U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB


(Mark One)

     [X]  Quarterly  report  pursuant  to Section 13 or 15(d) of the  Securities
          Exchange Act of 1934

          For the quarterly period ended March 31, 2001

          [ ]  Transition  report  pursuant  to  Section  13  or  15(d)  of  the
               Securities Exchange Act of 1934

          For the transition period from _______________ to _______________

                         Commission File Number: 0-24431

                                 LIL MARC, INC.
        (Exact Name of Small Business Issuer as Specified in Its Charter)

               Nevada                                            84-1417774
(State or Other Jurisdiction of                               (I.R.S. Employer
     Incorporation or Organization)                          Identification No.)

 830 Third Avenue, New York, New York                               10022
(Address of Principal Executive Offices)                          (Zip Code)

                                  212-829-5800
                (Issuer's Telephone Number, Including Area Code)

--------------------------------------------------------------------------------
   (Former Name, Former Address and Former Fiscal Year, if Changed Since Last
                                     Report)

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act 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  Registrant's  Common Stock,  $.01 par
value per share, as of May 9, 2001, was 2,668,666 shares.

Transitional Small Business Disclosure Format (check one):

Yes               No  X
   -----            -----

<PAGE>

                                 LIL MARC, INC.

                              INDEX TO FORM 10-QSB

                                                                           PAGE

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements                                                 3

        Balance Sheets as of March 31, 2001 (Unaudited)                      3
           and December 31, 2000

        Statements of Operations (Unaudited) for the                         4
           Three Months Ended March 31, 2001 and 2000
           and from Inception through March 31, 2001

        Statements of Stockholders' Equity from Inception                    5
           through March 31, 2001

        Statements of Cash Flows (Unaudited) for the                         7
          Three Months Ended March 31, 2001and 2000 and
          and from Inception through March 31, 2001

        Notes to Financial Statements                                        9

Item 2. Management's Discussion and Analysis or Plan of Operation           12


PART II. OTHER INFORMATION                                                  14

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

SIGNATURES                                                                  15


<PAGE>

                          PART I. FINANCIAL INFORMATION


Item 1. Financial Statements




                                       3

<PAGE>


                                 LIL MARC, INC.
                          (A Development Stage Company)


                              FINANCIAL STATEMENTS

                                 MARCH 31, 2001



<PAGE>


                                                                          Page 1


                                 LIL MARC, INC.
                          (A Development Stage Company)

                                 BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                            March 31,           December 31,
                                                                              2001                  2000
                                                                         -------------       ---------------
                                          A S S E T S                     (Unaudited)

<S>                                                                         <C>                    <C>
Current assets:
   Cash and cash equivalents                                                $ 242,323              $ 245,542
                                                                            ---------              ---------

             Total current assets                                           $ 242,323              $ 245,542
                                                                            =========              =========


             LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                                         $  10,847              $   1,117
                                                                            ---------              ---------

             Total current liabilities                                         10,847                  1,117
                                                                            ---------              ---------

Stockholders' equity:
   Common stock, $0.01 par value; 5,000,000 shares
     authorized; 2,668,666 shares issued and outstanding                       26,686                 26,686
   Additional paid-in capital                                                 267,671                267,671
   Accumulated deficit during the development stage                           (62,881)               (49,932)
                                                                            ---------              ---------
                                                                              231,476                244,425
                                                                            ---------              ---------

                                                                            $ 242,323              $ 245,542
                                                                            =========              =========
</TABLE>



                See accompanying notes to financial statements.


<PAGE>


                                                                          Page 2
                                 LIL MARC, INC.
                          (A Development Stage Company)

                            STATEMENTS OF OPERATIONS

                                   (UNAUDITED)



                                                                Period
                                  Three months ended       April 22, 1997
                                      March 31,            (inception) to
                           ------------------------------      March 31,
                              2 0 0 1           2 0 0 0        2 0 0 1
                           ----------------------------------------------

 Sales                          $      --      $      --      $    346

Cost of sales                          --             --          --
                                -----------    -----------    --------

Gross margin                           --             --           346
                                -----------    -----------    --------

Operating expenses:
   General and administrative        16,351         10,801      77,012
   Amortization                        --            1,433      17,191
                                -----------    -----------    --------
                                     16,351         12,234      94,203
                                -----------    -----------    --------

Loss from operations                (16,351)       (12,234)    (93,857)
                                -----------    -----------    --------

Other income (expense):
   Gain on sale of subsidiary          --             --        21,132
   Interest expense                    --             --          (900)
   Interest income                    3,402           --        10,744
                                -----------    -----------    --------
                                      3,402           --        30,976
                                -----------    -----------    --------

Net loss                        $   (12,949)   $   (12,234)   $(62,881)
                                ===========    ===========    ========

Net loss per common share       $       .00    $      (.01)
                                ===========    ===========

Weighted average number of
  shares outstanding              2,668,666      1,768,666
                                ===========    ===========


                See accompanying notes to financial statements.


<PAGE>


                                                                          Page 3
                                 LIL MARC, INC.
                          (A Development Stage Company)
                       STATEMENTS OF STOCKHOLDERS' EQUITY
                  THREE MONTHS ENDED MARCH 31, 2001 AND PERIOD
            APRIL 22, 1997 (INCEPTION) TO MARCH 31, 2001 (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                Accumulated
                                                                                                  deficit
                                                                                  Additional     during the          Total
                                                       Common stock                 paid-in      development      stockholders'
                                                  Shares           Amount           capital        stage              equity
                                                ------------ ---------------- ---------------- ---------------   --------------

<S>                                             <C>               <C>             <C>              <C>             <C>
Balance, April 22, 1997                               --          $   --          $    --          $   --          $    --

Common stock issued for cash
  at $0.00 per share                               666,666           6,666           (1,666)           --              5,000
Issuance of shares to acquire patent
  rights recorded at predecessor cost
  of $0.00 per share                               400,000           4,000           (1,000)           --              3,000
Issuance of 540,000 shares of
  common stock at $0.10 per share                  540,000           5,400           48,600            --             54,000
Stock offering costs                                  --              --             (8,843)           --             (8,843)
Net loss, December 31, 1997                           --              --               --            (9,251)          (9,251)
                                                ----------        --------        ---------        --------        ---------

Balance, December 31, 1997                       1,606,666          16,066           37,091          (9,251)          43,906

Issuance of 75,000 shares of
  common stock at $0.10 per share                   75,000             750            6,750            --              7,500
Net loss, December 31, 1998                           --              --               --           (21,560)         (21,560)
                                                ----------        --------        ---------        --------        ---------

Balance, December 31, 1998                       1,681,666          16,816           43,841         (30,811)          29,846

Issuance of 87,000 shares of
  common stock at $0.10 per share                   87,000             870            7,830            --              8,700
Net loss, December 31, 1999                           --              --               --           (21,166)         (21,166)
                                                ----------        --------        ---------        --------        ---------

Balance, December 31, 1999                       1,768,666          17,686           51,671         (51,977)          17,380

Cancellation of treasury stock                    (100,000)         (1,000)         (24,000)           --            (25,000)
Common stock issued for cash at
  $0.25 per share                                1,000,000          10,000          240,000            --            250,000
Net income, December 31, 2000                         --              --               --             2,045            2,045
                                                ----------        --------        ---------        --------        ---------

Balance, December 31, 2000                       2,668,666          26,686          267,671         (49,932)         244,425

Net loss, three months ended
  March 31, 2001                                      --              --               --           (12,949)         (12,949)
                                                ----------        --------        ---------        --------        ---------

Balance, March 31, 2001                          2,668,666        $ 26,686        $ 267,671        $(62,881)       $ 231,476
                                                ==========        ========        =========        ========        =========
</TABLE>


                See accompanying notes to financial statements.


<PAGE>


                                                                          Page 4
                                 LIL MARC, INC.
                          (A Development Stage Company)

                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                                    Period
                                                                                                                April 22, 1997
                                                                                     Three months ended         (inception) to
                                                                                          March 31,                 March 31,
                                                                                   2 0 0 1          2 0 0 0         2 0 0 1
                                                                               -------------     ------------     ------------

<S>                                                                               <C>              <C>             <C>
Cash flows from operating activities:
   Net loss                                                                       $ (12,949)       $(12,234)       $ (62,881)
   Adjustments to reconcile net loss to
    net cash used by operating activities:
      Amortization                                                                     --             1,433           17,191
      Gain on sale of subsidiary                                                       --              --            (21,132)
      Common stock issued for services                                                 --              --              8,700
      Changes in assets and liabilities:
        Increase in accounts payable and
          accrued expenses                                                            9,730           7,200           19,547
                                                                                  ---------        --------        ---------
             Net cash used by operating activities                                   (3,219)         (3,601)         (38,575)
                                                                                  ---------        --------        ---------

Cash flows used by investing activities:
   Cash included pursuant to sale of subsidiary                                        --              --             (1,109)
Purchase of patent rights                                                              --              --            (28,650)
                                                                                  ---------        --------        ---------
             Net cash used by investing activities                                     --              --            (29,759)
                                                                                  ---------        --------        ---------

Cash flows from financing activities:
   Stock offering costs                                                                --              --             (5,843)
   Common stock issued for cash                                                        --              --            316,500
                                                                                  ---------        --------        ---------
             Net cash provided by financing activities                                 --              --            310,657
                                                                                  ---------        --------        ---------

Net increase (decrease) in cash and cash equivalents                                 (3,219)         (3,601)         242,323
Cash and cash equivalents, beginning of period                                      245,542           5,988             --
                                                                                  ---------        --------        ---------

Cash and cash equivalents, end of period                                          $ 242,323        $  2,387        $ 242,323
                                                                                  =========        ========        =========

Supplemental cash flow information: Cash paid during the period for:
      Interest                                                                    $    --          $   --          $    --
      Income taxes                                                                      555            --                655
Noncash financing activities:
   Patent rights and deferred interest acquired for
     common stock and assumption of note payable                                  $    --          $   --          $  30,000
</TABLE>


                See accompanying notes to financial statements.


<PAGE>


                                                                          Page 5


                                 LIL MARC, INC.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                             MARCH 31, 2001 AND 2000




1.      The Company and basis of presentation:

        The financial  statements  presented herein as of March 31, 2001 and for
        the three  months ended March 31, 2001 and 2000 and the period April 22,
        1997  (inception) to March 31, 2001 are unaudited and, in the opinion of
        management,  include  all  adjustments  (consisting  only of normal  and
        recurring  adjustments)  necessary for a fair  presentation of financial
        position and results of  operations.  Such  financial  statements do not
        include  all  of  the  information  and  footnote  disclosures  normally
        included in audited  financial  statements  prepared in accordance  with
        generally accepted  accounting  principles.  The accompanying  unaudited
        financial   statements   have  been  prepared  in  accordance  with  the
        instructions  to Form 10-QSB.  The results of  operations  for the three
        months  ended  March  31,  2001 are not  necessarily  indicative  of the
        results  that may be expected for any other  interim  period or the full
        year ending December 31, 2001.


2.      Net loss per common share:

        Net loss per common  share for the three months ended March 31, 2001 and
        2000 is based on  2,668,666  and  1,768,666,  respectively,  of weighted
        average common shares outstanding.




<PAGE>


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


        This document  includes  statements that may constitute  forward-looking
        statements  made  pursuant to the Safe Harbor  provisions of the Private
        Securities  Litigation  Reform Act of 1995.  The  Company  would like to
        caution readers  regarding  certain  forward-looking  statements in this
        document and in all of its  communications  to shareholders  and others,
        press  releases,  securities  filings,  and  all  other  communications.
        Statements  that are based on  management's  projections,  estimates and
        assumptions  are  forward-looking   statements.   The  words  "believe,"
        "expect,"  "anticipate,"  "intend,"  and similar  expressions  generally
        identify forward-looking  statements.  While the Company believes in the
        veracity of all statements made herein,  forward-looking  statements are
        necessarily based upon a number of estimates and assumptions that, while
        considered   reasonable  by  the  Company,  are  inherently  subject  to
        significant  business,   economic  and  competitive   uncertainties  and
        contingencies and known and unknown risks. Many of the uncertainties and
        contingencies  can affect  events and the Company's  actual  results and
        could cause its actual results to differ materially from those expressed
        in any forward-looking statements made by, or on behalf of, the Company.


        The following discussion and analysis should be read in conjunction with
the  financial  statements  and related  notes thereto which are included in the
Company's  Annual  Report on Form 10-KSB for the fiscal year ended  December 31,
2000 filed with the Securities and Exchange Commission.

        Pursuant  to a Stock  Purchase  Agreement  dated as of May 19, 2000 (the
"Purchase Agreement") by and among ComVest Capital Partners, LLC ("ComVest") and
the Company,  George I. Norman III, Laurie J. Norman,  Alewine Limited Liability
Company ("Alewine"), and Linda Bryson (the latter four parties, collectively the
"Sellers"),  on May 25, 2000 (the "Closing Date"),  ComVest purchased  1,194,166
shares of the common stock of the Company (the "Common  Stock") from the Sellers
for an  aggregate  purchase  price of  $315,000.  Also  pursuant to the Purchase
Agreement,  ComVest purchased from the Company,  for an aggregate purchase price
of  $250,000,  (i)  1,000,000  newly  issued  shares of Common  Stock and (ii) a
warrant (the  "Warrant")  to purchase an additional  3,000,000  shares of Common
Stock.  The Warrant is exercisable  until November 25, 2001 at an exercise price
of $0.25 per share.

        In addition,  on the Closing Date,  all of the officers and directors of
the  Company  resigned  and  ComVest's  designees,  Joseph  P.  Wynne  and Basil
Asciutto,  were elected sole directors and officers.  On January 26, 2001, Basil
Asciutto resigned as President and director and was replaced in those capacities
by David Boris.

        Subsequent  to the  Closing  Date,  pursuant  to a stock sale  agreement
between  the  Company  and  Alewine,  the  Company  sold all of the  issued  and
outstanding capital stock of its wholly-owned subsidiary, LILM, Inc., to Alewine
in exchange for 100,000  shares of Common  Stock,  which  100,000  shares became
treasury stock.

        As a result of such transactions, the Company has no further interest in
its former business (the development, manufacture, and marketing of the Lil Marc
training urinal). From



                                       12
<PAGE>

and after  consummation of those  transactions,  the Company's plan of operation
has been to merge or effect a business  combination  with a domestic  or foreign
private operating entity.  Management believes that there are perceived benefits
to being a "reporting company" with a class of publicly-traded  securities which
may be  attractive  to private  entities.  Other  than  activities  relating  to
attempting to locate such a candidate, the Company does not currently anticipate
conducting any operations.

        The Company may enter into a definitive agreement with a wide variety of
private businesses  without  limitation as to their industry or revenues.  It is
not possible at this time to predict when, if ever,  the Company will enter into
a  business  combination  with  any such  private  company  or what  will be the
industry, operating history, revenues, future prospects or other characteristics
of any such company. As of the date hereof, the Company is not currently engaged
in negotiations concerning any such business combination.


Liquidity and Capital Resources

        At March 31, 2001, the Company had cash and cash equivalents of $242,323
as  contrasted  to  accounts  payable  of  $10,847.  As  the  Company's  current
operations  are limited to seeking a merger or business  combination  candidate,
the Company believes that its cash and cash equivalents will fund all operations
until any such merger or combination is consummated.

        Although  it does not  currently  plan to do so, the  Company may in the
future raise additional  funds through the sale of its securities.  In addition,
the Company would receive up to $750,000 if ComVest should exercise the Warrant;
however, no assurances can be given that ComVest will exercise such Warrant.




                                       13
<PAGE>


                           PART II. OTHER INFORMATION


Item 6.    Exhibits and Reports on Form 8-K

(a)     No exhibits are being filed with this Report.

(b)     Reports on Form 8-K.

        During the quarter ended March 31, 2001, the Company filed the following
Reports on Form 8-K:

        A Report on Form 8-K and an amended Report on Form 8-K/A,  dated January
        12, 2001, reporting the cessation of the Company's relationship with its
        former auditors, H J & Associates, L.L.C., and the engagement of its new
        auditors, Berenson & Company LLP.

        A Report on Form 8-K dated January 26, 2001,  reporting the  resignation
        of Basil  Asciutto as President and a director and the election of David
        Boris as President and a director.





                                       14
<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.



                                                LIL MARC, INC.



Dated: As of May 14, 2001                   By: /s/ David Boris
                                                -----------------------------
                                                David Boris, President
                                                and a Director
                                                (Principal Executive Officer)



Dated: As of May 14, 2001                   By: /s/ Joseph P. Wynne
                                                -----------------------------
                                                Joseph P. Wynne,
                                                Chief Financial Officer,
                                                Secretary, and a Director
                                                (Principal Financial and
                                                Accounting Officer)





                                       15