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 March 31, 2001

                                       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 April 31, 2001, there were 19,360,690 shares of Common Stock, $.001 par
value, outstanding.


<PAGE>


                              SCANTEK MEDICAL INC.

                                      INDEX


Part I.   Financial Information                                           Page
                                                                          ----
Item 1.   Financial Statements                                              1

          Consolidated Balance Sheets as of
            March 31, 2001 (unaudited) and
            June 30, 2000                                                   2

          Consolidated Statements of Operations
            and Comprehensive (Loss) for the
            Nine and Three Months Ended March 31,
            2001 and 2000 (unaudited)                                     3 - 4

          Consolidated Statements of Cash Flows
            For the Nine Months Ended March 31,
            2001 and 2000 (unaudited)                                     5 - 6

          Notes to Financial Statements (unaudited)                       7 - 9

Item 2.   Management's Discussion and Analysis of
            Financial Condition and Results of
            Operations                                                  10 - 16

Part II.  Other Information

Item 1.   Legal Proceedings                                                17

Item 6.   Exhibits and Report on Form 8-K                                  17

Signatures                                                                 18


<PAGE>


PART 1. 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, 2000.

     The results of operations for the nine months ended March 31, 2001, are not
necessarily indicative of the results to be expected for the entire fiscal year
or for any other period.


                                      -1-
<PAGE>


<TABLE>
                         SCANTEK MEDICAL INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<CAPTION>
                                                               March 31,            June 30,
                                                                 2001                2000
                                                            ------------         ------------
                                                             (Unaudited)
                             ASSETS
<S>                                                         <C>                  <C>
Current Assets:
    Cash                                                    $      2,247         $      2,898
    Marketable securities                                          3,456               20,735
    Accounts receivable                                           24,000               24,000
    Inventories                                                  594,528              721,315
    Prepaid expenses                                                --                  8,511
                                                            ------------         ------------
        Total Current Assets                                     624,231              777,459
                                                            ------------         ------------

Property and equipment - net                                   1,323,422            1,548,016
Other assets - net                                                50,468              101,174
                                                            ------------         ------------

    TOTAL ASSETS                                            $  1,998,121         $  2,426,649
                                                            ============         ============

            LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current Liabilities:
    Short-term debt                                         $  1,236,810         $    860,593
    Current portion of long-term debt                            850,000              300,000
    Accounts payable                                           1,273,290            1,263,095
    Accrued interest                                             841,448              539,333
    Accrued salaries                                           1,542,472            1,332,472
    Accrued expenses                                             626,555              528,406
                                                            ------------         ------------
        Total Current Liabilities                              6,370,575            4,823,899
                                                            ------------         ------------

Long-term debt                                                 2,166,109            2,604,609
                                                            ------------         ------------
        Total Liabilities                                      8,536,684            7,428,508
                                                            ------------         ------------

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 19,360,690 and
     18,810,540 shares                                            19,361               18,810
    Additional paid-in-capital                                 3,980,542            3,726,976
    Cumulative other comprehensive loss                         (298,544)            (281,265)
    Deficit                                                  (10,239,922)          (8,466,380)
                                                            ------------         ------------
        Total Stockholders' Deficiency                        (6,538,563)          (5,001,859)
                                                            ------------         ------------

    TOTAL LIABILITIES AND STOCKHOLDERS'
     DEFICIENCY                                             $  1,998,121         $  2,426,649
                                                            ============         ============
</TABLE>



                See notes to consolidated financial statements.


                                      -2-

<PAGE>


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

<CAPTION>
                                                Nine Months Ended March 31,              Three Months Ended March 31,
                                            ---------------------------------         ---------------------------------
                                                 2001                 2000                2001                 2000
                                            ------------         ------------         ------------         ------------
<S>                                         <C>                  <C>                  <C>                  <C>
Revenues:
    Net sales                               $     21,137         $     29,775         $       --           $     24,000
    License fees                                    --                597,500                 --                   --
                                            ------------         ------------         ------------         ------------
                                                  21,137              627,275                 --                 24,000
                                            ------------         ------------         ------------         ------------

Costs and expenses:
    Cost of sales                                361,127              275,555               69,266               92,615
    General and administrative                   861,156
     expenses                                       --              1,331,301              409,136              446,399
    Research and development                     210,000              213,768               70,000               73,768
                                            ------------         ------------         ------------         ------------
                                               1,432,283            1,820,624              548,402              612,782
                                            ------------         ------------         ------------         ------------

Income (loss) from operations                 (1,411,146)          (1,193,349)            (548,402)            (588,782)
                                            ------------         ------------         ------------         ------------

Other income (expense):
    Interest and dividends                            25                  202                    6                   52
    Gain on sale of marketable
     securities                                     --                 25,007                 --                (51,637)
    Miscellaneous income                          27,000                                      --
    Interest expense                            (389,421)            (293,336)            (109,035)             (93,976)
                                            ------------         ------------         ------------         ------------
                                                (362,396)            (268,127)            (109,029)            (145,561)
                                            ------------         ------------         ------------         ------------

Net loss                                    $ (1,773,542)        $ (1,461,476)        $   (657,431)        $   (734,343)
                                            ============         ============         ============         ============

Loss per common share - basic               $      (0.09)        $      (0.08)        $      (0.03)        $      (0.04)
                                            ============         ============         ============         ============

Loss per common share - diluted             $      (0.09)        $      (0.08)        $      (0.03)        $      (0.04)
                                            ============         ============         ============         ============


Weighted average number of
 common shares outstanding - basic            19,105,046           18,333,820           19,105,046           18,333,820
                                            ============         ============         ============         ============
Weighted average number of
 common shares outstanding - diluted          19,105,046           18,333,820           19,105,046           18,333,820
                                            ============         ============         ============         ============
</TABLE>



                See notes to consolidated financial statements.


                                      -3-

<PAGE>


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


<CAPTION>
                                       Nine Months Ended March 31,   Three Months Ended March 31,
                                      ----------------------------   ----------------------------
                                          2001           2000             2001         2000
                                          ----           ----             ----         ----
<S>                                   <C>            <C>              <C>           <C>
Net loss                              $(1,773,542)   $(1,461,476)     $ (657,431)   $ (734,343)

Other comprehensive income (expense)
  net of income taxes:

  Unrealized gain (loss) on
    marketable securities                 (17,279)       120,905             650       120,331
                                      -----------    -----------      ----------    ----------
Comprehensive loss                    $(1,790,821)   $(1,340,571)     $ (656,781)   $ (614,012)
                                      ===========    ===========      ==========    ==========
</TABLE>



                See notes to consolidated financial statements.


                                      -4-

<PAGE>


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

                                                   Nine Months Ended March 31,
                                                -------------------------------
                                                    2001                2000
                                                -----------         -----------
Cash flows from operating activities:
    Net loss                                    $(1,773,542)        $(1,461,476)
Adjustments to reconcile net
 loss to net cash
 used in operating activities:
    Depreciation and amortization                   275,300             275,299
    Net gain on sale of marketable
     securities                                        --               (25,007)
    Non-employee stock based compensation            60,250              47,772
    Non-cash officers compensation                   41,867             171,093
    Other non-cash items                            130,000            (164,234)
    Changes in operating assets
     and liabilities                                755,757             463,145
                                                -----------         -----------
       Net Cash (Used in)
        Operating Activities                       (510,368)           (693,408)
                                                -----------         -----------

Cash flows from investing activities:
    Proceeds from sale of marketable
     securities                                        --               298,164
                                                -----------         -----------

Cash flows from financing activities:
    Proceeds from borrowings                        341,800             367,715
    Proceeds from officer loans                     165,400             133,513
    Repayment of officer loans                       (5,000)            (76,084)
    Repayment of notes                               (4,483)            (36,326)
    Proceeds from sale of common stock               12,000              10,000
                                                -----------         -----------
       Net Cash Provided by
        Financing Activities                        509,717             398,818
                                                -----------         -----------

Net increase (decrease) in Cash                        (651)              3,574

Cash - beginning of period                            2,898               5,516
                                                -----------         -----------

Cash - end of period                            $     2,247         $     9,090
                                                ===========         ===========



                See notes to consolidated financial statements.


                                      -5-

<PAGE>


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

<CAPTION>
                                                                Nine Months Ended March 31,
                                                               ----------------------------
                                                                   2001              2000
                                                               -----------        ---------
<S>                                                            <C>                <C>
Changes in operating assets and liabilities consist of:
    (Increase) in accounts receivable                          $      --          $ (24,000)
    Decrease in inventory                                          126,787           15,238
    Increase in due from licenses                                     --           (291,000)
    Decrease in prepaid expenses                                     8,511           36,073
    (Increase) in other assets                                        --             (3,300)
    Increase in accounts payable
     and accrued expenses                                          620,459          730,134
                                                               -----------        ---------

                                                               $   755,757        $ 463,145
                                                               ===========        =========

Supplementary information:
    Cash paid during the year for:
       Interest                                                $    46,360        $  37,083
                                                               ===========        =========
       Income Taxes                                            $       440        $     200
                                                               ===========        =========

Non-cash investing activities:
    Acquisition of investment in connection with
     licensing agreement                                       $      --          $(247,500)
                                                               ===========        =========
     Unrealized (loss) on
      marketable securities                                    $   (17,279)       $(120,905)
                                                               ===========        =========

Non-cash financing activities:
     Conversion of accounts payable
      to stock options                                         $      --          $  47,772
                                                               ===========        =========
     Conversion of accrued officers'
      salaries to common stock                                 $      --          $   9,375
                                                               ===========        =========
    Common stock issued to officers for
      loan financing                                           $    41,867        $  73,891
                                                               ===========        =========
    Compensation for the cancellation
      and re-issuance of stock options                         $      --          $ 171,093
                                                               ===========        =========
    Common stock issued for loan financing
      and extensions                                           $   160,250        $    --
                                                               ===========        =========
    Conversion of notes payable to
      common stock                                             $    10,000        $    --
                                                               ===========        =========
    Conversion of accrued expenses
      to common stock                                          $    30,000        $    --
                                                               ===========        =========
</TABLE>



                See notes to consolidated financial statements.


                                      -6-

<PAGE>


                      SCANTEK MEDICAL INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

     The consolidated balance sheet as of March 31, 2001, and the consolidated
statements of operations and comprehensive (loss) and cash flows for the nine
months ended March 31, 2001 and 2000 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. The information for June 30, 2000 was derived from
audited financial statements.

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 the normal course of business.

     The Company has experienced losses during and subsequent to its development
stage. Losses and negative cash flows from operations have continued in the
current fiscal year and subsequent to June 30, 2000. As of March 31, 2001, the
Company has a working capital deficit of approximately $6.5 million.

     The activities of the Company are being financed through the sale of its
common stock and debt securities. In October 2000, the Company was to sell 36%
of its Brazilian subsidiary to a Brazilian investment group for $2 million. The
Company intended to reinvest the proceeds in Scantek Medical do Brasil Ltda. On
December 29, 2000, the agreement was unilaterally terminated by the Company due
to the failure of the Brazilian investors to comply with the terms of the
agreement. 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)/BreastAlert(TM)to create
sales that will help the Company achieve a profitable level of operations.
However, there is no assurance that additional capital will be obtained or the
BreastCare(TM)/BreastAlert(TM)will be commercially successful. This 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 that might be necessary should the Company be
unable to continue as a going concern.

Earnings (Loss) Per Common Share

     Basic and diluted loss per common share are computed by dividing net loss
by the weighted average number of common shares outstanding during the year.
Potential common shares used in computing diluted earnings per share relate to
stock options and warrants which, if exercised, would have a dilutive effect on
earnings per share. During the nine months ended March 31, 2001 and 2000,
potential common shares were not used in the computation of diluted loss per
common share, as their effect would be antidilutive.


                                       -7-

<PAGE>


2.  SALE OF SUBSIDIARY

     On October 1, 2000, the Company and its Brazilian subsidiary executed an
agreement with a Brazilian investment group. Scantek Medical Inc. was to sell
36% of its equity in Scantek to Brasil Ltda for $2 million ($2,000,000) dollars
to such Brazilian investment group. The Company intended to reinvest the total
proceeds in Scantek Medical do Brasil Ltda.

     On December 29, 2000, the agreement was unilaterally terminated by the
Company due to the failure of the Brazilian investment group to comply with the
terms of the agreement.

3.  SEGMENTS - GEOGRAPHIC AREAS

     The Company does not have reportable operating segments as defined in the
Statement of Financial Accounting Standards No. 131, "Disclosure about Segments
of an Enterprise and Related Information". 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.
Revenues include license fees received by the Company in connection with various
arrangements contracted throughout the world.

<TABLE>
<CAPTION>
                                         Nine Months Ended                       Three Months Ended
                                             March 31,                                March 31,
                                 -------------------------------         -------------------------------
                                     2001                2000                2001                2000
                                 -----------         -----------         -----------         -----------
<S>                              <C>                 <C>                 <C>                 <C>
Total Revenues:
     United States               $       400         $   597,500         $      --           $      --
     South America                    28,237              24,000                --                24,000
     Europe                             --                 5,775                --                  --
     Less intergeopraphic
       revenue                        (7,500)               --                  --                  --
                                 -----------         -----------         -----------         -----------
                                 $    21,137         $   627,275         $      --           $    24,000
                                 ===========         ===========         ===========         ===========
Income (loss) from
 operations:
     United States               $  (987,414)        $  (900,385)        $  (295,481)        $  (447,694)
     South America                  (423,732)           (292,964)           (252,921)           (141,088)
                                 -----------         -----------         -----------         -----------
                                 $(1,411,146)        $(1,193,349)        $  (548,402)        $  (588,782)
                                 ===========         ===========         ===========         ===========
</TABLE>



                                       -8-

<PAGE>


4.  NEW ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board (FASB)issued
Statement of Financial Accounting Standards No. 133 "Accounting for Derivative
Instruments and Hedging Activities"(SFAS 133). This standard was amended by
Statement of Financial Accounting Standards No. 137 "Accounting for Derivative
Instruments and Hedging Activities-Deferral of the Effective Date of FASB
Statement No. 133" and changed the effective date for SFAS 133 to all fiscal
quarters of fiscal years beginning after June 15, 2000.In June 2000, the FASB
issued SFAS 138, "Accounting for Certain Derivative Instruments and Certain
Hedging Activities, ("SFAS 133"). SFAS 133 and 138 requires that all derivative
instruments be recorded on the balance sheet at their respective fair values.
Changes in the fair value of derivatives are recorded each period in current
earnings or other comprehensive income, depending on the designation of the
hedge transaction. For fair value hedge transactions in which the Company is
hedging changes in the fair value of assets or liabilities, changes in the fair
value of the derivative instrument will generally be offset by changes in the
hedged item's fair value. For cash flow hedge transactions in which the Company
is hedging the variability of cash flows related to a variable rate asset,
liability or forecasted transaction, changes in the fair value of the derivative
instrument will be reported in other comprehensive income. The gains and losses
on the derivative instrument that are reported in other comprehensive income
will be recognized in earnings in the periods in which earnings are impacted by
the variability of the cash flows of the hedged item. The Company will adopt
SFAS 133 and 138 in the first quarter of 2001 and does not expect such adoption
to have a material effect on the Company's consolidated results of operations,
financial position or cash flows.

     In December 1999, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements". SAB 101 summarizes certain of the SEC's views in applying generally
accepted accounting principles to revenue recognition in financial statements.
The Company adopted the provisions of SAB 101 during the fourth quarter ending
December 31, 2000 and it is not expected to have a material impact on the
Company's consolidated results of operations, financial position or cash flows.


5.  SUBSEQUENT EVENT

     On April 26, 2001 the Company signed a letter of intent for a European
joint venture with Arturo Madariaga Mazzingshi ("Madariaga"), a principal of
Commercial Balear De Multi propiegad, of Palma de Mallora, Spain. The letter of
intent calls for the organization of a joint venture to manufacture, market and
sell medical devices and products for the territory of Europe. At the present
time, Scantek's principal product, BreastCare(TM)/BreastAlert(TM) Differential
Temperature sensor, will be manufactured and sold under the agreement.

     The Company anticipates the final agreement to establish the joint venture
will be signed by the end of May. Upon signing the final agreement, Madarigia
will pay the Company $400,000 for the exclusive license and distribution for the
territory of Europe.



                                       -9-


<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, 2000, 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 that 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
                                      ----------------------------------------
                                       Nine Months Ended    Three Months Ended
                                        March 31, 2001        March 31, 2001
                                      compared with 2000    compared with 2000
                                      ------------------    ------------------
Sales                                      (29.0)                (100.0)
License fee revenue                       (100.0)                  --
Cost of sales                               31.1                  (25.2)
General and administrative
    expense                                (35.3)                  (8.3)
Research and development                    (1.8)                  (5.1)
Interest expense                            32.8                   16.0
Net (loss)                                  21.4                  (10.5)



                                      -10-



<PAGE>

     Nine Months Ended March 31,2001 vs.
        Nine Months Ended March 31,2000


Revenues

     Net sales decreased to $21,137 during the nine months ending March 31, 2001
from $29,775 during the nine months ended March 31, 2000 as the Company is
re-focusing its South American marketing strategy in Brazil. The Company will
ship the BreastCare(TM)/BreastAlert(TM) from the United States to South America
until the manufacturing facility in Brazil is completed and operational.

     License fee revenue decreased to $-0- during the nine months ended March
31, 2001 from $597,500 for the nine months ended March 31, 2000 as the Company
recognized license fees from Nugard Healthcare Ltd. from the preceding year.

Cost of Sales

     Cost of sales increased to $361,127 during the nine months ended March 31,
2001 from $275,555 during the nine months ended March 31, 2000 primarily due to
an inventory write off of $119,000 for expired product at the Uruguayan
location.

General and Administrative Expenses

     General and administrative expenses decreased to $861,156 during the nine
months ending March 31, 2001 from $1,331,301 during the nine months ended March
31, 2000. This decrease is primarily due to decreases in consulting services in
the Company's South American subsidiary in Uruguay.

Interest Expense

     Interest expense was $389,421 for the nine months ended March 31, 2001
compared to $293,336 for the nine months ended March 31, 2000. The 32.8%
increase was attributable to additional imputed interest on common stock for
loan financing and extensions.

Research and Development Expense

     Research and development expense was $210,000 for the nine months ended
March 31, 2001 compared to $213,768 for the nine months ended March 31, 2000.
The 1.8% decrease is the result of salaries incurred by the Company in the
experimental area of development of its product remaining relatively constant.




                                      -11-

<PAGE>


     Three Months Ended March 31,2001 vs.
        Three Months Ended March 31,2000

Revenues

     Net sales decreased to $-0- during the three months ended March 31, 2001
from $24,000 during the three months ended March 31, 2000 due to primarily the
same reasons set forth in the nine month analysis.

     There was no license fee revenue during the three months ended March 31,
2001 and March 31, 2000.

Cost of Sales

     Cost of sales decreased 25.2% to $69,266 during the three months ended
March 31, 2001 from $92,615 during the three months ended March 31, 2000
primarily due to reduced manufacturing labor in the United States and inventory
write-offs in Uruguay.

General and Administrative Expenses

     General and administrative expenses decreased to $409,136 during the three
months ended March 31, 2001 from $446,399 during the three months ended March
31, 2000 due to decreases in consulting services in the Company's South American
subsidiary in Uruguay coupled with increases in consulting services in the
Company's subsidiary in Brazil.

Interest Expense

     Interest expense was $109,035 for the three months ended March 31, 2001
compared to $93,976 for the three months ended March 31, 2000, the 16.0%
increase is due to primarily the same reasons set forth in the nine month
analysis.

Research and Development Expense

     Research and development expense of $70,000 decreased 5.1% for the three
months ended March 31, 2001 compared to March 31, 2000 for primarily the same
reasons set forth in the nine month analysis.




                                      -12-


<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 and maintenance of domestic and international trademarks and international
patent protection; licensing and pre-marketing activities; and, attempts to
raise the necessary capital to expand the Company's production capacity. 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. In addition, the Company's
auditors' report for the year ended June 30, 2000 dated August 17, 2000,
expressed an opinion as to the Company continuing as a going concern.

     During September 1998, the Company commenced the sale of its
BreastCare(TM)/BreastAlert(TM) 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 expected revenue. The
Company is establishing a production facility in Brazil. This will eliminate the
high value - added tax and hopefully will be able to facilitate sales. The
Company terminated its license agreement with its former licensee in South
America but key personnel for the former licensee have joined Scantek. The
Company's Brazilian subsidiary plans to manufacture, market and distribute the
BreastCare(TM)/BreastAlert(TM) in Brazil and export to other South American
countries.

     The Company commenced its distribution operations in South America during
the second half of calendar 2000, while shipments to Ireland commenced in
October 1999 for test marketing and shipments to other parts of Europe will
commence during calendar year 2001. 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 March 31, 2001, the Company borrowed $2,007,910 from
unaffiliated third parties. These loans are payable by the Company on various
dates through December 2001. In addition, as of May 1, 2001, the Company's
President advanced the Company an additional $111,500 since July 2000. These
loans have supported the Company through the prior fiscal year and the current
fiscal year, and the Company expects the cash flow from sales commencing in the
first quarter of calendar 2001 to cover the operations of the Company in
calendar 2001 and 2002, providing the Company is successful in raising
additional capital to support the operations until cash flows generated for the
sales of the BreastCare(TM)/BreastAlert(TM) 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)/BreastAlert(TM) throughout South America through the
Company'South American subsidiaries.



                                      -13-


<PAGE>


     Through its Brazilian subsidiary, the Company signed an agreement with the
State of Pernambuco in December 1999. The State of Pernambuco has the second
largest concentration of hospitals in Brazil offering quality care and
management believes that the location is also the most desirable for production,
shipping, financing and tax incentives. The Company is establishing a 2,550
square meter manufacturing facility in Recife, Pernambuco at the new port of
Suape. The Company has broken ground, and anticipates construction to be
completed by the first half of calendar 2001. The Company will ship the
production equipment for arrival by the time construction is complete.

     The State of Pernambuco has offered various incentives, including acreage,
at a reduced price, to build the facility, a 85% reduction in taxes through
2013, free shipping outside the state, and in connection with the federal
programs offered in Northeast Brazil, financing programs to help fund the
operations and capital improvements.

     The Company plans to ship the BreastCare(TM)/BreastAlert(TM) from the
United States until the production facility in Brazil is operational.

     On October 1, 2000, the Company and its Brazilian subsidiary executed an
agreement with a Brazilian investment group. Scantek Medical Inc. was to sell
36% of its equity in Scantek Medical do Brasil Ltda for two million ($2,000,000)
dollars to the Brazilian investment group. The Company intended to reinvest the
total proceeds in Scantek Medical do Brasil Ltda.

     On December 29, 2000, the agreement was unilaterally terminated by the
Company due to the failure of the Brazilian investment group to comply with the
terms of the agreement.

     On May 4, 2001 the Company announced that it received an official
invitation from the City of Nova Iguacu of the State of Rio de Janeiro in Brazil
to finalize an agreement for BreastCare's participation in the Women's Health
Program.

     The Agreement will call for an initial purchase order for 100,000 units of
BreastCare(TM)equating to revenues in excess of one million dollars
($1,000,000). Nova Iguacu is the seventh (7th) largest municipality in Brazil.

     The agreement will be finalized after a 30-day Bidding Process, ((which
gives others the opportunity to bid the BreastCare(TM)for government use;
however, the Company has the only BreastCare(TM)product for sale in Brazil).
After the bidding period, an official classification number will be assigned to
BreastCare(TM) for government use in Brazil. Thereafter, based on the State of
Rio de Janeiro'classification number assigned to BrastCare(TM) any government
agencies, municipalities and states in Brazil will not have to go through any
preliminary process before ordering the BreastCare(TM).

     On July 14, 1999, the Company granted an exclusive license to NuGard
HealthCare Ltd. ("NuGard"), an Irish Company; to market Scantek's
BreastCare(TM)/BreastAlert(TM) in Ireland and the United Kingdom. Pursuant to
the licensing agreement, NuGard will pay a non-refundable licensing fee of
$350,000 in various stages, of which $59,000 was received as of June 30, 2000,
and the Company received common shares equivalent to fifteen (15%) percent of
NuGard's total outstanding common shares. The purchase price will range from $10
to $15 per unit - FOB US. The licensing agreement requires minimum purchases of
5,000 units a month and payments of licensing fees that have been postponed
until the license agreement can be renegotiated.


                                      -14-

<PAGE>


     On April 26, 2001 the Company signed a letter of intent for a European
joint venture with Arturo Madariaga Mazzingshi ("Madariaga"), a principal of
Commercial Balear De Multi propiegad, of Palma de Mallora, Spain. The letter of
intent calls for the organization of a joint venture to manufacture, market and
sell medical devices and products for the territory of Europe. At the present
time, Scantek'principal product, BreastCare(TM)/BreastAlert(TM) Differential
Temperature sensor, will be manufactured and sold under the agreement.

     The Company anticipates the final agreement to establish the joint venture
will be signed by the end of the Company's fiscal year. Upon signing the final
agreement, Madarigia will pay the Company $400,000 for the exclusive licenses
and distribution for the territory of Europe.

     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 production in South America
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)/BreastAlert(TM) in the international market. The Company entered
into an agreement with Zigmed Inc., pursuant to which Zigmed Inc. will
manufacture the sensor production equipment needed for manufacturing of the
BreastCare(TM)/BreastAlert(TM) device. The balance of $718,276 will be paid when
the Company raises the additional capital.













                                      -15-

<PAGE>


     The Company'success is dependent on raising sufficient capital to
manufacture, market and sell the BreastCare(TM)/BreastAlert(TM) for the global
market. The Company believes the BreastCare(TM)/BreastAlert(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.


     NEW ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133 "Accounting for Derivative
Instruments and Hedging Activities"(SFAS 133). This standard was amended by
Statement of Financial Accounting Standards No. 137 "Accounting for Derivative
Instruments and Hedging Activities-Deferral of the Effective Date of FASB
Statement No. 133" and changed the effective date for SFAS 133 to all fiscal
quarters of fiscal years beginning after June 15, 2000.In June 2000, the FASB
issued SFAS 138, "Accounting for Certain Derivative Instruments and Certain
Hedging Activities, ("SFAS 133"). SFAS 133 and 138 requires that all derivative
instruments be recorded on the balance sheet at their respective fair values.
Changes in the fair value of derivatives are recorded each period in current
earnings or other comprehensive income, depending on the designation of the
hedge transaction. For fair value hedge transactions in which the Company is
hedging changes in the fair value of assets or liabilities, changes in the fair
value of the derivative instrument will generally be offset by changes in the
hedged item's fair value. For cash flow hedge transactions in which the Company
is hedging the variability of cash flows related to a variable rate asset,
liability or forecasted transaction, changes in the fair value of the derivative
instrument will be reported in other comprehensive income. The gains and losses
on the derivative instrument that are reported in other comprehensive income
will be recognized in earnings in the periods in which earnings are impacted by
the variability of the cash flows of the hedged item. The Company will adopt
SFAS 133 and 138 in the first quarter of 2001 and does not expect such adoption
to have a material effect on the Company's consolidated results of operations,
financial position or cash flows.

     In December 1999, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements". SAB 101 summarizes certain of the SEC's views in applying generally
accepted accounting principles to revenue recognition in financial statements.
The Company adopted the provisions of SAB 101 during the fourth quarter ending
March 31, 2001 and it is not expected to have a material impact on the Company's
consolidated results of operations, financial position or cash flows.





                                      -16-


<PAGE>


PART II.  Other Information

Item 1.  Legal Proceedings

     The Company is not presently subject to any legal proceedings which are
material to the consolidated results of operations or financial condition of the
Company.

Item 6.  Exhibits and Reports on Form 8-K

     (a)  There were no Current Reports on Form 8-K filed by the registrant
          during the quarter ended March 31, 2001.





                                      -17-

<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 L. Sagi
                                            -----------------------------------
                                            Zsigmond L. Sagi, President and
                                            Chief Financial Officer



Dated:  May 21, 2001


                                      -18-