1. Basis of Presentation

The accompanying unaudited  financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Regulation S-B of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and should be read in conjunction with Notes to Financial Statements contained in the Company’s Annual Report on Form 10-KSB for the year ended December 31, 1999. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2000 are not necessarily indicative of the results that may be expected for the year ended December 31, 2000.

The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates.

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

To the extent that we make any forward-looking statements in the "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report, we emphasize that forward-looking statements involve risks and uncertainties and our actual results may differ materially from those expressed or implied by our forward-looking statements. All forward-looking statements in this Quarterly Report reflect our current views about future events and are based on assumptions and are subject to risks and uncertainties. Except as required by applicable law, including the securities laws of the United States, we do not intend to update or revise any forward-looking statements, which forward-looking statements may include, but not be limited to, statements about our plans, objectives, expectations, intentions and assumptions and other statements that are not historical facts. Generally, forward-looking statements include phrases with words such as  "expect", "anticipate", "intend", "plan", "believe", "seek", "estimate" and similar expressions to identify forward-looking statements.

This Quarterly Report contains reference to our intent to explore and pursue new business opportunities. Any plan to pursue new business opportunities may involve certain estimates and plans related to us, which assumes certain events, trends and activities will occur and the projected information based on those assumptions. We do not know that any assumptions that we may make will be accurate. In particular, we do not know and cannot predict with any degree of certainty the growth in any business or industry in which we may seek to operate. If our assumptions are wrong about any events, trends and activities, and specifically about which business opportunity to pursue, if any, and because of our limited resources, then our efforts regarding and new business opportunity may also be wrong.

As used in this Quarterly Report, the terms "we", "us", "our" and the "Company" mean BSD Healthcare Industries, Inc., a Florida corporation. We are filing this Quarterly Report for the three month period ended June 30, 2000 as one of several Quarterly Reports and an Annual Report that we were required to file under the Securities Exchange Act of 1934 (the "Exchange Act"), but which we failed to file in a timely manner. We are seeking to become current under reporting requirements of the Exchange Act by the filing of this Quarterly Report together with our filing of other past due Quarterly Reports for the periods ended September 30, 1999, March 31, 2000 and our Quarterly Report for September 30, 2000, as well as our Annual Report for the year ended December 31, 1999, which includes our audited financial statements for 1999 and 1998.

We are disclosing in this Quarterly Report that following the end of our fiscal year ended December 31, 1999, and since inception, we have generated no revenues from any business operations.

Please read this Quarterly Report together with our other Quarterly Reports and our Annual Report for the year ended December 31, 1999 referenced above. Reference is made to our Annual Report on Form 10-KSB for the year ended December 31, 1999 and the Risk Factors discussed under Item 1, Description of Business.

Results of Operations

During the three and six month periods ended June 30, 2000 we had no business operations. We also had no revenues from continuing operations during the three and six month periods ended June 30, 1999. We report no net income for the three-month period ended June 30, 2000, which is the result of no business activities during this quarter. For the three month period ended June 30, 1999 we had a net loss of $240,335 or $(.12) per share, which is principally attributable to a charge of $240,335 from discontinued health care operations. During the three and six month periods ended June 30, 2000 and 1999, we had no expenses.

At June 30, 2000, our only asset was available-for-sale securities valued $32,850. The same securities were valued $46,875 at December 31, 1999. At June 30, 2000 and December 31, 1999 we had no liabilities. The change in stockholders’ equity is attributable to an unrealized loss in our available-for-sale securities.

We also had no new borrowings or other source of funding of any kind during the period ended June 30, 2000.

Through the quarter ended June 30, 2000 and December 31, 1999 we had an accumulated deficit of $137,143 and $123,118 respectively, net of comprehensive losses.

During the period ended June 30, 2000 we did not identified any source of continued funding and have no ongoing operations. There can be no assurance that we will be able to fund any expenses until we find and negotiate a new business opportunity, if ever.

As disclosed in our Form 10-SB/12g/A filed with the SEC on November 30, 2000, we have experienced a change in management which followed the March 30, 2000 period. Our sole officer and director has pad on behalf of the Company a total of $12,500 from about July 1, 2000 through November 30, 2000 to pay accounting fees for the purpose of enabling the us to become current under the reporting obligations of the Exchange Act. There is no formal agreement or arrangement with such officer-director to provide any continued funding and there is no arrangement that has been determined as of the date of filing this Quarterly Report for the payment of the legal fees or other expenses related to preparing and filing our Reports under the Exchange Act. We hope to be able to negotiate to pay any legal and other fees, excluding accounting fees, with the issuance of stock at some future date although there can be no assurance of the amount of shares or whether the terms and conditions of issuance will be acceptable to us. In all likelihood the amount of such legal fees and other expenses will not be determined until such time as we negotiate a business combination.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 2. Changes in Security

None

Item 3. Default Upon Senior Securities

None

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

None

Item 5. Other Information

We are filing this Quarterly Report for the three-month period ended June 30, 2000. However, as discussed under Part I, Item 2, "Management's Plan of Operation" above, we are also filing our Annual Report for our year ended December 31, 1999 at about the same time as we are filing this Quarterly Report. Our financial statements for the year ended December 31, 1999 and 1998 were audited by Grassano Accounting, P.A.. During the two most recent fiscal years, there was a change in independent accountants. The financial statements used in our Registration Statement Form 10-SB/12g filed on August 18, 1999 were audited by J.H. Cohn L.L.P., New Jersey, another accounting firm which we understand resigned or declined to stand for re-election. The financial statements contained in our Form 10-SB/12g/A filed with the SEC on November 30, 2000 were audited by Grassano Accounting, P.A. There was no adverse opinion, disclaimer of opinion, or was modified as to uncertainty, audit scope or accounting principles. There was no disagreement with the former accountant, whether or not resolved, on any matter of accounting principles or practices, financial statement disclosure, which would have caused it to make reference to the subject matter of the disagreement(s) in connection with its reports. Further, the decision to change accountants was recommended by our board of directors, and was the result of our cessation of business operations and change in control.

Item 6. Exhibits and Reports on Form 8-K

During the quarter ended June 30, 2000 the Company did not file any Reports on Form 8-K.

In accordance with Section 13 or 15(d) of the Exchange Act, the small business issuer has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.