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


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

                                   FORM 10-QSB

     [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                      FOR THE QUARTER ENDED August 31, 2000

                                       OR

     [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                         COMMISSION FILE NUMBER 0-22720

                              CYCLO3PSS CORPORATION
           (Name of Small Business Issuer as specified in its charter)

                Delaware                                87-0455642
          -------------------                     ----------------------
    (State or other jurisdiction of                  (I.R.S. Employer
    Incorporation or organization)                    Identification No.)

       3646 West 2100 South
       Salt Lake City, Utah                             84120-1202
     -------------------------                        ---------------
 (Address of principal executive offices)               (Zip Code)

         Issuer's telephone number, including area code: (801) 972-9090
        -----------------------------------------------------------------

    Securities registered pursuant to Section 12(b) of the Exchange Act: None

   Securities registered pursuant to Section 12(g) of the Exchange Act: $.001
                             Par Value Common Stock

     Check whether the Issuer (1) has filed all reports  required to be filed by
Section 13 or 15(d) of the Exchange  Act during the  preceding 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.

     Common Stock  outstanding at October 14, 2000 - 28,404,815  shares of $.001
par value Common Stock.


                      DOCUMENTS INCORPORATED BY REFERENCE: NONE

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



<PAGE>





                                   FORM 10-QSB

                       Financial Statements and Schedules
                              Cyclo3pss Corporation

                     For Three Months Ended August 31, 2000

     The following financial  statements and schedules of the registrant and its
consolidated subsidiaries are submitted herewith:

                         PART I - FINANCIAL INFORMATION

                                                                   Page of
                                                                 Form 10-QSB
                                                                -------------
   Item 1. Financial  Statements

           Condensed Consolidated Balance Sheets.......................3
           Condensed Consolidated Statements of Operations.............5
           Condensed Consolidated Statements of Cash Flow..............7
           Notes to Condensed Consolidated Financial Statements........8

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

                            PART II - OTHER INFORMATION

   Item 1. Legal Proceedings .........................................18

   Item 2. Changes in Securities......................................18

   Item 3. Defaults Upon Senior Securities............................18

   Item 4. Submission of Matters to a Vote of Security Holders........18

   Item 5. Other Information..........................................19

   Item 6. Exhibits...................................................19









                                      - 2 -

<PAGE>






   CYCLO3PSS CORPORATION
   Condensed Consolidated Balance Sheets
-------------------------------------------------------------------------------
   (UNAUDITED)





                                                   August 31      February 29
                                                      2000           2000
                                                  ------------ --------------
  Assets

   Current assets:

      Cash                                          $208,950       $107,565
      Accounts receivable                             61,485         70,723
      Inventories                                     17,930         17,930
      Prepaid expenses                                10,935          5,815
                                                  ------------ --------------
  Total current assets                               299,300        202,033

  Property and equipment, net                        105,436        135,521

  Other assets:
      Acquired patents, net                           54,607         72,807
      Developed patents and other, net                54,581         56,623
                                                  ------------ --------------
                                                    $513,924       $466,984
                                                  ============ ==============







                                      - 3 -

<PAGE>




   CYCLO3PSS CORPORATION
   Condensed Consolidated Balance Sheets (continued)
   (UNAUDITED)
 -----------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                      August 31  February 29
                                                                         2000       2000
                                                                    -------------------------
<S>                                                                  <C>           <C>
   Liabilities and stockholders' equity (deficit)

  Current liabilities:
      Accounts payable                                                 $99,149     $256,955
      Accrued liabilities                                              172,079      449,440
      Note Payable                                                   1,000,000      250,000
      Current portion of capital lease obligations                         834        3,778
      Deferred Revenue                                                 100,000      100,000
                                                                    -------------------------
  Total current liabilities                                          1,372,062    1,060,173


  Commitments and contingencies

   Stockholders' equity (deficit):
    Preferred stock:
      Preferred stock issuable in series: par value $.01,
          4,500,000 authorized:
          Series "A" convertible preferred stock; 356,638
            shares authorized; 356,638 shares issued and
            outstanding                                                   356          356
         Series "B" convertible preferred stock; 30,000
            shares authorized; 795 and 900 shares issued and
            outstanding  at August 31, 2000 and February 29,
            2000, respectively                                              8           9
         Series "C" convertible preferred stock; 550 shares
            authorized; none and 75 shares issued and
           outstanding at August 31, 2000 and February 29,
           2000, respectively                                             ---           1
      Class "A" preferred stock, par value $.01; 500,000
           shares authorized; none issued or outstanding                  ---         ---
      Common stock, par value $.001;  55,000,000 shares                 27,925      25,734
          authorized; shares issued at August 31,
         2000 and 25,226,066 shares issued at February 29               27,925      25,225
      Additional paid-in capital                                    19,404,648  19,028,410
      Accumulated deficit                                          (19,789,530)(19,145,645)
      Less treasury stock, 264,000 common shares at cost              (501,545)   (501,545)
                                                                  -------------------------
      Total stockholders' equity (deficit)                            (858,138)   (593,189)
                                                                  -------------------------
                                                                      $513,924    $466,984
                                                                  =========================
</TABLE>


   See accompanying notes to condensed consolidated financial statements


                                      - 4 -

<PAGE>






   CYCLO3PSS CORPORATION
   Condensed Consolidated Statements of Operations
 -----------------------------------------------------------------------------
   (UNAUDITED)





                                                   For the three months ended
                                                             August 31
                                                        2000           1999
                                                  -------------- --------------

   Net revenues                                       $44,409       $169,203

   Costs and expenses:
      Cost of sales                                   111,222        118,108
      Research and development                         20,389             --
      Selling and marketing                            35,985             --
      General and administrative                      221,651        234,978
      Depreciation and amortization                    25,718         29,896
                                                  -------------- --------------
                Total expenses                        414,965        382,982

  Loss from operations                               (370,556)      (213,779)
   Legal settlement expense                              --         (853,000)
  Interest income                                       1,684              3
  Interest expense                                        (44)          (229)
                                                  -------------- --------------
  Net loss                                           (368,916)    (1,067,005)
   Preferred stock dividends                             --           (8,499)
                                                  -------------- --------------
   Net loss applicable to common stockholders       $(368,916)   $(1,075,504)
                                                  ============== ==============
   Net loss per common share                            $(.01)         $(.06)
                                                  -------------- --------------
    Weighted average number of common shares
        issued and outstanding                     27,159,853     17,779,482
                                                 ============== ==============







   See accompanying notes to condensed consolidated financial statements




                                      - 5 -

<PAGE>







   Condensed Consolidated Statements of Operations
-------------------------------------------------------------------------------
   (UNAUDITED)





                                                     For the six months ended
                                                             August 31
                                                        2000           1999
                                                  -------------- --------------

   Net revenues                                      $225,165       $485,935

   Costs and expenses:
      Cost of sales                                   200,514        248,107
      Research and development                         33,845             --
      Selling and marketing                            65,582             --
      General and administrative                      477,386        321,897
      Depreciation and amortization                    93,767         65,957
                                                  -------------- --------------
                Total expenses                        871,094        635,961

  Loss from operations                               (645,929)      (150,026)
   Legal settlement expense                                --       (853,000)
  Interest income                                       2,175             18
  Interest expense                                       (131)          (577)
                                                  -------------- --------------
  Net loss                                           (643,885)    (1,003,585)
   Preferred stock dividends                               --        (16,998)
                                                 -------------- --------------
   Net loss applicable to common stockholders       $(643,885)   $(1,020,583)
                                                 ============== ==============
   Net loss per common share                            $(.02)         $(.06)
                                                 -------------- --------------
    Weighted average number of common shares
        issued and outstanding                     27,236,575     17,709,482
                                                 ============== ==============












   See accompanying notes to condensed consolidated financial statement


                                      - 6 -

<PAGE>






   CYCLO3PSS CORPORATION
   Condensed Consolidated Statements of Cash Flow
   (UNAUDITED)
------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                   For the six months ended
                                                                           August 31
                                                                     2000            1999
                                                                --------------------------------
<S>                                                              <C>              <C>
  Cash flows from operating activities:
   Net loss                                                       $(643,885)      $(1,003,585)
   Adjustments to reconcile net loss to net cash used in
     operating activities:
          Depreciation and amortization                              93,766            65,957
          Common stock issued for services                          177,060             --
          Common stock issued for legal settlement                    --              853,000
          Changes in operating assets and liabilities:
    Decrease (increase) in accounts receivable                        9,238           (88,677)
    Increase in inventories                                           --               11,868
    Increase in prepaid expense                                      (5,120)           (7,587)
    (Decrease) increase in accounts payable/accrued liabilites     (435,167)           24,606
                                                               --------------------------------
  Net cash used in operating activities                            (804,108)         (144,418)
                                                               --------------------------------

  Cash flows from investing activities:
      Purchase of property and equipment                            (11,713)             (802)
      Addition to developed patents and other                       (31,728)           (9,914)
                                                               --------------------------------
  Net cash used in investing activities                             (43,441)          (10,716)
                                                               --------------------------------
  Cash flows from financing activities:
      Proceeds from issuance of preferred and common stock            --              156,825
      Proceeds from issuance of warrants                            196,000              --
      Proceeds from issuance and exercise of stock options            5,878            18,000
      Proceeds from notes payable                                   750,000              --
      Principal payments under capital lease obligations             (2,944)           (9,425)
                                                               --------------------------------
  Net cash provided by financing activities                         948,934           165,400
                                                               --------------------------------

  Net increase (decrease) in cash                                   101,385            10,266

  Cash at beginning of period                                       107,565            36,018
                                                               --------------------------------

  Cash at end of period                                           $ 208,950           $46,284
                                                               ================================
</TABLE>


  See  accompanying  notes to condensed  consolidated  financial statements.




                                             - 7 -

<PAGE>





   CYCLO3PSS CORPORATION
   Notes to Condensed Consolidated Financial Statements (Unaudited)
------------------------------------------------------------------------------


   1.  Summary of Significant Accounting Policies

   Financial Statements

   The accompanying interim consolidated 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. The balance sheet at February 29, 2000 represents the Company's  audited
   consolidated balance sheet at that date.

   In  the  opinion  of  management,  the  accompanying  condensed  consolidated
   financial  statements contain all normal recurring  adjustments  necessary to
   present fairly the financial position of Cyclo3pss Corporation ("Company") as
   of August 31, 2000,  and the results of its operations and its cash flows for
   the interim  periods ended August 31, 2000 and August 31, 1999. The operating
   results for the interim periods are not necessarily indicative of the results
   for a full year.  These  financial  statements  should be read in conjunction
   with the  Company's  audited  consolidated  financial  statements  and  notes
   thereto  included in the Company's Annual Report to Stockholders for the year
   ended February 29, 2000.

   Organization

   The  Corporation was formed in Delaware in 1927. In 1990, the Corporation was
   reorganized as Cyclo3pss  Medical Systems,  Inc. In 1995, the Company changed
   its name to Cyclo3pss Corporation. The Company is engaged in the manufacture,
   sale and  installation of ozone food processing  products,  ozone washing for
   commercial and institutional laundries, the manufacture and sale of specialty
   compounds and chemicals,  and research and  development of  technologies  for
   sterilization and/or disinfection of medical and some consumer products.

   Principles of Consolidation

   The consolidated financial statements include the accounts of the Company and
   its wholly-owned  subsidiaries.  All  intercompany  balances and transactions
   have been eliminated.

   Inventory

   Inventory  primarily  consists of raw material  related to the  production of
   "VAC" soil laundry counting system.





                                    - 8 -

<PAGE>






   CYCLO3PSS CORPORATION
   Notes to Condensed Consolidated Financial Statements (Unaudited)
 ------------------------------------------------------------------------------

   1.  Summary of Significant Accounting Policies (continued)

   Use of Estimates

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

   Comprehensive Income

   Statement  of Financial  Accounting  Standards  ("SFAS") No. 130,  "Reporting
   Comprehensive  Income",  requires  that all items that are  recognized  under
   accounting  standards as components of comprehensive  income be reported in a
   financial  statement  that is  displayed  with the same  prominence  as other
   financial  statements.  The  items of  other  comprehensive  income  that are
   typically  required to be  displayed  are  foreign  currency  items,  minimum
   pension  liability  adjustments,  and unrealized  gains and losses on certain
   investments in debt and equity securities.  There have been no items of other
   comprehensive income to date.

   2.  Basis of Presentation

   The accompanying  financial  statements have been prepared  assuming that the
   Company will continue as a going concern,  which contemplates the realization
   of assets and  satisfaction  of liabilities in the normal course of business.
   The Company has  sustained  significant  net losses which have resulted in an
   accumulated  deficit at August 31, 2000 of  $19,789,530  and  $19,145,645  at
   February 29, 2000,  and periodic cash flow  difficulties,  all of which raise
   substantial doubt of the Company's ability to continue as a going concern.

   The net loss for the six months  ended  August 31, 2000 was  $643,885 and for
   the year ended  February 29, 2000 was  $1,960,414.  To date,  the Company has
   funded its  operations  through the issuances of common and preferred  stock,
   and a loan as described further.  The Company  anticipates a net loss for the
   year ended  February 28, 2001,  and with a cash balance of $208,950 at August
   31, 2000 and expected cash  requirements  for the year,  there is substantial
   doubt as to the Company's ability to continue operations.

   The Company  believes that these  conditions  have resulted from the inherent
   risks associated with small technology companies. Such risks include, but are
   not limited to, the  ability to (a)  generate  sales of its product at levels
   sufficient to cover its costs and provide a return for investors, (b) attract
   additional  capital in order to  finance  growth,  (c)  further  develop  and
   successfully  market  commercial  products and (d) successfully  compete with
   other  technology  companies  having  financial,   production  and  marketing
   resources significantly greater than those of the Company.


                                    - 9 -

<PAGE>


   CYCLO3PSS CORPORATION
   Notes to Condensed Consolidated Financial Statements (Unaudited)
------------------------------------------------------------------------------


   2.  Basis of Presentation (continued)

   The Company is  attempting  to improve  these  conditions by way of financial
   assistance  through  collaborative   partnering   agreements,   issuances  of
   additional equity, debt arrangements,  and product sales. Management believes
   that  appropriate  funding will be generated  and future  product  sales will
   result from these opportunities and that the Company will continue operations
   through the next fiscal year;  however,  no assurance can be given that sales
   will be generated or that the additional necessary funding will be raised.

   The severe  financial  condition  of the Company was  disclosed  to Procter &
   Gamble  (" P&G")  during  the  last  week of  November  1999.  P&G  responded
   immediately and after conferring with the Company's management negotiated and
   subsequently  entered into a new Letter of Intent on December  10, 1999.  The
   agreement  allowed for two separate  financings  by P&G to the  Company.  The
   first, a Secured Convertible  Promissory Note for $250,000,  was executed and
   funded in  concert  with the  signing of the new Letter of Intent in order to
   relieve the  immediate  and critical cash  requirements  of the Company.  The
   second Secured  Convertible  Promissory Note for $750,000 provides  long-term
   working capital for the Company.  The entire  $1,000,000 loan is secured by a
   first security interest in all of the Company's  Intellectual  Properties and
   will be due and  payable  in full  on the one  year  anniversary  date of its
   execution,  February 1, 2001.  The loan is non interest  bearing,  but in the
   event of a default,  it may  accrue up to 15%  interest.  The loan  agreement
   grants a conversion  right to P&G allowing for the  conversion  of all or any
   part of the outstanding loan,  including all or any part of interest due into
   shares in the Company's  common shares of stock at anytime during the term of
   the loan, and at the sole discretion of P&G, at the average closing bid price
   of the Company's common stock for ten consecutive  business days prior to the
   date of  execution  of the note,  February 2, 2000,  which was  $.27987.  The
   Company  contemplates  engaging in several  diverse  development  and testing
   contracts within various departments of P&G. In addition,  under the terms of
   the  agreement,  P&G will be granted an Exclusive  First Right of Refusal for
   the Licensing of all the current and future technologies of the Company.

   3. Contingencies

   The  Company  is not a party to and  presently  is not  aware of any  pending
   claims or existing litigation.  Previous settled matters are described in the
   Company's Form 10-KSB for the year ended February 29, 2000.

   4. Segment Information

   On March 7, 2000 the  Company  internally  realigned  its  ozone  businesses,
   collapsing  these separate  business  units into a single entity.  During the
   three  months  ended  May 31,  2000 the  Company  operated  in two  principal
   industries; the manufacture,  sale and installation of ozone products ("ozone
   products"); and the manufacture and sale of specialty chemicals ("biochemical
   products").

   Operating profit is total revenue less operating expenses, excluding interest
   expense and general corporate expenses. Corporate assets consist primarily of
   cash and cash equivalents, other receivables,  prepaid expenses, property and
   equipment and corporate payables.


                                    - 10 -

<PAGE>






   CYCLO3PSS CORPORATION
   Notes to Condensed Consolidated Financial Statements (Unaudited)
------------------------------------------------------------------------------

   4. Segment Information (continued)

<TABLE>
<CAPTION>
                                  For three months ended         For six months ended
                                 Aug 31, 2000  Aug 31, 1999   Aug 31, 2000  Aug 31, 1999
                                ------------- -------------- ------------- --------------
<S>                             <C>            <C>            <C>           <C>
   Net revenues
     Ozone products             $    6,321     $   39,830     $  82,408     $  248,129
     Biochemical products           38,087        129,373       142,757        237,806
                                ------------- -------------- ------------- --------------

     Total Revenue              $   44,408     $  169,203     $ 225,165     $  485,935
                                ============= ============== ============= ==============

   Operating income (loss)
     Ozone products             $ (114,972)    $ (100,214)    $(142,990)    $  (30,304)
     Biochemical products          (25,091)        44,591        23,944         76,809
                                ------------- -------------- ------------- --------------
     Total operating income(loss) (140,063)       (55,623)     (119,046)        46,505

        Corporate expenses        (230,493)    (1,011,156)     (526,883)    (1,049,531)
        Interest income              1,684              3         2,175             18
        Interest expense               (44)          (229)         (131)          (577)
                                ------------- -------------- ------------- --------------
        Net income (loss)       $ (368,916)   $(1,067,005)   $ (643,885)   $(1,003,585)
                                ============= ============== ============= ==============

   Identifiable assets
        Ozone products                                         $262,345       $387,834
        Biochemical products                                     68,696        152,203

        General corporate assets                                182,883         92,990
                                                             ------------  ------------
        Total assets                                           $513,924       $633,027
                                                             ===========   ============

</TABLE>


   5. Stockholders' Equity

   During the six months ended August 31,  2000,  the Company had the  following
   equity  transactions:  105 Series "B"  preferred  shares  were  redeemed  for
   1,125,618  unrestricted  common shares pursuant to the legal  settlement with
   Mifal Kilta et al. in September of 1999. 75 shares of Series "C"  convertible
   preferred stock were converted into 744,250 shares of common stock. Also some
   "Series A" warrants were  exercised at $.50 each,  and 392,000  common shares
   were  issued for  $196,000  upon the  exercise of 392,000  warrants.  350,000
   shares  were  issued in lieu of cash  payment for  services.  Finally  87,800
   shares were issued in  connection  to some  exercise of stock  options by the
   Company's employees.




                                    - 11 -

<PAGE>




                                PART I - ITEM 2

           MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

   General

   Cyclopss Corporation (the "Company") historically has been engaged in a fully
   integrated  business  model  providing the design,  manufacturing,  assembly,
   sales and installation of ozone application  technologies and processes.  The
   Company's principal technology provides an alternative to address food safety
   concerns and laundry disinfection and processing efficiency. Ozone technology
   is proven to reduce  microbial  counts on food products without the potential
   for the development of immunity or resistance by the organism.  Ozone laundry
   systems enable users to reduce costs  associated with labor,  water,  energy,
   chemical,  textile  replacement  and  wastewater.  The Company  has  recently
   changed  its  business   model  to  include  the  licensing  of   proprietary
   technologies to partners who have resources and infrastructures better suited
   to  successfully  commercialize  certain  of the  Company's  technologies  or
   products.  The Company has entered into a Technology Licensing Agreement with
   Consolidated Stills and Sterilizers of Boston, MA. The agreement licenses the
   ozone medical instrument  sterilization  technology developed and patented by
   the Company for an initial  licensing fee and future  royalties.  The Company
   anticipates  negotiating  like  arrangements  on  other  of  its  proprietary
   technologies when the circumstances are beneficial. Cyclopss will continue to
   engage in all integrated  functions required in the synthesis,  manufacturing
   and marketing of its specialty chemicals.

   Consumers, food producers and processors, both large and small, are searching
   for new  technologies  to address  food  safety and  sterilization  concerns.
   Consumers and food  processors,  who have relied heavily on chlorination  and
   other chemicals to decontaminate  foods and household items, are being forced
   to consider  alternatives to chlorine and other toxic chemicals.  The Company
   believes    that   ozone    products    offer   a   lower   cost   and   more
   environmentally-friendly  and consumer accepted form of  decontamination  and
   sterilization than many other chemical treatments.

   These statements are forward-looking and involve matters which are subject to
   a number of risks and uncertainties that could cause actual results to differ
   materially  from  those  expressed  in or  implied  by such  forward  looking
   statements.  These risks and  uncertainties  include  product  development or
   production  difficulties  or  delays  due to  supply  constraints,  technical
   problems  or other  factors;  technological  changes;  the  effect of global,
   national and regional economic conditions; the impact of competitive products
   and pricing; changes in demand; increases in component prices or other costs;
   and a  number  of other  risks  including  those  identified  by the  Company
   throughout  Form 10- KSB for February 29,  2000,  and other risks  identified
   from time to time in the Company's  filings with the  Securities and Exchange
   Commission,  press releases and other communications.  The Company assumes no
   obligation to update forward-looking statements.


   Results of Operations

   The  Company's  revenues  were  $44,409 for the three months ended August 31,
   2000  compared to $169,203 for the three  months  ended August 31, 1999.  The
   revenues  were  $225,165 for the six months ended August 31, 2000 compared to
   $485,935 for the six months ended August 31, 1999.  This  decrease was mainly
   due to the Company's shift in the use of its employees and resources from


                                    - 12 -

<PAGE>






   the generation of short term revenues,  required to cover operating expenses,
   to research and design  efforts in  developing  long term future  product and
   application royalty receipts as described further. The Company's gross margin
   for the three months ended August 31, 2000 was $(66,813)  compared to $51,095
   for the three  months  ended  August 31,  1999.  The gross margin for the six
   months  ended  August 31, 2000 was $24,651  compared to $237,828  for the six
   months ended August 31, 1999.  This reduction is due to a decrease in product
   sales as described above.  The Company  continues to closely monitor expenses
   to minimize all  unnecessary  operating  costs.  The Company expects to start
   receiving  royalty  payments from the sale of consumer  products as described
   further in this section.

   Research and  development  expenses  increased to $20,389 and $33,845 for the
   three and six months  ended  August 31,  2000,  respectively  from $0 for the
   three and six months  ended  August 31,  1999.  The  Company  eliminated  all
   research and  development  costs during the three and six months ended August
   31,  1999,  due to lack of  necessary  funds for this  function.  The Company
   resumed its  research and  development  efforts in the last quarter of fiscal
   2000 when funds and personnel were available for these activities.

   Selling and marketing expenses increased to $35,985 and $65,582 for the three
   and six months ended August 31, 2000, respectively, from $0 for the three and
   six months ended August 31, 1999. In 1999, the Company  eliminated  marketing
   staff  and  eliminated  all  advertising  in  order  to help  conserve  cash.
   Management  believes  that  it  is  critical  to  periodically   support  and
   supplement  its sales  efforts  through  advertising,  public  relations  and
   trade-show  participation when sufficient funds are available, and started to
   dedicate  limited funds to selling and marketing  expense in the last quarter
   of fiscal 2000.

   General and  administrative  expenses  decreased  to  $221,651  for the three
   months ended August 31, 2000 from  $234,978 for the three months ended August
   31, 1999. General and  administrative  expenses increased to $477,386 for the
   six months  ended  August 31,  2000 from  $321,897  for the six months  ended
   August 31, 1999. The unusually low general and  administrative  expenses last
   year  were  due to a refund  of  $138,875  for  insurance  premiums  that was
   recorded against administrative expenses in the first quarter.  Excluding the
   refund of insurance premiums, the general and administrative expenses for the
   first and second quarter of this year are comparable to the same periods last
   year.  Management  is closely  monitoring  and  controlling  these  expenses.
   However,  management  has  little  control  over  the  escalating  legal  and
   accounting  expenses  related  to  newly  enacted  SEC  requirements  and new
   regulations that are being adopted with increasing regularity. These expenses
   while  burdensome  are crucial to providing and  maintaining a market for the
   Company's securities. These expenses are expected to increase in fiscal 2001,
   with  other  potential   increases  due  to  management  and  human  resource
   requirements for the Company should commercial activities increase,  and more
   funds become available for this use.

   The Company recorded net loss applicable to common stockholders for the three
   months ended August 31, 2000 of $368,916 compared to $1,075,504 for the three
   months ended August 31, 1999. Net loss applicable to common  stockholders for
   the six months ended August 31, 2000 of $643,885  compared to $1,020,583  for
   the six months ended August 31, 1999. The Company recorded $853,000 in August
   1999 legal settlement expenses in connection with the settlement agreement it
   reached with Mifal Klita et al. in September of 1999.  During the period from
   May through August




                                    - 13 -

<PAGE>




   1996,  the Company sold its series B preferred  stock in a private  placement
   offering to certain investors pursuant to the provisions of Regulation S. One
   of these investors,  Mifal Klita, a purported  Canadian  company,  filed suit
   against  the Company  demanding  the  removal of the  restrictive  investment
   legend which the Company caused to be placed on common shares issued pursuant
   to the  conversion  of series B preferred  shares.  The suit was filed in the
   Court of  Chancery  in the  State of  Delaware,  which  ruled in favor of the
   Company on April 8, 1997 and  dismissed  Mifal  Klita's  suit.  Subsequently,
   Mifal Klita  refiled an amended  suit in the  Superior  Court of the State of
   Delaware.  The final settlement  agreement  reached by the parties  involved,
   entitled Mifal Klita to the conversion of the series B preferred  shares into
   unrestricted common stock of the Company plus shares for legal fees and other
   provisions stated in the original  agreement.  The unrestricted  common stock
   will be disbursed monthly over a two year period.

   A toothbrush  and a kitchen  sponge  sanitizer  were  developed  by Otres,  a
   strategic partner, in collaboration with the Company and are the subject of a
   co-marketing agreement with the Crest and Dawn divisions of P&G. The products
   are designed to kill 99.9% of germs found on toothbrushes and kitchen sponges
   using ozone technology,  and they address a growing consumer concern, that of
   reducing the spread of germs and  microorganisms,  such as  streptococci  and
   staphylococci on toothbrushes and e-coli,  salmonella and listeria on kitchen
   sponges.  The Company will receive ongoing royalty  revenues from the sale of
   those  products.  The  products  are expected to be available to the consumer
   market  in  September  2000.  The  OTRES  products,  when  released,  will be
   available for purchase on the Company's website  (www.cyclopss.com),  as well
   as grocery,  appliance  and  hardware  stores,  mass  merchandisers  and drug
   stores.


   Liquidity and Capital Resources

   In December 1999, the Company entered into a Secured  Convertible  Promissory
   Note for $250,000 with P&G. In February 2000,  the Company  received a second
   financing  of a  Secured  Convertible  Promissory  Note  for  $750,000  which
   provides  long-term  working  capital for the  Company.  With  respect to the
   second $750,000 Note, $250,000 in cash was received and recorded in the first
   quarter  ended May 31, 2000.  The balance of $500,000 in cash was received on
   June 19,  2000.  The entire  $1,000,000  loan is secured by a first  security
   interest in all of the Company's Intellectual  Properties and will be due and
   payable in full on the one year anniversary  date of its execution,  February
   1, 2001. The loan agreement grants a conversion right to P&G allowing for the
   conversion of all or any part of the outstanding  loan,  including all or any
   part of interest due, into shares of the Company's  unrestricted common stock
   at anytime during the term of the loan, and at the sole discretion of P&G.

   The Company has, and continues to engage in several  diverse  development and
   testing contracts within various  departments of P&G. In addition,  under the
   terms of the  agreement,  P&G will be granted  an  Exclusive  First  Right of
   Refusal for the licensing of all the current and future  technologies  of the
   Company.  There are no assurances that cash received from these  arrangements
   will be sufficient to meet the Company's operating needs through February 28,
   2001.

   Cash used in  operating  activities  was  $804,105  for the six months  ended
   August 31,  2000  compared to $144,418  for the six months  ended  August 31,
   1999.  A large  portion of this  increase  was due to the Company  paying off
   accrued  liabilities  and  extremely  aged  accounts  payables  that had been
   accumulating  for a  substantial  amount  of time.  There was a  decrease  of
   $435,167 in accounts payable and accrued liabilities for the six months ended
   August 31, 2000  compared to an increase of $24,606 for the same accounts for
   the six months ended August 31, 1999.


                                    - 14 -

<PAGE>






   Cash expenditures for property,  equipment and developed patents were $43,441
   for the six months  ended  August 31,  2000  compared  to $10,716 for the six
   months  ended  August 31, 1999.  This  increase was due  primarily to Company
   updating, maintaining and filing new patents.

   Net cash provided by financing activities for the six months ended August 31,
   2000 was  $948,934,  $196,000 of this total was received from the exercise of
   certain  "Series A" warrants  in  connection  with an  offering of  1,000,000
   "Series A"  preferred  shares  made in October of  1997.These  warrants  were
   exercisable  at $.50 each, and 392,000 common shares were issued for $196,000
   upon the exercise of the same number of warrants.  $750,000 was received from
   P&G during this period as part of the loan described  earlier.  Cash provided
   by  financing  activities  for the six  months  ended  August  31,  1999  was
   $165,400,  due mainly to  issuance  of 157  shares of  "Series  C"  preferred
   shares.

   Total  assets  increased  to $513,924 at August 31, 2000 from  $466,984 as of
   February 29, 2000. This increase was mainly due to increase in cash, slightly
   offset by increase in amortization and depreciation of assets.

   Total  current  liabilities  increased to  $1,372,062 at August 31, 2000 from
   $1,060,173 at February 29, 2000,  mainly due to the increase in Notes payable
   from  $250,000 to  $1,000,000,  offset by a decrease  in accounts  payable of
   $157,806 and a decrease in accrued liabilities of $277,361.

   Plan of Operation

   Under the Company's new plan of operations and revised  operations  strategy,
   it will no longer  attempt to act as a  manufacturer  of  products  using the
   Company's  technology.  Instead,  the Company intends to act as a provider of
   specialized and proprietary  technologies to others.  The Company will direct
   efforts  toward the creation of technology  bridges for other  companies that
   will in turn use the Cyclopss technologies to develop new products, processes
   and services.  The Company envisions that it will be able to create strategic
   alliances,   joint  ventures  and  other  partnerships  with   manufacturers,
   equipment  suppliers,  and  manufacturers  and  suppliers of  disposable  and
   consumable products to utilize the Company's proprietary technologies under a
   variety of licensing  and royalty  structures.  This new business  model will
   permit the Company to better commercialize its technology,  without having to
   take  on  the  significant   cost  of  developing   individual   products  or
   manufacturing  processes.  Revenues  will  be  derived  through  royalty  and
   licensing  arrangements from the  commercialization of the Company's products
   as well as research and development  efforts and services performed on behalf
   of others. This model will allow the Company to more efficiently utilized its
   limited resources and provide a more effective means of  commercializing  its
   significant technology.

   The Company sold an EcoWash  ozone laundry  system to the US Navy,  which was
   shipped  in  September  of  2000,  and  is not  recorded  in  this  financial
   statement.  Also, the Company has entered into an exclusive relationship with
   Alliance  Laundry to jointly  furnish  Eco-Wash ozone laundry  systems to the
   Navy.  The Company  anticipates  the  manufacturing  activity will become the
   function of Alliance or some other contract  manufacturer  as demand from the
   Navy  dictates.  The Company and Alliance are  currently  in  discussions  in
   regards to co-venturing other commercial laundry




                                    - 15 -

<PAGE>




   markets  other  than  the  Navy.  The  Company  continues  to  seek  industry
   participants  for design and  development  work  required in modifying  their
   existing   products  to  accommodate  the   incorporation  of  the  Company's
   proprietary technologies. This model allows the Company to keep the number of
   employees limited to specific requirements of the technology application, and
   converts the Company into a technology purveyor.

   This  business  model is  illustrated  by the current  business  relationship
   between the Company,  P&G and Otres,  Inc. Cyclopss had established a working
   relationship  with P&G  early  in  1999.  In May of  1999,  the  Company  was
   approached  by the  principals  of Otres to  assist  in the  development  and
   validation of a toothbrush sanitizer and a kitchen sponge sanitizer utilizing
   ozone.  The  management of the Company  determined  the products  could be of
   great interest to P&G and, after having appropriate confidentiality documents
   executed, Otres agreed to allow the Company to introduce the product concepts
   to P&G. P&G  determined  they had products  that would lend  themselves  to a
   co-marketing  relationship  with the Otres  appliances as long as the product
   development was responsibly  executed and the technology  application  proved
   safe and  effective.  Both  Otres  and P&G  engaged  the  Company  for  these
   activities.  The Company  manages the  relationship  with P&G for Otres under
   contract, and contributed to the execution of co-marketing agreements between
   Otres and CREST(R) for the  toothbrush  sanitizer,  and Otres and DAWN(R) for
   the kitchen sponge  sanitizer that were announced at the  International  Home
   Appliance  Show in Chicago on January 16,  2000.  The Company  negotiated  to
   receive an ongoing royalty from the sale of these appliances,  which provides
   the potential for significant future revenues with minimal related costs.

   To better  provide  the  personnel  required  under this  business  model the
   Company  moved its  Research  and  Development  activities  to New  Mexico in
   February 2000. The Company maintains a limited  administrative staff, and its
   Biochemical division in its current offices in Salt Lake City, Utah.

   The Company  anticipates its revenues as well as the source of those revenues
   to change  significantly  through  establishment  of these types of strategic
   alliance relationships. However, there can be no assurance that the financing
   as completed  with P&G will be  sufficient  to offset cash  demands,  nor can
   there be any assurance that any of the Company's products will be accepted in
   such numbers as to make the royalty revenues  significant enough to cover the
   cost of operation.

   Even with  sufficient  funds  available,  the  ongoing  challenge  facing the
   Company is that of educating potential partners, government, industry and the
   end  consumer  about the  benefits of ozone.  Ozone is a  naturally-occurring
   phenomenon that is usually  associated with  photochemical smog or an eroding
   level of protection in our atmosphere.  It is the Company's intent to provide
   this education and show the beneficial  side of ozone-  decontamination.  For
   industry, ozone is a cost competitive and environmentally-friendly  answer to
   microbial contaminates.  For the consumer, ozone kills harmful microorganisms
   quickly and leaves behind no chemical residue.

   The Biochem  products  will  continue to be driven by customer  requests  and
   increased sales will be derived from contract  product  development.  Current
   sales  activities  will be evaluated and  alternatives  looked for to improve
   profit  margins.  Joint efforts will continue  with Foster  Miller,  Inc., in
   order to create a market for Biochem's monomer to the aerospace industry.

   The information  set forth herein as to anticipated  research and development
   costs,  equipment  purchases and increase in employees are management's  best
   estimates  based upon current plans.  Actual  expenditures  may be greater or
   less than such estimates depending on many factors


                                    - 16 -

<PAGE>






   including,  but not  limited to the  availability  of new  technologies,  the
   completion  or lack of  completion of certain  strategic  alliances,  and the
   timing and  successful  completion of the  Company's  stated  requirement  to
   acquire  additional  operating  and  growth  capital,  industry  initiatives,
   success of the Company's research and development efforts, and other factors.

   From  time to  time,  the  Company  may  publish  forward-looking  statements
   relating  to such  matters as  anticipated  financial  performance,  business
   prospects, technological developments, new products, research and development
   activities and similar matters. The private Securities  litigation Reform Act
   of 1995 provides a safe harbor for forward  looking  statements.  In order to
   comply with the terms of the safe harbor, the Company notes that a variety of
   factors could cause the  Company's  actual  results and  experience to differ
   materially from the anticipated  results or other  expectations  expressed in
   the Company's forward looking  statements.  The risks and uncertainties  that
   may  affect  the  operations,  performance,  development  and  results of the
   Company's business include, but are not limited to, the following:

1.   Market acceptance of the Company's products;

2.   Obtaining  sufficient  additional  operating capital in the form of debt or
     equity;

3.   The existence of an orderly market in the Company's securities;

4.   Increased sales of the various products of the Company;

5.   Continued success in the Company's research and development activities; and

6.   Successful completion of strategic alliances.



                          PART II - OTHER INFORMATION

      Item 1.     Legal Proceedings.None

      Item 2.     Changes in Securities.  None.

      Item 3.     Defaults Upon Senior SecuritieNone.

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

      Item 5.     Other Information.

      Item        6(a).  Exhibits and Reports on Form S-8. To register Executive
                  Employee Stock Option Agreements, register shares for director
                  fees, legal and consulting fees.

                  6(b). Exhibits and Reports on Form S-3. To register 3,573,024
                  shares of  Common  stock  that  may be  used  by P&G in  lieu
                  of cash repayment  of the  $1,000,000  Promissary  Note  as
                  described above.







                                    - 17 -

<PAGE>



                                   SIGNATURES

   In accordance with the  requirements of the Securities  Exchange Act of 1934,
   as amended,  the Registrant  caused this report to be signed on its behalf by
   the undersigned, thereunto duly authorized.



                                          CYCLO3PSS CORPORATION


   Date: October 16, 2000                   By  /s/ William R. Stoddard
                                          ----------------------------------
                                               William R. Stoddard
                                               Chief Executive Officer
                                               Principal Executive Officer



   Date: October 16, 2000                   By /s/ Mondis Nkoy
                                          ----------------------------------
                                               Mondis Nkoy
                                               Controller, Corporate Secretary
                                               Principal Financial Officer