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

                                   FORM 10-QSB/A

                                  (Amendment #2)

     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.

This  Form  10-QSB/A  (Amendment  #2) is being  filed to  correct  in Item 1 the
calculation of Net Earnings Per Common Share - Assuming Dilution.


<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
                                            ===========       ===========       ===========     ===========
Net earnings per common
  share - assuming dilution
  (based on 1,292,805 common shares         $      0.23       $      0.26       $      0.40     $      0.48
                                            ===========       ===========       ===========     ===========

</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.



                                   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