UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-QSB

--------------------------------------------------------------------------------

(Mark one)

   X     Quarterly  Report Under Section 13 or 15(d) of the Securities  Exchange
-------  Act of 1934


              For the quarterly period ended June 30, 2004

         Transition Report Under Section 13 or 15(d) of the Securities  Exchange
-------  Act of 1934


              For the transition period from ______________ to _____________

--------------------------------------------------------------------------------

                         Commission File Number: 0-49608
                                                 -------

                            Basic Empire Corporation
        (Exact name of small business issuer as specified in its charter)

          Nevada                                               75-2955368
------------------------                                ------------------------
(State of incorporation)                                (IRS Employer ID Number)

                      12890 Hilltop Road, Argyle, TX 76226
                      ------------------------------------
                    (Address of principal executive offices)

                                 (972) 233-0300
                                 --------------
                           (Issuer's telephone number)


--------------------------------------------------------------------------------

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

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: July 26, 2004: 1,089,077

Transitional Small Business Disclosure Format (check one): YES    NO X
                                                              ---   ---



<PAGE>
                            Basic Empire Corporation

                 Form 10-QSB for the Quarter ended June 30, 2004

                                Table of Contents


                                                                            Page
                                                                            ----
Part I - Financial Information

  Item 1   Financial Statements                                               3

  Item 2   Management's Discussion and Analysis or Plan of Operation         12

  Item 3   Controls and Procedures                                           14

Part II - Other Information

  Item 1   Legal Proceedings                                                 14

  Item 2   Changes in Securities                                             14

  Item 3   Defaults Upon Senior Securities                                   15

  Item 4   Submission of Matters to a Vote of Security Holders               15

  Item 5   Other Information                                                 15

  Item 6   Exhibits and Reports on Form 8-K                                  15

Signatures                                                                   15




















                                                                               2

<PAGE>
<TABLE>
<CAPTION>

Part I
Item 1 - Financial Statements

                            Basic Empire Corporation
                                 Balance Sheets
                             June 30, 2004 and 2003

                                   (Unaudited)

                                                                   June 30,      June 30,
                                                                     2004          2003
                                                                  ----------    ----------
<S>                                                               <C>           <C>
                                     Assets
                                     ------
Assets
   Cash on hand and in bank                                       $  200,000    $     --
                                                                  ----------    ----------

Total Assets                                                      $  200,000    $     --
                                                                  ==========    ==========


                 Liabilities and Shareholders' Equity (Deficit)
                 ----------------------------------------------

 Liabilities
   Accounts payable - trade                                       $   11,499    $     --
   Advances from shareholder                                            --      $   11,000
                                                                  ----------    ----------

     Total Liabilities                                                11,499        11,000
                                                                  ----------    ----------

Commitments and contingencies

Shareholders' Equity (Deficit)
   Preferred stock - $0.001 par value
     10,000,000 shares authorized
     None issued and outstanding                                        --            --
   Common stock - $0.001 par value
     100,000,000 shares authorized
     1,089,077 and 285,507 shares
       issued and outstanding, respectively                            1,089           286
   Additional paid-in capital                                        389,406       160,209
   Accumulated deficit                                              (201,994)     (171,495)
                                                                  ----------    ----------

     Total Shareholders' Equity (Deficit)                            188,501       (11,000)
                                                                  ----------    ----------

Total Liabilities and Shareholders' Equity (Deficit)              $  200,000    $     --
                                                                  ==========    ==========
</TABLE>


















   The financial information presented herein has been prepared by management
           without audit by independent certified public accountants.
   The accompanying notes are an integral part of these financial statements.
                                                                               3

<PAGE>
<TABLE>
<CAPTION>

                            Basic Empire Corporation
                 Statements of Operations and Comprehensive Loss
                Six and Three months ended June 30, 2004 and 2003

                                   (Unaudited)

                                           Six months       Six months    Three months     Three months
                                             ended            ended           ended            ended
                                         June 30, 2004    June 30, 2003   June 30, 2004    June 30, 2003
                                         -------------    -------------   -------------    -------------
<S>                                      <C>              <C>             <C>              <C>

Revenues                                 $        --      $        --     $        --      $        --

Expenses
   General and administrative expenses          30,499             --            30,499             --
                                         -------------    -------------   -------------    -------------

Loss from Operations                           (30,499)            --           (30,499)            --

Provision for Income Taxes                        --               --              --               --
                                         -------------    -------------   -------------    -------------

Net Loss                                       (30,499)            --           (30,499)            --

Other Comprehensive Income                        --               --              --               --
                                         -------------    -------------   -------------    -------------

Comprehensive Loss                       $     (30,499)   $        --     $     (30,499)   $        --
                                         =============    =============   =============    =============

Loss per weighted-average share
   of common stock outstanding,
   computed on Net Loss -
   basic and fully diluted               $       (0.07)             nil   $       (0.05)             nil
                                         =============    =============   =============    =============

Weighted-average number of
   shares of common stock outstanding          448,870          285,507         612,233          285,507
                                         =============    =============   =============    =============
</TABLE>

























   The financial information presented herein has been prepared by management
           without audit by independent certified public accountants.
   The accompanying notes are an integral part of these financial statements.
                                                                               4

<PAGE>
<TABLE>
<CAPTION>

                            Basic Empire Corporation
                            Statements of Cash Flows
                     Six months ended June 30, 2004 and 2003

                                   (Unaudited)

                                                             Six months    Six months
                                                                ended         ended
                                                              June 30,      June 30,
                                                                2004          2003
                                                             ----------    ----------
<S>                                                          <C>           <C>
Cash Flows from Operating Activities
   Net Loss                                                  $  (30,499)   $     --
   Adjustments to reconcile net income to net cash
     provided by operating activities
       Depreciation                                                --            --
       Consulting fees paid with common stock                    19,000          --
       Decrease in Accounts payable - trade                      11,499          --
                                                             ----------    ----------

Net cash used in operating activities                              --            --
                                                             ----------    ----------


Cash Flows from Investing Activities                               --            --
                                                             ----------    ----------


Cash Flows from Financing Activities
   Proceeds from sale of common stock                           200,000          --
                                                             ----------    ----------

Increase (Decrease) in Cash and Cash Equivalents                200,000          --

Cash and cash equivalents at beginning of period                   --            --
                                                             ----------    ----------

Cash and cash equivalents at end of period                   $  200,000    $     --
                                                             ==========    ==========

Supplemental Disclosures of Interest and Income Taxes Paid
   Interest paid during the period                           $     --      $     --
                                                             ==========    ==========
   Income taxes paid (refunded)                              $     --      $     --
                                                             ==========    ==========
</TABLE>



   The financial information presented herein has been prepared by management
           without audit by independent certified public accountants.
   The accompanying notes are an integral part of these financial statements.
                                                                               5

<PAGE>

                            Basic Empire Corporation

                          Notes to Financial Statements


Note A - Organization and Description of Business

Basic Empire  Corporation  (Company) was originally  incorporated  on January 5,
1925  under the laws of the State of Nevada  as Argyle  Mining  Company  for the
development  of mining  claims.  In 1970,  the Company  experienced  a change in
control and focused its business  activities on the development of properties in
Southern  California.  None of these efforts were successful and the Company has
been dormant since 1986.

Throughout  the  Company's  existence,   the  Company  has  experienced  several
corporate name changes as follows:  Argyle  Corporation  in January 1960;  Basic
Empire in November 1963; and Basic Empire Corporation in December 1976.

The Company has had no operations, assets or liabilities since 1986.

On March 29,  2004,  the Company  filed a Schedule 14C -  Information  Statement
Pursuant to Section 14(c) of the  Securities  Exchange Act of 1934 giving notice
that  the  Company   received  written  consents  in  lieu  of  a  meeting  from
shareholders representing  approximately 56% of its outstanding shares of common
stock  approving an  amendment  and  restatement  of the  Company's  Articles of
Incorporation (the  "Restatement") to effect,  among other things, a one-for-5.6
share reverse split of the Company's  common stock and to decrease the par value
of the common stock from $0.10 per share to $0.001 per share. The effect of this
action is reflected in the Company's financial statements as of the first day of
the first period presented.


Note B - Preparation of Financial Statements

The  Company  follows  the  accrual  basis  of  accounting  in  accordance  with
accounting principles generally accepted in the United States of America and has
a year-end of December 31.

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting period. Actual results could differ from those estimates.

Management further acknowledges that it is solely responsible for adopting sound
accounting  practices,   establishing  and  maintaining  a  system  of  internal
accounting  control and preventing and detecting  fraud. The Company's system of
internal  accounting  control is designed to assure,  among other items, that 1)
recorded  transactions  are valid; 2) valid  transactions  are recorded;  and 3)
transactions  are  recorded in the proper  period in a timely  manner to produce
financial  statements which present fairly the financial  condition,  results of
operations  and cash  flows of the  Company  for the  respective  periods  being
presented

During interim periods, the Company follows the accounting policies set forth in
its annual  audited  financial  statements  filed with the U. S.  Securities and
Exchange  Commission  on its  Annual  Report on Form  10-KSB  for the year ended
December 31, 2003.  The  information  presented  within these interim  financial
statements  may not  include all  disclosures  required  by  generally  accepted
accounting  principles  and the  users of  financial  information  provided  for
interim periods should refer to the annual  financial  information and footnotes
when reviewing the interim financial results presented herein.



                                                                               6

<PAGE>

                            Basic Empire Corporation

                    Notes to Financial Statements - Continued


Note B - Preparation of Financial Statements - Continued

In the opinion of management,  the accompanying  interim  financial  statements,
prepared in  accordance  with the U. S.  Securities  and  Exchange  Commission's
instructions   for  Form  10-QSB,   are   unaudited  and  contain  all  material
adjustments,  consisting  only of  normal  recurring  adjustments  necessary  to
present fairly the financial condition,  results of operations and cash flows of
the Company for the respective  interim  periods  presented.  The current period
results of operations are not necessarily indicative of results which ultimately
will be reported for the full fiscal year ending December 31, 2004


Note C - Going Concern Uncertainty

The Company was originally  formed in 1925 for the development of mining claims.
In 1970,  the Company  experienced  a change in control and focused its business
activities on the  development  of properties  in Southern  California.  None of
these efforts were  successful  and the Company has been dormant since 1986. The
Company has had no operations, assets or liabilities since 1986.

The  Company's  continued  existence is  dependent  upon its ability to generate
sufficient cash flows from operations to support its daily operations as well as
provide sufficient resources to retire existing liabilities and obligations on a
timely basis.

The Company  anticipates  offering future sales of equity  securities.  However,
there is no assurance that the Company will be able to obtain additional funding
through the sales of additional  equity  securities  or, that such  funding,  if
available, will be obtained on terms favorable to or affordable by the Company.

If no additional  operating  capital is received  during the next twelve months,
the  Company  will be  forced  to rely on  existing  cash in the  bank  and upon
additional  funds  loaned  by  management  and/or  significant  shareholders  to
preserve the integrity of the corporate  entity at this time. In the event,  the
Company  is  unable to  acquire  advances  from  management  and/or  significant
shareholders, the Company's ongoing operations would be negatively impacted.

It  is  the  intent  of  management  and  significant  shareholders  to  provide
sufficient  working  capital  necessary to support and preserve the integrity of
the corporate entity.  However, no formal commitments or arrangements to advance
or loan funds to the Company or repay any such advances or loans exist. There is
no legal obligation for either management or significant shareholders to provide
additional future funding.


Note D - Summary of Significant Accounting Policies

1.   Cash and cash equivalents
     -------------------------

     For  Statement of Cash Flows  purposes,  the Company  considers all cash on
     hand  and  in  banks,  including  accounts  in  book  overdraft  positions,
     certificates of deposit and other highly-liquid investments with maturities
     of three months or less, when purchased, to be cash and cash equivalents.


                                                                               7

<PAGE>

                            Basic Empire Corporation

                    Notes to Financial Statements - Continued


Note D - Summary of Significant Accounting Policies - Continued

2.   Income Taxes
     ------------

     The Company uses the asset and liability  method of  accounting  for income
     taxes. At June 30, 2004 and 2003, respectively,  the deferred tax asset and
     deferred tax liability accounts, as recorded when material to the financial
     statements,  are entirely the result of  temporary  differences.  Temporary
     differences   represent  differences  in  the  recognition  of  assets  and
     liabilities for tax and financial reporting purposes, primarily accumulated
     depreciation and amortization, allowance for doubtful accounts and vacation
     accruals.

     As of June 30,  2004 and  2003,  the  deferred  tax  asset  related  to the
     Company's net operating loss  carryforward  is fully  reserved.  Due to the
     provisions  of Internal  Revenue  Code Section 338, the Company may have no
     net operating loss carryforwards available to offset financial statement or
     tax  return  taxable  income in future  periods  as a result of a change in
     control   involving  50  percentage  points  or  more  of  the  issued  and
     outstanding securities of the Company.

3.   Earnings (loss) per share
     -------------------------

     Basic  earnings  (loss) per share is computed  by  dividing  the net income
     (loss) available to common shareholders by the  weighted-average  number of
     common shares  outstanding  during the respective  period  presented in our
     accompanying financial statements.  Fully diluted earnings (loss) per share
     is  computed  similar  to basic  income  (loss) per share  except  that the
     denominator is increased to include the number of common stock  equivalents
     (primarily  outstanding  options and  warrants).  Common stock  equivalents
     represent the dilutive  effect of the assumed  exercise of the  outstanding
     stock options and warrants,  using the treasury stock method, at either the
     beginning  of the  respective  period  presented  or the date of  issuance,
     whichever is later, and only if the common stock equivalents are considered
     dilutive  based  upon the  Company's  net  income  (loss)  position  at the
     calculation date.

     At June 30, 2004, the Company's outstanding common stock equivalents in the
     form of Stock Warrants were  considered  antidilutive  due to the Company's
     net operating  loss position.  The Company had no common stock  equivalents
     outstanding at June 30, 2003.


Note E - Fair Value of Financial Instruments

The carrying amount of cash,  accounts  receivable,  accounts  payable and notes
payable, as applicable,  approximates fair value due to the short term nature of
these items  and/or the current  interest  rates  payable in relation to current
market conditions.

Interest  rate risk is the risk  that the  Company's  earnings  are  subject  to
fluctuations  in interest  rates on either  investments  or on debt and is fully
dependent  upon  the  volatility  of  these  rates.  The  Company  does  not use
derivative instruments to moderate its exposure to interest rate risk, if any.

Financial  risk  is  the  risk  that  the  Company's  earnings  are  subject  to
fluctuations in interest rates or foreign exchange rates and are fully dependent
upon the  volatility  of  these  rates.  The  company  does  not use  derivative
instruments to moderate its exposure to financial risk, if any.



                                                                               8

<PAGE>

                            Basic Empire Corporation

                    Notes to Financial Statements - Continued


Note F - Advances from Shareholder

As of June 30,  2004,  the  Company's  controlling  shareholder  had  repaid all
outstanding  advances  from the Company's  former  controlling  shareholder  and
officer. As of June 30, 2003, the former controlling shareholder and officer had
loaned  the  Company  an  aggregate  $11,000  to  support   operations,   settle
outstanding  trade accounts payable and provide working capital.  This aggregate
advance was repayable upon demand and was non-interest bearing.

On May 25,  2004,  the  Company  agreed to pay  Little  and  Company  Investment
Securities, an entity owned by Glenn A. Little, the Company's former controlling
shareholder,  officer and director, an aggregate $30,000,  consisting of $11,000
in advances for working  capital and $19,000 in consulting fees related to a May
25, 2004  change in control  transaction  and as  additional  consideration  for
maintaining  the corporate  entity.  To formalize this  obligation,  the Company
issued a $30,000 non-interest bearing promissory note payable on demand.

Concurrent with the May 25, 2004 change in control transaction,  the Company and
Little and  Company  Investment  Securities  executed  an  "Exchange  Agreement"
whereby the Company  issued 89,285  post-reverse  split shares of  unregistered,
restricted common stock in satisfaction of the outstanding  promissory note. The
Company relied upon Section 4(2) of the Securities Act of 1933, as amended,  for
an exemption from  registration  of these shares and no underwriter  was used in
this transaction.


Note G - Income Taxes

The components of income tax (benefit) expense for each of the six month periods
ended June 30, 2004 and 2003 is as follows:

                                                     Six months      Six months
                                                       ended           ended
                                                   June 30, 2004   June 30, 2003
                                                   -------------   -------------
     Federal:
       Current                                     $        --     $        --
       Deferred                                             --              --
                                                   -------------   -------------
                                                            --              --
                                                   -------------   -------------
     State:
       Current                                              --              --
       Deferred                                             --              --
                                                   -------------   -------------
                                                            --              --
                                                   -------------   -------------
       Total                                       $        --     $        --
                                                   =============   =============

As a result of a May 25, 2004 change in control, the Company has a net operating
loss carryforward of approximately  $30,000 to offset future taxable income. The
amount and availability of any net operating loss  carryforwards  may be subject
to  limitations  set forth by the  Internal  Revenue  Code.  Factors such as the
number of shares ultimately issued within a three year look-back period; whether
there is a deemed more than 50 percent  change in control  involving  holders of
5.0%  or more  of the  issued  and  outstanding  shares  of  common  stock;  the
applicable  long-term tax exempt bond rate;  continuity of historical  business;
and  subsequent  income of the Company all enter into the annual  computation of
allowable annual utilization of the carryforwards.


                                                                               9

<PAGE>

                            Basic Empire Corporation

                    Notes to Financial Statements - Continued


Note G - Income Taxes - continued

The  Company's  income tax expense  (benefit)  for each of the six month periods
ended June 30, 2004 and 2003, respectively,  differed from the statutory federal
rate of 34 percent as follows:
<TABLE>
<CAPTION>
                                                              Six months      Six months
                                                                ended           ended
                                                            June 30, 2004   June 30, 2003
                                                            -------------    -------------
<S>                                                         <C>              <C>
Statutory rate applied to income before income taxes        $     (10,400)   $        --
Increase (decrease) in income taxes resulting from:
     State income taxes                                              --               --
     Other, including reserve for deferred tax asset
       and application of net operating loss carryforward          10,400             --
                                                            -------------    -------------

         Income tax expense                                 $        --      $        --
                                                            =============    =============
</TABLE>

Temporary  differences,  consisting primarily of statutory deferrals of expenses
for organizational costs and statutory  differences in the depreciable lives for
property and equipment, between the financial statement carrying amounts and tax
bases of assets and liabilities give rise to deferred tax assets and liabilities
as of June 30, 2004 and 2003, respectively:

                                                 June 30, 2004    June 30, 2003
                                                 -------------    -------------
     Deferred tax assets
       Net operating loss carryforwards          $      10,400    $       1,000
       Less valuation allowance                        (10,400)          (1,000)
                                                 -------------    -------------

       Net Deferred Tax Asset                    $        --      $        --
                                                 =============    =============

During each of the six month periods  ended June 30, 2004 and 2003,  the reserve
for the deferred current tax asset increased by  approximately  $9,400 and $-0-,
respectively.


Note H - Common Stock Transactions

Authorized Shares
-----------------

On April 12,  2004,  the Company  filed an  Amendment  and  Restatement  of it's
Articles of  Incorporation  withe the Secretary of State of the State of Nevada.
This Amendment allows for the issuance of up to 10,000,000  shares of $0.001 par
value Preferred  Stock and 100,000,000  shares of $0.001 par value Common Stock.
Prior to this change, the Company was authorized to issue up to 5,000,000 shares
of $0.10 par value Common  Stock.  The effect of this change is reflected in the
accompanying  financial  statements  as of the  first  day of the  first  period
presented.

Reverse Stock Split
-------------------

On May 25, 2004,  the  Company's  Board of Directors  effected a 1 for 5.6 share
reverse stock split of the then issued and outstanding common stock. The reverse
stock split did not change the number of  authorized  shares of common  stock or
the par value of the Company's common stock.  Except for any changes as a result
of  the  treatment  of  fractional  shares,  each  shareholder  holds  the  same
percentage of common stock outstanding  immediately  following the reverse stock
split as such shareholder did immediately prior to the reverse stock split.

                                                                              10

<PAGE>

                            Basic Empire Corporation

                    Notes to Financial Statements - Continued


Note H - Common Stock Transactions

Reverse Stock Split - continued

This action caused the issued and outstanding  shares to decrease from 1,604,952
to  approximately  285,507.  The  effect  of this  action  is  reflected  in the
accompanying  financial  statements  as of the  first  day of the  first  period
presented.

Stock issuances

On May  25,  2004,  the  Company  sold  714,285  post-reverse  split  shares  of
restricted  common  stock  for  gross  proceeds  of  $200,000,   pursuant  to  a
subscription  agreement,  to Halter  Financial  Group,  Inc., an entity owned by
Timothy P. Halter, who became the Company's current Chief Executive Officer. The
Company relied upon Section 4(2) of The Securities Act of 1933, as amended,  for
an exemption from  registration  of these shares and no underwriter  was used in
this transaction. As a result of this transaction,  Halter Financial Group, Inc.
became the Company's controlling shareholder,  owning 714,285 shares of the then
1,089,077  issued and outstanding  shares of the  Registrant's  common stock, or
approximately 66%.

On May 25,  2004,  the  Company  agreed to pay  Little  and  Company  Investment
Securities, an entity owned by Glenn A. Little, the Company's former controlling
shareholder,  officer and director, an aggregate $30,000,  consisting of $11,000
in advances for working  capital and $19,000 in consulting fees related to a May
25, 2004  change in control  transaction  and as  additional  consideration  for
maintaining  the corporate  entity.  To formalize this  obligation,  the Company
issued a  $30,000  non-interest  bearing  promissory  note  payable  on  demand.
Concurrent with the May 25, 2004 change in control transaction,  the Company and
Little and  Company  Investment  Securities  executed  an  "Exchange  Agreement"
whereby the Company  issued 89,285  post-reverse  split shares of  unregistered,
restricted common stock in satisfaction of the outstanding  promissory note. The
Company relied upon Section 4(2) of the Securities Act of 1933, as amended,  for
an exemption from  registration  of these shares and no underwriter  was used in
this transaction.


Note I - Stock Warrant

As a result of the May 25,  2004  change in  control  and in  consideration  for
agreeing to serve as an officer and director of the  Company,  Timothy P. Halter
was  granted  a  stock  warrant  on  May  26,  2004  to  purchase  up to  89,285
post-reverse split shares of the Company's restricted, unregistered common stock
at a price of $0.28 per share, in reliance upon the exemption from  registration
set forth in  Section  4(2) of the  Securities  Act of 1933,  as  amended.  This
warrant is  exercisable  at any time after its  issuance  and expires on May 26,
2007. Due to the  uncertainty  related to the ultimate  exercise for purchase of
any shares covered by this warrant,  the Company did not assign any compensation
expense upon the issuance of this warrant.

The following table presents warrant activity through June 30, 2004:

                                                                        Weighted
                                                                         Average
                                                            Number of   Exercise
                                                              Shares      Price
                                                            ---------   --------

Balance at December 31, 2003                                    --          --
Issued                                                         89,285      $0.28
                                                            ---------
Balance at June 30, 2004                                       89,285
                                                            =========




                                                                              11

<PAGE>

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

(1)  Caution Regarding Forward-Looking Information

Certain  statements  contained  in this  quarterly  filing,  including,  without
limitation, statements containing the words "believes", "anticipates", "expects"
and  words  of  similar  import,  constitute  forward-looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

Such factors include, among others, the following:  international,  national and
local general economic and market conditions:  demographic  changes; the ability
of the Company to sustain,  manage or  forecast  its growth;  the ability of the
Company to successfully make and integrate acquisitions;  raw material costs and
availability;  new product  development and  introduction;  existing  government
regulations  and  changes  in,  or  the  failure  to  comply  with,   government
regulations;  adverse publicity;  competition; the loss of significant customers
or suppliers;  fluctuations  and  difficulty in forecasting  operating  results;
changes in business strategy or development  plans;  business  disruptions;  the
ability  to attract  and  retain  qualified  personnel;  the  ability to protect
technology; and other factors referenced in this and previous filings.

Given  these  uncertainties,  readers  of this Form  10-QSB  and  investors  are
cautioned not to place undue reliance on such  forward-looking  statements.  The
Company  disclaims  any  obligation  to update any such  factors or to  publicly
announce the result of any  revisions to any of the  forward-looking  statements
contained herein to reflect future events or developments.

(2)  Results of Operations, Liquidity and Capital Resources

Quarters Ended June 30, 2004 and 2003
-------------------------------------

The Company had no revenue for the  respective  six or three month periods ended
June 30, 2004 and 2003, respectively.

The Company had no general and  administrative  expenses  for the quarter  ended
June 30, 2003. The Company  incurred general  operating  expenses related to the
April 2004  reverse  split  transaction  and the sale of common  stock to Halter
Financial Group in the amount of approximately  $30,500.  The Company's net loss
for the six months ended June 30, 2004 and 2003, respectively, was approximately
$(30,499) and $-0-.  Earnings per share for the  respective  quarters ended June
30, 2004 and 2003 were $(0.07) and $0.00 on the  weighted-average  shares issued
and  outstanding,  as adjusted  for the effect of the April 2004  reverse  stock
split.

The  Company  does not  expect  to  generate  any  meaningful  revenue  or incur
operating  expenses for purposes  other than  fulfilling  the  obligations  of a
reporting  company  under The  Securities  Exchange Act of 1934 unless and until
such time that the Company's operating subsidiary begins meaningful operations.

At June 30, 2004 and 2003,  respectively,  the  Company  had working  capital of
approximately $200,000 and $(11,000).

It  is  the  intent  of  management  and  significant  shareholders  to  provide
sufficient  working  capital  necessary to support and preserve the integrity of
the  corporate  entity.  However,  there  is  no  legal  obligation  for  either
management or significant  shareholders  to provide  additional  future funding.
Should this pledge fail to provide financing, the Company has not identified any
alternative  sources.  Consequently,   there  is  substantial  doubt  about  the
Company's ability to continue as a going concern.

The  Company's  need for  capital  may  change  dramatically  as a result of any
business acquisition or combination transaction.  There can be no assurance that
the Company will  identify any such  business,  product,  technology  or company
suitable for acquisition in the future.  Further, there can be no assurance that


                                                                              12

<PAGE>

the Company would be successful in  consummating  any  acquisition  on favorable
terms  or that it will be able  to  profitably  manage  the  business,  product,
technology or company it acquires.

Plan of Business
----------------

General
-------

The  Company  intends to locate and  combine  with an  existing,  privately-held
company which is profitable  or, in  management's  view,  has growth  potential,
irrespective of the industry in which it is engaged.  However,  the Company does
not  intend  to  combine  with a  private  company  which may be deemed to be an
investment  company subject to the Investment Company Act of 1940. A combination
may be structured as a merger,  consolidation,  exchange of the Company's common
stock for stock or assets or any other form which  will  result in the  combined
enterprise's becoming a publicly-held corporation.

Pending  negotiation and consummation of a combination,  the Company anticipates
that it will have, aside from carrying on its search for a combination  partner,
no business  activities,  and, thus, will have no source of revenue.  Should the
Company incur any significant  liabilities prior to a combination with a private
company, it may not be able to satisfy such liabilities as are incurred.

If the Company's management pursues one or more combination opportunities beyond
the  preliminary  negotiations  stage and those  negotiations  are  subsequently
terminated,  it is  foreseeable  that such efforts  will  exhaust the  Company's
ability to continue to seek such combination opportunities before any successful
combination can be consummated.  In that event,  the Company's common stock will
become  worthless  and  holders of the  Company's  common  stock will  receive a
nominal distribution, if any, upon the Company's liquidation and dissolution.

Combination Suitability Standards
---------------------------------

In its pursuit for a combination  partner,  the Company's  management intends to
consider only  combination  candidates  which are profitable or, in management's
view, have growth potential.  The Company's management does not intend to pursue
any  combination  proposal  beyond the  preliminary  negotiation  stage with any
combination  candidate which does not furnish the Company with audited financial
statements  for at least its most  recent  fiscal year and  unaudited  financial
statements for interim periods  subsequent to the date of such audited financial
statements, or is in a position to provide such financial statements in a timely
manner.  The Company will, if necessary  funds are available,  engage  attorneys
and/or accountants in its efforts to investigate a combination  candidate and to
consummate a business  combination.  The Company may require  payment of fees by
such combination  candidate to fund the investigation of such candidate.  In the
event such a combination candidate is engaged in a high technology business, the
Company may also obtain  reports from  independent  organizations  of recognized
standing  covering the technology  being developed and/or used by the candidate.
The  Company's  limited  financial  resources may make the  acquisition  of such
reports  difficult  or even  impossible  to obtain  and,  thus,  there can be no
assurance  that the Company  will have  sufficient  funds to obtain such reports
when considering combination proposals or candidates.  To the extent the Company
is  unable to  obtain  the  advice or  reports  from  experts,  the risks of any
combined enterprise's being unsuccessful will be enhanced.  Furthermore,  to the
knowledge of the Company's officers and directors, neither the candidate nor any
of  its  directors,   executive  officers,  principal  shareholders  or  general
partners:

     (1)  will have been convicted of securities  fraud,  mail fraud, tax fraud,
          embezzlement,   bribery,  or  a  similar  criminal  offense  involving
          misappropriation  or theft of funds,  or be the  subject  of a pending
          investigation or indictment involving any of those offenses;

     (2)  will have been  subject to a  temporary  or  permanent  injunction  or
          restraining  order arising from unlawful  transactions  in securities,
          whether as issuer, underwriter, broker, dealer, or investment advisor,
          may be the subject of any pending  investigation  or a defendant  in a
          pending  lawsuit  arising from or based upon  allegations  of unlawful
          transactions in securities; or

     (3)  will have been a defendant in a civil action which resulted in a final
          judgement  against it or him awarding damages or rescission based upon
          unlawful practices or sales of securities.

                                                                              13

<PAGE>

The Company's  officers and directors will make these  determinations  by asking
pertinent  questions of the  management of prospective  combination  candidates.
Such persons will also ask pertinent  questions of others who may be involved in
the combination proceedings.  However, the officers and directors of the Company
will not generally take other steps to verify independently information obtained
in this manner which is favorable.  Unless  something  comes to their  attention
which  puts  them on  notice  of a  possible  disqualification  which  is  being
concealed  from them,  such persons will rely on  information  received from the
management of the prospective  combination  candidate and from others who may be
involved in the combination proceedings.

Item 3 - Controls and Procedures

As required by Rule 13a-15 under the Exchange  Act,  within the 90 days prior to
the filing date of this report,  the Company  carried out an  evaluation  of the
effectiveness of the design and operation of the Company's  disclosure  controls
and  procedures.  This evaluation was carried out under the supervision and with
the  participation  of  the  Company's   management,   including  the  Company's
President,  Chief  Executive  and  Chief  Financial  Officer.  Based  upon  that
evaluation, the Company's President, Chief Executive and Chief Financial Officer
concluded that the Company's  disclosure  controls and procedures are effective.
There have been no significant  changes in the Company's internal controls or in
other factors,  which could significantly affect internal controls subsequent to
the date the Company carried out its evaluation.

Disclosure  controls and procedures are controls and other  procedures  that are
designed to ensure that information  required to be disclosed in Company reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported,  within the time  periods  specified  in the  Securities  and Exchange
Commission's  rules and  forms.  Disclosure  controls  and  procedures  include,
without limitation,  controls and procedures designed to ensure that information
required to be  disclosed  in Company  reports  filed under the  Exchange Act is
accumulated  and  communicated  to  management,  including the  Company's  Chief
Executive and Chief Financial Officer as appropriate,  to allow timely decisions
regarding required disclosure.


Part II - Other Information

Item 1 - Legal Proceedings

None

Item 2 - Changes in Securities

On March 29,  2004,  the Company  filed a Schedule 14C -  Information  Statement
Pursuant to Section 14(c) of the  Securities  Exchange Act of 1934 giving notice
that  the  Company   received  written  consents  in  lieu  of  a  meeting  from
shareholders representing  approximately 56% of our outstanding shares of common
stock  approving an  Amendment  and  Restatement  of the  Company's  Articles of
Incorporation (the  "Restatement") to effect,  among other things, a one-for-5.6
share reverse split of the Company's  common stock and to decrease the par value
of the common stock from $0.10 per share to $0.001 per share. The effect of this
action is reflected in the Company's accompanying financial statements as of the
first day of the first period presented.

On May  25,  2004,  the  Company  sold  714,285  post-reverse  split  shares  of
restricted  common  stock  for  gross  proceeds  of  $200,000,   pursuant  to  a
subscription  agreement,  to Halter  Financial  Group,  Inc., an entity owned by
Timothy P. Halter, who became the Company's current Chief Executive Officer. The
Company relied upon Section 4(2) of The Securities Act of 1933, as amended,  for
an exemption from  registration  of these shares and no underwriter  was used in
this transaction. As a result of this transaction,  Halter Financial Group, Inc.
became the Company's controlling shareholder,  owning 714,285 shares of the then
1,089,077  issued and outstanding  shares of the  Registrant's  common stock, or
approximately 66%.

On May 25,  2004,  the  Company  agreed to pay  Little  and  Company  Investment
Securities, an entity owned by Glenn A. Little, the Company's former controlling
shareholder,  officer and director, an aggregate $30,000,  consisting of $11,000

                                                                              14

<PAGE>


in advances for working  capital and $19,000 in consulting fees related to a May
25, 2004  change in control  transaction  and as  additional  consideration  for
maintaining  the corporate  entity.  To formalize this  obligation,  the Company
issued a  $30,000  non-interest  bearing  promissory  note  payable  on  demand.
Concurrent with the May 25, 2004 change in control transaction,  the Company and
Little and  Company  Investment  Securities  executed  an  "Exchange  Agreement"
whereby the Company  issued 89,285  post-reverse  split shares of  unregistered,
restricted common stock in satisfaction of the outstanding  promissory note. The
Company relied upon Section 4(2) of the Securities Act of 1933, as amended,  for
an exemption from  registration  of these shares and no underwriter  was used in
this transaction.

As a result of the May 25,  2004  change in  control  and in  consideration  for
agreeing to serve as an officer and director of the  Company,  Timothy P. Halter
was  granted  a  stock  warrant  on  May  26,  2004  to  purchase  up to  89,285
post-reverse split shares of the Company's restricted, unregistered common stock
at a price of $0.28 per share, in reliance upon the exemption from  registration
set forth in  Section  4(2) of the  Securities  Act of 1933,  as  amended.  This
warrant is  exercisable  at any time after its  issuance  and expires on May 26,
2007. Due to the  uncertainty  related to the ultimate  exercise for purchase of
any shares covered by this warrant,  the Company did not assign any compensation
expense upon the issuance of this warrant.

Item 3 - Defaults on Senior Securities

None

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

The  Company  has held no  regularly  scheduled,  called or special  meetings of
shareholders during the reporting period.

Item 5 - Other Information

None

Item 6 - Exhibits and Reports on Form 8-K

   Exhibits
   --------
     31.1   Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
     32.1   Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

   Reports on Form 8-K
   -------------------
     May 25, 2004 -  Announcing  an April 12, 2004  amendment  to the  Company's
     Articles  of  Incorporation  and the  implementation  of a 1 for 5.6  share
     reverse stock split.
     May 25, 2004 - Announcing the completion of a private  placement of 714,285
     shares of restricted common stock for gross proceeds of $200,000;  a change
     in control of the  majority  shareholder,  officers  and  directors  of the
     Company;  and the issuance of a Warrant to purchase up to 89,285  shares of
     the Company's common stock.

--------------------------------------------------------------------------------

                                   SIGNATURES

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

                                                        Basic Empire Corporation

Dated: July 26, 2004                                /s/ Timothy P. Halter
       -------------                        ------------------------------------
                                                               Timothy P. Halter
                                              President, Chief Executive Officer
                                            Chief Financial Officer and Director




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