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 December 31, 2002

                                   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.)

                  4B WING DRIVE, CEDAR KNOLLS, NEW JERSEY 07927
                                 (973) 401-0434
             ------------------------------------------------------
             (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 January 31, 2003, there were 34,236,195 shares of Common Stock,
$.001 par value, outstanding.


<PAGE>



                              SCANTEK MEDICAL INC.

                                      INDEX
                                      -----

                                                                     Page
                                                                     ----
Part I.  Financial Information

   Item 1.   Financial Statements                                     1

             Consolidated Balance Sheets as of
              December 31, 2002 (unaudited)                           2

             Consolidated Statements of Operations
              and Comprehensive Loss for the
              Six Months and Three Months Ended
              December 31, 2002 and 2001 (unaudited)                  3-4

             Consolidated Statements of Cash Flows
              For the Six Months Ended December
              31, 2002 and 2001 (unaudited)                           5-6

             Notes to Consolidated Financial Statements
              (unaudited)                                             7-11

    Item 2.  Management's Discussion and Analysis of
              Financial Condition and Results of
              Operations                                              12-19

    Item 14. Controls and Procedures                                  20

Part II. Other Information                                            20

    Item 1.  Legal Proceedings                                        20
    Item 2.  Changes in Securities
    Item 3.  Defaults Upon Senior Securities                          20
    Item 4.  Submission of Matters to a Vote of Security
              Holders                                                 20
    Item 5.  Other Information                                        20
    Item 6.  Exhibits and Report on Form 8-K                          21

Signatures                                                            22



<PAGE>


PART I.  FINANCIAL INFORMATION

         Item 1.  Financial Statements
                  --------------------

                  Certain information and footnote disclosures required under
accounting principles generally accepted in the United States of America 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 condensed 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, 2002.

                  The results of operations for the six and three month period
ended December 31, 2002, 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

                                                                   December 31,
                                                                       2002
                                                                   ------------
                                                                   (Unaudited)
                                     ASSETS

Current Assets:
     Cash                                                         $        475
     Marketable securities                                               2,765
     Inventories                                                       562,037
                                                                  ------------
         Total Current Assets                                          565,277
                                                                  ------------
Property and equipment - net                                           750,489
Other assets - net                                                      18,911
                                                                  ------------
     TOTAL ASSETS                                                 $  1,334,677
                                                                  ============
                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current Liabilities:
     Short-term debt                                              $  1,558,671
     Current portion of long-term debt                               1,255,060
     Accounts payable (includes $815,803
      to a related party)                                            1,444,134
     Accrued interest                                                1,519,406
     Accrued salaries                                                2,032,472
     Accrued expenses                                                  612,105
                                                                  ------------
         Total Current Liabilities                                   8,421,848
                                                                  ------------
Long-term debt                                                       2,020,368
                                                                  ------------
         Total Liabilities                                          10,442,216
                                                                  ------------

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 34,236,195  shares                            34,236
     Additional paid-in-capital                                      5,069,168
     Cumulative other comprehensive loss                              (299,235)
     Deficit                                                       (13,911,708)
                                                                  ------------
         Total Stockholders' Deficiency                             (9,107,539)
                                                                  ------------
     TOTAL LIABILITIES AND STOCKHOLDERS'
      DEFICIENCY                                                  $  1,334,677
                                                                  ============


                See notes to consolidated financial statements.

                                       2
<PAGE>


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

<TABLE>
<CAPTION>
                                   Six Months Ended December 31,     Three Months Ended December 31,
                                   -----------------------------     -------------------------------
                                       2002            2001                2002          2001
                                       ----            ----                ----          ----
<S>                                <C>             <C>                <C>             <C>
Revenues:
   Net sales                       $         --    $                   $               $
   License fees                              --              --                                  --
                                   ------------    ------------        ------------    ------------
                                             --              --                  --              --
                                   ------------    ------------        ------------    ------------

Costs and expenses:
   Cost of sales (consisting  of
     depreciation expense)              132,192         134,982              66,096          68,886
   General and administrative
    expenses                            513,643         377,954             238,760         166,615
   Research and development             140,000         140,000              70,000          70,000
                                   ------------    ------------        ------------    ------------
                                        785,835         652,936             374,856         305,501
                                   ------------    ------------        ------------    ------------
Loss from operations                   (785,835)       (652,936)           (374,856)       (305,501)
                                   ------------    ------------        ------------    ------------
Other income (expense):
   Interest and dividends                    --               6                  --               2
   Miscellaneous income                      --              --                  --              --
   Interest expense                    (276,726)       (211,711)           (120,509)       (108,606)
                                   ------------    ------------        ------------    ------------
                                       (276,726)       (211,705)           (120,509)       (108,604)
                                   ------------    ------------        ------------    ------------
Net loss                           $ (1,062,561)   $   (864,641)       $   (495,365)   $   (414,105)
                                   ============    ============        ============    ============
Loss per common share -
   basic and diluted               $      (0.04)   $      (0.03)       $      (0.02)   $      (0.02)
                                   ============    ============        ============    ============
Weighted average number of
 common shares outstanding -
 basic and diluted                   29,881,681      26,146,731          31,718,206      26,339,440
                                   ============    ============        ============    ============

</TABLE>


                                       3

<PAGE>

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

<TABLE>
<CAPTION>

                                   Six Months Ended December 31,     Three Months Ended December 31,
                                   -----------------------------     -------------------------------
                                       2002            2001                2002          2001
                                       ----            ----                ----          ----
<S>                                <C>             <C>                <C>             <C>


Net loss                           $ (1,062,561)   $   (864,641)       $   (479,617)   $   (414,105)

Other comprehensive income
  (expense) net of income taxes:

 Unrealized loss on
   marketable securities                   (276)             --                (276)           (691)
                                   ------------    ------------        ------------    ------------
Comprehensive loss                 $ (1,062,837)   $   (864,641)       $   (479,893)   $   (414,796)
                                   ============    ============        ============    ============
</TABLE>

                See notes to consolidated financial statements.


                                       4
<PAGE>

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

                                                   Six Months Ended December 31,
                                                   -----------------------------
                                                       2002            2001
                                                       ----            ----
Cash flows from operating activities:
     Net loss                                      $(1,062,561)   $  (864,641)
Adjustments to reconcile net
 loss to net cash used in operating activities:
     Depreciation and amortization                     145,372        147,697
     Write off of leasehold improvements                14,231             --
     Non-employee stock based compensation              87,952        131,025
     Non-cash officers compensation                      7,159             --
     Other non-cash items                               48,051             --
     Changes in operating assets
      and liabilities                                  540,773        403,851
                                                   -----------    -----------
         Net Cash Used in
         Operating Activities                         (219,023)      (182,068)
                                                   -----------    -----------
Cash flows from financing activities:
     Proceeds from borrowings                          262,500         94,960
     Proceeds from officer loans                         4,298         31,288
     Repayment of officer loans                         (2,529)        (3,759)
     Repayment of notes                                (56,000)        (6,245)
     Proceeds from sale of common stock                     --         62,000
                                                   -----------    -----------
        Net Cash Provided by
         Financing Activities                          208,269        178,244
                                                   -----------    -----------
Net decrease in cash                                   (10,754)        (3,824)
Cash - beginning of period                              11,229          6,026
                                                   -----------    -----------
Cash - end of period                               $       475    $     2,202
                                                   ===========    ===========

                See notes to consolidated financial statements.


                                       5
<PAGE>

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

<TABLE>
<CAPTION>
                                                       Six Months Ended December 31,
                                                       -----------------------------
                                                             2002          2001
                                                             ----          ----
<S>                                                       <C>          <C>
Changes in operating assets and liabilities consist of:
     Decrease in other assets                             $  14,441           --
     Increase in accounts payable
      and accrued expenses                                  526,332      403,851
                                                          ---------    ---------
                                                          $ 540,773    $ 403,851
                                                          =========    =========
Supplementary information:
     Cash paid during the period for:
        Interest                                          $     328          225
                                                          =========    =========
        Income Taxes                                      $     340          200
                                                          =========    =========
Non-cash investing activities:
      Unrealized loss on
       marketable securities                              $    (276)          --
                                                          =========    =========
Non-cash financing activities:
     Common stock issued to officers for
       loan financing                                     $   7,159           --
                                                          =========    =========
     Common stock issued for loan financing               $  42,402        6,405
                                                          =========    =========
     Issuance of stock options to non-employees           $  48,051        7,400
                                                          =========    =========
     Common stock issued for bonuses and
      consulting services                                 $ 138,050    $ 117,220
                                                          =========    =========
     Common stock issued in exchange for debt             $  92,500           --
                                                          =========    =========
</TABLE>

                See notes to consolidated financial statements.


                                       6




<PAGE>

                      SCANTEK MEDICAL INC. AND SUBSIDIARIES
              NOTES CONDENSED TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION

   Scantek Medical, Inc. and its subsidiaries (the "Company"), operates in one
industry segment and is engaged, in developing, manufacturing, marketing, and
licensing the BreastCare(TM)/BreastAlert(TM). The BreastCare(TM)/BreastAlert(TM)
is an early screening device which can detect certain breast tissue
abnormalities, including breast cancer. This device has been patented and has
Food and Drug Administration ("FDA") approval for sale.

2. BASIS OF PRESENTATION

   The consolidated balance sheet as of December 31, 2002, and the consolidated
statements of operations and cash flows for the period presented herein have
been prepared by the Company and are unaudited. In the opinion of management,
all adjustments (consisting solely of normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows for
all period presented have been made.

   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 its development stage. Losses and
negative cash flows from operations have continued in the prior fiscal year and
subsequent to June 30, 2002. As of December 31, 2002, 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. 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.

                                       -7-

<PAGE>


3. LOSS PER SHARE

   Basic loss per common share is computed by dividing net loss by the weighted
average number of common shares outstanding during the year. Diluted earnings
per common share are computed by dividing net earnings by the weighted average
number of common and potential common shares outstanding during the year.
Potential common shares used in computing diluted earnings per share relate to
stock options and warrants that, if exercised, would have a dilutive effect on
earnings per share. For the six and three months ended December 31, 2002 and
2001, potential common shares were not used in the computation of diluted loss
per common share, as their effect would be antidilutive.

4. 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, when received, include license fees received by the Company in
connection with various arrangements contracted throughout the world.

                               Six Months Ended             Three Months Ended
                                 December 31,                   December 31,
                             2002           2001            2002          2001
                           ---------     ----------       ---------    ---------

Total Revenues:
  United States            $      --     $       --              --           --
  South America                   --             --              --           --
  Less intergeographic
   revenue                        --             --              --           --
                           ---------     ----------       ---------    ---------
                           $      --     $       --              --           --
                           =========     ==========       =========    =========

Loss from operations:
  United States            $ 724,713     $ (582,276)      $ 347,856    $ 270,501
  South America               61,122        (70,660)         27,000       35,000
                           ---------     ----------       ---------    ---------
                           $ 785,835     $ (652,936)      $ 374,856    $ 305,501
                           =========     ==========       =========    =========

5. STOCK-BASED COMPENSATION

   The Company accounts for employee stock options in accordance with the
provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees." Accordingly, stock options granted to employees are
recorded using the intrinsic value method. The Company has adopted the
disclosure-only provisions of Statement Of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation." The standard encourages, but
does not require, companies to recognize compensation expense for grants of
stock, stock options and other equity instruments to employees based on fair
value.

                                       -8-

<PAGE>


6. STOCK ISSUED FOR SERVICES AND LOAN FINANCING

   During the six months ended December 31, 2002 and 2001, the Company issued
1,991,039 and 1,062,500 shares, respectively, of the Company's common stock to
employees and non-employees as stock - based compensation in the amount of
$95,111 and $123,625.

7. STOCKHOLDERS' DEFICIENCY

a) On November 2, 2002 the Company granted 1,000,000 warrants to non-employees
   for services performed to purchase the Company's common stock at an exercise
   price of $.05 per share, the fair market value at the date of grant. The
   Company recorded expense of $48,051 during the six months ended December 31,
   2002 in connection with the issuance of the warrants. The warrants are
   exercisable immediately and expire on November 1, 2007.

b) On November 8, 2002 the Company issued 3,000,000 shares of the Company's
   common stock in exchange for the reduction of a $45,000 liability for
   professional services.

c) On November 18, 2002 the Company issued 1,200,000 shares of the Company's
   common stock to non-employees from the exercise of options and warrants in
   exchange for the reduction of accrued interest of $26,500 and a $21,000
   liability for professional services.

d) During the six months ended December 31, 2001, the Company sold 775,000
   shares of the Company's common stock for $62,000.

8. LEGAL PROCEEDINGS

   The Company is a defendant in various legal proceedings seeking claims
aggregating approximately $100,000, which has been included in accrued expenses
in the Company's financial statements at December 31, 2002.

9. RECENT ACCOUNTING PRONOUNCEMENTS

   On June 29, 2001, the Financial Accounting Standards Board (FASB) issued SFAS
No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Intangible
Assets." The major provisions of SFAS No. 141 were as follows: all business
combinations initiated after June 30, 2001 must use the purchase method of
accounting; the pooling of interest method of accounting is prohibited. SFAS No.
142 eliminated the amortization of goodwill and certain other intangibles and
requires an impairment test of their carrying value. An initial impairment test
of goodwill and certain other intangibles must be completed in the year of
adoption with at least an annual impairment test thereafter. On January 1, 2002,
the Company adopted SFAS No. 142. The Company completed the initial impairment
tests in the first quarter of fiscal 2003, which did not result in an impairment
of goodwill or certain other intangibles. The provisions of SFAS No. 142 are
effective for periods after adoption and retroactive application is not
permitted. Therefore, the historical results of periods prior to 2002 in the
Company's Consolidated Statements of Operations do not reflect the effect of
SFAS No. 142, however, the three months ended September 30, 2001 includes no
amortization expense.

                                       -9-

<PAGE>


   In August 2001, the FASB issued SFAS No. 143 "Accounting for Asset Retirement
Obligations". SFAS No. 143 addresses financial accounting and reporting for
obligations and costs associated with the retirement of tangible long-lived
assets. The Company is required to implement SFAS No. 143 on July 1, 2003.
Management believes the effect of implementing this pronouncement will not have
a material impact on the Company's results of operations or financial position.

   In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets", effective for fiscal years beginning after
December 15, 2001. Under SFAS No. 144 assets held for sale will be included in
discontinued operations if the operations and cash flows will be or have been
eliminated from the ongoing operations of the entity and the entity will not
have any significant continuing involvement in the operations of the component.
The Company adopted SFAS No. 144 on July 1, 2002. The adoption of SFAS No. 144
did not have a material impact on the Company's results of operations or
financial position.

   In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections". This statement eliminates the automatic classification of gain or
loss on extinguishment of debt as an extraordinary item of income and requires
that such gain or loss be evaluated for extraordinary classification under the
criteria of Accounting Principles Board No. 30 "Reporting Results of
Operations". This statement also requires sales-leaseback accounting for certain
lease modifications that have economic effects that are similar to
sales-leaseback transactions, and makes various other technical corrections to
existing pronouncements. This statement will be effective for the Company for
the year ending June 30, 2004. Management believes that adopting this statement
will not have a material effect on the Company's results of operations or
financial position.

   In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." This Statement requires recording costs
associated with exit or disposal activities at their fair values when a
liability has been incurred. Under previous guidance, certain exit costs were
accrued upon management's commitment to an exit plan. Adoption of this Statement
is required with the beginning of fiscal year 2003. The Company has not yet
completed the evaluation of the impact of adopting this Statement.

   On October 1, 2002, the Financial Accounting Standards Board issued SFAS No.
147, "Acquisitions of Certain Financial Institutions." SFAS No. 147 removes
acquisitions of financial institutions from the scope of FASB Statement No. 72,
"Accounting for Certain Acquisitions of Banking or Thrift Institutions", and
FASB Interpretation No. 9, "Applying APB Opinion Nos. 16 and 17 When a Savings
and Loan Association or a Similar Institution is Acquired in a Business
Combination Accounted for by the Purchase Method," and requires that those
transactions be accounted for in accordance with FASB Statements Nos. 141 and
142.

                                      -10-

<PAGE>


   Additionally, this statement amends FASB Statement No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets," to include in its scope
long-term customer-relationship intangible assets of financial institutions such
as depositor and borrower relationship intangible assets and credit cardholder
intangible assets. Consequently, those intangible assets are subject to the same
undiscounted cash flow recoverability test and impairment loss recognition and
measurement provisions that Statement No. 144 requires for other long-lived
assets that are held and used.

   This statement became effective on October 1, 2002 and did not have a
material impact on the Company's results of operations or financial position.

                                      -11-


<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, 2002, 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.

   The Company's Form 10-QSB for the period ending December 31, 2002 was not
reviewed on an interim basis by the Company's auditors as required by Statements
on Auditing Standards No. 71, "Interim Financial Information".

   The following discussion and analysis should be read in conjunction with the
Company's consolidated financial statements and the notes related thereto. The
discussion of results, causes and trends should not be construed to infer any
conclusion that such results, causes or trends will necessarily continue in the
future.

Critical Accounting Policies
----------------------------

   The Company's discussion and analysis of its financial condition and results
of operations are based upon the Company's consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States. The preparation of these financial statements
requires the Company to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. On an on-going basis, the Company evaluates
its estimates, including those related to product returns, bad debts,
inventories, intangible assets, investments, income taxes and contingencies and
litigation. The Company bases its estimates on historical experience and on
various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results under different assumptions or conditions may
differ from these estimates.

                                      -12-


<PAGE>

   The Company believes the following critical accounting policies affect its
more significant judgments and estimates used in the preparation of its
consolidated financial statements. The Company maintains allowances for doubtful
accounts for estimated losses resulting from the inability of its customers to
make required payments. If the financial condition of the Company's customers
were to deteriorate, resulting in an impairment of their ability to make
payments, additional allowances may be required.

   The Company makes purchasing decisions principally based upon firm sales
orders from customers, the availability and pricing of raw materials and
projected customer requirements. Future events that could adversely affect these
decisions and result in significant charges to the Company's operations include
slow down in customer demand, customers delaying the issuance of sales orders to
the Company, miscalculating customer requirements, technology changes which
render the raw materials and finished goods obsolete, loss of customers and/or
cancellation of sales orders. The Company writes down its inventory for
estimated obsolescence or unmarketable inventory equal to the difference between
the cost of inventory and the estimated market value based upon the
aforementioned assumptions. If actual market conditions are less favorable than
those projected by management, additional inventory write-downs may be required.

   The Company seeks sales and profit growth by expanding its existing customer
base, developing new products and by pursuing strategic acquisitions that meet
the Company's criteria relating to (i) the market for the products; (ii) the
Company's ability to efficiently manufacture the product; (iii) synergies that
are created by the acquisition; and (iv) a purchase price that represents fair
value. If the Company's evaluation of a target company misjudges its technology,
estimated future sales and profitability levels, or inability to keep pace with
the latest technology, these factors could impair the value of the investment,
which could materially adversely affect the Company's profitability.

   The Company files income tax returns in every jurisdiction in which it has
reason to believe it is subject to tax. Historically, the Company has been
subject to examination by various taxing jurisdictions. To date, none of these
examinations has resulted in any material additional tax. Nonetheless, any tax
jurisdiction may contend that a filing position claimed by the Company regarding
one or more of its transactions is contrary to that jurisdiction's laws or
regulations.

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:

                                      -13-

<PAGE>

                                 % Increase (Decrease)     % Increase (Decrease)
                                   from Prior Period         from Prior Period
                                 ---------------------     ---------------------
                                   Six Months Ended         Three Months Ended
                                   December 31, 2002         December 31, 2002
                                     compared with             compared with
                                   Six Months Ended         Three Months Ended
                                   December 31, 2001         December 31, 2001
                                 ---------------------     ---------------------

     Sales                                0.0%                      0.0%
     Cost of sales                       -2.1%                     -4.1%
     General and administrative
      expense                            35.9%                     43.3%
     Research and development             0.0%                      0.0%
     Interest expense                    30.7%                     11.0%
     Net (loss)                          22.9%                     16.4%



 SIX MONTHS ENDED DECEMBER 31, 2002 VS.
 --------------------------------------
  SIX MONTHS ENDED DECEMBER 31, 2001
  ----------------------------------

Revenues
--------

   There were no sales for the six months ended December 31, 2002 and 2001.

Cost of Sales
-------------

   Cost of sales (which consists of depreciation expense) decreased 2.1% to
$132,192 during the six months ended December 31, 2002 from $134,982 during the
six months ended December 31, 2001.

General and Administrative Expenses
-----------------------------------

   General and administrative expenses increased 35.9% to $513,643 during the
six months ended December 31, 2002 from $377,954 during the six months ended
December 31, 2001 due to increases in travel expenses, rent, outside services
and professional fees attributable to stock and stock options issued for
services offset by higher consulting fees in 2001 also attributable to stock
options issued for services.

Interest Expense
----------------

   Interest expense increased to $276,726 during the six months ended December
31, 2002 from $211,711 during the six months ended December 31, 2001 primarily
due to interest expense on stock issuance for loan financing and additional
interest on increase in debt.

Research and Development Expense
--------------------------------

   Research and development expense of $140,000 remained constant for the six
months ended December 31, 2002 and 2001.

                                      -14-

<PAGE>


 THREE MONTHS ENDED DECEMBER 31, 2002 VS.
 ----------------------------------------
   THREE MONTHS ENDED DECEMBER 31, 2001
   ------------------------------------

Revenues
--------

   There were no sales for the three months ended December 31, 2002 and 2001.

Cost of Sales
-------------

   Cost of sales (which consists of depreciation expense) decreased 4.1% to
$66.096 during the three months ended December 31, 2002 from $68,886 during the
three months ended December 31, 2001.

General and Administrative Expenses
-----------------------------------

   General and administrative expenses increased 43.3% to $238,760 during the
three months ended December 31, 2002 from $166,615 during the three months ended
December 31, 2001 due to primarily the same reasons set forth in the six months
analysis.

Interest Expense
----------------

   Interest expense increased to $120,509 during the three months ended December
31, 2002 from $108,606 during the three months ended December 31, 2001 primarily
due to interest expense on stock issuance for loan financing and additional
interest on increased debt.

Research and Development Expense
--------------------------------

   Research and development expense of $70,000 remained constant for the three
months ended December 31, 2002 and 2001.

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, 2002 dated October 10, 2002,
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) device in Brazil, Uruguay and Paraguay through
its South American licensee. The Company terminated its license agreement with
its former licensee in South America. The Company's Brazilian subsidiary plans
to manufacture, market and distribute the BreastCare(TM)/BreastAlert(TM) device
in Brazil and export to other South American countries. As of this date only
minimal shipments have been made and the Company has not generated any material
revenues.

                                      -15-

<PAGE>


   Until cash flow generated from the shipment of the BreastCare(TM) device is
sufficient to support the Company's operations, the Company will require
financing to fund its current overhead and various capital requirements. As of
December 31, 2002, the Company borrowed approximately $2.5 million from
unaffiliated third parties. These loans are payable by the Company on various
dates through December 31, 2003. In addition, as of December 31, 2002, the
Company's President advanced the Company approximately $1.1 million. These loans
have supported the Company through the prior and the current fiscal year. The
Company expects the cash flow from sales commencing in 2003 to cover the
operations of the Company through December 2003, provided the Company is
successful in raising additional capital to support the operations until cash
flows generated from the sales of the BreastCare(TM)/BreastAlert(TM) device
commences.

   In 2003, the Company will market and distribute the
BreastCare(TM)/BreastAlert(TM) device throughout South America through the
Company's South American subsidiaries.

   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 State of Pernambuco has offered
various incentives, including acreage to build the facility at a reduced price,
an 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) device from the
United States until a production facility in Brazil is operational.

   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) device in Ireland and the United Kingdom.
Pursuant to the licensing agreement, NuGard is obligated to pay a non-refundable
licensing fee of $350,000 in various stages, of which $59,000 was received, 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, both of which NuGard is in
default. At the present time the Company has not renegotiated the license
agreement.

   In August/September 2001, Fiocruz, a government agency in the Ministry of
Health assisted in the BreastCare(TM) educational program for the Women's Health
Program for the City of Nova Iguacu and Fiocruz will be an integrated part of
the Company's BreastCare(TM) educational process.




                                      -16-

<PAGE>


   On October 1, 2002, the Company signed an agreement with Compat Comercio
Exterior Ltda, a Brazilian company located in Rio De Janeiro, Brazil, for a
long-term exclusive marketing and sales agreement for the BreastCare(TM) product
in the country of Brazil, excluding 4 states where the Company is pursuing more
direct agreements. The Compat Comercio agreement calls for the shipment of a
minimum of 100,000 units during the first six months of the term of the
agreement, 400,000 units during the second six months and 1,000,000 units during
the second year. Management believes that the timely fulfillment of the Compat
Comercio agreement will result in net profits in excess of $2,000,000 for the
first year of the Compat Comercio agreement, subject to Compat Comercio meeting
its minimum purchase obligations to the Company. Pursuant to such agreement
which has a term of five years with a renewal term of an additional five years,
subsequent to the initial two year term of the agreement, the Company has the
right to terminate the agreement if the parties cannot agree upon the minimum
number of units. There can be no assurance that Compat Comercio will meet the
minimum purchase requirement, or that the Company will recover any damages that
may result from such failure.

   Pursuant to the Compat Comercio agreement, the first shipment of 10,000
BreastCare(TM) units have been prepaid and deposited into a bank escrow account
and will be released when a Brazil government import license is secured.
Subsequent shipments will be paid fifty (50%) at the time of request and fifty
(50%) percent sixty (60) days later.

   The Company's working capital and capital requirements will depend on
numerous factors, including the level of resources that the Company devotes to
support start-up production and to the marketing aspects of its products. The
Company intends to construct assembly centers abroad to manufacture, market and
sell the BreastCare(TM)/BreastAlert(TM) device 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.

   The Company's success is dependent on raising sufficient capital to establish
a fully operable production and assembly facility to manufacture the
BreastCare(TM)/BreastAlert(TM) device for the international market. The Company
believes the device 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.

   This Management's Discussion and Analysis of Financial Condition and Results
of Operations includes forward-looking statements that may or may not
materialize. Additional information on factors that could potentially affect the
Company's financial results may be found in the Company's filings with the
Securities and Exchange Commission.

                                      -17-

<PAGE>


NEW ACCOUNTING PRONOUNCEMENTS

   On June 29, 2001, the Financial Accounting Standards Board (FASB) issued SFAS
No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Intangible
Assets." The major provisions of SFAS No. 141 were as follows: all business
combinations initiated after June 30, 2001 must use the purchase method of
accounting; the pooling of interest method of accounting is prohibited. SFAS No.
142 eliminated the amortization of goodwill and certain other intangibles and
requires an impairment test of their carrying value. An initial impairment test
of goodwill and certain other intangibles must be completed in the year of
adoption with at least an annual impairment test thereafter. On January 1, 2002,
the Company adopted SFAS No. 142. The Company completed the initial impairment
tests in the first quarter of fiscal 2003, which did not result in an impairment
of goodwill or certain other intangibles. The provisions of SFAS No. 142 are
effective for periods after adoption and retroactive application is not
permitted. Therefore, the historical results of periods prior to 2002 in the
Company's Consolidated Statements of Operations do not reflect the effect of
SFAS No. 142, however, the three months ended September 30, 2001 includes no
amortization expense.

   In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations". SFAS No. 143 addresses financial accounting and
reporting for obligations and costs associated with the retirement of tangible
long-lived assets. The Company is required to implement SFAS No. 143 on July 1,
2003. Management believes the effect of implementing this pronouncement will not
have a material impact on the Company's results of operations or financial
position.

   In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets", effective for fiscal years beginning after
December 15, 2001. Under SFAS No. 144 assets held for sale will be included in
discontinued operations if the operations and cash flows will be or have been
eliminated from the ongoing operations of the entity and the entity will not
have any significant continuing involvement in the operations of the component.
The Company adopted SFAS No. 144 on July 1, 2002. The adoption of SFAS No. 144
did not have a material impact on the Company's results of operations or
financial position.

   In April 2002, the FASB issued SFAS No. 145 "Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections". This statement eliminates the automatic classification of gain or
loss on extinguishment of debt as an extraordinary item of income and requires
that such gain or loss be evaluated for extraordinary classification under the
criteria of Accounting Principles Board No. 30 "Reporting Results of
Operations". This statement also requires sales-leaseback accounting for certain
lease modifications that have economic effects that are similar to
sales-leaseback transactions, and makes various other technical corrections to
existing pronouncements. This statement will be effective for the Company for
the year ending June 30, 2004. Management believes that adopting this statement
will not have a material effect on the Company's results of operations or
financial position.

   In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." This Statement requires recording costs
associated with exit or disposal activities at their fair values when a
liability has been incurred. Under previous guidance, certain exit costs were
accrued upon management's commitment to an exit plan. Adoption of this Statement
is required with the beginning of fiscal year 2003. The Company has not yet
completed the evaluation of the impact of adopting this Statement.

                                      -18-

<PAGE>


   On October 1, 2002, the Financial Accounting Standards Board issued SFAS No.
147, "Acquisitions of Certain Financial Institutions." SFAS No. 147 removes
acquisitions of financial institutions from the scope of FASB Statement No. 72,
"Accounting for Certain Acquisitions of Banking or Thrift Institutions", and
FASB Interpretation No. 9, "Applying APB Opinion Nos. 16 and 17 When a Savings
and Loan Association or a Similar Institution is Acquired in a Business
Combination Accounted for by the Purchase Method," and requires that those
transactions be accounted for in accordance with FASB Statements Nos. 141 and
142.

   Additionally, this statement amends FASB Statement No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets," to include in its scope
long-term customer-relationship intangible assets of financial institutions such
as depositor and borrower relationship intangible assets and credit cardholder
intangible assets. Consequently, those intangible assets are subject to the same
undiscounted cash flow recoverability test and impairment loss recognition and
measurement provisions that Statement No.144 requires for other long-lived
assets that are held and used.

   This statement became effective on October 1, 2002 and did not have a
material impact on the Company's results of operations or financial position.




                                      -19-


<PAGE>


Item 14. Controls and Procedures

       Within the 90 days prior to the date of this report, the Company carried
       out an evaluation, under the supervision and with the participation of
       the Company's management, including the Company's Chief Executive Officer
       and Chief Financial Officer, of the effectiveness of the design and
       operation of the Company's disclosure controls and procedures pursuant to
       Exchange Act Rule 13a-14. Based upon that evaluation, the Company's Chief
       Executive Officer and Chief Financial Officer concluded that the
       Company's disclosure controls and procedures are effective in timely
       alerting them to material information relating to the Company (including
       its consolidated subsidiaries) required to be included in the Company's
       periodic SEC filings. There have been no significant changes in the
       Company's internal controls or in other factors that could significantly
       affect internal controls subsequent to the date of their evaluation,
       including any corrective actions with regard to significant deficiencies
       and material weaknesses.

PART II.  Other Information

     Item 1.   Legal Proceedings
               -----------------

       There are several lawsuits against the Company that may have a material
       impact on the consolidated results of operations or financial condition
       of the Company.

     Item 2.   Changes in Securities
               ---------------------

       None

     Item 3.   Defaults Upon Senior Securities
               -------------------------------

       None.

     Item 4.   Submission of Matters to a Vote of Security Holders
               ---------------------------------------------------

       None

     Item 5.   Other Information
               -----------------

       None



                                      -20-

<PAGE>


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

(a) Exhibits:

      Exhibit 99.1 Certification of Chief Executive Officer and Chief Financial
      Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

      Exhibit 99.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b)   On October 9, 2002 the Company filed a Report of Form 8-K disclosing a
      change in the Registrant's Certifying Accountants. The former accountants,
      Wiener, Goodman & Company, P.C. ("Wiener, Goodman"), resigned as the
      Registrant's certifying accountants, although Wiener, Goodman agreed to
      provide accounting services on an ongoing basis with respect to the
      Registrant's books and records.

      During the Registrant's two most recent fiscal years and during the
      subsequent interim period preceding Wiener Goodman's resignation, the
      Registrant had no disagreement with Wiener Goodman on any matter of
      accounting principles or practices, financial statement disclosure or
      auditing scope or procedure.

      The Registrant, pursuant to the approval of the Board of Directors of the
      Registrant, engaged Grassi & Co., CPAs, P.C. as the Registrant's
      certifying accountants to audit the financial statement of the Registrant
      for its fiscal year ending June 30, 2002. During the Registrant's two most
      recent fiscal years and the interim period prior to Grassi & Co.'s
      engagement as the Registrant's principal accountants, neither the
      Registrant not anyone on its behalf has consulted Grassi & Co. on either
      (I) the application of accounting principles to any transaction (completed
      or proposed) or (ii) the type of audit that might be rendered on the
      Registrant's financial statements or (iii) any matter that was either the
      subject of a disagreement or a reportable event as such terms are defined
      in Item 304 of Regulation S-K.

                                      -21-

<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: February 19, 2003

                                      -22-