<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-QSB

[X]     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997.

[ ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND 
        EXCHANGE ACT OF 1934.

          FOR THE TRANSITION PERIOD FROM ____________ TO _____________

                         Commission File Number 0-21931

                                 AMPLIDYNE, INC.
                                 ---------------
        (Exact name of small business issuer as specified in its charter)

         DELAWARE                                            22-3440510
-------------------------------                           ----------------
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                            Identification No.)

                                144 Belmont Drive
                           Somerset, New Jersey 08873
                           --------------------------
                    (Address of principal executive offices)

                                 (908) 271-8473
                                 --------------
                           (Issuer's telephone number)

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.

                                 Yes X   No 
                                    ---    ---

The number of shares outstanding of the Issuer's Common Stock, $.0001 Par Value,
as of October 31, 1997 was 4,460,000.



<PAGE>

                                 AMPLIDYNE, INC.
                                   FORM 10-QSB
                      NINE MONTHS ENDED SEPTEMBER 30, 1997

                                TABLE OF CONTENTS

PART 1 - FINANCIAL INFORMATION

Item 1   Financial Statements (Unaudited):

         Balance Sheets................................................. 1-2

         Statements of Operations....................................... 3

         Statement of Changes in Stockholder's Equity................... 4

         Statement of Cash Flows........................................ 5

         Notes to Financial Statements.................................. 6-8

Item 2   Management's Discussion and Analysis of Financial
           Condition and Results of Operations.......................... 9-11

PART II - OTHER INFORMATION

Signatures............................................................. 12

Exhibit 27 - Financial Data Schedule................................... 13



<PAGE>

                         PART 1 - FINANCIAL INFORMATION

Item 1.  Financial Statements

                                 AMPLIDYNE, INC.
                                 BALANCE SHEETS

                                     ASSETS
                                     ------

                                                   December 31, September 30,
                                                       1996*        1997
                                                       -----        ----
                                                                (Unaudited)
CURRENT ASSETS
  Cash and cash equivalents                         $  104,310   $2,724,629
  Accounts receivable, net of allowance
    for doubtful accounts of $119,000                  207,339      181,575
  Inventories                                          402,696      320,390
  Deferred financing costs                             324,540         --
  Private placement costs                               55,000         --
  Prepaid expenses and other current assets              5,665        9,208
                                                    ----------   ----------
    Total current assets                             1,099,550    3,235,802

PROPERTY AND EQUIPMENT - AT COST
  Machinery and equipment                              389,433      538,214
  Furniture and fixtures                                42,806       42,806  
  Autos and trucks                                      19,923       19,923
  Leasehold improvements                                 4,162        4,162
                                                    ----------   ----------
                                                       456,324      605,105
    Less: Accumulated depreciation and amortization    145,593      199,557
                                                    ----------   ----------
      Net depreciated cost                             310,731      405,548

PREPAID REGISTRATION COSTS                             167,053         --

OTHER ASSETS                                            45,230       35,000
                                                    ----------   ----------

TOTAL ASSETS                                        $1,622,564   $3,676,350
                                                    ==========   ==========

* Derived from Company's audited Balance Sheet at December 31, 1996

    The accompanying notes are an integral part of these financial statements

                                     -1-

<PAGE>

                                 AMPLIDYNE, INC.
                                 BALANCE SHEETS

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

                                                   December 31,    September 30,
                                                       1996*            1997
                                                       ----             ----
                                                                    (Unaudited)

CURRENT LIABILITIES
  Bank line of credit                              $    210,000    $         --
  Notes payable                                       1,214,000              --
  Current maturities of lease obligations               381,392         157,825
  Accounts payable                                      690,760         173,634
  Accrued expenses                                      401,518         114,858
  Stockholders' loan                                    442,745         103,051
                                                   ------------    ------------
    Total current liabilities                         3,340,415         549,368

LONG-TERM LIABILITIES
  Lease obligations                                     200,969         100,322

STOCKHOLDERS' EQUITY
  Preferred stock - authorized, 1,000,000 shares
    of no stated value; no shares issued and
    outstanding
  Common stock - authorized, 25,000,000 shares
    of $.0001 par value; 2,850,000 shares and
    4,460,000 shares issued and outstanding at
    December 31, 1996 and September 30, 1997,
    respectively                                            285             446
  Additional paid-in-capital                          5,239,961      12,021,953
  Accumulated deficit                                (7,159,066)     (8,995,739)
                                                   ------------    ------------

    Total stockholders' equity                       (1,918,820)      3,026,660
                                                   ------------    ------------

TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY                             $  1,622,564    $  3,676,350
                                                   ============    ============


* Derived from Company's audited Balance Sheet at December 31, 1996

    The accompanying notes are an integral part of these financial statements

                                       -2-

<PAGE>

                                 AMPLIDYNE, INC.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                              Three Months Ended            Nine Months Ended
                                                 September 30,                 September 30,
                                                 -------------                 -------------
                                               1996          1997           1996           1997
                                           -----------    -----------    -----------    -----------
<S>                                        <C>            <C>            <C>            <C>      
Net sales                                  $   685,487        286,846    $ 1,957,694      1,185,740
Cost of goods sold                             783,010        334,553      1,889,436      1,171,311
                                           -----------    -----------    -----------    -----------
   Gross profit                                (97,523)       (47,707)        68,258         14,429

Operating expenses
  Selling, general, and administrative         372,986        296,380        871,241        916,534
  Research, engineering, and development       169,845        199,948        701,209        676,976
                                           -----------    -----------    -----------    -----------
    Operating loss                            (640,354)      (544,035)    (1,504,192)    (1,579,081)

Other nonoperating income and expenses
  Interest income                                 --           41,219           --          107,845
  Interest expense                              20,259         12,412         51,025         40,298
  Stock compensation and financing costs     1,170,000           --        2,553,125        324,540
                                           -----------    -----------    -----------    -----------

    Loss before income taxes                (1,830,613)      (515,228)    (4,108,342)    (1,836,074)

Provision for income taxes                        --              249           --              599
                                           -----------    -----------    -----------    -----------

    NET LOSS                               $(1,830,613)      (515,477)   $(4,108,342)    (1,836,673)
                                           ===========    ===========    ===========    ===========

Net loss per share                         $      (.50)          (.10)   $     (1.12)          (.35)
                                           ===========    ===========    ===========    ===========

Weighted average number of shares
  outstanding                                3,644,950      5,254,950      3,644,950      5,254,950
                                           ===========    ===========    ===========    ===========
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                       -3-


<PAGE>

                                 AMPLIDYNE, INC.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                       Nine Months       Nine Months
                                                          Ended             Ended
                                                      Sept. 30, 1996    Sept. 30, 1997
                                                      --------------    --------------
<S>                                                   <C>               <C>            

Cash flows from operating activities:
  Net Loss                                            $   (4,108,342)   $   (1,836,673)
  Adjustments to reconcile net loss to net cash
    used in operating activities
      Depreciation and amortization                           42,413            64,194
      Stock compensation expense                           2,553,125           324,540
      Bad debt expense                                        51,065              --
      Changes in assets and liabilities
        Accounts receivable                                 (261,385)           25,764
        Inventories                                         (184,678)           82,306
        Prepaid expenses and other current assets           (141,330)           51,457
        Accounts payable and accrued expenses                308,691          (803,786)
        Customer advances                                   (155,932)             --
                                                      --------------    --------------
    Total adjustments                                      2,211,969          (255,525)
                                                      --------------    --------------
      Net cash used for operating activities              (1,896,373)       (2,092,198)
                                                      --------------    --------------

Cash flows from investing activities:
  Purchase of fixed assets                                   (92,892)         (148,781)
                                                      --------------    --------------
     Net cash used for investing activities                  (92,892)         (148,781)
                                                      --------------    --------------

Cash flows from financing activities:
  Proceeds from (repayments of) bank line of credit          (20,000)         (210,000)
  Proceeds from (repayments of) notes payable                925,000        (1,214,000)
  Lease obligations                                          269,101          (324,214)
  Proceeds from (repayments of) stockholders' loans          205,000          (339,694)
  Prepaid registration costs                                    --             167,053
  Stock issuance                                             570,000         6,782,153
                                                      --------------    --------------
    Net cash provided by financing activities              1,949,101         4,861,298
                                                      --------------    --------------


      NET INCREASE (DECREASE) IN CASH                        (40,164)        2,620,319

Cash at beginning of year                                    153,747           104,310
                                                      --------------    --------------

Cash and cash equivalents at end of period            $      113,583    $    2,724,629
                                                      ==============    ==============
Supplemental disclosures of cash flow information
  Cash paid for:  Interest                            $       29,748    $      112,261
                  Income taxes                                  --                 249
</TABLE>
    The accompanying notes are an integral part of these financial statements

                                       -4-


<PAGE>

                                 AMPLIDYNE, INC.
                  STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
                            FOR THE NINE MONTHS ENDED
                               SEPTEMBER 30, 1997
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                     Common Stock              Additional      Accumulated
                                     ------------              ----------      -----------
                                  Shares       Par Value     Paid-In-Capital    (Deficit)        Total
                                ----------    -----------    ---------------   -----------    -----------
<S>                             <C>           <C>            <C>               <C>            <C>

Balance at December 31, 1996     2,850,000    $       285    $     5,239,961   $(7,159,066)   $(1,918,820)

Issuance of common stock         1,610,000            161          6,781,992                    6,782,153

Net Loss                                                                        (1,836,673)    (1,836,673)
                                ----------    -----------    ---------------   -----------    -----------

Balance at September 30, 1997    4,460,000    $       446    $    12,021,953   $(8,995,739)   $ 3,026,660
                                ==========    ===========    ===============   ===========    ===========
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                       -5-


<PAGE>

                                 AMPLIDYNE, INC.
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1997

Note A - Adjustments

     In the opinion of management, all adjustments, consisting only of normal
     recurring adjustments necessary for a fair statement of (a) results of
     operations for the nine-month periods ended September 30, 1996 and
     September 30 1997, (b) the financial position at December 31, 1996 and
     September 30, 1997, (c) the statements of cash flows for the nine-month
     periods ended September 30, 1996 and September 30, 1997, and (d) the
     changes in stockholders' equity for the nine month period ended September
     30, 1997, have been made. The results of operations for the nine months
     ended September 30, 1997 are not necessarily indicative of the results to
     be expected for the full year.

Note B - Unaudited Interim Financial Information

     The accompanying unaudited financial statements have been prepared in
     accordance with generally accepted accounting principles for interim
     financial information. Accordingly, they do not include all the information
     and footnotes required by generally accepted accounting principles for
     financial statements. For further information, refer to the audited
     financial statements and notes thereto for the year ended December 31,
     1996, included in the Company's Form 10-KSB filed with the Securities and
     Exchange Commission on April 15, 1997.

Note C - Public Offering

     A registration statement covering an underwritten public offering of
     1,610,000 units at a price of $5.10 per unit, prior to underwriters'
     commissions, was declared effective by the Securities and Exchange
     Commission on January 21, 1997. Each unit consists of one share of common
     stock, par value $.0001 per share and one redeemable common stock purchase
     warrant. Each warrant entitles the holder to purchase one share for $6.00
     during the four-year period commencing one year from the date of the
     offering. The Company may redeem the warrants at a price of $.01 per
     warrant at any time with not less than thirty days' prior written notice if
     the average closing price equals or exceeds $9.00 per share for any twenty
     consecutive trading days.

                                       -6-

<PAGE>

                                 AMPLIDYNE, INC.
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1997

Note C (Continued)


     In the first quarter of 1997, the Company received proceeds from the public
     offering of $ 8,211,000, which included the overallotment of 210,000 units.
     The net proceeds received by the Company was calculated as follows:

         Gross Proceeds                         $ 8,211,000
         Less: Costs of Issuance:
           Underwriting                           1,024,430
           Legal and Blue Sky Fees                  178,453
           Printing                                  58,911
           Registration Costs                       167,053
                                                -----------
         Net Proceeds of Stock Issuance         $ 6,782,153
                                                ===========

     The Company paid down the bank line of credit, notes payable and accrued
     interest which totalled approximately $1,500,000.

     The following table summarizes shares of common stock reserved for
     issuance:

         Offering warrants                                    1,610,000
         Underwriters' purchase option warrants and shares      280,000
         Options to noteholders                                 550,000
         Warrants to noteholders                                476,500
         Shares reserved for stock option and SARs plan       1,500,000
         Warrants to officers                                   350,000
         Options to employees                                    30,000
                                                              ---------
                                                              4,796,500
                                                              =========

Note D - Loss Per Share

     All shares, warrants and options issued or granted within the prior twelve
     months at prices lower than the initial public offering price ($5 per
     share) are considered, for purposes of calculating loss per share, to be
     outstanding for all periods presented. Accordingly, loss per share amounts
     are based upon the weighted average number of shares outstanding (2,850,000
     and 4,460,000 shares at September 30, 1996 and September 30, 1997,
     respectively) for each period presented plus the effect of below market
     warrants and options calculated based on the treasury stock approach
     (794,950 and 794,950 shares at September 30, 1996 and September 30, 1997,
     respectively). The total shares outstanding for purposes of loss per share
     calculations are 3,644,950 and 5,254,950 shares at September 30, 1996 and
     September 30, 1997, respectively.

                                       -7-


<PAGE>

                                 AMPLIDYNE, INC.
                           NOTES FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1997


Note E - Litigation

     Reference is hereby made to the Company's form 10-QSB for the period 
     June 30, 1997.

Note F - New Accounting Pronouncement

     In February 1997, the Financial Accounting Standards Board issued
     Statements on Financial Accounting Standards No. 128, Earnings Per Share,
     which is effective for financial statements for both interim and annual
     periods ending after December 1997. Early adoption of the new standard is
     not permitted. The new standard eliminates primary and fully diluted
     earnings per share and requires presentation of basic and diluted earnings
     per share together with disclosure of how the per share amounts were
     computed. The pro forma effect of adopting the new standard would have no
     impact on these financial statements.

                                      -8-

<PAGE>


                         PART 1 - FINANCIAL INFORMATION

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

Results of Operations

        The following table sets forth certain operating data:

                                                  Percentage of Total Net Sales
                                                 Nine Months ended September 30,
                                                     1996              1997
                                                 -----------        -----------

Net sales                                        $ 1,957,694        $ 1,185,740
Cost of goods sold                                 1,889,436          1,171,311
                                                 -----------        -----------
  Gross profit                                        68,258             14,429
                                                 -----------        -----------
Selling, general, and
  administrative                                     871,241            916,534
Research, engineering,
  and development                                    701,209            676,976
                                                 -----------        -----------
  Total operating expenses                         1,572,450          1,593,510
                                                 -----------        -----------
Stock compensation and
  financing costs                                  2,553,125            324,540
Interest income                                         --              107,845
Other expenses                                        51,025             40,298
                                                 -----------        -----------
  Loss before income taxes                        (4,108,342)        (1,836,074)
Provision for income taxes                              --                  599
                                                 -----------        -----------
  NET LOSS                                       $(4,108,342)       $(1,836,673)
                                                 ===========        ===========

  Results of operations-Nine months ended September 30, 1997 compared to Nine
                        months ended September 30, 1996

Net sales for the nine month period ended September 30, 1997 were $1,185,740,
representing an decrease of approximately 39% over the corresponding period in
1996. This decrease is principally attributable to purchase orders received in
early 1997 which have been placed on hold due to engineering changes made to the
original specifications, by a key customer in Korea. In addition, prototype
orders received for wireless loop amplifiers were engineered and delivered
during the third quarter of 1997. These prototypes are expected to generate
1.3 million dollars in sales orders for the fourth quarter of 1997, which are
expected to be shipped during the fourth quarter of 1997 and the first quarter
of 1998. The Company has demonstrated its products at the PCS show in September
1997 which were well received by engineers and managers of the various OEM

organizations throughout the world. As a result, the Company is continuing to
demonstrate it's products to major OEM's in the United States, Europe, and Asia.
Prototype orders continue to be placed with the Company, which should result in
major developments during 1998.

                                       -9-

<PAGE>

               PART 1 - FINANCIAL INFORMATION - ITEM 2 (CONTINUED)

Gross profit for the nine month period ended September 30, 1997 amounted to
$14,429 (1.2% of sales), compared to $68,253 (3.5% of sales), for the
corresponding period in 1996. The decrease in the gross margin from the
corresponding period of the prior year is principally attributable to a key
Korean customer placing a hold on purchase orders they placed in early 1997 and
prototype orders.

Selling, general and administrative expenses were $916,534 (77% of sales) for
the period ended September 30, 1997 compared to $871,241 (45% of sales) for the
corresponding period in 1996. These expenses increased from 1996 to 1997 due to
higher consulting and professional fees relating to the public offering during
the first quarter of 1997.

Research, engineering and development decreased slightly from 1996 to 1997.
Research and development expenses for the period ended September 30, 1997 were
$676,976 compared to the expenditures for the period ended September 30, 1996
which were $701,209. These expenses remain relatively unchanged due to the fact
that the Company needs to maintain research and development efforts in order to
refine it's products for the needs of the PCS and cellular markets.

Interest income for the nine months ended September 30, 1997 was $107,845
compared to $0 for the corresponding period in 1996. This increase is due to the
injections of IPO which are maintained in an investment account.

Stock compensation expense for the nine months ended September 30, 997 was
$324,540 which relates to the deferred costs on warrants issued in September and
December 1996 at prices substantially lower than the initial public offering
price. No future write offs are expected.

As a result of the foregoing, the Company incurred net losses of ($1,183,673) or
(.35) per share for the nine months ended September 30 1997 compared with net
losses of ($4,108,342) or (1.12) per share for the same period in 1996.

Liquidity and Capital Resources

At September 30 1997, the Company had cash and cash equivalents of $2,724,629
principally due to the injection of IPO funds. The outstanding bank loans,
private placement debt and interest totalling approximately $1,500,000 was paid
off during the period ended March 31 1997. In addition, $295,000 of the
outstanding loan from a principal stockholder was paid off during the second and
third quarters of 1997. The Company had accrued expenses of $114,858 at
September 30, 1997 consisting of payroll, taxes, and commissions.


                                      -10-

<PAGE>

               PART 1 - FINANCIAL INFORMATION - ITEM 2 (CONTINUED

The Company believes that the net proceeds of the Company's initial public
offering and operations will meet its working capital obligations and fund
further development of it's business for the next twelve months. There can be no
assurance that any additional financing will be available to the Company.

                                      -11-


<PAGE>

                                   SIGNATURES
                                   ----------

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

                           AMPLIDYNE, INC.

Dated:  November 10, 1997                By:     /s/ Devendar S. Bains
                                                 ------------------------
                                         Name:   Devendar S. Bains
                                         Title:  Chief Executive Officer,
                                                 President, Treasurer,
                                                 Principal Accounting
                                                 Officer and Director

                                      -12-