EFFICIENCY LODGE, INC. FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-QSB


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

For the quarterly period ended June 30, 1999

                                       OR

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

For the transition period from _____________ to ____________

                        Commission File Number 000-02290

                             EFFICIENCY LODGE, INC.
        (Exact name of small business issuer as specified in its charter)

              Georgia                                    58-0898219
(State or other jurisdiction                        (I.R.S. Employer
of incorporation or                                 Identification No.)
organization)

           5342 Old Floyd Road, P.O. Box 635, Mableton, Georgia 30059
                    (Address of principal executive offices)

                                  (770)819-0039
                (Issuer's telephone number, including area code)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter  period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes /
X / No / /

Shares  outstanding of each of the issuer's classes of common equity at June 30,
1999: 572,918 shares of Common Stock, $0.44 per value share.

Transitional Small Business Disclosure Format (check one)

Yes /     /       No /  X  /
<PAGE>

PART I
ITEM 1
                             Efficiency Lodge, Inc.

                           CONSOLIDATED BALANCE SHEET



                                     ASSETS
<TABLE>
<CAPTION>
                                        June 30, 1999     December 31, 1998
                                        -------------     ------------------
                                               (Unaudited)

<S>                                      <C>                 <C>
Property and Equipment, net              $ 15,463,258        $ 15,121,958
Cash                                        1,114,597             921,220
Other Assets                                2,482,740           1,485,114
                                         ------------        ------------

                                         $ 19,060,595        $ 17,528,292
                                         ============        ============


                      LIABILITIES AND STOCKHOLDERS' EQUITY



Mortgage Notes Payable                   $ 18,960,270        $ 18,584,016
Other Liabilities                             792,061             255,705
                                         ------------        ------------

     Total Liabilities                     19,752,331          18,839,721

Stockholders' Equity
   Common Stock                               104,368             104,368
   Additional Paid-In Capital                  52,674              52,674
   Accumulated Earnings                       798,899             179,206
   Treasury Stock                          (1,647,677)         (1,647,677)
                                         ------------        ------------

     Total Stockholders' Equity              (691,736)         (1,311,429)
                                         ------------        ------------

                                         $ 19,060,595        $ 17,528,292
                                         ============        ============
</TABLE>

<PAGE>


                                        Efficiency Lodge, Inc.

                                CONSOLIDATED STATEMENTS OF OPERATIONS
                                             (Unaudited)

                             For the Quarter Ended June 30, 1999 and 1998
                           For the Six Months Ended June 30, 1999 and 1998

<TABLE>
<CAPTION>
                                                  Quarter Ended                Six Months Ended
                                                     June 30,                      June 30,
                                                1999           1998           1999           1998
                                             ----------     ----------     ----------     ----------
<S>                                          <C>            <C>            <C>            <C>
Revenues                                     $1,677,912     $1,214,586     $3,233,670     $2,408,784
Operating Expenses                              893,093        633,433      1,649,703      1,286,692
                                             ----------     ----------     ----------     ----------


     Operating Income                           784,819        581,153      1,583,967      1,122,092

Other (Income) Expense, net                     385,336        280,712        614,660        577,140
                                             ----------     ----------     ----------     ----------

     Earnings (Loss) before Income Taxes        399,483        300,441        969,307        544,952

Provision for Income Taxes                      148,203        107,571        349,614        159,688
                                             ----------     ----------     ----------     ----------

     Net Earnings (Loss)                     $  251,280     $  192,870     $  619,693     $  385,264
                                             ==========     ==========     ==========     ==========


Net Earnings (Loss) per common share         $     0.44     $     0.18     $     1.08     $     0.37
                                             ==========     ==========     ==========     ==========

Weighted Average Number of Common
   Shares Outstanding                           572,918      1,043,683        572,918      1,043,683
                                             ==========     ==========     ==========     ==========
</TABLE>

<PAGE>


                                         Efficiency Lodge, Inc.

                             CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                              (Unaudited)

                                     Six Months Ended June 30, 1999


<TABLE>

                                              Additional
                                   Common       Paid-In   Accumulated     Treasury
                                   Stock        Capital     Earnings        Stock           Total
                                   -----        -------     --------        -----           -----
<S>                <C>            <C>          <C>          <C>          <C>              <C>
Balance at January 1, 1999        $104,368     $ 52,674     $179,206     ($1,647,677)     ($1,311,429)

Net Income for the Six Months                                619,693                          619,693
                                  --------     --------     --------     -----------      -----------

Balance at June 30, 1999          $104,368     $ 52,674     $798,899     ($1,647,677)     ($  691,736)
                                  ========     ========     ========     ===========      ===========
</TABLE>

<PAGE>


                                   Efficiency Lodge, Inc.

                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                        (Unaudited)


                                 Six Months Ended June 30,
<TABLE>
<CAPTION>
                                                                    1999           1998
                                                                -----------      ---------
<S>                                                             <C>              <C>
Cash Flows from Operating Activities:
   Net Earnings (Loss)                                          $   619,693      $ 385,264
   Adjustments to Reconcile Net Earnings (Loss)
     to Net Cash Provided by Operating
     Activities:
        Depreciation and Amortization                               380,129        213,626
        Changes in Assets and Liabilities:
           Other Assets                                            (467,616)       (69,279)
           Other Liabilities                                        535,791        209,727
                                                                -----------      ---------

            Net Cash Provided by Operating Activities             1,067,997        739,338

Cash Flows from Investing Activities:
    Investment Purchases                                           (213,737)          --
   Capital Expenditures                                          (1,037,702)      (102,456)
                                                                -----------      ---------

            Net Cash Used by Investing Activities                (1,251,439)      (102,456)


Cash Flows from Financing Activities:
   Principal Payments on Long-Term Debt                            (123,181)      (245,014)
   Proceeds from Issuance of Debt                                   500,000           --
                                                                -----------      ---------

           Net Cash Provided (Used) by Financing Activities         376,819       (245,014)
                                                                -----------      ---------
Increase (Decrease) in Cash and Cash Equivalents                    193,377        391,868

Cash and Cash Equivalents, beginning of period                      921,220        169,246
                                                                -----------      ---------

Cash and Cash Equivalents, end of period                        $ 1,114,597      $ 561,114
                                                                ===========      =========

Cash Paid during the Period for Interest                        $   674,727      $ 605,831
                                                                ===========      =========
</TABLE>


<PAGE>
                             Efficiency Lodge, Inc.

         NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                         Six Months Ended June 30, 1999



NOTE A -- BASIS OF PREPARATION

         The accompanying unaudited interim consolidated financial statements of
         Efficiency Lodge, Inc. (The "Company") have been prepared in accordance
         with generally  accepted  accounting  principles for interim  financial
         statements  and with the rules and  regulations  of the  Securities and
         Exchange  Commission.  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 accruals)
         considered necessary for a fair presentation have been included.

         The results of  operations  for the quarter ended June 30, 1999 are not
         necessarily indicative of the results that may be expected for the full
         year. The interim  consolidated  financial statements should be read in
         conjunction with the Company's 1998 consolidated  financial  statements
         and related notes.


<PAGE>
Item 2.  Management Discussion and Analysis

         Total assets  increased  during the first quarter from  $17,528,292  on
December 31, 1998 to  $19,060,595  on June 30, 1999.  This increase is primarily
the result of the purchase of a lodge in March 1999.

         Revenue  increased  during the second  quarter from  $1,214,586  in the
second quarter of 1998 to $1,677,912 in 1999. This increase can be attributed to
the  addition  of three  lodges.  Two lodges  began  operation  during the third
quarter of 1998.  One lodge is located in Kennesaw,  Georgia (Town Center Lodge)
and the other is  located  in  Columbus,  Georgia.  The third  lodge  located in
Louisville, Georgia had operations for the last half of March 1999.

         Operating  expenses  increased in the second  quarter from  $633,433 in
1998 to $893,093 in 1999.  This  increase is primarily  attributable  to the one
time start up expenses of the three new lodges.  Operating income increased from
$581,153  in 1998 to  $784,819  for the  same  period  in 1999.  Other  expenses
increased  from $280,712 in the second quarter of 1998 to $385,336 in 1999 wihch
was primarily  attributable to the  refinancing of five lodges.  Earnings before
taxes were $399,483 for the second  quarter of 1999 compared to $300,441  during
the same period in 1998.  Net earnings were  $251,280 for the second  quarter of
1999 compared to $192,870 in the second quarter of 1998. The Company continued a
favorable trend in occupancy and revenue for the quarter.

         The Company purchased an existing motel in Louisville, Georgia on March
11,  1999 for a total  purchase  price  of nine  hundred  seventy-five  thousand
dollars  ($975,000).  The Company paid  $475,000 in cash and obtained a $500,000
loan from Georgia State Bank.



<PAGE>



Part II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

     (a) The following Exhibits are filed as part of this report:

         Exhibit
         Number                     Description
             27                     Financial Data Schedule - (for SEC use only)


<PAGE>


                                    SIGNATURE


In accordance with the  requirements of the Exchange Act, the Registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                    EFFICIENCY LODGE, INC.


DATE: August 6, 1999               By: /s/ W. Ray Barnes
                                      W. Ray Barnes
                                      President and Chief Executive Officer


DATE: August 6, 1999               By: /s/ Bonnie Byers
                                      Bonnie Byers
                                      Secretary/Treasurer