FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C.

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

                For the quarterly period ended September 30, 1999

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

         For the transition period from _____________ to _____________

                        Commission File Number 000-27592


                              SCANTEK MEDICAL INC.
             (Exact name of registrant as specified in its charter)

          Delaware                                              84-1090126
 (State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                             Identification No.)

                   321 Palmer Road, Denville, New Jersey 07834
                                 (973) 366-5250
             (Address and telephone number, including area code, of
                    registrant's principal executive office)


         (Former name, former address and former fiscal year, 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 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 ___

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date.

     At October 31, 1999,  there were 18,453,420  shares of Common Stock,  $.001
par value, outstanding.


<PAGE>


                              SCANTEK MEDICAL INC.

                                      INDEX

                                                                          Page
                                                                          ----

Part I.  Financial Information                                             1

  Item 1.         Financial Statements

                  Consolidated Balance Sheets as of
                   September 30, 1999 (unaudited) and
                   June 30, 1999                                           2

                  Consolidated Statements of Operations
                   and Comprehensive (Loss) for the
                   Three Months Ended September 30, 1999 and
                   1998 (unaudited)                                      3 - 4

                  Consolidated Statements of Cash Flows
                   for the Three Months Ended September 30,
                   1999 and 1998 (unaudited)                             5 - 6

                  Notes to Financial Statements (unaudited)              7 - 8

  Item 2.         Management's Discussion and Analysis of
                   Financial Condition and Results of Operations         9 - 14

Part II. Other Information

  Item 1.         Legal Proceedings                                       15

  Item 6.         Exhibits and Report on Form 8-K                         15

Signatures                                                                16


<PAGE>



PART I.  Financial Information

     Item 1. Financial Statements

     Certain  information  and footnote  disclosures  required  under  generally
accepted accounting principles have been condensed or omitted from the following
consolidated  financial  statements pursuant to the rules and regulations of the
Securities  and  Exchange  Commission.   It  is  suggested  that  the  following
consolidated  financial  statements  be read in  conjunction  with the  year-end
consolidated  financial  statements and notes thereto  included in the Company's
Annual Report on Form 10-KSB for the year ended June 30, 1999.

     The results of  operations  for the three months ended  September 30, 1999,
are not  necessarily  indicative  of the results to be  expected  for the entire
fiscal year or for any other period.


                                      -1-
<PAGE>


                      SCANTEK MEDICAL INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

                                     ASSETS

                                                   September 30,       June 30,
                                                       1999             1999
                                                    -----------     -----------
                                                    (Unaudited)
Current Assets:
  Cash                                              $    33,528     $     5,516
  Marketable securities                                 240,069         409,272
  Inventory                                             898,796         898,796
  Due from licensees                                     55,000              --
  Prepaid expenses                                       84,452          84,287
                                                    -----------     -----------
         Total Current Assets                         1,311,845       1,397,871
                                                    -----------     -----------

Property and equipment - net                          1,729,112       1,803,974
Other assets - net                                      644,077         160,179
                                                    -----------     -----------
         TOTAL ASSETS                               $ 3,685,034     $ 3,362,024
                                                    ===========     ===========

                   LIABILITIES AND STOCKHOLDERS' (DEFICIENCY)

Current Liabilities:
  Short-term debt                                   $ 1,324,271     $ 1,274,271
  Accounts payable                                    1,186,140       1,210,861
  Accrued interest                                      342,602         224,279
  Accrued salaries                                    1,176,119       1,106,119
  Accrued expenses                                      120,902          84,213
                                                    -----------     -----------

     Total Current Liabilities                        4,150,034       3,899,743
                                                    -----------     -----------

Long-term debt                                        1,852,009       1,827,009
                                                    -----------     -----------
         Total Liabilities                            6,002,043       5,726,752
                                                    -----------     -----------

Commitments and Contingencies

Stockholders' Deficiency:
  Preferred stock, par value $.001
   per share - authorized 5,000,000
   shares; none issued                                       --              --
  Common stock, par value $.001 per
   share - authorized 45,000,000 shares;
   outstanding 18,328,420 and 18,070,200 shares          18,328          18,070
  Additional paid-in-capital                          3,534,923       3,433,002
  Deficit                                            (5,734,537)     (5,649,915)
  Cumulative other comprehensive (loss)                (135,723)       (165,885)
                                                    -----------     -----------

         Total Stockholders' (Deficiency)            (2,317,009)     (2,364,728)
                                                    -----------     -----------

         TOTAL LIABILITIES AND STOCK-
          HOLDERS' (DEFICIENCY)                     $ 3,685,034     $ 3,362,024
                                                    ===========     ===========




                See notes to consolidated financial statements.

                                       2
<PAGE>



                      SCANTEK MEDICAL INC. AND SUBSIDIARIES
         CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)
                                   (Unaudited)


                                                Three Months Ended September 30,
                                                --------------------------------
                                                      1999             1998
                                                  ------------     ------------
Revenues:
  Net sales                                       $         --     $     94,792
  License fees                                         597,500          500,000
                                                  ------------     ------------
         Total Revenues                                597,500          594,792
                                                  ------------     ------------

Costs and Expenses:
  Cost of sales                                         85,275           57,415
  General and administrative expenses                  433,674          194,930
  Research and development                              70,000           81,391
                                                  ------------     ------------

         Total Costs and Expenses                      588,949          333,736
                                                  ------------     ------------

Net operating income                                     8,551          261,056
                                                  ------------     ------------

Other income (expense):
  Interest and dividends                                    73              119
  Gain on sale of marketable securities                 76,644               --
  Interest expense                                    (169,890)         (40,539)
                                                  ------------     ------------
                                                       (93,173)         (40,420)
                                                  ------------     ------------

Net earnings (loss)                               $    (84,622)    $    220,636
                                                  ============     ============

Earnings (loss) per common share -  basic         $         --     $        .01
                                                  ============     ============
Earnings (loss) per common share - diluted        $         --     $        .01
                                                  ============     ============
Weighted average number of common
  shares outstanding - basic                        18,328,420       17,220,200
                                                  ============     ============
Weighted average number of common
 shares outstanding -  diluted                      18,328,420       17,453,714
                                                  ============     ============

                                                                     (Continued)

                 See notes to consolidated financial statements.
                                       3
<PAGE>



                      SCANTEK MEDICAL INC. AND SUBSIDIARIES
         CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)
                                  (Unaudited)                        (Continued)



                                                Three Months Ended September 30,
                                                --------------------------------
                                                    1999               1998
                                                 -----------        -----------

Net earnings (loss)                              $   (84,622)       $   220,636

Other comprehensive income
  (expense) net of income taxes:

   Unrealized gain (loss) on
    marketable securities                             30,162         (1,383,243)
                                                 -----------        -----------

Comprehensive (loss)                             $   (54,460)       $(1,162,607)
                                                 ===========        ===========


                 See notes to consolidated financial statements.
                                       4
<PAGE>



                      SCANTEK MEDICAL INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


                                                Three Months Ended September 30,
                                                --------------------------------
                                                       1999            1998
                                                    ---------       ---------
Cash flows from operating activities:
 Net earnings (loss)                                $ (84,622)      $ 220,636
Adjustments to reconcile net
 earnings (loss) to net cash
 used in operating activities:
  Depreciation and amortization                        91,764          22,592
  Net gain on sale of mar-
   ketable securities                                 (76,644)             --
  Non-cash officers compensation                       55,943              --
  Other non-cash items                               (211,264)         14,218
  Changes in operating
   assets and liabilities                            (106,848)       (375,283)
                                                    ---------       ---------
         Net Cash (Used in)
          Operating Activities                       (331,671)       (117,837)
                                                    ---------       ---------

Cash flows from investing activities:
  Proceeds from sale of
   marketable securities                              276,009              --
  Purchase and deposits
   of equipment                                            --        (140,000)
                                                    ---------       ---------
         Net Cash Provided by
          (Used in) Investing
          Activities                                  276,009        (140,000)
                                                    ---------       ---------

Cash flows from financing activities:
   Proceeds from borrowings                            60,000         100,000
   Proceeds from officer loans                         25,000         125,000
   Repayment of officer loans                         (10,000)             --
   Repayment of notes                                  (1,326)         (1,202)
   Proceeds from sale of common stock                  10,000              --
                                                    ---------       ---------
         Net Cash Provided by
          Financing Activities                         83,674         223,798
                                                    ---------       ---------

Net Increase (decrease) in Cash                        28,012         (34,039)

Cash - beginning of period                              5,516          55,929
                                                    ---------       ---------

Cash - end of period                                $  33,528       $  21,890
                                                    =========       =========


                                                                     (Continued)

                See notes to consolidated financial statements.
                                       5
<PAGE>



                      SCANTEK MEDICAL INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                     (Continued)


                                                Three Months Ended September 30,
                                                --------------------------------
                                                     1999               1998
                                                 -----------        -----------
Changes in Operating Assets
 and Liabilities Consist of:
  (Increase) in inventory                        $        --        $   (54,224)
  (Increase) decrease in
    due from licensees                              (305,000)            75,000
  (Increase) decrease in
   prepaid expenses                                     (165)             3,816
  (Increase) in other assets                          (3,300)           (63,792)
  Increase in accounts payable
   and accrued expenses                              201,617            163,917
  Increase (decrease) in
   deferred income                                        --           (500,000)
                                                 -----------        -----------
                                                 $  (106,848)       $  (375,283)
                                                 ===========        ===========
Supplementary information:
 Cash paid during the year for:
         Interest                                $    30,783        $     1,531
                                                 ===========        ===========
         Income taxes                            $        --        $        --
                                                 ===========        ===========
Non-cash investing activities:
  Acquisition of investment in
   connection with
   licensing agreement                           $  (247,500)       $        --
                                                 ===========        ===========
  Unrealized gain (loss)
   on marketable securities                      $    30,162        $(1,383,243)
                                                 ===========        ===========
Other Non-Cash Activities:
 Conversion of accrued
  expenses to common stock                       $    20,312        $        --
                                                 ===========        ===========
 Conversion of accounts
  payable to stock options                       $    15,924        $    14,218
                                                 ===========        ===========
 Conversion of common stock
  issued to officers for loan
  financing                                      $    55,943        $        --
                                                 ===========        ===========


                See notes to consolidated financial statements.


                                       6
<PAGE>


                      SCANTEK MEDICAL INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   ORGANIZATION

          The  consolidated  balance  sheet as of September  30,  1999,  and the
     consolidated  statements of operations  and  comprehensive  (loss) and cash
     flows for the three  months  ended  September  30,  1999 and 1998 have been
     prepared by the Company and are  unaudited.  In the opinion of  management,
     all adjustments  (consisting of normal recurring  adjustments) necessary to
     present   fairly  the  financial   position,   results  of  operations  and
     comprehensive  (loss) and cash flows for all  periods  presented  have been
     made.  Certain items in the September 30, 1998  financial  statements  have
     been  reclassified  to conform to September 30, 1999  classifications.  The
     information   for  June  30,  1999  was  derived  from  audited   financial
     statements.

2.   BASIS OF PRESENTATION

          The accompanying  consolidated financial statements have been prepared
     on a going concern basis,  which contemplates the realization of assets and
     the satisfaction of liabilities in a normal course of business.

          The Company has experienced  losses during its development  stage. The
     Company is no longer a  development  stage  Company but losses and negative
     cash flows from operations have continued in the current fiscal year. As of
     September  30,  1999,  the  Company  has  a  working   capital  deficit  of
     approximately $2.3 million.

          The activities of the Company are being  financed  through the sale of
     its common stock and debt securities.  The Company's continued existence is
     dependent  upon its  ability  to  obtain  needed  working  capital  through
     additional equity and/or debt financing,  and the commercial  acceptability
     of the  (BreastCare(TM))  device  throughout  the world.  This  uncertainty
     raises  substantial doubt about the ability of the Company to continue as a
     going concern.

          The financial  statements do not include any  adjustments  relating to
     the  recoverability  and  classification  of recorded  asset amounts or the
     amounts and  classifications  of liabilities the might be necessary  should
     the Company be unable to continue as a going concern.

3.   EARNINGS (LOSS) PER SHARE

          Basic earnings (loss) per common share are computed using the weighted
     average  number of common  shares  outstanding  during the period.  Diluted
     earnings per common share are computed using the weighted average number of
     common shares and potential common shares outstanding during the period.


                                       7
<PAGE>


                      SCANTEK MEDICAL INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


4.   SEGMENTS - GEOGRAPHIC AREAS

          The Company does not have reportable  operating segments as defined in
     Statement of Financial  Accounting  Standards  No. 131,  "Disclosure  about
     Segments of an Enterprise and Related  Information"  (SFAS 131). The method
     for  attributing   revenues  to  individual   countries  is  based  on  the
     destination  to which  finished  goods are  shipped.  The Company  operates
     facilities in the United States and South America.

          One   hundred   (100%)   percent  of  the  sales   ($94,792)   of  the
     BreastCare(TM) device for the three months ended September 30, 1998 were to
     the Company's  former South American  licensee,  Sandell  Corporation  S.A.
     Sales of the  BreastCare(TM)  device were not recorded by the Company until
     Sandell  Corporation  S.A. shipped the  BreastCare(TM)  device to unrelated
     entities.  Revenues  include  license  fees  received  by  the  Company  in
     connection with various arrangements  contracted  throughout the world. The
     following is a summary of key financial data:

                                                        Three Months Ended
                                                           September 30,
                                                      1999              1998
                                                    ---------         ---------
Total Revenues:
  United States                                     $ 597,500         $ 557,415
  South America                                            --            94,792
  Less intergeographic revenue                             --           (57,415)
                                                    ---------         ---------
                                                    $ 597,500         $ 594,792
                                                    =========         =========

Income (loss) from operations:
  United States                                     $ 160,427         $ 319,402
  South America                                      (151,876)          (58,346)
                                                    ---------         ---------
                                                    $   8,551         $ 261,056
                                                    =========         =========


                                       8
<PAGE>



Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

          The Company's quarterly and annual operating results are affected by a
     wide variety of factors that could materially and adversely affect revenues
     and profitability,  including competition from other suppliers;  changes in
     the regulatory and trade environment;  changes in consumer  preferences and
     spending habits; the inability to successfully manage growth;  seasonality;
     the ability to introduce and the timing of the introduction of new products
     and the  inability to obtain  adequate  supplies or materials at acceptable
     prices. As a result of these and other factors,  the Company may experience
     material  fluctuations in future operating results on a quarterly or annual
     basis, which could materially and adversely affect its business,  financial
     condition,  operating results, and stock price. Furthermore,  this document
     and other  documents  filed by the Company with the Securities and Exchange
     Commission (the "SEC") contain certain forward-looking statements under the
     Private  Securities  Litigation  Reform  Act of 1995  with  respect  to the
     business of the Company.  These  forward-looking  statements are subject to
     certain risks and uncertainties, including those mentioned above, and those
     detailed in the  Company's  Annual Report on Form 10-KSB for the year ended
     June 30, 1999, which may cause actual results to differ  significantly from
     these forward-looking  statements.  The Company undertakes no obligation to
     publicly  release the  results of any  revisions  to these  forward-looking
     statements which may be necessary to reflect events or circumstances  after
     the date hereof or to reflect the occurrence of  unanticipated  events.  An
     investment in the Company involves various risks, including those mentioned
     above and those which are detailed  from time to time in the  Company's SEC
     filings.

     Results of Operations

          The  following  table  sets  forth  for  the  periods  indicated,  the
     percentage  increase  or  (decrease)  of  certain  items  included  in  the
     Company's consolidated statement of operations:

                                         % Increase (Decrease) from Prior Period
                                         ---------------------------------------
                                                Three Months Ended
                                                September 30, 1999
                                                compared with three
                                                    months ended
                                                September 30, 1998
                                                ------------------

Sales (1)                                                -- %
License fee revenue                                    19.5
Cost of sales                                          48.5
General and administrative expense                    122.5
Research and development                              (14.0)
Interest expense                                      319.1
Net earnings (loss)                                  (138.4)

(1) Percentage not meaningful


                                       9
<PAGE>



Three Months Ended September 30,1999 vs.
  Three Months Ended September 30,1998


Revenues

Net sales  decreased to $-0- during the three months  ended  September  30, 1999
from $94,792 during the three months ended  September 30, 1998 as the Company is
re-focusing its South American marketing strategy in Brazil. The Company expects
its distribution  operations in Brazil to be in full operation during the latter
part of the  fourth  quarter  of  calendar  1999,  while  shipments  to  Ireland
commenced in October  1999.  The Company  will  manufacture  the  BreastCare(TM)
device in its U.S. facilities.  Manufacturing in Brazil will commence during the
second   quarter  of  calendar   2000  after  the  Company   establishes  a  new
manufacturing facility in Brazil.

License  fee  revenue  increased  to  $597,500  during  the three  months  ended
September 30, 1999 from  $500,000 for the three months ended  September 30, 1998
as the Company  recognized  higher license fees from Nugard  Healthcare  Ltd. as
compared to Sandell from the preceding year.

Cost of Sales

Cost of sales  increased to $85,275 during the three months ended  September 30,
1999 from $57,415 during the three months ended September 30, 1998 primarily due
to depreciation  expense of $69,211 on the production  equipment compared to the
cost of sales of the initial  shipments of its product  during the first quarter
of the Company's prior year.

General and Administrative Expenses

General and administrative  expenses increased 122.5% for the three month period
ending  September  30,  1999 as  compared  with the  three  month  period  ended
September  30, 1998.  This  increase is primarily due to increases in consulting
services in connection with the Company's South American marketing strategies in
Brazil.

Interest Expense

Interest  expense was $169,890 for the three  months  ended  September  30, 1999
compared to $40,539 for the three months ended  September  30, 1998.  The 319.1%
increase was attributable to the increase on the Company's short-term debt.

Research and Development Expenses

Research and  development  expense  decreased  14.0% to $70,000 during the three
months  ended  September  30, 1999 from  $81,391  during the three  months ended
September 30, 1998. The decrease is primarily attributable to decreased salaries
incurred by the Company in the experimental area of development of its product.


                                       10
<PAGE>



     LIQUIDITY AND CAPITAL RESOURCES

     The Company's  need for funds has increased from period to period as it has
incurred expenses for among other things, research and development; applications
for domestic and international  trademarks and international  patent protection;
licensing  and  pre-marketing  activities;  and attempts to raise the  necessary
capital for initial  production.  Since inception,  the Company has funded these
needs through private  placements of its equity and debt securities and advances
from the Company's President, Chief Executive Officer and major shareholder. The
Company has entered into various license  agreements that have raised additional
funds and borrowed money against  common stock  received in connection  with the
license  agreements.  In addition,  the Company's  auditors' report for the year
ended June 30, 1999 dated August 24, 1999 expressed an opinion as to the Company
continuing as a going concern.

     During September 1998, the Company commenced the sale of its BreastCare(TM)
device in Brazil,  Uruguay and  Paraguay  through its South  American  licensee.
During February 1999, the Brazilian economy declined and the Brazilian  currency
lost fifty (50%) percent of its value.  Brazil  increased the import and value -
added tax from  approximately  twenty - one (21%)  percent in  December  1998 to
approximately  seventy - four  (74%)  percent  in  February  1999.  Due to these
factors, sales substantially decreased in Brazil, which represents approximately
eighty (80%) percent of the Company's present revenue. The Company plans to move
the  production  facility from Uruguay to Brazil.  This will  eliminate the high
value - added tax and will be able to facilitate  sales. The Company  terminated
its license  agreement  with its former  licensee in South  America and signed a
letter of intent to create a joint  venture  with  exclusive  rights to  import,
manufacture, market and distribute the BreastCare(TM) device in Brazil.

The Company expects to commence its distribution operations in Brazil during the
fourth quarter of calendar 1999 while shipments to Ireland  commenced in October
1999. However, until cash flow generated from the shipment of the BreastCare(TM)
device is  sufficient  to support the  Company's  operations,  the Company needs
financing to fund its current overhead and various capital  requirements.  As of
September 30, 1999, the Company  borrowed  $1,200,000  from  unaffiliated  third
parties.  These loans are payable by the Company on various  dates  through June
2000. In addition,  the Company's  president  advanced the Company an additional
$342,000.  These loans have supported the Company  through the prior fiscal year
and the current first quarter,  and the Company expects the cash flow from sales
commencing in the latter part of 1999 to cover the  operations of the Company in
calendar 2000 providing the Company is successful in raising  additional capital
to  support  the  operations  until cash  flows  generated  for the sales of the
BreastCare(TM) device commences.

As previously noted, the Company terminated its license agreement with its South
American  licensee.  The Company will  manufacture,  market and  distribute  the
BreastCare(TM)  device  throughout  South America  through the  Company's  South
American subsidiaries.

     On July  19,1999 the  Company,  through its  Brazilian  subsidiary  Scantek
Medical Do Brazil  LTDA,  executed a letter of intent with  Contrutoro  CEC LTDA
("CEC") and EPIC - Empressa de Participacano, Investimnto e Consultoia s/c LTDA.
("EPIC") to create a joint venture with exclusive rights to import, manufacture,
market and distribute the BreastCare(TM)  device in Brazil. The letter of intent
is subject to a definitive  agreement which is still in negotiations between the
parties.


                                       11
<PAGE>


     On July 29,  1999 the  Company  granted  an  exclusive  license  to  Nugard
Healthcare Ltd, an Irish company,, ("Nugard") to market Scantek's BreastCare(TM)
device in  Ireland  and the United  Kingdom.  Nugard  will pay a  non-refundable
licensing fee of $350,000 in various stages, of which $45,000 was received as of
September 30, 1999, and the Company received common shares equivalent to fifteen
(15%)  percent of  Nugard's  total  outstanding  common  shares.  The  agreement
requires  minimum  purchase of 5,000 units per month.  The  purchase  price will
range from $10 to $15 per unit based on shipment of the BreastCare(TM) device to
the government or private physicians. Sales commenced to Nugard in October 1999.

     The Company  executed a letter of intent on August 20, 1997 with respect to
the acquisition of a Hungarian based  manufacturer of plastic medical  packaging
products  and the  manufacturing  facility for an  aggregate  purchase  price of
$1,750,000.  It is the Company's  intention to use this facility as a production
center for the  BreastCare(TM)  device for Eastern  Europe.  The  acquisition is
subject to the Company  obtaining  financing  for the purchase of the  Hungarian
manufacturer.

     The  Company's  working  capital  and capital  requirements  will depend on
numerous  factors,  including the level of resources that the Company devotes to
the purchase of manufacturing  equipment to support  start-up  production and to
the  marketing  aspects  of its  products.  The  Company  intends  to  construct
production  and/or assembly  centers abroad to manufacture,  market and sell the
BreastCare(TM)  in  the  international  market.  The  Company  entered  into  an
agreement with Zigmed Inc.  pursuant to which Zigmed Inc. will  manufacture  the
production  equipment needed for manufacturing of the BreastCare(TM)  device for
the contract  price of  $1,850,680.  The Company as of September  30, 1999,  has
advanced Zigmed Inc.  payments of $989,679 and issued Zigmed Inc. 100,000 shares
of the Company's  common stock (valued at $1.00 per share)  against the contract
price.  The  balance  of  $861,001  will be paid  when the  Company  raises  the
additional capital.

     The  Company's  success  is  dependent  on  raising  sufficient  capital to
establish a production and assembly  facility to manufacture the  BreastCare(TM)
for the international  market. The Company believes the  BreastCare(TM)  will be
commercially  accepted throughout the international market. The Company does not
have all the  financing  in place at this time,  nor may it ever,  to meet these
objectives.

Other Matters

     Year 2000

     Background

     The Year 2000  problem is the result of  computer  programs  being  written
using two digits (rather than four) to define the applicable  years.  Any of the
Company's programs that have time-sensitive  software may recognize a date using
"00" as the  year  1900  rather  than the  year  2000,  which  could  result  in
miscalculations or system failures.



                                       12
<PAGE>


     The  Company  will rely  heavily on  computer  technologies  to operate its
business.   In  1998,  the  Company  conducted  an  initial  assessment  of  its
information technology to determine which Year 2000 related problems might cause
processing  errors or computer system failures.  The Company also did a complete
analysis of its present  computer system and its needs for the future.  Based on
the results of that analysis,  the Company's executive management identified the
Year 2000 problem as a top corporate  priority and established an internal group
to provide a solution.

     The following  discussion of the  implications of the Year 2000 problem for
the Company  contains  numerous  forward-looking  statements based on inherently
uncertain information. The cost of the project and the date on which the Company
plans  to  complete  its  internal  Year  2000  modifications  are  based on the
Company's best estimates,  which were derived  utilizing a number of assumptions
of future events  including the continued  availability of internal and external
resources, third party modifications and other factors. However, there can be no
guarantee  that these  estimates  will be  achieved,  and actual  results  could
differ.  Moreover,  although  the  Company  believes it will be able to make the
necessary  modifications  in advance,  there can be no guarantee that failure to
modify the systems would not have a material adverse effect on the Company.

     In  addition,  the  Company  places a high  degree of  reliance on computer
systems of third  parties,  such as  customers,  trade  suppliers  and  computer
hardware and commercial  software  suppliers.  Although the Company is assessing
the readiness of these third parties and preparing  contingency plans, there can
be no guarantee  that the failure of these third parties to modify their systems
in advance of December 31, 1999, would not have a material adverse effect on the
Company.

Readiness

     The Year 2000  project is  intended to ensure  that all  critical  systems,
devices  and  applications,  as well as data  exchanged  with  customers,  trade
suppliers and other third  parties have been  evaluated and will be suitable for
continued use into and beyond the Year 2000.

     The Company  was  formerly a  development  stage  company and became  fully
operational in early 1999. All computers the Company operates now are compatible
with the Year 2000. The Company expects to vastly upgrade its computer system as
it becomes fully operational in the latter part of 1999.

     Since early 1998, the Company has required Year 2000 compliance  statements
from all suppliers of the Company's  computer hardware and commercial  software.
Regardless of the compliance  statements,  all third party hardware and software
will also be subjected to testing to reconfirm the Year 2000 readiness.

Cost

     The Company  estimates that the total cost of achieving Year 2000 readiness
for its internal systems, devices and applications and a complete upgrade of its
computer system is approximately  $250,000. The cost of the Year 2000 problem is
not material but the extent of upgrading the computer system will absorb most of
the cost.  Year 2000 project costs are difficult to estimate  accurately and the
projected cost could change due to unanticipated  technological difficulties and
Year 2000 readiness of third parties.


                                       13
<PAGE>

Contingency Plans

     In the event that the  efforts of the  Company's  Year 2000  project do not
address all  potential  systems  problems,  the Company is currently  developing
business interruption contingency plans. The Company believes, however, that due
to the widespread nature of potential Year 2000 issues, the contingency planning
process  is an ongoing  one which  will  require  further  modifications  as the
Company  obtains  additional  information  regarding (1) the Company's  internal
systems during the  remediation  and testing phases of its Year 2000 project and
(2) the status of third  party Year 2000  readiness.  Contingency  planning  for
possible  Year 2000  disruptions  will  continue  to be  defined,  improved  and
implemented.

Risks

     The  Company  believes  that  completed  and  planned   modifications   and
conversions of its critical  systems,  devices and applications will allow it to
be Year 2000 compliant in a timely manner. There can be no assurances,  however,
that the Company's  internal  systems,  devices and  applications  or those of a
third  parties on which the Company  relies will be Year 2000  compliant by year
2000 or that the Company's or third parties' contingency plans will mitigate the
effects  of any  noncompliance.  An  interruption  of the  Company's  ability to
conduct its business due to a Year 2000 readiness  problem could have a material
adverse effect on the Company.



                                       14
<PAGE>


PART II.  Other Information

     Item 1. Legal Proceedings

          See Item 3 of the Company's  Annual Report on Form 10-KSB for the year
     ended June 30, 1999.

     Item 6.   Exhibits and Reports on Form 8-K

     (a)  Exhibits: Exhibit 27.1 Financial Data Schedule.

     (b)  There  were no  Current  Reports  on Form 8-K filed by the  registrant
          during the quarter ended September 30, 1999.




                                       15
<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.



                                          SCANTEK MEDICAL INC.



                                          By: /s/ Zsigmond Sagi
                                              ----------------------------
                                              Zsigmond Sagi, President and
                                              Chief Financial Officer


Dated:  November 13, 1999


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