1

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

                                   FORM 10-QSB


(Mark One)

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

     For the quarterly period ended SEPTEMBER 30, 1999

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

     For the transition period from _____________ to _____________

          Commission file number 0-22132


      BUCKHEAD AMERICA CORPORATION (Exact name of small business issuer as
                            specified in its charter)

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

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

                                 (770) 393-2662
                           (Issuer's telephone number)

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

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares  outstanding of each of the issuer's  classes of
common equity, as of the latest practicable date: November 4, 1999

           Common stock, par value $.01 - 2,029,313 shares outstanding

     Transitional Small Business Disclosure Format

     (Check one): Yes      No X


<PAGE>


                         PART I - FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS


                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

                   Condensed Consolidated Financial Statements

                           September 30, 1999 and 1998

                                   (Unaudited)


<PAGE>


                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

                      Condensed Consolidated Balance Sheet
                               September 30, 1999
                                   (Unaudited)


                                     Assets
Current assets:
    Cash and cash equivalents, including
     restricted cash of $598,730                $   3,124,064
    Investment securities                           2,589,799
    Accounts receivable, net                        2,130,561
    Current portions of notes receivable              455,342
    Other current assets                              332,412
                                                -------------
             Total current assets                   8,632,178

Noncurrent portions of notes receivable, net        3,414,511
Property and equipment, at cost, net               36,268,877
Deferred tax assets                                 2,458,032
Deferred costs, net                                 2,465,403
Leasehold interests, net                            2,590,163
Other assets                                        1,369,433
                                                -------------

                                                $  57,198,597
                                                =============

                      Liabilities and Shareholders' Equity
Current liabilities:
    Accounts payable and accrued expenses       $   3,524,525
    Current portions of notes payable               1,077,538
                                                -------------
             Total current liabilities              4,602,063

Noncurrent portions of notes payable               29,289,613
Other liabilities                                     386,474
                                                -------------
             Total liabilities                     34,278,150
                                                -------------


Shareholders' equity:
    Series A preferred stock; $100 par value;
      200,000 shares authorized; 30,000 shares
      issued and outstanding                        3,000,000
    Common stock; $.01 par value; 5,000,000
     shares authorized; 2,094,655 shares issued
     and 2,029,313 shares outstanding                  20,947
    Additional paid-in capital                      7,854,921
    Retained earnings                              12,688,217
    Accumulated other comprehensive income(loss)     (136,358)
    Treasury stock (65,342 shares)                   (507,280)
                                                -------------
             Total shareholders' equity            22,920,447
                                                -------------

                                                $  57,198,597
                                                =============


See accompanying notes to condensed consolidated financial statements.


<PAGE>


                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

                   Condensed Consolidated Statements of Income
                  Nine Months ended September 30, 1999 and 1998
                                   (Unaudited)





                                                      1999          1998
                                             -------------   -----------
Revenues:
    Hotel revenues                           $  19,446,646   19,846,707
    Investment income                              327,020      110,551
    Other income, net                            5,367,513    1,558,728
                                             -------------   -----------
               Total revenues                   25,141,179   21,515,986
                                             -------------   -----------

Expenses:
    Hotel operations                            15,734,038   15,473,788
    Other operating and administrative           2,386,358    2,423,977
    Depreciation and amortization                1,217,548    1,325,622
    Interest                                     2,364,490    2,175,301
                                             -------------   -----------
             Total expenses                     21,702,434   21,398,688
                                             -------------   -----------

             Income before income taxes          3,438,745      117,298

Provision for income tax expense (benefit)       1,385,000      (10,000)
                                             -------------   -----------

             Net income                      $   2,053,745      127,298
                                             =============   ===========


Net income(loss) per common share:
    Basic                                    $        0.93        (0.05)
                                             =============   ===========

    Diluted                                  $        0.72        (0.05)
                                             =============   ===========


See accompanying notes to condensed consolidated financial statements.


<PAGE>


                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

                   Condensed Consolidated Statements of Income
                 Three Months ended September 30, 1999 and 1998
                                   (Unaudited)





                                                      1999          1998
                                             -------------   -----------
Revenues:
    Hotel revenues                           $  6,901,554     7,799,274
    Investment income(loss)                        83,037       (44,828)
    Other income, net                             807,281       860,367
                                             -------------   -----------
               Total revenues                   7,791,872     8,614,813
                                             -------------   -----------

Expenses:
    Hotel operations                            5,490,510     6,080,479
    Other operating and administrative            759,053       781,710
    Depreciation and amortization                 345,290       453,197
    Interest                                      732,379       760,909
                                             -------------   -----------
             Total expenses                     7,327,232     8,076,295
                                             -------------   -----------

             Income before income taxes           464,640       538,518

Provision for income tax expense                  185,000       140,000
                                             -------------   -----------

             Net income                      $    279,640       398,518
                                             =============   ===========




Net income per common share:
    Basic                                    $       0.10          0.17
                                             =============   ===========

    Diluted                                  $       0.10          0.16
                                             =============   ===========

See accompanying notes to condensed consolidated financial statements.


<PAGE>


                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                  Nine Months Ended September 30, 1999 and 1998
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                        1999                      1998
                                                                                ------------             -------------
<S>                                                                             <C>                      <C>
Cash flows from operating activities:
     Net income                                                                 $ 2,053,745                   127,298
     Adjustments to reconcile net income
      to net cash provided (used) by
      operating activities:
       Depreciation and amortization                                              1,217,548                 1,325,622
       Sales (purchases) of trading securities, net                              (2,469,018)                2,998,950
       Gains on property transactions, net                                       (5,471,395)                 (820,236)
       Minority interests in partnership income                                   2,521,962                   201,068
       Other, net                                                                   999,558                   193,447
                                                                                ------------             -------------
        Net cash provided (used) by
         operating activities                                                    (1,147,600)                4,026,149
                                                                                ------------             -------------

Cash flows from investing activities:
     Note receivable principal receipts                                             183,725                   598,958
     Originations of notes receivable                                              (165,000)                 (878,721)
     Capital expenditures                                                        (2,488,400)               (4,745,570)
     Proceeds from property sales                                                 8,379,512                   749,611
     Other, net                                                                    (672,974)               (1,328,817)
                                                                                ------------             -------------
        Net cash provided (used) by
         investing activities                                                     5,236,863                (5,604,539)
                                                                                ------------             -------------

Cash flows from financing activities:
     Repayments of notes payable                                                 (1,827,961)                 (620,232)
     Additional borrowings                                                        2,495,018                 2,184,872
     Distributions to minority interests                                         (3,206,894)                 (164,750)
     Preferred stock dividends                                                      (94,375)                 (225,000)
     Other, net                                                                      64,819                   325,742
                                                                                ------------             -------------
        Net cash provided (used) by
         financing activities                                                    (2,569,393)                1,500,632
                                                                                ------------             -------------


Net increase (decrease) in cash and
   cash equivalents                                                               1,519,870                   (77,758)

Cash and cash equivalents at beginning
   of period                                                                      1,604,194                 3,281,774
                                                                                ------------             -------------

Cash and cash equivalents at end of period                                      $ 3,124,064                 3,204,016
                                                                                ============             =============

                                                                                                           (Continued)

</TABLE>

See accompanying notes to condensed consolidated financial statements.


<PAGE>


                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

           Condensed Consolidated Statements of Cash Flows - Continued
                  Nine Months Ended September 30, 1999 and 1998
                                   (Unaudited)


Supplemental disclosures of noncash investing and financing activities:

In June 1999, the Company recorded the following  partial cash activity relating
to the sale of a 150-room hotel in Orlando, Florida:

             Gross sale price                           $ 13,500,000
             Portion allocated to management
               and franchise contract termination         (1,446,590)
                                                        -------------
             Net sales price                              12,053,410

             Basis in property sold                       (6,474,116)
             Costs                                          (327,682)
                                                        -------------
             Net gain                                   $  5,251,612
                                                        =============

     The  company  owns  approximately  59% of the  partnership  which owned the
     hotel.


In August  1999,  the Company  recorded  the  following  partial  cash  activity
relating to the acquisition of management contracts on nine hotel properties:

             Cash and payables                          $    506,040
             Common stock issued (65,378 shares)             392,268
                                                        -------------

             Deferred costs of management contracts     $    898,308
                                                        =============


During 1999, the Company recorded the following  partial cash activity  relating
to the sale of a hotel  property  and the sales of  leasehold  interests in four
other hotel properties:

             Proceeds:
               Cash, net of closing costs               $    709,437
               Note payable reduction                        525,000
               Notes receivable, net                         825,000
                                                        -------------
                                                           2,059,437
             Basis in assets sold                          1,839,654
                                                        -------------
             Net gains                                  $    219,783
                                                        =============



                                                          (Continued)



<PAGE>


                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

           Condensed Consolidated Statements of Cash Flows - Continued
                  Nine Months Ended September 30, 1999 and 1998
                                   (Unaudited)


In May 1998, the Company recorded the following  partial cash activity  relating
to an acquired 121-room hotel in Norcross, Georgia:

             Costs:
               Cash and payables                        $    223,101
               Debt assumed                                3,818,798
                                                        -------------

             Property and equipment acquired            $  4,041,899
                                                        =============


In June 1998, the Company recorded the following  partial cash activity relating
to the acquisition of leasehold interests in seven hotels:

             Costs:
               Cash and payables                        $    516,635
               Common stock issued                           400,000
               Notes payable issued                          400,000
                                                        -------------
                                                        $  1,316,635
                                                        =============
             Allocated to:
               Lessor=s common stock                         288,000
               Leasehold interests                         1,028,635
                                                        -------------
                                                         $ 1,316,635
                                                        =============

In August and September  1998, the Company  recorded the following  partial cash
activity relating to the refinancing of four owned hotels:

             New mortgage notes issued                  $ 4,885,000
             Discharge of old mortgage notes             (4,323,476)
             Debt issuance costs                           (187,084)
                                                        ------------
               Net proceeds                             $   374,440
                                                        ============


During 1998, the Company recorded the following  partial cash activity  relating
to the sales of leasehold interests in five hotel properties:

             Proceeds:
               Cash, net of closing costs               $    749,611
               Notes receivable, net                         750,000
                                                        ------------
                                                           1,499,611
             Basis in assets sold                            679,375
                                                        ------------

             Net gains                                  $    820,236
                                                        ============


See accompanying notes to condensed consolidated financial statements.


<PAGE>


                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

              Notes to Condensed Consolidated Financial Statements
                           September 30, 1999 and 1998
                                   (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-KSB for the year ended December 31, 1998.


   (2)    Comprehensive Income(Loss)

          Total  comprehensive  income(loss)for  the nine months ended September
          30, 1999 and 1998 was $2,065,410 and $(36,278),  respectively, and for
          the three  months ended  September  30, 1999 and 1998 was $283,529 and
          $234,942, respectively.

   (3)    Sale of Hotel

          In June 1999, the Company completed the sale of the Country Hearth Inn
          located in Orlando,  Florida for $13.5  million.  The Company  held an
          approximate 59% interest in the  partnership  which owned the hotel in
          addition to holding franchise and hotel management  contracts relating
          to the operation of the property.  After  retirement of an approximate
          $4.4 million first  mortgage  loan,  payment of certain  fees,  costs,
          bonuses,  and minority  interest  shares,  the Company=s  share of net
          proceeds was approximately $5.5 million. The Company has no obligation
          to continue to operate the property,  but plans to continue to operate
          the  hotel  under  an  agreement  with  Orange  County,  Florida  (the
          purchaser)  until  December  2000 at which time the  property is to be
          demolished to make way for  expansion of the Orange County  Convention
          Center.

          The pretax  impact of the  Orlando  hotel sale is  reflected  in other
          income  for the  nine  month  period  ended  September  30,  1999.  In
          connection  with the  transaction,  other  income  includes  franchise
          termination fees of approximately  $640,000 and management termination
          fees  of   approximately   $605,000.   Other   income  also   includes
          approximately  $3 million which  represents the Company=s share of the
          pretax gain on sale net of termination fees to others,  cost accruals,
          and minority interest=s share of the gain.


<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS.

FINANCIAL CONDITION AND CHANGES IN FINANCIAL CONDITION.

First Nine Months of 1999

In June 1999,  the Company  completed the sale of the Country Hearth Inn located
in Orlando,  Florida for $13.5  million.  The Company  held an  approximate  59%
interest  in the  partnership  which  owned the  hotel in  addition  to  holding
franchise  and hotel  management  contracts  relating  to the  operation  of the
property.  After  retirement of an approximate $4.4 million first mortgage loan,
payment of certain fees,  costs,  bonuses,  and minority  interest  shares,  the
Company's  share  of  net  proceeds  was  approximately   $5.5  million.   After
distributions to minority interest partners of approximately  $3.2 million,  the
Company began  soliciting for additional  partnership  units.  During  September
1999, the Company purchased an additional 13.4% of the partnership.  The Company
has no obligation to continue to operate the property,  but plans to continue to
operate the hotel under an agreement with Orange County, Florida (the purchaser)
until  December  2000 at which time the property is to be demolished to make way
for expansion of the Orange County Convention Center.

In August 1999, the Company purchased nine hotel management  agreements from the
members of Quality Lodging,  LLC ("Quality") for an aggregate  purchase price of
approximately $900,000,  including the issuance of 65,378 unregistered shares of
the  Company's  common  stock.  The Company  has agreed to  purchase  additional
contracts  from Quality when the related  hotel  properties  are  completed  and
opened.

The Company sold its leasehold  interests in three hotel  properties  during the
first quarter of 1999 resulting in aggregate  gains of  approximately  $300,000.
These sales  represent a  continuation  of the  Company's  previously  announced
desire  to divest  itself  of older  properties.  One  additional  such sale was
completed in September 1999 resulting in a net gain of approximately $205,000.

In July 1999,  the Company  completed the sale of one of its three 40-room hotel
properties  in  Texas.  The  Company  is  presently   marketing  the  other  two
properties.  The Company recognized a second quarter charge of $300,000 relating
to the establishment of valuation reserves for these three properties.

During the first half of 1999, the Company drew down $1 million on its bank line
of credit in order to fund working capital needs and  construction  commitments.
Also,  the Company  temporarily  suspended  payment of dividends on its Series A
preferred  stock.  As  has  been  previously  disclosed,   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 further believes that the Company's  present liquidity and existing
commitments are adequate to sustain the current  operations of the Company.  The
line of credit was fully repaid in July from a portion of the proceeds  from the
Orlando  hotel sale.  The  Company  also  resumed  payment of Series A preferred
dividends.

The Company  has  continued  its  expansion  of the  Country  Hearth Inn lodging
system.  Nine  additional  properties  were  opened  in the  first  half of 1999
bringing the total to 46 properties  operating in fourteen states. An additional
24 properties are in various stages of development;  approximately half of which
are expected to open within the next 12 months.

Capital   expenditures   during  the  first  nine  months  of  1999   aggregated
approximately  $2.5 million and mostly  related to two new Company owned Country
Hearth  Inns  in   Eddyville,   Kentucky  and   Washington   Courthouse,   Ohio.
Approximately  $1.5 million of such expenditures was funded by construction loan
commitments  and the remainder  was funded by working  capital and the Company's
line of credit.

The Company  also has  continued  expansion  of its hotel  management  business.
During the first quarter of 1999, the Company entered into four additional hotel
management contracts with third party owners and the Company began management of
the nine Quality hotel properties mentioned above during the third quarter.

Management  presently  intends to use the  remaining  proceeds  from the Orlando
hotel sale to fund working capital needs and to continue to invest in the growth
of the  Country  Hearth  Inn  lodging  system  and the  expansion  of its  hotel
management  business.  Also,  the Company's  board of directors  authorized  the
repurchase of up to 100,000  shares of the Company's  outstanding  common stock.
Through  November  12,  1999,  6,000  shares have been  repurchased  in the open
market.


First Nine Months of 1998

The Company began 1998 with 33 hotel properties  owned or leased,  36 properties
managed,  and 29 Country  Hearth Inn franchise  properties  open and  operating.
Seven additional Country Hearth Inn properties were opened during the first nine
months of 1998.

Construction of an additional Company owned Country Hearth Inn in Nicholasville,
Kentucky was underway and the Company  acquired  rights to a site in  Eddyville,
Kentucky  which  began   construction  in  the  second  quarter  of  1998.  Loan
commitments  were in place which  funded the major  portion of the  construction
costs for both of these projects. The Nicholasville property opened in September
1998 and the Eddyville property opened in March 1999.

Renovation  and  conversion of two Ohio  properties  to Country  Hearth Inns was
begun in the  first  quarter  using  funds  from  the  Company's  December  1997
debenture sale. Both conversions were completed during 1998.

Capital  expenditures in the first nine months of 1998 amounted to approximately
$4.7 million.  Construction  and other loan commitments  provided  approximately
$2.2  million of these  funds.  The  remainder  was provided by a portion of the
proceeds from the Company's December 1997 sale of convertible debentures.

In May 1998,  the Company  acquired a 121-room  hotel in  Norcross,  Georgia for
approximately $4 million, most of which was financed by the assumption of a $3.8
million first mortgage loan.

In June 1998,  the Company  entered into lease  agreements for the operation and
management  of seven  hotels  owned by Host  Funding,  Inc.("Host").  The leased
properties  are  operated as "Sleep  Inns" and "Super 8" hotels;  are located in
Florida, Illinois, Missouri, Kentucky, and Mississippi; and aggregate 450 rooms.

In August 1998, the Company  refinanced three 40-room hotel properties.  The new
mortgage  notes bear  interest at 8.25% and are  amortized  over  twenty  years;
replacing  floating  rate notes  which had  relatively  shorter  maturities.  In
September  1998,  the Company  refinanced  its Daytona hotel  property.  The new
mortgage  note  bears  interest  at 8.5% and is  amortized  over  twenty  years;
replacing a note which was to be due in April 1999.  The four new notes  totaled
$4,885,000  and after  satisfaction  of the old notes and  issuance  costs,  the
Company  netted  proceeds  of  approximately  $375,000 in addition to locking in
long-term fixed rate financing on these four properties.

In 1998,  the Company  began a program of  divesting  its older less  profitable
hotel properties. During the first nine months of 1998, five leasehold interests
in hotel properties were sold for an aggregate gain of approximately $820,000.


RESULTS OF OPERATIONS

Periods ended September 30, 1999 and 1998

The pretax impact of the Orlando hotel sale is reflected in other income for the
nine month period ended September 30, 1999. In connection with the  transaction,
other income includes franchise  termination fees of approximately  $640,000 and
management  termination  fees  of  approximately  $605,000.  Other  income  also
includes  approximately  $3 million which  represents the Company's share of the
pretax  gain on sale net of  termination  fees to  others,  cost  accruals,  and
minority  interest's  share of the gain.  Other  income  in the 1999 nine  month
period also includes the $300,000  valuation  charge relating to the Texas hotel
properties.  Other  income in all  periods  presented  also  includes  the gains
relating  to the sales of  leasehold  interests  in hotel  properties  described
above.

Earnings before interest,  taxes,  depreciation and amortization  ("EBITDA") for
the nine months ended  September 30, 1999 and 1998  amounted to  $7,020,783  and
$3,618,221,  respectively.  EBITDA for the three months ended September 30, 1999
and 1998  amounted to $1,542,309  and  $1,752,624,  respectively.  Excluding the
impact of the property transactions described in the preceding paragraph, EBITDA
for the 1999 three and nine month periods amounted to $1,389,174 and $2,758,040,
respectively,  versus  $1,167,510  and  $2,755,656,  respectively  for the  same
periods  in 1998.  During  the first  half of 1999,  a decline  in  revenue  and
operating profit occurred in the Company's older leasehold  properties which are
held for sale.  Also, the Company's  Orlando hotel  experienced a second quarter
operating profit decline of approximately  $125,000 attributable to a decline in
convention  center  business.  The first half of 1999 EBITDA was also negatively
impacted by new property  openings  which take time to ramp up to normal  profit
levels.




Excluding the impact of the property  transactions,  1999 third  quarter  EBITDA
increased  by  $221,664  versus  the  same  period  in 1998.  This is  primarily
attributable  to increases in franchise and  management  fee revenues  resulting
from the increases in the number of franchised and managed hotel properties.

Hotel  revenues and operating  profits for the three months ended  September 30,
1999 amounted to $6,901,554 and $1,411,044,  respectively, versus $7,799,274 and
$1,718,795 in 1998.  These  reductions  result from the sale of the older,  less
profitable hotel  properties.  The properties sold were generally  profitable in
the third quarter and marginally profitable or unprofitable during the remaining
nine months of each year.

The  properties  presently  owned or  leased by the  Company  are  subject  to a
significant  amount  of  seasonal  fluctuation.   Most  of  the  properties  are
profitable  during the third quarter and will generally not be profitable during
the fourth quarter.  On an annual basis,  all properties are expected to satisfy
their debt,  rent,  and other cash  obligations  in addition  to  providing  the
Company with management and/or franchise fees.

Franchising profits increased over $600,000 due to the Orlando termination fees.
Franchising profits for the remainder of 1999 and beyond are expected to further
increase as a result of additional  franchise  property openings and a reduction
in payroll relating to the resignation of an executive officer.

Interest  income  increased  during the three and nine month 1999 periods due to
increases in the notes  receivable  portfolio  resulting  from the 1998 and 1999
leasehold interest sales.  Other operating and  administrative  expenses in 1999
are comparable to 1998 amounts and in line with management expectations.

Changes in depreciation  and interest expense are directly related to changes in
property and equipment and related  mortgages  resulting from new  construction,
other acquisitions, and disposals.

The Company files income tax returns and recognizes income tax expense (benefit)
on an annual  calendar  basis.  The provisions for income tax expense  (benefit)
recognized  in  the  quarterly   condensed   financial   statements   represents
management's  estimates of the impact on the annual income tax expense (benefit)
which results from such quarter's operations.


YEAR 2000 ISSUES

The following  information is being provided as a Year 2000 Readiness Disclosure
Statement,  as is subject to the  provisions  of the Year 2000  Information  and
Readiness Disclosure Act.

The  Year  2000   compliance   issue  concerns  the  inability  of  computerized
information  systems to  accurately  calculate,  store or use a date after 1999.
This could result in a system failure or miscalculations  causing disruptions of
operations.  The  Year  2000  issue  affects  virtually  all  companies  and all
organizations.  The Company  recognizes  the  importance  of  ensuring  that its
business  operations are not disrupted as a result of Year 2000 related computer
system and software issues.

The  Company  has   conducted   an   assessment   of  its   computer   and  data
telecommunications  information  systems ("IT Systems"),  as well those computer
systems  that  do not  relate  to  information  technology,  including,  without
limitation,  electronic locks,  telephone  systems,  elevators,  VCR's and other
guest service related systems ("Non-IT  Systems"),  to identify needed Year 2000
remediation.  The Company  currently  anticipates that its Year 2000 assessment,
remediation, and testing efforts will be completed prior to December 31, 1999.

The Company's home office, and management company IT Systems have been evaluated
and tested and are considered to be Year 2000 compliant.  All hotel front office
systems have been  evaluated.  Seven such systems were found not to be Year 2000
compliant and will need to be upgraded or replaced at an estimated total cost of
$40,000.

The Company has communicated with its significant  vendors and service providers
regarding the extent to which these entities have addressed Year 2000 compliance
issues. The most critical IT System, credit card processing, has been tested and
found to be Year 2000 compliant.  Other vendor and service provided systems such
as electronic  lock systems and guest related  telephone and television  systems
have been tested and found to be Year 2000  compliant.  All other less  critical
systems are currently being  evaluated.  Management  estimates that this overall
process is approximately 90% complete and expenditures to remediate any problems
encountered will not be significant.

The Company  has not  communicated  with its hotel  guests  regarding  Year 2000
compliance  issues,  since none of its guests is considered  to be  individually
significant  and the Company  receives no electronic  data from its guests other
than credit card information which is discussed above.

Based on the  Company's  assessments  and  available  information,  the  Company
believes that its cost to ensure Year 2000 compliance will not exceed  $100,000.
As of October 31, 1999 the Company had incurred approximately $32,000 related to
Year 2000  assessment,  remediation and testing.  The Company  believes that the
Year 2000 issue will not pose significant  operational problems for the Company.
However,  if all Year 2000 issues are not properly  identified,  or  assessment,
remediation and testing are not completed timely, there can be no assurance that
the Year 2000 issue will not materially  adversely impact the Company's  results
of  operations  or adversely  affect the  Company's  relationships  with guests,
vendors or others.  Additionally,  there can be no assurance  that the Year 2000
issues of other  entities,  including,  but not limited to, the Company's  third
party  vendors and service  providers  and its guests,  will not have a material
adverse impact on the Company's  systems or results of  operations.  The Company
has not engaged an independent expert solely to assist in its Year 2000 efforts.
However, when installing new software, the Company requires year 2000 compliance
assurances from its vendors.

The Company has not yet determined the operational costs and problems that would
be reasonably likely to result from the failure by the Company and certain third
parties to complete  efforts  necessary  to achieve  Year 2000  compliance  on a
timely basis.  The Company has not developed a contingency plan for dealing with
the most  reasonably  likely worst case scenario,  and such scenario has not yet
been clearly  identified.  The Company currently plans to complete such analysis
and contingency planning prior to December 31, 1999.

Readers are cautioned that forward-looking statements regarding Year 2000 issues
should be read in conjunction with the cautionary  statement in the RISK FACTORS
section which follows.


RISK FACTORS

This Form 10-QSB  contains  forward  looking  statements  that involve risks and
uncertainties.  Statements contained in this Form 10-QSB 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 underinsured 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 risks involved in hotel renovation and construction.
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).



<PAGE>


                           PART II - OTHER INFORMATION

ITEM 2.   CHANGES IN SECURITIES

During 1999, the Company  temporarily  suspended  payments of Series A preferred
stock dividends due to liquidity requirements created by the seasonal aspects of
the Company=s  hotel  operations.  Such  preferred  dividends are cumulative and
would be required to be paid prior to any distributions to common  shareholders.
As of September  30,  1999, a total of $130,625 of Series A preferred  dividends
were in arrears.

On August 23, 1999, the Registrant issued 65,378 unregistered shares of its $.01
par value  common  stock to the  members  (Aaccredited  investors@)  of  Quality
Lodging,  LLC.  Such  shares  were  issued  as  partial  consideration  for  the
Registrant=s  purchase and assignment of hotel management agreements relating to
nine  hotel  properties.  The  consideration  received  by  the  Registrant  was
estimated  to have a fair market  value  equal to the fair  market  value of the
shares issued.

The exemption from  registration  was pursuant to Section 4(2) of the Securities
Act of 1933, as amended.

<PAGE>


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.)

     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  A
          Preferred  Stock of the  Registrant.  (Incorporated  by  reference  to
          Exhibit 3(i)(c) to the  Registrant's  Quarterly  Report on Form 10-QSB
          for the quarter ended September 30, 1997.)

     11   Statement re: Computation of per share earnings

     27   Financial Data Schedule




(B) REPORTS ON FORM 8-K

       The  Company has not filed any reports on Form 8-K during the quarter for
which this report is filed.



<PAGE>






                                   SIGNATURES


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





                          Buckhead America Corporation
                                  (Registrant)



Date:    November 12, 1999                /s/Douglas C. Collins
                                          --------------------------------------
                                          Douglas C. Collins
                                          President and Chief Executive Officer




Date:    November 12, 1999                /s/Robert B. Lee
                                          --------------------------------------
                                          Robert B. Lee
                                          Senior Vice President and
                                          Chief Financial Officer