FORM 10-QSB

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

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

                 For the quarterly period ended October 31, 1999

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

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.)

         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

The number of shares of the issuer's common stock outstanding as of December 13,
1999 is 1,121,655 shares.


                                        1

<PAGE>



                          PART I- FINANCIAL INFORMATION

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

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

                                     ASSETS
<TABLE>
<CAPTION>


                                                                       31-Oct-99              31-Jul-99
                                                                       ---------              ---------
<S>                                                                  <C>                   <C>

CURRENT ASSETS
  Cash and cash equivalents                                          $    994,000          $    1,175,000
  Marketable securities                                                 1,105,000                 993,000
  Trade accounts receivable, net                                        2,535,000               3,059,000
  Related party receivable                                                 29,000                  51,000
  Deferred income taxes                                                   323,000                 323,000
  Inventories                                                           3,466,000               3,190,000
  Other current assets                                                     82,000                 159,000
                                                                     ------------          --------------

         Total current assets                                           8,534,000               8,950,000


PROPERTY HELD FOR LEASE, NET                                            1,469,000               1,598,000


PROPERTY AND EQUIPMENT, NET                                             1,413,000               1,181,000


LAND                                                                      170,000                 170,000


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

                                                                     $ 12,808,000          $   13,121,000
                                                                     ============          ===============



</TABLE>

        The accompanying notes are an integral part of these statements.


                                        2

<PAGE>


                  Lifschultz Industries, Inc. and Subsidiaries
                      LIABILITIES AND SHAREHOLDERS' EQUITY
                                   (Unaudited)
                       October 31, 1999 and July 31, 1999


<TABLE>
<CAPTION>



                                                                      31-Oct-99               31-Jul-99
                                                                      ---------               ---------

<S>                                                                  <C>                   <C>
CURRENT LIABILITIES
  Notes payable to banks                                             $    250,000          $      150,000
  Trade accounts payable                                                  754,000                 688,000
  Income taxes payable                                                    169,000                 149,000
  Accrued liabilities                                                     824,000               1,528,000
  Current maturities of capital lease obligations                          37,000                  39,000
  Current maturities of long-term obligation                                2,000                   2,000
                                                                     ------------          --------------

         Total current liabilities                                      2,036,000               2,556,000

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

CAPITAL LEASE OBLIGATIONS, less current maturities                         85,000                  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 October 31 and July 31, 1999                                -                       -
      Series E; issued and outstanding 21,231
        shares at October 31 and July 31, 1999                                -                       -
  Common stock, par value $0.001; authorized
    1,650,000 shares; issued and outstanding,
    1,117,519 shares issued at October 31 and
    July 31                                                                 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 deficit                                                    (222,000)               (436,000)

         Total shareholders' equity                                    10,682,000              10,468,000
                                                                     ------------          ---------------

                                                                     $ 12,808,000          $   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 ended October 31,
<TABLE>
<CAPTION>


                                                                         1999                    1998
                                                                         ----                    ----

<S>                                                                  <C>                   <C>
Net Revenues                                                         $  3,871,000          $    3,626,000
Cost and expenses:
  Cost of products sold                                                 2,268,000               2,001,000
  Selling, general and administrative                                   1,153,000               1,172,000
  Research and development                                                196,000                 127,000
  Interest expense                                                         10,000                   7,000
                                                                     ------------          --------------

                                                                     $  3,627,000          $    3,307,000
                                                                     ------------          --------------

  Earnings before income taxes                                            244,000                 319,000

  Income tax expense                                                       29,000                  32,000
                                                                     ------------          --------------

  NET EARNINGS                                                       $    215,000          $      287,000
                                                                     ============          ==============

Net earnings per common - basic                                              0.19                    0.26
                                                                     ============          ==============
Net earnings per common share-
  assuming dilution                                                          0.17                    0.24
                                                                     ============          ==============


</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 three months ended October 31,
<TABLE>
<CAPTION>


                                                                         1999                    1998
                                                                         ----                    ----

<S>                                                                  <C>                   <C>
Increase (decrease) in cash and cash equivalents
Cash flows from operating activities
  Net Earnings                                                       $    215,000          $      287,000
  Adjustments to reconcile net earnings to
    net cash provided by operating activities:
      Depreciation and amortization                                        57,000                  42,000
      Amortization of leasehold interest                                  129,000                 129,000
      Changes in assets and liabilities:
        Accounts receivable                                               524,000                 350,000
        Related party receivable                                           22,000                  11,000
        Inventories                                                      (276,000)               (256,000)
        Deferred Tax                                                           -                       -
        Other current assets                                               77,000                (177,000)
        Accounts payable                                                   66,000                 283,000
        Accrued liabilities                                              (704,000)               (456,000)
        Income taxes payable                                               20,000                  59,000
                                                                     ------------          ---------------

                  Total Adjustments                                       (85,000)                (15,000)
                                                                     ------------          ---------------

                  Net cash provided (used) by
                  operating activities                                    130,000                  272,000

Cash flows from investing activities
  Purchase of property and equipment                                     (289,000)               (223,000)
  Purchase of marketable securities                                      (112,000)               (375,000)
  Proceeds from maturities of marketable
      securities                                                               -                  163,000
                                                                     ------------          ---------------

                  Net cash used in
                  investing activities                                   (401,000)               (435,000)

</TABLE>



                                        5

<PAGE>



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

<TABLE>
<CAPTION>


                                                                         1999                    1998
                                                                         ----                    ----

<S>                                                                  <C>                   <C>
Cash flows from financing activities
  Principal payments on long-term obligations                              (1,000)                 (1,000)
  Principal payments on capital lease
    obligations                                                            (9,000)                 (3,000)
  Net change in line of credit                                            100,000                  96,000
  Cash received from issuance of common stock                                  -                      -
                                                                     -------------         ---------------

                  Net cash provided by
                  financing activities                                     90,000                  92,000

Net decrease in cash and cash
  equivalents                                                            (181,000)                (71,000)
Cash and cash equivalents at beginning
  of quarter                                                            1,175,000                 989,000
                                                                     -------------         ---------------

Cash and cash equivalents at end of quarter                          $    994,000          $      918,000
                                                                     =============         ===============


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

Cash paid during the quarter for
  Interest                                                           $     10,000          $        7,000
  Income Taxes                                                       $    128,000          $        3,000






</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 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  reclassifications  have been made to the  October  31, 1998 three month
period  financial  statements to conform with the October 31, 1999  presentation
without effect on 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") and
Hart'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 and CSC to  continue  increasing  instrument  sales to new and  existing
customers and successfully introduce and market new or enhanced products.

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

The Company's  consolidated  net revenues  rose 7% to  $3,871,000  for its first
quarter  ended  October 31, 1999 from  $3,626,000  for the first  quarter  ended
October 31, 1998.


                                        7

<PAGE>



Consolidated net revenues for Hart (including CSC revenues), were $3,868,000 for
the first quarter this year versus $3,495,000 for the same period last year.

Consolidated net earnings  decreased 25% from $287,000 for first quarter of last
year to $215,000 in the first quarter this year.  Hart  Scientific's  net profit
for the first  quarter of this year was  $316,000  versus  $366,000 for the same
period last year. The company  attributes  the decline  primarily to a change in
product mix, with a higher proportion of lower margined products being sold this
year,  and  increases  in  expenses   associated  with  expanded   research  and
development and marketing efforts.

Historically,  quarterly  profitability of the company has widely fluctuated due
to a variety of factors, including the timing of expenses, timing of orders, and
changes in the profitability of the product mix during a quarter.  One quarter's
performance has never been  determinative of a trend.  The Company's  historical
growth is reflected by 1990 gross revenues of $2,066,000 and net earnings before
income  taxes and  extraordinary  items of ($1,000)  and 1999 gross  revenues of
$16,254,000  and net earnings  before  income taxes and  extraordinary  items of
$1,231,000. The historical variation in the company's quarterly profitability is
demonstrated by the quarterly  consolidated net earnings before income taxes and
extraordinary items for the last two fiscal years:


                                       Fiscal 1997-98             Fiscal 1998-99

First Quarter                          $    299,000                    319,000

Second Quarter                              544,000                    365,000

Third Quarter                               119,000                    315,000

Fourth Quarter                              175,000                    232,000
                                       ------------               ------------

July 31 Year End                       $  1,137,000               $  1,231,000

The comparison shows that pre-tax, year-end earnings rose 8% from fiscal 1997-98
to fiscal 1998-99 despite a 30% drop in profitability between the second quarter
of those two years.  Notably,  the  aggregate  dollar  decline  between  pre-tax
earnings in the first quarter of fiscal  1999-2000 and fiscal 1998-99  ($75,000)
is significantly less than the aggregate dollar decline between pre-tax earnings
in the second quarter of fiscal 1997-99 and fiscal 1998-99 ($179,000).

Research and  development  expenses  increased in the first quarter of this year
25% to $195,000 from $127,000 in the first quarter of last year.  This year Hart
Scientific  developed  a new bath  model 7380 for a  specific  customer  that we
currently  estimate  will  represent  from  $300,000 to $750,000 in new business
during its first year. Last year's audited financial  statements showed research
and  development  expenditures  of $1,077,000 in fiscal  1997-98 and $786,000 in
fiscal 1998-99,  although  classification  of certain costs  consistent with our
1998-99 presentation would have brought the 1997-98 amount to $642,000,  showing
significant growth between years.


                                       8

<PAGE>



The company is  continuing  its  substantial  efforts to market new products and
expand  market share.  Marketing  expenses rose in this quarter from $335,000 in
the first quarter last year to $489,000 in the first quarter this year.

The company's exports grew by 13% from $940,000 in first quarter of last year to
$1,070,000 in the first quarter of this year. Notably, the company experienced a
33% increase in sales to the Far East from $240,000 in the first quarter of last
year to $360,000 in the first  quarter  this year.  Exports  had  declined  from
representing  35% of annual  sales in fiscal  1996- 97 to 25% of sales in fiscal
1998-99, as described in the company's last annual report.

Hart's gross  margins were 41% for the first  quarter in the current year versus
43% for the same period last year. Company management  believes that product mix
accounts for the lower margins in 1999. General and Administrative costs for the
first quarter of this year were  $560,000 for Hart versus  $626,000 for the same
period  last  year,  and  $205,000  for the first  quarter of this year for Fast
Freight versus $178,000 for the same period last year.

In a  continuing  effort  to  improve  margins,  Calorimetry  Sciences  recently
acquired  important designs for certain hardware and software used in several of
the company's  products.  For many years,  the company has paid royalties to use
the designs.  The company made the purchase to reduce long-term costs and assure
continued  use  of  the  technology.   Calorimetry  Sciences  also  moved  their
manufacturing  operations to larger facilities in November to house their entire
operation under one roof for greater efficiency.

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

The Company's  current ratio at October 31, 1999 is 4.19 to 1 versus 3.5 to 1 at
July 31, 1999. The current ratio improved to 4.19 to 1 at the end of the current
first quarter versus 2.93 on October 31, 1998.

Management  expects that internal  operating cash flow from Hart  Scientific and
from certain  subleases  held by  Lifschultz  Fast Freight will be sufficient to
meet the cash needs of the  Company  during this fiscal  year.  Hart  Scientific
currently  has  approximately  $400,000  remaining on its bank line of credit if
such funds are required.

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


                                       9

<PAGE>



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
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 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:
<TABLE>
<CAPTION>


         Exhibit                                                                Location if other
           No.             Title of Document                                    than attached hereto
         -------           -----------------                                    --------------------
         <S>               <C>                                                  <C>

         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

</TABLE>



                                       10

<PAGE>

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

                  No reports on Form 8-K were  filed by the  Company  during the
                  quarter ended October 31, 1999.

* 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.


                                   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     December 17, 1999                   By: DENNIS R. HUNTER
         -----------------                   ---------------------------
                                             Dennis R. Hunter
                                             President and Chief
                                             Financial Officer


                                       11

<PAGE>