SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB
(Mark One)

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

                  For the quarterly period ended JUNE 30, 1999
                                                 -------------

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

                    For the transition period from ___ to ___

                         Commission file number 0-18109
                                                -------

                            BCAM INTERNATIONAL, INC.
         ---------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

         New York                                    13-3228375
-------------------------------           ------------------------------------
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
incorporation or organization)

                1800 Walt Whitman Road, Melville, New York 11747
                ------------------------------------------------
                    (Address of principal executive offices)

                                 (516) 752-3550
                           ---------------------------
                           (Issuer's telephone number)

                                 Not applicable
                                 --------------
(Former  name,  former  address and former  fiscal year,  if changed  since last
report.)


     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or
for such shorter  period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes  X  No
    ---    ---

     Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court. Yes    No
                                                 ---    ---

     State the number of shares  outstanding of each of the issuer's  classes of
common equity as of the latest practicable date:  July 31, 1999: 25,291,971
                                                  -------------------------

     Transitional Small Business Disclosure Format  (check one): Yes     No  X
                                                                     ---    ---

<PAGE>


                            BCAM INTERNATIONAL, INC.



PART I.  FINANCIAL INFORMATION:

Item 1.  Financial Statements

   Condensed Consolidated Balance Sheet--June 30, 1999 (Unaudited).............1

   Condensed Consolidated Statements of Operations - Three and Six Months
       ended June 30, 1999 and 1998 (Unaudited)................................2

   Condensed Consolidated Statements of Cash Flows - Six months ended
       June 30, 1999 and 1998 (Unaudited)......................................3

   Condensed Consolidated Statement of Shareholders' Deficiency-
       Six months ended June 30, 1999 (Unaudited)............................. 4

   Notes to Condensed Consolidated Financial Statements - June 30, 1999
       (Unaudited)......................................................... 5-13

Item 2.  Management's Discussion and Analysis or Plan of Operations........14-17

PART II.  OTHER INFORMATION

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

Item 2.  Changes in Securities and Use of Proceeds.........................18-19

Item 4.  Submission of matters to a vote of security holders...............19-20

Item 6.  Exhibits and Reports on Form 8-K.....................................20

SIGNATURES....................................................................21

INDEX OF EXHIBITS.............................................................22



<PAGE>

<TABLE>
<CAPTION>



                    BCAM INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 1999
                                   (UNAUDITED)


<S>                                                                                <C>

ASSETS
Current assets:
    Cash and cash equivalents                                                      $            32,000
    Prepaid expenses and other current assets                                                   22,000
    Assets of discontinued operations                                                                0
                                                                                -----------------------
Total current assets                                                                            54,000

Patent costs and other assets                                                                  173,000
                                                                                -----------------------
Total assets                                                                       $           227,000
                                                                                =======================

LIABILITIES AND SHAREHOLDERS' DEFICIENCY Current liabilities:
    Current portion of long term debt                                              $            75,000
    Accounts payable                                                                           289,000
    Accrued expenses and other current liabilities                                             320,000
    Liabilities of discontinued operations                                                     125,000
                                                                                -----------------------
Total current liabilities                                                                      809,000
                                                                                -----------------------

Commitments and contingencies (Note 7)
Shareholders' deficiency
    Acquisition preferred stock, par value $.01 per share:
       750,000 shares authorized, none issued                                                        -
    Preferred stock, 2,000,000 shares authorized, none issued                                        -
    Common stock, par value $.01 per share; authorized 65,000,000
       shares, 26,055,153 shares issued and 25,291,971 shares                                  261,000
       Outstanding, see Note 5.
    Additional paid-in capital                                                              30,083,000
    Deficit                                                                                (30,027,000)
                                                                                -----------------------
                                                                                               317,000
    Less:  763,182 treasury shares                                                            (899,000)
                                                                                -----------------------
         Total shareholders' deficiency                                                       (582,000)
                                                                                -----------------------
Total liabilities and shareholders' deficiency                                     $           227,000
                                                                                =======================







SEE ACCOMPANYING NOTES
</TABLE>


<PAGE>
<TABLE>
<CAPTION>


                    BCAM INTERNATIONAL, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998
                                   (UNAUDITED)

                                                 SIX MONTHS ENDED                   THREE MONTHS ENDED
                                                 ----------------                   ------------------
                                              1999              1998              1999              1998
                                        ----------------  ----------------  ----------------  ---------------
<S>                                     <C>               <C>               <C>               <C>

License revenue                         $             0   $         2,000   $             0   $            0
                                        ----------------  ----------------  ----------------  ---------------

Costs and expenses:
  Selling, general and                          410,000           900,000           156,000          335,000
administrative
  Charge for compensatory element of
      1997 options approved in 1998                   0           858,000                 0                0
  Research & development                         29,000           281,000            10,000          154,000
                                        ----------------  ----------------  ----------------  ---------------
                                                439,000         2,039,000           166,000          489,000
                                        ----------------  ----------------  ----------------  ---------------
     Loss from operations                      (439,000)       (2,037,000)         (166,000)        (489,000)

Interest and other income (expense)              (4,000)           31,000            (2,000)          19,000
                                        ----------------  ----------------  ----------------  ---------------
Loss from continuing operations                (443,000)       (2,006,000)         (168,000)        (470,000)
                                        ----------------  ----------------  ----------------  ---------------

Discontinued operations - Drew,
   operations through September                       0        (4,967,000)                0       (3,122,000)
1998
Discontinued operations - Drew, gain
   on sale of 33.3% interest, net of
   33.3% of Drew's losses                       997,000                 0                 0                0
                                        ----------------  ----------------  ----------------  ---------------
     Subtotal - Drew                            997,000        (4,967,000)                0       (3,122,000)
Discontinued operations - HCAD and
   ECSD, including estimated loss on
   disposal of HCAD of approximately
   $250,000 in 1998                                   0          (803,000)                0                0
                                        ----------------  ----------------  ----------------  ---------------
Income (loss) from discontinued
   operations                                   997,000        (5,770,000)                0       (3,122,000)
                                        ----------------  ----------------  ----------------  ---------------
Income (loss) before extraordinary              554,000        (7,776,000)         (168,000)      (3,592,000)
item
Extraordinary item - charge for
   restructure of debt                                0          (552,000)                0         (552,000)
                                        ----------------  ----------------  ----------------  ---------------
Net income (loss)                       $       554,000   $    (8,328,000)  $      (168,000)  $   (4,144,000)
                                             ===========       ===========       ===========      ===========
Basic net income (loss) per share:
   Continuing operations                $         (0.02)  $         (0.11)  $         (0.01)  $        (0.03)

   Discontinued operations              $          0.04   $         (0.30)  $          0.00   $        (0.15)
                                        ----------------  ----------------  ----------------  ---------------
Income(loss)before extraordinary item   $          0.02   $         (0.41)  $         (0.01)  $        (0.18)

   Extraordinary item                   $          0.00   $         (0.03)  $          0.00   $        (0.03)
                                        ----------------  ----------------  ----------------  ---------------
      Net income (loss) per share       $          0.02   $         (0.44)  $         (0.01)  $        (0.21)
                                                 ======             ======            ======           ======
Weighted average number of common
   Shares outstanding (see Note 5)           22,957,000        19,037,000        23,341,000       19,914,000
                                             ==========        ==========        ==========       ==========

SEE ACCOMPANYING NOTES
</TABLE>



<PAGE>
<TABLE>
<CAPTION>


                    BCAM INTERNATIONAL, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                                                                          SIX MONTHS ENDED JUNE 30
                                                                                 ------------------------------------------
                                                                                        1999                     1998
                                                                                 ------------------       -----------------
         <S>                                                                     <C>                      <C>
         OPERATING ACTIVITIES
         Net income (loss)                                                       $         554,000        $     (8,328,000)
         Adjustments to reconcile to net cash used in operating activities:
           Gain on sale of Drew                                                           (997,000)                      -
           Depreciation and amortization                                                    20,000                 187,000
           Amortization of unamortized charge for beneficial debt conversion                     -               3,084,000
           Amortization of deferred finance cost and debt discount                          28,000                 275,000
           Write-off of deferred finance cost and debt discount                                  -               1,651,000
           Compensation charge for stock options including $286,000
              related to discontinued operations                                                 -               1,144,000
           Interest paid in kind                                                                 -                 390,000
           Changes in operating assets and liabilities:
             Accounts receivable                                                                 -                (248,000)
             Inventory                                                                           -                (442,000)
             Current assets of discontinued operations                                           -                  92,000
             Prepaid expenses and other current assets                                      26,000                 (85,000)
             Accounts payable, accrued expenses, current liabilities, other                  2,000                 404,000
                                                                                 ------------------       -----------------
         Net cash (used in) operating activities                                          (367,000)             (1,876,000)
                                                                                 ------------------       -----------------
         INVESTING ACTIVITIES
         Purchase of equipment                                                                   -                (238,000)
                                                                                 ------------------       -----------------
         Net cash (used in) provided by investing activities                                     -                (238,000)
                                                                                 ------------------       -----------------
         FINANCING ACTIVITIES
         Proceeds from sale of common stock                                                      -               2,000,000
         Proceeds from exercise of options and warrants                                          -                  65,000
         Payment of notes payable and long term debt                                             -                (121,000)
         Drawdown of revolving credit agreement                                                  -                 550,000
         Payment of stock registration and issuance costs, proxy and Drew sale            (139,000)               (150,000)
         Cash paid for deferred financing costs                                                  -                 (25,000)
                                                                                 ------------------       -----------------
         Net cash provided by (used in) financing activities                              (139,000)              2,319,000
                                                                                 ------------------       -----------------

         (Decrease) increase in cash and cash equivalents                                 (506,000)                205,000
         Cash and cash equivalents at beginning of period                                  538,000               1,594,000
                                                                                 ------------------       -----------------
         Cash and cash equivalents at end of period                              $          32,000        $      1,799,000
                                                                                 ==================       =================


Supplemental  information on non-cash financing  activities:  See Notes 3 and 4,
regarding the sale of Drew and the elimination of certain  Convertible Notes and
warrants and non-cash interest paid.



SEE ACCOMPANYING NOTES
</TABLE>

<PAGE>

<TABLE>
<CAPTION>


                    BCAM INTERNATIONAL INC. AND SUBSIDIARIES
          CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIENCY
                   SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED)






                                        COMMON STOCK $.01 PAR
                                               VALUE
                                                                   PAID-IN                                  TREASURY
                                        SHARES        AMOUNT       SURPLUS        DEFICIT       SUBTOTAL      STOCK         TOTAL
                                      ----------------------------------------------------------------------------------------------
<S>                                   <C>            <C>         <C>           <C>             <C>          <C>         <C>
Balance at January 1, 1999            21,754,471     $218,000    $30,126,000   $(30,581,000)   $(237,000)   $(899,000)  $(1,136,000)

Shares issued in January and May
  "repricing" increments of April
   1998 offering                       4,300,682       43,000        (43,000)             -            -            -             -
Net income                                     -            -              -        554,000      554,000            -       554,000
                                      ----------------------------------------------------------------------------------------------
Balance at June 30, 1999 (a)          26,055,153(a)  $261,000    $30,083,000   $(30,027,000)   $ 317,000    $(899,000)  $  (582,000)
                                      ==============================================================================================



(a)  Excludes  additional  shares issuable,  without  additional  consideration,
     pursuant to  "repricing"  provisions  of the April 1998  offering of common
     stock and warrants. See Note 5.










SEE ACCOMPANYING NOTES
</TABLE>

<PAGE>


                    BCAM INTERNATIONAL, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                  JUNE 30, 1999

1. BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally  accepted  accounting  principles for
interim  financial  information  and  with  the  instructions  to  Form  10-QSB.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of management,  all adjustments  (consisting of normal  recurring
adjustments and accruals) considered necessary for a fair presentation have been
included.  See  Form  10-KSB  for the  year  ended  December  31,  1998 for more
information.

2.  DESCRIPTION  OF  BUSINESS,   PRINCIPLES  OF  CONSOLIDATION,   GOING  CONCERN
CONSIDERATION

     BCAM  International,   Inc.  and  Subsidiaries  (the  "Company")  has  been
primarily  a  software,  technology  and  consulting  company,  specializing  in
providing  ergonomic  solutions  (human  factors  engineering)  to  individuals,
corporations  and  government.  The  Company's  revenues had  historically  been
derived  primarily  from  ergonomic  consulting  services.  Through  a series of
actions since approximately  September 1997 including the acquisition of 100% of
Drew  Shoe  Corporation  ("Drew"),  subsequent  disposition  of 100% of Drew and
certain other  restructuring  activities  (which are summarized in the following
paragraph and described in more detail in Notes 3 and 5 to the Company's  annual
Consolidated  Financial  Statements included with Form 10-KSB for the year ended
December  31,  1998),  the Company is now a  technology  company in the field of
Intelligent Surface Technology ("IST") blending biomechanics and ergonomics with
innovative  electronic  systems  and  software  (see,  however,   Going  Concern
Consideration, below).

     The acquisition and restructuring  activity since  approximately  September
1997 has included the  following.  On September 22, 1997,  the Company  acquired
Drew as described in Note 4 to the Consolidated  Financial  Statements contained
in Form 10-KSB for the year ended  December  31, 1998.  Drew is a  manufacturer,
marketer and distributor of medical footwear.  The purchase of Drew was financed
principally  by the  issuance  of 10%/13%  Convertible  Notes and  Warrants.  In
December  1997  the  Board  of  Directors  of the  Company  decided  to sell the
operations of the Ergonomic  Consulting  Services  Division  ("ECSD") due to the
inability  of that  business  to generate  operating  profits for the Company as
discussed  further in Note 6. In February  1998,  the Board of  Directors of the
Company decided to discontinue  the HumanCAD  Systems  Operations  ("HCAD") as a
result of the lack of available  financing,  on acceptable terms to the Company,
to further the necessary  business  development  activities of that operation as
discussed further in Note 6. In April 1998 the Company  restructured the 10%/13%
Convertible  Notes which included granting a 10% interest in the common stock of
Drew (and also 10% of the common stock of another subsidiary, BCAM Technologies,
Inc.) to the  noteholders  as further  discussed in Note 5. In October 1998, the
Company sold 56.7% of Drew to the holder of the 10%/13% Convertible Notes and on
March 4, 1999 it sold its remaining  33.3% interest in the common stock of Drew,
after  receipt of  approval  of the  shareholders  of the  Company as  discussed
further in Note 3.

     The results of  operations  for the three and six month  periods ended June
30, 1999 and 1998 reflect the results of  operations  of Drew as a  discontinued
operation with a measurement date of October 2, 1998.

     The  consolidated   financial  statements  include  the  accounts  of  BCAM
International,  Inc. and its subsidiaries,  principally BCAM Technologies,  Inc.
(principally IST and related technologies).

     Results of  operations  for the three and six month  periods ended June 30,
1999 are not necessarily  indicative of results of operations to be expected for
the year ending December 31, 1999.  Further,  the six months ended June 30, 1999
include a one-time, non-cash gain on the sale of Drew.

     GOING CONCERN CONSIDERATION - As indicated in the accompanying consolidated
financial  statements,  as of June 30, 1999,  the Company had  negative  working
capital  of   approximately   ($755,000)  and  a  shareholders'   deficiency  of
approximately  ($582,000),  and for the six months  then  ended had losses  from
continuing operations of approximately ($439,000) with no revenues.  Losses from
continuing  operations have continued since June 30, 1999. Further,  the Company
has a development  agenda which requires  additional  financing.  These factors,
among  others,  indicate that the Company is in need of  significant  additional
financing  and/or a strategic  business  arrangement  in order to  continue  its
operations  through the 1999 fiscal  year.  The Company  believes  that its cash
resources at June 30, 1999 are  insufficient to fund its operations  through the
third  quarter of 1999 and it will be  required to raise  additional  capital or
enter into a strategic  business  arrangement  in order to continue  its planned
operations.

     The  Company's   plans  include   undertaking  a  development   program  to
miniaturize and lower the cost of IST applications in the belief that the result
will  be a more  marketable  product  than  the  current  IST  application.  The
development  and  subsequent  marketing  is a  multi-year  project.  In order to
miniaturize and lower the cost of IST applications, the Company and a subsidiary
of MCNC (founded in 1980 as the  Microelectronics  Center of North  Carolina and
now  known  simply as  MCNC)("MCNC")  have  completed  an alpha  prototype  of a
microvalve  component to control air flow in the IST system.  A beta (production
ready)  version  of  the  MCNC  microvalve  would  be  the  subject  of  further
development  about which the Company and MCNC have  entered  into a  non-binding
letter of intent. The Company's ability to perform such further development will
be dependent upon its ability to obtain  sufficient  financial  resources or its
ability to enter into a strategic  transaction  which would  provide the Company
the  resources  to perform such  development.  Such  further  development  would
involve costs incurred under arrangements with MCNC as well as costs incurred by
the  Company.   Beyond  development,   the  Company  would  require  capital  to
commercialize,  market and sell.  The  Company's  plans are to raise  additional
financing  or enter into a strategic  transaction  in order to proceed  with the
development program. Other courses of action including the potential merger with
another  company  (resulting in a change of control of the Company) and possible
spin-off of the IST  technology  are being  explored.  At the present time,  the
Company is in discussion with potential sources of additional financing and with
potential candidates for a strategic transaction.  No assurance can be made that
such discussions would result in definitive  arrangements.  These factors, among
others,  indicate  that in the absence of  additional  financing  or a strategic
business  arrangement,  the Company does not have the financial  resources to go
forward with such further development and to continue as a going concern.

     There  can  be no  assurances  that  management's  plans  described  in the
preceding paragraph will be realized.  The accompanying  Consolidated  Financial
Statements  do not include any  adjustments  related to the  recoverability  and
classification  of assets or the amounts and  classification of liabilities that
might be  necessary  should the  Company be unable to continue  operations  as a
going concern.

     For  further  information,  refer  to the  audited  consolidated  financial
statements  and related  notes  thereto of the Company (at December 31, 1998 and
for the two year periods then ended) included in the Company's  annual report on
Form 10-KSB for the year ended December 31, 1998.

3. SALE OF DREW -

     During the six months ended June 30, 1999,  the Company  completed the sale
of Drew.

     On October 2, 1998,  the Board of Directors of the Company  approved a plan
to dispose of the Company's interest in Drew (the "Plan"). Pursuant to the Plan,
on October 23, 1998, the Company  entered into a Stock Purchase and  Restructure
Agreement with Impleo,  LLC. ("Impleo") and sold 56.7% of the outstanding shares
of its Drew  subsidiary  to  Impleo in  exchange  for  approximately  $3,780,000
principal amount of the Company's  10%/13% Secured  Convertible Notes ("Notes").
Impleo,  which initially owned $5,000,000  principal amount of Notes,  purchased
the remaining  $1,000,000  principal amount (plus accrued  interest) of Notes on
October 23,  1998,  thereby  making it the sole holder of the Notes.  After this
transaction,  the  remaining  principal  balance  on the  Convertible  Notes was
$2,220,000  plus accrued  interest  which  aggregated  approximately  $1,025,000
(including   approximately  $805,000  paid-in-kind  and  approximately  $220,000
accrued) as of March 4, 1999 when the remaining  33.3% was sold.  The Notes were
secured by all of the assets of the Company and were due in April 1999. In April
1998,  the  Company  had  granted  Impleo and the other  holders of the  10%/13%
convertible  notes an  aggregate  10%  ownership  interest in Drew.  The Company
entered  into a separate  Purchase  and Sale  Agreement on October 23, 1998 with
Impleo in which it agreed to promptly  submit to its  shareholders a proposal to
sell the remaining  33.3% of Drew to Impleo in exchange for the  cancellation of
the then  remaining  principal  amount of Notes  together with accrued  interest
thereon  (the  "Second  Sale").  On March  4,  1999,  at a  Special  Meeting  of
Shareholders,  the  sale of the  remaining  33.3% of Drew  was  approved  by the
shareholders and such remaining interest was sold.

     As a condition of the sale of the Drew shares to, and the redemption of the
Notes from, Impleo, Michael Strauss, the Chairman, President and Chief Executive
Officer of the  Company,  has become the Chief  Executive  Officer of Drew.  Mr.
Strauss  is  obliged to spend a defined  amount of his time on the  business  of
Drew. Mr. Strauss will continue to serve the Company as its Chairman,  President
and Chief Executive Officer and has entered into a new employment agreement with
the Company that reduces his  compensation  from the Company and requires him to
spend a defined amount of his time on the Company's business.

     Because the Company's intention was to divest itself of its entire interest
in  Drew  pursuant  to the  Plan,  the  Company  has  accounted  for  Drew  as a
discontinued operation with a measurement date of October 2, 1998.  Accordingly,
the Company reflected Drew's  operations  (which had been consolidated  prior to
that  date)  and the gain  from  the  sale of the  33.3%  interest  as  separate
components of discontinued operations in the accompanying Condensed Consolidated
Statements  of  Operations.  The Company  has been  informed by Drew that Drew's
operations  for the  remainder of 1998  (October  through  December) and for the
period  until its  ultimate  sale on March 4, 1999,  were  expected  to generate
material losses. The Company's  proportionate  share of such losses would likely
be material.  Generally accepted accounting principles, as reflected in Emerging
Issues Task Force Issue 85-36, indicate that such operating losses should not be
recorded when the sale transaction will generate a gain, after  considering such
losses,  since the  recognition  of losses in one period will generate a gain in
the next.  The Company did report a non-cash gain of  approximately  $997,000 on
the March 4, 1999 sale of the 33.3%  interest  in Drew  after  reflecting  33.3%
share of Drew's losses from  operations  from October 1998 through March 4, 1999
(which the Company  believes,  based on  information  provided by Drew, to be in
excess of approximately $400,000) and costs of disposal.

     Impleo is an affiliate of Wexford Management, LLP.

     In connection  with the sale and  redemption  transaction,  the Company has
been  released  from  its  guarantee  of  approximately  $3,800,000  of  secured
obligations of Drew to a bank.

     Separately,  the Company and Drew,  under the Plan, have reached  agreement
with the  sellers of Drew to the  Company  in 1997 to: (i) cancel an  employment
contract and enter into a severance  agreement with the former president of Drew
(to be paid by Drew), (ii) cancel approximately $200,000 of notes payable by the
Company to the former  owners of Drew,  (iii)  forgive  certain  purchase  price
adjustments  due to  the  Company  from  the  former  owners  of  Drew  and  the
assumption,  by Drew, of certain  contingent  liabilities in connection with the
Ulin & Holland  litigation in which the Company was subsequently  dismissed as a
defendant.

     Also see Note 7 regarding a  shareholder  derivative  action  commenced  in
February 1999 regarding this matter.

     For selected  balance sheet  information at September 30, 1998  (unaudited)
and the results of  operations  for the nine  months  ended  September  30, 1998
(unaudited)  and for the period from September 23, 1997 (date of acquisition) to
December  31,  1997 for Drew,  the reader is referred to the Form 10-KSB for the
year ended December 31, 1998. For information regarding the purchase and sale of
Drew, the reader is referred to Note 4 to Consolidated  Financial  Statements as
of and for the year ended December 31, 1998 included in Form 10-KSB for the year
ended December 31, 1998 and the related Forms 8-K filed by the Company.

4. LONG TERM DEBT AND CONVERTIBLE NOTES

     SECURED  10%/13%  CONVERTIBLE  NOTES  AND  WARRANTS  - In order to fund the
acquisition of Drew and provide working capital to the Company, on September 19,
1997,  the Company  issued  convertible  notes (the  "Convertible  Notes"),  and
Non-Redeemable Class DD Warrants to purchase 2,400,000 shares of common stock of
the  Company  at  $1.75  (subject  to  the  operation  of  certain  antidilution
provisions)  prior to September 19, 2002, in the aggregate amount of $6,000,000.
The Convertible Notes bore an interest rate of 10%, payable  semi-annually,  but
the Company,  at its  discretion,  could pay interest in the form of  additional
Convertible  Notes  ("payment-in-kind")  in which case the annual  interest rate
became 13% with  semi-annual  compounding.  The  Convertible  Notes required the
Company to  maintain  compliance  with  certain  financial  covenants  including
maintenance of minimum  levels of interest  coverage and net worth (as defined).
At December 31, 1997,  the Company was in  violation of such  covenants  and the
Convertible  Notes were  subsequently  restructured  as  described in the second
succeeding  paragraph.  On March 19, 1998 and on September 19, 1998, the Company
elected to make the  semiannual  interest  payment in kind. As such, the Company
increased the related obligation under the Convertible Notes to $6,805,350.

     The Convertible  Notes were due, as amended (see below), on April 16, 1999,
unless at any time after September 19, 1998 they were converted,  as amended, at
$.80 per share, into 7,500,000 shares of Common Stock of the Company (subject to
the operation of antidilution  provisions to certain transactions  including the
April 1998  financing  described  in Note 5 and related  "repricings"  and other
potential financings).

     On April 14, 1998, the  noteholders  and the Company entered into the First
Amendment of the Note Purchase Agreement (together with a Stock Pledge Agreement
and Security Agreement) in order to restructure the obligation. The key elements
of the restructuring were as follows: (1) waiving of the Company's violations of
the financial  covenants at December 31, 1997 (as well as certain other breaches
of the agreement),  (2) eliminating  the financial  covenants  through April 16,
1999,  (3)  securing  the  obligation  with a pledge of all of the assets of the
Company  (excluding  the  assets of Drew which are  already  pledged to a bank),
including the stock of the Company's subsidiaries, (4) accelerating the maturity
date  for the  obligation  from  September  19,  2002 to  April  16,  1999,  (5)
cancellation of Class DD warrants to purchase  400,000 shares of common stock of
the Company,  (6) issuance to the holders of a total of 10% of the common shares
of the Company's subsidiaries, Drew Shoe Corporation and BCAM Technologies, Inc.
As a  result  of  the  restructuring,  the  Company  had a  significant  capital
requirement to repay this  obligation  ($6,805,350  including  interest "paid in
kind" on March  19,  1998 and  September  19,  1998,  respectively,  and  before
additional  interest  payments  in cash or in kind  subsequent  to that date) by
April 19, 1999 or face default and  foreclosure  on the security.  The Company's
intention was to refinance or otherwise restructure this obligation prior to its
maturity.

     During the three and six months  ended June 30, 1998 the Company  reflected
an  aggregate  of  approximately  $2,500,000  of  charges to  operations  and/or
stockholders'  equity in connection  with the  restructuring  of the debt.  Such
charges included: (i) approximately $1,651,000 to write-off interest and finance
costs as further described in the second following paragraph, (ii) approximately
$552,000 charged to extraordinary item representing the approximate value of the
10% interest in subsidiaries given up and (iii)  approximately  $281,000 charged
to  shareholders'  equity  representing  the unamortized  portion of the amounts
assigned to the value of the 400,000  Class DD warrants  given up by the holders
of the Convertible Notes.

     As discussed in Note 3, on October 23,  1998,  the Company  agreed with the
holders  of the  Convertible  Notes to  redeem  $3,780,000  principal  amount of
Convertible  Notes in exchange for 56.7% of the common  stock of Drew.  Further,
the parties agreed that the Company would request shareholder approval to redeem
the remaining  approximately  $2,220,000  principal amount of Convertible  Notes
together with  paid-in-kind  and accrued  interest in exchange for the remaining
33.3% of the common stock of Drew owned by the Company.  On March 4, 1999,  at a
Special  Meeting of  Shareholders,  the  proposal  to sell the  remaining  33.3%
interest  in Drew was  approved by the  shareholders  and this  remaining  33.3%
interest in Drew was sold.

     The Company originally recorded approximately  $1,872,000 of the $6,000,000
received  from the sale of the  Convertible  Notes and Warrants as the estimated
value (based upon a "Black  Scholes"  calculation)  of the  detachable  warrants
issued in connection with the  Convertible  Notes resulting in a discount to the
value assigned to the Convertible  Notes.  Additionally,  the Company originally
recorded  approximately  $825,000 in deferred financing costs in connection with
the issuance of the Convertible Notes. Approximately $1,872,000 in debt discount
and  $825,000  of deferred  finance  costs were being  charged to  interest  and
financing  costs over the original 60 month term of the  Convertible  Notes.  As
discussed  above,  in April 1998, the Company and the holders of the Convertible
Notes agreed to shorten the  maturity of the  Convertible  Notes from  September
2002 to April 1999. Under generally accepted  accounting  principles the Company
recorded  a  charge  to  interest  and  financing  costs  during  1998  for  the
amortization  of this discount and these costs that would have  occurred  during
the 41 months that have been shortened from the original maturity ($1,651,000).

     The private  placement  of  convertible  notes and warrants to one investor
group  (aggregating  $5,000,000  of the  total  $6,000,000)  was  made  with the
assistance of an investment  banker who charged a cash fee of 6% ($300,000) plus
187,500  unregistered  shares  of  common  stock  (valued  at $1.20 per share to
reflect a discount for lack of registration),  and Class EE warrants to purchase
500,000 shares of common stock,  at an exercise price of $0.80 per share, of the
Company.  The cash  fee,  shares of stock and the  estimated  fair  value of the
warrants aggregate  approximately  $1,025,000.  This amount has been apportioned
between  deferred  financing costs (discussed in the preceding  paragraph),  and
acquisition  costs of Drew. The portion  allocated to deferred  financing  costs
(approximately   $775,000),   together   with  legal  and  other  costs  of  the
transaction,  were being amortized over the term of the Convertible Notes. There
were no investment  banking fees  associated  with the  remaining  $1,000,000 of
proceeds.

     Remaining debt discount and deferred financing costs in connection with the
transaction were amortized over the remaining term of the Convertible Notes.

     The market  value of the  Company's  common  stock on The  Nasdaq  SmallCap
Market on September  19, 1997 was  approximately  $1.50 at the  inception of the
Notes and  approximately  $1.25 and $0.25 at March 19,  1998 and  September  19,
1998,   respectively,   (when  additional   Convertible  Notes  were  issued  as
payment-in-kind for interest).

     In response to positions  taken by the Securities and Exchange  Commission,
Emerging  Issues  Task Force  Statement  D-60 has been  issued.  Statement  D-60
requires  certain  accounting for securities  issued which are convertible  into
common stock at a value which is  "beneficial"  at the date of issuance (such as
the Convertible  Notes).  This accounting  required that the beneficial value be
charged to operations  (based upon the traded market  price,  without  discount,
compared to the  conversion  price) in the case of a  convertible  note,  over a
period  reflecting the shortest period in which the investor had to exercise and
under the most favorable terms to the investor. As such, the Company has charged
approximately  $5,925,000 at September 19, 1997, an additional $219,000 at March
19, 1998 and no additional  amount at September 19, 1998, to Unamortized  Charge
for  Beneficial  Debt  Conversion  in the  shareholders'  equity  section of its
Consolidated  Balance Sheet.  Such amounts represent the value of the beneficial
debt  conversion  feature  of the  Convertible  Notes  measured  at the  date of
issuance in  September  1997 and for the  payment-in-kind  in March 1998.  These
amounts were charged to Interest and financing costs of discontinued  operations
in the Condensed  Consolidated  Statements of Operations for approximately  $-0-
and  $1,591,000,  respectively,  during the six months  ended June 30,  1999 and
1998.

     In  connection  with the sale of 56.7% of the common  stock of Drew and the
redemption  of  $3,780,000 of 10%/13%  Convertible  Notes in October  1998,  the
Company was released from its  guarantee of the term loan and  revolving  credit
obligations of Drew. Additionally,  the Company has been released from liability
for the $200,000  balloon  payment to the sellers of Drew due on  September  19,
1999.

     At June 30, 1999, the obligation  under the 10%/13%  Convertible  Notes was
satisfied,  and  the  remaining  warrants  were  cancelled,  by the  sale of the
Company's remaining 33.3% interest in Drew to the Noteholder.

     Long-term  debt at June 30, 1999 (payable in 1999 and therefore  classified
as a current liability in the accompanying Condensed Consolidated Balance Sheet)
consists of $75,000 of notes payable to the sellers of Drew, bearing interest at
8% with  monthly  payments of principal  aggregating  $8,333 plus  interest.  In
February  1999,  the Company  advised  the holders of the seller  notes that the
January 1999 monthly  payment of  principal  and interest  would not be made and
that future monthly  payments  would  similarly not be made until and unless the
Company obtained new financing.  Such notes are therefore in arrears at June 30,
1999.  The  Company  requested  the  Noteholders'  forbearance  and  there is no
assurance  that the holders of the seller notes will not take action against the
Company to collect their notes.

5. PRIVATE PLACEMENT OF EQUITY DURING 1998, SUBJECT TO "REPRICING"

     Beginning on April 14, 1998,  the Company  commenced a private  offering of
its common stock and  warrants.  The offering  generated  aggregate  proceeds of
$2,000,000 from the purchase of 1,980,198  shares of common stock of the Company
subject to "repricing",  as described  below,  and warrants to purchase  250,000
shares of common stock at $2.05 for three years by seven  accredited  investors.
The Company has agreed to, and did, register such shares.

     The number of shares  issuable  to these  investors  were to be  "repriced"
pursuant to a schedule in two  $300,000  increments  and then in seven  $200,000
increments on nine occasions commencing with the effectiveness of a registration
statement (August 13, 1998) covering up to 4,000,000 additional shares and again
60 days later and then in 30 day  intervals.  On such dates,  the investor would
receive the additional number of shares, if any, that result from the difference
between  the number of shares  actually  issued  and the number of shares  which
would have been issued using a 23% discount to the market price, as defined,  at
that time. The operation of this provision could result in significantly greater
number of shares being issued.  The Company paid a placement agent a fee of 6.5%
with respect to this transaction.

     In  August  1998,  436,047  shares  were  issued  in  connection  with  the
"repricing"  provisions and very significant  additional shares (estimated to be
in excess of 5,000,000  shares)  would be required to be issued for the October,
November and December 1998 "repricing" dates.

     On December 24,  1998,  the Company and the  investors  agreed to amend the
subscription  agreement  with  respect to  "repricing".  The  December  24, 1998
amendment  has four  principal  effects as  follows:  (i) the  August,  October,
November  and  December  1998  "repricings"  are  eliminated  in  favor  of  new
"repricings"  which began on January 1, 1999, (ii) the discount from market used
to measure the  "repricings" was increased from 23% to 27% (iii) a ceiling price
was  established  of $0.75  per  share  and (iv)  certain  penalties  under  the
agreement were waived.  Under the amended  agreement,  the  investors,  at their
option,  may  reprice  up to 12 1/2% of the amount  invested  (an  aggregate  of
$250,000 based upon the original $2,000,000 invested in April 1998) on the first
of each month  beginning with January 1, 1999. Any amounts not "repriced" in any
month may be carried over to any future month without limitation.

     In  connection  with  the  amendment,  the  Company  was  obliged  to issue
additional  shares to the  investors  to bring the total  shares from  1,980,198
originally  purchased up to 2,666,667  shares  (inclusive of the 436,047  shares
issued in August 1998 as discussed in the  preceding  paragraph)  based upon the
$0.75 ceiling price in the amendment.  Additionally, these investors requested a
"repricing" of $190,000 of the offering in January 1999. The obligation to issue
shares to reflect  the new  ceiling and the  January  1999  repricing  increment
resulted in the issuance to the investors of an additional  2,259,827  shares on
January 27, 1999. On May 17, 1999 these  investors  requested the "repricing" of
an additional  $127,500 of the offering resulting in the requirement to issue an
additional  2,040,855  shares.  Such  shares  have  been  accounted  for  in the
accompanying  condensed  consolidated  financial  statements as though they were
issued 10 days later,  when required to be issued,  even though such shares will
not actually be issued until August 1999.

     Of the total dollar amount of the offering,  only $317,500  ($190,000  plus
$127,500 referred to in the preceding  paragraph) of the $2,000,000  proceeds of
the offering has been "repriced"  leaving  $1,682,500  still to be "repriced" at
the holders' option. The "repricing" of this amount  ($1,682,500),  if requested
by the  investors,  at market prices for the Company's  stock in July 1999 would
result in a very significant  number of additional  shares being issued and in a
change  of  control  of the  Company  to  these  investors.  The  Company  is in
discussions with the  representatives  of the investors to possibly  restructure
the "repricing"  provisions in light of the very significant  effects that would
result at current prices of the Company's common stock.

     The  Company is  exposed to  significant  penalties  for  failure to file a
registration  statement  covering  additional  shares  issuable  with respect to
possible "repricings" prior to April 15, 1999 (which registration  statement was
not filed by the  Company)  and to have  such  registration  statement  declared
effective  prior to July 31, 1999 (which has not occurred) and has agreed not to
issue certain  financings.  As a practical  matter,  the Company expects that it
will be unable  to file such  registration  statements  any time soon  until the
financial and liquidity concerns discussed in Note 1 are resolved, if at all. As
such, the Company is attempting to renegotiate  such penalties also. The Company
has  requested,  from the  investors,  a waiver of such penalties for the period
from April 15, 1999 through June 30, 1999 while such discussions take place. The
investors  have  agreed to such  waiver and,  as such,  no  penalties  have been
accrued to the financial statements as of June 30, 1999.


6. OTHER DISCONTINUED OPERATIONS

     ERGONOMIC  CONSULTING  SERVICES  DIVISION - In December  1997, the Board of
Directors of the Company approved a plan to sell the operations of its Ergonomic
Consulting Services Division ("ECSD").  ECSD had not generated operating profits
and was no longer  considered a core asset in light of the  Company's  strategy.
The plan of disposition  involved  finding a strategic buyer who would take over
the  Company's  contractual   commitments  (some  of  which  are  long-term)  to
consulting  division  customers and  liquidating  the remaining  assets  through
collection  (with respect to  receivables)  or sale or disposal (with respect to
furniture and equipment). On February 9, 1998, the Company closed on the sale of
the revenue  contract rights and transfer of the obligations for certain related
personnel of the ECSD to a third  party.  Terms of the sale call for the payment
of a portion of future  revenues of the  contracts  sold as well as a portion of
certain  follow-on work, or referrals for work provided by the Company.  At June
30,  1999,  there  were no  material  assets or  liabilities  of the  ECSD.  The
operations of the ECSD from January 1, 1998 through disposal on February 9, 1998
did not  generate a loss due to the high  utilization  of personnel on contracts
during that time.  Approximately  $50,000 was accrued in the  December  31, 1997
financial statements as a loss on disposal representing management's estimate of
the  write-off of furniture  and  equipment  and accrual of certain lease costs.
There was no material  severance paid in connection with the  discontinuance  of
the ECSD.

     There were not material royalties from the sale of ECSD in the three or six
months ended June 30, 1999 or 1998.

     HUMANCAD  SYSTEMS  OPERATIONS - During late  February  1998, as a result of
specific  events at the time,  the Board of Directors of the Company  approved a
plan to seek alternative value for the HumanCAD Systems operations  ("HCAD") by:
(i)  initially  reducing the activity and (ii) seeking a strategic or management
buyer for the operation.  In December 1997, the Company had reached  preliminary
agreement  with  a  funding  source  to  provide  approximately  $2,500,000  for
development  and marketing of the Company's  existing and planned HCAD ergonomic
modeling software products. In January 1998, the Company commenced executing the
business plan  contemplated  by the financing  but in late  February  1998,  the
funding  source  advised  the  Company  that they were no longer  willing  to go
forward with the planned  financing.  The Company was  unsuccessful in seeking a
strategic or possible  management  buyer for a majority of HCAD on a basis which
would result in meaningful value for the shareholders and therefore,  in October
1998, placed the operations of HCAD in receivership under the bankruptcy laws of
Ontario, Canada, where HCAD was headquartered.

     The  measurement  date for the  discontinuance  was February 1998, at which
time losses from  January 1, 1998  through  February  1998 were  recorded  and a
provision  (approximately  $250,000) for  discontinued  operations  (principally
severance  and  non-cancelable  lease  costs) was made.  Such amount  aggregated
approximately  $803,000. At June 30, 1999, assets of the HCAD were approximately
$0 and liabilities were approximately  $100,000 consisting  principally of trade
payables.

     The provision for discontinued  operations consists  principally of payroll
and other costs  associated  with the effort to  discontinue,  the  write-off of
inventories and other assets dedicated to HCAD and severance principally for the
former HCAD President.  At June 30, 1999,  substantially  all of such costs have
been incurred and the remaining accrual is not material.

7. CONTINGENCIES


     On or about February 22, 1999, a purported  shareholder  derivative  action
was filed in United States  District Court for the Eastern  District of New York
in connection with certain  transactions  culminating in the sale by the Company
to Impleo, LLC of the Company's interest in Drew. The complaint named all of the
Company's  current  directors and several former directors as defendants as well
as Impleo, LLC and certain related entities and individuals  (collectively,  the
"Defendants").  The complaint alleges  violations of the federal securities laws
and state law and challenge the  Defendants'  actions in connection with certain
transactions, including but not limited to, (i) the April 14, 1998 restructuring
of certain  convertible  notes;  (ii) the October  1998 sale of 56.7% of Drew to
Impleo, LLC; and (iii) the sale on March 4, 1999 to Impleo, LLC of the Company's
remaining 33.3% interest in the Drew. In addition to seeking  recovery on behalf
of  the  Company  for  certain  allegedly  wrongful  acts  on  the  part  of the
Defendants,  the complaint seeks, among other things, to enjoin or set aside any
shareholder  vote in connection  with a proxy statement filed with the SEC on or
about February 1, 1999 (pursuant to which the Company received  approval of over
67% of its  shareholders  to sell its remaining  33.3%  interest in Drew) and to
block or rescind the sale of any  interests in Drew to Impleo,  LLC. The current
Directors deny the allegations concerning any allegedly wrongful actions. In May
1999,  all  defendants  filed  motions  to  dismiss  the  complaint.  Instead of
responding to these motions,  plaintiff filed and served an amended complaint in
July 1999.  The amended  complaint  dropped  certain  parties as defendants  and
raised  several  new  allegations,  including,  but not  limited to, the alleged
failure to make adequate  disclosure of the advice  rendered by Mesa Partners to
the Company and the alleged  failure to seek separate  shareholder  approval for
the October 1998 sale.  The Company and its directors  deny that they engaged in
wrongful  conduct and intend to file  motions to dismiss the amended  complaint.
The parties have  complaint.  The parties have agreed that  defendants'  motions
must be filed by September 13, 1999.

     In October 1998, the Company's  HumanCAD  Systems Inc.  subsidiary filed an
assignment in bankruptcy  under the laws of the Province of Ontario,  Canada and
Fuller Landau Ltd., 151 Bloor St. West, Toronto,  Canada, was appointed receiver
and  trustee.  Certain  creditors  of the  HumanCAD  operations  have  filed  or
threatened  to file claims  against the Company for the debts of  HumanCAD.  One
such action was filed by Miller Freeman,  Inc. in the Civil Court of City of New
York in the amount of approximately  $18,000.  The Company intends to vigorously
defend itself in such action, however its ability to do so may be limited by its
financial  resources which are currently  inadequate (See Note 1 - Going Concern
Consideration  and Form 10-KSB for the year ended  December 31, 1998  including;
Consolidated Financial Statements,  Report of Independent Public Accountants and
Management's Discussion and Analysis or Plan of Operations).

     The  Company  has an  employment  agreement  with its CEO  which  calls for
significant payments in the event of a change of control of the Company.

     In March 1999, the Company was notified that it is no longer a defendant in
the Ulin & Holland  Incorporated  litigation  against the Company's  former Drew
subsidiary.

     Also see Note 5.

8. OTHER -

     PER SHARE DATA - In March 1997, the Financial  Accounting  Standards  Board
("FASB") issued Statement of Financial  Standards ("SFAS") No. 128, EARNINGS PER
SHARE.  Statement  128 replaced  the  calculation  of primary and fully  diluted
earnings  per share with basic and diluted  earnings per share.  Unlike  primary
earnings per share,  basic earnings per share  excludes any dilutive  effects of
options, warrants and convertible securities. Diluted earnings per share is very
similar to the previously  reported fully diluted  earnings per share.  Net loss
per  share has been  computed  on the basis of the  weighted  average  number of
common shares  outstanding.  Common stock equivalents have been excluded because
their effect is antidilutive.

     INCOME TAXES - The Company  accounts for income  taxes in  accordance  with
Financial Accounting Standards Board ("FASB") Statement No. 109, "Accounting for
Income  Taxes".  The Company has not  reflected a credit for income taxes in the
accompanying  Condensed  Consolidated  Statements  of  Operations  for the three
months  ended  June 30,  1999 and 1998,  since the  future  availability  of net
operating loss carryforwards have been offset in full by valuation allowances in
accordance with FASB Statement No. 109.




<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS
         OR PLAN OF OPERATIONS
         ---------------------

EXCEPT FOR THE  HISTORICAL  INFORMATION  CONTAINED  HEREIN,  THIS REPORT AND THE
FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING  STATEMENTS WITHIN THE MEANINGS OF
SECTION 27A OF THE  SECURITIES  ACT OF 1933 AND  SECTION  21E OF THE  SECURITIES
EXCHANGE ACT OF 1934. SUCH  STATEMENTS  INVOLVE RISKS AND  UNCERTAINTIESAND  THE
COMPANY'S  ACTUAL RESULTS COULD DIFFER  MATERIALLY FROM THOSE DISCUSSED  HEREIN.
FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES  INCLUDE, BUT ARE NOT
LIMITED TO, THOSE DISCUSSED BELOW IN FACTORS THAT MAY AFFECT FUTURE RESULTS
                                     --------------------------------------

     OVERVIEW

     BCAM  International,   Inc.  and  Subsidiaries  (the  "Company")  has  been
primarily  a  software,  technology  and  consulting  company,  specializing  in
providing  ergonomic  solutions  (human  factors  engineering)  to  individuals,
corporations  and  government.  The  Company's  revenues had  historically  been
derived  primarily  from  ergonomic  consulting  services.  Through  a series of
actions since approximately  September 1997 including the acquisition of 100% of
Drew  Shoe  Corporation  ("Drew"),  subsequent  disposition  of 100% of Drew and
certain other  restructuring  activities  (which are summarized in the following
paragraph  and  described  in more  detail in Notes 3, 4 and 6 to the  Condensed
Consolidated Financial Statements included in this Form 10-QSB and in Notes 3, 4
and 5 to the Company's annual  Consolidated  Financial  Statements included with
Form  10-KSB  for the year  ended  December  31,  1998),  the  Company  is now a
technology  Company  in the  field of  Intelligent  Surface  Technology  ("IST")
blending  biomechanics  and ergonomics  with innovative  electronic  systems and
software.

     The acquisition and restructuring  activity since  approximately  September
1997 has included the  following.  On September 22, 1997,  the Company  acquired
Drew as described in Note 4 to the Consolidated  Financial  Statements contained
in Form 10-KSB for the year ended  December  31, 1998.  Drew is a  manufacturer,
marketer and distributor of medical footwear.  The purchase of Drew was financed
principally  by the  issuance  of 10%/13%  Convertible  Notes and  Warrants.  In
December  1997  the  Board  of  Directors  of the  Company  decided  to sell the
operations of the Ergonomic  Consulting  Services  Division  ("ECSD") due to the
inability  of that  business  to generate  operating  profits for the Company as
discussed  further in Note 6. In February  1998,  the Board of  Directors of the
Company decided to discontinue  the HumanCAD  Systems  Operations  ("HCAD") as a
result of the lack of available  financing,  on acceptable terms to the Company,
to further the necessary  business  development  activities of that operation as
discussed further in Note 6. In April 1998 the Company  restructured the 10%/13%
Convertible  Notes which included granting a 10% interest in the common stock of
Drew (and also 10% of the common stock of another subsidiary, BCAM Technologies,
Inc.) to the  noteholders  as further  discussed in Note 4. In October 1998, the
Company sold 56.7% of Drew to the holder of the 10%/13% Convertible Notes and on
March 4, 1999 it sold its remaining  33.3% interest in the common stock of Drew,
after  receipt of  approval  of the  shareholders  of the  Company as  discussed
further in Note 3.

     The Company is now in discussions with others regarding potential financing
and/or strategic  transaction(s) for the Company going forward. Such discussions
include the  possibility of a merger with another company (which would result in
a change  of  control  of the  Company)  and the  possible  spin-off  of the IST
technology.

     RESULTS OF OPERATIONS

     Results of operations  for the six months ended June 30, 1999 and 1998 were
significantly impacted by restructuring  developments including: (1) the sale of
the  Company's  remaining  33.3%  interest in Drew to the holders of the 10%/13%
Convertible  Notes  ("Notes") in exchange for redemption of the remaining  Notes
and related  interest  (see Notes 3 and 4 to  Condensed  Consolidated  Financial
Statements),  (2) the sale of the ECSD (in  February  1998) and the  measurement
date for discontinuance of the HCAD operations  (February 1998), (3) a charge to
compensation  expense in the first quarter of 1998 for certain  options  granted
during 1997 which were at exercise  prices below the market value when  approved
by the  shareholders  in February 1998, and (4) charges and costs,  in the first
quarter of 1998, related to the financing to acquire Drew (discussed below).

     DISCONTINUED  OPERATIONS - As discussed in greater  detail in Notes 3 and 6
to the Condensed Consolidated Financial Statements, the Company has recorded the
operations  of Drew,  ECSD and HCAD as  discontinued  operations.  Operations of
these  discontinued  businesses in the six months ended June 30, 1998 (including
provisions  for  losses on  discontinuance  of HCAD of  approximately  $250,000)
resulted in losses of  approximately  $803,000 for HCAD and  $4,967,000 for Drew
including very  substantial  non-cash  charges.  Such non-cash  charges included
charges  for the  beneficial  conversion  feature of certain  convertible  notes
(principally  used for the Drew  acquisition)  pursuant to Emerging  Issues Task
Force   Statement  #  D-60  of   approximately   $3,079,000  and  a  charge  for
approximately  $286,000 (related to HCAD) for the compensatory  element of stock
options granted in 1997 and approved by the shareholders in the six months ended
June  30,  1998.  Additionally,  in the six  months  ended  June 30,  1998,  the
following  other charges and costs related to the Drew  acquisition are included
in results of  discontinued  operations:  (i)  amortization of debt discount and
deferred  finance  costs  of   approximately   $275,000  and  (ii)  interest  on
convertible notes of approximately $390,000.  Drew's losses from operations from
the  measurement  date  (October  1998) to the date of sale  (March 4, 1999) are
deferred  and then  netted  against  the gain on the sale of Drew in the quarter
ended June 30, 1999. In the six months ended June 30, 1999, the Company recorded
a gain of  approximately  $997,000  on the sale of Drew in March,  net of Drew's
operating  losses.  The Company estimates that its 33.3% share of such losses of
Drew for the period from  October 1998  through  March 4, 1999 exceeds  $400,000
based upon  information  provided by Drew.  The reader is  referred  for further
information  regarding  these  discontinued  operations  to Notes 3 and 6 to the
Condensed Consolidated Financial Statements.

     These businesses were discontinued  because,  among other things,:  (1) the
Company could not service and/or  refinance the debt related to the  acquisition
of Drew,  (2) ECSD did not  generate  operating  profits for the Company and (3)
HCAD required capital which the Company could not obtain on favorable terms.

     ONGOING SELLING,  GENERAL AND ADMINISTRATIVE  COSTS - Selling,  general and
administrative  costs decreased from approximately  $900,000 and $335,000 in the
six and three months ended June 30, 1998 to approximately  $410,000 and $156,000
for the six and three months  ended June 30,  1999.  The three months ended June
30, 1998 amounts include reversal of approximately  $140,000 of accruals made in
the first quarter of 1998 and later determined to be unnecessary.  The remaining
decrease from 1998 to 1999 reflects  significantly  decreased  costs  associated
with the Company's  business plans subsequent to the decision to sell Drew. Such
costs have been decreasing since  approximately the third quarter of 1998 as the
completion of the plan to sell Drew reduces the need for certain  management and
administrative  personnel and facilities and other costs.  The Company's plan is
to  further  reduce  such  costs in 1999,  if  possible,  as the sale of Drew is
completed  and  until new  financing  or  strategic  business  arrangements  are
completed.

     RESEARCH AND DEVELOPMENT COSTS - In the three and six months ended June 30,
1998,  research and development costs consisted  principally of costs associated
with the  Company's  development  of an alpha  prototype  of a  "microvalve"  in
collaboration  with a  third  party,  MCNC,  for  potential  use  in its  "ISTX"
technology.  Such  costs  and  related  development  expenditures  decreased  to
approximately  $29,000 and  $10,000 for the three and six months  ended June 30,
1999 due to the  Company's  financial  position  and the  stage  of  development
activities  at the  time as well as the  reversal  of  certain  accruals  in the
quarter ended June 30, 1999 which were no longer considered necessary.

     LICENSE  REVENUES  -  License  revenues  consist  principally  of  revenues
received from IST products and have not been  significant  to date.  One Company
licensee,  Textron, has launched a new product, in September 1997, utilizing IST
in an automobile seat.  Annually,  the Company must first deduct a credit due to
Textron before earning any revenues in that year. To date, earned royalties have
not materially exceeded the amount of the credit.

     LIQUIDITY AND CAPITAL RESOURCES

     As indicated in the accompanying  consolidated financial statements,  as of
June 30,  1999,  the  Company  had  negative  working  capital of  approximately
($755,000) and a shareholders' deficiency of approximately  ($582,000),  and for
the six months then ended had losses from continuing operations of approximately
($439,000) with no revenues.  Losses from  continuing  operations have continued
since June 30,  1999.  Further,  the  Company  has a  development  agenda  which
requires additional financing.  These factors,  among others,  indicate that the
Company  is in need of  significant  additional  financing  and/or  a  strategic
business arrangement in order to continue its operations through the 1999 fiscal
year.  The  Company  believes  that its  cash  resources  at June  30,  1999 are
insufficient  to fund its  operations  through the third  quarter of 1999 and it
will be required to raise additional  capital or enter into a strategic business
arrangement in order to continue its planned operations.

     The  Company's   plans  include   undertaking  a  development   program  to
miniaturize and lower the cost of IST applications in the belief that the result
will  be a more  marketable  product  than  the  current  IST  application.  The
development  and  subsequent  marketing  is a  multi-year  project.  In order to
miniaturize  and  lower  the  cost of IST  applications,  the  Company  and MCNC
(founded in 1980 as the Microelectronics  Center of North Carolina and now known
simply as MCNC) have completed an alpha  prototype of a microvalve  component to
control air flow in the IST system.  A beta  (production  ready)  version of the
MCNC  microvalve  would be the  subject of further  development  about which the
Company and MCNC have entered into a non-binding letter of intent. The Company's
ability to perform such further  development  will be dependent upon its ability
to  obtain  sufficient  financial  resources  or its  ability  to  enter  into a
strategic  transaction  which would provide the Company the resources to perform
such  development.  Such further  development would involve costs incurred under
arrangements  with  MCNC  as well  as  costs  incurred  by the  Company.  Beyond
development,  the Company would  require  capital to  commercialize,  market and
sell.  The  Company's  plans are to raise  additional  financing or enter into a
strategic  transaction in order to proceed with the development  program.  Other
courses of action including the potential merger with another company (resulting
in a  change  of  control  of the  Company)  and  possible  spin-off  of the IST
technology are being explored. At the present time, the Company is in discussion
with potential sources of additional financing and with potential candidates for
a strategic  transaction.  No assurance can be made that such discussions  would
result in definitive arrangements. These factors, among others, indicate that in
the absence of additional  financing or a strategic  business  arrangement,  the
Company  does not have the  financial  resources to go forward with such further
development and to continue as a going concern.

     There  can  be no  assurances  that  management's  plans  described  in the
preceding paragraph will be realized.  The accompanying  Condensed  Consolidated
Financial   Statements   do  not   include  any   adjustments   related  to  the
recoverability and classification of assets or the amounts and classification of
liabilities  that might be  necessary  should the  Company be unable to continue
operations as a going concern.

     For  further  information,  refer  to the  audited  consolidated  financial
statements  and related  notes  thereto of the Company (at December 31, 1998 and
for the two year periods then ended) included in the Company's  annual report on
Form 10-KSB for the year ended December 31, 1998.

     In March 1999, the Company received approval of the Company's  shareholders
to sell the remaining 33.3% of Drew to the holders of the Company's  Convertible
Notes.  As such, the Convertible  Notes were retired in 1999.  Such  Convertible
Notes had been due on April 14,  1999 and were  secured  by all of the assets of
the Company (see Note 4 to Condensed Consolidated Financial Statements).

     In February 1999, the Company advised the holders of its 8% unsecured notes
that it had passed on the payment of principal  and interest in January 1999 and
would be unable to make any  further  payments  until a financial  or  strategic
transaction was concluded. At June 30, 1999,  approximately $50,000 of principal
payments plus interest are in arrears.

     The reader is directed to Item 5 - Recent Sales of Unregistered  Securities
and to  Notes 3, 4 and 5 of Notes to  Consolidated  Financial  Statements  for a
discussion of financing activities in 1998 and related restructurings  including
the recent  retirement of the Convertible  Notes in exchange for the sale of the
Company's remaining interest in Drew. Also see Item 3 - LEGAL PROCEEDINGS.


     THE YEAR 2000 ISSUE

     At the Company's  corporate  office,  information  systems are  principally
utilized for general  accounting  and  administration.  During 1998, the Company
upgraded such system and currently believes it to be Year 2000 compliant.

                     FACTORS THAT MAY AFFECT FUTURE RESULTS

THE COMPANY'S  FUTURE OPERATING  RESULTS ARE DEPENDENT ON THE COMPANY'S  ABILITY
TO: (I) OBTAIN SUFFICIENT CAPITAL OR A STRATEGIC BUSINESS ARRANGEMENT , WHICH IS
REQUIRED IMMEDIATELY, TO FUND ITS CONTINUED OPERATIONS INCLUDING ITS DEVELOPMENT
AND  COMMERCIALIZATION  PLANS, (II) PAY ITS DEBTS INCLUDING SIGNIFICANT PAYMENTS
TO TRADE CREDITORS AND NOTEHOLDERS WHICH ARE PRESENTLY OVERDUE, (III) SUCCESSFUL
COMPLETION  OF  DEVELOPMENT  OF A LOWER  COST AND  SMALLER  VERSION  OFIST  (IV)
SUCCESSFUL BUSINESS DEVELOPMENT AND MARKETING EFFORTS TO, ASSUMING COMPLETION OF
THE DEVELOPMENT EFFORT IN (III) ABOVE, INCREASE THE NUMBER OF LICENSEES, AND THE
COMMERCIALIZATION  OF  IST  BY  ITS  LICENSEES,  (V)  SUCCESSFULLY  DEVELOP  THE
"MICROVALVE"  AND INTEGRATE IT INTO IST, (VI) GENERAL  ECONOMIC  CONDITIONS  AND
CONDITIONS IN THE FINANCIAL AND TECHNOLOGY MARKETS.


<PAGE>


     PART II. OTHER INFORMATION

     ITEM 1. LEGAL PROCEEDINGS
             -----------------

     On or about February 22, 1999, a purported  shareholder  derivative  action
was filed in United States  District Court for the Eastern  District of New York
in connection with certain  transactions  culminating in the sale by the Company
to Impleo, LLC of the Company's interest in Drew. The complaint named all of the
Company's  current  directors and several former directors as defendants as well
as Impleo, LLC and certain related entities and individuals  (collectively,  the
"Defendants").  The complaint alleged  violations of the federal securities laws
and state law and challenge the  Defendants'  actions in connection with certain
transactions, including but not limited to, (i) the April 14, 1998 restructuring
of certain  convertible  notes;  (ii) the October  1998 sale of 56.7% of Drew to
Impleo, LLC; and (iii) the sale on March 4, 1999 to Impleo, LLC of the Company's
remaining 33.3% interest in the Drew. In addition to seeking  recovery on behalf
of  the  Company  for  certain  allegedly  wrongful  acts  on  the  part  of the
Defendants,  the complaint seeks, among other things, to enjoin or set aside any
shareholder  vote in connection  with a proxy statement filed with the SEC on or
about February 1, 1999 pursuant to which the Company  received  approval of over
67% of its  shareholders  to sell its  remaining  33.3%  interest in Drew and to
block or rescind the sale of any  interests in Drew to Impleo,  LLC. The current
Directors deny the allegations concerning any allegedly wrongful actions. In May
1999,  all  defendants  filed  motions  to  dismiss  the  complaint.  Instead of
responding to these motions,  plaintiff filed and served an amended complaint in
July 1999.  The amended  complaint  dropped  certain  parties as defendants  and
raised  several  new  allegations,  including,  but not  limited to, the alleged
failure to make adequate  disclosure of the advice  rendered by Mesa Partners to
the Company and the alleged  failure to seek separate  shareholder  approval for
the October 1998 sale.  The Company and its directors  deny that they engaged in
wrongful  conduct and intend to file  motions to dismiss the amended  complaint.
The parties have agreed that defendants'  motions must be filed by September 13,
1999.

     In October 1998, the Company's  HumanCAD  Systems Inc.  subsidiary filed an
assignment in bankruptcy  under the laws of the Province of Ontario,  Canada and
Fuller Landau Ltd., 151 Bloor St. West, Toronto,  Canada, was appointed receiver
and  trustee.  Certain  creditors  of the  HumanCAD  operations  have  filed  or
threatened  to file claims  against the Company for the debts of  HumanCAD.  One
such action was filed by Miller Freeman,  Inc. in the Civil Court of City of New
York in the amount of approximately  $18,000.  The Company intends to vigorously
defend itself in such action, however its ability to do so may be limited by its
financial resources which are currently inadequate (See Form 10-KSB for the year
ended December 31, 1998 including;  Consolidated Financial Statements, Report of
Independent Public Accountants and Management's  Discussion and Analysis or Plan
of Operations).

     In March 1999, the Company was notified that it is no longer a defendant in
a lawsuit  filed in  January  1998 by Ulin & Holland  Incorporated  against  the
Company's  then  subsidiary,  Drew,  in  United  States  District  Court for the
District of Massachusetts  (see Form 10-QSB for the three months ended March 31,
1999).

     ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
             -----------------------------------------

     ELIMINATION  OF SECURITIES  WHICH ARE  CONVERTIBLE  INTO OR  EXERCISABLE TO
PURCHASE  COMMON  STOCK OF THE COMPANY See Item 6.  Exhibits and Reports on Form
8-K as well as Notes 3 and 4 to Condensed  Consolidated Financial Statements for
a discussion  of the  redemption of $2,220,000  original  principal  amount plus
$805,350 resulting from pay-in-kind  interest of 10%/13%  Convertible Notes plus
accrued  interest from  September 19, 1998 and the resultant  elimination of the
conversion  feature and warrants  which were  derivative  into  several  million
common shares of the Company.

     SALE OF COMMON STOCK,  SUBJECT TO  "REPRICING"  PROVISIONS  AND WARRANTS IN
APRIL 1998 AND THE ISSUANCE OF "REPRICING" SHARES IN JANUARY 1999 - Beginning on
April 14, 1998, the Company commenced a private offering of its common stock and
warrants.  The  offering  generated  aggregate  proceeds of  $2,000,000  for the
purchase of 1,980,198  shares,  subject to  "repricing" as described  below,  of
common  stock of the Company and warrants to purchase  250,000  shares of common
stock at $2.05 for three years by seven accredited investors.

     The Company agreed to and did register such shares for resale.

     The Company  agreed that the number of shares  issuable to these  investors
would be "repriced"  pursuant to a schedule initially in two $300,000 increments
and then in seven  $200,000  increments on nine  occasions  commencing  with the
effectiveness  of  a  registration   statement  covering  the  shares  (declared
effective August 13, 1998) and again 60 days later and then in 30 day intervals.
On such dates, the investor would have received the additional number of shares,
if any, that result from the  difference  between the number of shares  actually
issued  and the  number of shares  which  would  have  been  issued  using a 23%
discount to the market price,  as defined,  at that time.  The operation of this
provision  would have resulted in  significantly  greater number of shares being
issued.  The  Company  agreed  not to issue  certain  financings  and has paid a
placement agent a 6.5% fee in connection with the transaction.

     In  August  1998,  436,047  shares  were  issued  in  connection  with  the
"repricing"  provisions and very significant  additional shares (estimated to be
in excess of  5,000,000  shares)  would be required to be issued in the October,
November and December 1998 "repricing" dates.

     On December 24,  1998,  the Company and the  investors  agreed to amend the
subscription  agreement  with  respect to  "repricing".  The  December  24, 1998
amendment  has four  principal  effects as  follows:  (i) the  August,  October,
November  and  December  1998  "repricings"  are  eliminated  in  favor  of  new
"repricings"  which began on January 1, 1999, (ii) the discount from market used
to measure the  "repricings" was increased from 23% to 27% (iii) a ceiling price
was  established  of $0.75  per  share  and (iv)  certain  penalties  under  the
agreement were waived.  Under the amended  agreement,  the  investors,  at their
option,  may  reprice  up to 12 1/2% of the amount  invested  (an  aggregate  of
$250,000 based upon the original $2,000,000 invested in April 1998) on the first
of each month  beginning with January 1, 1999. Any amounts not "repriced" in any
month may be carried over to any future month without limitation.

     In  connection  with  the  amendment,  the  Company  was  obliged  to issue
additional  shares to the  investors  to bring the total  shares from  1,980,198
originally  invested up to 2,666,667  shares  (inclusive  of the 436,047  shares
issued in August 1998 as discussed in the second preceding paragraph) based upon
the  $0.75  ceiling  price  in  the  amendment.  Additionally,  these  investors
requested a "repricing" of $190,000 of the offering in January 1999. The January
"repricing"  and the  issuance  of the new  shares to  reflect  the new  ceiling
resulted in the issuance to the investors of an additional  2,259,827  shares on
January  27,  1999.  In  May  1999,  these  investors  requested  an  additional
"repricing"  of $127,500 of the  offering  requiring  the  issuance of 2,040,855
additional shares.

     Of the total dollar  amount of the offering,  only this $317,500  ($190,000
plus  $127,500) of the $2,000,000  proceeds of the offering has been  "repriced"
leaving $1,682,500 still to be "repriced" at the holders option. The "repricing"
of this amount  ($1,682,500)  at market prices for the  Company's  stock in July
1999 would result in a very significant number of additional shares being issued
and in a change of control of the Company to these investors.  The Company is in
discussions  with  the  representatives  of the  investors  to  restructure  the
"repricing"  provisions  in light of the very  significant  effects  which would
result at current prices of the Company's common stock. Such discussions to date
have  contemplated  that the Company would enter into a merger  transaction with
another company.  Such merger transaction continues to be in discussions but has
not occurred.


     ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At a March 4, 1999 Special  Meeting of  Shareholders,  the following  matter was
brought for a vote of the shareholders:

              Proposal                       Votes For   Votes Against   Abstain
--------------------------------------------------------------------------------
1.  Proposal to sell the Company's          15,748,202      253,240       7,850
remaining 33.3% common stock interest
in Drew Shoe Corporation to the holder
of the Company's 10/13% Convertible Notes

     The proposal  required a vote of 66.7% of the  shareholders for passage and
the  proposal  was  passed by a vote of  approximately  67.7% of the  23,251,116
shares outstanding on January 27, 1999, the date of record.

     ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
             --------------------------------

            (a)  EXHIBITS.
            ---  ---------

                 27       Financial Data Schedule.


            (b)  REPORTS ON FORM 8-K
            ---  -------------------


During the quarter covered by this Report,  and through the date of this report,
the  Company  has not filed any reports on Form 8-K.  See,  however,  such forms
filed on December  22, 1998,  January 11,  1999,  February 26, 1999 and March 4,
1999.


<PAGE>


                                   SIGNATURES

     Pursuant to the  requirements  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.


                                       BCAM INTERNATIONAL, INC.


Dated: August 10, 1999                 By: /s/  Michael Strauss
       ---------------                    --------------------
                                          Michael Strauss
                                          Chairman of the Board of  Directors,
                                          President and Chief Executive Officer
                                          (principal executive officer and
                                          acting principal financial and
                                          accounting officer)




<PAGE>


                                INDEX OF EXHIBITS
                                -----------------

Exhibit No.                Exhibit
-----------                -------

27                         Financial Data Schedule





<PAGE>