MINORITY INTEREST IN SUBSIDIARY                            12,738        29,201

STOCKHOLDERS' EQUITY:
   Preferred stock, $1.00 par value;                      298,534       319,934
    1,000,000 shares authorized, 65,000 Class
    B issued and outstanding on March 31, 1998
    and December 31, 1997, liquidation
    preference of $341,250; 233,534 and
    254,934 Class A issued and outstanding on
    March 31, 1998 and on December 31, 1997
    respectively; liquidation preference of
    $1,226,054
   Common stock, $.01 par value;                           37,782        34,985
    10,000,000 shares authorized,
    3,778,176 shares issued and
    outstanding on March 31, 1998 and
    3,498,407 shares issued and
    outstanding on December 31, 1997
   Additional paid-in capital                           6,239,304     5,713,867
   Subscription receivable                                      0        (1,000)
   Unrealized Gains (Losses)                               (1,250)       24,624
   Retained Earnings Accumulated Deficit               (1,447,807)   (1,334,217)
                                                       ----------    ----------
 Total stockholders' equity                             5,126,563     4,758,193
                                                       ----------    ----------
 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY              $5,883,909    $6,257,067
                                                       ==========    ==========

                 See Notes to Consolidated Financial Statements
          (See Note A) - Amounts do not Include US Computer Group, Inc.


                                      -4-

<PAGE>


                 Tech Electro Industries, Inc. and Subsidiaries
                      Consolidated Statements of Operations
                                   (Unaudited)



                                                          Three Months Ended

                                                     Mar 31, 1998  Mar 31, 1997
                                                       ----------    ----------
Sales                                                  $1,996,589    $1,086,565
Cost of goods sold                                      1,355,537       798,939
                                                       ----------    ----------
Gross profit                                              641,052       287,626

General and administrative expenses                       756,086       522,370
                                                       ----------    ----------
Loss from operations                                     (115,034)     (234,744)

Other income (expense):
   Interest income                                         25,424        16,136
   Interest expense                                        (6,639)      (15,970)
                                                       ----------    ----------
Total other income (expense)                               18,785           166

Minority share of subsidiary loss                          16,463        14,468

                                                       ----------    ----------
Loss before provision for taxes                           (79,786)     (220,110)

Income tax expense (benefit):
                                                       ----------    ----------
Total income tax expense (benefit)                              0             0

                                                       ----------    ----------
NET LOSS                                                 $(79,786)    $(220,110)
                                                       ==========    ==========

Basic and diluted net loss per share
 attributable to common shareholders                       $(0.03)       $(0.13)
                                                       ==========    ==========
Number of weighted-average shares of
 common stock outstanding (basic and diluted)           3,638,292     1,907,164
                                                       ==========    ==========


                 See Notes to Consolidated Financial Statements
          (See Note A) - Amounts do not Include US Computer Group, Inc.


                                      -5-

<PAGE>


                 Tech Electro Industries, Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows
                                   (unaudited)



                                                          Three Months Ended
                                                      Mar 31, 1998  Mar 31, 1997
                                                       -----------   -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                              $(79,786)    $(220,110)
   Adjustments to reconcile net loss to
      cash used by operations
         Deprecation and amortization adjustment           14,076         7,424
         Provision for slow moving inventory               15,116        15,000
         Minority interest share of subsidiary            (16,463)      (14,468)
   Changes in operating assets and liabilities
    (Increase) decrease in:
         Accounts receivable - trade                       31,891      (246,525)
         Other receivables                                 (9,727)        1,496
         Inventory                                         90,815        39,934
         Prepaid expenses                                 (63,088)     (219,481)
     Increase (decrease) in:
         Accounts payable                                  30,686       (12,659)
         Accrued liabilities                             (511,213)       28,217
                                                      -----------   -----------
NET CASH USED BY OPERATING ACTIVITIES                    (497,693)     (622,046)
                                                      -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to property and equipment                    (10,280)      (18,129)
   Additions to certificates of deposit                       -0-      (600,000)
   Advances on note receivable                              9,442         8,894
   Marketable securities                                  (57,361)        7,543
   Acquisition of US Computer Group, Inc.                (500,000)          -0-
                                                      -----------   -----------
NET CASH USED BY
 INVESTING ACTIVITIES                                     558,199      (601,692)
                                                      -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from short-term debt                         (250,000)     (346,772)
   Proceeds from long-term debt                                 0      (245,000)
   Proceeds from sale of preferred,
    common, warrants                                      474,030     1,870,000
   Dividends paid                                           5,462       (32,491)
                                                      -----------   -----------
 NET CASH PROVIDED BY FINANCING ACTIVITIES                229,492     1,245,737
                                                      -----------   -----------
 NET (DECREASE) IN CASH AND CASH EQUIVALENTS              826,400        21,999
 CASH AND CASH EQUIVALENTS
  AT BEGINNING OF PERIOD                                1,918,754       261,973
                                                      -----------   -----------
 CASH AND EQUIVALENTS AT END OF PERIOD                 $1,092,354      $283,972
                                                      ===========   ===========

                 See Notes to Consolidated Financial Statements
          (See Note A) - Amounts do not Include US Computer Group, Inc.

                                       -6-

<PAGE>

                  Tech Electro Industries, Inc and Subsidiaries
              Notes to Condensed Consolidated Financial Statements


Note A - Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting  principles for interim financial information
and in  accordance  with the  instructions  per Item  310(b) of  Regulation  SB.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting principles for complete financial statements.

In the opinion of management,  all adjustments  (consisting of normal  recurring
adjustments)  considered  necessary for a fair  presentation have been included,
with the exception of the consolidated statements of US Computer Group, Inc., as
discussed below.  Operating  results  for the three  month  period  ended  March
31, 1998 are not necessarily indicative  of the results that may be expected for
the year ending December 31, 1998.

As discussed below,  on March 19, 1998,  the Company purchased 51% of the issued
and  outstanding  common  stock  of  U.S. Computer Group, Inc.  (USCG).   USCG's
results of  operations  for  the  period from  March 19 to  March 31, 1998,  and
balance  sheet  as of March 31, 1998  have not been included in the consolidated
amounts  reported due to the  unavailability of the prior year end final audited
balances.  As of the date of this filing, the audit of  USCG's February 28, 1998
financial statements is in progress but not yet complete.

Note B - Organization

Tech Electro Industries, Inc. ("TEI" or the "Company") was formed on January 10,
1992 as a Texas  organization.  On January 31, 1992,  TEI  acquired  100% of the
outstanding common stock of Computer Components  Corporation (CCC). In February,
1996,  TEI filed a Form  SB-2  Registration  Statement  and  completed  a public
offering the net proceeds of which amounted to $2,043,891 including warrants.

On June 1, 1996,  pursuant to a Stock Exchange  Agreement,  TEI acquired 100% of
the outstanding shares of Vary Brite Technologies,  Inc. (VBT) by issuing 50,000
shares of its common stock. The business combination was accounted for using the
pooling method.  The historical  consolidated  statements of operations prior to
the date of the combination  have not been adjusted to include the operations of
VBT as these  operations  are immaterial to the  consolidated  operations of the
Company.  Accordingly,  the accompanying  consolidated  statements of operations
include,  the  operations  of VBT from  June 1, 1996  forward.  The  assets  and
liabilities  acquired were also immaterial to the consolidated balance sheets of
the Company.

On October 29, 1996, TEI incorporated  Universal Battery  Corporation (UBC) as a
67% owned subsidiary.

Effective  February 10, 1997,  pursuant to  Regulation S as  promulgated  by the
Securities  and Exchange  Commission,  TEI sold  1,100,000  shares of its common
stock and options to acquire 1,000,000 shares of common stock for $1,870,000,  a
combined  price of $1.70 net to the  Company.  The  options  were issued with an
exercise  price of $2.15 per share and expire  thirteen  months from the date of
issuance.  In February 1998 the terms on the options were extended to March 1999
and the exercise price was increased to $2.50 per share.


                                      -7-
<PAGE>


On March 19, 1998,  the Company  completed the  acquisition of 51% of the issued
and  outstanding  common  stock  of  U.S.  Computer  Group,  Inc.  The  purchase
consideration  for the  interest  was  $1,000,000  paid in cash.  The results of
operations  for the nine  business  days in the quarter were not  material  with
respect to the operations of the Company.  Due to the timing of the acquisition,
the balance sheet of US Computer Group,  Inc. has not been consolidated with the
balance sheet of Tech Electro Industries, Inc. and Subsidiaries.  Management has
recorded the purchase as an  investment  in  subsidiary  at a purchase  price of
$1,000,000,  which management  believes reflects the net impact of the Company's
interest in US Computer Group,  Inc. on the financial  condition of the Company.
The Company will include financial information regarding US Computer Group, Inc.
in future reports, which will reflect a reclassification of such investment on a
consolidated basis with the balance sheet of the Company.

Note C - Dividends

Dividends were declared on March 6, 1998 for Class A and Class B Preferred Stock
at $0.0975 per share.  This dividend was paid in the form of common stock at the
rate of .04 shares of common  for each  share of  preferred.  The  dividend  was
payable on March 31, 1998 to  stockholders  of record a the close of business of
February 28, 1998.  In addition, dividends  paid during the quarters ended March
31, 1998 and 1997 were $28,432 and $30,000  respectively.  The cash dividends of
$28,432 were declared and accrued as of December 31, 1997.  Dividends payable at
March 31, 1998 were $33,894.

Note D - Notes Receivable

Notes Receivable consisted of the following at March 31, 1998:

     Note  receivable  from  a  minority   shareholder,
     $30,000 due at maturity in August 1999 and $65,616
     due  in  February,   2000.  The  notes  are  being
     liquidated by monthly payments of $3,500 which are
     applied  against  interest  due at six percent per
     annum on both said notes and the  balance  applied
     in reduction  of the  principal of the note due in
     February, 2000.                                              67,371


     Note  receivable,  each in the sum of $7,500  from
     two minority  shareholders bearing interest at six
     percent per annum and are due on December 1, 2001.
     Interest  for the period from May 1, 1997  through
     October  31,  1997  in the  sum of $225 is due and
     payable  on each said notes in  November  1, 1997.
     Commencing  December 1, 1997 and continuing on the
     1st day of each month  thereafter the principal of
     each  note  shall be due and  payable  in 48 equal
     monthly  installments  in the  amount  of  $156.25
     each.  In  addition  to  the  payment  of  monthly
     principal   the  maker  of  each  note  shall  pay
     interest  at the  rate of six  percent  per  annum
     monthly   on   the   unpaid   principal    balance
     simultaneously  with the payment of the principal.           14,375
     


                                      -8-
<PAGE>


     Note receivable  from minority  shareholder in the
     amount of  $320,000  with  interest at ten and one
     half  percent  to  be  paid  quarterly   beginning
     October 1, 1997 and thereafter on the first day of
     January,   April  and  July  until  principal  and
     interest is paid in full at maturity on  September
     5,  1998.  Secured  by  65,000  shares  of Class B
     Preferred Stock of TEI and 40,000 shares of common
     stock of Electric and Gas Technology, Inc.                  320,000
                                                                 -------

     Total notes receivable                                      401,746

     Less current maturities                                     334,378
     Long-term portion                                            67,368

Note E - Bank Debt

Bank debt as of March 31, 1998 consisted of the following:

     $750,000  line of credit with Texas  Central  Bank
     payable on demand with  interest at prime plus one
     half percent,  maturing June 30, 1998, and secured
     by accounts  receivable,  inventory  and machinery
     and equipment.

     Currently outstanding                                      $175,000

         Less current maturities                                 175,000
         Long term portion                                            -0-

Note F - Loss per Share

The Company adopted SFAS NO. 128, "Earnings Per Share", in 1997, which, requires
the  disclosure  of basic and  diluted  net income  (loss) per share.  Basic net
income  (loss)  per share is  computed  by  dividing  net  income  (loss) by the
weighted average number of common shares outstanding for the period. Diluted net
loss per share is computed by dividing net income (loss) by the weighted average
number of common shares and common stock equivalents outstanding for the period.
The Company's common stock  equivalents are not included in the diluted loss per
share for 1998 and 1997 as they are antidilutive. Therefore, diluted and primary
loss per share is identical.  Net loss per share has been  increased for accrued
dividends on preferred stock totaling $33,894 and $10,950 respectively.

Note G - Stock and Options Issued to Two Employees

On February  25, 1998 225,000  common  shares were issued to tow  employees  for
payment of accrued  1997  compensation.  In addition to the shares  issued,  the
Company also issued a total of 150,000 options to purchase the Company's  common
stock at an exercise price of $5.00.  The options will expire 24 months from the
February 6, 1998 date of grant.

Note H - Subsequent Event

In April 1998,  the Company commenced  a  private placement of 375,000 shares of
the Company's common stock for gross proceeds of $750,000, or $2.00 per share.


                                      -9-

<PAGE>


Item 2.  Management's Discussion and Analysis or Plan of Operation


         The following  discussion  and analysis  should be read in  conjunction
with the Company's  Consolidated Financial Statements and notes thereto included
elsewhere in this Form 10-QSB.  Except for the historical  information contained
herein,  the discussion in this Form 10-QSB  contains  certain  forward  looking
statements  that involve  risks and  uncertainties,  such as  statements  of the
Company's  plans,  objectives,   expectations  and  intentions.  The  cautionary
statements  made in this Form 10-QSB  should be read as being  applicable to all
related forward-looking statements wherever they appear in this Form 10-QSB. The
Company's  actual results could differ  materially  from those  discussed  here.
Factors that could cause or  contribute  to such  differences  include,  without
limitation, those factors discussed herein and in the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1997.

         Recent Developments

         On  January  19,  1998,  the  Company  appointed  David  Kaye as  Chief
Financial Officer of the Company.  Mr. Kaye replaced Sadasuke Gomi, who had held
this  position  on a temporary  basis.  Mr. Gomi  resigned as  secretary  of the
Company on February 16, 1998 but remains a director.  Mee Mee Tan was  appointed
to replace Mr. Gomi in the position of secretary of the Company.  Ms. Tan is the
daughter of Mr. Kim Wah Tan, Chairman, President, and CEO of the Company.

         On May 1, 1998,  the Company  entered  into a Letter of Intent to merge
with  DenAmerica  Corporation  (DEN).  Under  the  terms  of the  agreement  the
shareholders  of Den  will  receive  $ 4.00 in cash  and $ .90 in  newly  issued
preferred  stock in the  Company.  The  proposed  merger is  subject  to various
contingencies including financing, regulatory approvals and other matters.

         In March of 1998,  the  Company  opened an office at 2941 Main  Street,
Suite 300B, in Santa Monica, California.

         Results of Operations

         Currently,   the  Company's   operations  are  conducted   through  its
subsidiaries,  Computer  Components  Corporation  (CCC), Very Brite Technologies
(VBT), Universal Battery Corporation (UBC), and US Computer Group, Inc. (USCG).

         The  Company's  results for  operations  for the first three  months of
1998,  compared to the first three months of 1997 were impacted primarily by the
increase in sales by the Company's subsidiaries CCC and UBC. USCG's contribution
to  operations  of the  Company  were not  significant  due to the fact that the
Company's purchase of USCG was not consummated until March 19, 1998.

         Revenues

         For the three months  ending  March 31, 1998,  the Company had recorded
sales of  $1,996,588  compared  to sales of $  1,086,565  for the same period in
1997,  an  increase  of 84%.  This  increase  can be  attributable  to  enhanced
marketing  efforts  on the  part of the  Company.  The  increase  in  sales  was
primarily attributable to increased sales by UBC, which recorded a 555% increase
in sales from $ 100,376 to $657,409 in the same  period of 1998.  CCC  generated


                                      -10-

<PAGE>

revenues  of $  1,295,316  for the three  month  period  ending  March 31,  1998
compared  to $ 972,136 for the same  period in 1997,  an  increase  of 34%.  VBT
recorded  increased  sales of $ 14,143 to $ 43,867  for the three  month  period
ending March  31,1998 over the same period in 1997,  an increases of 211%.  This
relatively  high  percentage  increases  in sales by UBC and VBT from the period
ending March 31, 1997 to the same period for 1998 are  attributable  to the fact
that both operations could be characterized as start-ups in 1997.

         The  Company  recognized  a net loss of $ 79,786  for the  three  month
period  ending March 31,  1998,  compared to a loss of $ 220,110 for the similar
period of 1997.  This reduction in losses in 1998 is attributed  primarily to an
increase in CCC's gross profit margins from 27% in the three months ending March
31, 1997 to 40% for the same period of 1998.  Increases in profit margins can be
attributed to CCC's ability to negotiate more favorable sales terms with various
of its suppliers. CCC's general & administrative (G&A) expenses also declined as
a percentage  of sales from 39% in the three month period  ending March 31, 1997
to 27% in the same period of 1998.  Interest expenses were also reduced in 1998,
as CCC reduced outstanding indebtedness in March 1997. Profits before taxes as a
percentage of sales for the  Company's  operating  subsidiaries  were 3% for the
three months ending March 31, 1998 versus (20%) for the same period of 1997.

         Cost of Goods Sold

         The Company's  cost of goods sold,  consisting  primarily of inventory,
increased  from $ 798,939  during the three  months  ending  March 31, 1997 to $
1,355,537  for the same period of 1998.  Cost of goods as a percentage  of sales
decrease  from 74% in the three months  ending March 31, 1997 to 68% in the same
period of 1998.

         General and Administrative Expenses

         The Company's  general and  administrative  (G&A) expenses,  consisting
primarily of wages,  benefits and related expenses,  increased from $ 522,370 in
the three months ending March 31, 1997 to $ 756,086 for the same period of 1998.
Approximately  $  95,000  is  attributable  to  increased  G&A at the  Company's
subsidiary  level.  Approximately  $ 138,000 of the G&A is  attributable  at the
parent  level.  As a  percentage  of  sales,  the  G&A at the  subsidiary  level
decreased  from 46% for the three month period  ending March 31, 1997 to 30% for
the same period of 1998.


         Purchase Order Backlog

         As  of  March  31,  1998,   Company's   purchase   order   backlog  was
approximately $ 1,155,000,  compared to $ 1,568,000 for the same period of 1997.
A reduction of  approximately  26.3% Generally order backlog  represents  orders
received  from  customers  but  not  shipped  typically  at the  request  of the
customer.  The Company  believes that the reduction of purchase order backlog is
due to the  acceleration  of delivery  dates by certain  customers.  The Company
monitors its purchase backlog to help analyze sales trends.

         Interest Expense

         The Company incurred $ 6,639 in interest  expenses for the three months
ending  March 31,  1998.  For the same period of 1997,  the Company had interest


                                      -11-

<PAGE>


expense  of $  15,970.  This  reduction  was  due  to  a  repayment  of  certain
outstanding indebtedness in March of 1997.

         Liquidity

         As of March 31, 1998,  the Company had cash and cash  equivalents  of $
1,092,353 and marketable  securities of $ 125,550. At March 31, 1997 the Company
had cash  and cash  equivalents  of $  223,467,  certificates  of  deposit  of $
1,695,287,  and  marketable  securities  of $ 94,063.  The  change in  Company's
investment  in cash,  certificates  of  deposit,  and  securities  reflects  the
liquidation  of  certificates of deposit to fund cash needs of the Company.  The
Company expects to use these funds as required  for maintenance and expansion of
existing operations of CCC, UBC, and VBT.

         On April 8, 1998, the Company  commenced a private placement of 375,000
shares of Company  common stock for $ 750,000.  The  proceeds  from this private
placement are expected to be used for working capital.

         Inflation

         Company  has not been  materially  effected  by  inflation,  while  the
Company  does not  anticipate  inflation  affecting  the  Company's  operations,
increases in labor and supplies could impact the Company's ability to compete.





                                      -12-

<PAGE>


         PART II - OTHER INFORMATION

         Item 1.   Legal Proceedings

                           None

         Item 2.  Changes in Securities

         (a) In April 8, 1998, the Company  commenced a private  placement of up
to 375,000 shares of the Company's common stock for $ 2.00 per share. All shares
are to be sold through  officers and  directors of the Company with all proceeds
going to the Company.

         (b) On February  20,  1998,  the Company  issued to Mr.  Steven  Scott,
Executive Vice President of the Company,  50,000 shares of common stock,  valued
at $ 2.25 per share,  as  consideration  for  services  rendered to the Company.
Concurrently with the issuance of the foregoing  shares,  the Company granted to
Mr.  Scott  options to  acquire  an  additional  50,000  shares of common  stock
exercisable over a period of two years from the date of issuance, at an exercise
price of $ 5.00.

         (c) On  February  20,  1998,  the  Company  issued to Mr.  Tan Kim Wah,
Chairman of the Board, President and Chief Executive Officer,  100,000 shares of
common stock,  valued at $ 2.25 per share,  in lieu of accrued but unpaid salary
for fiscal  1997.  An  additional  75,000  shares of common stock were issued in
repayment of expenses and advances incurred by Mr. Tan on behalf of the Company.
Concurrently with the issuance of the foregoing  shares,  the Company granted to
Mr. Tan options to acquire  100,000  shares of common  stock,  which options are
excercisable  over a  period  of two  years  from the  date of  issuance,  at an
exercise price of $ 5.00 per share.


         Item 3.  Defaults Upon Senior Securities

                           None

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

                           None

         Item 5.  Other Information

                           None



                                      -13-

<PAGE>


         Item 6.  Exhibits and Reports on Form 8-K

                           (a)      Exhibits

                          27.1 Financial Data Schedule

                           (b)      Reports on Form 8-K


         On  January  19,  1998,  the  Registrant  filed a  Report  on Form  8-K
reporting  that it had determined  not to retain  Deloitte & Touche,  LLP as its
independent public accounts, as previously reported on June 27, 1997, but rather
to continue  with its current  independent  public  accountants,  King Griffin &
Adamson, P.C. In this filing it was also reported that the Company had appointed
David Kaye as Chief Financial Officer of the Company,  replacing  Sadasuke Gomi,
the Company's secretary, who had held that office on a temporary basis.

         On March 19, 1998, the Registrant  filed a Report on Form 8-K reporting
that it had consummated the acquisition of 51% of newly-issued  shares of common
stock of US Computer Group, Inc. of Farmingdale, New York.



                                      -14-
<PAGE>

                                   Signatures                                  

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


Tech Electro Industries, Inc.


Date: May 19, 1998                /s/ WILLIAM KIM WAH TAN
                                  -----------------------
                                  William Kim Wah Tan
                                  Chairman of the Board, President and
                                  Chief Executive Officer



Date:  May 19, 1998               /s/ DAVID KAYE
                                  --------------
                                  David Kaye
                                  Chief Financial Officer and
                                  Principal Accounting Officer


                                       -15-