SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

FORM 10-QSB

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 For the quarterly period ended June 30, 2000

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

     For the transition period from:

          Commission file number 000-30115

                            KUSHI NATURAL FOODS CORP.
       (Exact name of Small Business Issuer as specified in its charter.)

        DELAWARE                                               13-3912047
(State of other jurisdiction of                              (IRS Employer
incorporation or organization)                             Identification No.)

                      c/o Madison Venture Capital II, Inc.,
                 150 East 58th Street, New York, New York 10022
          (Address of principal executive offices, including zip code.)

                                 (212) 583-1363
                (Issuer's telephone number, including area code.)


        ----------------------------------------------------------------
                 (Former Address, if changed since last report.)

Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities 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 [_]

     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: Common Stock par value per
share, at July 28, 2000 was 10,588,718 shares.


<PAGE>



                                     Part I
                              Financial Information

Item 1. Financial Statements

                            KUSHI NATURAL FOODS CORP.
                        (A Development Stage Enterprise)
                                  BALANCE SHEET
                                  JUNE 30, 2000
                                   (Unaudited)

ASSETS

Current Assets:

  Cash and Cash Equivalents                                             $43,076
                                                                      ---------

Total Assets                                                            $43,076
                                                                      =========


LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

  Accounts Payable                                                      $18,932

Commitments and Contingencies

Stockholders' Equity:

  Preferred Stock, $.0001 par value; 5,000,000 shares
    authorized, none issued and outstanding                $    --
  Common Stock, $.0001 par value; 35,000,000 shares
    authorized, 10,588,718 shares issued and outstanding       1,059
  Additional Paid-In Capital                                 213,494
  Deficit Accumulated in the Development Stage              (190,409)
                                                           ---------

            Total Stockholders' Equity                                   24,144
                                                                      ---------

Total Liabilities and Stockholders' Equity                              $43,076
                                                                      =========



The accompanying notes are an integral part of the financial statements.




                                        2

<PAGE>


<TABLE>
<CAPTION>
                                                      KUSHI NATURAL FOODS CORP.
                                                  (A Development Stage Enterprise)
                                                      STATEMENTS OF OPERATIONS
                                                             (Unaudited)

                                                                                                                        Cumulative
                                                                                                                           From
                                                                                                                      August 1, 1996
                                                         Six Months Ended                Three Months Ended             (Inception)
                                                   -----------------------------     -----------------------------     -------------
                                                             June 30,                          June 30,                 To June 30,
                                                   -----------------------------     -----------------------------     -------------
                                                       2000             1999             2000             1999             2000
                                                   ------------     ------------     ------------     ------------     ------------
<S>                                                <C>              <C>              <C>              <C>              <C>
Revenues                                           $       --       $       --       $       --       $       --       $       --

Costs and Expenses:
  Selling, General and Administrative
    Expenses                                              3,316            1,500            1,600              750           50,497
                                                   ------------     ------------     ------------     ------------     ------------

Loss from Operations                                     (3,316)          (1,500)          (1,600)            (750)         (50,497)

Other Income:
  Interest Income                                           461              382              222              108            1,373
                                                   ------------     ------------     ------------     ------------     ------------

Loss from Continuing Operations                          (2,855)          (1,118)          (1,378)            (642)         (49,124)
                                                   ------------     ------------     ------------     ------------     ------------

Discontinued Operations:

  Loss from Operations of Discontinued
    Joint Venture                                          --               --               --               --            (99,143)
  Loss on Write-Off of Investment in
    Discontinued Joint Venture                             --               --               --               --            (42,142)
                                                   ------------     ------------     ------------     ------------     ------------
                                                           --               --               --               --           (141,285)
                                                   ------------     ------------     ------------     ------------     ------------

Net Loss                                                $(2,855)         $(1,118)         $(1,378)           $(642)       $(190,409)
                                                   ============     ============     ============     ============     ============

Earnings Per Common Share - Basic

Weighted Average Common Shares
  Outstanding                                        10,588,718        8,603,718       10,588,718        8,603,718
                                                   ============     ============     ============     ============

Net Loss Per Common Share - Basic                         $(.00)           $(.00)           $(.00)           $(.00)
                                                   ============     ============     ============     ============
</TABLE>


The accompanying notes are an integral part of the financial statements.

                                        3

<PAGE>



                            KUSHI NATURAL FOODS CORP.
                        (A Development Stage Enterprise)
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                         Cumulative From
                                                                                          August 1, 1996
                                                                  Six Months Ended         (Inception)
                                                                      June 30,              To June 30,
                                                              ------------------------      ---------
                                                                 2000           1999           2000
                                                              ---------      ---------      ---------
<S>                                                             <C>            <C>          <C>
Cash Flows from Operating Activities:
  Net Loss                                                      $(2,855)       $(1,118)     $(190,409)
  Adjustments to Reconcile Net Loss to Net Cash
    (Used) by Operating Activities:
  Stock Compensation                                               --             --            3,970
  Loss from Operations of Discontinued Joint Venture               --             --           99,143
  Loss on Write-Off of Investment in Discontinued Joint
     Venture                                                       --             --           42,142
  Changes in Operating Assets and Liabilities:
     Increase (Decrease) in Accounts Payable                     (6,701)        (1,000)        18,932
                                                              ---------      ---------      ---------
Net Cash (Used) by Operating Activities                          (9,556)        (2,118)       (26,222)
                                                              ---------      ---------      ---------
Cash Flows from Investing Activities:
  Investment in Joint Venture                                      --             --          (47,854)
  Cash Acquired Pursuant to Spin-Off                               --             --          115,167
                                                              ---------      ---------      ---------

Net Cash Provided by Investing Activities                          --             --           67,313
                                                              ---------      ---------      ---------

Cash Flows from Financing Activities:

  Proceeds of Stock Subscriptions Receivable                      1,985           --            1,985
                                                              ---------      ---------      ---------
Net Cash Provided by Financing Activities                         1,985           --            1,985
                                                              ---------      ---------      ---------
Increase (Decrease) in Cash and Cash Equivalents                 (7,571)        (2,118)        43,076
Cash and Cash Equivalents - Beginning                            50,647         60,792           --
                                                              ---------      ---------      ---------
Cash and Cash Equivalents - Ending                              $43,076        $58,674        $43,076
                                                              =========      =========      =========

Supplemental Disclosure of Cash Information:

  Cash Paid for Income Taxes                                  $    --        $    --        $    --
                                                              =========      =========      =========
  Cash Paid for Interest                                      $    --        $    --        $    --
                                                              =========      =========      =========
Non-Cash Investing and Financing Activities:
  Contributed Capital by Former Officers Pursuant
    to Debt Cancellation                                      $    --        $    --          $78,250
                                                              =========      =========      =========
  Issuance of Common Stock as Consideration for
    the Net Assets of Kushi Macrobiotics Corp.                $    --        $    --         $130,348
                                                              =========      =========      =========
  Increase in Stock Subscriptions Receivable Upon Sale of
    Common Stock                                              $    --        $    --           $1,985
                                                              =========      =========      =========
</TABLE>



The accompanying notes are an integral part of the financial statements.


                                        4

<PAGE>



                            KUSHI NATURAL FOODS CORP.
                        (A Development Stage Enterprise)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2000
                                   (Unaudited)


NOTE 1 - Basis of Presentation

     In the  opinion  of  the  Company,  the  accompanying  unaudited  financial
statements   reflect  all  adjustments  (which  include  only  normal  recurring
adjustments)  necessary to present  fairly the  financial  position,  results of
operations and cash flows for the periods presented.

     The results  for interim  periods  are not  necessarily  indicative  of the
results to be obtained for a full fiscal year.



                                        5

<PAGE>



ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF
        OPERATION.

Results of Operations - Through June 30, 2000.

     The  Company  was  incorporated  under the laws of the State of Delaware on
August 1, 1996, and is in the early  developmental  and promotional  stages.  To
date the Company's only activities  have been acquiring the "Kushi  Assets",  as
defined below,  liquidating  the same and activities  directed at developing its
present  business  plan and  raising its  initial  capital.  The Company has not
commenced any commercial operations.  The Company has no full-time employees and
neither  owns nor leases any real estate.  The Company was formed in  connection
with the merger  acquisition of Kushi  Macrobiotics  Corp. ("KMC") with American
Phoenix Group, Inc. (APGI") in 1996. Prior to such acquisition, KMC had operated
a business of  marketing a line of natural  foods (the  "Kushi  Cuisine").  This
business was not successful and  management  determined  that it would be in the
shareholder's  interest  for KMC to operate a  different  business.  In the APGI
reverse merger,  the shareholders of APGI became the owners of 85% of the shares
of KMC, which changed its name to American Phoenix Group, Inc. As a condition to
the merger, KMC was required to divest itself of all assets related to the Kushi
Cuisine  business.  This  divestiture  was effected by  transferring  all of the
assets  related  to  the  Kushi  Cuisine  business,  principally  inventory  and
receivables,  and approximately  $115,000 to a newly formed entity, the Company,
and  spinning off the shares of the Company to the KMC  shareholders  on a three
for one basis  simultaneously with the consummation of the KMC merger with APGI.
The Kushi Cuisine  assets and a portion of the cash were  contributed to a joint
venture   which  failed  and  the  Company  lost  its   investment   therein  of
approximately  $48,000. Since its loss of its investment in the joint venture in
1997 the Company has been an dormant  "shell  corporation"  with its  activities
only activities being those relating to finding an acquisition  partner. The net
loss during the three month and periods ended June 30, 1999 and 2000, were $ 642
and $1,378, respectively. The increase in the net loss resulted from an increase
in Selling, General and Administrative Expense (SG&A) from $750 to $1,600, which
increase in expense was only partly offset by the Company's  increased  interest
income ($222 in 2000 vs. $108 in 1999).  The increase in SG&A reflects  expenses
incident to the Company's  becoming a company required to file reports under the
Exchange  Act of 1934.  The  increase  in  interest  income  reflects  increased
interest rates paid on the Company's cash  accounts.  Net loss increased  during
the six month  period  ended  June 30,  2000 over the net loss for the six month
period ended June 30, 1999 for the same reasons.


Liquidity and Capital Resources.

     On June 30, 2000, the Company had $43,076 in cash and cash equivalents.  As
the Company does not have active  operations,  these funds should be  sufficient
for the  Company's  needs as a "blank check shell  company" for the  foreseeable
future.


                                        6

<PAGE>



                                    PART II.
                                OTHER INFORMATION

     Item 1. Legal Proceedings.

     There are no material  legal  proceedings  commenced or  maintained  by, or
against, the Company.

     Item 2. Changes in Securities.

     None

     Item 3. Defaults Upon Senior Securities.

     The Company has no debt securities outstanding.

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

     There were no matters  submitted for a vote of the security  holders during
the period covered by this report.

     Item 5. Other Information.

     None

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

     (a)  Exhibits

     27   - Financial Data Schedule

     (b)  Reports on Form 8-K

          No reports  were filed on Form 8-K during the  quarter  ended June 30,
     2000.


                                       7

<PAGE>



                                   SIGNATURES

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

                                      KUSHI NATURAL FOODS CORP.




Dated: New York, New York             By: /s/ Dr. Eugene Stricker
                                          -----------------------------------
July 31, 2000                         Dr. Eugene Stricker,
                                          President and Principal Executive and
                                          Financial Officer





                                      By: /s/ Daniel A. France
                                          -----------------------------------
                                          Daniel A. France, Treasurer and
                                          Principal Accounting Officer

                                        8