U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                    FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 For the quarterly period ended JUNE 30, 2002

[ ]  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: 0-22132


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

              DELAWARE                                      58-2023732
  (State or other jurisdiction of                         (IRS Employer
  incorporation or organization)                       Identification No.)

               7000 CENTRAL PARKWAY, SUITE 850, ATLANTA, GEORGIA
                 30328 (Address of principal executive offices)
                                   (Zip Code)

                                 (770) 393-2662
              (Registrant's telephone number, including area code)

                                       N/A
                    (Former name, former address and former
                   fiscal year, if changed since last report.)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares  outstanding of each of the issuer's  classes
of  common  stock,   as  of  the  latest   practicable   date:   JULY  31,  2002

           Common stock, par value $.01 - 2,015,885 shares outstanding



<PAGE>

                         PART I - FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS


                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

                   Condensed Consolidated Financial Statements

                       June 30, 2002 and December 31, 2001

                                      and

                   For the Six Month and Three Month Periods
                          Ended June 30, 2002 and 2001

                                   (Unaudited)





                                       2
<PAGE>


                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

                      Condensed Consolidated Balance Sheets
                       June 30, 2002 and December 31, 2001
                                   (Unaudited)

<TABLE>
<CAPTION>
<S>                                                                                       <C>                     <C>
                                                                                                June 30,            December 31,
                                           Assets                                                2002                  2001
                                                                                           ----------------      ----------------

  Current assets:
     Cash and cash equivalents, including restricted cash of
      $137,761 at June 30, 2002 and $329,479 at December 31, 2001                          $        313,169               625,005
     Investment securities, including restricted securities of
      $148,270 at June 30, 2002 and $168,259 at December 31, 2001                                   169,783               190,678
     Accounts receivable, net                                                                       708,867             1,013,534
     Current portions of notes receivable, net                                                      336,477               676,017
     Property, equipment, and leasehold interests held for sale, net                              4,108,638            10,539,253
     Deferred costs relating to franchise rights held for sale                                      879,145                     -
     Other current assets                                                                           306,148               289,438
                                                                                           ----------------      ----------------
                    Total current assets                                                          6,822,227            13,333,925

  Noncurrent portions of notes receivable, net                                                    4,638,288             3,871,373
  Property, equipment, and leasehold interests held for sale, net                                 7,307,793             9,415,229
  Other property and equipment, at cost, net                                                        492,646               966,640
  Deferred costs                                                                                     74,582             1,149,831
                                                                                           ----------------      ----------------
                                                                                           $     19,335,536            28,736,998
                                                                                           ================      ================

                             Liabilities and Shareholders' Deficit

  Current liabilities:
     Accounts payable                                                                      $        814,995             1,250,123
     Accrued expenses                                                                             1,495,259             2,514,933
     Current portions of notes payable                                                            8,778,848            15,227,767
                                                                                           ----------------      ----------------
                    Total current liabilities                                                    11,089,102            18,992,823

  Noncurrent portions of notes payable                                                            9,286,086             9,537,617
  Other liabilities                                                                                 271,645               289,551
                                                                                           ----------------      ----------------
                    Total liabilities                                                            20,646,833            28,819,991
                                                                                           ----------------      ----------------

  Minority interests                                                                                340,073               587,520

  Shareholders' deficit:
     Series B preferred stock; par value $100; 200,000 shares
        authorized; 30,000 shares issued and outstanding                                          3,000,000             3,000,000
     Common stock; $.01 par value; 5,000,000 shares authorized;
        2,113,881 shares issued and 2,015,885 outstanding                                            21,139                21,139
     Additional paid-in capital                                                                   7,897,530             7,897,530
     Accumulated deficit                                                                        (11,882,722)          (10,901,865)
     Treasury stock, 97,996 common shares                                                          (687,317)             (687,317)
                                                                                           ----------------      ----------------
                    Total shareholders' deficit                                                  (1,651,370)             (670,513)
                                                                                           ----------------      ----------------

                                                                                           $     19,335,536            28,736,998
                                                                                           ================      ================
</TABLE>

     See accompanying notes to condensed consolidated financial statements.



                                       3
<PAGE>


                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

               Condensed Consolidated Statements of Income (Loss)
                     Six Months ended June 30, 2002 and 2001
                                   (Unaudited)
<TABLE>
<CAPTION>
<S>                                                                        <C>                  <C>
                                                                                2002                  2001
                                                                           --------------       ---------------

  Revenues:
      Hotel revenues                                                        $  3,598,089             9,365,295
      Investment income                                                          185,879               244,197
      Other income                                                                27,987                 1,584
                                                                           --------------       ---------------
              Total revenues                                                   3,811,955             9,611,076
                                                                           --------------       ---------------

  Expenses:
      Hotel operations                                                         3,141,906             7,369,028
      Other operating and administrative                                         589,975               711,620
      Leasehold rent                                                             463,909             1,330,754
      Interest                                                                   898,387             1,557,413
      Depreciation and amortization                                                6,000               412,500
                                                                           --------------       ---------------
              Total expenses                                                   5,100,177            11,381,315
                                                                           --------------       ---------------

              Loss from continuing operations before income taxes             (1,288,222)           (1,770,239)

  Provision for income taxes                                                           -                     -
                                                                           --------------       ---------------

               Loss from continuing operations                              $ (1,288,222)           (1,770,239)
                                                                           --------------       ---------------

  Discontinued operations:
      Income (loss) from operations of hotel management segment
             and hotel franchising segment                                       330,490               (47,034)
                                                                           --------------       ---------------


              Net loss                                                      $   (957,732)           (1,817,273)
                                                                           ==============       ===============


  Net income (loss) per common share:
      Basic:
           Continuing operations                                            $      (0.71)                (0.95)
           Discontinued operations                                                  0.16                 (0.02)
                                                                           --------------       ---------------
              Net loss                                                      $      (0.55)                (0.97)
                                                                           ==============       ===============

      Diluted:
           Continuing operations                                            $      (0.71)                (0.95)
           Discontinued operations                                                  0.16                 (0.02)
                                                                           --------------       ---------------
              Net loss                                                      $      (0.55)                (0.97)
                                                                           ==============       ===============


  Weighted  average  number of shares used to
     calculate  net income  (loss) per common share:
      Basic                                                                    2,015,885             2,017,459
                                                                           ==============       ===============

      Diluted                                                                  2,015,885             2,017,459
                                                                           ==============       ===============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>


                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

               Condensed Consolidated Statements of Income (Loss)
                    Three Months ended June 30, 2002 and 2001
                                   (Unaudited)
<TABLE>
<CAPTION>
<S>                                                                           <C>                  <C>
                                                                                    2002                2001
                                                                              --------------       ---------------

  Revenues:
      Hotel revenues                                                           $  1,483,429             5,088,520
      Investment income                                                              74,944               123,708
      Other income                                                                    1,270                   878
                                                                              --------------       ---------------
              Total revenues                                                      1,559,643             5,213,106
                                                                              --------------       ---------------

  Expenses:
      Hotel operations                                                            1,151,129             3,624,019
      Other operating and administrative                                            325,823               424,195
      Leasehold rent                                                                206,930               691,514
      Interest                                                                      404,094               746,800
      Depreciation and amortization                                                   3,000               195,926
                                                                              --------------       ---------------
              Total expenses                                                      2,090,976             5,682,454
                                                                              --------------       ---------------

              Loss from continuing operations before income taxes                  (531,333)             (469,348)

  Provision for income taxes                                                              -                     -
                                                                              --------------       ---------------

               Loss from continuing operations                                 $   (531,333)             (469,348)
                                                                              --------------       ---------------

  Discontinued operations:
      Income from operations of hotel management segment
             and hotel franchising segment                                          161,511                34,616
                                                                              --------------       ---------------


              Net loss                                                         $   (369,822)             (434,732)
                                                                              ==============       ===============


  Net income (loss) per common share:
      Basic:
           Continuing operations                                               $      (0.30)                (0.27)
           Discontinued operations                                                     0.08                  0.02
                                                                              --------------       ---------------
              Net loss                                                         $      (0.22)                (0.25)
                                                                              ==============       ===============

      Diluted:
           Continuing operations                                               $      (0.30)                (0.27)
           Discontinued operations                                                     0.08                  0.02
                                                                              --------------       ---------------
              Net loss                                                         $      (0.22)                (0.25)
                                                                              ==============       ===============


  Weighted  average  number of shares used to
     calculate  net income  (loss) per common share:
      Basic                                                                       2,015,885             2,015,885
                                                                              ==============       ===============

      Diluted                                                                     2,015,885             2,015,885
                                                                              ==============       ===============
</TABLE>


     See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>


                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                     Six Months Ended June 30, 2002 and 2001
                                   (Unaudited)
<TABLE>
<CAPTION>
<S>                                                                                           <C>                   <C>
                                                                                                   2002                  2001
                                                                                              --------------        --------------


  Cash flows from operating activities:
      Loss from continuing operations                                                          $ (1,288,222)           (1,770,239)
      Adjustments to reconcile loss from continuing operations
        to net cash used in continuing operating activities:
         Depreciation and amortization                                                                6,000               412,500
         Minority interest in loss                                                                  (60,288)             (129,472)
         Decrease (increase) in accounts receivable                                                 351,667              (463,188)
         (Decrease) increase in accounts payable and accrued expenses                              (490,516)             (191,182)
         Other, net                                                                                  24,763              (177,212)
                                                                                              --------------        --------------
              Net cash used in continuing operating activities                                   (1,456,596)           (2,318,793)
                                                                                              --------------        --------------

      Net cash (used in) provided by discontinued operations                                       (415,341)               83,229
                                                                                              --------------        --------------

              Net cash used in operations                                                        (1,871,937)           (2,235,564)
                                                                                              --------------        --------------

  Cash flows from investing activities:
      Principal receipts on notes receivable                                                        567,625               446,290
      Originations of notes receivable                                                              (45,000)             (140,000)
      Capital expenditures                                                                          (35,554)             (341,600)
      Proceeds from property and leasehold interest sales, net                                    1,627,982             1,651,418
      Other, net                                                                                          -               195,042
                                                                                              --------------        --------------
              Net cash provided by investing activities                                           2,115,053             1,811,150
                                                                                              --------------        --------------

  Cash flows from financing activities:
      Repayments of notes payable                                                                  (528,795)             (408,000)
      Proceeds from notes payable                                                                         -               240,000
      Distributions to minority interest partners                                                    (3,032)              (27,648)
      Preferred stock dividends paid                                                                (23,125)              (23,125)
      Other, net                                                                                          -                27,014
                                                                                              --------------        --------------
              Net cash used in financing activities                                                (554,952)             (191,759)
                                                                                              --------------        --------------

  Net decrease in cash and cash equivalents                                                        (311,836)             (616,173)

  Cash and cash equivalents at beginning of period                                                  625,005             1,345,671
                                                                                              --------------        --------------

  Cash and cash equivalents at end of period                                                   $    313,169               729,498
                                                                                              ==============        ==============
</TABLE>


     See accompanying notes to condensed consolidated financial statements.



                                       6
<PAGE>


                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

              Notes to Condensed Consolidated Financial Statements
                             June 30, 2002 and 2001
                                   (Unaudited)

(1)  Basis of Presentation

     The accompanying  unaudited condensed  consolidated financial statements do
     not include all of the  information  and  footnotes  required by  generally
     accepted accounting  principles for complete financial  statements.  In the
     opinion of management,  all  adjustments  (consisting  of normal  recurring
     accruals)  considered necessary for a fair presentation have been included.
     The  results  of  operations  for  interim   periods  are  not  necessarily
     indicative of the results that may be expected for a full year or any other
     interim period.  For further  information,  see the consolidated  financial
     statements  included in the Company's Form 10-K for the year ended December
     31, 2001.

(2)  Comprehensive Loss

     Total  comprehensive  loss for the six months  ended June 30, 2002 and 2001
     was $(957,732)  and  $(1,853,823),  respectively,  and for the three months
     ended June 30, 2002 and 2001 was $(369,822) and$(447,175), respectively.

(3)  Operating Segments and Discontinued Operations

     The  Company  conducted  recurring  operations  in  three  segments  of the
     limited-service hotel industry - hotel franchising,  hotel management,  and
     hotel operations.  The Company generates additional revenues and results of
     operations from hotel  development  and sale activities  which also include
     servicing notes receivable generated from hotel sales.

     During  the  fourth  quarter  of  2001,  the  Company  adopted  a  plan  to
     discontinue its hotel management  activities.  During the second quarter of
     2002, the Company  categorized its hotel  franchising  business as held for
     sale.  Since the Company has determined to discontinue the hotel management
     and  hotel  franchising  segments  of its  business,  the  net  results  of
     operations  and cash flows from these  segments are segregated and reported
     separately  from the results of operations  and cash flows from  continuing
     operations.



                                       7
<PAGE>


                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

              Notes to Condensed Consolidated Financial Statements
                             June 30, 2002 and 2001
                                   (Unaudited)


     Condensed  operating results for each continuing segment for the six months
     ended June 30, 2002 and 2001 are presented below:
<TABLE>
<CAPTION>
<S>                                 <C>                      <C>                        <C>
                                                    Six months ended June 30, 2002
     ------------------------------------------------------------------------------------------------
                                         Hotel                 Development
                                       Operations              & Corporate              Consolidated
                                    ---------------          --------------             -------------

     Revenues                        $   3,598,089                 213,866                 3,811,955
     Expenses                            3,141,906                 589,975                 3,731,881
                                    ---------------          --------------             -------------
        EBITDAR*                           456,183                (376,109)                   80,074

     Rent                                  463,909                                           463,909
     Interest                              590,357                 308,030                   898,387
     Depreciation                                -                   6,000                     6,000
                                    ---------------          --------------             -------------

     Income (loss) before
        income taxes                 $    (598,083)               (690,139)               (1,288,222)
                                    ===============          ==============             =============
</TABLE>


<TABLE>
<CAPTION>
<S>                                 <C>                      <C>                        <C>
                                                    Six months ended June 30, 2001
     -----------------------------------------------------------------------------------------------------
                                         Hotel                 Development
                                       Operations              & Corporate              Consolidated
                                    ---------------          --------------             -------------

     Revenues                        $   9,365,295                 245,781                 9,611,076
     Expenses                            7,369,028                 711,620                 8,080,648
                                    ---------------          --------------             -------------

        EBITDAR*                         1,996,267                (465,839)                1,530,428

     Rent                                1,330,754                                         1,330,754
     Interest                            1,222,677                 334,736                 1,557,413
     Depreciation                          400,500                  12,000                   412,500
                                    ---------------          --------------             -------------

     Income (loss) before
        income taxes                 $    (957,664)               (812,575)               (1,770,239)
                                    ===============          ==============             =============

</TABLE>


     * Earnings before interest, taxes, depreciation, amortization and rent



                                       8
<PAGE>


                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

              Notes to Condensed Consolidated Financial Statements
                             June 30, 2002 and 2001
                                   (Unaudited)


     Condensed  operating  results  for each  continuing  segment  for the three
     months ended June 30, 2002 and 2001 are presented below:

<TABLE>
<CAPTION>
<S>                                 <C>                      <C>                        <C>
                                                    Three months ended June 30, 2002
     -----------------------------------------------------------------------------------------------------
                                         Hotel                 Development
                                       Operations              & Corporate              Consolidated
                                    ---------------          --------------             -------------


     Revenues                        $   1,483,429                  76,214                 1,559,643
     Expenses                            1,151,129                 325,823                 1,476,952
                                    ---------------          --------------             -------------

        EBITDAR*                           332,300                (249,609)                   82,691

     Rent                                  206,930                                           206,930
     Interest                              250,434                 153,660                   404,094
     Depreciation                                -                   3,000                     3,000
                                    ---------------          --------------             -------------

     Income (loss) before
        income taxes                 $    (125,064)               (406,269)                 (531,333)
                                    ===============          ==============             =============

</TABLE>

<TABLE>
<CAPTION>
<S>                                 <C>                      <C>                        <C>
                                                    Three months ended June 30, 2001
     -----------------------------------------------------------------------------------------------------
                                         Hotel                 Development
                                       Operations              & Corporate              Consolidated
                                    ---------------          --------------             -------------


     Revenues                        $   5,088,520                 124,586                 5,213,106
     Expenses                            3,624,019                 424,195                 4,048,214
                                    ---------------          --------------             -------------

        EBITDAR*                         1,464,501                (299,609)                1,164,892

     Rent                                  691,514                                           691,514
     Interest                              576,462                 170,338                   746,800
     Depreciation                          189,926                   6,000                   195,926
                                    ---------------          --------------             -------------

     Income (loss) before
        income taxes                 $       6,599                (475,947)                 (469,348)
                                    ===============          ==============             =============


</TABLE>



     * Earnings before interest, taxes, depreciation, amortization and rent



                                       9
<PAGE>


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

Material Changes in Financial Condition

The  Company   conducted   recurring   operations  in  three   segments  of  the
limited-service hotel industry - hotel franchising,  hotel management, and hotel
operations.  The Company generates additional revenues and results of operations
from hotel  development and sale activities  which also include  servicing notes
receivable generated from hotel sales.

During the fourth quarter of 2001, the Company adopted a plan to discontinue its
hotel  management  activities.  During the second  quarter of 2002,  the Company
categorized its hotel  franchising  business as held for sale. Since the Company
has  determined  to  discontinue  the hotel  management  and  hotel  franchising
segments  of its  business,  the net results of  operations  and cash flows from
these  segments  are  segregated  and  reported  separately  from the results of
operations and cash flows from continuing operations.

The Company  completed its exit from the hotel  management  business  during the
second quarter of 2002. Certain continuing obligations remain, principally rent,
tax  compliance,  and other  compliance  reporting.  The Company's June 30, 2002
balance sheet includes current liabilities of approximately $350,000 relating to
such obligations.

The Board of Directors has approved the sale of the Company's hotel  franchising
business.  The Company's June 30, 2002 balance sheet includes  deferred costs of
$879,145 relating to the hotel franchising business. Management expects proceeds
from the sale to exceed such amount,  therefore  no provision  for loss has been
made.  The  timing  and  ultimate  proceeds  from the  anticipated  sale  remain
uncertain.

The Company experienced negative cash flow from operations of approximately $1.9
million during the first half of 2002, including approximately $415,000 relating
to the Company's  discontinued hotel management and hotel franchising  segments.
The  Company  also  repaid  approximately  $530,000  of  debt  obligations,  not
including repayments related to the sale of properties (see below). Cash inflows
of approximately  $570,000 resulted from principal  receipts on notes receivable
and over $1.6 million from the sale of hotel  properties  after the repayment of
approximately $6.2 million of related mortgage obligations.  The combined effect
of these and other  activities  resulted in a decrease in cash of  approximately
$312,000  from  December 31, 2001.  The Company's  hotel  operations  are highly
seasonal.  Historically, the Company's hotel revenues and operating profits have
been stronger  during the second and third  quarters as opposed to the first and
fourth  quarters.  Management  expects this trend to continue and believes  that
additional  cash will be generated  from third  quarter hotel  operations,  from
additional  sales  of  hotel  properties,  and  possibly  from the sale of other
assets.

As of December 31, 2001 the Company had 15 owned or leased properties classified
as held for sale.  Seven hotel  properties were sold during the first and second
quarters of 2002 and an  additional  property was sold in July 2002.  Two others
are presently  under contract for sale.  Further,  three  long-term hotel leases
were terminated during the first quarter . All of the Company's  remaining owned
hotels are held for sale.

The Company is also exploring the  possibility  of selling its notes  receivable
portfolio.  If the Company completes the sale of its hotel franchising business,
its hotels, and its notes receivable  portfolio;  virtually all of the Company's
assets  will  have  been  sold  and  the  Company's  operations,   as  presently
configured, will have ceased.


Liquidity and Capital Resources

The  Company  has  suspended  payment  of  preferred  stock  dividends  and  has
negotiated  deferrals  of certain  note  payable  obligations.  The  Company has
significantly  reduced  personnel  and  implemented a salary  deferral  program.
Certain other overhead costs have been reduced or eliminated. The combination of
these and the previously  discussed actions are expected to reduce the Company's
negative cash flow from operations to an amount which  management  expects could
be funded from continued property sales and other sources.

The Company is presently in default on certain of its note payable  obligations.
Management is presently  conducting  negotiations  with certain of its creditors
regarding the  modification  of repayment  terms. If such  negotiations  are not
successful,  the  Company  will  most  likely  not be  able to  satisfy  all its
obligations as they become due.

Management is also  exploring  other  sources of liquidity as further  described
above. No assurance can be given that any of the previously described activities
will be  successful.  These  circumstances  raise  substantial  doubt  about the
Company's ability to continue as a going concern.




                                       10
<PAGE>


Contractual Commitments

Following is a summary of the Company's material contractual cash commitments as
of June 30, 2002:
<TABLE>
<CAPTION>
<S>                               <C>                 <C>                 <C>                    <C>
                                        *  Notes           Operating      **  Contingent
     Due In:                             Payable      Lease Payments         Obligations                 Total
                                  --------------      --------------      --------------         -------------

     Remainder of 2002             $   8,537,680             459,596             700,068             9,697,344
     2003                                751,641             717,120           1,230,251             2,699,012
     2004                                692,507             697,184             992,228             2,381,919
     2005                                468,305             637,655             742,700             1,848,660
     2006                                325,669             617,100             674,556             1,617,325
     Thereafter                        7,289,132           5,228,300           7,220,409            19,737,841
                                  --------------      --------------      --------------         -------------
                                   $  18,064,934           8,356,955          11,560,212            37,982,101
                                  ==============      ==============      ==============         =============
</TABLE>

     *    Includes capital lease obligations of $115,006 in 2002.

     **   Contingent  obligations  consist of rent and debt payments relating to
          leases  and  notes  payable  on which  other  entities  are  primarily
          obligated.  (See "ITEM 3.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES
          ABOUT  MARKET  RISK.") The Company  will become  responsible  for such
          obligations should the primary obligors default. Thus far, the Company
          has not  been  required  to make  any  such  payments.  If  management
          determines  that the Company  will more likely than not be required to
          make any payments  relating to contingent  obligations,  the liability
          for such will be accrued and reported as an obligation of the Company.


Material Changes in Results of Operations

The decline in hotel revenues is principally  attributable  to the 2001 and 2002
property  sales.  Same hotel  revenues in the  aggregate  declined from the same
three and six month  periods in 2001 which  continues  to reflect  the  weakened
economic conditions affecting the hospitality  industry.  The property sales and
revenue  declines   resulted  in  reduced   earnings  before  interest,   taxes,
depreciation,  amortization  and  rent  ("EBITDAR")  from the  hotel  operations
segment  from  $1,996,267  in the first half of 2001 to  $456,183 in the current
half and from  $1,464,501  in the  second  quarter  of 2001 to  $332,300  in the
current second quarter.  Negotiated  first quarter rent  abatements  relating to
terminated  leases and the  elimination  of  depreciation  expense  relating  to
properties  held for sale  resulted  in a  reduction  of the  first  half  hotel
operations  segment  loss of  approximately  $360,000.  The net  second  quarter
results  declined  by  over  $130,000  in  spite  of  a  $190,000   decrease  in
depreciation  expense.  This indicates that the properties  which remain held by
the  Company  are not as  profitable  as the  properties  which  have been sold.
Management expects continued reductions in hotel revenues,  EBITDAR, and segment
losses as additional properties are sold and leases terminated.

As discussed above,  due to the planned sale of the Company's hotel  franchising
business, its results are included in discontinued  operations.  Had its results
been included in continuing  operations,  the hotel franchising  segment results
would have been reported as follows:

<TABLE>
<CAPTION>
<S>                                      <C>               <C>                   <C>              <C>
                                           Six Months        Six Months          Three Months     Three Months
                                         June 30, 2002     June 30, 2001         June 30, 2002    June 30, 2001
                                         -------------     -------------         -------------    -------------

       Revenues                           $   803,247          1,010,592              394,297          505,034
       Expenses                               409,757            570,842              201,286          270,180
                                         -------------     -------------         -------------    -------------

          EBITDAR                             393,490            439,750              193,011          234,854

       Amortization                            63,000             63,000               31,500           31,500
                                         -------------     -------------         -------------    -------------


       Income before income taxes         $   330,490            376,750              161,511          203,354
                                         =============     =============         =============    =============
</TABLE>


                                       11
<PAGE>


The hotel management segment lost $423,784 and $168,738 during the six and three
month  periods ended June 30, 2001,  respectively.  Such amounts are included in
discontinued operations.  Net expenditures of approximately $750,000 relating to
the  operation  of and phasing out of the hotel  management  business  were made
during  the  first  half of 2002  and were  charged  to  previously  established
reserves for such. As discussed above, management expects approximately $350,000
of additional expenditures to be made.

Net losses of approximately $3.8 million resulting from first and second quarter
2002 hotel  property  sales were charged to  previously  established  impairment
allowances  and  therefore  had no  impact  on 2002  net  loss.  Net  losses  of
approximately  $1.3 million  resulting  from first and second quarter 2001 hotel
property sales were charged to previously  established impairment allowances and
therefore had no impact on 2001 net loss.

Corporate  expenses,  EBITDAR loss, and loss before income taxes  decreased from
the first and second quarters of 2001. This is primarily attributable to expense
reductions which were offset somewhat by increased professional fees. Management
expects this may continue.

The Company files income tax returns and recognizes income tax expense (benefit)
on an annual calendar basis. In the fourth quarter of 2000,  management  elected
to establish a valuation allowance for the full amount of the Company's deferred
tax assets. Consequently, no deferred tax benefit has been recognized in 2001 or
2002.


Risk Factors

This Form 10-Q  contains  forward  looking  statements  that  involve  risks and
uncertainties.  Statements  contained in this Form 10-Q that are not  historical
facts are forward looking statements that are subject to the safe harbor created
by the Private  Securities  Litigation  Reform Act of 1995. The Company's actual
results may differ  significantly  from the results  indicated  by such  forward
looking statements.

The  Company is subject to a number of risks,  including  the  general  risks of
investing in real estate, the illiquidity of real estate,  environmental  risks,
possible  uninsured or under insured  losses,  fluctuations  in property  taxes,
hotel operating  risks,  the impact of  competition,  the difficulty of managing
growth, seasonality, the risks inherent in operating a hotel franchise business,
and the uncertainty of obtaining  additional financing or extensions of existing
credit  facilities as needed.  For a discussion of these and other risk factors,
see the "RISK FACTOR" section contained in the Company's  Registration Statement
on Form S-3 (File No.  333-37691).  Also see "Liquidity  and Capital  Resources"
above and "Item 3. Quantitative and Qualitative Disclosures About Market Risk."


Critical Accounting Policies

The Company defines critical  accounting  policies as those accounting  policies
that require management to exercise their most difficult, subjective and complex
judgements.

Discontinued Operations

The Company  reports its results of  discontinued  operations in accordance with
APB Opinion No. 30,  Reporting the Results of Operations - Reporting the Effects
of  Disposal  of a  Segment  of  a  Business,  and  Extraordinary,  Unusual  and
Infrequently Occurring Events and Transactions.  Under APB Opinion No. 30, since
the Company has determined to discontinue  the hotel  management  segment of its
business  and to  sell  its  hotel  franchising  business,  the net  results  of
operations  and cash flows from the  management  and  franchising  segments  are
segregated and reported separately from the results of operations and cash flows
from continuing operations.  Additionally, costs associated with the phasing out
of the  management  segment and the expected  losses to be sustained  during the
phase out period were  accrued in the fourth  quarter of 2002 and reported as an
additional component of discontinued operations. Such accrued costs are based on
management's  current best  estimates and are subject to changes based on future
events.

Property, Equipment, and Leasehold Interests Held for Sale

Property,  equipment,  and leasehold  interests  held for sale are stated at the
lower of cost or fair  value  less costs to sell.  Fair  value of  property  and


                                       12
<PAGE>

leasehold  interests held for sale has been determined by the Company based upon
current market information  assuming a non-distressed  sale. Future events, such
as a forced  liquidation,  could negatively  impact such values.  At the date on
which a decision is made to dispose of a property  or  leasehold  interest,  any
amount by which the carrying amount of an asset exceeds the fair value less cost
to sell is  reported  as a provision  for  impairment.  Due to the intent of the
Company to dispose of such properties and leasehold interests in the short-term,
the properties, leasehold interests, and all related notes payable are initially
reflected  as  current  in  the  consolidated  balance  sheets.  Properties  and
leasehold interests which have remained held for sale for more than one year and
are not under contract for sale are classified as noncurrent.

Going Concern

Management is continuing  negotiations  with  creditors  for  extensions  and/or
reductions of obligations.  Management believes that it is possible that current
obligations  in 2002 could be met  through  assets  sales and  restructuring  of
certain  obligations.  However,  no assurance can be given that such  activities
will be  successful.  These  circumstances  raise  substantial  doubt  about the
Company's  ability to continue as a going concern.  The  consolidated  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.


Effect of New Accounting Pronouncements

In April 2002, the FASB issued SFAS 145  "Rescission  of FASB  Statements No. 4,
44, and 64, Amendment of FASB Statement No. 13, and Technical  Corrections." The
Company is required to adopt SFAS 145 on January 1, 2003. SFAS 145 significantly
limits the treatment of losses  associated with early  extinguishment of debt as
an   extraordinary   item.   SFAS  145  also  impacts   certain   sale-leaseback
transactions. Upon adoption, management does not believe that SFAS 145 will have
a material impact on the Company's financial position,  results of operations or
cash flows.

In July 2002, the FASB issued SFAS 146  "Accounting  for Costs  Associated  with
Exit or  Disposal  Activities."  The  Company is  required  to adopt SFAS 146 on
January 1, 2003. SFAS 146 requires that expenses  associated with  restructuring
charges be  accrued  as  liabilities  in the  period in which the  liability  is
incurred.  Management  does not  anticipate the adoption of SFAS 146 will have a
material impact on the Company's  financial  position,  results of operations or
cash flows.







                                       13
<PAGE>

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As of June 30, 2002, the Company's  obligations  included variable rate mortgage
notes and a bank note with  aggregate  principal  balances of  $1,553,095  which
mature at various dates through 2015.  The Company is exposed to the market risk
of  significant  increases in future  interest  rates.  Each  incremental  point
increase  in the prime  interest  rate would  increase  the  Company's  interest
expense by  approximately  $15,500 per year. This risk is somewhat  mitigated in
that  inflationary  increases in interest  rates would  theoretically  result in
increases in average hotel room rates. Also,  significant  increases in interest
rates would have a dampening  effect on additions of  competitive  hotels in the
Company's markets.

At June 30, 2002,  the Company's  unrestricted  investment  securities  included
equity  securities  valued at  $21,513.  The Company is exposed to the risk that
such  securities  will become  worthless.  The Company's  restricted  investment
securities also include equity securities.  Such restricted  securities comprise
the assets of the Company's deferred  compensation plan and changes in the value
of such securities have no net impact on the Company's earnings.

The ultimate  collection of the Company's notes receivable is subject to various
credit risks.  Net notes  receivable at June 30, 2002 amounted to $4,974,765 and
consisted  of 31 notes,  most of which  were  collateralized  by or  related  to
various hotel assets.  Additionally,  the Company remains contingently liable on
four  mortgage  notes  payable on which the  Company is  guarantor  relating  to
properties  sold in 2000,  2001, and 2002. The notes'  balances at June 30, 2002
were  approximately  $5  million  and the  notes  are due in  aggregate  monthly
installments of $47,945. The Company also remains contingently liable for future
minimum rental payments  totaling  approximately  $1.9 million on sold leasehold
interests and on subleased and assigned properties and equipment in the event of
default by the purchasers,  sublessees and/or assignees.  The collection of such
notes  receivable  and the  potential  financial  exposure for  guaranteed  note
obligations  and  contingent  rents is  determined by the ability of other hotel
operators  to  satisfy  these   obligations.   Their  ability  to  satisfy  such
obligations is subject to many risks,  including economic  conditions  affecting
the hotel industry,  their ability to effectively manage their hotel assets, new
competition,  and  other  factors.  See  "Item 2.  Management's  Discussion  and
Analysis  of  Financial  Condition  and  Results of  Operations.  -  Contractual
Commitments" for a summary of contingent liabilities.


                                       14
<PAGE>


                          PART II - OTHER INFORMATION

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

As of August 14, 2002, a total of $231,250 of Series B preferred  dividends  are
in arrears.

As of August  14,  2002,  a total of  $293,570  of  accrued  interest  which was
previously  due  and  payable  remained  unpaid  on  the  Company's  convertible
debenture notes.


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

The  Company  held its Annual  Meeting of  Stockholders  on June 20,  2002.  The
purpose of the meeting was to consider and vote upon the following matters:

1.   To  elect  five  directors  to  serve  until  the next  annual  meeting  of
     stockholders and until their successors are elected and have qualified.

2.   To  transact  such other  business  as may have  properly  come  before the
     meeting.

The Company's five incumbent  directors (Douglas C. Collins,  David C. Glickman,
Robert B. Lee,  David B.  Mumford,  and Steven A. Van Dyke) were  nominated  for
re-election. Each of the nominees was elected as follows:

                                     Votes For            Votes Withheld
                                    -----------           --------------
      Douglas C. Collins             1,627,530                     4,722

      David C. Glickman              1,627,425                     4,827

      Robert B. Lee                  1,627,535                     4,717

      David B. Mumford               1,627,294                     4,958

      Steven A. Van Dyke             1,627,425                     4,827


No other matters came before the meeting.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(A) EXHIBIT INDEX

    Exhibit             Description
    -------             -----------

    3(i)                Articles    of   Incorporation. (Incorporated    by
                        reference  to  Exhibit  3(i)  to  the  Registrant's
                        Registration  Statement on Form 10-SB  (No.0-22132)
                        which became effective on November 22, 1993.)

    3(i)(a)             Certificate   of   Amendment  of   Certificate   of
                        Incorporation.   (Incorporated   by   reference  to
                        Exhibit 3(i)(a) to the  Registrant's  Annual Report
                        on Form 10-KSB for the fiscal  year ended  December
                        31, 1994.)

                                       15
<PAGE>

    3(i)(b)             Certificate   of   Amendment  of   Certificate   of
                        Incorporation.   (Incorporated   by   reference  to
                        Appendix "A" to the  Registrant's  Definitive Proxy
                        Statement  filed with the  Securities  and Exchange
                        Commission on June 9, 1997.)

    3(i)(c)             Certificate   of   Amendment  of   Certificate   of
                        Incorporation.   (Incorporated   by   reference  to
                        Appendix "A" to the  Registrant's  Definitive Proxy
                        Statement  filed with the  Securities  and Exchange
                        Commission on May 5, 1998.)

    3(ii)               By-Laws - Amended and Restated as of June 27, 1994.
                        (Incorporated  by reference to Exhibit 3(ii) to the
                        Registrant's  Annual  Report on Form 10-KSB for the
                        fiscal year ended December 31, 1994.)

    4(i)                Certificate of Designation,  Preferences and Rights
                        of  Series B  Preferred  Stock  of the  Registrant.
                        (Incorporated  by  reference to Exhibit 4(i) to the
                        Registrant's  Quarterly Report on Form 10-Q for the
                        quarter ended March 31, 2001.)

    11                  Statement re: Computation of per share Earnings

    99.1                Certification of Periodic Financial Report


(B) REPORTS ON FORM 8-K

    On or about May 28, 2002,  the Company  filed a Current  Report on Form 8-K
    which reported the Company's  imminent delisting of its common shares by The
    Nasdaq Stock Market, Inc.






                                       16
<PAGE>

                                   SIGNATURES


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





                                          Buckhead America Corporation
                                          (Registrant)



August 19, 2002                           /s/ Douglas C. Collins
-----------------------------             ---------------------------
Date                                      Douglas C. Collins
                                          President and Chief Executive Officer



August 19, 2002                           /s/ Robert B. Lee
-----------------------------             ---------------------------
Date                                      Robert B. Lee
                                          Senior Vice President and
                                          Chief Financial and Accounting Officer



                                       17


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