U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                ----------------

                                   FORM 10-QSB

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

                  For the quarterly period ended June 30, 2001

                            ------------------------

                        Commission File Number: 000-26555

                            ------------------------

                           ACCUIMAGE DIAGNOSTICS CORP.
                 (Name of Small Business Issuer in its Charter)

           Nevada                                          33-0713615
--------------------------                       -------------------------------
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                        Identification Number)

400 Grandview Drive, South San Francisco, California              94080-4920
--------------------------------------------------------------------------------
(Address of principal executive offices)                          (Zip Code)

                    Issuer's telephone number: (650) 875-0192

Indicate by check mark whether the registrant has (1) filed all reports required
to be filed by  Section  13 or 15(d) of the  Securities  Act of 1934  during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports),  and (2) has been subject to filing  requirements  within
the past 90 days.

                                 Yes _X_ No ___

The number of shares  outstanding  of the issuer's  common stock was  10,981,534
shares of common  stock,  par value  $.001,  as of June 30,  2001.  No shares of
preferred stock are outstanding.

Transitional Small Business Disclosure Format:

                                  Yes___ No _X_

<PAGE>

                           ACCUIMAGE DIAGNOSTICS CORP.

                                   Form 10-QSB
                                  June 30, 2001


TABLE OF CONTENTS


PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements                                                 3

             Balance Sheets as of June 30, 2001 (unaudited)                   3
               and September 30, 2000

             Statements of Operations (unaudited) for the
               Three Months and Nine Months Ended June 30, 2001 and 2000      4

             Statements of Cash Flow (unaudited) for the Period
               Ended June 30, 2001 and 2000                                   5

             Notes to Financial Statements                                    6

Item 2.  Management's Discussion and Analysis of
             Financial Condition or Plan of Operations                        7

PART II.  OTHER INFORMATION


Item 2.  Changes in Securities                                               10

Item 4.  Submission of Matters to a Vote of Securities Holders               10

Item 6.  Exhibits and Reports on Form 8-K                                    10


Signature                                                                    10


                                       2
<PAGE>



PART I.  FINANCIAL INFORMATION
         Item 1.  Financial Statements

<TABLE>
<CAPTION>

                           ACCUIMAGE DIAGNOSTICS CORP.
                                 BALANCE SHEETS
            JUNE 30, 2001(UNAUDITED) AND SEPTEMBER 30, 2000 (AUDITED)

ASSETS                                                                         June 30, 2001        September 30, 2000
                                                                                (UNAUDITED)             (AUDITED)
Current Assets
<S>                                                                              <C>                      <C>
              Cash                                                               $209,248                 $702,903
              Accounts Receivable, Net of Allowance                               344,804                  499,141
                 for Doubtful accounts of $10,073 and $26,712
              Inventory - net of reserve for obsolete equipment                    56,185                  101,893
              Prepaid Rent                                                         11,566                    3,648
              Prepaid insurance                                                    17,749                        -
              Other prepaids                                                        3,846                        -
              Note receivable - short term                                         37,323                        -
                                                                            ------------------------ ---------------------
Total Current Assets                                                              680,721                1,307,585

Property and Equipment, net of accumulated depreciation                            41,600                   52,015

Other Assets
              Security Deposits                                                    18,887                   11,711
              Trade receivable-non-current                                              -                   11,375
              Licenses, net of accumulated amortization                            33,628                   44,603
              Goodwill, net of accumulated amortization                           386,331                  432,691
                                                                          ------------------------ ---------------------
Total Other Assets                                                                438,846                  500,380

              TOTAL ASSETS                                                     $1,161,167               $1,859,980
                                                                          ======================== =====================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
              Accounts Payable                                                    $25,552                 $137,995
              Product Warranty Reserve                                            216,157                  246,785
              Sales Tax Payable                                                     4,511                    3,282
              Wages & Payroll taxes Payable                                             -                   17,150
              Other Accrued Expenses                                               49,439                    2,400
              Accrued Vacation                                                     43,454                   23,351
                                                                          ------------------------ ---------------------
Total Current Liabilities                                                         339,113                  430,963

Stockholders' Equity
Preferred Shares - $0.001 Par Value; 10,000,000                                         -                        -
shares Authorized; None issued or outstanding

Common Shares - $0.001 Par Value; 50,000,000 Authorized;                           10,982                   10,982
10,981,534 shares issued and outstanding on
June 30, 2001 and September 30, 2000

Paid-In-Capital                                                                 2,443,470                2,443,470
Accumulated Earnings (Deficit)                                                 (1,632,398)              (1,025,435)
                                                                          ------------------------ ---------------------

Total Stockholder's Equity                                                        822,054                1,429,017

              TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                       $1,161,167               $1,859,980
                                                                          ======================== =====================
</TABLE>

   The accompanying notes are an integral part of these financial statements


                                       3
<PAGE>



                           ACCUIMAGE DIAGNOSTICS CORP
                      STATEMENTS OF OPERATIONS (UNAUDITED)
                       FOR THE THREE AND NINE MONTHS ENDED
                         JUNE 30, 2001 AND JUNE 30, 2000


<TABLE>
<CAPTION>

                                               For the three months    For the nine months
                                                  Ended June 30,          Ended June 30,
                                                 2001        2000       2001        2000
                                                 ----        ----       ----        ----

<S>                                           <C>        <C>        <C>         <C>
TOTAL REVENUES                                $440,206    $694,567  $1,705,254  $2,372,369

COST OF GOODS SOLD                              82,124     204,128     376,687     764,613
                                             ------------------------------------------------

GROSS PROFIT                                   358,082     490,439   1,328,567   1,607,756

SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
Sales and Marketing                             94,877     136,914     410,625    276,867
General and
Administrative                                 331,333     396,371     957,525    942,170
Research and
Development                                    239,837      56,693     576,210    149,552
                                             ------------------------------------------------

TOTAL SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES                                       666,047     589,978    1,937,360  1,368,589


OPERATING INCOME (LOSS)                       (307,965)    (99,539)    (615,793)   239,167
                                             ------------------------------------------------

OTHER (INCOME) AND EXPENSES
          Interest Income                      (2,805)     (9,481)    (17,888)    (13,329)
          Other Income                          (100)         -         (850)      (200)
          Franchise and Other Taxes             4,273        200        9,910       600
                                             ------------------------------------------------


TOTAL OTHER (INCOME) AND EXPENSES               1,368      (9,281)     (8,828)    (12,929)
                                             ------------------------------------------------

NET INCOME (LOSS)                             $(309,333)  $(90,258)  $(606,965)  $252,096
                                             ================================================


INCOME (LOSS) PER SHARE-BASIC                  $(0.028)    $(0.008)   $(0.055)     $0.025


INCOME (LOSS) PER SHARE-DILUTED                $(0.028)    $(0.008)   $(0.055)     $0.023

Weighted Average Shares Outstanding
                                     Basic    10,981,534  10,914,253 10,981,534  10,236,497
                                     Diluted  10,981,534  11,731,543 10,981,534  11,053,787

</TABLE>




                                       4
<PAGE>
                           ACCUIMAGE DIAGNOSTICS CORP
                      STATEMENTS OF CASH FLOWS (UNAUDITED)
                 FOR THE PERIOD OCTOBER 1, 2000 TO JUNE 30, 2001
              and THE PERIOD FROM OCTOBER 1, 1999 TO JUNE 30, 2000


<TABLE>
<CAPTION>

                                                                                   June 30,            June 30,
                                                                                     2001                2000
                                                                                   --------            --------
Cash Flows from Operating Activities
<S>                                                                                 <C>                   <C>
              Net Cash provided (used) by Operating Activities:                     $(443,453)            $ (9,174)
                                                                              -------------------- ------------------

              Loan to other entity

Cash Flow from Investing Activities:
              Investment in Property and Equipment                                     (5,424)              (6,993)
              Loan to other entity                                                    (44,778)                   -
                                                                              -------------------- ------------------

              Net Cash Provided (Used) by Investing Activities                        (50,202)              (6,993)
                                                                              -------------------- ------------------

Cash Flow From Financing Activities:
              Repayment of Short-Term Debt                                                  -               (4,500)
              Proceeds from Sales of Stock                                                  -              730,500
                                                                              -------------------- ------------------

              Net Cash Provided (Used) by Financing Activities                              -              726,000
                                                                              -------------------- ------------------

Increase (Decrease) in Cash                                                          (493,655)             709,833

Cash Balance at beginning of period                                                   702,903               34,201
                                                                              -------------------- ------------------

Cash Balance at end of period                                                        $209,248             $744,034
                                                                              ==================== ==================

Supplemental Disclosure:
              Interest Paid                                                                $0                   $0
              Income Taxes-Franchise tax                                               $4,273                   $0
              Compensation paid in shares (Non-Cash)                                       $0                   $0

</TABLE>

   The accompanying notes are an integral part of these financial statements

                                       5
<PAGE>


NOTES TO THE FINANCIAL STATEMENTS

(1) Basis of Presentation

     In the opinion of the management,  the accompanying  consolidated financial
statements  contain  all  adjustments   necessary  (consisting  of  only  normal
recurring  accruals) to present fairly the financial  position at June 30, 2001,
the results of its  operations  for the three months ended June 30, 2001 and the
cash  flow for the  period  ended  June 30,  2001;  and June 30,  2000.  Certain
information and footnote  disclosures  normally included in financial statements
that would have been prepared in accordance with generally  accepted  accounting
principles have been condensed or omitted  pursuant to the rules and regulations
of the Securities and Exchange  Commission,  although  management of the Company
believes that the disclosures in these financial statements are adequate to make
the information  presented  therein not  misleading.  It is suggested that these
condensed financial statements and notes thereto be read in conjunction with the
financial  statements and the notes thereto included in the Company's  September
30, 2000 Form 10-KSB.  The results of operations for the three months ended June
30,  2001 are not  necessarily  indicative  of the results of  operations  to be
expected for the full fiscal year ending September 30, 2001.


(2) Interim Period Cost of Goods Sold

     Interim  period  cost of  goods  sold is  calculated  using  the  perpetual
inventory  record.  The Company reports any significant  adjustments that result
from reconciling the perpetual  inventory record to periodic and annual physical
inventory observations.


(3) Income Taxes

     Significant  components  of the provision for taxes based on income for the
nine months ended June 30, 2001 and 2000 are as follows:

                                                2001                  2000
                                                ----                  -----
         Current tax expense
                  Federal                     $   0                  $  0
                  State                         600                   600
                                              -----                  -----
                                                600                   600

                  Deferred tax expense
                  Federal                         0                     0
                  State                           0                     0
                                              -----                 ------
         Provision for income taxes           $ 600                 $ 600
                                              =====                 ======


     At September 30, 2000, the Company has approximately $839,514 net operating
loss  carryforwards  available to offset future  federal and state income taxes,
which expire through 2010 and 2019.

     The Company has elected to fully  reserve all tax benefits  until such time
as it is able to reasonably expect to realize those benefits.


                                       6
<PAGE>



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

     The following  discussion and analysis  should be read in conjunction  with
the  Company's  Consolidated  Financial  Statements  and related  Notes  thereto
contained  elsewhere with this document.  Operating  results for the three-month
period ended June 30, 2001 are not  necessarily  indicative  of the results that
may be  expected  for any  future  periods,  including  the  full  fiscal  year.
Reference should also be made to the Annual Financial Statements, Notes thereto,
and Management's  Discussion and Analysis of Financial  Condition and Results of
Operations contained in the Company's Form 10-KSB, filed on December 29, 2000.


AccuImage is engaged in the  development,  marketing and support of software for
visualization,  analysis and management of medical imaging data, particularly in
support of the imaging  screening  market,  a market that is growing even faster
than the traditional  imaging market.  The software brings value by reducing the
time the  physician  needs for  reviewing  and  reporting  cases,  enhancing the
interpretation  of studies,  and providing  readily  visualizable 3-D images for
marketing, promotion and patient information.  Efficiency gains and cost savings
are realized through automated reporting tools  incorporating  expert knowledge,
and by  providing  hardware  and  software  for  distribution  of the images and
reports  via  internal  networks  as well as  internet  transmission  to  remote
locations,  to referring physicians and to patients. The company is now ready to
expand its markets through a three-pronged approach: The generation of automated
report generators for new applications, including whole body screening; the sale
of upgrades and new products to existing customers; and the provision of quality
assurance  accreditation  support services needed for  demonstrating  compliance
with upcoming  recommendations  from the American College of Radiology and other
accrediting  bodies.  The company is also  actively  establishing  a proprietary
position  in  these  new  areas.  Market  expansion  is  dependent  on  reaching
agreements with OEMs and large service providers. The company has established an
infrastructure capable of supporting the needs of these organizations.  This has
required an up-front  investment  in  personnel  resources,  in advance of these
programs  yielding revenue.  Coupled with an unexpected  decrease in orders from
the  company's  largest  customer,  Imatron,  this has  resulted  in a period of
negative cash flow.  Our programs  have  attracted  attention  from the intended
markets,  and we expect these  programs to start to produce  results in the next
few months. There is no certainty that such results will be achieved.

Revenue
-------

     For the three  months  ended  June 30,  2001,  revenue  decreased  37.6% to
$440,206 compared with $694,567 in 2000.

Gross Profit
------------

     For the three months  ended June 30, 2001 gross  profit on sales  decreased
27.0 % to $358,082 compared with $490,439 in 2000.

Sales and Marketing
-------------------

     The Company's  sales and  marketing  expenses for the quarter were $94,877;
compared with expenses of $136,914 for the same quarter in fiscal year 2000. The
decrease reflects the cost of decreased sales and marketing activity.

Research and Development
------------------------

     The Company spent $239,837 on research and  development  activities  during
the  quarter,  which  compares  with  $56,693 for the same  quarter in the prior
fiscal  year.  The Company  anticipates  that  software  development  costs will
increase  as the  Company  continues  its  recruitment  of  additional  software
development  expertise.  The Company  does not intend to reduce its research and
development   effort  since  maintenance  of  a  competitive   position  in  the
marketplace  where  the  Company  operates  requires  constant  improvement  and
high-level development of the Company's software products.



                                       7
<PAGE>

Operational and Administrative
------------------------------

     Operational  and  administrative  expenses  were  $331,333 for the quarter,
which  compares  with  $396,371 for the same quarter in the previous  year.  The
decrease is primarily driven by a decrease in  administrative  staff and related
expenses.  The Company believes that operational and  administrative  costs will
increase  in the future if the Company is  successful  in its efforts to recruit
additional  staff and continue to develop its  capabilities  in this area.  As a
result of becoming a reporting  company pursuant to the Securities  Exchange Act
of 1934, the Company will likely increase its expenditures on investor relations
and legal and financial expertise.

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

     Increased  expenses  for  research  and  development  along with lower than
expected  revenues from sales to Imatron,  Inc. resulted in an operating loss of
$307,965 for the three months ending June 30, 2001 compared to an operating loss
of $99,539 for the same period in the prior fiscal year.

Liquidity and Capital Resources
-------------------------------

     In the quarter  ending June 30,  2001,  the Company  generated an operating
loss of  ($307,965).  On June 30,  2001,  the Company  had  $209,248 in cash and
accounts  receivable of $354,876.  Working Capital for the period ended June 30,
2001 equaled $341,608  compared with $876,622 for the period ended September 30,
2000. The current ratio for the period ended June 30, 2001 was 2.01 with 3.01 as
the current ratio for the period ended September 30, 2000.

     The Company  anticipates  that cash  requirements  for the remainder of the
year will be met by a combination of existing cash on hand,  operational income,
and financing. There is no assurance that the Company will be able to obtain the
necessary  financing.  In the event that such financing cannot be obtained,  the
Company's business could be adversely affected.

Foreign Currency Transactions
-----------------------------

     All the Company's  transactions  are negotiated,  invoiced and paid in U.S.
dollars.


                                       8
<PAGE>


Inflation
---------

     Management  believes the Company's  operations and financial condition have
suffered no adverse material effect due to inflation.

Share Price Volatility
----------------------

     During the third  quarter of fiscal year 2001,  the  Company's  share price
experienced some price decline and volatility compared to the same period in the
prior  fiscal year.  The trading  price of the  Company's  common stock could be
subject to wide  fluctuations  in response to  quarter-to-quarter  variations in
operating results,  changes in earnings estimates by analysts,  announcements of
technological  innovations  or new  products by the Company or its  competitors,
general  conditions in the software and computer  industries and other events or
factors.  In  addition,  in recent  years the stock  market in general,  and the
shares of technology  companies in particular,  have  experienced  extreme price
fluctuations.  This volatility has had a substantial  effect on the market price
of securities  issued by many  companies for reasons  unrelated to the operating
performance  of the  specific  companies.  These broad market  fluctuations  may
adversely affect the market price of the common stock.

Forward-looking Statements
--------------------------

     The  discussion  contained  in this  Management  Discussion  & Analysis  is
"forward  looking" as that term is contemplated by Section 27A of the Securities
Act of 1933 and Section 12E of the Securities  Exchange Act of 1934,  including,
without limitation,  statements regarding the Company's  expectations,  beliefs,
intentions or strategies  regarding  future  business  operations  and projected
earnings from its products and services, which are subject to many risks.

     All  forward-looking  statements  included  in this  document  are based on
information available to the Company on the date hereof, and the Company assumes
no  obligation  to update any such  forward-looking  statements.  The  Company's
actual results may differ  materially as a result of certain factors,  including
those set forth hereafter and elsewhere in this Form 10-QSB. Potential investors
should consider  carefully the previously  stated  factors,  as well as the more
detailed  information  contained elsewhere in this Form 10-QSB,  before making a
decision to invest in the common stock of the Company.


                                       9
<PAGE>


PART II - OTHER INFORMATION

Item 2.  Changes In Securities

          None.

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

         (a)

Item 6.  Exhibits And Reports On Form 8-K

         (a)      Exhibits:

                  None.

         (b)      Form 8-K Reports:  None.



                                   SIGNATURES

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


                                            ACCUIMAGE DIAGNOSTICS CORP.

August 20, 2001

                                             By:  /s/  Leon Kaufman
                                               --------------------------------
                                               Leon Kaufman
                                               Chief Executive Officer

                                       10