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                     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, 1999

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

                         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 Oyster Point Blvd., Suite 114, South San Francisco, California 94080-1917
-----------------------------------------------------------------------------
       (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 ___ No _X_

The number of shares outstanding of the issuer's  common stock
was 9,748,200 shares of common stock, par value $.001, as of August 20, 1999.
No shares of Preferred stock are outstanding.

Transitional Small Business Disclosure Format:
Yes___ No _X_

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<PAGE>


INDEX

                         PART I - FINANCIAL INFORMATION

 Item   Description

 1. Financial Statements                                               4

 2. Management's Discussion and Analysis of Financial Condition or
    Plan of Operations                                                 8

                           PART II - OTHER INFORMATION                 9






<PAGE>




                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                                 JAMES R. KERR
                          CERTIFIED PUBLIC ACCOUNTANT
                        60 East Third Avenue, Suite 390
                          San Mateo, California 94401
                       (650) 548-1700 - FAX (650) 548-1716

Acculmage Diagnostics Corp.
South San Francisco, California

We have compiled the accompanying  balance sheet of Acculmage  Diagnostics Corp.
(a  corporation)  as of June 30, 1999, and the related  statements of income and
retained  earnings and cash flows for the nine months then ended,  in accordance
with  Statements on Standards for Accounting and Review  Services  issued by the
American Institute of Certified Public Accountants.

A  compilation  is limited to  presenting  in the form of  financial  statements
information  that is the  representation  of management.  We have not audited or
reviewed the accompanying financial statements and, accordingly,  do not express
an opinion or any other form of assurance on them.

Management has elected to omit substantially all of the disclosures  required by
generally  accepted  accounting  principles.  If the  omitted  disclosures  were
included  in  the  financial   statements,   they  might  influence  the  user's
conclusions about the Company's financial position,  results of operations,  and
cash flows.  Accordingly,  these financial statements are not designed for those
who are not informed about such matters.

/s/ James R. Kerr
---------------------------
Certified Public Accountant
August 18, 1999

<PAGE>

                          Acculmage Diagnostics Corp.
                                 Balance Sheet
                                 June 30, 1999

                                     Assets

Current Assets
 Cash                                                   $  67,660.23
 Accounts receivable                                      204,722.92
 Inventory                                                  5,391.48
 Prepaid expenses                                          81,850.00
                                                        ------------
                                                          359,624.63
Property and Equipment
 Equipment                                                 46,797.78
 Less accumulated depreciation                            (24,708.56)
                                                        ------------
                                                           22,089.22

Other Assets
 Deposits                                                   4,318.45
 Other intangible assets                                  171,265.00
 Less accumulated amortization                           (100,462.77)
                                                        ------------
                                                           75,120.68
                                                        ------------
                                                        $ 456,834.53
    Total Assets                                        ============


                              Liabilities & Capital

Current Liabilities
 Accounts payable                                       $  56,931.39
 Other accrued liabilities                                 42,559.70
 Withheld and accrued payroll taxes                        14,919.03
                                                        ------------
                                                          114,410.12

Long Term Liabilities
 Notes payable                                             25,000.00
 Loan from shareholders                                    56,500.00
                                                        ------------
                                                           81,500.00
                                                        ------------
  Total Liabilities                                       195,910.12

Stockholder's Equity
 Common stock issued                                      159,199.00
 Additional paid-in capital                             1,278.010.86
 Retained earnings                                     (1,176,285.45)
                                                       -------------
                                                          260,924.41
                                                       -------------
Total Liabilities &
         Capital                                       $  456,834.53
                                                       =============



                Compiled - see accompanying accountants' report.
<PAGE>

                          Acculmage Diagnostics Corp.
                   Statement of Income and Retained Earnings
                       For the Period Ended June 30, 1999

                                                       Year to
                              June         %             Date            %
                          ------------   ------      ------------      ------
Revenue
  Sales                   $ 303,774.49   100.00      $ 783,538.49      100.00
                          ------------   ------      ------------      ------
                            303,774.49   100.O0        783,538.49      100.00

Cost of Sales                92,059.94    30.31        185,812.61       23.71
                          ------------   ------      ------------      ------
  Gross Profit              211,714.55    69.69        597,725.88       76.29

Operating Expenses
Depreciation & amortization  12,886.77     4.24         40,558.14        5.18
Salaries and Wages           79,342.13    26.12        213,215.82       27.21
Employee benefits            11,078.06     3.65         58,377.17        7.45
General & Administrative
   Expense                   15,827.08     5.21         39,338.37        5.02
Legal and accounting         73,276.14    24.12         88,281.02       11.27
Interest                        750.00     0.25          2,500.00        0.32
Professional Consulting       5,223.92     1.72        111,734.77       14.26
Rent                         11,243.30     3.70         33,488.20        4.27
Marketing & Promotion        26,039.95     8.57         80,974.47       10.33
Other operating expenses      1,350.17     0.44         21,550.23        2.75
                           -----------   ------        ----------      ------
                            237,017.52    78.02        690,018.19       88.06
                           -----------   ------        ----------      ------

   Operating Income         (25,302.97)   (8.33)       (92,292.31      (11.78)

Other Income and Expense        668.96     0.22          5,389.16        0.69
                           -----------   ------        ----------      ------
                                668.96     0.22          5,389.16        0.69
                           -----------   ------        ----------      ------

Net Income (Loss)          $(24,634.01)   (8.11)       (86,903.15)     (11.09)
                           ===========   ======                        ======

Beginning Retained Earnings                         (1,089,382.30)
                                                    -------------

Ending Retained Earnings                           $(1,176,285.45)
                                                   ==============

                Compiled - see accompanying accountants' report.
<PAGE>


                          Acculmage Diagnostics Corp.
                            Statement of Cash Flows
                       For the Period Ended June 30, 1999

                                                 Quarter ended       Year to
                                                     March            Date
                                                -------------       -------

Cash Flows from Operating Activities:
 Net income(loss)                             $  (24,634.01)    $  (86,903.15)
 Adjustments to reconcile net income to
 net cash provided by operating activities:
  Depreciation  expense                            3,120.00           9,360.00
  Amortization expense                             9,766.77          27,904.37
 Change in accounts receivable                   (49,424.84)       (187,496.71)
 Change in inventory                               4,185.00           6,975.00
 Change in prepaid assets                              -0-            3,667.20
 Change in accounts  payable                      11,444.18          37,950.64
 Change in accrued  expenses                       3,295.68         (67,160.06)
 Change in other current liabilities                 824.19           6,236.42
                                              -------------      -------------
 Net Cash Provided by (Used by)
  Operating Activities                            (41,423.03)      (249,466.29)

Cash Flows from Investment Activities:
 Investment in property & equipment                     -0-           6,510.00
 Investment in other assets                             -0-          22,290.00
                                              -------------      -------------
  Net Cash Provided by (Used by)
   Investing Activities                                 -0-          28,800.00

Cash Flows from Financing Activities:
  Repayment of loans from shareholder             (25,000.00)       (75,000.00)
  Additional paid-in capital                            -0-         210,742.97
  Sale of capital stock                                 -0-         150,467.00
                                              --------------     -------------
   Net Cash Provided by (Used by)
    Financing Activities                          (25,000.00)       286,209.97
                                              --------------     -------------

   Net Increase (Decrease) in Cash                (66,423.03)        65,543.68
Cash at Beginning of Period                       134,083.26          2,116.55
                                              --------------     -------------

Cash at End of Period                             $67,660.23     $   67,660.23
                                              ==============     =============


                 Compiled -see accompanying accountants' report

<PAGE>


Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATION.

         The following  discussion  and analysis  should be read in  conjunction
with the  Company's  Condensed  Financial  Statements  and related Notes thereto
contained  elsewhere with this document.  Operating  results for the three-month
period ended June 30, 1999 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-SB, General Form for Registration
of Securities that the Company filed on June 30, 1999.

Results of Continuing Operations:

Three months ended June 30, 1999 versus 1998

         Overall revenues were $303,774 for the three months ended June 30, 1999
compared  with  $117,323  for the  three  months  ended  June 30,  1998,  a 159%
increase. These increases were primarily the result of increases in shipments of
the  Company's  proprietary  medical  visualization  software to the medical and
clinical community.  Currently,  the Company realizes negligible income from its
maintenance and services revenue.

         Total cost of revenues as a percent of  revenues  for the three  months
ended June 30, 1999 decreased to 30% as compared with 66% in 1998.

         Operating expenses for the three months ended June 30 1999 decreased to
78% of overall quarterly revenues compared to 122% of quarterly revenues for the
equivalent period in 1998.

Liquidity and Capital Resources:

         At June 30, 1999,  working  capital  decreased to $245,214  compared to
March 31, 1999 working capital of $283,948 primarily as a result of the net loss
sustained by the Company.  The current ratio decreased to 3.1:1 at June 31, 1999
from 3.9:1 at March 31, 1999.

         The Company's total assets decreased to $456,864  compared to March 31,
1999 total assets of $490,904. Cash and cash equivalents decreased to $67,660 in
June 1999,  from  $134,083 in March 1999,  as a result of  operating  losses and
payment of long term debt.  Cash used in continuing  operations  was $41,422 for
three months ended June 30, 1999 compared to $143,365  during the same period in
1998.  Cash generated from  receivables and decreased  inventory  purchases were
augmented  by  an  increase  in  accounts  payable.  The  decrease  in  accounts
receivables was primarily due to payment of outstanding  invoices.  The decrease
in inventory resulted from the use of parts and materials in product shipments.

         There was no cash  provided by investment  activities  during the three
months ended June 30, 1999.

         There was no cash  provided by  financing  activities  during the three
months ended June 30, 1999.

         The Company's liquidity is affected by many factors,  some based on the
normal   ongoing   operations  of  the  business  and  others   related  to  the
uncertainties  of  the  industry  and  global   economies.   Although  the  cash
requirements  will  fluctuate  based on  timing  and  extent  of these  factors,
management  believes that cash, and cash  equivalents  existing at June 30, 1999
together  with the proceeds  from ongoing sales of products and services in 1999
will provide the Company  with  sufficient  cash for  operating  activities  and
capital requirements through December 31, 1999.

         To satisfy the  Company's  capital and  operating  requirements  beyond
1999,  profitable  operations,  additional  public or private  financing  or the
incurrence  of debt may be required.  If future  public or private  financing is
required by the Company,  holders of the  Company's  securities  may  experience
dilution.  There can be no assurance  that equity or debt sources,  if required,
will be available or, if available, will be on terms favorable to the Company or
its shareholders. The Company does not believe that inflation has had a material
effect on its revenues or results of operations.

         YEAR 2000 COMPLIANCE

The Company's State of Readiness

         In 1999, the Company  established a project team to coordinate existing
Year 2000  activities  and  address  remaining  Year 2000  issues.  The team has
focused  its  efforts on three  areas:  (1)  information  systems  software  and
hardware,  (2) software the Company  produces and the operating  systems used in
conjunction  with  the  Company's  proprietary  software,  and  (3)  third-party
relationships.

         The  Company has  reviewed  its primary  financial  and other  business
information  systems and it believes that the systems will be able to manage and
manipulate all material data involving the transition  from 1999 to 2000 without
functional or data  abnormality and without  inaccurate  results related to such
data.

         The  Company   has   reviewed   its   proprietary   visualization   and
communications  software for Y2K readiness.  The Company has made the commitment
that any product  releases in 1999 and later will be Y2K compliant.  The Company
is coordinated  efforts with its largest customer,  Imatron Inc., to ensure that
its  software  will  transition  from the year  1999 to the  year  2000  without
functional  abnormalities.  The  Company  does not have any  formal  information
concerning  the Y2K  compliance  status of its  other  customers.  If  customers
experience  significant Y2K problems,  they may choose to delay or cancel orders
for the Company's products.

         The Company has contacted  all its  suppliers,  especially  sole-source
vendors,  and a review is underway to ensure Year 2000  compliance.  The Company
expects this  evaluation  to be completed by September  30, 1999.  To the extent
that  responses to the Y2K issue are  unsatisfactory,  the Company will consider
changing suppliers or service providers,  but there can be no assurance that the
Company  will be  successful  in finding such  alternative  suppliers or service
providers.  In the event  that any of the  Company's  significant  suppliers  or
customers do not achieve Y2K compliance in a timely  manner,  and the Company is
unable to replace them with  alternate  suppliers or  customers,  the  Company's
operations could be materially adversely affected.

         While  the  Company  believes  the  issues  associated  with  Year 2000
compliance  are  being  addressed,  and  that the  cost of  conformance  will be
negligible,  there remains the risk that suppliers may encounter disruptions due
to Year 2000  compliance  or the costs  associated  with  implementing  computer
system changes.

The Company's Risks and Contingency Plan

         The  Company  is  working  to  identify  and  analyze  the most  likely
worst-case  scenarios  for  third-party  relationships  affected  by Y2K.  These
scenarios could include possible  infrastructure  collapse, the failure of power
and  water  supplies,  major  transportation  disruptions,   unforeseen  product
shortages  due to  hoarding  of  products  and  sub-assemblies  and  failures of
communications  and financial  systems.  Any one of these scenarios could have a
major and  material  effect on the  Company's  ability to build its products and
deliver  services to its customers.  An  infrastructure  problem  outside of its
control or some combination of several of these problems could result in a delay
in product shipments depending on the nature and severity of the problems.

         There  is no  assurance  that the  Company  will be  successful  in its
efforts to identify  and address all Y2K issues.  Even if the Company  acts in a
timely manner to complete all of its and develops  contingency plans believed to
be adequate, some problems may not be identified or corrected in time to prevent
material adverse consequences to the Company.

Estimated Costs

         The  costs  incurred  by the  Company  to  date in  addressing  its Y2K
readiness issues are primarily  non-incremental  compensation costs and have not
been  material  to  the  Company's  operating  results.  The  Company  currently
estimates  that the total  additional  costs for  addressing  its  internal  Y2K
readiness will not be substantial.

         The discussion above regarding estimated completion dates, costs, risks
and other  forward-looking  statements  regarding  Y2K is based on the Company's
best estimates given  information that is currently  available and is subject to
change.  As the Company  continues to progress with its Y2K initiatives,  it may
discover that actual results will differ materially from these estimates.


ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

         In the past the Company  has held  investments  consisting  of interest
bearing  investment grade instruments  consistent with the Company's  investment
portfolio.  At June 30,  1999,  the  Company  had  money  market  mutual  funds,
certificates  of deposit  and  commercial  paper that  mature in less than three
months.

         The Company's sales are denominated in U.S. Dollars.

         The  Company  does  not  believe  that it is  subject  to any  material
exposure to interest rate, foreign currency or other market risks.


                           PART II - OTHER INFORMATION


Item 1.  LEGAL PROCEEDINGS

         Not applicable.

Item 2.  CHANGES IN SECURITIES

          Not applicable.

Item 3.  DEFAULTS UPON SENIOR SECURITIES

         Not applicable.

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not applicable.


Item 5.  OTHER INFORMATION

          None.

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)    Exhibits:

                No. 27 - Financial Data Schedule as of June 30, 1999.

         (b)    Form 8-K Reports:

                Date     Item    Description
                ----     ----    -----------
                8/20/99   5      Change in Registrant's Certifying Accountants



                                   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.

Date: August 20, 1999                  /s/    Allen B. Poirson, Ph.D.
                                       ------------------------------
                                              Allen B. Poirson, Ph.D.
                                              President, CEO, and Director