<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 JUNE 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 August 14, 1997 was 4,460,000.

<PAGE>

                                 AMPLIDYNE, INC.
                                   FORM 10-QSB
                         SIX MONTHS ENDED JUNE 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........................9-10

PART II - OTHER INFORMATION
          -----------------

Signatures.............................................................11

Exhibit 27- Financial Data Schedule....................................12

<PAGE>


                         PART 1 - FINANCIAL INFORMATION

Item 1.  Financial Statements

                                 AMPLIDYNE, INC.
                                 BALANCE SHEETS

                                     ASSETS

                                                         December 31,  June 30,
                                                            1996         1997
                                                            ----         ----
                                                                     (Unaudited)
CURRENT ASSETS
  Cash and cash equivalents                              $  104,310   $3,502,394
  Accounts receivable, net of allowance
    for doubtful accounts of $119,000                       207,339      274,031
  Inventories                                               402,696      391,942
  Deferred financing costs                                  324,540           --
  Private placement costs                                    55,000           --
  Prepaid expenses and other current assets                   5,665        5,365
                                                         ----------   ----------
    Total current assets                                  1,099,550    4,173,732

PROPERTY AND EQUIPMENT - AT COST
  Machinery and equipment                                   389,433      527,198
  Furniture and fixtures                                     42,806       42,806
  Autos and trucks                                           19,923       19,923
  Leasehold improvements                                      4,162        4,162
                                                         ----------   ----------
                                                            456,324      594,089
    Less: Accumulated depreciation and amortization         145,593      179,957
                                                         ----------   ----------
      Net depreciated cost                                  310,731      414,132

PREPAID REGISTRATION COSTS                                  167,053           --

OTHER ASSETS                                                 45,230       35,000

TOTAL ASSETS                                             $1,622,564   $4,622,864
                                                         ----------   ----------

* 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,      June 30,
                                                        1996 *          1997
                                                        ----            ----
                                                                     (Unaudited)

CURRENT LIABILITIES
  Bank line of credit                              $    210,000    $         --
  Notes payable                                       1,214,000              --
  Current maturities of lease obligations               381,392         263,390
  Accounts payable                                      690,760         149,441
  Accrued expenses                                      401,518         424,307
  Stockholders' loan                                    442,745         148,051
                                                   ------------    ------------
    Total current liabilities                         3,340,415         985,189

LONG-TERM LIABILITIES
  Lease obligations                                     200,969          95,538

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 June 30, 1997,
    respectively                                            285             446
  Additional paid-in-capital                          5,239,961      12,021,953
  Accumulated deficit                                (7,159,066)     (8,480,262)
                                                   ------------    ------------
    Total stockholders' equity                       (1,918,820)      3,542,137

TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY                             $  1,622,564    $  4,622,864
                                                   ============    ============


* 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            Six Months Ended
                                                                  June 30,                      June 30,
                                                           1996            1997            1996           1997
                                                      -----------     -----------     -----------     -----------
<S>                                                   <C>                 <C>         <C>                 <C>    
Net sales                                             $   771,549         348,249     $ 1,272,207         898,894
Cost of goods sold                                        620,771         318,488       1,106,426         836,758
                                                      -----------     -----------     -----------     -----------
   Gross profit                                           150,778          29,761         165,781          62,136

Operating expenses
  Selling, general, and administrative                    302,881         310,111         498,255         620,154
  Research, engineering, and development                  345,450         212,508         531,364         477,028
                                                      -----------     -----------     -----------     -----------
    Operating loss                                       (497,553)       (492,858)       (863,838)    (1,035,046)

Other nonoperating income and expenses
  Interest income                                              --          51,666              --          66,626
  Interest expense                                         21,323           8,905          30,766          27,886
  Stock compensation and financing costs                1,101,875              --       1,383,125         324,540
                                                      -----------     -----------     -----------     -----------

    Loss before income taxes                           (1,620,751)       (450,097)     (2,277,729)    (1,320,846)

Provision for income taxes                                     --              --              --             350
                                                      -----------     -----------     -----------     -----------

    NET LOSS                                          $(1,620,751)       (450,097)    $(2,277,729)     (1,321,196)
                                                      ===========     ===========     ===========     ===========

Net loss per share                                    $      (.44)           (.08)    $      (.62)           (.25)
                                                      ===========     ===========     ===========     ===========

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>

                                                        Six Months       Six Months
                                                          Ended            Ended
                                                      June 30, 1996    June 30, 1997
                                                       -----------     -----------
<S>                                                    <C>             <C>         
Cash flows from operating activities:
  Net Loss                                             $(2,277,729)    $(1,321,196)
                                                       -----------     -----------

  Adjustments to reconcile net loss to net cash
    used in operating activities
      Depreciation and amortization                         28,228          44,594
      Stock compensation expense                         1,383,125         324,540
      Changes in assets and liabilities
        Accounts receivable                               (419,605)        (66,692)
        Inventories                                       (188,157)         10,754
        Prepaid expenses and other current assets          (46,330)         55,300
        Accounts payable and accrued expenses               62,344        (518,530)
        Customer advances                                 (144,132)             --
                                                       -----------     -----------
    Total adjustments                                      675,473        (150,034)
                                                       -----------     -----------
      Net cash used for operating activities            (1,062,256)     (1,471,230)
                                                       -----------     -----------

Cash flows from investing activities:
  Purchase of fixed assets                                 (79,563)       (137,765)
                                                       -----------     -----------
     Net cash used for investing activities                (79,563)       (137,765)

Cash flows from financing activities:
  Proceeds from (repayments of) bank line of credit             --        (210,000)
  Proceeds from (repayments of) notes payable              550,000      (1,214,000)
  Lease obligations                                        216,465        (223,433)
  Proceeds from (repayments of) stockholders' loans        205,000        (294,694)
  Prepaid registration costs                                    --         167,053
  Stock issuance                                           570,000       6,782,153
                                                       -----------     -----------
    Net cash provided by financing activities            1,541,465       5,007,079
                                                       -----------     -----------

      NET INCREASE (DECREASE) IN CASH                     (140,354)      3,398,084

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


Cash and cash equivalents at end of period             $    13,393     $ 3,502,394
                                                       ===========     ===========

Supplemental disclosures of cash flow information
  Cash paid for:  Interest                             $    19,377     $    97,403
                  Income taxes                                  --              --

</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 SIX MONTHS ENDED
                                  JUNE 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                                                                      (1,321,196)     (1,321,196)
                                  ---------    -----------    -----------    -----------     -----------
Balance at June 30, 1997          4,460,000    $       446    $12,021,953    $(8,480,262)    $ 3,542,137
                                  ---------    -----------    -----------    -----------     -----------

</TABLE>


    The accompanying notes are an integral part of these financial statements

                                       -5-

<PAGE>

                                 AMPLIDYNE, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 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 six-month periods ended June 30, 1996 and June 30 1997,
    (b) the financial position at December 31, 1996 and June 30, 1997, (c) the
    statements of cash flows for the six-month periods ended June 30, 1996 and
    June 30, 1997, and (d) the changes in stockholders' equity for the six
    month period ended June 30, 1997, have been made. The results of operations
    for the six months ended June 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
                                  JUNE 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 June 30, 1996 and June 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 June 30, 1996 and June 30, 1997, respectively). The total shares
    outstanding for purposes of loss per share calculations are 3,644,950 and
    5,254,950 shares at June 30, 1996 and June 30, 1997, respectively.

                                       -7-
<PAGE>
                                 AMPLIDYNE, INC.
                           NOTES FINANCIAL STATEMENTS
                                  JUNE 30, 1997

Note E - Litigation

    The Company is a defendant to a complaint filed in the Circuit Court of the
    Eighteenth Judicial District of the State of Florida on January 23, 1997,
    alleging breach of contract and alleged damages in the amount of
    $4,322,579.05, plus interest, costs and attorneys' fees. The Company filed

    an answer to the complaint denying the allegations therein and a
    counterclaim on March 10, 1997. The counterclaim alleges breach of
    contract, common law fraud, conversion and unjust enrichment. The Company
    further asserts damages in the amount of $463,411.36, plus interest, costs
    and attorneys' fees. Management believes that the allegations in the
    complaint are without merit.

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
                                         Six Months ended June 30,
                                        1996                  1997
                                        ----                  ----
Net sales                           $ 1,272,207           $   898,894
Cost of goods sold                    1,106,426               836,758
                                    -----------           -----------
  Gross profit                          165,781                62,136
                                    -----------           -----------
Selling, general, and
  administrative                        498,255               620,154
Research, engineering,
  and development                       531,364               477,028
                                    -----------           -----------
  Total operating expenses            1,029,619             1,097,182
                                    -----------           -----------
Stock compensation and

  financing costs                     1,383,125               324,540
Interest income                              --                66,626
Other expenses                           30,766                27,886
                                    -----------           -----------

  Loss before income taxes           (2,277,729)           (1,320,846)
Provision for income taxes                   --                   350
                                    -----------           -----------
  NET LOSS                          $(2,277,729)          $(1,321,196)
                                    ===========           ===========

Results of operations-Six months ended June 30 1997 compared to Six months ended
                                  June 30 1996

Net sales for the six month period ended June 30 1997 were $898,894,
representing an decrease of approximately 29% 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.

Gross profit for the six month period ended June 30 1997 amounted to $62,136
(6.9% of sales), compared to $165,781 (13.0% of sales), for the corresponding
period in the prior year. 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,
thereby reducing sales for the quarter. A hold was put on these purchase orders
due to engineering changes made to the original specifications.

                                       -9-

<PAGE>

               PART 1 - FINANCIAL INFORMATION - ITEM 2 (CONTINUED)

    Selling, general and administrative expenses were $620,154 (69.0 % of
    sales) in the second quarter of 1997 compared to $498,255 (39.2% of sales)
    for the second quarter of 1996. The $121,899 rise is due in part to
    increased rental expense for the new larger facilities leased May 1, 1996.
    These expenses will decrease in November 1997 when the lease on the old
    location expires. Higher consulting and professional fees relating to the
    public offering in the first quarter of 1997 also added to the increase in
    selling, general and administrative expenses.

    Research, engineering and development decreased in the second quarter of 
    1997 compared to the second quarter of 1996 due to continuing orders from
    customers involving less research and development expenses. This trend
    should continue as reoccurring orders are received.

    Interest expense was lower in the second quarter of 1997 because bank debt
    and private placement notes were paid off with the proceeds of the public
    offering which will eliminate most of the interest expense during the
    remainder of 1997.

    Stock compensation expense for the six months ended June 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
   ($1,321,196) or (.25) per share for the quarter ended June 30 1997 compared
   with net losses of ($2,277,729) or (.62) per share for the same period in
   1996.

Liquidity and Capital Resources

    At June 30 1997, the Company had cash and cash equivalents of $3,502,394
    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, $250,000 of
    the outstanding loan from a principal stockholder was paid off during the
    second quarter of 1997. The Company had accrued expenses of $424,307 at
    June 30, 1997 consisting of back payroll, taxes and commissions.

    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.

                                      -10-

<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:  August 14, 1997                      By: /s/ Devendar S. Bains
                                                 ---------------------
                                             Name:  Devendar S. Bains
                                             Title: Chief Executive Officer,
                                                    President, Treasurer,
                                                    Principal Accounting
                                                    Officer and Director

                                      -11-