<PAGE>

                    U.S. SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549


                                   FORM 10-Q

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

                 For the quarterly period ended March 31, 2000

[ ] 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: 1-9083

                             POLYPHASE CORPORATION
            (Exact name of registrant as specified in its charter)

               Nevada                               23-2708876
    (State or other jurisdiction of              (I.R.S. Employer
     incorporation or organization)             Identification No.)

                            4800 Broadway, Suite A
                             Addison, Texas 75001
                   (Address of principal executive offices)

                                (972) 386-0101
             (Registrants's telephone number, including area code)


Indicate by check mark whether the registrant (1) has 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 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.

Common Stock, $.01 par value                          17,812,464
                                              --------------------------
                                              Outstanding at May 3, 2000
<PAGE>

                             POLYPHASE CORPORATION
                                   FORM 10-Q
                         QUARTER ENDED MARCH 31, 2000
--------------------------------------------------------------------------------

                               TABLE OF CONTENTS
                               -----------------

PART I. FINANCIAL INFORMATION                                     Page No.
-----------------------------                                     --------

Item 1. Financial Statements

Consolidated Condensed Balance Sheets as of
   March 31, 2000 and September 30, 1999                               2

Consolidated Condensed Statements of
  Operations for the Three Months Ended
  March 31, 2000 and 1999                                              4

Consolidated Condensed Statements of
  Operations for the Six Months Ended
  March 31, 2000 and 1999                                              5

Consolidated Condensed Statements of
  Cash Flows for the Six Months Ended
  March 31, 2000 and 1999                                              7

Notes to Consolidated Condensed Financial Statements                   9

Item 2. Management's Discussion and Analysis of
  Financial Condition and Results of Operations                       15

Item 3. Quantitative and Qualitative Disclosures about Market Risk    17

PART II - OTHER INFORMATION
---------------------------

Item 1. Legal Proceedings                                             18

Item 6. Exhibits and Reports on Form 8-K                              18

Signature Page                                                        19

                                      -1-
<PAGE>

                    POLYPHASE CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED CONDENSED BALANCE SHEETS

                                    Assets
<TABLE>
<CAPTION>
                                                                March 31,    September 30,
                                                               -----------   -------------
                                                                  2000           1999
                                                               -----------   -------------
                                                               (Unaudited)
<S>                                                            <C>           <C>
Current assets:
 Cash                                                          $ 1,679,962     $   375,408
 Receivables, net of allowance for doubtful accounts
  of $530,268 and $502,667
   Trade accounts                                               17,617,493      17,373,364
   Current portion of sales contracts                            4,197,018       4,765,072
   Notes receivable                                              3,445,539       3,359,777
 Inventories                                                    33,066,624      30,924,744
 Prepaid expenses and other                                      2,684,402       1,663,269
                                                               -----------     -----------
    Total current assets                                        62,691,038      58,461,634
                                                               -----------     -----------

Property and equipment:
 Land                                                              432,000         432,000
 Buildings and improvements                                      3,755,213       3,481,009
 Machinery, equipment and other                                  9,115,549       8,929,988
                                                               -----------     -----------
                                                                13,302,762      12,842,997
 Less-Accumulated depreciation                                  (7,864,683)     (7,114,989)
                                                               -----------     -----------
                                                                 5,438,079       5,728,008
                                                               -----------     -----------

Other assets:
 Noncurrent receivables, net of allowance for
   doubtful accounts of $1,264,563 and $1,305,220
    Sales contracts                                              1,795,090       2,114,591
    Notes receivable                                                  -               -
    Related parties                                              1,230,034       1,523,096
 Excess of cost over fair value of net assets of businesses
   acquired, net of accumulated amortization of $4,201,851
   and $3,754,614                                               14,005,594      12,178,209
 Other intangible assets                                         1,904,250       1,216,393
 Restricted cash                                                   748,632         625,623
 Other                                                           1,564,177       1,674,388
                                                               -----------     -----------
                                                                21,247,777      19,332,300
                                                               -----------     -----------

                                                               $89,376,894     $83,521,942
                                                               ===========     ===========
</TABLE>

                  The accompanying notes are an integral part
                  of these consolidated financial statements.

                                      -2-
<PAGE>

                    POLYPHASE CORPORATION AND SUBSIDIARIES
               CONSOLIDATED CONDENSED BALANCE SHEETS (continued)

                     Liabilities and Stockholders' Equity

<TABLE>
<CAPTION>
                                                        March 31,    September 30,
                                                      -----------    -------------
                                                          2000           1999
                                                      -----------    -------------
                                                      (Unaudited)
<S>                                                   <C>             <C>
Current liabilities:
 Notes payable                                        $  7,205,669    $  4,403,264
 Accounts payable                                        8,321,969       9,937,347
 Accrued expenses and other                              3,041,593       3,374,493
 Current maturities of long-term debt                    6,050,118       6,798,467
                                                      ------------    ------------
    Total current liabilities                           24,619,349      24,513,571

Long term debt, less current maturities                 36,949,227      33,592,522
Note payable and accrued interest to related party      18,652,481      17,914,842
Reserve for credit guarantees                              748,632         625,623
                                                      ------------    ------------
    Total liabilities                                   80,969,689      76,646,558
                                                      ------------    ------------

Warrants to purchase common stock
 in subsidiary                                           2,370,000       1,425,378

Stockholders' equity:
 Preferred stock, $.01 par value, authorized
    50,000,000 shares, issued and outstanding
    none and 56,440 shares, respectively                      -                564
 Common stock, $.01 par value, authorized
   100,000,000 shares, issued and outstanding
   17,812,464 shares                                       178,125         178,125
 Paid-in capital                                        27,596,046      28,159,887
 Accumulated deficit                                   (21,736,966)    (22,888,570)
                                                      ------------    ------------
    Total stockholders' equity                           6,037,205       5,450,006
                                                      ------------    ------------

                                                      $ 89,376,894    $ 83,521,942
                                                      ============    ============
</TABLE>

                  The accompanying notes are an integral part
                  of these consolidated financial statements.

                                      -3-
<PAGE>

                    POLYPHASE CORPORATION AND SUBSIDIARIES
                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                           For the Three Months Ended
                                                                    March 31,
                                                           ---------------------------
                                                               2000           1999
                                                           -----------     -----------
<S>                                                        <C>             <C>
Net revenues                                               $43,487,234     $39,695,102

Cost of sales                                               34,691,213      32,889,609
                                                           -----------     -----------

Gross profit                                                 8,796,021       6,805,493

Selling, general and administrative expenses                 5,976,604       4,971,144
                                                           -----------     -----------

Operating income                                             2,819,417       1,834,349
                                                           -----------     -----------

Other income (expenses):
 Interest expense                                           (2,081,631)     (2,191,110)
 Interest income and other                                     167,150         155,784
                                                           -----------     -----------

  Total other income (expenses)                             (1,914,481)     (2,035,326)
                                                           -----------     -----------

Income (loss) before income taxes and
 discontinued operations                                       904,936        (200,977)

Income taxes                                                    93,701            -
                                                           -----------     -----------

Income (loss) before discontinued operations                   811,235        (200,977)

Discontinued operations                                           -              7,418
                                                           -----------     -----------

Net income (loss)                                              811,235        (193,559)

Dividends on preferred stock                                      -            (24,236)
                                                           -----------     -----------

Net income (loss) attributable to common stockholders      $   811,235     $  (217,795)
                                                           ===========     ===========

Net income (loss) per share - basic and diluted:
   Before discontinued operations                          $       .05     $      (.01)
   Discontinued operations                                        -               -
                                                           -----------     -----------

   Net income (loss) per share                             $       .05     $      (.01)
                                                           ===========     ===========
</TABLE>

                  The accompanying notes are an integral part
                  of these consolidated financial statements.

                                      -4-
<PAGE>

                    POLYPHASE CORPORATION AND SUBSIDIARIES
          CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (continued)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                           For the Six Months Ended
                                                                    March 31,
                                                           --------------------------
                                                               2000          1999
                                                           -----------    -----------
<S>                                                        <C>            <C>
Net revenues                                               $87,930,184    $74,550,100

Cost of sales                                               69,691,471     61,720,419
                                                           -----------    -----------

Gross profit                                                18,238,713     12,829,681

Selling, general and administrative expenses                12,293,214      9,364,031
                                                           -----------    -----------
Operating income                                             5,945,499      3,465,650
                                                           -----------    -----------

Other income (expenses):
 Interest expense                                           (4,074,355)    (4,348,785)
 Interest income and other                                     331,876        338,447
                                                           -----------    -----------

  Total other income (expenses)                             (3,742,479)    (4,010,338)
                                                           -----------    -----------

Income (loss) before income taxes, discontinued
 operations and extraordinary item                           2,203,020       (544,688)

Income taxes                                                   112,442           -
                                                           -----------    -----------

Income (loss) before discontinued operations
 and extraordinary item                                      2,090,578       (544,688)

Discontinued operations                                           -            10,744

Extraordinary item--early extinguishment of debt            (1,290,431)          -
                                                           -----------    -----------

Net income (loss)                                              800,147       (533,944)

Gain (dividends) on reacquired preferred stock                 351,457        (57,334)
                                                           -----------    -----------

Net income (loss) attributable to common stockholders      $ 1,151,604    $  (591,278)
                                                           ===========    ===========
</TABLE>

                  The accompanying notes are an integral part
                  of these consolidated financial statements.

                                      -5-
<PAGE>

                    POLYPHASE CORPORATION AND SUBSIDIARIES
          CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (continued)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                           For the Six Months Ended
                                                                   March 31,
                                                           ------------------------
                                                               2000        1999
                                                           -----------  -----------
<S>                                                        <C>          <C>
Net income (loss) per share - basic and diluted:
   Before discontinued operations and
      extraordinary item                                   $       .13  $      (.04)
   Discontinued operations                                          -            -
   Extraordinary item                                             (.07)          -
                                                           -----------  -----------

   Net income (loss) per share:                            $       .06  $      (.04)
                                                           ===========  ===========
</TABLE>

                  The accompanying notes are an integral part
                  of these consolidated financial statements.

                                      -6-
<PAGE>

                    POLYPHASE CORPORATION AND SUBSIDIARIES
                CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                          For the Six Months Ended
                                                                                March 31,
                                                                        ----------------------------
                                                                            2000            1999
                                                                        -----------      -----------
<S>                                                                     <C>              <C>
Cash flow provided by (used in) operating activities:
 Net income (loss)                                                      $   800,147      $  (533,944)
 Adjustments to reconcile net income (loss)
  to net cash provided by (used in) operating
  activities:
   Depreciation and amortization                                          1,691,068        1,976,686
   Provision for doubtful accounts                                           69,820           79,000
   Discontinued operations                                                     -             (10,744)
   Extraordinary item                                                     1,290,431             -
 Changes in:
   Accounts and sales contracts receivable                                  573,606       (4,611,381)
   Inventories                                                           (2,141,880)        (418,727)
   Prepaid expenses and other                                              (910,922)        (381,654)
   Accounts payable                                                      (1,615,378)       4,988,205
   Accrued expenses and other                                                61,799          306,386
                                                                        -----------      -----------
      Net cash provided by (used in)
       operating activities                                                (181,309)       1,393,827
                                                                        -----------      -----------

Cash flows provided by (used in) investing
 activities:
  Notes and other receivables                                               (85,762)        (112,820)
  Receivables from related parties                                          293,062          (80,676)
  Capital expenditures, net                                                (459,765)        (669,261)
                                                                        -----------      -----------

     Net cash used in
      investing activities                                              $  (252,465)     $  (862,757)
                                                                        -----------      -----------
</TABLE>

                  The accompanying notes are an integral part
                  of these consolidated financial statements.

                                      -7-
<PAGE>

                    POLYPHASE CORPORATION AND SUBSIDIARIES
          CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (continued)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                            For the Six Months Ended
                                                                    March 31,
                                                           ---------------------------
                                                               2000           1999
                                                           ------------   ------------
<S>                                                        <C>            <C>
Cash flows provided by (used in) financing activities:
  Refinancing of Overhill indebtedness:
   Borrowings                                              $ 38,502,176   $       -
   Repayments                                               (32,322,005)          -
   Redemption of warrants                                    (3,700,000)          -
   Deferred financing costs                                  (1,832,907)          -
  Borrowings (principal payments) on other
   notes payable and long term debt, net                      1,541,064        981,165
  Exercise of common stock options                                 -             1,300
  Repurchase of preferred stock                                (450,000)          -
                                                           ------------   ------------
   Net cash provided by
     financing activities                                     1,738,328        982,465
                                                           ------------   ------------

Net increase (decrease) in cash                               1,304,554      1,513,535
Cash - beginning of period                                      375,408        401,393
                                                           ------------   ------------

Cash - end of period                                       $  1,679,962   $  1,914,928
                                                           ============   ============


Supplemental schedule of cash flow information:
 Cash paid during the period for :
  Interest                                                 $  3,169,457   $  2,934,213
  Income taxes                                             $      5,000   $       -

</TABLE>

Supplemental schedule of noncash investing and financing activities:

In November 1999, in connection with the Overhill Farms refinancing, warrants
were issued having an estimated fair market value of $2,370,000.

During the six months ended March 31, 1999, the Company made partial payments on
a lawsuit obligation, together with certain associated expenses, by issuing
300,000 shares of common stock valued at $85,000.

During the six months ended March 31, 1999, the Company settled certain disputed
obligations by granting an option on 130,000 shares of common stock, exercisable
at $.01 per share.  The options were assigned a value of $28,000.



                  The accompanying notes are an integral part
                  of these consolidated financial statements.

                                      -8-
<PAGE>

                    POLYPHASE CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Condensed Financial Statements
                                March 31, 2000



1.   NATURE OF BUSINESS

     Polyphase Corporation (the "Company" or "Polyphase") is a diversified
     holding company that, through its subsidiaries, operates in two industry
     segments: the food segment and the forestry segment. The food segment (the
     "Food Group"), which consists of the Company's wholly-owned subsidiary,
     Overhill Farms, Inc. ("Overhill"), produces high quality entrees, plated
     meals, soups, sauces and poultry, meat and fish specialities. The Company's
     100% ownership of Overhill is subject to warrants outstanding to purchase a
     minority position in Overhill. The forestry segment (the "Forestry Group"),
     which consists of the Company's wholly-owned subsidiary Texas Timberjack,
     Inc. ("Timberjack" or "TTI") and its majority-owned subsidiaries Southern
     Forest Products LLC ("SFP") and Wood Forest Products LLC ("WFP"),
     distributes, leases and provides financing for industrial and commercial
     timber equipment and is also engaged in certain related timber and sawmill
     operations. The Company's transformer segment, which manufactures and
     markets electronic transformers, inductors and filters (the "Transformer
     Group"), was discontinued in fiscal 1999, as a result of the sale of the
     Company's wholly-owned subsidiary, Polyphase Instrument Co. ("PIC").


2.   BASIS OF PRESENTATION

     The consolidated financial statements include the accounts of the Company,
     its wholly-owned subsidiaries and its majority-owned subsidiaries. All
     material intercompany accounts and transactions have been eliminated.
     Certain prior year amounts have been reclassified to conform to the current
     year presentation.

     The financial statements included herein have been prepared by the Company,
     without an audit, pursuant to the rules and regulations of the Securities
     and Exchange Commission. Certain information and footnote disclosures
     normally included in financial statements prepared in accordance with
     generally accepted accounting principles have been condensed or omitted
     pursuant to such rules and regulations. The Company believes that the
     disclosures are adequate to make the information presented not misleading.
     The information presented reflects all adjustments (consisting solely of
     normal recurring adjustments) which are, in the opinion of management,
     necessary for a fair statement of results for the interim periods when read
     in conjunction with the financial statements and the notes thereto included
     in the Company's latest financial statements filed as part of Form 10-K for
     the year ended September 30, 1999.

                                      -9-
<PAGE>

3.   INVENTORIES

<TABLE>
<CAPTION>
     Inventories are summarized as follows:      March 31,     September 30,
                                                   2000             1999
                                               -------------   -------------
<S>                                            <C>             <C>
          Finished goods                       $  24,450,177   $  22,409,448
          Raw materials                            8,676,953       8,565,296
          Inventory reserve                          (60,506)        (50,000)
                                               -------------   -------------
               Total                           $  33,066,624   $  30,924,744
                                               =============   =============
</TABLE>


     As of March 31, 2000 and September 30, 1999, finished goods inventories
     consisted of approximately $8,309,000 and $7,804,000 in inventories at the
     Food Group, $15,494,000 and $13,603,000 in timber and logging related
     equipment, and $647,000 and $1,003,000 in finished wood products,
     respectively. As of March 31, 2000 and September 30, 1999, raw materials
     inventories consisted of approximately $6,392,000 and $5,872,000 in
     inventories at the Food Group and $2,285,000 and $2,693,000 in harvested
     but unprocessed timber, respectively.


4.   TAXES

     For the six months ended March 31, 2000, the actual federal income tax
     expense attributable to income from continuing operations differed from the
     net amounts recorded by the Company. The Company's subsidiaries recorded a
     provision for federal income taxes of approximately $597,000 using the
     statutory rate of 34% and the Company then applied a like amount of its
     existing valuation allowance as a reduction of this amount, resulting in a
     net federal provision for the period of zero. The provision for the period
     represents state income taxes only.


5.   LONG-TERM DEBT

     In November 1999, Overhill refinanced substantially all its existing debt.
     The new facility amounted to $44 million, consisting of a $16 million line
     of credit provided by Union Bank of California, N.A. ("Union Bank"),
     together with $28 million in the form of a five-year term loan provided by
     Levine Leichtman Capital Partners II, L.P. ("LLCP").

     The line of credit with Union Bank expires in November 2002 and provides
     for borrowings limited to the lesser of $16 million or an amount determined
     by a defined borrowing base consisting of eligible receivables and
     inventories. Borrowings under the line bear interest at a rate, as selected
     by Overhill at the time of borrowing, of prime plus .25% or LIBOR plus
     2.75%. The agreement contains various covenants including restrictions on
     capital expenditures, requirements to maintain specified net worth levels
     and debt service ratios, and generally prohibits loans, advances or
     dividends from Overhill to the Company and limits payments of taxes and
     other expenses to Polyphase to specified levels. The line of credit is
     guaranteed by the Company and collateralized by certain assets of Overhill
     and the Overhill common stock owned by Polyphase.

                                      -10-
<PAGE>

     The term loan with LLCP is a secured senior subordinated note bearing
     interest at 12% per annum, with interest payable monthly until maturity in
     October 2004. Principal payments in an amount equal to 50% of the excess
     cash flow, as defined, for Overhill's previous fiscal year are also payable
     annually commencing in January 2001. Voluntary principal payments are
     permitted after October 31, 2001, subject to certain prepayment penalties.
     The agreement contains various covenants including restrictions on capital
     expenditures, minimum EBITDA and net worth levels, and specified debt
     service and debt to equity ratios. In addition, the terms of the agreement
     restrict changes in control, generally prohibit loans, dividends or
     advances by Overhill to the Company and limit payments of taxes and other
     expenses to Polyphase to specified levels. The term loan with LLCP is
     guaranteed by the Company and collateralized by certain assets of Overhill.
     The agreement also requires Overhill to pay to LLCP, during each January,
     annual consulting fees of $180,000.

     In connection with the agreement, LLCP was issued warrants to purchase
     17.5% of the common stock of Overhill, exercisable immediately at a nominal
     exercise price. During the first two years following the date of the
     agreement, Overhill has the right to repurchase 5% of Overhill's shares
     from LLCP for $3 million and/or to repurchase all 17.5% of the Overhill
     shares subject to the LLCP warrant within five days of the term loan being
     repaid at their then determined fair market value. If such shares are not
     purchased, LLCP will be entitled under the agreement to receive a cash
     payment of $500,000 from Overhill. At the date of issuance, the warrants
     granted to LLCP were estimated to have a fair value of $2.37 million.

     As a result of the transactions, Overhill repaid in full the $22.7 million
     senior subordinated notes and the $9.7 million balance of its revolving
     line of credit with previous lenders. Additionally, Overhill repurchased,
     for $3.7 million, the warrants held by a previous lender to purchase 30% of
     Overhill's common stock; the excess of such repurchase amount over the
     carrying value of the warrant amounted to approximately $2.3 million and
     was recorded as goodwill. In connection with the refinancing, Overhill was
     permitted to make a one-time advance of $1.25 million to Polyphase for
     working capital and other specified purposes. Overhill incurred costs and
     expenses in connection with the refinancing totaling approximately $1.9
     million, substantially all of which has been, or will be, paid to the
     lenders. The early extinguishment of the previous indebtedness resulted in
     an extraordinary loss of approximately $1.3 million (net of a $500,000
     refund for early payment of the senior subordinated notes) during the six
     months ended March 31, 2000.

                                      -11-
<PAGE>

6.   EARNINGS PER SHARE

     The following table sets forth the computations of basic and diluted
     earnings per share:

<TABLE>
<CAPTION>
                                                                     For the Three Months Ended
                                                                             March 31,
                                                                     --------------------------
                                                                         2000        1999
                                                                     -----------    -----------
<S>                                                                  <C>            <C>
Numerator:
     Income (loss) before discontinued operations                    $   811,235    $  (200,977)
     Dividends on preferred stock                                           -           (24,236)
                                                                     -----------    -----------
                                                                         811,235       (225,213)

     Discontinued operations                                                -             7,418
                                                                     -----------    -----------

     Net income (loss) attributable to common stockholders           $   811,235    $  (217,795)
                                                                     ===========    ===========

Denominator:
   Denominator for basic earnings per share-
     weighted average shares                                          17,812,464     16,104,381
                                                                     -----------    -----------

   Effect of dilutive securities (a):
     Convertible preferred stock                                            -              -
     Stock options                                                        32,273           -
     Warrants                                                               -              -
                                                                     -----------    -----------
        Dilutive potential common shares (a)                              32,273           -
                                                                     -----------    -----------

   Denominator for diluted earnings per share                         17,844,737     16,104,381
                                                                     ===========    ===========

Net income (loss) per share - basic and diluted:

   Before discontinued operations                                    $       .05    $      (.01)

   Discontinued operations                                                  -              -
                                                                     -----------    -----------

   Net income (loss) per share                                       $       .05    $      (.01)
                                                                     ===========    ===========
</TABLE>


                                      -12-
<PAGE>

<TABLE>
<CAPTION>
                                                                      For the Six Months Ended
                                                                             March 31,
                                                                     -------------------------
                                                                        2000           1999
                                                                     -----------   -----------
<S>                                                                   <C>          <C>
Numerator:
 Income (loss) before discontinued operations
  and extraordinary item                                             $ 2,090,578   $  (544,688)
 Gain (dividends) on reacquired preferred stock                          351,457       (57,334)
                                                                     -----------   -----------
                                                                       2,442,035      (602,022)

 Discontinued operations                                                    -           10,744

 Extraordinary item                                                   (1,290,431)         -
                                                                     -----------   -----------

   Net income (loss) attributable to common stockholders              $1,151,604   $  (591,278)
                                                                     ===========   ===========

Denominator:
 Denominator for basic earnings per share-
  weighted average shares                                             17,812,464    16,104,381
                                                                     -----------   -----------
 Effect of dilutive securities (a):
  Convertible preferred stock                                            537,926          -
  Stock options                                                            3,739          -
  Warrants                                                                  -             -
                                                                     -----------   -----------
  Dilutive potential common shares (a)                                   541,665          -
                                                                     -----------   -----------
 Denominator for diluted earnings per share                           18,354,129    16,104,381
                                                                     ===========   ===========

Net income (loss) per share - basic and diluted:

 Before discontinued operations and extraordinary item               $       .13   $      (.04)


 Discontinued operations                                                    -             -

 Extraordinary item                                                         (.07)         -
                                                                     -----------   -----------

  Net income (loss) per share                                         $      .06   $      (.04)
                                                                     ===========   ===========
</TABLE>

  (a) Dilutive potential common shares were excluded from the computation in
      loss periods since their effect would have been antidilutive.

                                      -13-
<PAGE>

7.   STOCKHOLDERS' EQUITY

     During November 1999, the Company and Infinity Investors Limited
     ("Infinity"), the holder of the Company's Series A-3 preferred stock,
     entered into a settlement agreement whereby, among other things, the
     Company agreed to repurchase all Series A-3 preferred stock owned by
     Infinity, including all accrued but unpaid dividends, for $450,000 cash,
     and Infinity agreed to the dismissal of all litigation against the Company
     with respect to various matters related to its ownership of the preferred
     stock. As a result of the settlement, the Company recorded a gain of
     approximately $351,000, related to the difference in the carrying value of
     the preferred stock plus the accrued dividends and the settlement amount.
     Such amount was accounted for by recording a reduction of the Company's
     accumulated deficit during the six months ended March 31, 2000.

     The Company, during November 1998, entered into an agreement, whereby it
     agreed to pay a $500,000 judgment relating to certain litigation in fiscal
     1998, in monthly payments of $8,000 (including interest at 10% per annum)
     over an eighteen month period, with a balloon payment due at the end of
     that period. In connection therewith, the Company, during the year ended
     September 30, 1999, issued a total of 300,000 shares of its common stock
     valued at $85,000, as partial payment against the judgment, together with
     certain costs associated therewith. The remaining balance related to the
     judgment obligation was repaid during the six months ended March 31, 2000.

                                      -14-
<PAGE>

Item 2.   Management's Discussion and Analysis

Statements contained in this Form 10-Q that are not historical facts, including,
but not limited to, any projections contained herein, are forward-looking
statements and involve a number of risks and uncertainties.  The actual results
of the future events described in such forward-looking statements in this Form
10-Q could differ materially from those stated in such forward-looking
statements. Among the factors that could cause actual results to differ
materially are: adverse economic conditions, industry competition and other
competitive factors, government regulation and possible future litigation.


Results of Operations

Revenues for the six months ended March 31, 2000 increased $13,380,000  (17.9%)
to $87,930,000 from $74,550,000 during the six months ended March 31, 1999.  The
increase in revenues is primarily attributable to sales gains by Overhill.
Gross profits increased $5,409,000 to $18,239,000 in the current year from
$12,830,000 in the comparable period in 1999, as a result of both the volume
increase, as well as an increase in gross margin rates to 20.7% in the current
year as compared to 17.2% in the comparable period in fiscal 1999.  During the
current six month period, operating income increased 71.5% to $5,945,000 from
$3,466,000 for the comparable period in the prior year.

Consolidated income before discontinued operations and extraordinary item for
the six months ended March 31, 2000 increased $2,636,000 to $2,091,000 from a
loss of $545,000 during the six months ended March 31, 1999.  After the effect
of an extraordinary expense of $1,290,000 related to the early extinguishment of
debt in connection with major refinancing by Overhill and a gain of $351,000 on
the reacquisition of preferred stock, net income attributable to common
stockholders amounted to $1,152,000 ($.06 per share) in the current year
compared to a loss of $591,000 ($.04 per share) in fiscal 1999.

The Food Group's revenues increased $15,237,000 (29.6%) to $66,743,000 for the
six months ended March 31, 1999 as compared to $51,506,000 for the six months
ended March 31, 1999.  Gross profits increased $4,875,000 to $13,308,000,
compared to $8,433,000 in the prior year, primarily due to continued volume
increases from both new and existing national accounts, together with the effect
of improved purchasing practices, including the outsourcing of certain
production. Operating income increased $2,278,000 to $5,286,000 in the current
period, compared to $3,008,000 for the same period in fiscal 1999.

Revenues for the Forestry Group for the six months ended March 31, 2000
decreased  $1,856,000 (8.0%) to $21,188,000 from $23,044,000 for the six months
ended March 31, 1999. Operating income for the same period increased $256,000 to
$804,000 for the six months ended March 31, 2000 from $548,000 for the six
months ended March 31, 1999.  This increase is due to improved results from
increased sales and margins on timber product operations, and, while sales of
logging equipment decreased due to a continued softness in the East Texas timber
market, gross profits improved somewhat from the comparable period in the prior
year.

                                      -15-
<PAGE>

Liquidity and Capital Resources

During the six months ended March 31, 2000, the Company's operating activities
resulted in a use of cash of approximately $181,000, compared to cash provided
of $1,394,000 during the comparable period in fiscal 1999. The use of cash in
the current year is generally due to improved operating results which were
offset by an increase in inventories by Overhill and reductions in trade
accounts payable by both Timberjack and Overhill.

During the six months ended March 31, 2000, the Company's investing activities
resulted in a use of cash of approximately $252,000, compared to a use of cash
of $863,000 during the comparable period in fiscal 1999.  The Company's use of
cash in the current year consisted primarily of capital expenditures.

During the six months ended March 31, 2000, the Company's financing activities
provided cash of approximately $1,738,000 as compared to cash provided of
$982,000 during the comparable period in fiscal 1999.  The cash provided in the
current year resulted generally from the refinancing of substantially all
indebtedness of Overhill which was offset somewhat by the repurchase of the
Company's Series A-3 preferred stock.

The Company believes that funds available to it from operations and existing
capital resources will be adequate for its capital requirements for the next
twelve months.


Year 2000

The Company initiated a Year 2000 program to identify and address issues
associated with the ability of its business systems and equipment to properly
recognize the Year 2000.  The purpose of this effort was to avoid interruption
of the operations of the Company as a result of the century change that occurred
on January 1, 2000.  The Company's program included a review of its software
systems, a review of its operating systems, upgrading or retirement of non-
compliant hardware and contacting key suppliers to assess their Year 2000
readiness.

The Food Group completed the installation of a new integrated accounting,
inventory, sales and purchasing system to replace the existing manual and
computer systems supporting operations.  The system software and hardware has
been certified by the vendor to be Year 2000 compliant and was implemented as a
parallel system.  The Forestry Group has reviewed its existing software and
completed an upgrade modification.  The Company's subsidiaries also contacted
key vendors to assess their Year 2000 readiness and evaluate the effect of non-
compliance on the Company's future business.

Subsequent to December 31, 1999, the Company has not experienced any disruptions
or additional costs as a result of the century change. However, because all Year
2000 issues may not reveal themselves until later in 2000, no assurances can be
given that the Company will not experience any interruptions due to Year 2000
issues. The Company will continue to monitor these matters throughout the year.
To date, the Company has had no material expenditures for direct Year 2000
compliance procedures.

                                      -16-
<PAGE>

Item 3.   Quantitative and Qualitative Disclosures About Market Risk

The Company's interest expense is affected by changes in prime and LIBOR rates
as a result of its various line of credit arrangements.  If these market rates
increase by an average of 1% in fiscal 2000, the Company's interest expense
would increase by approximately $200,000 based on the outstanding line of credit
balances at March 31, 2000.

The Company does not own, nor does it have an interest in any other market risk
sensitive instruments.

                                      -17-
<PAGE>

                          PART II - OTHER INFORMATION


Item 1.   Legal Proceedings

During fiscal 1997, five substantially identical complaints were filed in the
United States District Court for the District of Nevada against the Company and
certain of its officers and directors.  The complaints each sought certification
as a class action and asserted liability based on alleged misrepresentations
that the plaintiffs claimed resulted in the market price of the Company's stock
being artificially inflated.  The defendants named in those original complaints
filed motions to dismiss in each of the lawsuits.  Without certifying the cases
as class actions, the District Court consolidated the cases into a single
action.  In June 1998, the District Court ordered the plaintiffs to file an
amended complaint which satisfied the Court's interpretation of the pleading
standards set by the Private Securities Law Reform Act (the "PSLRA").  The
plaintiffs then filed a motion for reconsideration of the Court's ruling.  The
defendants opposed that motion, and the Court subsequently denied the
plaintiffs' motion for reconsideration. The plaintiffs then filed an amended
complaint which named two additional companies as defendants. The original
defendants moved to dismiss the amended complaint, among other things, on the
grounds that it failed to state a claim for securities fraud under the PSLRA.
The plaintiffs sought a stay of the Court's consideration of the original
defendants' second motion to dismiss, asserting that there was uncertainty as to
the legal standards to be applied in securities fraud cases.  At a hearing held
on March 3, 2000, the Court denied the plaintiffs' motion to stay and ruled on
the second motion to dismiss, granting it in part and denying it in part. The
Court gave the plaintiffs ninety (90) days to conduct discovery on a limited
issue and directed that any motions for summary judgment should be submitted
shortly after the conclusion of the discovery period.  Following the March 3,
2000 hearing, the two companies named as additional defendants in the amended
complaint filed a motion to dismiss, claiming that the plaintiffs had failed to
state a claim against them under the PSLRA.  The Court has not ruled on that
motion to dismiss.  In addition, the ninety (90) day period for the limited
pretrial discovery has not expired, and no motions for summary judgment have
been filed.  However, there have been disputes over the scope of discovery
permitted by the Court which have been resolved favorably to the defendants.
Management believes (based upon advice of legal counsel) that this litigation
will be resolved without material effect on the Company's financial condition,
results of operations or cash flows.

The Company and its subsidiaries are involved in certain legal actions and
claims arising in the ordinary course of business.  Management believes that
such litigation and claims will be resolved without material effect on the
Company's financial position or results of operations.


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

          (a)   Exhibits

                27.1   Financial Data Schedule

          (b)  Reports on Form 8-K - No reports on form 8-K were filed during
               the quarter ended March 31, 2000.

                                      -18-
<PAGE>

                                  SIGNATURES


In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                                         POLYPHASE CORPORATION
                                         (Registrant)


Date: May 5, 2000                        By: /s/ James Rudis
                                             -----------------------------------
                                              James Rudis
                                              Chairman, President and
                                              Chief Executive Officer



Date: May 5, 2000                        By: /s/ William E. Shatley
                                             -----------------------------------
                                              William E. Shatley
                                              Senior Vice President and
                                              Chief Financial Officer

                                      -19-
<PAGE>

                               INDEX TO EXHIBITS


           Exhibit No.                                  Exhibit
          -------------                ----------------------------------------

          27.1                       Financial Data Schedule

                                      -20-