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 March 31, 2003

                            ________________________

                        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 22,886,295
shares of common stock, par value $.001, as of March 31, 2003. No shares of
preferred stock are outstanding.

Transitional Small Business Disclosure Format:

                                  Yes [ ] No [X]


<PAGE>


                           ACCUIMAGE DIAGNOSTICS CORP.

                                   Form 10-QSB
                                  March 31, 2003


                               TABLE OF CONTENTS


PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

             Balance sheet as of March 31, 2003 (unaudited)
             and September 30, 2002 (audited)

             Statement of operations (unaudited) for the three and six
             months  ended March 31, 2003 and 2002

             Statement of cash flows (unaudited) for the six
             months period ended March 31, 2003 and 2002

             Notes to financial statements

Item 2.  Management's discussion and analysis of
         financial condition or plan of operations


PART II.  OTHER INFORMATION


Item 2.  Changes in securities

Item 4.  Submission of matters to a vote of securities holders

Item 6.  Exhibits and reports on form 8-K


Signature

<PAGE>


PART I.  FINANCIAL INFORMATION
         ITEM 1.  FINANCIAL STATEMENTS

<TABLE>
<CAPTION>


                           ACCUIMAGE DIAGNOSTICS CORP.
                                  BALANCE SHEET

                                                    March 31, 2003       September 30, 2002
                                                      (UNAUDITED)            (AUDITED)
                                                    ______________       __________________
<S>                                                   <C>                    <C>

ASSETS
Current Assets
              Cash and cash equivalents               $   13,456             $  231,843
              Accounts receivable, net of
                 allowance of $18,338                    337,497                330,062
              Employee receivable                         17,808                 20,895
              Inventory                                  100,516                106,046
              Prepaid expenses                            46,083                 53,175
                                                      __________             __________

Total Current Assets                                     515,359                742,021

Property and Equipment, net of accumulated
   depreciation and amortization                          46,733                 52,759

Other Assets
              Deposits                                    16,815                 15,067
              Other intangible assets, net                10,680                 16,969
              Goodwill, net                              309,063                309,063
              Investment in MDiagnostics, Inc.           300,000                300,000
                                                      __________             __________
Total Other Assets                                       636,558                641,099
                                                      __________
TOTAL ASSETS                                          $1,198,650             $1,435,879
                                                      ==========             ==========


   The accompanying notes are an integral part of these financial statements.


                                       3

</TABLE>

<PAGE>

<TABLE>
<CAPTION>


                          ACCUIMAGE DIAGNOSTICS CORP.
                           BALANCE SHEET (CONTINUED)


                                                    March 31, 2003       September 30, 2002
                                                      (UNAUDITED)            (AUDITED)
                                                    ______________       __________________
<S>                                                   <C>                    <C>

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
              Accounts payable                        $  287,117             $  208,592
              Product warranty reserve                    47,393                 50,000
              Other accrued liabilities                  133,724                107,401
              Accrued vacation                            63,597                 77,845
              Short-term note payable to
                 related party                           425,000                     -
                                                      __________             __________

Total Current Liabilities                                956,831                443,838

Long-Term Liabilities
              Long-term notes payable to
                 stockholders                            259,199                250,000
                                                      __________             __________

Total Liabilities                                      1,216,030                693,838
                                                      __________             __________

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              22,887                 22,887
   authorized; 22,886,295 shares issued and
   outstanding on March 31, 2003 and
   September 30, 2002

Paid-in-capital                                        3,488,348              3,488,348
Accumulated deficit                                   (3,528,615)            (2,769,194)
                                                      __________             __________

Total Stockholder's Equity                               (17,380)               742,041
                                                      __________             __________

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY            $1,198,650             $1,435,879
                                                      ==========             ==========


   The accompanying notes are an integral part of these financial statements.


                                       4

</TABLE>

<PAGE>

<TABLE>
<CAPTION>



                           ACCUIMAGE DIAGNOSTICS CORP
           STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME (UNAUDITED)
                       FOR THE THREE AND SIX MONTHS ENDED
                             MARCH 31, 2003 AND 2002


                                               For the three months     For the six months
                                                 Ended March 31,         Ended March 31,
                                              _____________________   ______________________
                                                  2003       2002       2003        2002
                                              _____________________   ______________________
<S>                                           <C>           <C>       <C>         <C>

REVENUES                                      $405,198     $965,592   $1,150,481  $1,712,325

COST OF GOODS SOLD                              25,767      124,040      211,423     200,926
                                              _____________________   ______________________

GROSS PROFIT                                   379,431      841,552      939,058   1,511,399

SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
General and
Administrative                                 271,608      328,935      636,945     703,691
Sales and Marketing                            259,421      191,522      660,558     350,879
Research and
Development                                    199,811      313,491      381,872     563,370
                                              _____________________   ______________________
TOTAL SELLING, GENERAL AND ADMINISTRATIVE      730,840      833,948    1,679,375   1,617,940
EXPENSES

                                              _____________________   ______________________
OPERATING INCOME/(LOSS)                       (351,409)       7,604     (740,317)   (106,541)

OTHER (INCOME) AND EXPENSES
          Interest Income                         (298)      (1,078)        (595)     (1,544)
          Other Income                               -      (10,667)           -     (20,615)
          Interest Expense                      13,050        6,250       19,300      12,500
          Franchise and Other Taxes                800            -          800           -
                                              _____________________   _____________________

TOTAL OTHER (INCOME) AND EXPENSES              (13,552)      (5,495)     (19,505)     (9,659)
                                              _____________________   ______________________

NET INCOME/(LOSS)                            $(364,961)    $ 13,099     (759,822)    (96,882)
                                              ====================    ======================

INCOME / (LOSS) PER SHARE-BASIC               $ (0.016)    $  0.001    $ (0.0332)  $  (0.005)
                                              =====================   ======================
INCOME / (LOSS) PER SHARE- DILUTED            $ (0.016)    $  0.001    $ (0.0332)  $  (0.005)
                                              =====================   ======================

Weighted Average Shares Outstanding
                   Basic                    22,886,295   22,886,295   22,886,295  18,517,248
                   Diluted                  22,886,295   22,901,702   22,886,295  18,517,248


   The accompanying notes are an integral part of these financial statements.

</TABLE>


                                        5


<PAGE>

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<CAPTION>


                           ACCUIMAGE DIAGNOSTICS CORP
                       STATEMENTS OF CASH FLOWS (UNAUDITED)
                           FOR THE SIX MONTHS PERIOD ENDED
                                MARCH 31, 2003 AND 2002

                                                                     March 31,           March 31,
                                                                       2003                2002
                                                                     _________           _________
<S>                                                                  <C>                <C>

Cash Flows from Operating Activities
              Net Cash provided (used) by Operating Activities:      $(212,656)         $(436,037)
                                                                     _____________________________

              Loan to other entity

Cash Flow from Investing Activities:
              Investment in Property and Equipment                      (6,134)             (2,593)
              Loan to other entity                                                               -
                                                                     _____________________________

              Net Cash Provided (Used) by Investing Activities        (218,790)           (438,630)
                                                                     _____________________________

Cash Flow From Financing Activities:
              Proceeds from Sales of Stock                                   -           1,000,000

                                                                     _____________________________

              Net Cash Provided (Used) by Financing Activities               -           1,000,000
                                                                     _____________________________

Increase (Decrease) in Cash                                           (218,790)            561,370

Cash Balance at beginning of period                                    232,246              51,422
                                                                     _____________________________

Cash Balance at end of period                                        $  13,456          $  612,792
                                                                     =============================


Supplemental Disclosure:
              Interest Paid                                                  -          $   12,500
              Income Taxes-Franchise tax                                     -          $      800


   The accompanying notes are an integral part of these financial statements.

</TABLE>


                                       6


<PAGE>


NOTES TO THE FINANCIAL STATEMENTS

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 March 31, 2003
and September 30, 2002, the results of its operations for the three and six
months ended March 31, 2003 and 2002, and the cash flow for the six months
period ended March 31, 2003 and 2002. 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, 2002
Form 10-KSB. The results of operations for the three months March 31, 2003 are
not necessarily indicative of the results of operations to be expected for the
full fiscal year ending September 30, 2003.


INVENTORIES AND COST OF SALES

     Inventories are stated at the lower of cost or market. Cost is determined
by the first-in, first-out (FIFO) method. Interim period cost of goods sales 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.

SOFTWARE DEVELOPMENT COSTS


     The Company capitalizes certain software development costs in accordance
with SFAS No. 86, ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE TO BE SOLD,
Leased or Otherwise Marketed. Costs incurred internally to create a computer
software product or to develop an enhancement to an existing product are charged
to expense when incurred as research and development until technological
feasibility has been established for the product or enhancement. Thereafter, all
software production costs are capitalized and reported at the lower of
unamortized cost or net realizable value. Capitalization ceases when the product
or enhancement is available for general release to customers. Software
development costs are amortized on a product basis at the greater of the amounts
computed using (a) the ratio of current gross revenues for a product or
enhancement to the total current and anticipated future gross revenues for that
product or enhancement, or (b) the straight-line method over the remaining
estimated economic life of the product or enhancements, not to exceed five
years. The Company evaluates the net realizable value of its software
development costs at each period end using undiscounted estimated future net
operating cash flows expected to be derived from the respective software product
or enhancement. If such evaluation indicates that the unamortized software costs
exceed the net realizable value, the Company writes off the amount by which the
unamortized software development costs exceed net realizable value. The Company
did not capitalize any software development costs in the quarter ended March 31,
2003 or during the fiscal year ended September 30, 2002.

WARRANTY RESERVE

     Based upon historical costs and its sales agreements, the Company maintains
a warranty reserve based on product sales to cover anticipated warranty costs
related to software sold. This reserve is continually compared to actual costs
by management and revised as necessary.


                                       7


<PAGE>


(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

DEFERRED REVENUE

     The Company recognizes revenues as earned. Amounts billed in advance of the
period in which product is shipped are recorded as a liability under "deferred
revenue".

ADVERTISING COSTS

     The Company expenses advertising costs as they are incurred. Advertising
expenses were $9,416 and $22,878, and $15,242 and $33,079 for the three months
and six months ended on March 31, 2003, and 2002, respectively.

INCOME TAXES

     At September 30, 2002, the Company has approximately $2,300,000 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.

USE OF ACCOUNTING ESTIMATES

     The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ
materially from those estimates. The actual results with regard to warranty
expenditures could have a material impact on the financial statements of the
Company if the actual rate of unit failure is greater than what was estimated by
the Company in the calculation of its warranty reserve.

NET LOSS PER SHARE

     Basic loss per share is computed by dividing net loss by the weighted
average number of common shares outstanding. The dilutive loss per share
calculation gives effect to all potentially dilutive common shares, such as
stock options or warrants, which were outstanding during the period. Shares
issued during the period and shares repurchased by the Company are weighted for
the portion of the period that they were outstanding for both basic and diluted
loss per share calculations. There were no dilutive securities for the three
month period ended March 31, 2003 and 2002.


                                       8


<PAGE>


(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


STOCK-BASED COMPENSATION


     The Company accounts for its stock based compensation plan based on
Accounting Principles Board ("APB") Opinion No. 25. In October 1995, the
Financial Accounting Standards Board ("FASB") issued SFAS No. 123, Accounting
for Stock-Based Compensation. The Company has determined that it will not change
to the fair value method and will continue to use APB Opinion No. 25 for
measurement and recognition of any expense related to employee stock based
transactions. As such, compensation expense would generally be recorded on the
date of grant only if the current market price of the underlying stock exceeds
the exercise price.

     In March 2000, the FASB released Interpretation No. 44, "Accounting for
Certain Transactions Involving Stock Compensation." This Interpretation
addresses certain practice issues related to APB Opinion No. 25. The provisions
of this Interpretation are effective July 1, 2000, and except for specific
transactions noted in paragraphs 94-96 of this Interpretation, shall be applied
prospectively to new awards, exchanges of awards in business combinations,
modifications to an outstanding award, and exchanges in grantee status that
occur on or after that date. Certain events and practices covered in this
Interpretation have different application dates, and events that occur after an
application date but prior to July 1, 2000, shall be recognized only on a
prospective basis. Accordingly, no adjustment shall be made upon initial
application of the Interpretation to financial statements for periods prior to
July 1, 2000. Thus, any compensation cost measured upon initial application of
this Interpretation that is attributed to periods prior to July 1, 2000 shall
not be recognized. The Company adopted the provisions of this Interpretation
starting July 1, 2000.


ACCOUNTING PRONOUNCEMENTS

     In July 2001, the FASB issued Statements of Financial Accounting Standards
No. 141, "Business Combinations" ("FAS 141") and No. 142, "Goodwill and Other
Intangible Assets" ("FAS 142"). SFAS No. 141 requires all business combinations
initiated after June 30, 2001 to be accounted for using the purchase method.
Under SFAS No. 142, goodwill and intangible assets with indefinite lives are no
longer amortized but instead tested for impairment at least annually in
accordance with the provisions of FAS No. 142. FAS No. 142 will also require
that intangible assets with definite lives be amortized over their respective
useful lives to their estimated residual values, and reviewed for impairment in
accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of." The provisions of this
Statement are required to be applied starting with fiscal years beginning after
December 15, 2001. The Company will continue to amortize goodwill existing at
September 30, 2001 until the new standard is adopted and goodwill tested for
impairment in accordance with SFAS No. 144. The Company is currently evaluating
the effect that adoption of the provisions of FAS No. 142 will have on its
results of operations and financial position.

     In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." SFAS No. 143 requires liability recognition for
obligations associated with the retirement of tangible long-lived asset and the
associated asset retirement costs. The Statement is effective for financial
statements issued for fiscal years beginning after June 15, 2002 with earlier
application encouraged. The implementation of SFAS No. 143 will not have a
material affect on the Company's results of operations or financial position.


                                       9


<PAGE>


(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 supersedes SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed of", in that it removes goodwill from its impairment scope
and allows for different approaches in cash flow estimation. However, SFAS No.
144 retains the fundamental provisions of SFAS No. 121 for (a) recognition and
measurement of long-lived assets to be held and used and (b) measurement of
long-lived assets to be disposed of. SFAS No. 144 also supersedes the business
segment concept in APB opinion No. 30, "Reporting the Results of
Operations-Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions," in
that it permits presentation of a component of an entity, whether classified as
held for sale or disposed of, as a discontinued operation. However, SFAS No. 144
retains the requirement of APB Opinion No. 30 to report discontinued operations
separately from continuing operations. The provisions of this Statement are
effective for financial statements issued for fiscal years beginning after
December 15, 2001 with earlier application encouraged. Implementation of SFAS
No. 144 will not have a material effect on the Company's results of operations
or financial position.

FAIR VALUE OF FINANCIAL INSTRUMENTS

     The carrying value of certain financial instruments, including accounts
receivable, accounts payable and accrued expenses approximates fair value due to
their short maturities. Based on borrowing rates currently available for loans
with similar terms, the carrying values of notes payable approximates the fair
values.


(2)  RELATED PARTY TRANSACTIONS

     The following transactions took place between the Company and related
parties during the three month period ended March 31, 2003:

     On January 31, 2003, February 18 and March 14, 2003 the Company received
new note loans from Coit Tower Realty in the amounts of $60,000, $100,000, and
$50,000, respectively. As of March 31, 2003, the Company has $310,000 of note
loans outstanding with Coit Tower Realty. These notes are secured by certain
account receivables of the Company. The Company's Chairman of the Board, C.
Allen Wall, manages Coit Tower Realty. The note payable bears an interest rate
of 12.0% per annum. C. Allen Wall has been Chairman since March 2002. Mr. Wall
was also unanimously appointed by the Board of Directors as Chief Executive
Officer of the Company on April 18, 2003.

     On January 30, 2003, the Company received a loan from Dr. Louis J. Kearn, a
Director in the Board of the Company, in the amount of $15,000. This note was
secured by certain receivables of the Company. Dr. Kearn is the Founder and
Chairman, Emeritus, of COIT Services one of the largest drapery and carpet
cleaning companies in the United States. The note payable bears an interest rate
of 10.00% per annum.

     On March 3, 2003 and March 31, 2003, the Company received short-term loan
notes in the amounts of $50,000 and $50,000, respectively, from Chung Lew, a
major shareholder and bondholder in the Company. These notes carry an interest
rate of 10.0% per annum. The notes were used to meet payroll for the company.


(3)   EQUITY TRANSACTIONS

COMMON STOCK TRANSACTIONS

     Effective December 10, 2001, the Company concluded the sale of its common
shares through a private placement offering. The Company sold 11,904,761 shares
of unregistered, restricted common stock for $1,000,000, completing the full
offering. The shares were issued at a price of $0.084 per share, which was at a
discount from the market price. Under this private placement offering, the
Company sold 2,976,189 of these shares to related parties, which include members
of the Board of Directors and their relatives. Additionally, Dr. C. Allen Wall
purchased 6,378,576 shares and became a member of the Board of Directors. Dr.
Wall was elected as Chairman of the Board on March 6, 2002.

STOCK OPTIONS

     During the period January 1, 2003 through March 31, 2003, the Company
issued incentive stock options to its employees allowing them to purchase up to
50,000 shares of common stock. The exercise price is equivalent to the market
price on the date of the grant. The exercise period for the options is for 10
years from the date of the grant, and the options vest equally over a 4-year
period.


                                       10


<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 March 31, 2003 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 January 14, 2003.

     AccuImage is engaged in the development, marketing and support of software
for the visualization, analysis and management of medical imaging data. The
software's primary function is to enhance physicians' interpretation of data
from medical imaging modalities such as computed tomography, magnetic resonance,
and ultrasound through the application of three-dimensional computer graphics
and image processing technologies. This enhanced analysis can support physicians
in clinical diagnosis, surgical planning and medical research. Three-dimensional
visualization allows communication of findings in a form readily understood by
physicians and others without the specialized training otherwise required for
interpreting the images generated by the medical imaging modalities. Efficiency
gains and cost savings may be realized through automated reporting tools and
provision for electronic distribution of the medical imaging data and
post-processed results via internal networks and the Internet.

     The AccuImage software was conceived and developed on the same hardware
platform that it is now distributed on: standard, high-performance, low cost
personal computer ("PC") workstations running the Windows operating system from
Microsoft. The software interfaces with various medical imaging modalities via
the standard medical imaging DICOM protocol and uses the Internet and standard
PC networks for subsequent distribution of images and post-processed results.
Through this combination of standard underlying products and protocols,
AccuImage is able to offer to physicians cost-effective, easy-to-use yet
powerful visualization, analysis and laborsaving tools for everyday use.

     The Company markets its products to radiology departments, imaging centers
and original equipment manufacturers of diagnostic imaging systems through a
direct sales force, non-exclusive distributors in the United States and
independent distributors in international markets.

REVENUE

     For the quarter ended March 31, 2003, revenue decreased by $560,394, or by
58%, over the same period in 2002. Sales for this quarter to GE/Imatron Inc.
decreased by $451,300 to $0, compared to $451,300 for the same period in 2002.
Approximately $43,872 in sales to AmeriScan were recognized in the quarter ended
March 31, 2003. This represented 11% of the March 31, 2003 quarter's revenues.

GROSS PROFIT

     For the three months ended March 31, 2003, gross profit on sales revenues
decreased to $379,431, or 94.0%, compared with $841,552, or 87.2%% for the same
period in 2002.

SALES AND MARKETING

     The Company's sales and marketing expenses for the quarter ended March 31,
2003 were $259,421 compared with expenses of $191,522 for the same quarter in
fiscal year 2002. This increase of $67,899 was due primarily to the increase in
sales people from three to six, and the related increased travel and
entertainment expenses for the sales force.


                                       11


<PAGE>


RESEARCH AND DEVELOPMENT

     The Company spent $199,811 on research and development (R&D) activities
during the quarter ended March 31, 2003 compared with $313,491 for the quarter
ended March 31, 2002. This decrease is due primarily to a 20% reduction in
salary and related expenses from R&D staff over the prior quarter. 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.

OPERATIONAL AND ADMINISTRATIVE

     Operational and administrative expenses were $271,608 for the quarter ended
March 31, 2003, which compares with $328,935 for the same quarter in the
previous year. This decrease, of $57,327, is primarily due to reduced officers
and administrative salaries, and reduced office operational expenses.


RESULTS OF OPERATIONS

     Revenues decreased by $560,394, to $ 405,198, for the quarter ended March
31, 2003 over the same quarter ended March 31, 2002. This was due to lack of
sales across the board. Expenses decreased by $103,108, to $730,840 primarily
due to salary reductions of 20% and office expense reductions.

     This resulted in a net operating loss of ($759,822) for the six months
ending March 31, 2003, or $662,940 greater than the net operating loss of
($96,882) for the same period in fiscal year 2002. This was primarily due to
lack of sales revenues and increased in sales force operating expenses.

LIQUIDITY AND CAPITAL RESOURCES

     In the quarter ending March 31, 2003, the Company generated an operating
loss of $351,409 due to lack of sales revenues and increased operating expenses
from sales force. On March 31, 2003, the Company had $13,456 in cash and net
accounts receivable of $337,497. Working capital for the period ended March 31,
2003 equaled a deficit of ($558,485) compared with $298,183 for the period ended
September 30, 2002. The current ratio for the period ended March 31, 2003 was
0.54 compared to 1.67 for the period ended September 30, 2002.

     During the six months period ending March 31, 2003, the Company invested
approximately $6,134 to acquire primarily computer equipment and tradeshow
display units.

     The Company cash position has deteriorated considerably due to lack of
sales revenues and increased sales and marketing expenses. Sales prospects are
quite poor at this time and the Company will be implementing a reorganization
plan, including financial strategies, during the next quarters.

     The Company anticipates that cash requirements for the remainder of the
fiscal year will be met by a combination of existing operational income from
sales and financing from investors or other capital sources. If these conditions
are not met during the next quarter, the Company's financial position as a going
concern is at high risk given current sales, capital and financial market
conditions.

FOREIGN CURRENCY TRANSACTIONS

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

INFLATION

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

SHARE PRICE VOLATILITY

     During the second quarter of fiscal year 2003, 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,


                                       12


<PAGE>


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 and as disclosed in the
Company's other filings with the Security and Exchange Commission. 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.

PART II - OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES

         None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

         None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibit  Description
_______  ___________

  99     Certification of Periodic Report


                                   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.

May 28, 2003

                                            By:  /s/  C. ALLEN WALL
                                            ____________________________________
                                            C. Allen Wall
                                            Chairman and Chief Executive Officer


                                       13


<PAGE>


<PAGE>


                           ACCUIMAGE DIAGNOSTICS CORP.


I, C. ALLEN WALL, certify that:
   _____________

1.   I have reviewed this quarterly report on Form 10-Q of ACCUIMAGE DIAGNOSTICS
     CORP.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

          a)   designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

          b)   evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c)   presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of registrant's  auditors and the audit committee of registrant's
     board of directors (or persons performing the equivalent function):

          a)   all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal controls; and

          b)   any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


DATED:  MAY 28, 2003                 ACCUIMAGE DIAGNOSTICS CORP.
____________________                 ___________________________
                                            (Registrant)



                                     /s/ C. ALLEN WALL
                                     __________________________________________
                                         C. Allen Wall
                                         Chairman and Chief Executive Officer


                                       14

<PAGE>



                           ACCUIMAGE DIAGNOSTICS CORP.


I, HERNAN WELCH, certify that:
   ____________

1.   I have reviewed this quarterly report on Form 10-Q of ACCUIMAGE DIAGNOSTICS
     CORP.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

          a)   designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

          b)   evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c)   presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of registrant's  auditors and the audit committee of registrant's
     board of directors (or persons performing the equivalent function):

          a)   all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal controls; and

          b)   any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


DATED:  MAY 28, 2003                 ACCUIMAGE DIAGNOSTICS CORP.
____________________                 ___________________________
                                            (Registrant)



                                     /s/ HERNAN WELCH
                                     __________________________________________
                                         Hernan Welch
                                         VP of Finance



                                       15