SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   Form 10-QSB

                QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
         SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
                                December 31, 1999

Commission file number  0-21151


                           PROFILE TECHNOLOGIES, INC.
         ---------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

DELAWARE                                                       91-1418002
-----------------------------                              ------------------
(State or other jurisdiction                                (I.R.S. Employer
incorporation or organization)                             Identification No.)


1077 Northern Blvd., Roslyn, NY                                   11576
-------------------------------                                   -----
(Address of principal executive offices)                        (Zip Code)


                                  516-365-1909
                                  ------------
                          (Issuer's telephone number)


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 be
subject to such filing requirements for the past 90 days. Yes X No ___


State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.

     There were 4,285,092 shares of common stock outstanding on February 2,
2000.

Transitional Small Business Disclosure Format
(Check one):

Yes       No   X
   -----     -----


<PAGE>

Item 1.  Financial Statements


                           PROFILE TECHNOLOGIES, INC.

                            Condensed Balance Sheets
                                   (unaudited)


--------------------------------------------------------------------------------
                                                    December 31,      June 30,
                                                       1999            1999
--------------------------------------------------------------------------------

                                     Assets
                                     ------

Current assets:
    Cash and cash equivalents                       $ 2,667,361      3,140,647
    Accounts receivable                                   9,300         15,106
    Contract work-in-progress                              --           87,750
    Paid expenses                                        12,384         24,562
    Other current assets                                  8,050           --
                                                    --------------------------

               Total current assets                   2,697,095      3,268,065



Equipment, net                                          159,209        140,099
Patents, net                                            232,880        259,303
Other assets                                              9,993          9,993
                                                    --------------------------

               Total assets                         $ 3,099,177      3,677,460
                                                    --------------------------


                      Liabilities and Stockholders' Equity
                      ------------------------------------

Current liabilities:
    Accounts payable - stockholder                  $     1,178          7,423
    Other accounts payable                               24,263         25,826
    Accrued liabilities                                  99,145         88,500
                                                    --------------------------

               Total current liabilities                124,586        121,749
                                                    --------------------------

Stockholders' equity:
    Common stock, $0.001 par value
       Authorized 10,000,000 shares; issued
       and outstanding 4,285,092 shares at
       December 31, 1999 and 4,275,092 shares
       at June 30, 1999                                   4,285          4,275
    Additional paid-in capital                        7,572,998      7,561,758
    Accumulated deficit                              (4,602,692)    (4,010,322)
                                                    --------------------------

               Total stockholders' equity             2,974,591      3,555,711

================================================================================
               Total liabilities and
                 stockholders' equity               $ 3,099,177      3,677,460
================================================================================



            See accompanying notes to condensed financial statements


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<PAGE>
<TABLE>
<CAPTION>



                                          PROFILE TECHNOLOGIES, INC.

                                     Condensed Statements of Operations
                                                 (unaudited)
-----------------------------------------------------------------------------------------------------------------------

                                                       Three months ended                       Six months ended
                                                          December 31,                             December 31,
                                                -----------------------------------------------------------------------
                                                    1999                  1998               1999                1998
-----------------------------------------------------------------------------------------------------------------------

<S>                                             <C>                      <C>                <C>                 <C>
Revenues                                        $     1,903              39,925             142,250             178,910

Cost of revenues                                      1,244              10,874              70,861              53,085
                                                -----------------------------------------------------------------------
             Gross profit                               659              29,051              71,389             125,825
                                                -----------------------------------------------------------------------

Research and development                             91,516              77,927             150,152             146,777
General and administrative                          330,033             236,243             582,169             405,193
                                                -----------------------------------------------------------------------
             Total costs and expenses               421,549             314,170             732,321             551,970
                                                -----------------------------------------------------------------------

             Loss from operations                  (420,890)           (285,119)           (660,932)           (426,145)


Interest income                                      32,842              47,608              68,562             101,873
                                                -----------------------------------------------------------------------
             Net loss                           $  (388,048)           (237,511)           (592,370)           (324,272)
                                                -----------------------------------------------------------------------

Basic and diluted net loss per share            $     (0.09)              (0.06)              (0.14)              (0.08)

Shares used to calculate basic and
    diluted net loss per share                    4,282,592           4,275,092           4,280,925           4,272,261
=======================================================================================================================



                          See accompanying notes to condensed financial statements



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<PAGE>

                                                PROFILE TECHNOLOGIES, INC.

                                            Condensed Statements of Cash Flows
                                                       (unaudited)

---------------------------------------------------------------------------------------------------------------------
                                                                                             Six months ended
                                                                                               December 31,
                                                                                   ----------------------------------
                                                                                        1999                  1998
---------------------------------------------------------------------------------------------------------------------


Cash flows from operating activities:
    Net loss                                                                       $  (592,370)              (324,272)
    Adjustments to reconcile net loss to net cash used in
       operating activities:
          Depreciation and amortization                                                 66,873                 47,711
          Changes in assets and liabilities:
             Accounts receivable                                                         5,806                (37,553)
             Contract work-in-progress                                                  87,750                (20,426)
             Accounts receivable/payable - stockholder                                  (6,245)                19,594
             Prepaid expenses                                                           12,178                   --
             Other current assets                                                       (8,050)                10,253
             Other accounts payable                                                     (1,563)                  --
             Accrued liabilities                                                        10,645                (68,159)
                                                                                   ----------------------------------

                    Net cash used in operating activities:                            (424,976)              (372,852)


Cash flows from investing activities:
    Patents                                                                             (4,717)               (49,572)
    Purchase of equipment                                                              (54,843)               (57,647)
                                                                                   ----------------------------------
                    Net cash used in investing activities                              (59,560)              (107,219)
                                                                                   ----------------------------------

Cash flows from financing activities:
    Proceeds from exercise of common stock purchase warrants                            11,250                 47,625
                                                                                   ----------------------------------

                    Net cash provided by financing activities                           11,250                 47,625
                                                                                   ----------------------------------

                    Decrease in cash and cash equivalents                             (473,286)              (432,446)


Cash and cash equivalents at beginning of period                                     3,140,647              4,167,951
                                                                                   ----------------------------------

Cash and cash equivalents at end of period                                         $ 2,667,361              3,735,505

=====================================================================================================================




                        See accompanying notes to condensed financial statements

</TABLE>




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<PAGE>
                           PROFILE TECHNOLOGIES, INC.

                     Notes to Condensed Financial Statements



1.    Description of Business

Profile Technologies, Inc. (the "Company") is in the business of developing and
commercializing potential processes for the nondestructive, noninvasive testing
of both above ground and buried pipelines for the effectiveness of pipeline
cathodic protecting systems and coating integrity. The Company's future revenues
are currently dependent upon the market's acceptance of its sole developed
process.

2.    Basis of Presentation

The unaudited interim condensed financial statements and related notes of the
Company have been prepared pursuant to the instructions to Form 10-QSB.
Accordingly, certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to such instructions. The condensed
financial statements and related notes should be read in conjunction with the
audited financial statements and notes thereto included in the annual report on
form 10-KSB for the year ended June 30, 1999 (filed September 24, 1999). The
information furnished reflects, in the opinion of management, all adjustments,
consisting of only normal recurring items, necessary for fair presentation of
the results of the interim periods presented. Interim results are not
necessarily indicative of results for a full year.

3.   Net Loss Per Share

Basic earnings per share is computed by dividing the net loss by the weighted
average number of common shares outstanding during the period. Diluted earnings
per share is computed by dividing the net loss by the weighted average number of
common and dilutive common equivalent shares outstanding during the period. As
the Company had a net loss attributable to common shareholders in each of the
periods presented, basic and diluted net loss per share are the same.

Excluded from the computation of diluted loss per share for the three and six
months ended December 31, 1999 are options and warrants to acquire 1,246,000
shares of common stock with a weighted-average exercise price of $4.10 because
their effect would be antidilutive. Excluded from the computation of diluted
loss per share for the three and six months ended December 31, 1998 are options
and warrants to acquire 1,212,508 shares of common stock with a weighted-average
exercise price of $3.86 because their effect would be antidilutive.


4.  New Accounting Pronouncement

In December 1999, the Securities and Exchange Commission released Staff
Accounting Bulletin No. 101 ("SAB 101") "Revenue Recognition in Financial
Statements" which the Company expects to adopt no later than July 1, 2000. SAB
101 provides guidance on revenue recognition issues. The Company anticipates
that the adoption of SAB 101 will not have a material impact on the Company's
financial statements.


4


<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations.


GENERAL

     The Company is in the business of developing and commercializing potential
processes for the non-destructive, non-invasive testing of both above ground and
buried pipeline to evaluate the condition and integrity of the pipeline. The
development of its pulse propagation analyzer process and the further refinement
of the technology associated therewith have progressed to the point where it is
now being utilized commercially. The Company has begun to obtain revenues from
its commercial activities but has not yet reached profitability. There can be no
assurance that the Company will obtain commercial contracts in the future that
would produce operating revenues sufficient to attain profitability. The
Company's process identifies electromagnetic anomalies that may be indicative of
areas of corrosion, areas that lack cathodic protection and areas that may have
defective coating on both below ground and above ground pipes. The pulse
propagation analyzer consists of a computer, software to enhance collection and
processing of data, a precision multi-channel pulse generator and a signal
analyzer.

     In order for the Company to obtain significant revenues from the use of its
technology, the Company must establish a sales and marketing organization that
is effective and obtains customers for its pulse propagation analyzer. The
Company must also be able to supply and train work crews in sufficient numbers
to satisfy the requirements of its customers. For the two-year period ended June
30, 1999, the Company incurred net losses of $ 1,577,465 and experienced a
further net loss of $592,370 for the six months ended December 31, 1999. Losses
are expected to continue at least through the third quarter of the year ending
June 30, 2000; no assurances can be given that losses will not continue
thereafter.

RESULTS OF OPERATIONS

--------------------------------------------------------------------------------
Quarter Ended December 31, 1999 Compared to the Quarter Ended December 31, 1998.

     The Company had revenues of $1,903 for the quarter ended December 31, 1999
compared to revenues of $39,925 for the quarter ended December 31, 1998. The
loss from operations for the quarter ended December 31, 1999 was $420,890,
compared to a loss from operations of $285,119 for the quarter ended December
31, 1998. The loss from operations in the quarter ended December 31, 1999
increased by $135,771 over the comparable quarter ended December 31, 1998
primarily because of increased general and administrative expenses of $330,033
compared to $236,243 incurred in the quarter ended December 31, 1998. The
operating loss for the quarter ended December 31, 1999 was offset somewhat by
interest income in the amount of $32,842 representing interest earned from
proceeds of the Company's public stock offering which was completed in February
of 1997. This resulted in a net loss of $388,048 for the quarter ended December
31, 1999 compared to a net loss of $237,511for the quarter ended December 31,
1998. Research and development expenses increased to $91,516 for the quarter

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<PAGE>

ended December 31, 1999 compared to $77,927 for the quarter ended December 31,
1998. General and administrative expenses increased by $93,790 for the quarter
ended December 31, 1999 from the quarter ended December 31, 1998 primarily
because of increased salary expenses associated with hiring additional
personnel, including a new Vice-President for marketing, costs associated with
opening a new office in upstate New York devoted to data interpretation and
analysis and an increase in travel expenses.

Six Months  Ended  December 31, 1999  Compared to Six Months Ended  December 31,
1998.
--------------------------------------------------------------------------------

     Revenues decreased to $142,250 for the six months ended December 31, 1999
compared to $178,910 for the six months ended December 31, 1998. Revenues in the
six months ended December 31, 1999 were derived from both commercial contracts
and demonstration projects with large multi-national oil companies. Total costs
and expenses for the six months ended December 31, 1999 were $732,321 compared
to $551,970 for the six months ended December 31, 1998, an increase of $180,351
or 33%. Research and development expenses increased slightly to $150,152 from
$146,777 for the six months ended December 31, 1998, an increase of $3,375 or
2.3%. General and administrative expenses increased for the six months ended
December 31, 1999 to $582,169 compared to $405,193 for the six months ended
December 31, 1998, primarily as a result of additional personnel expenses as the
Company focused on hiring and training additional field crew personnel and
marketing personnel.

     Management believes that both revenues and expenses of the Company are
likely to increase during the remainder of the fiscal year ending June 30, 2000
compared to the fiscal year ended June 30, 1999 if it is able to secure
additional contracts with customers, of which there is no assurance. The
revenues earned by the Company to date have often included research and
development activities that have been sponsored by large multi-national oil
companies and large utilities. These activities included field research and
development at such companies' facilities and are likely to continue during the
year ending June 30, 2000 and for the foreseeable future. Management is also
working towards obtaining additional fee for service contracts that are expected
to be the major source of the Company's revenues. If such contracts are
obtained, management expects that its expenditures associated with personnel and
testing equipment will begin to rise. In addition, as the Company begins to
actually provide fee for service work on a larger scale, additional
administrative support activities will increase together with related expenses.

LIQUIDITY AND CAPITAL RESOURCES

     Net cash used in operating activities totaled $424,976 in the six months
ended December 31, 1999 compared to $372,852 for the six months ended December
31, 1998 and the Company expects that additional operating activities will
result in cash outflows in the near term while the Company pursues additional

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<PAGE>

commercial contracts, marketing activities, and research and development. Cash
outflows from operations are expected to continue at least through the fourth
quarter of the year ending June 30, 2000; no assurances can be given that
operational activities will generate positive cash flows thereafter.

     The Company's cash and cash equivalents as of December 31, 1999 were
$2,667,361. At December 31, 1999, the Company had working capital of $2,572,509
and no material long-term commitments or material commitments for capital
expenditures.

     The Company believes that its current capital resources and liquidity are
adequate for at least the next twelve months. Other than equipment purchases for
field crews, if the Company is successful in obtaining additional commercial
contracts, and the expenses associated with the hiring and training of such
field crews, the Company does not have any plans for significant capital or
operating expenditures above its current level.



RESOURCES

     As of December 31, 1999, the Company did not have any material commitments
for capital expenditures. However, management is currently directing the
Company's activities towards obtaining additional fee for service contracts,
which will necessitate the Company attracting, hiring, training and outfitting
qualified technicians. The Company's intention is to purchase field equipment
for its field crews for the foreseeable future, until such time as the scope of
the operations may require alternate sources of financing such equipment. The
timing of these events is dependent upon the Company's ability to obtain
additional fee for service contracts, which is dependent upon the Company's
continuing ability to demonstrate the effectiveness of its technology. The
Company believes that its cash position is sufficient to satisfy its operating
needs for the next twelve months. Management believes it is well on the way to
reaching these milestones, but there can be no assurance that the Company's
process will gain widespread commercial acceptance within any particular time
frame, or at all. The Company will incur additional personnel expenses as it
hires and trains field crews and support personnel related to the successful
receipt of commercial contracts.

YEAR 2000 COMPLIANCE

     The Company did not experience any `Year 2000" computer related problems
nor did any such problems of its customers and suppliers have any impact on the
Company's expenses, business, including data gathering and interpretation, or
its operations. The Company does not believe that it will incur any "Year 2000"
problems in the future and is therefore of the opinion that such problems will
not have any material impact on its future operations and business.


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<PAGE>


                            PART II OTHER INFORMATION


Item 1.   Legal Proceedings.

     The Company is not a party to any pending or threatened legal proceedings.

Item 2.   Changes in Securities and Use of Proceeds.

     None.

Item 3.  Defaults Upon Senior Securities.

     None.

Item 4.  Submission of Matters to a Vote of Security Holders.

     The Company held its annual meeting of shareholders on November 15, 1999.
The only agenda item at the meeting was the re-election of an incumbent board of
directors. All directors received favorable votes sufficient for their
re-election.

Item 5.  Other Information.

     None.

Item 6.  Exhibits and Reports on Form 8-K

     (a) Exhibits.

            27.1 Financial Data Schedule


     (b) Reports on Form 8-K

            None


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<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.


                                            PROFILE TECHNOLOGIES, INC.
                                                   (Registrant)


Date:    February 11, 2000                  /s/ G. L. Scott
                                            ------------------------------------
                                            G. L. SCOTT
                                            Chief Executive Officer


                                            /s/ Henry Gemino
                                            ------------------------------------
                                            HENRY GEMINO
                                            Chief Financial Officer




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