STEARMAN ENTERPRISES LTD. - 10QSB - Quarterly Report      Date Filed:  9/13/2000
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      10QSB
          1


                   SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  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
                              April 30, 2000
   OR

[  ]            TRANSITION REPORT PURSUANT TO SECTION 13 OR
               15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
                      For the transition period from
                                      to


                      Commission file number 0-27759

                       Stearman Enterprises Inc.
          (Exact name of registrant as specified in its charter)



     Delaware                                           13-4082816
(State or other jurisdiction of                     (I.R.S. Employer
incorporation or organization)                      Identification No.)


                1501 Broadway, Suite 1807, New York, New York 10036
           (Address of principal executive offices  (zip code))

                              212 768-2383
           (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the last 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

Yes  X        No


Indicate the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.


             Class                        Outstanding at April 30, 2000

Common Stock, par value $0.0001                    1,623,000


                      PART I -- FINANCIAL INFORMATION


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STEARMAN ENTERPRISES LTD. - 10QSB - Quarterly Report      Date Filed:  9/13/2000
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ITEM 1.  FINANCIAL STATEMENTS

                            STEARMAN ENTERPRISES LTD.
                            (A Delaware Corporation)
                          (A development stage company)
                                  Balance Sheet
                                  (U.S. DOLLARS)

                                           9 months ended          Fiscal year
                                              April 30,           ended July 31,
                                                2000                   1999
                                              (Unaudited)


Assets
Current assets
     Cash and bank                         $          300          $        300
     ---------------------------------------------------------------------------


Incorporation costs                                   403                   403
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Total Assets                               $          703          $        703
================================================================================





Liabilities
Current liabilities
     Accounts payable                      $        1,412          $        357
     Accrued interest                                   6                    55
     Convertible debenture                           -                      500
================================================================================

Total Liabilities                                   1,418                   912
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Shareholders' equity (deficit)

Share Capital
Authorized:
100,000,000 common shares with a
 par value of $.0001 each
Issued and outstanding
1,623,000 common shares with a
 par value of $0.0001 at April 30,
 2000 and 515,000 at July 31, 1999                  1,104                   550
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                                                    1,104                   550

Accumulated Deficit                                (1,819)                 (759)
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                                                     (715)                 (209)
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                                           $          703          $        703
================================================================================

CONTINUING OPERATIONS (NOTE 1)


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STEARMAN ENTERPRISES LTD. - 10QSB - Quarterly Report      Date Filed:  9/13/2000
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                            STEARMAN ENTERPRISES LTD.
                            (A Delaware Corporation)
                          (A development stage company)
                                Statement of Loss
                                  (U.S. DOLLARS)
                                   (Unaudited)



                       6 months        9 months        6 months        9 months
                        ended           ended           ended           ended
                      January 31,      April 30,       January 31,     April 30,
                         1999            2000            1998            1999

Expenses
     Legal            $     -         $     1,055      $     -       $     -
     Interest and
      bank charges             5                5              10            19
     Filing fees            -                -               -             -
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Net earnings (loss)
for the period        $       (5)     $     1,060      $      (10)   $       19
================================================================================

Basic and diluted
loss per share        $(0.000004)     $ (0.000800)     $ (0.040000)  $(0.076000)
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Weighted average
shares Outstanding     1,165,348        1,314,546              250          250
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STEARMAN ENTERPRISES LTD. - 10QSB - Quarterly Report      Date Filed:  9/13/2000
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                            STEARMAN ENTERPRISES LTD.
                            (A Delaware Corporation)
                          (A development stage company)
                             Statement of Cash Flow
                                 (U.S. DOLLARS)
                                   (Unaudited)

                       6 months        9 months        6 months        9 months
                        ended           ended           ended           ended
                      January 31,      April 30,       January 31,     April 30,
                         1999            2000            1998            1999

Cash provided by (used in)

Operations
     Net Loss for
      period          $      (5)      $    (1,060)     $      (11)   $      (19)
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                             (5)           (1,060)            (11)          (19)

     Net change in
     non-cash working
     capital balances

     Accounts payable       -               1,055            -             -
     Accrued interest        (49)             (49)             11            19
     Convertible
      Debenture             (500)            (500)           -             -
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    Net cash used
    in operating
    activities              (554)            (554)           -             -

Financing
     Issuance of
      capital stock          554              554            -             -
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     Net cash
     --------
     generated by
     ------------
     financing
     ---------
     activities             -                -               -             -
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Change in cash
for period                  -                -               -             -

Cash, beginning
of period                    300              300            -             -
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Cash, end of
 period               $      300      $       300      $     -       $     -
================================================================================



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STEARMAN ENTERPRISES LTD. - 10QSB - Quarterly Report      Date Filed:  9/13/2000
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                            STEARMAN ENTERPRISES LTD.
                            (A Delaware Corporation)
                          (A development stage company)

                          Notes to Financial Statements

                                  (U.S. DOLLARS)


1.   Continuing operations

     Stearman Enterprises Ltd. was incorporated on March 13, 1992 in the state
     of Delaware, U.S.A.

     The Company has negative working capital and a deficit.  The ability for
     the Company to continue as a going concern is dependent upon its ability to
     obtain adequate financing to reach profitable levels of operations.  It is
     not possible to predict whether financing efforts will be successful or if
     the Company will attain profitable levels of operations.

2.   Summary of significant accounting policies

     These financial statements have been prepared in accordance with generally
     accepted accounting principles in the United States and reflect the
     following significant accounting principles:

     a.  Estimates and assumptions

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make 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 amount of revenues and expenses
         during the reporting period.  Actual results could differ from those
         estimates.

     b.  Earnings (loss) per common share

         In February, 1997, the Financial Accounting Standards Board issued
         Statement No. 128, Earnings Per Share (SFAS 128), which established new
         standards for computing and presenting earnings per share effective for
         fiscal years ending after December 15, 1997.  With SFAS 128, primary
         earnings per share is replaced by basic earnings per share, which is
         computed by dividing income available to common shareholders by the
         weighted average number of shares outstanding for the period.  In
         addition, SFAS 128 requires the presentation of diluted earnings per
         share, which includes the potential dilution that could occur if
         dilutive securities were exercised or converted into common stock.  The
         computation of diluted EPS does not assume the conversion or exercise
         of securities if their effect is anti-dilutive.  Common equivalent
         shares consist of the common shares issuable upon the conversion of the
         convertible loan notes and special warrants (using the if-converted
         method) and incremental shares issuable upon the exercise of stock
         options and share purchase warrants ( using the treasury stock method).


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STEARMAN ENTERPRISES LTD. - 10QSB - Quarterly Report      Date Filed:  9/13/2000
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     c.  Cash and cash equivalents

         Cash and cash equivalents consist of cash on hand, deposits in banks
         and highly liquid investments with an original maturity of three months
         or less.


3.     Convertible debenture

       On May 13, 1997 the Company issued a 5% Convertible Debenture in the
       amount of $500 U.S. due May 13, 2002 in partial settlement of outstanding
       legal fees.  The debenture principle bears interest at 5% per annum and
       the accrued interest and the principle shall be convertible, in part or
       in whole on the basis of 1 share for every $1.00 U.S. ($0.0005 U.S. post
       forward split shares) of debt.  The debenture conversion may be exercised
       at the holder's option by giving the Company 10 days notice.  The
       Convertible debenture was converted on October 15, 1999.


4.     Share Capital

     a.  On May 4, 1999, the Company amended its certificate of incorporation
         by subdividing the authorized capital stock of the corporation so
         that each share was subdivided into two thousand shares.  The
         certificate of incorporation was further amended by increasing the
         authorized capital stock of the company to 20,000,000 shares with a
         par value of $0.01 each.

     b.  On October 20, 1999, the Company amended its certificate of
         incorporation by increasing its authorized capital stock to 100,000,000
         shares of common stock and changing the par value of its common shares
         to $.0001 par value per share.

     c.  On October 15, 1999, the Company issued 1,108,000 common shares on the
         conversion of the debt and accrued interest of $54 at 1 share for every
         $0.0005 U.S. debt.


5.     Related party transactions

     a.  At April 30, 2000, members of Maitland & Company, the Company's
         Canadian legal counsel owned 125,000 shares of the Company's common
         stock.

     d.  At April 30, 2000, members of the Company's U.S. legal counsel owned
         1,108,000 shares of the Company's common stock

6.     Income taxes

       The Company has net operating losses which may give rise to future tax
       benefits of approximately $229, $25 and $505 as of July 31, 1999, July
       31, 1998 and July 31, 1997 respectively.  To the extent not used, net
       operating loss carryforwards expire in varying amounts beginning in the
       year 2012.  Income taxes are accounted for in accordance with Statement
       of Financial Accounting Standards No. 109 (SFAS 109).  Under this method,
       deferred income taxes are determined based on differences between the tax
       basis of assets and liabilities and their financial reporting amounts at
       each year end, and are measured based on enacted tax rates and laws that
       will be in effect when the differences are expected to reverse. Valuation
       allowances are established, when necessary, to reduce deferred tax assets
       to the amount expected to be realized.  No provision for income taxes is
       included in the statement due to its immaterial amount.



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STEARMAN ENTERPRISES LTD. - 10QSB - Quarterly Report      Date Filed:  9/13/2000
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ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

     The Company has registered its common stock on a Form 10-SB
registration statement filed pursuant to the Securities Exchange Act of
1934 (the "Exchange Act") and Rule 12(g) thereof.  The Company files with
the Securities and Exchange Commission periodic and episodic reports under
Rule 13(a) of the Exchange Act, including quarterly reports on Form 10-QSB
and annual reports Form 10-KSB.  As a reporting company under the Exchange
Act, the Company may register additional securities on Form S-8 (provided
that it is then in compliance with the reporting requirements of the
Exchange Act) and on Form S-3 (provided that is has during the prior 12
month period timely filed all reports required under the Exchange Act).

     The Company was formed to engage in a merger with or acquisition of an
unidentified foreign or domestic private company which desires to become a
reporting company whose securities have been registered under
the Exchange Act.  The Company may be deemed to meet the definition of a
"blank check" company contained in Section (7)(b)(3) of the Securities Act
of 1933, as amended.

     Management believes that there are perceived benefits to being a
reporting company which may be attractive to foreign and domestic
private companies.

     These benefits are commonly thought to include

     (1) the ability to use securities to make acquisition of assets or
         businesses;
     (2) increased visibility in the financial community;
     (3) the facilitation of borrowing from financial institutions;
     (4) improved trading efficiency;
     (5) the potential for shareholder liquidity;
     (6) greater ease in subsequently raising capital;
     (7) compensation of key employees through options for stock for which there
         may be a public market;
     (8) enhanced corporate image; and,
     (9) a presence in the United States capital market.

     A private company which may be interested in a business combination
with the Company may include

     (1) a company for which a primary purpose of becoming a reporting company
         is the use of its securities for the acquisition of assets or
         businesses;
     (2) a company which is unable to find an underwriter of its securities or
         is unable to find an underwriter of securities on terms acceptable to
         it;
     (3) a company which wishes to become a reporting company with less dilution
         of its common stock than would occur normally upon an underwriting;
     (4) a company which believes that it will be able obtain investment capital
         on more favorable terms after it has become a reporting company;
     (5) a foreign company which may wish an initial entry into the United
         States securities market;

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STEARMAN ENTERPRISES LTD. - 10QSB - Quarterly Report      Date Filed:  9/13/2000
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     (6) a special situation company, such as a company seeking to satisfy
         redemption requirements under a qualified Employee Stock Option Plan;
         and,
     (7) a company seeking one or more of the other benefits believed to attach
         to a reporting company.

     Management is actively engaged in seeking a qualified private company
as a candidate for a business combination.  The Company is authorized to enter
into a definitive agreement with a wide variety of private businesses without
limitation as to their industry or revenues.  It is not possible at this time to
predict with which private company, if any, the Company will enter into a
definitive agreement or what will be the industry, operating history, revenues,
future prospects or other characteristics of that company.

     As of the date hereof, management has not made any final decision
concerning or entered into any agreements for a business combination.  When any
such agreement is reached or other material fact occurs, the Company will file
notice of such agreement or fact with the Securities and Exchange Commission on
Form 8-K.  Persons reading this Form 10-QSB are advised to see if the Company
has subsequently filed a Form 8-K.

     The Company does not intend to trade its securities in the secondary
market until completion of a business combination.  It is anticipated that
following such occurrence the Company will take the steps required to cause its
common stock to be admitted to quotation on the NASD OTC Bulletin Board or, if
it then meets the financial and other requirements thereof, on the Nasdaq
SmallCap Market, National Market System or regional or national exchange.

COMPUTER SYSTEMS REDESIGNED FOR YEAR 2000

     Many existing computer programs use only two digits to identify a year in
such program's date field.  These programs were designed and developed without
consideration of the impact of the change in the century for which four digits
will be required to accurately report the date.  If not corrected, many computer
applications could fail or create erroneous results by or following the year
2000 ("Year 2000 Problem").  Many of the computer programs containing such date
language problems have not been corrected by the companies or governments
operating such programs.  The Company does not have operations and does not
maintain computer systems.  However, it is impossible to predict what computer
programs will be effected, the impact any such computer disruption will have on
other industries or commerce or the severity or duration of a computer
disruption.

     Before the company enters into any business combination, it will inquire as
to the status of any target company's Year 2000 Problem, the steps such target
company has taken to correct any such problem and the probable impact on such
target company of any computer disruption.  However, there can be no assurance
that the Company will not combine with a target company that has an uncorrected
Year 2000 Problem or that any such Year 2000 Problem corrections are sufficient.
The extent of the Year 2000 Problem of a target company may be impossible to
ascertain and its impact on the Company is impossible to predict.


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STEARMAN ENTERPRISES LTD. - 10QSB - Quarterly Report      Date Filed:  9/13/2000
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                       PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     There are no legal proceedings against the Company and the Company is
unaware of such proceedings contemplated against it.

ITEM 2.  CHANGES IN SECURITIES

On October 15, 1999, the Company issued 1,108,000 common shares on the
conversion of the 5% Convertible Debenture in the amount of $500 and accrued
interest of $54 at the rate of 1 share for every $0.0005 of debt.  The debenture
was in settlement of outstanding legal fees.

On October 20, 1999, the company amended it certificate of incorporation by
increasing its authorized capital stock to 100,000,000 shares of common stock
and changing its authorized capital to $0.0001 par value per share.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

     Not applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Not applicable.

ITEM 5.  OTHER INFORMATION

     Not applicable.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)     Exhibits

     Not applicable.

     (b)     Reports on Form 8-K

     There were no reports on Form 8-K filed by the Company during the quarter.


_                                SIGNATURES


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

                                  STEARMAN ENTERPRISES LTD.



                                  By:      /s/ Herbert Maxwell
                                           Herbert Maxwell, President

Dated: April 10, 2000


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