UNITED STATES
                       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 QUARTERLY PERIOD ENDED JUNE 30, 2001

                                       OR

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      For the transition period from to

                          COMMISSION FILE NUMBER 1-9043

                                  B.H.I.T. INC.
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

         DELAWARE                                                36-3361229
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

875 AVENUE OF THE AMERICAS, SUITE 1808, NEW YORK, N.Y.             10001
(Address of principal executive offices)                         (Zip Code)

                  (212) 736-7880
Registrant's telephone number, including area code

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
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 |_|.

Shares of Common Stock Outstanding as of August 2, 2001: 14,988,051

Transitional Small Business Disclosure Format Yes |_| No |X|.

<Page>

                                  B.H.I.T. INC.

                         QUARTERLY REPORT ON FORM 10-QSB
                     FOR THE SIX MONTHS ENDED JUNE 30, 2001

                                TABLE OF CONTENTS

INDEX                                                                  PAGE

                          PART I FINANCIAL INFORMATION

ITEM 1. Financial Statements

Consolidated Balance Sheets as of June 30, 2001
(unaudited) and December 31, 2000 ....................................   3

Consolidated Statements of Operations for the
three months ended June 30, 2001 and 2000 (unaudited) ................   4

Consolidated Statements of Operations for the
six months ended June 30, 2001 and 2000 (unaudited) ..................   5

Consolidated Statement of Stockholders' Equity for the
six months ended June 30, 2001 (unaudited) ...........................   6

Consolidated Statements of Cash Flows for the
six months ended June 30, 2001 and 2000 (unaudited) ..................   7

Notes to Consolidated Financial Statements (unaudited) ...............  8-9

ITEM 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations .................................  10-12

                            PART II OTHER INFORMATION

ITEM 1. Legal Proceedings ............................................  13

ITEM 6. Exhibits and Reports on Form 8-K .............................  13

SIGNATURES ...........................................................  14


                                       2
<Page>

                                  B.H.I.T. INC.

                         PART I - FINANCIAL INFORMATION

                           CONSOLIDATED BALANCE SHEETS

ITEM 1. FINANCIAL STATEMENTS

<Table>
<Caption>
                                                                  JUNE 30, 2001      Dec. 31, 2000
                                                                  -------------      -------------
                                                                   (UNAUDITED)
                         ASSETS
<S>                                                                <C>                <C>
Cash and cash equivalents                                          $  1,496,241       $  1,552,507
Interest receivable on mortgage loan and
  miscellaneous receivables                                               5,928              2,750
Mortgage loans receivable                                               275,000            275,000
Prepaid insurance                                                        11,133             14,753
Other assets                                                              3,198              3,198
                                                                   ------------       ------------

             Total Assets                                          $  1,791,500       $  1,848,208
                                                                   ============       ============

LIABILITIES AND STOCKHOLDERS' EQUITY

ACCOUNTS PAYABLE AND ACCRUED EXPENSES                              $     15,904       $     27,024

STOCKHOLDERS' EQUITY

     Shares of Common Stock, $0.01 par value,
     20,000,000 shares authorized, 15,020,808 shares issued          88,060,847         88,060,847

     Accumulated deficit                                            (86,277,062)       (86,231,474)

     Less 32,757 shares of common stock in treasury - at cost            (8,189)            (8,189)
                                                                   ------------       ------------

         Total Stockholders' Equity                                   1,775,596          1,821,184
                                                                   ------------       ------------

         Total Liabilities and Stockholders' Equity                $  1,791,500       $  1,848,208
                                                                   ============       ============
</Table>

          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                        3
<Page>

                                  B.H.I.T. INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                FOR THE THREE MONTHS ENDED JUNE 30, 2001 AND 2000
                                   (UNAUDITED)

<Table>
<Caption>
                                                                                       2001           2000
                                                                                     --------       --------
REVENUE
<S>                                                                                  <C>            <C>
       Interest income on cash and cash equivalents                                  $ 15,742       $    216
       Interest income on mortgage receivables                                          8,250          9,000
                                                                                     --------       --------

            Total revenue                                                              23,992          9,216

EXPENSES

       General and administrative                                                      52,817         55,790
                                                                                     --------       --------

            Loss from operations                                                      (28,825)       (46,574)

Equity in net income of unconsolidated Joint Venture                                       --         30,870
                                                                                     --------       --------

            Net Loss                                                                 $(28,825)      $(15,704)
                                                                                     ========       ========

Basic and diluted net loss per share of Common Stock (based on weighted average
  number of shares outstanding
  of 14,988,051 in 2001 and 12,338,051 in 2000)                                      $  (.002)      $  (.001)
                                                                                     ========       ========
</Table>

          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                        4
<Page>

                                  B.H.I.T. INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
                                   (UNAUDITED)

<Table>
<Caption>
                                                                                        2001            2000
                                                                                     --------       ---------
REVENUE
<S>                                                                                  <C>            <C>
       Interest income on cash and cash equivalents                                  $ 36,114       $   1,118
       Interest income on mortgage receivables                                         16,500          18,000
                                                                                     --------       ---------

            Total revenue                                                              52,614          19,118

EXPENSES

       General and administrative                                                      98,202         103,725
                                                                                     --------       ---------

            Loss from operations                                                      (45,588)        (84,607)

Equity in net income of unconsolidated Joint Venture                                       --          45,873
                                                                                     --------       ---------

            Net Loss                                                                 $(45,588)      $ (38,734)
                                                                                     ========       =========

Basic and diluted net loss per share of Common Stock (based on weighted average
  number of shares outstanding
  of 14,988,051 in 2001 and 12,338,051 in 2000)                                      $  (.003)      $   (.003)
                                                                                     ========       =========
</Table>

          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                        5
<Page>

                                  B.H.I.T. INC.

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                     FOR THE SIX MONTHS ENDED JUNE 30, 2001
                                   (UNAUDITED)

<Table>
<Caption>
                                           COMMON STOCK
                                    ---------------------------                           TREASURY STOCK
                                      SHARES                         ACCUMULATED        -------------------
                                      ISSUED          AMOUNT           DEFICIT          SHARES       AMOUNT          TOTAL
                                    ----------      -----------      ------------       ------      -------       -----------
<S>                                 <C>             <C>              <C>                <C>         <C>           <C>
Stockholders' equity (deficit)
  December 31, 2000                 15,020,808      $88,060,847      $(86,231,474)      32,757      $(8,189)      $ 1,821,184

Net loss                                    --               --           (45,588)          --           --           (45,588)
                                    ----------      -----------      ------------       ------      -------       -----------

STOCKHOLDERS' EQUITY (DEFICIT)
  JUNE 30, 2001                     15,020,808      $88,060,847      $(86,277,062)      32,757      $(8,189)      $ 1,775,596
                                    ==========      ===========      ============       ======      =======       ===========
</Table>

          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                        6
<Page>

                                  B.H.I.T. INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
                                   (UNAUDITED)

<Table>
<Caption>
                                                                                     2001            2000
                                                                                 -----------       ---------
OPERATING ACTIVITIES:
<S>                                                                              <C>               <C>
      Net Loss                                                                   $   (45,588)      $ (38,734)

      Adjustments to reconcile net loss to net cash flows used in operating
      activities:

      Equity in net income of unconsolidated Joint Venture                                --         (45,873)

      Net change in:
         Interest receivable                                                          (3,178)          1,162
         Prepaid insurance                                                             3,620           4,502
         Accounts payable and accrued expenses                                       (11,120)        (30,054)
                                                                                 -----------       ---------

            Net cash used in operating actitivies                                    (56,266)       (108,997)
                                                                                 -----------       ---------

INVESTING ACTIVITIES:

      Principal collections on mortgage loans                                             --          25,000

      Sale of mortgage interest                                                           --          41,250
                                                                                 -----------       ---------

            Net cash provided by investing activities                                     --          66,250
                                                                                 -----------       ---------

Net decrease in cash and cash equivalents                                            (56,266)        (42,747)

Cash and cash equivalents at beginning of period                                   1,552,507         110,992
                                                                                 -----------       ---------

Cash and cash equivalents at end of period                                       $ 1,496,241       $  68,245
                                                                                 ===========       =========
</Table>

          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                        7
<Page>

                                  B.H.I.T. INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

NOTE 1. BASIS OF PRESENTATION

B.H.I.T. Inc., formerly Banyan Hotel Investment Fund (the "Company"), was
organized under the laws of the State of Massachusetts, pursuant to a
declaration of Trust filed March 19, 1985, and subsequently reorganized as a
Delaware Corporation on March 13, 1987. The Company's purpose is to invest in
mortgage loans.

The accompanying financial statements have been prepared by the Company pursuant
to the rules and regulations of the Securities and Exchange Commission. In the
opinion of management, these financial statements give effect to all normal
recurring adjustments necessary to present fairly the financial position of the
Company as of June 30, 2001 and December 31, 2000, and the results of its
operations and cash flows for the three months and six months ended June 30,
2001, and June 30, 2000.

Certain reclassifications have been made to the prior year's financial
statements to conform to classifications used in the current year.

The financial information included herein for the quarter and six months ended
June 30, 2001 and June 30, 2000 is unaudited.

Although the Company believes that the disclosures included herein are adequate
to make the information not misleading, certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been omitted. Accordingly,
the accompanying financial statements should be read in conjunction with the
annual audited financial statements included in the Company's latest annual
report on Form 10-KSB for the year ended December 31, 2000.

The results of operations for the interim period presented are not necessarily
indicative of the results to be expected for the full year.

NOTE 2. MORTGAGE LOANS RECEIVABLES

On August 20, 1997, the Company made a first mortgage loan in the amount of
$1,000,000 which was secured by one commercial and one residential property
located in the Dallas, Texas area. The loan bears interest at the rate of 12%
and requires monthly interest payments. The principal payment has been extended
and is now due on September 1, 2001. The loan was originally due on April 1,
1998. The principals of the corporate owners of both properties have personally
guaranteed the loan. In April 1998, this loan was paid down by $700,000 to
$300,000 and the residential property was released from the lien. In June 2000,
the loan was paid down by an additional $25,000 leaving the Company with an
outstanding loan balance of $275,000.


                                       8
<Page>

                                  B.H.I.T. INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

                                   (continued)

NOTE 2. MORTGAGE LOANS RECEIVABLES (continued)

As of June 30, 2001, the carrying value of the above mortgage loan approximated
its fair value.

NOTE 3. INVESTMENT IN JOINT VENTURE

On May 28, 1998, the Company made an investment of $1,005,000, representing a
50% interest, in Metro Franchising Commissary, LLC (the "Venture"). In September
2000, in connection with the Arrowhead transaction, discussed below, the Company
sold its interest in the Venture to Harvey Polly ("Polly") for $1,000,000 and
recognized a loss of $56,799. The operation of the Venture resulted in a net
profit of $45,873 for the six months ended June 30, 2000. Net profit was
allocated to the Company per the terms of the Venture Agreement.

NOTE 4. INVESTMENT IN LIQUIDATING TRUST

The Company owned an interest in a liquidating Trust which was received as final
settlement of guarantees by VMS Realty Partners for loans made by the Company in
prior years. No payments had been received by the Company from the Trust since
1997. In September 2000, the Company accepted an offer of $47,759 for its 0.16%
interest in the Trust, and sold its interest. As a result, the Company
recognized a gain on the sale of $47,759, which was reflected in the quarter
ended September 30, 2000 financial statements.


                                       9
<Page>

                                  B.H.I.T. INC.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND PLAN OF
        OPERATIONS

GENERAL

      The Registrant, B.H.I.T. Inc. was originally organized as a Massachusetts
business trust pursuant to a Declaration of Trust filed March 19, 1985, under
the name VMS Hotel Investment Trust and subsequently reorganized as a Delaware
corporation on March 13, 1987, at which time the Company's name was changed to
VMS Hotel Investment Fund. The Company changed its name to Banyan Hotel
Investment Fund in 1991. In 1998, the Company changed its name to B.H.I.T. Inc.
in accordance with terms of a February 15, 1995 agreement (see below). On
January 13, 1986, the Company received $98,482,751 from a public offering.

BUSINESS OPERATIONS

      The Company was established to invest in mortgage loans, principally to
entities affiliated with VMS Realty Partners which were collateralized by hotel
and resort properties. Mortgage loans made by the Company were for initial terms
of three, five or seven years.

      As a result of severe losses, the Board of Directors, on January 28, 1992,
authorized the preparation of a formal plan of liquidation which was
subsequently adopted on April 7, 1992. This liquidation never took place and,
after additional losses, the Board of Directors, by unanimous written consent
dated June 15, 1994, authorized the Company to execute and deliver a non-binding
letter of intent with Polly.

      On August 3, 1994, the Company signed an agreement with Polly, providing,
among other things, that he make a cash offer to purchase 100% of the shares of
common stock of the Company for $.35 per share. This offer, which commenced on
December 28, 1994, concluded on January 26, 1995, resulted in the tender to
Polly of 1,288,217 shares of common stock, or 12.5% of the Company's then
outstanding shares of common stock, for $.35 per share. The terms of the
agreement required Polly to purchase from the Company a number of shares
sufficient to allow him to own, by virtue of the combination of the tender offer
and the share purchase, not less than 3,335,000 and not more than 40% of the
shares of common stock after giving effect to the shares issued in connection
with the purchase on February 15, 1995. Polly purchased 2,047,766 newly issued
shares of common stock of the Company for a cash price of $0.22 per share. Upon
the acquisition of these shares from the Company, Polly was the beneficial owner
of 3,335,983 shares or approximately 27% of the Company's outstanding voting
shares of common stock.

      In July 1999, Polly, then the President and Chief Executive Officer of the
Company, entered into an agreement to sell his stock in the Company to Vesper
Corporation or its nominee.


                                       10
<Page>

                                  B.H.I.T. INC.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND PLAN OF
        OPERATIONS

(continued)

BUSINESS OPERATIONS (continued)

      In September 2000, the stock sale was completed. In connection with this
transaction, Polly exercised his option to acquire 2,650,000 additional shares
of the Company's stock. The Company received $583,000 for these shares. Polly
then sold 5,370,563 shares, constituting his entire holdings, to Arrowhead
Holdings Corporation ("Arrowhead"), the nominee of Vesper Corporation. At the
same time, Sheltering Palms Foundation, a not-for-profit charitable entity
controlled by Polly and his wife, sold 500,000 shares of the Company to
Arrowhead. Upon closing of this transaction, Arrowhead held 5,870,563 shares of
the Company or 39% of the outstanding shares of the Company.

      As required by the Stock Purchase Agreement with Arrowhead, Polly
purchased B.H.I.T.'s 50% interest in Metro Franchising Commissary, LLC for
$1,000,000. The Company recognized a loss on the sale of $56,799 in September
2000.

      Upon completion of the stock sale, discussed above, Leo Yarfitz and Willis
Ryckman resigned their position as Directors, and were replaced by James
Benenson, Jr., and James A. Lash, designees of Arrowhead.

      The business of the Company is not seasonal and the Company does no
foreign or export business. The Company does not segregate revenue or assets by
geographical region, and such presentation is not applicable and would not be
material to an understanding of the Company's business taken as a whole.

RESULTS OF OPERATIONS

      Revenue for the three months ended and six months ended June 30, 2001,
compared to the same periods in 2000, increased by $14,776 and $33,496,
respectively. The increase is the result of an increase in interest earned on
cash received from the sale of the Venture interest and the sale of additional
capital stock.

      During the quarter ended June 2001, the Company had no income from the
Venture, due to its sale, as compared to income of $30,870 for the same period
in 2000.

      Total expenses for the three months ended and six months ended June 30,
2001, compared to the same period in 2000, decreased by $2,973 and $5,523,
respectively. The decrease was due to the reduction in audit fees partially
offset by increases in various general and administrative expenses.

      The net loss for the quarter ended June 30, 2001 was $28,825 ($.002 per
share) and for the same period in 2000 was $15,704 ($.001 per share).


                                       11
<Page>

                                  B.H.I.T. INC.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND PLAN OF
        OPERATIONS

(continued)

LIQUIDITY AND CAPITAL RESOURCES

      Cash and cash equivalents consist of cash and short term investments. The
Company's cash and cash equivalents balance at June 30, 2001 and December 31,
2000 was $1,496,241 and $1,552,507 respectively. The decrease in cash and cash
equivalents is primarily the result of the Company's net loss for the six months
ended June 30, 2001.

      At this time, there are no material commitments for capital expenditures.
The Company's cash is sufficient to meet its needs for anticipated operating
expenses. The Company deems its liquidity to be adequate.

      During 1997, the Company invested $1,000,000 in a mortgage loan. The loan
yields 12% and was for a term of 7-1/3 months, payable on April 1, 1998. The due
date has been extended by mutual consent on numerous occasions for periods of 90
days and is now due on September 1, 2001. In April 1998, the amount of the loan
was paid down by $700,000 and in June 2000 an additional $25,000 was paid on the
loan, resulting in a balance of $275,000 at June 30, 2001.

      During 1998, the Company invested $1,005,000 in a venture whose business
is to open and operate Dunkin' Donuts Quick Service Restaurant locations in
Exxon Service Stations in the New York, New Jersey and Connecticut areas. In
September 2000, the Venture was sold to Polly for $1,000,000 in connection with
the Arrowhead transaction.


                                       12
<Page>

                                  B.H.I.T. INC.

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

      The Registrant is not aware of any material legal proceedings to which the
Company is a party or to which any of its property is subject.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS

      NONE

(b) REPORTS ON FORM 8-K

      NONE


                                       13
<Page>

                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.

B.H.I.T. Inc.


By:           /s/ Harvey Polly
    --------------------------------------
    Harvey Polly                                            Date: August 7, 2001
    Chairman of the Board


By:          /s/ Morton I. Kalb
    --------------------------------------
    Morton I. Kalb                                          Date: August 7, 2001
    Vice-President, Director and
    Chief Financial Officer


                                       14