UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

     X                  QUARTERLY  REPORT  UNDER  SECTION  13  OR  15(d)  OF THE
    ---                 SECURITIES EXCHANGE ACT OF 1934

                        For the quarterly period ended January 31, 2000

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

                     For the transition period from ____________ to ____________

                        Commission file number 001-10287

                           LIFSCHULTZ INDUSTRIES, INC.
        (Exact name of small business issuer as specified in its charter)

                  DELAWARE                                   No. 87-0448118
                  --------                                  ---------------
         (State or other jurisdiction of                    (IRS Employer
         incorporation or organization)                    Identification No.)

                    641 West 59th Street, New York, NY 10019
                    ----------------------------------------
                    (Address of principal executive offices)

                                 (212) 397-7788
                                 --------------
                           (Issuer's telephone number)

                                 Not Applicable
                                 --------------
                     (Former name, former address and former
                       fiscal year, if changed since last
                                    report.)

The number of shares of the issuer's common stock outstanding as of March 15, is
1,121,655 shares.




<PAGE>



                          PART I- FINANCIAL INFORMATION

ITEM 1.           FINANCIAL STATEMENTS
                  --------------------

                  Lifschultz Industries, Inc. and Subsidiaries
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                       January 31, 2000 and July 31, 1999

                                     ASSETS

                                                 31-Jan-00             31-Jul-99
                                                 ---------             ---------
CURRENT ASSETS
  Cash and cash equivalents                    $   996,000          $  1,175,000
  Marketable securities                            919,000               993,000
  Trade accounts receivable, net                 2,523,000             3,059,000
  Related party receivable                          55,000                51,000
  Deferred income taxes                            323,000               323,000
  Inventories                                    4,137,000             3,190,000
  Other current assets                              54,000               159,000
                                               -----------          ------------

                  Total current assets           9,007,000             8,950,000

PROPERTY HELD FOR LEASE, NET                     1,339,000             1,598,000

PROPERTY AND EQUIPMENT, NET                      2,097,000             1,181,000

LAND                                               170,000               170,000

DEFERRED INCOME TAXES                            1,222,000             1,222,000







                                               $13,835,000          $ 13,121,000
                                               ===========          ============


        The accompanying notes are an integral part of these statements.

                                        2

<PAGE>



                  Lifschultz Industries, Inc. and Subsidiaries
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                       January 31, 2000 and July 31, 1999

                      LIABILITIES AND SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                 31-Jan-00            31-Jul-99
                                                                 ---------            ---------
<S>                                                             <C>                 <C>
CURRENT LIABILITIES
  Notes payable to banks                                        $   620,000         $    150,000
  Trade accounts payable                                            809,000              688,000
  Income taxes payable                                              112,000              149,000
  Accrued liabilities                                             1,118,000            1,528,000
  Current maturities of capital lease                                50,000               39,000
    obligations
  Current maturities of long-term obligation                          2,000                2,000
                                                                -----------         ------------

                 Total current liabilities                        2,711,000            2,556,000

LONG-TERM OBLIGATION, less current maturities                         5,000                5,000

CAPITAL LEASE OBLIGATIONS, less current maturities                  133,000               92,000

COMMITMENTS AND CONTINGENCIES                                           -                    -

SHAREHOLDERS' EQUITY
  Convertible preferred stock, par value $0.01;
    authorized 100,000 shares
      Series A; issued and outstanding 5,200                            -                    -
      shares at January 31, 2000 and July 31, 1999
      Series E; issued and outstanding 552                              -                    -
      shares at January 31, 2000 and July 31, 1999
  Common stock, par value $0.001; authorized
    1,650,000 shares:  issued 1,121,655 shares at
    January 31, 2000 and 1,117,519 at July 31, 1999                   1,000                1,000
  Additional paid-in capital                                     11,060,000           11,060,000
  Treasury stock, at cost (22,560 common shares)                   (157,000)            (157,000)
  Accumulated earnings (deficit)                                     82,000             (436,000)

             Total shareholders' equity                          10,986,000           10,468,000
                                                                -----------         ------------

                                                                $13,835,000         $ 13,121,000
                                                                ===========         ============

</TABLE>

        The accompanying notes are an integral part of these statements.

                                        3

<PAGE>



                  Lifschultz Industries, Inc. and Subsidiaries
                       CONSOLIDATED STATEMENTS OF EARNINGS
                                   (unaudited)
              For the three months and six months ended January 31,
<TABLE>
<CAPTION>


                                              (Three months ended)                 (Six months ended)
                                                2000             1999               2000              1999
                                                ----             ----               ----              ----

<S>                                         <C>               <C>               <C>             <C>
Net Revenues                                $ 4,620,000       $ 3,920,000       $ 8,491,000     $ 7,418,000


Cost and expenses:
   Cost of products sold                      2,533,000         2,014,000         4,801,000       4,014,000
   Selling, general and                       1,506,000         1,328,000         2,661,000       2,372,000
     administrative
   Research and development                     235,000           203,000           430,000         331,000
   Interest expense                                                14,000            10,000          24,000            17,000
                                            -----------       -----------       -----------     -----------
                                              4,288,000         3,555,000         7,916,000       6,734,000
                                            -----------       -----------       -----------     -----------

   Earnings before income taxes                 332,000           365,000           575,000         684,000

Income tax expense                               28,000            30,000            57,000          62,000

         NET EARNINGS                       $   304,000       $   335,000       $   518,000     $   622,000
                                            ===========       ===========       ===========     ===========

Net earnings per common
  share - basic
  (based on 1,121,655 common shares
   outstanding)                             $      0.27       $      0.30       $      0.46     $      0.49
                                            ===========       ===========       ===========     ===========

</TABLE>



        The accompanying notes are an integral part of these statements.

                                        4

<PAGE>



                  Lifschultz Industries, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                      For the six months ended January 31,

<TABLE>
<CAPTION>

                                                                        2000             1999
                                                                        ----             ----

<S>                                                                 <C>                <C>

Increase (decrease) in cash and cash equivalents
Cash flows from operating activities
  Net Earnings                                                      $    518,000       $   622,000
  Adjustments to reconcile net earnings to
    net cash provided by operating activities:
      Depreciation and amortization                                       71,000           107,000
      Amortization of leasehold interest                                 259,000           255,000
      Changes in assets and liabilities:
        Accounts receivable                                              536,000           126,000
        Related party receivable                                          (4,000)           17,000
        Inventories                                                     (947,000)         (324,000)
        Deferred Tax                                                         -                 -
        Other current assets                                             105,000          (160,000)
        Accounts payable                                                 121,000            94,000
        Accrued liabilities                                             (410,000)         (568,000)
        Income taxes payable                                             (37,000)           27,000
                                                                    ------------       -----------
         Total Adjustments                                              (306,000)         (426,000)
                                                                    ------------       -----------

         Net cash provided (used) by
                 operating activities                                    212,000           196,000

Cash flows from investing activities
   Purchase of property and equipment                                   (987,000)         (379,000)
   Purchase of marketable securities                                    (126,000)         (375,000)
   Proceeds from maturities of marketable
      securities                                                         200,000           354,000
                                                                    ------------       -----------
         Net cash used in investing activities                          (913,000)         (400,000)

Cash flows from financing activities
   Principal payments on long-term obligations                               -              (1,000)
   Principal payments on capital lease
    obligations                                                          (20,000)          (18,000)
   Proceeds from Capital Lease                                            72,000               -
   Net change in line of credit                                          470,000           196,000
  Cash received from issuance of common stock                                -                 -
                                                                    ------------       -----------
         Net cash provided by financing activities                       522,000           177,000

</TABLE>

                                       5

<PAGE>



                  Lifschultz Industries, Inc. and Subsidiaries
                  CONSOLIDATED STATEMENTS OF CASH FLOWS (cont.)
                                   (Unaudited)
                      For the six months ended January 31,

<TABLE>
<CAPTION>

                                                                         2000              1999
                                                                         ----              ----

<S>                                                                 <C>                <C>

Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of quarter                       (179,000)          (27,000)
Cash and cash equivalents at end of quarter                            1,175,000           989,000
                                                                    ------------       -----------
                                                                    $    996,000       $   962,000
                                                                    ============       ===========

Supplemental disclosures of cash flow information
-------------------------------------------------

Cash paid during the quarter for
  Interest                                                          $     10,000       $    10,000
  Income Taxes                                                           128,000       $    27,000

</TABLE>

        The accompanying notes are an integral part of these statements.




                                        6

<PAGE>



                          Notes to Financial Statements
                                   (unaudited)

Note 1
------

The  consolidated   financial   statements  have  been  prepared  by  Lifschultz
Industries  Inc. (the  "Company")  without audit,  in accordance  with generally
accepted  accounting  principles.  Pursuant to the rules and  regulations of the
Securities and Exchange  Commission,  certain  disclosures  normally included in
consolidated financial statements prepared in accordance with generally accepted
accounting principles have been omitted or condensed.  It is management's belief
that the  disclosures  made are adequate to make the  information  presented not
misleading  and reflect all  adjustments  (consisting  only of normal  recurring
adjustments) necessary for a fair presentation of financial position and results
of  operations  for the periods  presented.  The results of  operations  for the
periods  presented  should  not  be  considered  as  necessarily  indicative  of
operations  for  the  full  year.  It is  recommended  that  these  consolidated
financial  statements be read in  conjunction  with the  consolidated  financial
statements  for the year ended July 31, 1999 and the notes  thereto  included in
the Company's Form 10-KSB.

Note 2
------

Certain items from fiscal year 1999 were  reclassified to be consistent with the
2000 statement of earnings presentation with no effect on net income.

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

General
-------

The  Company  designs,  manufactures,  and  markets  scientific  and  industrial
instrumentation  and  instrument  calibration  equipment.  Most of the Company's
revenues  are  from  its  operating  subsidiary  Hart  Scientific,  Inc.  ("Hart
Scientific") and Hart Scientific's subsidiary,  Calorimetry Sciences Corporation
("CSC").  The Company  realizes a small amount of revenue  from a real  property
lease held by its non-operating subsidiary, Lifschultz Fast Freight, Inc. ("Fast
Freight").  Company management believes that its future growth is dependent upon
the ability of Hart Scientific and CSC to continue  increasing  instrument sales
to new and  existing  customers  and  successfully  introduce  and market new or
enhanced products.  The following  discussion should be read in conjunction with
the text of  Management's  Discussion  and Analysis of Financial  Condition  and
Results of  Operations  contained in the  Company's  Form 10-KSB for fiscal year
ended July 31, 1999.

Results of Operations:
----------------------

Total  revenues for the Company for the current six month  period ended  January
31, 2000, increased 14% to $8,491,000 versus $7,418,000 for the same period last
fiscal year. Total revenues for the current three month period ended January 31,
2000,  increased 18% to $4,620,000  versus  $3,920,000  for the same period last
fiscal year.

                                        7

<PAGE>



Total revenues for Hart  Scientific  (including  Hart  Scientific's  subsidiary,
CSC),  during the current six month period were $8,490,000 versus $7,413,000 for
the same period last fiscal year, a 15% increase.  Hart Scientific  revenues for
the current three month period were  $4,623,000  versus  $3,918,000 for the same
period last fiscal  year,  an 18%  increase.  This  growth  trend  appears to be
continuing with the Company experiencing record revenues in February 2000.

A substantial  portion of the Company's  revenue growth  resulted from increased
product  demand in  export  markets.  Export  sales by Hart  Scientific  grew to
$1,920, 000 in the current three month period from $1,377,000 in the same period
last year, a 39%  increase.  Much of this grown in exports was  generated in the
Far East market,  where export sales rose to $722,000 in the current three month
period  from  $325,000  in the  same  period  last  year,  a 122%  increase.  In
comparison, domestic sales in the current three month period grew 11.7% over the
prior year's second quarter, from $2,686,000 to $2,801,000.

Company  management  believes that the  Company's  growth in revenues is largely
attributable  to improved  economic  conditions in certain export  markets,  and
increased  demand  generally  for the  Company's  products  resulting  from  the
Company's  increased  marketing  efforts and the  introduction  of new  products
resulting from the Company's research and development efforts.

Hart Scientific's gross margins were 43% for the current six month period versus
46% for the same period  last year.  Management  believes  that  differences  in
product mix, higher research and development costs,  higher marketing costs, and
generally  higher  labor and  material  costs are the main reasons for the lower
margins during the current period.

Hart  Scientific's  general and  administrative  costs for the current six month
period were $1,470,000 versus $1,718,000 for the same period last year.  General
and  administrative  costs  during  the  current  three  month  period  for Hart
Scientific were $909,000 versus $889,000 for the same period last year.

Research and  development  costs for the current six month  period  increased to
$430,000 from  $331,000.  Research and  development  costs for the current three
month period increased to $235,000 from $203,000 in the same period last year.

Hart Scientific  increased its marketing expenses during the current three month
period to $476,000  versus $311,000 for the same period last year. Its marketing
and sales  expenses  for the  current  six month  period  were  $965,000  versus
$646,000 for the same period last year.

Net  consolidated  earnings  for the current  three month  period were  $304,000
versus $335,000 for the same period last year, a 9% decrease.  Net  consolidated
earnings for the current six month period were $518,000  versus $622,000 for the
same period last fiscal year, a 17% decrease.  Hart  Scientific had net earnings
of $424,000  for the current  three month  period  versus  $462,000 for the same
period last year, an 8% decrease. Hart Scientific had net income for the current
six month  period of $741,000  versus  $827,000 for the same period last year, a
10% decrease.


                                        8

<PAGE>



Revenue  growth  for  the  current  period  was  strong,  but  the  Company  has
experienced  labor and material cost increases  compared to the same period last
year. A price  increase  intended to offset some of these higher costs went into
effect late in the second quarter, but the effect of this price increase has not
yet been realized.  Increase  marketing  expenditures,  research and development
costs, and changes in product mix also contributed to lower earnings.

Earnings for the second quarter where also negatively affected by costs incurred
with the Company's  intentional  increase in inventory  during that quarter.  To
reduce the impact of potential  product and supplies  shortages  resulting  from
possible "Y2K" problems,  the Company increased its inventory from $3,190,000 as
of July 31, 1999 to  $4,137,000  as of January 31,  2000.  This  resulted in the
Company  increasing  inventory  related costs,  such as freight charges,  in the
first half of the fiscal year and should be  reflected  in reduced  costs in the
second half as inventory levels decline.

Overall,  while there is no  assurance  that the trend in growth will  continue,
particularly  the strong growth  recently  experienced by the Company in the Far
East market,  Company management believes that, based on the results to date and
the price  increases  recently  implemented  by the  Company,  the Company  will
generate overall sales and profit growth for the current fiscal year.

Financial Condition and Liquidity
---------------------------------

The Company's current ratio at January 31, 2000 is 3.31 to 1 versus 3.50 at July
31,  1999.  Management  expects  that  internal  operating  cash  flow from Hart
Scientific  will be sufficient to meet the cash needs of the Company  during the
2000 fiscal year.

Total current  assets  increased by $57,000  during the current six month period
while current liabilities increased by $155,000 during the same period. Cash and
cash  equivalents  decreased  by $179,000  in the  current  six month  period to
$996,000.  As of  January  31,  2000,  Hart  Scientific  also had  approximately
$200,000 available under its bank line of credit if such funds are required.

Hart  Scientific  currently  anticipates  purchasing  its facilities in American
Fork,  Utah,  which  facilities are currently leased and in the process of being
expanded.  The  anticipated  purchase  price is  approximately  $2,430,000.  The
Company  currently  does not  anticipate  that the purchase will have a material
adverse effect on the cash flows of the Company.

Cautionary  Statement  for Purposes of "Safe Harbor  Provisions"  of the Private
Securities Litigation Reform Act of 1995.

When used in this report,  the words  "believe,"  "plan"  "expects"  and similar
expressions  are  intended to  identify  forward-looking  statements  within the
meaning  of  Section  27A of  the  Securities  Act  of  1933,  as  amended  (the
"Securities  Act") and Section 21E of the  Securities  Exchange Act of 1934,  as
amended (the "Exchange  Act").  Such statements are subject to certain risks and
uncertainties,  including those discussed below, that could cause actual results
to differ  materially from those  projected.  These  forward-looking  statements
speak only as of the date hereof.  All of these  forward-looking  statements are
based on estimates and  assumptions  made by  management  of the Company,  which

                                        9

<PAGE>



although  believed to be reasonable,  are inherently  uncertain and difficult to
predict.  There  can be no  assurance  that the  benefits  anticipated  in these
forward-looking  statements will be achieved.  The following  important factors,
among others,  could cause the Company not to achieve the benefits  contemplated
herein,  or otherwise cause the Company's  results of operations to be adversely
affected in future  periods:  (i) continued or increased  competitive  pressures
from existing competitors and new entrants;  (ii) unanticipated costs related to
the Company's growth and operating  strategies;  (iii) loss or retirement of key
members of management;  (iv) prolonged labor  disruption;  (v)  deterioration in
general of international economic conditions;  and (vi) loss of customers.  Many
such  factors  are  beyond  the  control  of the  Company.  Please  refer to the
Company's  SEC  Form  10-KSB  for its  fiscal  year  ended  July 31,  1999,  for
additional cautionary statements.


                           PART II - OTHER INFORMATION

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

At the  Company's  last  annual  meeting,  held  January  6, 2000,  the  current
directors of the Company, Sidney B. Lifschultz,  David K. Lifschultz,  Dennis R.
Hunter, Joseph C. Fatony, and James E. Solomon were re-elected for an additional
term of one year with the following vote:

                                      FOR             WITHHELD           ABSTAIN
                                    -------           --------           -------

Sidney B. Lifschultz                767,301               191              5,284

David K. Lifschultz                 767,311               181              5,284

Dennis R. Hunter                    767,331               161              5,284

Joseph C. Fatony                    767,291               201              5,284

James E. Solomon                    767,331               161              5,284

Additionally,  Grant  Thornton LLP was affirmed at the meeting as the  Company's
independent  certified  public  accountants  for the 2000  fiscal  year with the
following vote: 771,618 for, 609 against, and 549 abstain.  There were no broker
non-votes.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K
                  --------------------------------

         (a)      Exhibits

                  The following exhibits are attached hereto or are incorporated
                  herein by reference as indicated in the table below:

                                       10

<PAGE>

         Exhibit                                               Location if other
           No.        Title of Document                     than attached hereto
         -------      -----------------                     --------------------

         3.01*        Certificate of Incorporation              1998 Form 10-KSB
                      (as amended to date)                          Exhibit 3.01

         3.02*        Bylaws                                      1991 Form 10-K
                                                                         Page 74

         4.01*        Certificate of Designation, Series A        1991 Form 10-K
                      Convertible Preferred Stock (as amended)           Page 94

         4.01*        Certificate of Designation, Series E        1994 Form 10-K
                      Convertible Preferred Stock                   Exhibit 4.05

         27.1         Financial Data Schedule

* Denotes exhibits specifically incorporated in this Form 10-QSB by reference to
other  filings of the  Company  pursuant to the  provisions  of  Securities  and
Exchange  Commission  rule 12b- 32 and  Regulation  S-B,  Item  10(f)(2).  These
documents are located under File No.  001-10287 at, among other  locations,  the
Securities and Exchange Commission,  Public Reference Branch, 450 5th St., N.W.,
Washington, D.C. 20549.

         (b)      Reports on Form 8-K
                  -------------------

No reports  on Form 8-K were  filed by the  Company  during  the  quarter  ended
January 31, 2000.



                                   SIGNATURES


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

                           LIFSCHULTZ INDUSTRIES, INC.


Date     March 16, 2000                            By: /s/DENNIS R. HUNTER
         --------------                            -----------------------
                                                   Dennis R. Hunter
                                                   President and Chief
                                                   Financial Officer

                                       11