FORM 10-QSB

                     SECURITIES AND EXCHANGE COMMISSION
                           Washington D.C.  20549

                Quarterly Report Under Section 13 or 15 (d)
                   Of the Securities Exchange Act of 1934

                 For Quarter Ended        June 30, 2001
                                        ---------------

                 Commission File Number      0001082562
                                           -------------

                       SOFTWALL EQUIPMENT CORPORATION
                    ------------------------------------
           (Exact name of registrant as specified in its charter)

          UTAH                                              87-06254752
--------------------------------                         ------------------
(State or other jurisdiction of                         (IRS Employer
  incorporation or organization)                        Identification No.)

                           11602 Colchester Drive
                             SANDY, UTAH 84092
                  ---------------------------------------
                  (Address of principal executive offices)

Registrant's telephone number
including area code                                      (801) 572-4724
                                                        ----------------

               ---------------------------------------------
                Former Address, if changed since last report

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 such shorter period that the
registrant was required to file such reports)

                             Yes  X    No
                                 -----     -----

and (2) has been subject to such filing requirements for the past 90 days.


                             Yes  X    No
                                 -----     -----

                                 14,145,500
                       -----------------------------
                        (Number of shares of common
                          stock the registrant had
                     outstanding as of August 13, 2001)



                                   PART 1

ITEM 1 - FINANCIAL STATEMENTS

     The condensed financial statements included herein have been prepared
by the Company, pursuant to the rules and regulations of the Securities and
Exchange Commission.

     In the opinion of the Company, all adjustments, consisting of only
normal recurring adjustments, necessary to present fairly the financial
position of the Company as of June 30, 2001 and the results of its
operations and changes in its financial position from December 31, 2000
through June 30, 2001 have been made.  The results of its operations for
such interim period is not necessarily indicative of the results to be
expected for the entire year.



                       Softwall Equipment Corporation
                       (a Development Stage Company)
                               Balance Sheets
<Table>
<Caption>

                                   Assets
                                                     June 30,  December 31,
                                                       2001        2000
                                                   -----------  -----------
<S>                                                <C>         <C>
Current Assets
  Cash                                             $    5,491  $     3,402
  Accounts receivable                                   6,590        -
                                                   -----------  -----------
     Total Current Assets                              12,081        3,402
                                                   -----------  -----------
Property Plant and Equipment-(net) (Note 3)            12,468       14,478
                                                   -----------  -----------
Other Assets
------------
  Patent (Note 4)                                      19,883       26,511
                                                   -----------  -----------
     Total Assets                                  $   44,432  $    44,391
                                                   ===========  ===========
                    Liabilities and Stockholders' Equity

Current Liabilities
-------------------
  Accounts payable and accrued expenses            $   55,784  $    26,514
  Accounts payable - related party (Note 5)           117,370       97,776
  Interest payable                                      2,697        2,052
  Taxes payable                                           100          100
  Note payable - related party (Note 6)                67,627       62,179
                                                   -----------  -----------
     Total Current Liabilities                        243,578      188,621
                                                   -----------  -----------
Stockholders' Equity
--------------------
  Common Stock, authorized 50,000,000
   shares of $.001 par value, 14,145,500 &
   14,142,000 issued and outstanding
   respectively                                        14,145       14,142
  Additional Paid in Capital                           30,232       29,325
  Deficit Accumulated During the
   Development Stage                                 (243,523)    (187,697)
                                                   -----------  -----------
     Total Stockholders' Equity                      (199,146)    (144,230)
                                                   -----------  -----------
     Total Liabilities and Stockholders' Equity    $   44,432  $    44,391
                                                   ===========  ===========


</Table>
               See accompanying notes to financial statements

                       Softwall Equipment Corporation
                       (a Development Stage Company)
                    Statements of Operations (Unaudited)
<Table>
<Caption>
                                                                            For the
                                                                             Period
                                For the    For the    For the    For the    October
                                 Three      Three       Six        Six      5, 1998
                                Months     Months      Months    Months    (Inception)
                                 Ended      Ended      Ended     Ended         to
                               June 30,   June 30,   June 30,   June 30,     June 30,
                                 2001       2000       2001       2000        2001
                              ---------- ---------- ---------- ----------  ----------
<S>                           <C>        <C>        <C>        <C>         <C>

Revenues:
  Consulting Revenues         $     -    $     -    $  11,548  $     -     $   11,548
                              ---------- ---------- ---------- ----------  ----------

Expenses:
  General and administrative     40,728      6,922     64,719     21,079     230,234
  Depreciation expense            1,005        764      2,010      1,502       8,324
  Research & Development            -          -          -          -        13,716
  Interest expense                  318        454        645        494       2,697
                              ---------- ---------- ---------- ----------  ----------
     Total Expenses              42,051      8,140     67,374     23,075     254,971

Net (Loss) Before Taxes       $ (42,051) $  (8,140) $ (55,826) $ (23,075)  $(243,423)
                              ---------- ---------- ---------- ----------  ----------
  Taxes                             -          100        -          100         100
                              ---------- ---------- ---------- ----------  ----------
Net (Loss)                    $ (42,051) $  (8,240) $ (55,826) $ (23,175)  $(243,523)
                              ========== ========== ========== ==========  ==========
Net (Loss) Per Share              (0.00)     (0.00)     (0.00)     (0.00)

Weighted average
  shares outstanding          14,144,577 14,142,000 14,143,288 14,142,000
                              ========== ========== ========== ==========

</Table>


               See accompanying notes to financial statements



                       Softwall Equipment Corporation
                       (a Development Stage Company)
                          Statement of Cash Flows
<Table>
<Caption>
                                                                  For the
                                              For        For       Period
                                           the Six    the Six     October
                                            Months     Months     5, 1998
                                            Ended      Ended        to
                                           June 30,   June 30,    June 30,
                                             2001       2000        2001
                                          ---------- ----------  ----------
<S>                                       <C>        <C>         <C>
Cash Flows from Operating Activities
  Net (Loss)                              $ (55,826) $ (23,175)  $(243,523)
  Adjustments to reconcile net income
   to net cash provided by operating
   activities:
    Add depreciation expense                  2,010      1,502       8,324
    (Gain) Loss on sale of equipment            -          -           (50)
    Stock for services/expenses                 910        -         5,927
   (Increase) in accounts receivable         (6,590)       -        (6,590)
    Increase in accounts payable             49,509     35,680     175,951
                                          ---------- ----------  ----------
     Net cash flows provided
     (used) by operating activities          (9,987)    14,007     (59,961)

Cash Flows from Investing Activities:
  Purchase of patent                          6,628         -      (11,372)
  Sale of fixed assets                           -         200      (8,311)
  Purchase of fixed assets                       -     (12,491)     (7,942)
                                          ---------- ----------  ----------
     Net cash flows provided
     (used) by investing activities           6,628    (12,291)    (27,625)

Cash Flows from Financing Activities:
  Cash from stock sales                          -          -       25,450
  Cash from notes                             5,448      4,550      67,627
                                          ---------- ----------  ----------
     Net cash flows provided
     (used) by financing activities           5,448      4,550      93,077

Net increase (decrease) in cash               2,089     (6,266)      5,491
Cash, beginning of period                     3,402      3,222          -
                                          ---------- ----------  ----------
Cash, end of period                       $   5,491  $   9,488   $   5,491
                                          ========== ==========  ==========

Cash paid for:
  Interest                                $     -    $     -              $
  -
  Taxes                                   $     -    $     100   $     200

Stock issued for assets                   $     -    $     -              $
  18,010
Stock issued for Services                 $     -    $     -              $
  917


</Table>
               See accompanying notes to financial statements


                       Softwall Equipment Corporation
                       (a Development Stage Company)
                     Notes to the Financial Statements
                               June 30, 2001

NOTE 1 - Summary of Significant Accounting Policies

     a.  Organization

           Softwall Equipment Corporation  (the "Company") was incorporated
     under the laws of the State of  Utah on October 5, 1998 for the
     purpose of manufacturing mining equipment. The Company has yet to
     begin operations and generate revenue.

          The Company is in the development stage according to Financial
     Accounting Standards Board Statement No. 7

     b.  Accounting Method

          The Company recognizes income and expense on the accrual basis of
     accounting.

     c.  Earnings (Loss) Per Share

          The computation of earnings (loss) per share of common stock is
     based on the weighted average number of shares outstanding at the date
     of the financial statements.

     d.  Cash and Cash Equivalents

          The Company considers all highly liquid investments with
     maturities of three months or less to be cash equivalents.

     e.  Provision for Income Taxes

          The Company adopted Statement of Financial Standards No. 109
     "Accounting for Income Taxes" for the current fiscal year.

          Statement of Financial Accounting Standards No. 109 "Accounting
     for Income Taxes" requires an asset and liability approach for
     financial accounting and reporting for income tax purposes.  This
     statement recognizes (a) the amount of taxes payable or refundable for
     the current year and (b) deferred tax liabilities and assets for
     future tax consequences of events that have been recognized in the
     financial statements or tax returns.

          Deferred income taxes result from temporary differences in the
     recognition of accounting transactions for tax and financial reporting
     purposes.  There were no temporary differences for the current year
     accordingly, no deferred tax liabilities have been recognized.

          No provision for income taxes has been recorded due to net
     operating loss carryforward totaling approximately $187,000 that will
     be offset against future taxable income. The NOL carryforward begins
     to expire in the year 2018.  No tax benefit has been reported in the
     financial statements.



                       Softwall Equipment Corporation
                       (a Development Stage Company)
                     Notes to the Financial Statements
                               June 30, 2001

NOTE 1 - Summary of Significant Accounting Policies (continued)

          Deferred tax assets and the valuation account at December 31,
     2000 is as follows:
          Deferred tax asset:
             NOL carryforward           $  63,580
             Valuation allowance        $ (63,580)
                  Total                 $    -

       f.  Use of Estimates in the Preparation of Financial Statements

          The preparation of financial statements in conformity with
     generally accepted accounting principles requires management to make
     estimates and assumptions that affect reported amounts of assets and
     liabilities, disclosure of contingent assets and liabilities at the
     time of the financial statements and revenues and expenses during the
     reporting period.  In these financial statements, assets involve
     reliance on management's estimates.

NOTE 2 - Development Stage Company

          The Company is a development stage company as defined in
     Financial Standards Board Statement No. 7.  It is concentrating
     substantially all of its efforts in raising capital and developing its
     business operations in order to generate significant revenues.

NOTE 3 - Property, Plant and Equipment

          Property, plant and equipment are stated at cost.  Major renewals
     and betterments are capitalized while expenditures for maintenance and
     repairs are charged to operations as incurred.

          Property, Plant and Equipment consist of the following:

<Table>
<Caption>
                                                June 30,  December 31,
                                                  2001         2000

                                             ------------ ------------
     <S>                                    <C>           <C>
     Generator - SW2                         $     2,435   $    2,435
     Furniture & Fixtures                          2,429        2,429
     Vehicle                                      15,403       15,403
     Machinery                                       525          525
                                             ------------ ------------
       Total property, plant and equipment        20,792       20,792
       Less: accumulated depreciation             (8,324)      (6,314)
                                             ------------ ------------
       Net Property, Plant and Equipment     $    12,468  $    14,478
                                             ============ ============
</Table>
          Depreciation - The cost of the equipment will be depreciated
     using the straight-line method.  The depreciation periods are
     prescribed based on the type of property.  The vehicle and computer
     will be depreciated over the property's estimated useful life of 5
     years.  Depreciation expense is $1,005 for the three months ended June
     30, 2001.

                       Softwall Equipment Corporation
                       (a Development Stage Company)
                     Notes to the Financial Statements
                               June 30, 2001

NOTE 4 - Patent

          The Company has capitalized all legal costs to file for the SACUM
     (Surface Assisted Continuous Underground Mining Conveyor) patent.  The
     SACUM patent will be amortized over 15 years, commencing in the year
     it becomes operational.

NOTE 5 - Related Party Transactions

          The Company currently has a contract with the chief executive
     officer of the Company at a rate of $105 per hour.  As of June 30,
     2001, the Company owes $117,370 in services performed that extend back
     to 1998.

          On October 15, 2000, Randall Peterson purchased all debt owed to
     Morning Star Investments.  The new debt agreement is unsecured and
     carries an annual interest rate of 7% up to the year ended December
     31, 2000.  Beginning January 1, 2001 the interest rate on the note has
     decreased to 2% at the request of Mr. Peterson.  The principal and
     accrued balance at June 30, 2001 is $64,899.  Interest expense for the
     quarter ended June 30, 2001 is $311.

NOTE 6 - Note & Interest Payable Related Party

          Note & Interest payable - related party are as follows:

          Note & interest payable to Randall Peterson, President and
             shareholder of the Company, accruing
             interest at a rate of 7% per year during 2000
             and 2% thereafter.  This note is unsecured and
             payable on demand                                   $  64,899
                                                                 ----------
        Total Notes Payable - Related Party                      $  64,899
                                                                 ----------


ITEM 2 -  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS.

     Liquidity and Capital Resources  The Company does not pay rent, has no
ongoing compensations costs, or any other long term or ongoing business
overhead commitments.

     In its initial offering the Company issued a limited amount of stock
to cover some start-up and business expenses.  Mr. Peterson has a
consulting contract with the Company and bills his hours on an ongoing
basis.  He has done this by operating the company business from his
consulting office in his home.

     IMC Phosphates (formerly IMC Agrico) has donated funds to BYU for the
continuing development of Softwall technology and the Company has matched
those contributions with Peterson's paid professional time.

     Future capital funding will come from government grants, debt
financing, and additional offerings.  Peterson intends to combine his
consulting practice as part of the Company when the Company is in a
financial position to pay him a salary.

     Once the technology is fully tested and demonstrated to the mining
industry and as opportunities allow, the Company may manufacture its
equipment or enter into a long term joint venture with an existing
manufacturing company already established in the mining industry and/or
license the technology to an existing mining company with it's own
manufacturing capabilities.

     Results of Operations
     ---------------------
     During the second quarter the company continued development of the
Softwall Mining Technology at Brigham Young University.  This work involved
further field-testing and evaluation of the SW2 prototype.  Video tapes
were recorded of the SW2 in operation in a sand pile at the test site.
Arrangements were made with the owner of the test site to keep the
prototype at the site for further testing next year.  The company was
pleased with the results of the field tests and promised to issue 500
shares of stock to each of the BYU students who participated in the project
as a token of appreciation for a job well done.

     The company is enthusiastic about the test results and is actively
seeking venture capital and debt financing to put a full-scale machine to
work.  Raising money is now the most important step and absolutely critical
to organizing a production scale machine.  The company plans to co sponsor
one more year of university work to make minor modifications to the machine
before transporting to a mine site for production testing.

     The company has made arrangements to acquire new mining technology to
compliment its SACUM and Softwall Mining systems.  In exchange for a non-
refundable promissory note for $2,000 the company has Right of first
refusal on the Self-Advancing Mining Sled (SAMS) from Randall Peterson the
president of the company.  David Hettinger invented SAMS while under contract
with Randall Peterson in January of 1998 prior to forming the company.

     The company has begun the evaluation of the tarsands project near
Vernal and has bid on contract mining opportunities at coal mines in
Wyoming and other confidential joint venture operations.

     Plan of Operations
     -------------------
     Business plans were modified to reflect the Tarsands opportunities and
other confidential mining opportunities.  The strategic plan of the company
now is to focus its attention on the contract mining opportunities that it
can obtain using the SACUM technology and likewise with Softwall as it is
further developed.

     The company has learned that while mines are slow to adopt new
methods, they are eager to retain the services of a contract-mining firm at
fixed unit prices that are mutually beneficial to both owner and
contractor.  The company believes that contract mining with its SACUM
Conveyor is the best opportunity to generate cash in this way.

     Critical to putting the SACUM Conveyor to work is the continuous miner
face cutting equipment that is required.  The company intends to purchase
the Joy 12 CM 12 from Whet Investments and has equity in the machine due to
consulting work performed on their behalf.  Softwall is still negotiating a
puchase agreement.

     Softwall
     --------
     The testing that began in the first quarter was completed in early
April.  BYU's Professor K.S. Mortensen has led the work and is presently in
the process of writing up a technical article to summarize and document the
finding from the last 3 years of engineering, manufacturing
and testing the SW2 prototype.  The work planned for this coming school
year will involve making the hardware modifications to the locking
mechanism and adding a guide-bar as will be described in his article.  This
article will be published in one of the technical journals and will be
placed on the company web site.

     SACUM
     -----
     In the process of bidding contract-mining work the company has come up
 with a shortened version of the SACUM conveyor, which will reduce capital
costs.

     The company anticipates that mine operations using the SACUM Conveyor
in contract operations will best demonstrate the systems.  Moreover, the
company anticipates that such operations offer the quickest way to
earnings to fund further softwall development and development of
other mining technology.  Therefore, SACUM is an important part of both
short-term and the long-term growth strategies.

     The company has been watching the coal and energy industries with keen
interest.  The application of SACUM from the highwall offers surface coal
producers the potential to produce low cost coal to help meet rising
demands for coal in the US.  The company anticipates that SACUM technology
will be quickly adopted and deployed as soon as it is commercially
available. Firm price quotations have been received from Cambelt
International of Salt Lake City, Utah for manufacturing 5,000 feet of
structure for a particular coal acquisition project.  The cost estimates
indicate that the SACUM Conveyor can be manufactured a costs less than the
next best highwall mining technology.



                                  PART II

OTHER INFORMATION

     Item 1.   Legal Proceedings                                      None

     Item 2.   Changes in Securities                                  None

     Item 3.   Defaults Upon Senior Securities                        None

     Item 4.   Submission of Matters to a Vote of
               Security Holders                                       None

     Item 5.   Other Information                                      None

     Item 6.   Exhibits and Reports on Form 8-K                       None


                                 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 authorized officer.


Dated August 14, 2001              Softwall Equipment Corporation

                                   /s/ Randall Peterson