SECURITIES AND EXCHANGE COMMISSION

                      Washington, D.C. 20549

                           FORM 10-QSB
            Quarterly Report Under Section 13 or 15(d)
              of the Securities Exchange Act of 1934

          For the quarterly period ended September 30, 1999
                 Commission file number 000-23955

                COMPUTERIZED THERMAL IMAGING, INC.
 ________________________________________________________________
(Exact name of small business issuer as specified in its charter)

        Nevada                                       87-0458721
    ____________________________           ________________________________
  (State or other jurisdiction of       (IRS Employer Identification Number)
   incorporation or organization)

              476 HERITAGE PARK BOULEVARD, SUITE 210
                          LAYTON, UTAH 84041
              ______________________________________
             (Address of principal executive offices)


                          (801) 776-4700
         ________________________________________________
         (Issuer's telephone number, including area code)


     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) Yes [ X ] No [   ], and (2) has been subject to such filing
requirements for the past 90 days. Yes [X ]   No [  ]

              APPLICABLE ONLY TO CORPORATE ISSUERS:

     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:

     As of September 30, 1999, the issuer had outstanding 65,032,837 shares of
its Common Stock, $0.001 par value.

                                1
<PAGE>

                  PART I - FINANCIAL INFORMATION

Item 1.     Financial Statements.

     The unaudited financial statements of Computerized Thermal Imaging, Inc.,
a Nevada corporation (the "Company"), as of September 30, 1999, were prepared
by Management and commence on the following page. In the opinion of Management
the financial statements fairly present the financial condition of the
Company.




                COMPUTERIZED THERMAL IMAGING, INC.
                  (A Development Stage Company)

                Consolidated Financial Statements

                        September 30, 1999

                           (Unaudited)


<PAGE> 2

               COMPUTERIZED THERMAL IMAGING, INC.
                 (A Development Stage Company)
                  Consolidated Balance Sheet


                                            September 30,       June 30,
                                                1999              1999
                                           -------------   ---------------
                                             (Unaudited)
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                 $    270,938    $       137,162
                                             -------------   ----------------
   Total Current Assets                          270,938            137,162

PROPERTY AND EQUIPMENT:
  Office equipment and furnishings               285,206            219,998
  Computer equipment                             165,908            159,615
  Accumulated depreciation                      (157,275)          (140,970)
                                             -------------   ----------------
   Total Property and Equipment                  293,839            238,643

      TOTAL ASSETS                          $    564,777    $       375,805
                                            =============   ================

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
  Accounts payable                          $    210,609    $       470,870
  Advances from affiliates                        25,641                  -
  Accrued liabilities                             82,668             64,644
                                            -------------   ----------------
    Total Current Liabilities                    318,918            535,514

STOCKHOLDERS' EQUITY (DEFICIT):
  Convertible preferred stock, $5.00 par
    value, 100,000 shares authorized                   -                  -
  Common stock, $.001 par value; authorized
    100,000,000 shares, issued and outstanding
    65,032,837 on September 30, 1999,
    62,275,560 on June 30, 1999                   65,033             62,276
  Additional paid-in capital                  26,994,399         25,486,825
  Accumulated deficit during the development
    stage                                    (26,813,573)       (25,708,810)
                                           --------------    ----------------
    Total Stockholders' Equity (Deficit)         245,859           (159,709)
                                           --------------    ----------------
       TOTAL LIABILITIES AND STOCKHOLDERS'
        EQUITY (DEFICIT)                   $     564,777      $     375,805
                                          ==============    ================

 The accompanying selected notes are an integral part of these
       consolidated financial statements.

                                3
<PAGE>

               COMPUTERIZED THERMAL IMAGING, INC.
                 (A Development Stage Company)
               Consolidated Statements of Operations
                           (Unaudited)
                                                                    From
                                                                 Inception on
                                  Three Months   Three Months    June 10, 1987
                                      Ended          Ended          through
                                   September 30,  September 30,  September 30,
                                       1999           1998           1999
                                   -------------  -------------  -------------
REVENUES

 Interest income                   $      1,493   $        733   $     27,500
 Income from sale of prototype                -              -        180,815
                                   -------------  -------------  -------------
   Total Revenues                         1,493            733        208,315
                                   -------------  -------------  -------------
COSTS AND EXPENSES

 Operating, general and
   administrative expenses              410,579        400,540     16,704,889
 Research and development costs         695,677        636,967      7,727,923
 Interest expense                            -         168,489      2,140,333
 Litigation settlement                       -              -         514,380
                                   -------------  -------------  -------------
   Total Costs and Expenses           1,106,256      1,205,996     27,087,525
                                   -------------  -------------  -------------
LOSS BEFORE EXTRAORDINARY ITEM       (1,104,763)    (1,205,263)   (26,879,210)

EXTRAORDINARY GAIN ON
 EXTINGUISHMENT OF DEBT                      -              -          65,637
                                   -------------  -------------  -------------
NET LOSS                           $ (1,104,763)  $ (1,205,263)  $(26,813,573)
                                   =============  =============  =============
WEIGHTED AVERAGE COMMON
  SHARES OUTSTANDING                 64,473,681     48,336,957
                                   =============  =============
LOSS PER COMMON SHARE              $      (0.02)  $      (0.02)
                                   =============  =============


              The accompanying selected notes are an integral
              part of these consolidated financial statements

                                4
<PAGE>

                    COMPUTERIZED THERMAL IMAGING, INC.
                     (A Development Stage Company)
                  Consolidated Statements of Cash Flows
                                (Unaudited)
<TABLE>
<CAPTION>

                                               Three Months   Three Months    From Inception
                                                   Ended          Ended       on June 10, 1987
                                               September 30,  September 30,   through September
                                                    1999           1998       30, 1999
                                               -------------   ------------   -------------
<S>                                            <C>             <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

  Net loss                                     $ (1,104,763)   $(1,205,263)   $(26,813,573)
  Adjustments to reconcile net loss
   to net cash used in operating activities:
    Extraordinary gain on debt
     extinguishment                                       -             -          (65,637)
    Depreciation expense                             16,305         11,522         148,619
    Amortization of debt issuance costs
     and discounts                                        -        150,000         937,969
    Common stock issued as compensation
     for services                                    31,873             -        8,943,469
    Common stock issued for interest expense              -             -          423,596
    Common stock issued in settlement of
     litigation                                           -             -          514,380
    Common stock issued for failure to
     complete timely registration                         -             -           82,216
  Changes in operating assets and liabilities:
    Increase (decrease) in accounts payable
     and accrued liabilities                       (242,237)       (22,173)        293,277
                                               -------------   ------------   -------------
       Net Cash Used in Operating Activities     (1,298,822)    (1,065,914)    (15,535,684)

CASH FLOWS USED IN INVESTING ACTIVITIES:

  Sale of assets                                          -              -           4,790
  Fixed asset capital expenditures                  (71,501)          (619)       (447,248)
                                               -------------   ------------   -------------
       Cash Used in Investing Activities            (71,501)          (619)       (442,458)

CASH FLOWS FROM FINANCING ACTIVITIES:

  Common stock issued for cash                    1,478,458              -      11,503,760
  Advances from stockholders                         25,641        596,548       2,346,379
  Proceeds from notes payable and accrued
   interest                                               -        392,614       3,213,132
  Legal fees and interest added to note                   -         82,482         496,599
  Payment of debt issuance costs                          -              -        (133,600)
  Payment of notes and convertible debentures             -        (60,000)     (1,177,190)
                                               -------------   ------------   -------------
      Cash Provided by Financing Activities       1,504,099      1,011,644      16,249,080

NET (DECREASE) INCREASE IN CASH                     133,776        (54,889)        270,938

CASH AT BEGINNING OF PERIOD                         137,162        230,064              -
                                               -------------   ------------   -------------
CASH AT END OF PERIOD                          $    270,938    $   175,175    $    270,938
                                               =============   =============  =============
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING
AND INVESTING ACTIVITIES:
  Common Stock (711,200 shares) returned to
    equity, rescission offer declined                     -        306,873              -
                                               =============   ============   =============
  Cash paid for interest (no income tax paid)  $          -    $         -    $     65,600
                                               =============   =============  =============

The accompanying selected notes are an integral part of these consolidated financial statements.

                                     5
</TABLE>
<PAGE>


                    COMPUTERIZED THERMAL IMAGING, INC.
                      (A Development Stage Company)
           Consolidated Statement of Stockholders' Equity (Deficit)
                 For the Three Months Ended September 30, 1999
                                (Unaudited)
<TABLE>
<CAPTION>

                                                                                     Total
                                  Common      Common    Additional                   Stock-
                                  Stock       Stock     Paid-in        Accumulated   Holders'
                                  Shares      Amount    Capital        Deficit       Equity
                                  ----------  --------- -------------  ------------- ------------
<S>                               <S>         <C>       <C>            <C>           <C>
Balance at July 1,1999            62,275,560  $ 62,276  $ 25,486,825   $(25,708,810) $  (159,709)

Common stock issued for
 cash, at $.55 per share             913,916       914       499,086              -      500,000

Common stock issued for cash,
 net of offering expenses of
 $25,000 at $.54 per share           933,707       934       474,066             -       475,000

Common stock issued for cash,
 net of offering expenses of
 $25,000 at $.60 per share           875,657       875       502,583             -       503,458

Common stock issued to a
 corporation for services             33,997        34        31,839             -        31,873

Net loss for three months
  Ended September 30, 1999                -         -            -       (1,104,763)  (1,104,763)
                                  ----------  --------- -------------  ------------- ------------
 Balance at September 30, 1999    65,032,837  $ 65,033  $26,994,399    $ (26,813,573) $  245,859
                                  ==========  ========= =============  ============= ============


The accompanying selected notes are an integral part of these interim financial statements.

                                     6
</TABLE>
<PAGE>

        COMPUTERIZED THERMAL IMAGING, INC.
         (A Development Stage Company)
       Notes to Consolidated Financial Statements

1.     UNAUDITED FINANCIAL STATEMENTS:

The unaudited consolidated financial statements for the three months ended
September 30, 1999, have been prepared pursuant to the rules and regulations
of the Securities and Exchange Commission (SEC).  Certain information and note
disclosures normally included in annual financial statements prepared in
accordance with generally accepted accounting principles have been omitted
pursuant to those rules and regulations, although the Company believes that
the disclosures made are adequate to make the information presented not
misleading.  In the opinion of management, all adjustments necessary for a
fair presentation of results of operations have been made to the interim
financial statements.  Results of operations for the three-month periods ended
September 30, 1999 and 1998 are not necessarily indicative of results of
operations for the respective full years.

A summary of the Company's significant accounting policies and other
information necessary to understand these consolidated financial statements
for its first quarter ended September 30, 1999, is presented in the Company's
audited financial statements for the years ended June 30, 1999 and 1998.
Accordingly, the Company's audited financial statements, as contained in the
Company's Form 10KSB for its year ended June 30, 1999 should be read in
connection with these financial statements.

                                7
<PAGE>

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

RESULTS OF OPERATIONS

       The Company is a development stage company that is a medical imaging
systems integrator producing a computerized clinical thermal imaging
diagnostic and patient management system (the "CTI System").  Computerized
Thermal Imaging Company, Inc. ("CTICO")(formerly known as Thermal Medical
Imaging, Inc.) is an 80 percent owned subsidiary of the Company that utilizes
the CTI System specially configured as a breast cancer system which is a
non-invasive, non-contact procedure that does not involve breast compression
or exposure to radiation (the "CTICO System").  TRW, Inc. ("TRW") is the
Company's primary systems development vendor.

        FIRST QUARTER ENDED SEPTEMBER 30, 1999 AND 1998. The Company's general
and administrative activities focused on fund raising and support of research
activities which included, primarily, clinical testing of the CTI Breast
Imaging System in the first quarter of this fiscal year, and development
expenses with TRW in the in the first quarter of the 98-99 fiscal year. The
Company incurred a loss of $1,104,763 for the first quarter ended September
30, 1999, as compared to a loss of $1,205,263 for the first quarter ended
September 30, 1998.  The Company had nominal revenues in each period.  General
and administrative expenses increased slightly to $410,579 during the first
quarter of the Company's fiscal year from $400,540 during the first quarter of
the Company's last fiscal year. Legal fees between the two comparable first
quarters, reduced this year by $88,000,  and accounting fees reduced by
approximately $10,000. The reduction in legal and accounting fees was mainly
due to the completion of legal and accounting expenses related to the filing
of the Company's Form SB-2 Registration Statement and the related Prospectus
declared effective on January 8, 1999. Travel related expenses also reduced by
more than $16,000 between the two first quarters and office expenses reduced
by approximately $10,000  mostly due to the fact that the Company did not
renew its lease on its Michigan office space. Consulting and special/
stockholder service fees were up during this year's first fiscal quarter over
the first quarter of last year by over $129,000. This increase is attributable
to expenses related to financial consulting and capital fund raising services.

     Research and development costs increased by approximately $60,000 for
the quarter ended September 30, 1999 over the quarter ended September 30,
1998: from $636,967 to $695,677. A breakdown of actual research and
development expenses demonstrates a shift from research to FDA testing with an
$75,000 increase on FDA testing and consulting over last year's first fiscal
quarter. The Company has expensed all costs associated with its processes and
systems, including software code writings, computer system hardware and
software purchases from third party vendors, material expenses in the
development of the examination table and all payroll related development
expenses throughout the periods presented.

     There were no interest expense in 1999's first quarter due to the
elimination of two notes during the Company's fourth quarter of its last
fiscal year; interest expenses during the first quarter of 1998 were $168,489.
Depreciation expenses during this year's first quarter were $16,304 as opposed
to the first fiscal quarter of the 1998-99 fiscal year when such depreciation
expenses were $11,523.

         The Company funded its losses during the three months ended September
30, 1999 mostly through cash provided by Beach Boulevard LLC as part of the


                                8
<PAGE>

Investment Agreement.  Beach provided approximately $1,478,500 during the
quarter through the purchase of 2,723,280 shares of the Company's common
stock.   Stockholders also provided a minor amount of funding in the amount of
$25,641 in the 1st quarter and the Company issued 33,997 common shares for
services valued at $31,873 to Sitrik & Company.  The Company purchased
upgrades for existing thermal imaging systems along with a new imaging system
for its CTI system in the amount of $71,501; otherwise most of the common
stock purchases went to fund continuing research and development expenditures
and the paydown of accounts payable and accrued liabilities in the amount of
$242,237.  The company ended the 1st quarter with a negative working capital
of $47,980; however, it is current in meeting its payment schedule for
research and development with TRW, Battelle and the various hospitals
conducting clinical studies.

     During the first three  months of last years fiscal year, the Company
satisfied a large part of its cash flow requirement through advances from
stockholders and/or affiliates and notes.  Shareholders advanced approximately
$596,500 during that quarter.  The Company also  entered into a note with an
affiliate for $347,750 in early September of 1998 as well as satisfying
approximately $82,400 in legal fees with its former counsel through a note.
Both of the foregoing notes were paid in full prior to the end of the
Company's June 30, 1999 fiscal year, the affiliate note through the issuance
of shares, and the note to the Company's legal counsel with cash. All
shareholder advances during the first quarter of 1998, were satisfied with
common stock prior to the Company's fiscal year end.

LIQUIDITY AND CAPITAL RESOURCES

        * No Revenues from Operations*

      The Company has had no significant revenues from operations from
inception. The Company's cash requirements consist of: office salaries and
expenses including lease payments on its office space,  legal and accounting
fees to comply with securities registration (including updating its Prospectus
currently in effect) and reporting requirements, cost of clinical trials, TRW
and Battelle technical support, and FDA consulting.   The Company intends to
raise additional equity funds from the sale of the common stock through
private offerings to new investors and pursuant to its agreement in effect
with Beach Boulevard LLC as discussed below, to meet cash requirements through
September 30,  2000.

     * Prospectus in Effect *

     The Company's prospectus (the "Prospectus") filed as part of its
Registration Statement on Form SB2 was declared effective by the Securities
and Exchange Commission on January 8, 1999.  The Prospectus was filed on
behalf of certain selling shareholders as well as to register the common stock
underlying certain warrants and options.  The Prospectus was amended as part
of a Post Effective Amendment to its SB-2 on April 1, 1999 as a result of the
Company entering into a securities purchase agreement with Beach Boulevard LLC
(the "Investment Agreement"). (The Investment Agreement has been filed as
Exhibit 10eee as part of the Company's Post Effective Amendment.)  The Company
expects to raise up to $7,000,000 as a result of the Investment Agreement and
has, to date,  received a little less than $3,000,000 including a $475,000
investment made by Beach subsequent to the end of the quarter covered by this
report. (See below). The Company's Prospectus was amended a second time on
July 16, 1999.
                                9
<PAGE>

     *Investment Agreement with Beach Boulevard LLC*

      On March 4, 1999, the Company entered into a Securities Purchase
Agreement (as amended in May, the "Investment Agreement") with Beach Boulevard
L.L.C. ("Beach"). Subject to certain conditions provided in the Investment
Agreement, the Company may require Beach to purchase up to $7,000,000 of
Common Stock of the Company in a series of tranches of $500,000 each.  The
first two tranches were completed prior to the Company's fiscal year ended
June 30, 1999. At the closing of the first of these tranches on May 13, 1999
(the "Initial Closing Date"), the Company issued 757,576 shares to Beach. At
the closing of the second of these tranches on June 15, 1999 (an "Additional
Closing Date") the Company issued 862,069 shares to Beach with gross proceeds
from the two tranches of $1,000,000. During the Company's first quarter ended
September 30, 1999, the third of these tranches closed on July 15, 1999 with
843,170 shares issued to Beach for additional gross proceeds of $500,000.
Closings for subsequent tranches (each, an "Additional Closing Date") are held
after the Company gives a notice (each, a "Tranche Notice") to Beach. Without
the consent of Beach, there can not be more than one Additional Closing Date
in any one calendar month. Beach elected to participate in a fourth and fifth
tranche which occurred on August 1, 1999 with the issuance of 856,164 shares
and on September 13, 1999 with the issuance of 875,657 shares and net proceeds
to the Company of $978,458.  Subsequent to the end of the Company's first
fiscal quarter, Beach participated in a sixth tranche with net proceeds to the
Company of $475,000.   Beach was not required under the Agreement to
participate in the fourth and fifth tranches because the Company's price of
its common shares in the market was below the required $.75 per share.
Beach's obligation to purchase additional tranches over the initial $1,500,000
in funding, is conditioned on several factors discussed below.

          The purchase price for each share of Common Stock being bought by
Beach on each Additional Closing Date is based on the lowest sale price of the
stock during the period from the date of the relevant Tranche Notice to and
including the trading day immediately before that Additional Closing Date
multiplied by (i) for the first two Additional Closing Dates, 82.5%, and (ii)
for each Additional Closing Date thereafter, 85%.  Beach's obligations to
purchase additional tranches are subject to certain requirements relating to
the effectiveness of the Company's Registration Statement covering the shares
issued or to be issued to Beach, the number of shares authorized and reserved
for issuance to Beach, the continued accuracy of representations and
warranties made by the Company in the Investment Agreement, the absence of
material adverse changes in the business, operations or conditions of the
Company, and the absence of any suspension of the trading of the Company's
Common Stock by the SEC or the NASD.

          In addition, once Beach purchased $1,500,000 (completed as of July
15, 1999) of the Company's Common Stock, Beach's obligation to fund subsequent
tranches is subject to the following conditions: (1) the lowest sale price of
the Common Stock during the period from the date of the Tranche Notice to and
including the trading day before the relevant Additional Closing Date (the
"Current Price") must be seventy-five cents ($0.75) or more and (2) the
average daily trading volume for the twenty consecutive trading days ending
the day before the relevant Additional Closing Date must be 200,000 or more
shares.

          The Company also agreed to issue certain additional shares
("Supplemental Shares") to Beach based on the average of the lowest sale price
of a share of Common Stock for any five trading days selected by Beach during
the period beginning on the first trading day after each closing date (whether


                                10
<PAGE>

the Initial Closing Date or an Additional Closing Date) and continuing through
and including the twentieth trading day after that closing date. If that
average (the "Market Price of the Common Stock") is less than 95% of the
Current Price applicable to the relevant closing date (the "Base Price"), the
Company will issue the number of Supplemental Shares equal to (1) the product
of (x) the number of shares purchased on the relevant closing date, multiplied
by (y) the excess of the Base Price over the Market Price of the Common Stock,
divided by (2) the Market Price of the Common Stock. The Company is obligated
to issue the Supplemental Shares, if any, within 30 days after the relevant
closing date. In connection with the shares issued on the initial Closing
Date, the Company issued 57,945 Supplemental Shares to Beach; supplemental
shares were also issued on the third tranche equal to 70,746 and on the forth
tranche equal to 69,080 shares taking into account a reduction due to an
8,463 share overage in the second tranche.  No supplemental shares were issued
in the fifth tranche and the Company has not calculated the number of
supplemental shares, if any, to be issued in the 6th tranche.  Because Beach
is not required to purchase additional shares unless certain provisions are
met as set forth in the preceding paragraph, there is no assurance that Beach
will ultimately provide the Company with the full $7 Million.  The Company has
amended its Prospectus twice as a result of the Investment Agreement.  The
first amendment was filed with the Securities and Exchange Commission as part
of a Post effective Amendment to its Form SB-2 on April 1, 1999; the second
was filed on July 16, 1999 under rule 424(b)(3). Because the Company is
registering the Beach shares for resale, it is required to maintain its
Prospectus in effect.

     * Agreement with Manhattan Financial Group *

       Since January 1, 1997, the Company has been a party to a Consulting
Agreement with MFG covering financial services. MFG provides regular financial
advising services to the Company, such as strategic consulting to arrange
financing of projects including the Beach Investment Agreement discussed
above, and the Sutro Agreement discussed below.  The term of the agreement is
for one year, automatically renewable for additional periods of one year
thereafter unless terminated upon proper notice.  The consideration for the
agreement was 100,000 shares of the Common Stock and an option to purchase
2,000,000 shares of the Common Stock.  The Consulting Agreement with MFG
remains in effect and MFG's fees are negotiated on a case by case basis
depending on the service provided and the extent of its involvement with a
specific financing project.  During this fiscal quarter the Company has
compensated MFG approximately $ 120,000.

     * Agreement with Sutro *

     The Company signed an agreement with Sutro & Co Incorporated ("Sutro") on
October 8, 1999 to provide investment banking services, including but not
limited to a private stock placement of the Company's common stock.  The
agreement provides for a non-refundable retainer of $50,000, placement fees of
1 1/2% to 6 1/2% depending on the debt or equity sources and a 3% of equity
ownership for warrants at current market exercise prices should an equity
placement occur. The agreement with Sutro is attached hereto and incorporated
by reference as Exhibit 10(lll).

CAPITAL REQUIREMENTS/PLAN OF OPERATION

      The Company will require an estimated $6,000,000 - $7,000,000 for the
next 12 months for its research and development programs, preclinical and
clinical testing, development of its sales and distribution efforts, operating

                                11
<PAGE>

 expenses, and regulatory processes. The Company's capital requirements,
however, may vary from its estimates and depends on numerous factors,
including the progress of its research and development programs; results of
preclinical and clinical testing; the time and cost involved in obtaining
regulatory approvals; the cost of filing, prosecuting, defending and enforcing
any patent claims and other intellectual property rights; the economic impact
of competing technological and market developments; licensing and other
relationships; and the terms of any new collaborative, licensing and other
arrangements that the Company may establish. The Company estimates that it
will need approximately $4.5 Million to complete CTICO's clinical trials; $1.5
Million for day-to-day operating expenses including its lease payments on two
facilities of $60,000 per year;  $600,000 -$700,000 to cover salaries; and
$400,000 for legal and accounting to maintain its Prospectus in effect as well
as for SEC compliance with reporting obligations. The Company currently has
eight employees and will likely hire an additional employee during its second
fiscal quarter to assist in engineering support.

      The following constitute the various aspects of the Company's Plan of
Operation over the next twelve months in order of priority: (1) the completion
of PMA on the CTI Breast Imaging System through clinical trials as well as
continued system integration development and algorithm development by the
Company associated therewith; and (2)  additional efforts for CTI Systems
development for other applications, such lower back imaging, especially
regarding insurance coding.

     The Company anticipates that the existing agreement with Beach Boulevard
LLC will fund its operations thru the majority of fiscal year 1999-2000; any
additional funding from Sutro will allow the Company to accelerate its FDA
testing and research and development expenditures to bring its system to
market. There is no guarantee that Beach will provide such the remainder of
the funding especially if the price of the Company's common stock falls below
$.75 in the market. If anticipated funding falls short, the Company will rely
on affiliates to continue to support the Company either through loans or
contributions to capital in exchange for the restricted common stock of the
Company. In the recent quarter ended such contributions have been minimal
because the Beach funding has provided sufficient cash for the Company's
needs.

         COMPLETION OF PMA/FDA APPROVAL/CLINICAL TRIALS -The efficacy of the
CTI Breast Imaging System is currently subject to confirmation in FDA clinical
trials as a tool complementary to mammography. The FDA clinical trials
requirement for CTICO to receive its PMA approval requires medical facilities
to conduct examinations and conduct and produce clinical statistical data from
use of the CTI Breast Imaging System. The rate of conducting examinations
determines the monthly cash flow requirements and the time for qualifying for
PMA. CTICO also incurs costs for FDA legal counsel and for consulting services
from a firm recognized by the FDA for overseeing clinical trial data
collection and adherence to FDA requirements. The Company has advanced CTICO
approximately $7 Million through September 30, 1999. The current estimated
requirements to fund CTICO's research and clinical testing are approximately
$500,000 per quarter. Management has set a goal of completing the clinical
testing for the PMA portion of FDA approval process during the next 12 months
and anticipates additional related costs of $4.5 Million. Module One of the
FDA data set was submitted to the FDA in September of 1999. The Company must
submit four additional data set modules to the FDA before final review by the
FDA can be completed.

                                12
<PAGE>

          CTI SYSTEM DEVELOPMENT - The Company has committed to devote a major
portion of its resources and subsequent capital financing, in excess of its
fixed operating costs, to the operations of CTICO for the completion of the
ongoing FDA Clinical Trials. Although the Company is prioritizing its funding
of CTICO, it also plans to conduct multiple clinical trials involving the CTI
System in the identification of soft tissue maladies. Although such clinical
trials may not be necessary for physicians to use the CTI System, the benefit
of specific purpose clinical trials will be to enable the Company to reference
medical efficacy claims in connection with marketing efforts, to enhance
physician in the CTI System, and to obtain the designation of insurance
payment codes for particular CTI System procedures. Management believes that
the market in the United States alone for the CTI System would be dramatically
enhanced if clinical trials were to substantiate the Company's assertion that
the CTI System can distinguish and verify fraudulent (versus real muscular)
lower back pains.

SOURCE OF POTENTIAL LONG-TERM LIQUIDITY: EQUIPMENT FINANCING/ USE AGREEMENTS

     The Company expects that both Use Agreements and equipment financing will
be sources of long term liquidity although it is premature to anticipate the
results of either. Although the Company has investigated both options and has
in fact entered into preliminary discussions with equipment financing
companies, it is awaiting PMA on its CTI Breast Imaging System, before
entering into any additional planning regarding either.  Much of what the
Company anticipates as being its sources of long-term liquidity will be a
result of (1) whether or not it achieves PMA on its CTI Breast Imaging System,
(2) if PMA is achieved, the development of a more definitive marketing
strategy, (3) how successful such marketing strategy proves to be, (4) whether
it is able to develop its CTI System for other applications in the United
States, and (5) the results of marketing efforts of the CTI System in the PRC
Thailand and elsewhere.

YEAR 2000 COMPLIANCE

      The Year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Any of the
Company's computer programs that have time-sensitive software may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities. The Company
believes that its internal systems are Year 2000 compliant or will be upgraded
or replaced in connection with previously planned changes to information
systems prior to the need to comply with Year 2000 requirements. However, the
Company is uncertain as to the extent its customers and vendors may be
affected by Year 2000 issues that require commitment of significant resources
and may cause disruptions in the customers' and vendors' businesses.

UNCERTAINTIES AFFECTING LIQUIDITY

      The Company is largely dependent on Beach to provide for liquidity over
the next year; it is possible that Beach will fail to provide the required
funding or that the price and volume of the Company's common stock in the
market place will be insufficient to enable the Company to require the
purchase of additional shares by Beach.   The Company, since inception, has
continually sought funding for both its day to day operations and its business
purpose and has often sought substantial loans from affiliates and
shareholders which were often repaid in stock.  Until such time as the Company


                                13
<PAGE>

begins receiving revenues from operations (not likely until and unless PMA
approval is received), the Company will be faced with the difficulties and
expenses associated with meeting its financing needs.

COMMITMENTS OF CAPITAL EXPENDITURES/SOURCES OF FUNDING

      See Plan of Operation/Cash Requirements above.

TRENDS/UNCERTAINTIES AFFECTING CONTINUING OPERATIONS

        The Company's ability to achieve profitability will depend, in part,
on its ability to successfully develop clinical applications and obtain
regulatory approvals for its products and to develop the capacity to
manufacture and market such products on a wide scale. There is no assurance
that the Company will be able to successfully make the transition from
research and development to manufacturing and selling commercial thermal
imaging products on a broad basis.  While attempting to make this transition,
the Company will be subject to all risks inherent in a growing venture,
including the need to produce reliable and effective products, develop
marketing expertise and enlarge its sales force.

     ANY FORWARD-LOOKING STATEMENTS INCLUDED IN THIS FORM 10-QSB REFLECT
MANAGEMENT'S BEST JUDGMENT BASED ON FACTORS CURRENTLY KNOWN AND INVOLVE RISKS
AND UNCERTAINTIES.  ACTUAL RESULTS MAY VARY MATERIALLY.

                   PART II - OTHER INFORMATION

Item 1.     Legal Proceedings

            None

Item 2.     Changes in Securities

    No instruments defining the rights of securities holders have been
materially modified, limited or qualified.  The following securities were
issued since the Company's Annual Report on Form 10KSB for the year ended June
30, 1999 which have not been registered under the Securities Act of 1933.

     During the Company first fiscal quarter ended September 30, 1999, it
issued an aggregate of 33,997 shares of its unregistered common stock and
101,988 warrants to purchase shares of common stock to Sitrik & Company for
services rendered in connection with investor relations.  The warrants are
exercisable immediately and expire at various dates beginning on September 30,
2003 through September 30, 2004,  at an exercise price of $0.9375.  The
foregoing securities were issued for a deemed value of $31,873 and were issued
in accordance with the exemption from registration requirements of Section 5
of the Securities Act of 1933, as amended, provided under Section 4(2), as a
"transaction not involving a public offering."

      In addition, during the Company's first quarter it received $1,478,558
for the purchase of 2,273,280 of its commons shares from Beach in accordance
with the Investment Agreement; the Beach shares purchased under the Investment
Agreement are considered "registered" under the 1933 Act through the Company's
Prospectus in effect.

Item 3.     Defaults Upon Senior Securities

            Not applicable.

                                14
<PAGE>

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

            None.

Item 5.     Other Information.

            None.

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

   (a)      Exhibits

The following exhibits are filed as part of this Form 10-QSB for the Company's
quarter ended September 30, 1999:

(i)
EXHIBIT NO.  EXHIBIT DESCRIPTION(1)       WHERE INCORPORATED IN THIS REPORT
----------   -------------------          -------------------------------
             Registration Statement                 Part I
             On Form SB-2, as amended
             Declared effective on Jan.
             8, 1999. (2)

             Post Effective Amendment to            Part I
             Registration Statement on
             Form SB-2, filed April 1,
             1999(2)

             Amended Prospectus under               Part I
             424(b)(3) as filed on
             July 16, 1999(2)

             Form 10KSB for the period              Part I and Part II
             Ended June 30, 1999 (2)

(ii)
EXHIBIT NO.     IDENTIFICATION OF EXHIBIT
-----------     --------------------------
10 eee          Beach Boulevard Security Purchase Agreement(3)
10 lll          Sutro Agreement (4)
27              Financial Data Schedule. (4))

(1) Summaries of all Exhibits contained within this Report are modified in
    their entirety by reference to these exhibits

(2) These documents and related exhibits have been previously filed with the
    Securities and Exchange Commission.

(3) Previously filed as part of the Company's Post-Effective Amendment to its
    Registration Statement on Form SB-2, filed on April 1, 1999.

(4) Filed herewith

   (b) Reports on Form 8-K -- None

                                15
<PAGE>

                            SIGNATURES

     In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
                                           COMPUTERIZED THERMAL IMAGING, INC.
                                           (Registrant)

Date: November 12, 1999                       By: /s/ David A. Packer
                                              ------------------------
                                                  David A. Packer
                                                  President/Treasurer
                                                  Chief Financial Officer