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 JUNE 30, 2004.

[_]   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.)


                               59 LaGrange Street
                            Raritan, New Jersey 08869
                    (Address of principal executive offices)


                                 (908) 253-6870
                           ---------------------------
                           (Issuer's telephone number)


      Indicate  by check  mark  whether  the  registrant  (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 August 20, 2004 was 10,376,500.


<PAGE>

                                 AMPLIDYNE, INC.

                                   FORM 10-QSB

                         SIX MONTHS ENDED June 30, 2004

                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1   FINANCIAL STATEMENTS (UNAUDITED):
         ---------------------------------

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

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

         Statement of Cash Flows...............................................4

         Statement of Changes in Stockholders' Deficiency......................5

         Notes to Financial Statements......................................6-10

Item 2   Management's Discussion and Analysis of Financial
         Condition and Results of Operations...............................12-14

Item 3.  Controls and Procedures..............................................14


PART II - OTHER INFORMATION

Item 1.  Legal Proceedings....................................................15

Item 2.  Change in Securities.................................................15

Item 5.  Other Information....................................................15

Item 6.  Exhibits.............................................................16

Signatures....................................................................16


<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements


                                 AMPLIDYNE, INC.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
ASSETS                                                                       (UNAUDITED)
                                                                              June 30       December 31
                                                                                2004            2003
                                                                              ---------      ---------
CURRENT ASSETS
<S>                                                                           <C>            <C>
           Cash                                                               $  15,465      $      --
           Accounts receivable, net of allowance for doubtful accounts of
             $262,000 and  $143,000 in 2004 and 2003, respectively               57,854         91,482
           Inventories                                                          348,520        407,709
           Prepaid expenses and other                                                --         12,307
                                                                              ---------      ---------

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

                     Total current assets                                       421,839        511,498

PROPERTY AND EQUIPMENT - AT COST
           Machinery and equipment                                              565,629        565,629
           Furniture and fixtures                                                43,750         43,750
           Autos and trucks                                                      66,183         66,183
           Leasehold improvements                                                 8,141          8,141
                                                                              ---------      ---------
                                                                                683,703        683,703
           Less accumulated depreciation and amortization                      (666,627)      (646,627)
                                                                              ---------      ---------
                                                                                 17,076         37,076
                                                                              ---------      ---------

SECURITY DEPOSITS AND OTHER NON-CURRENT ASSETS                                   35,625         35,625
                                                                              ---------      ---------

                          TOTAL ASSETS                                        $ 474,540      $ 584,199
                                                                              =========      =========
</TABLE>

Note:  The balance  sheet at December 31, 2003 has been derived from the audited
financial  statements  at that date but does not include all of the  information
and footnotes required by accounting principles generally accepted in the Unites
States for complete financial statements.

    The accompanying notes are an integral part of these financial statements

                                       -1-

<PAGE>

                                 AMPLIDYNE, INC.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>

LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                                             RECLASSIFIED FOR
                                                                                                     COMPARABILITY TO
                                                                                     (UNAUDITED)       CURRENT PERIOD
                                                                                       June 30          December 31,
                                                                                         2004              2003
                                                                                     ------------      ------------
CURRENT LIABILITIES
<S>                                                                                  <C>               <C>
           Overdraft                                                                 $         --      $     17,855
           Note payable in connection with Phoenix investor rescission agreement           40,000                --
           Convertible notes payable pursuant to Lee financing agreement                  250,000                --
           Customer advances                                                               36,878            60,000
           Accounts payable                                                               488,817           411,169
           Accrued expenses and other current liabilities                                 239,027           251,486
           Loans payable - officers                                                       329,228           256,997
                                                                                     ------------      ------------
                     Total current liabilities                                          1,383,950           997,507

Other convertible notes payable                                                            21,573            20,973
                                                                                     ------------      ------------
                                  TOTAL LIABILITIES                                     1,405,523         1,018,480
                                                                                     ------------      ------------

STOCKHOLDERS' DEFICIENCY
           Common stock - authorized, 25,000,000 shares of $.0001 par value;
               shares 10,376,500 and 10,376,500 shares issued and outstanding at
               June 30, 2004 and December 31, 2003, respectively                            1,038             1,038
           Additional paid-in capital                                                  22,503,014        22,494,854
                                                                                     ------------      ------------
           Accumulated deficit                                                        (23,435,035)      (22,930,173)
                                                                                     ------------      ------------
                                                                                         (930,983)         (434,281)
                                                                                     ------------      ------------

                                                                                     $    474,540      $    584,199
                                                                                     ============      ============
</TABLE>


Note:  The balance  sheet at December 31, 2003 has been derived from the audited
financial  statements  at that date but does not include all of the  information
and footnotes required by accounting principles generally accepted in the Unites
States for complete financial statements.

    The accompanying notes are an integral part of these financial statements

                                      -2-
<PAGE>

                                 AMPLIDYNE, INC.
                      STATEMENTS OF OPERATIONS (UNAUDITED)
                       THREE AND SIX MONTHS ENDED JUNE 30

<TABLE>
<CAPTION>
                                                                 Three Months Ended                  Six Months Ended
                                                                       June 30                           June 30
                                                               2004              2003              2004              2003
                                                           ------------      ------------      ------------      ------------
<S>                                                        <C>                    <C>          <C>               <C>
Net sales                                                  $    240,226           363,904      $    555,593      $    873,512
Cost of goods sold                                              223,367           278,925           511,767           557,783
                                                           ------------      ------------      ------------      ------------

                     Gross profit                                16,859            84,979            43,826           315,729

Operating expenses
           Selling, general and administrative                  109,033           216,940           322,106           410,671
           Research, engineering and development                 83,654            97,373           163,180           194,515
           Litigation settlement costs                           20,160                --            20,160                --
                                                           ------------      ------------      ------------      ------------

                     Operating loss                            (195,988)         (229,334)         (461,620)         (289,457)

Nonoperating income (expenses)
           Interest income and other income                          --                --                --                 2
           Loss incurred on rescission of prior year
              agreements with Phoenix to invest in the
              Company                                           (40,780)               --           (40,780)               --
           Interest expense                                        (368)               --              (600)              (69)
           Gain on sale of property and equipment                    --                --             4,000                --
                                                           ------------      ------------      ------------      ------------

                     Loss before income taxes                  (237,136)         (229,334)         (499,000)         (289,524)

Provision for income taxes                                        2,662               698             5,862               698
                                                           ------------      ------------      ------------      ------------

                     NET LOSS                              $   (239,798)     $   (230,032)     $   (504,862)     $   (290,222)
                                                           ============      ============      ============      ============

Net loss per share - basic and diluted                     $      (0.02)     $      (0.02)     $      (0.05)     $      (0.03)
                                                           ============      ============      ============      ============

Weighted average number of shares outstanding                10,376,500        10,143,167        10,376,500        10,143,167
                                                           ============      ============      ============      ============
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                      -3-
<PAGE>

                                 AMPLIDYNE, INC.

                      STATEMENTS OF CASH FLOWS (UNAUDITED)

                            SIX MONTHS ENDED JUNE 30

<TABLE>
<CAPTION>
                                                                                           Six Months Ended
                                                                                               June 30
                                                                                          2004           2003
                                                                                       ---------      ---------

<S>                                                                                    <C>            <C>
Cash flows from operating activities:
Net Loss                                                                               $(504,862)     $(290,222)
                                                                                       ---------      ---------
Adjustments to reconcile net loss to net cash used in operating activities
                     Depreciation and amortization                                        20,000         14,800
                     Provision for doubtful accounts                                      15,260         43,000
                     Litigation settlement costs                                          20,160
                     Deferred officer compensation                                        55,233         51,416
                     Interest accrued on other convertible promissory note                   600             --
                     Issuance of secured promissory in connection with
                               loss incurred on recision of agreements with
                                           Phoenix to invest in the Company               40,000             --
                     Changes in assets and liabilities
                               Accounts receivable                                        18,368        148,784
                               Inventories                                                59,189         22,708
                               Prepaid expenses and other assets                          12,307         (5,394)
                               Customer advances                                          23,122         47,641
                               Accounts payable and accrued expense                      210,187        (78,324)
                                                                                       ---------      ---------
                                          Total adjustments                              428,182        244,631
                                                                                       ---------      ---------
                      Net cash (used) for operating activities                           (76,680)       (45,591)
                                                                                       ---------      ---------

Cash flows from investing activities:

           Change in security deposits                                                        --          1,151
                                                                                       ---------      ---------
                     Net cash provided by (used for) investing activities                     --          1,151
                                                                                       ---------      ---------

Cash flows from financing activities:

            Change in overdraft                                                          (17,855)         5,481
           Payment of lease obligations                                                       --         (2,041)
           Officer loans                                                                  17,000         21,000
           Proceeds from convertible notes received directly in cash
                      pursuant to Lee financing agreement                                 93,000             --
           Proceeds from other convertible promissory note                                    --         20,000
                                                                                       ---------      ---------
                     Net cash provided by financing activities                            92,145         44,440
                                                                                       ---------      ---------

                     NET INCREASE (DECREASE) IN CASH                                      15,465             --

Cash at beginning of period                                                                   --             --
                                                                                       ---------      ---------
Cash at end of period                                                                  $  15,465      $      --
                                                                                       =========      =========

Supplemental disclosures of cash flow information:

           Cash paid for: Interest                                                     $      --      $      --
                          Income taxes                                                 $   5,862      $     698

Noncash financing activities:

           Convertible notes issued by Company pursuant to Lee financing agreement     $ 250,000      $      --
           Less: Proceeds received directly in cash by Company                            93,000             --
                                                                                       ---------      ---------
           Payment of Company obligations by lender in connection with
                      financing agreement in exchange for convertible notes            $ 157,000      $      --
                                                                                       =========      =========
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                      -4-
<PAGE>

                                 AMPLIDYNE, INC.
                      STATEMENT OF STOCKHOLDERS' DEFICIENCY
         YEAR ENDED DECEMBER 31, 2003 AND SIX MONTHS ENDED JUNE 30, 2004


<TABLE>
<CAPTION>
                                                                   PREFERRED STOCK                    COMMON STOCK
                                                             ---------------------------       ---------------------------
                                                               SHARES         PAR VALUE         SHARES          PAR VALUE
                                                             ----------       ----------       ----------       ----------
<S>                                                          <C>              <C>              <C>              <C>
BALANCE AT DECEMBER 31, 2002                                         --       $       --        9,676,500       $      968

Net loss for the year ended December 31, 2003
Issuance of common stock in connection with
litigation settled in the year ended December 31, 2002                                            700,000               70
                                                             ----------       ----------       ----------       ----------

BALANCE AT DECEMBER 31, 2003                                         --               --       10,376,500            1,038

Net loss for the six months ended June 30, 2004
Litigation settlement to be paid through the
issuance of common stock
                                                             ----------       ----------       ----------       ----------

BALANCE AT JUNE 30, 2004                                             --       $       --       10,376,500       $    1,038
                                                             ==========       ==========       ==========       ==========
</TABLE>

<TABLE>
<CAPTION>
                                                            ADDITIONAL
                                                             PAID-IN         ACCUMULATED      SUBSCRIPTIONS
                                                             CAPITAL           DEFICIT          RECEIVABLE         TOTAL
                                                           ------------      ------------      ------------     ------------
<S>                                                        <C>               <C>               <C>              <C>
BALANCE AT DECEMBER 31, 2002                               $ 22,494,924      $(21,949,679)     $         --     $    546,213

Net loss for the year ended December 31, 2003                                    (980,494)                          (980,494)
Issuance of common stock in connection with
litigation settled in the year ended December 31, 2002              (70)
                                                           ------------      ------------      ------------     ------------

BALANCE AT DECEMBER 31, 2003                                 22,494,854       (22,930,173)               --         (434,281)

THE FOLLOWING INFORMATION IS UNAUDITED:

Net loss for the six months ended June 30, 2004                                  (504,862)                          (504,862)
Litigation settlement to be paid through
the issuance of  common stock                                     8,160                                                8,160
                                                           ------------      ------------      ------------     ------------

BALANCE AT JUNE 30, 2004                                   $ 22,503,014      $(23,435,035)     $         --     $   (930,983)
                                                           ============      ============      ============     ============
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                      -5-
<PAGE>

                                 AMPLIDYNE, INC.
                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
                                  JUNE 30, 2004


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 three and six month periods ended June 30, 2004 and 2003, (b)
the financial  position at June 30, 2004,  (c) the  statements of cash flows for
the six month  period  ended  June 30,  2004 and 2003 , and (d) the  changes  in
stockholders'  deficiency for the six month period ended June 30, 2004 have been
made.  The results of operations for the three or six months ended June 30, 2004
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, 2003  included in the  Company's  Form
10-KSB filed with the Securities and Exchange Commission on April 14, 2004.

      The Company's financial  statements have been presented on a going concern
basis,  which  contemplates  the  realization of assets and the  satisfaction of
liabilities  in the normal course of business.  The liquidity of the Company has
been adversely  affected in recent years by significant  losses from operations.
As further  discussed in Note F, the Company incurred losses of $504,862 for the
six months  ended June 30,  2004,  has limited  cash  reserves  and has seen its
working  capital  decline by $476,102 to a deficiency  of  $(962,111)  since the
beginning of the fiscal year. Current liabilities exceed cash and receivables by
$1,310,631  indicating  that the  Company  will  have  difficulty  meetings  its
financial  obligations for the balance of this fiscal year.  These factors raise
substantial  doubt as to the Company's  ability to continue as a going  concern.
Recently,  operations have been funded by loans from the Chief Executive Officer
and costs have been cut through substantial reductions in labor and operations.

As further discussed in Note F, management is seeking  additional  financing and
intends to aggressively market its products, control operating costs and broaden
its product base through  enhancements  of products.  The Company  believes that
these  measures may provide  sufficient  liquidity for it to continue as a going
concern in its  present  form.  Accordingly,  the  financial  statements  do not
include any adjustments  relating to the  recoverability  and  classification of
recorded  asset amounts or the amount and  classification  of liabilities or any
other  adjustments  that  might be  necessary  should  the  Company be unable to
continue as a going concern in its present form.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any transactions,  agreements or other  contractual  arrangements
that constitute off balance sheet arrangements.


                                      -6-
<PAGE>


                                 AMPLIDYNE, INC.
                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
                                  JUNE 30, 2004


NOTE C - STOCKHOLDERS' EQUITY

1.    WARRANTS AND OPTIONS

      At June 30, 2004, the following 945,000 warrants, remained outstanding:

      (1)   20,000 exercisable at $1.00 through May 2010

      (2)   20,000 exercisable at $7.00 through December 2004

      (3)   30,000 exercisable at $6.00 through November 2004

      (4)   50,000 exercisable at $2.00 through December 2004

      (5)   50,000 exercisable at $4.00 through December 2004

      (6)   16,000 exercisable at $1.75 through December 2004

      (7)   41,500 exercisable at $1.80 through July 31, 2004

      (8)   207,500 exercisable at $3.00 through July 31, 2004

      (9)   55,000 exercisable at $1.20 through September 30, 2004

      (10)  300,000 exercisable at $2.00 through December 31, 2005

      (11)  75,000 exercisable at $.96 through March 2007

      (12)  80,000 exercisable at $1.50 through December 2004.

      At June 30, 2004,  the Company had employee  stock options  outstanding to
acquire 2,221,000 shares of common stock at exercise prices of $0.15 to $3.25.

2.    STOCK PURCHASE AND FINANCING AGREEMENTS

On January 28, 2004,  the Company  entered into a  Subscription  Agreement  (the
"Agreement")  with  Phoenix  Opportunity  Fund II, L.P.  ("Phoenix"),  a limited
partnership organized under the laws of the State of Delaware, pursuant to which
Phoenix  agreed to make an  aggregate  investment  of $100,000  in exchange  for
282,700 shares of a newly created class of Series C Convertible Preferred Stock,
representing  approximately  80% of the Company's  outstanding  stock on a fully
diluted  basis.  As the  Company  was  required  to  amend  its  certificate  of
incorporation  or  effect a  reverse  stock  split  in order to have  sufficient
authorized  shares to complete  the equity  financing,  Phoenix  made an initial
investment  of $20,000 in  exchange  for 54,325  shares of Series C  Convertible
Preferred  Stock,  and  loaned  approximately  $80,000 to the  Company  with the
remaining   portion   of  the   equity   investment   to  be   completed   after
recapitalization.  Phoenix also entered into a stock restriction  agreement with
Devendar S. Bains,  our former Chairman of the Board,  Chief Executive  Officer,
and  Treasurer,  pursuant  to which Mr.  Bains  issued an  irrevocable  proxy to
Phoenix until the recapitalization is completed, which, together with the shares
received in  connection  with the initial  investment,  would have given Phoenix
effective control over 53% of the Company's voting stock.

The  preferred  shares were never issued to Phoenix.  Due to a dispute among the
Parties  with  respect to the terms of the loan  transaction.  The  Company  and
Phoenix  agreed  to  rescind  their  agreement,  and the  Company  agreed to pay
Phoenix:  (i) $20,000 in cash for the funds  Phoenix  invested,  (ii) $80,000 in
cash for the funds which  Phoenix  lent to the  Company,  and (iii)  $40,000 for
expenses  incurred by Phoenix on behalf of the Company.  The $40,000 was paid by
delivery of a secured  promissory note due March 31, 2005, and bearing  interest
at the rate of eight percent per annum secured by  substantially  all the assets
of the company.  In addition,  the Company accepted the resignation of Ramesh S.
Akella,  Carmen P. Akella,  Venkata Maddineni from the Board of Directors of the
Company.


                                      -7-
<PAGE>

                                 AMPLIDYNE, INC.
                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
                                  JUNE 30, 2004


In a separate  transaction,  John Lee of Piscataway,  NJ ("Lee")  entered into a
Note  Purchase  Agreement  with the  Company by which Lee has agreed to lend the
Company an initial  $200,000  and up to an  additional  $300,000  in one or more
installments on or before October 30, 2004. The Company has agreed to deliver to
John Lee convertible promissory notes which are convertible into Series C shares
representing  approximately  80% of the Company's  outstanding  stock on a fully
diluted basis.  Such  conversion  will take place at such time is able to do so.
Messrs.  Devendar  Bains and  Tarlochan  Bains are required to devote their full
business  time and  attention to the business of the Company for eight (8) years
from May 25, 2004. In the event that either  Devendar  Bains or Tarlochan  Bains
must leave the employ of the  Company  for any  reason,  each  agrees  that,  if
requested by the Board of Directors of the Company, he will use his best efforts
to  find  a  qualified  replacement  for  himself  acceptable  to the  Board  of
Directors,  and that he will  not  engage  in a  business  competitive  with the
Company for a period of eight (8) years. On May 25, 2004, Lee loaned the Company
$200,000,  and  was  issued  two  convertible  promissory  notes  which  will be
convertible in the aggregate into Series C shares representing approximately 32%
of the  Company's  outstanding  stock  on a fully  diluted  basis,  if and  when
converted.  If not  converted,  the notes are payable on demand,  provided  that
demand cannot be made before December 31, 2004, unless the Company is in default
of the Note Purchase Agreement. Of the $200,000 loaned to the Company,  $100,000
was used to pay  Phoenix in  connection  with the  rescission  described  above,
$45,000 was used to make a final payment in  resolution of litigation  with High
Gain Antenna Co. Ltd. of Korea,  and to pay  associated  bank fees,  $12,000 was
used to pay legal fees and $43,000 was used for working capital purposes.

NOTE D - LOSS PER SHARE

      The Company  complies with the  requirements  of the Financial  Accounting
Standards  Board issued  Statement of Financial  Accounting  Standards  No. 128,
"Earnings per Share" ("SFAS No. 128").  SFAS No. 128 specifies the  compilation,
presentation  and  disclosure  requirements  for earnings per share for entities
with publicly held common stock or potential  common stock.  Net loss per common
share - basic and diluted is determined by dividing the net loss by the weighted
average number of common stock outstanding.

      Net loss per common  share - diluted  does not  include  potential  common
shares  derived from stock  options and  warrants  (see Note C) because they are
antidilutive.

NOTE E - LITIGATION

      From time to time,  the Company is party to what it  believes  are routine
litigation and proceedings that may be considered as part of the ordinary course
of its  business.  Except for the  proceedings  noted below,  the Company is not
aware of any pending litigation or proceedings that could have a material effect
on the Company's results of operations or financial condition.

1. The Company (as well as an officer and director of the
Company) is a defendant in a complaint  brought in November  2003 in the Circuit
Court of the State of Florida (17th Judicial District,  Broward County) alleging
fraud and seeking relief for  unspecified  damages and costs  associated with an
aborted plan of merger.  On June 29, 2004, the Company filed a Motion to Dismiss
the lawsuit of V-Link, inc. against the  Company.

2. The  Company  (as well as an  officer  and  director  of the  Company)  was a
defendant  in a  complaint  brought in the  Superior  Court of New  Jersey,  Law
Division,  Somerset County,  by High Gain Antenna Co., Ltd. of Korea in November
2000. In connection with a Stipulation of Settlement and Release entered into in
January 2003 before the Superior Court of New Jersey,  the Company has fulfilled
its  obligations  and has received a warrant of  satisfaction  of judgment  from
opposing counsel dated June 6, 2004.


                                      -8-
<PAGE>

                                 AMPLIDYNE, INC.
                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
                                  JUNE 30, 2004


3. In June 2004,  the Company  entered  into a Settlement  Agreement  with Wayne
Fogel,  et al, before the United states  District court in Tampa,  Florida.  The
settlement  provides for the following  obligations by the Company to Mr. Fogel:
(1)  payment of $12,000 by July 14,  2004;  (2)  issuance  of 250,000  shares of
restricted  common  stock by July 14, 2004 and;  (3) the  shipment of  specified
items of inventory valued at approximately  $22,000. The agreement further calls
for the  issuance  of common  stock of one share  for each $1 of  inventory  not
delivered  in lieu of the  inventory  in the event the company  cannot  deliver.
Since non-delivery of the specified items is definite,  the financial statements
provide for the issuance of 22,000 additional  shares.  All shares in connection
with this  settlement are valued at the publicly  traded market value of $.05 on
the date of the transaction, less a discount of 40% for the restriction on sale.

4. In April 2004, a law firm filed a judgement against the Company in the amount
of  approximately  $40,000 in connection with  non-payment of legal fees owed to
it.  Inasmuch  as  this  is a  perfection  of  an  already  recorded  liability,
management  does not believe that the judgement  will have a material  impact on
the financial position of the Company.

NOTE F - LIQUIDITY

      The Company's financial  statements have been presented on a going concern
basis,  which  contemplates  the  realization of assets and the  satisfaction of
liabilities  in the normal course of business.  The liquidity of the Company has
been adversely  affected in recent years by significant  losses from operations.
The Company has  incurred  losses of $239,798  and  $230,032  for the six months
ended June 30, 2004 and 2003, respectively.

      With  little  remaining  cash  and  no  near  term  prospects  of  private
placements,  options or warrant exercises (other than the Convertible Notes) and
reduced  revenues,  we believe  that we will have great  difficulty  meeting our
working  capital  needs  over the  next 12  months.  The  Company  is  presently
dependent  on cash  flows  generated  from  sales and  financing  under the Note
Purchase  Agreement  described in Note C.2.  Our failure to  consummate a merger
with an appropriate  partner or to substantially  improve our revenues will have
serious adverse consequences and, accordingly, there is substantial doubt in our
ability to remain in business over the next 12 months. There can be no assurance
that any financing will be available to the Company on acceptable  terms,  or at
all. If adequate funds are not available,  the Company may be required to delay,
scale  back  or  eliminate  its  research,   engineering   and   development  or
manufacturing  programs or obtain funds  through  arrangements  with partners or
others  that may  require  the  Company to  relinquish  rights to certain of its
technologies or potential products or other assets.  Accordingly,  the inability
to obtain such financing  could have a material  adverse effect on the Company's
business, financial condition and results of operations.

Management's plans for dealing with the foregoing matters include:

      o Increasing sales of its amplifier  products by developing newer products
      for  the  Multimedia   Broadcast  market  place  through  both  individual
      customers, strategic alliances and mergers.

      o Decreasing  the  dependency on certain major  customers by  aggressively
      seeking other customers in the amplifier markets;

      o Partnering  with  significant  companies to jointly  develop  innovative
      products,  which has yielded orders with multinational  companies to date,
      and which are expected to further expand such relationships;

      o Reducing costs through a more  streamlined  operation by using automated
      machinery to produce components for our products;

      o Deferral of payments of officers' salaries, as needed;

      o Selling  remaining net operating  losses  applicable to the State of New
      Jersey, pursuant to a special government high-technology incentive program
      in order to provide working capital, if possible;

      o Reducing overhead costs and general expenditures.

      o Merging with another  company to provide  adequate  working  capital and
      jointly develop innovative products.


                                      -9-
<PAGE>

                                 AMPLIDYNE, INC.
                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
                                  JUNE 30, 2004


NOTE G - OFFICER LOANS


      As of June 30,  2004,  the Company  owes  $268,101 to the now former Chief
Executive  Officer for loans and unpaid  salaries.  During the six months  ended
June 30, 2004,  the Chief  Executive  Officer  advanced  $18,000 to the Company.
Additionally, salaries of $23,192 were deferred for this quarter

NOTE H - SEGMENT INFORMATION

      The Company commenced its wireless Internet  connectivity  business in the
summer of 2000.  The Company does not measure its operating  results,  assets or
liabilities by segment.  However,  the following limited segment  information is
available:

<TABLE>
<CAPTION>
                                 Six Months Ended    Six Months Ended    Year Ended
                                      June 30             June 30        December 31,
                                       2004                2003             2003
                                    ----------          ----------       ----------
<S>                                 <C>                    <C>           <C>
Sales - external
           Amplifier                $  512,134             743,274       $1,128,453
           Internet business            43,459             130,238          222,772
                                    ----------          ----------       ----------
                                    $  555,593          $  873,512       $1,351,225
                                    ==========          ==========       ==========

Inventory                                   --
           Amplifier                $  232,513          $  409,317       $  248,575
           Internet business           116,007             494,688          159,134
                                    ----------          ----------       ----------
                                    $  348,520          $  904,005       $  407,709
                                    ==========          ==========       ==========
</TABLE>


NOTE I -- OTHER COMMENTS

1.    NOTICE OF OPPOSITION ON TRADEMARK

      The  Company's  registration  of the Ampwave  trademark was opposed at the
U.S. Patent Office.  The Company has settled with the opposing party by agreeing
to stop using the  Ampwave  name after a period of one (1) year from the date of
signing.  Sales under the Ampwave  label were $43,459 for the three months ended
June 30, 2004.  Management  believes that the  settlement  will have no material
financial effect.

NOTE J - SUBSEQUENT EVENT

      Effective  August  19,  2004,  Devendar  S.  Bains  stepped  down from his
position as Chairman of the Board,  Chief Executive Officer and President and is
now the Chief Technology Officer. Tarlochan Bains has taken over the position of
Chairman of the Board and Chief Executive Officer.


                                      -10-
<PAGE>

                                 AMPLIDYNE, INC.


PART I - FINANCIAL INFORMATION

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

RESULTS OF  OPERATIONS - THE THREE MONTHS ENDED JUNE 30, 2004  COMPARED TO THREE
MONTHS ENDED JUNE 30, 2003.

Revenues  for the three  months  ended June 30, 2004  declined by $123,678  from
$363,904 to  $240,226,  or 34% compared to the three months ended June 30, 2003.
The sales decrease were primarily in amplifiers.

The  majority of the  amplifier  sales for the three  months ended June 30, 2004
were  obtained  from the  Wireless  Local  Loop  amplifier  products  to a major
European  customer.  Sales of amplifiers were  approximately  93% of total sales
compared to 85% of total sales for the same period last year.  The Ampwave  high
speed  wireless  Internet  products  and  broadband   solutions   accounted  for
approximately 7% of total sales,  against 15% of total sales for the same period
last year.

The Company has continued to develop and refine its  amplifier  products for the
wireless  communications  market.  The  Company has also  refined  its  wireless
internet  products.  Sales and  marketing  efforts have been focused in the more
stable United States, European and Canadian markets.

Cost of sales was  $223,367  or 93% of sales  compared  to 77%  during  the same
period for 2003.  Gross margin for the three months ended June 30, 2004 amounted
to $16,859 (7%)  compared to $84,979  (23%),  for the same period ended June 30,
2003. The decline in gross margin was  principally  due to pricing  pressures in
the  telecommunications  sector.

Selling,   general   and   administrative   expenses   (excluding   stock  based
compensation)  decreased in 2004 by $107,907 to $109,033 from $216,940, in 2003.
Expressed as a percentage  of sales,  the  selling,  general and  administrative
expenses  (excluding stock based compensation) were 45% in 2004 and 39% in 2003.
The  principal  factors  contributing  to the  decrease in selling,  general and
administrative  expenses were related to the effects of our cost cutting program
implemented  in 2002.  In the  quarter  ended June 30,  2004,  we  continued  to
maintain the lower staffing and overhead levels that we instituted in 2002.

Research,  engineering  and  development  expenses were 35% of net sales for the
three months ended June 30, 2004 compared to 27% in 2003. In 2004 and 2003,  the
principal  activity  of the  business  related to the design and  production  of
product for OEM manufacturers,  particularly for the IMT 2000 and 3.5 GHz single
channel  products  and  refinements  to the High Speed  Internet  products.  The
research,  engineering and development  expenses  consist  principally of salary
cost for engineers and the expenses of equipment purchases  specifically for the
design  and  testing of the  prototype  products.  The  Company's  research  and
development  efforts are  influenced by available  funds and the level of effort
required by the engineering staff on customer specific projects.


                                      -11-
<PAGE>

                                 AMPLIDYNE, INC.


Interest  income was $NIL in 2004 and 2003  because our cash  balances  which we
have  historically  temporarily  invested in interest bearing accounts have been
fully depleted.

Interest  expense was $600 in 2004  compared to $69 in 2003 and was  principally
related to financing costs in connection with the Phoenix rescission.

As a result of the foregoing,  the Company  incurred net losses of $(239,798) or
$(0.02) per share for the quarter  ended June 30, 2004  compared with net losses
of $(230,032) or $(0.02) per share for the same quarter in 2003.

RESULTS OF  OPERATIONS  - THE SIX MONTHS  ENDED JUNE 30,  2004  COMPARED  TO SIX
MONTHS ENDED JUNE 30, 2003.

Revenues  for the six months  ended June 30,  2004  declined  by  $317,919  from
$873,512 to $555,593, or 36% compared to the six months ended June 30, 2003.

The majority of the amplifier  sales for the six months ended June 30, 2004 were
obtained from the Wireless  Local Loop  amplifier  products to a major  European
customer.

The Company has continued to develop and refine its  amplifier  products for the
wireless  communications  market.  The  Company has also  refined  its  wireless
internet  products . Sales and  marketing  efforts have been focused in the more
stable United States, European and Canadian markets.

Cost of sales was $511,767 or 92% of sales  compared to $557,783 or 64% of sales
during the same period for 2003. The decline in gross margin was principally due
to pricing pressures in the telecommunications sector. The Company is continuing
to assess cost  reduction and is promoting  increased  product demand to improve
gross margins in 2004.

Selling,   general   and   administrative   expenses   (excluding   stock  based
compensation)  decreased in 2004 by $88,565 to $322,106 from $410,671,  in 2003.
Expressed as a percentage  of sales,  the  selling,  general and  administrative
expenses  (excluding stock based compensation) were 58% in 2004 and 47% in 2003.
The  principal  factors  contributing  to the  decrease in selling,  general and
administrative  expenses were related to the effects of our cost cutting program
implemented  in 2002.  In the  quarter  ended June 30,  2004,  we  continued  to
maintain the lower staffing and overhead levels that we instituted in 2002.

Research, engineering and development expenses were 29% of net sales for the six
months  ended  June 30,  2004  compared  to 22% in 2003.  In 2004 and 2003,  the
principal  activity  of the  business  related to the design and  production  of
product for OEM manufacturers,  particularly for the IMT 2000 and 3.5 GHz single
channel  products  and  refinements  to the High Speed  Internet  products.  The
research,  engineering and development  expenses  consist  principally of salary
cost for engineers and the expenses of equipment purchases  specifically for the
design  and  testing of the  prototype  products.  The  Company's  research  and
development  efforts are  influenced by available  funds and the level of effort
required by the engineering staff on customer specific projects.

The Company had interest  income and other income in 2003 of $2. Interest income
was  $NIL  in  2004  because  our  cash  balances  which  we  have  historically
temporarily invested in interest bearing accounts have been fully depleted.

As a result of the  foregoing,  the Company  incurred  net losses of $504,862 or
$0.05 per share for the six months ended June 30, 2004  compared with net losses
of $290,222 or $0.03 per share for the same period in 2003.


                                      -12-
<PAGE>

                                 AMPLIDYNE, INC.


ITEM 3. LIQUIDITY AND CAPITAL RESOURCES

Liquidity refers to our ability to generate adequate amounts of cash to meet our
needs.  We have been  generating the cash necessary to fund our operations  from
continual  loans from the former  President and Chief  Executive  Officer of the
Company,  Devendar Bains. We have incurred a loss in each year since  inception.
We expect to incur further losses, that the losses may fluctuate,  and that such
fluctuations  may be  substantial.  As of June  30,  2004 we had an  accumulated
deficit of $23,435,035.  Potential  immediate  sources of liquidity are loans in
connection with the Convertible Notes.

As of June 30, 2004, our current  liabilities  exceeded our cash and receivables
by  $1,310,631.  Our current  ratio was 0.30 to 1.00,  but our ratio of accounts
receivable to current  liabilities was only 0.05 to 1.00. This indicates that we
will have  difficulty  meeting our obligations as they come due. We are carrying
$348,520 in inventory,  of which $299,418  represents  component parts. Based on
year to date usage, we are carrying 286 days worth of parts  inventory.  Because
of the lead times in our manufacturing process, we will likely need to replenish
many items before we use everything we now have in stock.  Accordingly,  we will
need more cash to replenish our  component  parts  inventory  before we are able
realize cash from all of our existing inventories.

As of June 30, 2004, we had cash of $15,465  compared to an overdraft of $17,855
at December 31, 2003.  Overall our cash increased  $33,320 during 2004. Our cash
used for operating  actives was $76,681.  This year we received loans of $18,000
and  deferred  salary  payments  to  officer/stockholders  of  $55,233.  We also
received proceeds from the issuance of convertible promissory notes of $93,000.

The allowance for doubtful accounts on trade receivables increased from $143,000
(61% of accounts  receivable  of $234,482) in 2003 to $262,000  (82% of accounts
receivable of $319,854) in 2004. Additionally, in 2003, we reserved an aggregate
of  $31,702  against  leases  that  appear to be  uncollectible.  Because of our
relatively small number of customers and low sales volume,  accounts  receivable
balances  and  allowances  for  doubtful  accounts do not  reflect a  consistent
relationship to sales. We determine our allowance for doubtful accounts based on
a specific customer-by-customer review of collectiblity.

Our inventories decreased by $59,189 to $348,520 in 2004 compared to $407,709 at
December 31, 2003, a decrease of 15%.

The Company has several lease obligations for its premises and certain equipment
requiring  minimum  monthly  payments  of  approximately  $9,800  through  2005.
Although the Company did not convert  salaries to officers  through the issuance
of Common Stock in 2004 or 2003, it may to do so in 2004. To help  alleviate the
cash flow  difficulties,  the Chief Executive  Officer and the Vice President of
Operations  agreed  to  additional  salary  deferrals  of  $46,384  and  $5,538,
respectively.

The Company continues to explore strategic  relationships with ISP's,  customers
and others,  which could involve  jointly  developed  products,  revenue-sharing
models, investments in or by the Company, or other arrangements. There can be no
assurance that a strategic relationship can be consummated.

In the past,  the  officers  of the  Company  have  deferred  a portion of their
salaries  or  provided  loans  to  the  Company  to  meet  short-term  liquidity
requirements.  Where possible,  the Company has issued stock or granted warrants
to certain vendors in lieu of cash payments,  and may do so in the future. There
can be no  assurance  that any  additional  financing  will be  available to the
Company on acceptable terms, or at all. If adequate funds are not available, the
Company  may be  required  to  delay,  scale  back or  eliminate  its  research,
engineering  and development or  manufacturing  programs or obtain funds through
arrangements  with partners or others that may require the Company to relinquish
rights to certain of its  technologies  or potential  products or other  assets.
Accordingly,  the  inability  to obtain  such  financing  could  have a material
adverse  effect on the Company's  business,  financial  condition and results of
operations.


                                      -13-
<PAGE>

                                 AMPLIDYNE, INC.


With little  remaining  cash and no near term  prospects of private  placements,
options or warrant  exercises  (other  than the  Convertible  Notes) and reduced
revenues,  we believe  that we will have great  difficulty  meeting  our working
capital needs over the next 12 months. We are presently  dependent on cash flows
generated from sales and loans in connection  with the  Convertible  Notes.  Our
failure  to  substantially  improve  our  revenues  will  have  serious  adverse
consequences  and,  accordingly,  there is  substantial  doubt in our ability to
remain in  business  over the next 12  months.  There can be no  assurance  that
adequate  additional  financing  will be available to the Company on  acceptable
terms,  or at all.  If  adequate  funds are not  available,  the  Company may be
required  to delay,  scale  back or  eliminate  its  research,  engineering  and
development or manufacturing  programs or obtain funds through arrangements with
partners or others that may require the Company to relinquish  rights to certain
of its  technologies  or potential  products or other assets.  Accordingly,  the
inability to obtain such financing  could have a material  adverse effect on the
Company's business, financial condition and results of operations.

CONTROLS AND PROCEDURES

Under the supervision and with the  participation  of our management,  including
the former Chief Executive and Principal  Accounting  officer, we have evaluated
the  effectiveness  of the  design  and  operation  of our  disclosure  controls
pursuant to Exchange Act Rule  13a-14(c) as of the end of the period  covered by
this report.  Based upon that  evaluation,  the Chief  Executive  and  Principal
Accounting  Officer  concluded  that  the  Company's   disclosure  controls  and
procedures are effective in timely alerting him to material information required
to be included in the  Company's  periodic SEC filings  relating to the Company.
There were no significant changes in the Company's internal controls or in other
factors that could  significantly  affect these internal controls  subsequent to
the date of my most recent evaluation.

Our management,  including the former Chief  Executive and Principal  Accounting
officer, does not expect that our disclosure controls and internal controls will
prevent all error and all fraud. A control system,  no matter how well conceived
and operated,  can provide only  reasonable,  not absolute,  assurance  that the
objectives  of the  control  system  are met.  Further,  the design of a control
system  must  reflect  the fact that  there are  resource  constraints,  and the
benefits of controls must be considered  relative to their cost.  Because of the
inherent  limitations  in all control  systems,  no  evaluation  of controls can
provide absolute assurance that all control issues and instances of fraud within
the Company,  if any, will be detected.  These inherent  limitations include the
realities that judgments in decision-making  can be faulty, and that a breakdown
can occur because of a simple error. Additionally,  controls can be circumvented
by the individual acts of some persons,  by collusion of two or more people,  or
by management override of the control.


                                      -14-
<PAGE>


                                 AMPLIDYNE, INC.


PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Note E to the Company's financial statements set forth in Part I.
*

ITEM 2. CHANGES IN SECURITIES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) The following is a list of exhibits to this Form 10-QSB:

*     Certification  of the Company's Chief  Executive and Principal  Accounting
      Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
      302 of the Sarbanes-Oxely Act of 2002.

*     Certification  of the Comapny's Chief  Executive and Principal  Accounting
      Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
      906 of the Sarbanes-Oxely Act of 2002.

(b) Reports on Form 8-K

None.


                                      -15-

<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 authorized.


                                      AMPLIDYNE, INC.

Dated:  August 23, 2004               By: /S/ TARLOCHAN. BAINS
                                          --------------------
                                          Name:  Tarlochan. Bains
                                          Title: Chief Executive Officer,
                                                 Treasurer, Principal
                                                 Accounting Officer and Director


                                       16