U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 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, 2000

[ ] Transition report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934.

For the transition period from to

Commission File Number: 2-99083-A

CATHEL PARTNERS, LTD.
(Exact name of registrant as specified in its charter)

Delaware 59-2571253
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

68 Schraalenberg Road
PO Box 233
Harrington Park, NJ 07640
(Address of principal executive offices)

(201) 784-5190
(Registrant's telephone number, including area code)

Former name, former address and former fiscal year, if changed since last report

Check whether the issuer

(1) filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and

(2) has been subject to such filing requirements for the past 90 days.

[X] Yes [ ] No

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: As of May 16, 2001, there were
1,609,374 shares of common stock outstanding.

CATHEL PARTNERS, LTD
JUNE 30, 2000 QUARTERLY REPORT ON FORM 10-QSB
TABLE OF CONTENTS

Page Number

Special Note Regarding Forward Looking Information............................ 1

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements...................................................2
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................. 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk........... 11

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.................................................... 11
Item 2. Changes in Securities and Use of Proceeds............................ 11
Item 3. Defaults Upon Senior Securities...................................... 11
Item 4. Submission of Matters to a Vote of Security Holders...................11
Item 5. Other Information.................................................... 11
Item 6. Exhibits and Reports on Form 8-K..................................... 11

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

To the extent that the information presented in this Quarterly Report on
Form 10-QSB for the quarter ended June 30, 2000 discusses financial projections,
information or expectations about our products or markets, or otherwise makes
statements about future events, such statements are forward- looking. We are
making these forward-looking statements in reliance on the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Although we
believe that the expectations reflected in these forward-looking statements are
based on reasonable assumptions, there are a number of risks and uncertainties
that could cause actual results to differ materially from such forward-looking
statements. These risks and uncertainties are described, among other places in
this Quarterly Report, in "Management's Discussion and Analysis of Financial
Condition and Results of Operations".

In addition, we disclaim any obligations to update any forward-looking
statements to reflect events or circumstances after the date of this Quarterly
Report. When considering such forward-looking statements, you should keep in
mind the risks referenced above and the other cautionary statements in this
Quarterly Report.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

The condensed financial statements for the period ended June 30, 2000
included herein have been prepared by Cathel Partners, Ltd. (the "Company")
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission (the "Commission"). In the opinion of management, the
statements include all adjustments necessary to present fairly the financial
position of the Company as of June 30, 2000, and the results of operations and
cash flows for the six months and three months periods ended June 30, 1999 and
1998.

The Company's results of operations during the three months of the
Company's fiscal year are not necessarily indicative of the results to be
expected for the full fiscal year.

The financial statements included in this report should be read in
conjunction with the financial statements and notes thereto in the Company's
Annual Report on Form 10-K for the fiscal years ended December 31, 1999 and
1998.

STATEMENTS

Balance Sheet as of June 30, 2000 and December 31, 1999........................6
Statement of Operations for the three months and
six months ended June 30, 2000 and 1999.................................. 7
Statement of Cash Flows for the six months ended June 30, 2000 and 1999....... 8
Statement of Stockholders' Equity for the six months ended June 30, 2000..... 9
Notes to Consolidated Financial Statements..................... ..............10

CATHEL PARTNERS, LTD.

BALANCE SHEET

June 30,
December 31, 2000
1999 Unaudited
----------- ---------
Assets

Current assets
Cash $273 $331
Total current assets 273 331

Total assets $273 $331

Liabilities and Stockholders' Equity

Current liabilities
Accounts payable and accrued expenses $19,771 $12,271
Total current liabilities 19,771 12,271

Stockholders' equity
Common Stock authorized 500,000,000 shares, $0.00001 par value each. 5 37
At December 31, 1999 and June 30, 2000, there are 469,374 and 3,709,374
shares outstanding respectively .
Additional paid in capital 1,285,279 1,301,447
Deficit accumulated during the development stage (1,304,782) (1,313,424)
Total stockholders' equity (19,498) (11,940)
Total liabilities and stockholders' equity $273 $331

The accompanying Notes are an integral part of these Financial Statements.

CATHEL PARTNERS, LTD.
STATEMENT OF OPERATIONS

For the For the For the period
three months three months For the six For the six from inception ,
ended ended months ended months ended June 7, 1985, to
June 30, June 30, June 30, June 30, June 30,
1999 2000 1999 2000 2000
Unaudited Unaudited Unaudited Unaudited Unaudited
------------ --------- ------------ ----------- ---------------

Revenue $-0- $-0- $-0- $-0- $-0-

Costs of goods sold -0- -0- -0- -0- -0-

Gross profit -0- -0- -0- -0- -0-

Operations:
General and administrative 2,322 3,219 4,518 7,442 1,312,221
Issuance of shares of common stock 1,200 1,200
as non cash compensation-officer's
salary
Depreciation and amortization -0- -0- -0- -0- -0-
Total expense 2,322 3,219 4,518 8,642 1,313,424

Loss from operations (2,322) (3,219) (4,518) (8,642) (1,313,424)

Net income (loss) $(2,322) $(3,219) $(4,518) $(8,642) $(1,313,424)

Net income (loss) per share -basic $(0.00) $(0.00) $(0.00) $(0.00)
Number of shares outstanding-basic 469,374 2,283,142 469,374 2,283,142

The accompanying Notes are an integral part of these Financial Statements.

CATHEL PARTNERS, LTD.
STATEMENT OF CASH FLOWS

For the period
For the six For the six from inception ,
months ended months ended June June 7, 1985, to
June 30, 30, June 30,
1999 2000 2000
Unaudited Unaudited Unaudited
------------ ----------------- ----------------

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(2,268) $(8,642) $(1,313,424)
Adjustments to reconcile net loss to cash used in operating activities
Shares issued for accrued salaries 1,200 1,200
Depreciation -0- -0-
Accounts payable and accrued expenses (2,232) (7,500) 12,271
TOTAL CASH FLOWS FROM OPERATIONS (36) (14,942) (1,299,953)

CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock 15,000 1,300,284
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES 15,000 1,300,284

TOTAL CASH FLOWS FROM INVESTING ACTIVITIES

NET INCREASE (DECREASE) IN CASH (36) 58 331
CASH BALANCE BEGINNING OF PERIOD 417 273 -0-
CASH BALANCE END OF PERIOD $309 $331 $331

The accompanying Notes are an integral part of these Financial Statements.

CATHEL PARTNERS, LTD.
STATEMENT OF STOCKHOLDERS EQUITY

Deficit
Common Stock Common Stock Additional accumulated during
Date paid in capital development stage Total
-------------- ------------ --------------- ------------------ -----

Balance December 31, 1997 469,374 $5 $1,285,279 $(1,291,867) $417
Net loss (72) (72)

Balance December 31, 1998 469,374 5 1,285,279 (1,291,939) 6,655
Net loss (12,843) (12,843)

Balance December 31, 1999 469,374 $5 $1,285,279 $(1,304,782) $(19,498)

Unaudited
Sale of shares 3,000,000 30 14,970 15,000
Issuance of shares for services 240,000 2 $1,198 $1,200
Net loss (8,642) (8,642)

Balances June 30, 2000 3,709,374 $37 $1,301,447 $(1,313,424) $(11,940)

CATHEL PARTNERS, LTD.
(a development stage company)
Notes to Financial Statements
June 30, 2000

Note A - Basis of Reporting

The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, such statements include all adjustments which are considered
necessary for a fair presentation of the financial position of Cathel Partners,
Ltd. (the "Company") at June 30, 2000 and the results of its operations, and
cash flows for the six-month period then ended. The results of operations for
the six-month period ended June 30, 2000 are not necessarily indicative of the
operating results for the full year. It is suggested that these financial
statements be read in conjunction with the financial statements and related
disclosures for the year ended December 31, 1999 included in the Company's Form
10-SB.

Note B - Net Income Per Share of Common Stock

In 1997, the Financial Accounting Standards Board issued Statement No. 128,
"Earnings Per Share". Statement No. 128 replaced the calculation of primary and
fully diluted earnings per share with basic and diluted earnings per share.
Unlike primary earnings per share, basic earnings per share exclude any dilutive
effects of options, warrants, and convertible securities. Dilutive earnings per
share is very similar to the previously reported fully diluted earnings per
share. The Company has adopted Statement No. 128.

Note C - Income Taxes

The Company provides for the tax effects of transactions reported in the
financial statements. The provision if any, consists of taxes currently due plus
deferred taxes related primarily to differences between the basis of assets and
liabilities for financial and income tax reporting. The deferred tax assets and
liabilities, if any represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. As of June 30, 2000, the Company had no
material current tax liability, deferred tax assets, or liabilities to impact on
the Company's financial position because the deferred tax asset related to the
Company's net operating loss carryforward and was fully offset by a valuation
allowance.

At June 30, 2000, the Company has net operating loss carry forwards for
income tax purposes of $1,313,424. This carryforward is available to offset
future taxable income, if any, and expires in the year 2010. The Company's
utilization of this carryforward against future taxable income may become
subject to an annual limitation due to a cumulative change in ownership of the
Company of more than 50 percent.
7

The components of the net deferred tax asset as of June 30, 2000 are as follows:

Deferred tax asset:
Net operating loss carry forward $ 446,564
Valuation allowance $(446,564)
--------
Net deferred tax asset $ -0-
========

The Company recognized no income tax benefit for the loss generated in the
period from inception, June 7, 1985, to June 30, 2000.

SFAS No. 109 requires that a valuation allowance be provided if it is more
likely than not that some portion or all of a deferred tax asset will not be
realized. The Company's ability to realize benefit of its deferred tax asset
will depend on the generation of future taxable income. Because the Company has
yet to recognize significant revenue from the sale of its products, the Company
believes that a full valuation allowance should be provided.

Note D - Related Party transactions

a. Office Space

The Company occupies office space at 68 Schraalenburg Road, Harrington
Park, New Jersey for a monthly rental of $250. The Company has accrued rent
expense for the six months ended June 30, 2000 of $750 and $750 respectively.

b. Officer Salaries

No officer has received a salary in excess of $100,000.

For the six months ended June 30, 2000, the Company has accrued a minimal
compensation of $250 per month respectively each as compensation to the
President and the Vice President and Secretary as consideration for services
while the Company is in the development stage of development of an aggregate of
$4,500 and $2,700 respectively.

c. Common Management

Robert N. Schuck is both the President of the Company and HITK Corporation
which holds 3,250,050 shares or 87.6% of the Company's issued and outstanding
shares of stock as of June 30, 2000.

John J. Gitlin is both the Vice President and Secretary of the Company and
HITK Corporation.

On March 10, 2000, the Company sold an aggregate of 3,000,000 shares of
common stock to HITK Corporation for an aggregate consideration of $15,000.

On March 14, 2000, the Company sold an aggregate of 240,000 shares of
common stock as follows: 120,000 shares to Robert N. Schuck and 120,000 shares
to John J. Gitlin for an aggregate consideration of $1,200 in accrued salaries
or $0.005 per share.

Item 2. Management's Discussion and Analysis or Plan of Operation.

Our corporation was formed on June 7, 1985, under the laws of the State of
Delaware, under the name of BC Communications, Inc. In 1985, we conducted an
offering and used the proceeds from therefrom to engage in the business of
developing, producing, distributing and programming a talk and interview format
for the commercial, cable and pay television markets. Following the offering, we
exhausted our funds on the incomplete production of a show and decided to seek
other business opportunities that would offer growth and development. On
February 14, 1987, we acquired Kinetic Systems, Inc. ("Kinetic Systems"), a
Delaware corporation, which was in the process of developing a closed chamber,
forced hot air, liquid heating system for use in residential and commercial
buildings. Through Kinetic Systems, we pursued development of the heating
system. In February, 1990, Kinetic Systems entered into a technology and patent
license agreement with a Michigan-based manufacturer pursuant to which the
manufacturer was granted a limited license to develop, manufacture and market
the Kinetic heating system apparatus. The agreement subsequently expired by its
own terms due in large part to the manufacturer's inability to complete
development of the heating system. On January 28, 1993, we sold 100 percent of
the issued and outstanding Kinetic Systems shares to the Barrister Group, Ltd.,
for $100,000. We have been inactive since 1993. In November 1994, by amendment
to our certificate of incorporation, we changed our name to Cathel Partners,
Ltd. In January 1995, we recorded a 1,000 to 1 reverse stock split reducing the
number of shares outstanding to 469,423. In 1999, we decided to engage in the
pursuit of seeking a partnership with a viable business entity. On March 10,
2000, we completed a private placement with its major shareholder which resulted
in our receiving $15,000.00.

Development stage activities.

The following discussion relates to the results of our operations to date,
and the our financial condition:

For the next 12 months, we plan to devote our efforts to seeking a viable
business opportunity. We anticipate that the results of our operations may
fluctuate for the foreseeable future due to several factors, including whether
operating results would also be adversely affected by our inability to locate a
profitable business venture. Because we desire to increase our operating
expenses for personnel and other general and administrative expenses, our
operating results would be adversely affected if either a viable business
opportunity could not be developed or located. Limited operating history makes
accurate prediction of future operating results difficult or impossible.

We have been a development stage enterprise since our date of inception in
1985 to December 31, 1999. During this period, management had devoted the
majority of its efforts to seeking new business opportunities, developing a new
business and finding a management team and seeking sufficient working capital
through loans and equity through a private placement offering. These activities
were funded by our management.

Results of operations.

For the six months ended June 30, 2000 as compared to the six months ended
June 30, 1999

We have remained inactive. Sales, costs of goods sold, gross profit,
operating expenses and net profit were $-0- for both the six months ended June
30, 1999 and 2000. Our activities during the six months ended June 30, 1999 and
2000 consisted of preparing and filing corporate income tax returns and filings
for the Securities and Exchange Commission.

Our general and administrative costs aggregated approximately $8,642 for
the six months ended June 30, 2000 as compared to $4,518 for the six months
ended June 30, 1999 representing an increase of $4,124. This increase represents
professional fees of $3,450 and the accruing of rent of $1,000, officer's salary
of $2,700 and office expense of $1,492.

Liquidity And Capital Resources

As of June 30, 2000, our cash balance was $331 and working capital was
negative at ($11,940) consisting of cash of $331 and less accrued liabilities of
$12,271.

Net (loss) from operations amounted to $(8,642) for the six months ended
June 30, 2000. Cash was provided through the initial sale of 3,000,000 shares of
common stock to HITK Corporation for an aggregate consideration of $15,000 or
$.0005 per share. HITK Corporation is under common management control with the
principals of the Company.

Our primary short-term needs are to seek sufficient capital to continue the
search for a viable business opportunity.

We expect our capital requirements to increase over the next several years
as we expand our search for either a viable business opportunity or to develop a
profitable business strategy. Our future liquidity and capital funding
requirements will depend on numerous factors, including the extent to which our
efforts to either find a viable business opportunity or to develop a profitable
business, the timing of regulatory actions, if any, regarding our entrance into
the business, the costs and timing of expansion of our entrance into that
business and the timing of hiring additional management to operate that
business.

We believe that we must raise additional cash from either operations or
from the personal resources of management to satisfy our funding needs for at
least the next 12 months. Thereafter, if cash generated from operations or the
personal resources of management is insufficient to satisfy our working capital
and capital expenditure requirements, we may be required to sell additional
equity or debt securities or obtain additional funds. There can be no assurance
that such financing, if required, will be available on satisfactory terms, if at
all.
10

Income tax: As of June 30, 2000, we had a tax loss carry-forward of
$1,313,424. Our ability to utilize its tax credit carry-forwards in future years
will be subject to an annual limitation pursuant to the "Change in Ownership
Rules" under Section 382 of the Internal Revenue Code of 1986, as amended.
However, any annual limitation is not expected to have a material adverse effect
on our ability to utilize its tax credit carry-forwards.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

PART II
OTHER INFORMATION

Item 1. Legal Proceedings.

No legal proceedings were brought, are pending or are threatened during the
quarter.

Item 2. Changes in Securities

None

Item 3. Defaults upon Senior Securities

None.

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

None.

Item 5. Other information

None.

Item 6. Exhibits and Reports on Form 8-K

No 8-K has been filed.

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Cathel Partners, Ltd.
(Registrant)

By: /s/ Robert Schuck
------------------
Robert Schuck
President

Dated: May 16, 2001

By: /s/John Gitlin
------------------
John Gitlin,
Vice President,Secretary,
Treasurer and Director