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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-QSB



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

For the quarterly period ended June 30, 2002

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.

|                                                                                     |  |                                                
|------------------------------------------------------------------------------------ |  | -----------------------------------------------
|Delaware
(State or other jurisdiction of
incorporation or organization)              |  | 36-3361229
(I.R.S. Employer
Identification No.)
|                                                                                    
|6950 South Edgerton Road, Brecksville, Ohio
(Address of principal executive offices) |  | 44141
(Zip Code)                               
|                                                                                    
|(440) 838-4700
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  NO .

Shares of Common Stock Outstanding as of August 12, 2002: 14,988,051
Transitional Small Business Disclosure Format                     
Yes   No .



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TABLE OF CONTENTS



|                                                        |                                                                                                |                                                 |  |  |  |  |  | 
|------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | ----------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION                         
|                                                        | ITEM 1. FINANCIAL STATEMENTS                                                                  
|                                                        |                                                                                                | Consolidated Statements of Operations          
|                                                        |                                                                                                | Consolidated Statements of Operations          
|                                                        |                                                                                                | Consolidated Statements of Stockholders Equity
|                                                        |                                                                                                | Consolidated Statements of Cash Flows          
|                                                        |                                                                                                | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     
|                                                        | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
|PART II  OTHER INFORMATION                            
|                                                        | ITEM 1. LEGAL PROCEEDINGS                                                                     
|                                                        | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                      
|CERTIFICATION OF CHIEF EXECUTIVE AND FINANCIAL OFFICERS



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B.H.I.T. INC.

QUARTERLY REPORT ON FORM 10-QSB
FOR THE SIX MONTHS ENDED JUNE 30, 2002

TABLE OF CONTENTS

|                                                                                                    |  |      |    | 
|--------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|INDEX                                                                                               |  | PAGE
|PART I FINANCIAL INFORMATION                                                                        |  |      |    | 
|ITEM 1. Financial Statements                                                                        |  |      |    | 
|Consolidated Balance Sheets as of June 30, 2002
(unaudited) and December 31, 2001                   |  |      | 3  | 
|Consolidated Statements of Operations for the
three months ended June 30, 2002 and 2001 (unaudited) |  |      | 4  | 
|Consolidated Statements of Operations for the
six months ended June 30, 2002 and 2001 (unaudited)   |  |      | 5  | 
|Consolidated Statement of Stockholders Equity for the
six months ended June 30, 2002 (unaudited)   |  |      | 6  | 
|Consolidated Statements of Cash Flows for the
six months ended June 30, 2002 and 2001 (unaudited)   |  |      | 7  | 
|Notes to Consolidated Financial Statements (unaudited)                                              |  |      | 8  | 
|ITEM 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations       |  |      | 9  | 
|PART II OTHER INFORMATION                                                                           |  |      |    | 
|ITEM 1. Legal Proceedings                                                                           |  |      | 11 | 
|ITEM 6. Exhibits and Reports on Form 8-K                                                            |  |      | 11 | 
|CERTIFICATION OF CHIEF EXECUTIVE AND FINANCIAL OFFICERS                                             |  |      | 12 | 

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B.H.I.T. INC.
PART I  FINANCIAL INFORMATION

Consolidated Balance Sheets

ITEM 1. FINANCIAL STATEMENTS







|                                           |                                                                                                                   |   |               |             |               |   |           |             |  
|------------------------------------------ | ----------------------------------------------------------------------------------------------------------------- | - | ------------- | ----------- | ------------- | - | --------- | ----------- | -
|                                           |                                                                                                                   |   | June 30, 2002 |             | Dec. 31, 2001
|                                           |                                                                                                                   |   |               |             |              
|                                           |                                                                                                                   |   | (Unaudited)   |             |               |   |          
|ASSETS                                     |                                                                                                                   |   |               |             |               |   |           |            
|                                           | Cash and cash equivalents                                                                                         |   | $             | 1,436,777   |               |   | $         | 1,471,139   |  
|                                           | Interest receivable on cash and cash equivalents                                                                  |   |               |            |               |   |           | 2,935       |  
|                                           | Mortgage loan receivable                                                                                          |   |               | 275,000     |               |   |           | 275,000     |  
|                                           | Interest receivable on mortgage loan                                                                              |   |               | 5,109       |               |   |           | 5,500       |  
|                                           | Miscellaneous receivable                                                                                          |   |               |            |               |   |           | 55          |  
|                                           | Prepaid insurance                                                                                                 |   |               | 15,000      |               |   |           |            |  
|                                           |                                                                                                                   |   |               |             |               |   |           |            
|Total Assets                               |                                                                                                                   | $ | 1,731,886     |             |               | $ | 1,754,629 |            
|                                           |                                                                                                                   |   |               |             |               |   |           |            
|LIABILITIES AND STOCKHOLDERS EQUITY       |                                                                                                                   |   |               |             |               |   |           |            
|                                           | Accounts payable and other accrued expenses                                                                       |   | $             | 28,621      |               |   | $         | 37,599      |  
|Stockholders Equity                       |                                                                                                                   |   |               |             |               |   |           |            
|                                           | Shares of Common Stock, $0.01 par value,
20,000,000 shares authorized, 15,020,808 shares
issued for 2002 and 2001 |   |               | 88,060,847  |               |   |           | 88,060,847  |  
|                                           | Accumulated deficit                                                                                               |   |               | (86,349,393 | )             |   |           | (86,335,628 | )
|                                           | Treasury stock, at cost, for 32,757 shares
of Common Stock                                                        |   |               | (8,189      | )             |   |           | (8,189      | )
|                                           |                                                                                                                   |   |               |             |               |   |           |            
|Total Stockholders Equity                 |                                                                                                                   |   | 1,703,265     |             |               |   | 1,717,030 |            
|                                           |                                                                                                                   |   |               |             |               |   |           |            
|Total Liabilities and Stockholders Equity |                                                                                                                   | $ | 1,731,886     |             |               | $ | 1,754,629 |            
|                                           |                                                                                                                   |   |               |             |               |   |           |            

See accompanying notes to the Consolidated Financial Statements.

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B.H.I.T. INC.




Consolidated Statements of Operations
For the Three Months Ended June 30, 2002 and 2001
(Unaudited)

|                                                                                                                                            |                                              |              |        |        |         |      |        |        |         |  
|------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | ------------ | ------ | ------ | ------- | ---- | ------ | ------ | ------- | -
|                                                                                                                                            |                                              |              |        | 2002   |         | 2001
|                                                                                                                                            |                                              |              |        |        |         |     
|INCOME                                                                                                                                      |                                              |              |        |        |         |      |        |       
|                                                                                                                                            | Interest income on cash and cash equivalents |              | $      | 7,300  |         |      | $      | 15,742 |        
|                                                                                                                                            | Interest income on mortgage receivable       |              |        | 8,250  |         |      |        | 8,250  |        
|                                                                                                                                            |                                              |              |        |        |         |      |        |       
|                                                                                                                                            |                                              | Total income |        |        | 15,550  |      |        |        | 23,992  |  
|                                                                                                                                            |                                              |              |        |        |         |      |        |       
|EXPENSES                                                                                                                                    |                                              |              |        |        |         |      |        |       
|                                                                                                                                            | General and administrative                   |              |        | 26,176 |         |      |        | 52,817 |        
|                                                                                                                                            |                                              | Net loss     |        | $      | (10,626 | )    |        | $      | (28,825 | )
|                                                                                                                                            |                                              |              |        |        |         |      |        |       
|Basic and diluted net loss per share of Common
Stock (based on weighted average number of
shares outstanding of 14,988,051 in 2002 and 2001 |                                              | $            | (0.001 | )      |         | $    | (0.002 | )     
|                                                                                                                                            |                                              |              |        |        |         |      |        |       

See accompanying notes to the Consolidated Financial Statements.

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B.H.I.T. INC.




Consolidated Statements of Operations
For the Six Months Ended June 30, 2002 and 2001
(Unaudited)

|                                                                                                                                            |                                              |              |        |        |         |      |        |        |         |  
|------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------- | ------------ | ------ | ------ | ------- | ---- | ------ | ------ | ------- | -
|                                                                                                                                            |                                              |              |        | 2002   |         | 2001
|                                                                                                                                            |                                              |              |        |        |         |     
|INCOME                                                                                                                                      |                                              |              |        |        |         |      |        |       
|                                                                                                                                            | Interest income on cash and cash equivalents |              | $      | 15,230 |         |      | $      | 36,114 |        
|                                                                                                                                            | Interest income on mortgage receivable       |              |        | 16,500 |         |      |        | 16,500 |        
|                                                                                                                                            |                                              |              |        |        |         |      |        |       
|                                                                                                                                            |                                              | Total income |        |        | 31,730  |      |        |        | 52,614  |  
|                                                                                                                                            |                                              |              |        |        |         |      |        |       
|EXPENSES                                                                                                                                    |                                              |              |        |        |         |      |        |       
|                                                                                                                                            | General and administrative                   |              |        | 45,495 |         |      |        | 98,202 |        
|                                                                                                                                            |                                              | Net loss     |        | $      | (13,765 | )    |        | $      | (45,588 | )
|                                                                                                                                            |                                              |              |        |        |         |      |        |       
|Basic and diluted net loss per share of Common
Stock (based on weighted average number of
shares outstanding of 14,988,051 in 2002 and 2001 |                                              | $            | (0.001 | )      |         | $    | (0.003 | )     
|                                                                                                                                            |                                              |              |        |        |         |      |        |       

See accompanying notes to the Consolidated Financial Statements.

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B.H.I.T. INC.




Consolidated Statements of Stockholders Equity
For the Six Months Ended June 30, 2002
(Unaudited)

|                                                 |  |              |            |        |  |         |            |                |  |        |             |       |  |  |        |  |  |   |        |   |  |   |           |  
|------------------------------------------------ |  | ------------ | ---------- | ------ |  | ------- | ---------- | -------------- |  | ------ | ----------- | ----- |  |  | ------ |  |  | - | ------ | - |  | - | --------- | -
|                                                 |  | Common Stock |            |        |  |         |            |                |  |        |             |       |  |  |        |  |  |  
|                                                 |  |              |            |        |  |         |            | Treasury Stock |  |        |             |      
|                                                 |  | Shares       |            |        |  |         |            | Accumulated    |  |        |             |       |  | 
|                                                 |  | Issued       |            | Amount |  | Deficit |            | Shares         |  | Amount |             | Total
|                                                 |  |              |            |        |  |         |            |                |  |        |             |      
|Stockholders equity (deficit)
December 31, 2001 |  |              | 15,020,808 |        |  | $       | 88,060,847 |                |  | $      | (86,335,628 | )     |  |  | 32,757 |  |  | $ | (8,189 | ) |  | $ | 1,717,030 |  
|Net loss                                         |  |              |           |        |  |         |           |                |  |        | (13,765     | )     |  |  |       |  |  |   |       |   |  |   | (13,765   | )
|                                                 |  |              |            |        |  |         |            |                |  |        |             |       |  |  |        |  |  |   |        |   |  |   |           |  
|Stockholders equity (deficit)
June 30, 2002     |  |              | 15,020,808 |        |  | $       | 88,060,847 |                |  | $      | (86,349,393 | )     |  |  | 32,757 |  |  | $ | (8,189 | ) |  | $ | 1,703,265 |  
|                                                 |  |              |            |        |  |         |            |                |  |        |             |       |  |  |        |  |  |   |        |   |  |   |           |  

See accompanying notes to the Consolidated Financial Statements.

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B.H.I.T. INC.




Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2002 and 2001
(Unaudited)

|                                                 |                                                                                   |                                       |                                        |   |         |         |           |   |         |         |  
|------------------------------------------------ | --------------------------------------------------------------------------------- | ------------------------------------- | -------------------------------------- | - | ------- | ------- | --------- | - | ------- | ------- | -
|                                                 |                                                                                   |                                       |                                        |   | 2002    |         | 2001     
|                                                 |                                                                                   |                                       |                                        |   |         |         |          
|Operating Activities:                            |                                                                                   |                                       |                                        |   |         |         |           |  
|                                                 |                                                                                   | Net Loss                              |                                        | $ | (13,765 | )       |           | $ | (45,588 | )      
|                                                 | Adjustments to reconcile net loss to net cash flows
used in operating activities: |                                       |                                        |   |         |         |           |   |        
|                                                 |                                                                                   | Net change in:                        |                                        |   |         |         |           |   |         |        
|                                                 |                                                                                   |                                       | Interest and miscellaneous receivables |   |         | 3,381   |           |   |         | (3,178  | )
|                                                 |                                                                                   |                                       | Prepaid insurance                      |   |         | (15,000 | )         |   |         | 3,620   |  
|                                                 |                                                                                   |                                       | Accounts payable and accrued expenses  |   |         | (8,978  | )         |   |         | (11,120 | )
|                                                 |                                                                                   |                                       |                                        |   |         |         |           |  
|                                                 |                                                                                   | Net cash used in operating activities |                                        |   | (34,362 | )       |           |   | (56,266 | )      
|Cash and cash equivalents at beginning of period |                                                                                   |                                       | 1,471,139                              |   |         |         | 1,552,507 |  
|                                                 |                                                                                   |                                       |                                        |   |         |         |           |  
|Cash and cash equivalents at end of period       |                                                                                   | $                                     | 1,436,777                              |   |         | $       | 1,496,241 |  
|                                                 |                                                                                   |                                       |                                        |   |         |         |           |  

See accompanying notes to the Consolidated Financial Statements.

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B.H.I.T. INC.




NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)

NOTE 1. BASIS OF PRESENTATION

B.H.I.T. Inc. (the Company) was organized under the laws of the State of
Massachusetts pursuant to a Declaration of Trust filed March 19, 1985 for the
purpose of investing in mortgage loans. The Company was subsequently
reorganized as a Delaware corporation on March 13, 1987.

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, 2002 and December 31, 2001;
and the results of operations for the three months and six months ended June
30, 2002 and June 30, 2001; and the cash flows for the six months ended June
30, 2002 and 2001.

The financial information included herein for the three months and six months
ended June 30, 2002 and June 30, 2001 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 Companys latest annual report on Form 10-KSB for the
year ended December 31, 2001.

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

As of June 30, 2002, the Company holds a note totaling $275,000 secured by a
mortgage on commercial property in Dallas, Texas. The mortgage yields 12% per
annum and requires monthly interest payments. The current maturity date for
this loan is April 1, 2003. As of June 30, 2002, the carrying value of the
mortgage loan approximated its fair value.

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B.H.I.T. INC.




ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

GENERAL

The Registrant, B.H.I.T. Inc. (the Company) 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. The Company changed
its name from Banyan Hotel Investment Fund to B.H.I.T. Inc. in 1998.

BUSINESS OPERATIONS AND HISTORY

The Companys current operations relate primarily to servicing its mortgage
and cash investment portfolio and seeking profitable investments for its
available funds.

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.

The Company was originally established to invest in mortgage loans
principally to entities affiliated with VMS Realty Partners. These loans were
collateralized by hotel and resort properties.

As the result of a public offering that concluded January 13, 1986, the
Company received gross proceeds of $98,482,751. During the years 1989
through 1992 the Company experienced severe losses due primarily to a decline
in real estate property values and the resulting default on mortgage loans
held by the Company. The Company has recorded losses every year since 1989
resulting in the accumulated deficit totaling $86,349,393 at June 30, 2002.

In July 1999, Harvey Polly (Polly), the majority shareholder and then
Chairman of the Board of Directors, entered into an agreement to sell his
stock in the Company to Vesper Corporation or its nominee. In September 2000
the stock sale was completed, whereby Polly sold 5,370,563 shares
constituting his entire holdings, and at the same time, a charitable entity
controlled by Polly and his wife sold 500,000 shares of the Company to
Arrowhead Holdings Corporation (Arrowhead), the nominee of Vesper
Corporation. Upon closing of this transaction, Arrowhead held 39% of the
outstanding shares of the Company. Effective October 1, 2001, Polly resigned
from the Board of Directors and as an officer of the Company.

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B.H.I.T. INC.

RESULTS OF OPERATIONS

Total income for the three months and six months ended June 30, 2002
decreased by $8,442 and $20,884, respectively compared to the same periods in
2001, from $23,992 and $52,614 for the three and six months ended June 30,
2001 to $15,550 and $31,730 for the three and six months ended June 30, 2002.
The decrease in total income is the result of reduced interest income due to
lower interest rates on cash investments.

Total expenses for the three months and six months ended June 30, 2002
decreased by $26,641 and $52,707, respectively compared to the same periods
in 2001, from $52,817 and $98,202 for the three and six months ended June 30,
2001 to $26,176 and $45,495 for the three and six months ended June 30, 2002.
The decrease in total expenses is primarily the result of expense reductions
associated with relocation of the Companys principal office to a facility
shared with its majority shareholder, Arrowhead Holdings Corporation, in
Brecksville, Ohio. Prior to September 30, 2001, the Company operated an
office in New York City with two full-time employees. During the three months
and six months ended June 30, 2002 compared to the same periods in 2001, a
reduction in salaries and benefits expenses of $22,250 and $43,978,
respectively was the result of the elimination of the two full-time
employees. Similarly, a reduction in rent and utilities expenses of $5,957
and $10,969, respectively was the result of savings realized in the
allocation of expenses in a shared facility versus the cost of a separate
office. These reductions were partially offset by increases in other
miscellaneous administrative expenses of $1,566 and $2,240, respectively.

The net loss for the three months ended June 30, 2002 was $10,626 ($0.001 per
share) compared to a net loss of $28,825 ($0.002 per share) for the same
period in 2001. The net loss for the six months ended June 30, 2002 was
$13,765 ($0.001 per share) compared to a net loss of $45,588 ($0.003 per
share) for the same period in 2001.

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, 2002 and December 31,
2001 was $1,436,777 and $1,471,139, respectively. Cash and cash equivalents
decreased in the first six months of 2002 by $34,362 as the result of the net
loss of $13,765, a decrease in various liabilities totaling $8,978, an
increase in prepaid insurance of $15,000, and a decrease in interest
receivables and other assets of $3,381.

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. This mortgage
yields 12% per annum and requires monthly interest payments. Principal
payments made in April 1998 and June 2000 were $700,000 and $25,000,
respectively. As of June 30, 2002 the outstanding mortgage balance was
$275,000. The maturity date has been extended by mutual consent on several
occasions. The current maturity date is April 1, 2003.

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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

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CERTIFICATION OF CHIEF EXECUTIVE AND FINANCIAL OFFICERS

The undersigned chief executive officer and chief financial officer of the
Registrant do hereby certify, to the best of their knowledge, that this
Quarterly Report of Form 10-QSB fully complies with the requirements of
Section 13(a) or 15 (d) of the Securities Exchange Act of 1934, as amended,
and that the information contained in this report fairly presents, in all
material respects, the financial condition and results of operations of the
Registrant at the dates and for the periods shown in such report.

B.H.I.T. Inc.

|    |  |                                                                                                                      |  |                     
|--- |  | -------------------------------------------------------------------------------------------------------------------- |  | --------------------
|By: |  | /s/ James Benenson, Jr.James Benenson, Jr.
Chairman of the Board of Directors,
President and Chief Executive Officer |  | Date August 12, 2002
|   
|By: |  | /s/ John V. CurciJohn V. Curci
Vice-President, Treasurer & Chief
Financial Officer
Principal Accounting Officer      |  | Date August 12, 2002

12