U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549
                              ---------------------

                                   FORM 10-QSB

(Mark One)


    X    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
--------

                       SECURITIES AND EXCHANGE ACT OF 1934


For the quarterly period ended                               March 31, 1998
                                                ...............................



         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
--------

                       SECURITIES AND EXCHANGE ACT OF 1934



For the transition period from      ..................   to ...................




Commission File Number                                               0-13324
                                              .................................



                            QUESTRON TECHNOLOGY, INC.
 ................................................................................
                     (Exact name of small business issuer as
                            specified in its charter)



       Delaware                                                    23-2257354
 ......................................      ...................................
(State or other jurisdiction                  (I. R. S. Employer Identification
of incorporation or organization)              Number)

             6400 Congress Avenue, Suite 200A, Boca Raton, FL 33487
 ...............................................................................
                    (Address of principal executive offices)



                                (561) 241 - 5251
 ..............................................................................
                           (Issuer's telephone number)

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. Yes X No    .
                                                                           ----

         As of May 12, 1997, there were 2,139,783 shares of the issuer's Common
Stock and 1,150,000 shares of the issuer's Series B Convertible Preferred Stock
outstanding.


715300.3 

<PAGE>



                           FORWARD LOOKING STATEMENTS

         This Quarterly Report of Form 10-Q contains forward-looking  statements
within the  meaning of the  Private  Securities  Litigation  Reform Act of 1995,
which involve certain risks and  uncertainties.  The Company's actual results or
outcomes may differ  materially  from those  anticipated.  Each  forward-looking
statement  that the Company  believe is material is  accompanied by a cautionary
statement or statements  identifying  important  factors that could cause actual
results  to  differ  materially  from  those  described  in the  forward-looking
statement. The cautionary statements are set forth following the forward-looking
statement,  and/or  elsewhere  in this  quarterly  report  on Form  10-Q and the
Company's  other  documents  filed with the Securities and Exchange  Commission,
whether or not such documents are incorporated herein by reference. In assessing
the forward-looking  statements contained in this quarterly report on Form 10-Q,
readers are urged to read carefully all cautionary statements.


715300.3 
                                       (i)

<PAGE>



                            QUESTRON TECHNOLOGY, INC.


                                      INDEX

<TABLE>
<CAPTION>
<S>            <C>                                                                             <C> 

                                                                                                   Page No.
                                                                                               ----------------
PART I.         FINANCIAL INFORMATION

Item 1.         Financial Statements

                Consolidated Balance Sheet -
                As of March 31, 1998 (unaudited) and December 31, 1997........................        1

                Consolidated Statement of Operations (unaudited) -
                Three Months Ended March 31, 1998 and 1997....................................        2

                Consolidated Statement of Cash Flows (unaudited) -
                Three Months Ended March 31, 1998 and 1997....................................        3

                Notes to Consolidated Financial Statements....................................        4

Item 2.         Management's Discussion and Analysis or Plan of Operation.....................        7

PART II.        OTHER INFORMATION.............................................................        9

Item 1.         Legal Proceedings.............................................................
                                                                                                      9
Item 2.         Changes in Securities.........................................................
                                                                                                      9
Item 3.         Defaults Upon Senior Securities...............................................
                                                                                                      9
Item 4.         Submission of Matters to a Vote of Security Holders...........................
                                                                                                      9
Item 5.         Other Information.............................................................
                                                                                                      9
Item 6.         Exhibits and Reports on Form 8-K..............................................        9

</TABLE>




715300.3 
                                                       (ii)

<PAGE>



                         PART I - FINANCIAL INFORMATION

Item 1.           Financial Statements

<TABLE>
                                     QUESTRON TECHNOLOGY, INC. & SUBSIDIARIES
                                            CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 1998 (UNAUDITED) AND DECEMBER 31, 1997

                                                      ASSETS


<CAPTION>
                                                                                    March 31,          December 31,
                                                                                       1998                1997       
                                                                                ------------------   -----------------
<S>                                                                                  <C>                <C>             
Current assets:
   Cash and cash equivalents                                                         $     641,104      $     875,080
                                                                                  
                                                                                  
   Accounts receivable, less allowance for
      doubtful accounts of $93,561 and $93,561, respectively                             5,660,293          4,740,678
   Other receivables                                                                       100,750             77,733
   Inventories                                                                           9,277,771          8,415,777
   Other current assets
                                                                                           215,787            158,597 
                                                                                     -------------      -------------  

Total current assets                                                                    15,895,705         14,267,865

Property and equipment - net                                                             1,262,329            910,988
Cost in excess of net assets of businesses acquired,
   less accumulated amortization of $657,178 and $549,566, respectively                 17,042,115         16,549,726
Deferred income taxes                                                                    3,135,411          3,192,947
Other assets
                                                                                           311,124            273,321 
                                                                                     -------------      -------------

      Total assets                                                                   $  37,646,684      $  35,194,847
                                                                                     =============      =============
                                                                  



                                        LIABILITIES AND SHAREHOLDERS' EQUITY


Current liabilities:
   Accounts payable                                                                  $  3,166,953      $    2,378,381
   Accrued expenses                                                                       648,799             839,514
   Income taxes payable                                                                   443,080             201,477
   Current portion of long-term debt
                                                                                        1,861,667           1,801,667 
                                                                                     ------------      --------------

Total current liabilities                                                               6,120,499           5,221,039
Deferred income taxes payable                                                             249,477             182,552
Long-term debt
                                                                                       10,555,239           9,893,521
                                                                                     ------------      --------------

      Total liabilities                                                                16,925,215          15,297,112 
                                                                                     ------------      --------------
Commitments and contingencies
Common stock subject to put option agreement                                              455,730             622,857
Shareholders' Equity:
   Preferred stock, $.01 par value; authorized 10,000,000
     shares; 1,150,000 issued and outstanding                                              11,500              11,500
  Common stock, $.001 par value; authorized 20,000,000
     shares; issued 2,139,783 shares in 1998 and 2,122,439 in 1997                          2,139               2,122
   Additional paid-in capital                                                          33,926,596          33,462,524
   Accumulated deficit
                                                                                     (13,319,018)        (13,845,790)
                                                                                     ------------      --------------
                                                                                       20,621,217          19,630,356
   Less: Treasury stock, 11,849 shares,  at cost
                                                                                        (355,478)           (355,478)
                                                                                     ------------      --------------

Total shareholders' equity                                                             20,265,739          19,274,878 
                                                                                     ------------      --------------

                                                                                     $ 37,646,684      $   35,194,847
                                                                                     ============      ==============
Total liabilities and shareholders' equity                                      
</TABLE>




                 See Notes to Consolidated Financial Statements.


715300.3 
                                        1

<PAGE>



<TABLE>
                                     QUESTRON TECHNOLOGY, INC. & SUBSIDIARIES
                                 CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
                                    THREE MONTHS ENDED MARCH 31, 1998 AND 1997




<CAPTION>
                                                                                Three Months Ended
                                                                                    March 31,
                                                                            ------------------------
                                                                                1998          1997 
                                                                            ------------- ----------

<S>                                                                        <C>                <C>                                  
Sales
                                                                           $  10,400,966      $    3,912,277 
                                                                           -------------      -------------- 



Operating costs and expenses:
   Cost of products sold                                                       6,181,350           2,328,374
   Selling, general & administrative expenses                                  2,490,567           1,086,020
   Depreciation and amortization                                                 163,600              79,870
                                                                           -------------      -------------- 

                                                                               8,835,517           3,494,264 
                                                                           -------------      -------------- 

Operating income                                                               1,565,449             418,013

Interest expense                                                                 281,375              60,209 
                                                                           -------------      -------------- 


Income before income taxes                                                     1,284,074             357,804
Provision for income taxes
                                                                                 526,470             147,773 
                                                                           -------------      -------------- 


Net income                                                                 $     757,604      $      210,031 
                                                                           =============      ==============  

Net income                                                                 $     757,604       $     210,031
Deduct: Preferred Stock dividend                                                  33,063                  --
              Imputed non-cash Preferred Stock dividend
                                                                                 197,769                  --
                                                                           -------------      -------------- 


Net income used in per common share calculation                            $     526,772       $     210,031 
                                                                           =============      ==============  




Net income per common share                                                       $  .25             $  .14 
                                                                                  ======             ====== 
Net income per diluted common share                                               $  .16             $  .11
                                                                                  ======             ======




Average number of common shares outstanding                                   2,115,793            1,535,484 
                                                                           =============      ==============  


                                                                                          
Average number of diluted common shares outstanding                           4,716,440            1,968,091
                                                                           =============      ==============  
</TABLE>








                 See Notes to Consolidated Financial Statements.


715300.3 
                                        2

<PAGE>



<TABLE>
                                     QUESTRON TECHNOLOGY, INC. & SUBSIDIARIES
                                       CONSOLIDATED STATEMENT OF CASH FLOWS
                                                    (UNAUDITED)
                                    THREE MONTHS ENDED MARCH 31, 1998 AND 1997



<CAPTION>
                                                                        March 31,             March 31,
                                                                           1998                 1997        
                                                                   --------------------- --------------------
<S>                                                                <C>                   <C>                 
Cash flows from operating activities:
  Net income                                                       $            757,604  $           325,054
  Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation and amortization                                             163,600               79,870
      Provision for doubtful accounts                                                --               14,112
      Recognition of current year income tax benefit of net
        operating loss carryforward                                              57,536                   --
  Change in assets and liabilities:
     Increase in accounts receivable                                          (919,615)            (187,102)
     Increase in other receivables                                             (23,017)              (6,309)
     (Increase) decrease in inventories                                       (861,993)              126,220
     Increase in accounts payable                                               788,571              410,428
     Decrease in accrued expenses                                             (124,589)                   --
     Increase in income taxes payable                                           241,603                   --
     Increase in deferred income taxes                                           66,925                   --
     (Increase) decrease in prepaid expenses and other assets
                                                                               (94,993)              364,874 
                                                                   --------------------- --------------------

     Net cash provided by operating activities
                                                                                 51,632            1,127,147
                                                                   --------------------- --------------------

Cash flows from investing activities:
  Net cash consideration paid for acquired business                           (600,000)          (3,796,809)
  Acquisition of property and equipment
                                                                              (407,326)              (1,380)
                                                                   --------------------- --------------------
     Net cash used for investing activities
                                                                            (1,007,326)          (3,798,189)
                                                                   --------------------- --------------------

Cash flows from financing activities:
  Proceeds from borrowings under revolving facility                           1,340,000                   --
  Proceeds from Convertible Preferred Stock Unit Offering                            --            6,900,000
  Proceeds from capital lease for computer system                               371,228                   --
  Payments on capital lease for computer system                                (14,682)                   --
  Costs associated with  Convertible Preferred Stock Unit Offering                   --          (1,260,447)
  Repayment of long-term debt                                                 (416,667)            (137,500)
  Repayment of revolving facilities                                           (525,000)          (2,033,193)
  Payments on other capital leases                                             (14,626)                   --
  Payments on note issued for acquired business
                                                                               (18,535)                   --
                                                                   --------------------- --------------------
     Net cash provided by financing activities
                                                                                721,718            3,468,860
                                                                   --------------------- --------------------

Increase in cash and cash equivalents                                         (233,976)              797,818
Cash and cash equivalents at beginning of period
                                                                                875,080               76,082
                                                                   --------------------- --------------------

Cash and cash equivalents at end of period                         $            641,104  $           873,900
                                                                   ====================  ===================

</TABLE>




                 See Notes to Consolidated Financial Statements.


715300.3 
                                        3

<PAGE>



                   QUESTRON TECHNOLOGY, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                   THREE MONTHS ENDED MARCH 31, 1998 AND 1997


Note 1.       Basis of presentation.

              The  accompanying   unaudited  consolidated  financial  statements
include  the  accounts of the Company  and its  subsidiaries.  The  consolidated
financial  statements have been prepared in accordance  with generally  accepted
accounting  principles for interim financial  information and in accordance with
the Securities and Exchange Commission's  instructions for a quarterly report on
Form  10-QSB.  Accordingly,  they  do not  include  all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements.

              Management  believes that all  adjustments  (consisting  of normal
recurring  adjustments)  considered  necessary for a fair presentation have been
included.  Operating results for the three-month period ended March 31, 1998 are
not  necessarily  indicative  of the results  that may be expected  for the year
ending December 31, 1998. The consolidated balance sheet as of December 31, 1997
reflects the audited balance sheet at that date. For further information,  refer
to the  financial  statements  and footnotes  thereto  included in the Company's
annual report on Form 10-KSB for the year ended December 31, 1997.

Note 2.       Acquisition of Webb Distribution.

              In  March  1997,  the  Company  acquired  100% of the  issued  and
outstanding capital stock of Comp Ware, Inc. d/b/a Webb Distribution ("Webb"), a
privately owned company.  The business of Webb is  substantially  similar to the
fastener,  electronic hardware,  and related products  value-added  distribution
business of the  Company,  serving  customers in the  high-technology  equipment
manufacturing industry. The purchase price of Webb consisted of:

              (i)     $3,250,000 in cash;

              (ii)    Note A in the principal amount of $375,000.  Principal and
                      interest  at the rate of 10% are due and payable 18 months
                      from the effective date of the closing;

              (iii)   Note B in the principal amount of $375,000.  Principal and
                      interest at the rate of 10% are payable  monthly over five
                      years from the effective date of the closing; and

              (iv)    1,500,000 Series IV Warrants (the "Webb Warrants")  issued
                      to the  majority  shareholder  of Webb  as a down  payment
                      under the Stock Purchase Agreement.


715300.3 
                                        4

<PAGE>



                   QUESTRON TECHNOLOGY, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                   THREE MONTHS ENDED MARCH 31, 1997 AND 1996

              Such  acquisition  was  effected  pursuant  to  a  Stock  Purchase
Agreement  dated as of December 16,  1996.  The Company has  accounted  for such
acquisition  using the purchase  method of accounting.  In connection  with this
acquisition,  the Company recorded $3,723,277 of cost in excess of net assets of
the business acquired.

              In  connection  with the sale of the Webb warrants by the majority
shareholder of Webb, Note A (as described in (ii) above) was satisfied  pursuant
to the terms of the acquisition  agreement,  effectively resulting in a $375,000
reduction in the cost of the acquisition.

Note 3.       Convertible Preferred Stock Unit Offering

              In March 1997,  the  Company  completed  an offering of  1,150,000
Units  (defined  below) of its  securities.  Each Unit consisted of one share of
Series B  Convertible  Preferred  Stock and one Series IV Common Stock  Purchase
Warrant (together,  a "Unit"). The net proceeds to the Company,  after deducting
underwriting  discounts  and other  expenses of the Offering,  were  $5,639,553.
These  proceeds  were used in part to finance the cash  portion of the  purchase
price of Webb. The remaining cash ($2,389,553) was used to repay the outstanding
balance on the Company's  revolving credit facility  ($750,000) and to repay the
outstanding balance on Webb's revolving credit facility  ($1,000,000),  with the
remaining balance ($639,553) retained by the Company for working capital.

Note 4.       Acquisition of Integrated Material Systems, Inc.

              In  June  1997,  the  Company  acquired  100%  of the  issued  and
outstanding  capital stock of  Integrated  Material  Systems,  Inc.  ("IMS"),  a
privately owned company. The purchase price of IMS consisted of 50,000 shares of
the  Company's  common stock and an  additional  75,000  shares of the Company's
common stock to be earned by the seller if IMS attains certain earnings targets.
In addition,  the acquisition  agreement calls for deferred purchase payments of
up to $1,500,000 in cash based on the future earnings of IMS.

Note 5.       Acquisition of Power Components, Inc.

              In September 1997, the Company  purchased the net operating assets
of Power Components, Inc. ("PCI"), a privately owned Philadelphia distributor of
lithium  batteries  and  customized  battery  packs  and  assemblies,  through a
simultaneously  acquired  wholly-owned  subsidiary.  The  purchase  price of PCI
consisted of:

              (i)     $900,000 in cash;

              (ii)    50,000 shares of the Company's common stock;

              (iii)   a note payable in the principal amount of $250,000; and

              (iv)    100,000 shares of the Company's  common stock to be earned
                      if PCI attains certain earnings targets.


715300.3 
                                        5

<PAGE>



                   QUESTRON TECHNOLOGY, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                   THREE MONTHS ENDED MARCH 31, 1997 AND 1996

              Such  transactions  were  effected  pursuant to an Asset  Purchase
Agreement and a Stock Purchase Agreement, in each case, dated September 4, 1997.
The Company has accounted  for such  transactions  using the purchase  method of
accounting.  In  connection  with  these  transactions,   the  Company  recorded
approximately  $1,231,000  of cost  in  excess  of net  assets  of the  business
acquired.

Note 6.       Acquisition of California Fasteners, Inc.

              In September  1997,  the Company  acquired  100% of the issued and
outstanding capital stock of California Fasteners, Inc. ("Calfast"), a privately
owned company. The purchase price of Calfast consisted of:

              (i)     $6,594,441 in cash;

              (ii)    the assumption of $1,058,712 in debt net of cash on hand;

              (iii)   475,106,  shares of the Company's common stock,  including
                      125,896 shares of the Company's common stock which sellers
                      of Calfast may put to the Company, valued at $2,981,288;

              (iv)    up to  $795,559  in cash to be  paid  if  Calfast  attains
                      certain  earnings targets for the four month period ending
                      December 31, 1997; and

              (v)     up to  $3,500,000  (50% in cash and 50% in  shares  of the
                      Company's   common  stock)  if  Calfast   attains  certain
                      earnings targets for the year ending December 31, 1998.

              The  acquisition  of  Calfast  was  effected  pursuant  to a Stock
Purchase  Agreement  dated as of August 29, 1997.  The Company has accounted for
such  acquisition  using the purchase  method of accounting.  In connection with
this  acquisition,  the  Company  recorded  $8,355,314  of cost in excess of net
assets of the business acquired.

Note 7.       Revolving Credit Facility and Long-Term Debt

              In  connection  with  the  acquisitions  of PCI and  Calfast,  the
Company entered into a loan agreement with a bank. The agreement  provides for a
$14,000,000  credit facility  consisting of a six-year term loan for $10,000,000
and a  $4,000,000  revolving  credit  facility.  The loan  agreement  contains a
provision for the calculation of a borrowing base,  which  determines the amount
of  borrowings  available  under the  revolving  facility.  At March  31,  1998,
$1,760,000  of the  $4,000,000  revolving  credit  facility was available to the
Company.  Interest  on the  revolving  facility is due monthly at the prime rate
plus 1%.  Interest  on the  six-year  term loan is due monthly at the prime rate
plus 1.5%.


715300.3 
                                        6

<PAGE>



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

Results of Operations

For the three months ended March 31, 1998

              The  results of  operations  through  March 31,  1998  include the
operating results of (i) the Company's inventory  logistics  business,  Questron
Distribution  Logistics  ("QDL"),  (ii) its  master  distribution  of  fasteners
business,  Integrated  Material  Systems,  Inc.  ("IMS"),  and (iii) its lithium
battery and battery pack distribution business,  Power Components,  Inc. (PCI").
QDL includes the operating results of Quest Electronic Hardware, Inc. ("Quest"),
Webb Distribution ("Webb") and California Fasteners, Inc. ("Calfast").

              The  Company's  revenues for the three months ended March 31, 1998
amounted to  $10,400,966,  compared with  $3,912,277  for the three months ended
March 31, 1997. The significant  growth in the Company's  revenues is due to the
growth of QDL, which had revenues of $9,238,508 in the 1998 period, representing
a record  level of sales for the  business,  compared  with  $3,896,764  for the
comparable prior year period.  The significant  growth in QDL's revenues for the
period ended March 31, 1998 is due to the  acquisitions of Webb and Calfast,  as
well as the continued  internal growth of Quest.  Revenues from Webb and Calfast
for the three months ended March 31, 1998 amounted to $5,572,822,  compared with
$715,377 for Webb for the one month ended March 31,  1997,  which is included in
the Company's 1997 first quarter results.

              The Company's operating income was $1,565,449 for the three months
ended March 31, 1998  compared with  operating  income of $418,013 for the prior
year period.  The increase in operating  income for the three month period ended
March 31, 1998, compared with the comparable prior year period, is primarily due
to the increased operating income achieved by QDL as a result of the acquisition
of Webb and Calfast,  as well as the  continued  internal  growth of Quest.  The
increase in  operating  income of QDL  resulted in a record  level of  operating
income for the Company.  QDL's operating income for the three month period ended
March  31,  1998  represents  approximately  19% of the  Company's  revenues,  a
relationship which continues to show improvement as compared with the historical
performance  of  QDL.  This   improvement  is  attributable  to  the  successful
transition  of the acquired  businesses  and the  resulting  cost savings of the
combination of these businesses.

              Interest expense, which reflects the cost of borrowings associated
with the acquisition of Calfast in September 1997 and borrowings associated with
QDL's  working  capital  needs,  amounted to $281,375 for the three months ended
March 31, 1998 compared with $60,209 for the comparable  prior year period.  The
increase  in  interest  expense  principally  reflects  the  costs of  increased
borrowings to complete the acquisition of Calfast.

              The  provision  for income  taxes for the three months ended March
31, 1998 reflects a federal income tax provision at an effective rate of 35% and
a state income tax provision at an effective  rate of 6% for the states in which
the Company  does  business.  The Company is not  expected,  however,  to have a
regular federal income tax liability for 1997 as a result of the availability of
net operating loss  carryforwards of approximately  $13.1 million as of December
31, 1996, expiring in the years 2000 through 2010.

              Net income for the three months  ended March 31, 1998  amounted to
$757,604  compared with net income of $210,031 for the comparable  period of the
prior year. This  improvement  reflects the increased  operating  income of QDL,
resulting from the  acquisition  of Webb and Calfast,  as well as the continuing
internal growth of Quest,  partially  reduced by increased  corporate  expenses,
interest expense, and income taxes.


715300.3 
                                        7

<PAGE>



Liquidity and Capital Resources

              As of  March  31,  1998,  the  Company  had  $641,104  in cash and
short-term  investments,  compared to $875,080 as of December  31,  1997.  As of
March 31, 1998,  the Company had working  capital of  $9,775,206,  compared with
working capital of $9,046,826 as of December 31, 1997.

              For the three months ended March 31, 1998,  the net cash  provided
by  the  Company's  operating   activities  amounted  to  $51,632,   principally
reflecting  the profits of QDL and the  increases  in accounts  payable,  income
taxes  payable and deferred  income  taxes,  offset by the increases in accounts
receivable,  prepaid  expenses  and other  assets,  and a  decrease  in  accrued
expenses.

              For the three months  ended March 31,  1998,  the net cash used in
the Company's investing  activities  amounted to $1,007,326,  including $600,000
net cash  consideration  paid in connection with the deferred  purchase price of
Calfast.  The  Company  also  had  capital  expenditures  of  $407,326  for  the
acquisition  of fixed  assets,  $392,040 of which  represents  the  purchase and
installation of an on-line real-time  computer system. The Company does not have
significant  commitments  for capital  expenditures  as of March 31, 1998 and no
significant commitments are anticipated for the remainder of 1998.

              For the three months ended March 31, 1998,  the net cash  provided
by the Company's financing  activities  amounted to $721,718,  which consists of
$1,340,000 of bank borrowings under the Company's revolving credit facility,  as
well as $371,228 of net  proceeds  from a capital  lease for the purchase of the
Company's  computer  system,  reduced by long-term  debt  principal  payments of
$416,667,  revolving  facility  repayments  of $525,000,  principal  payments of
$14,626 on  various  capital  leases,  principal  payments  of $18,535 on a note
issued for an acquired business and principal  payments on the capital lease for
the computer system of $14,682.

              In  connection  with  the  acquisition  of  Calfast,  the  Company
increased  its  revolving  facility to  $4,000,000,  under terms and  conditions
generally  consistent  with those of its original  facility.  At March 31, 1998,
$2,240,000  was borrowed  and  outstanding  under the  revolving  facility.  The
remaining amount of the $4,000,000 revolving credit facility, or $1,760,000, was
fully  available at March 31, 1998 for future  working  capital  needs.  Amounts
outstanding  under the revolving  facility bear interest at a rate equal to 1.0%
above the lender's  prime rate. As of May 12, 1998,  the interest rate under the
revolving  facility was 9.5%. In order to secure the  obligations of the Company
and its  subsidiaries  under the  revolving  facility  and the related term loan
facility  under the loan and  security  agreement  with the lender,  the Company
entered  into a stock  pledge  agreement  with the lender  whereby  the  Company
pledged to the lender the shares of capital stock of each of its subsidiaries at
the date of such  agreement  and any  shares  of its  subsidiaries  in which the
Company may  thereafter  acquire an interest.  In addition,  the Company and its
subsidiaries granted a security interest in substantially all of their assets to
the lender.

              The Company intends to continue to identify and evaluate potential
merger and acquisition  candidates  engaged in businesses  complementary  to its
business.  While  certain of such  potential  acquisition  opportunities  are at
various stages of consideration and evaluation,  none is at any definitive stage
at this time.  Management  believes that its working  capital,  funds  available
under  its  credit  agreement,  and  funds  generated  from  operations  will be
sufficient  to  meets  its  obligations  through  1998,  exclusive  of any  cash
requirements which may come about as a result of other business acquisitions.

715300.3 
                                        8

<PAGE>




                           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

              Not applicable.

Item 6.       Exhibits And Reports On Form 8-K

              (a) Exhibits.

                  See Exhibit Index immediately following the signature page
below.

              (b) Reports on Form 8-K.

                  No current  reports  on Form 8-K were filed by the  registrant
                  during the quarterly period ended March 31, 1998.



715300.3  
                                        9

<PAGE>



                                   SIGNATURES

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

                                           QUESTRON TECHNOLOGY, INC.



                                      (1)    Principal Executive Officer:

Date:         May 14, 1998                   /s/ Dominic A. Polimeni
                                             -----------------------
                                             Dominic A. Polimeni
                                             Chief Executive Officer

                                      (2)    Principal Financial and Accounting
                                             Officer:

Date:         May 14, 1998                   /s/ Milton M. Adler
                                             -------------------
                                             Milton M. Adler
                                             Treasurer



715300.3 

<PAGE>



                                  EXHIBIT INDEX


       The following exhibits are filed as part of this quarterly report on Form
10-Q:



<TABLE>
<CAPTION>
Exhibit                                                                                             Sequential
  No.                                        Description                                             Page No.
  ---                                        -----------                                             --------

<S>            <C>
3.0            Certificate  of  Incorporation,   incorporated  by  reference  to
               Exhibit  3(i) to the  Registrant's  Form  10-KSB  filed  with the
               Securities  and  Exchange  Commission  for the fiscal  year ended
               December 31, 1987 (File No. 0-13324)
3.1            Certificate of Amendment, dated March 20, 1985, to Certificate of
               Incorporation  of the  Registrant,  incorporated  by reference to
               Exhibit 4.1 to Amendment No. 1 of the  Registrant's  Registration
               Statement  on Form S-3 filed  with the  Securities  and  Exchange
               Commission on March 9, 1995 (File No. 33-44331)
3.3            Certificate  of Amendment,  dated June 9, 1989, to Certificate of
               Incorporation  of the  Registrant,  incorporated  by reference to
               Exhibit 4.1 to Amendment No. 1 of the  Registrant's  Registration
               Statement  on Form S-3 filed  with the  Securities  and  Exchange
               Commission on March 9, 1995 (File No. 33-44331)
3.4            Certificate of Correction,  dated May 17, 1991, to Certificate of
               Incorporation  of the  Registrant,  incorporated  by reference to
               Exhibit 4.1 to Amendment No. 1 of the  Registrant's  Registration
               Statement  on Form S-3 filed  with the  Securities  and  Exchange
               Commission on March 9, 1995 (File No. 33-44331)
3.5            Certificate of Amendment, dated December 20, 1993, to Certificate
               of Incorporation of the Registrant,  incorporated by reference to
               Exhibit  3(i) to the  Registrant's  Form  10-KSB  filed  with the
               Securities  and  Exchange  Commission  for the fiscal  year ended
               December 31, 1993 (File No. 0-13324)
3.6            Certificate of Correction, dated July 19, 1994, to Certificate of
               Incorporation  of the  Registrant,  incorporated  by reference to
               Exhibit 4.1 to Amendment No. 1 to the  Registrant's  Registration
               Statement  on Form S-3 filed  with the  Securities  and  Exchange
               Commission on March 9, 1995 (File No. 33-44331)
3.7            Certificate of Amendment,  dated April 2, 1996, to Certificate of
               Incorporation  of the  Registrant,  incorporated  by reference to
               Exhibit  3.5 to the  Registrant's  Form  10-KSB  filed  with  the
               Securities  and  Exchange  Commission  for the fiscal  year ended
               December 31, 1995 (File No. 0-13324)
</TABLE>


715300.3 

<PAGE>



<TABLE>
<CAPTION>
Exhibit                                                                                             Sequential
  No.                                        Description                                             Page No.
  ---                                        -----------                                             --------

<S>            <C>    
3.8            Certificate of Amendment, filed December 31, 1996, to Certificate
               of Incorporation of the Registrant,  incorporated by reference to
               Exhibit 3.10 to  Amendment  No. 1 to the  Registrant's  Form SB-2
               filed with the Securities and Exchange Commission on February 25,
               1997 (File No. 333-18243)
3.9            By-Laws of the  Registrant,  incorporated by reference to Exhibit
               3b(ii) to the Registrant's  Form 10-KSB filed with the Securities
               and Exchange  Commission  for the fiscal year ended  December 31,
               1987 (File No. 0-13324)
3.10           Amendment to By-Laws of the Registrant, incorporated by reference
               to Exhibit 3.4 of the  Registrant's  Form  10-KSB  filed with the
               Securities  and  Exchange  Commission  for the fiscal  year ended
               December 31, 1992 (File No. 0-13324)
4.0            Specimen Common Stock  Certificate,  incorporated by reference to
               Exhibit  4.0 to  Amendment  No. 1 to the  Registrant's  Form SB-2
               filed with the Securities and Exchange Commission on February 25,
               1997 (File No. 333-18243)
4.1            Specimen Preferred Stock  Certificate,  incorporated by reference
               to Exhibit 4.1 to Amendment No. 1 to the  Registrant's  Form SB-2
               filed with the Securities and Exchange Commission on February 25,
               1997 (File No. 333-18243)
4.2            Certificate  of  Designations,  Preferences  and  Rights  of  the
               Registrant's Series B Convertible  Preferred Stock,  incorporated
               by  reference   to  Exhibit  4.2  to  Amendment   No.  1  to  the
               Registrant's  Form SB-2 filed with the  Securities  and  Exchange
               Commission on February 25, 1997 (File No. 333-18243)
4.3            Form of Series IV Warrant Agreement, incorporated by reference to
               Exhibit  4.3 to  Amendment  No. 1 to the  Registrant's  Form SB-2
               filed with the Securities and Exchange Commission on February 25,
               1997 (File No. 333-18243)
4.4            Form of Series III  Warrant  Agreement,  dated as of  November 7,
               1994,   incorporated   by  reference  to  Exhibit  10.22  to  the
               Registrant's  Form 10-K filed with the  Securities  and  Exchange
               Commission  for the fiscal year ended December 31, 1994 (File No.
               0-13324)
4.5            Form of Underwriters' Purchase Option,  incorporated by reference
               to Exhibit 4.5 to Amendment No. 1 to the  Registrant's  Form SB-2
               filed with the Securities and Exchange Commission on February 25,
               1997 (File No. 333-18243)
4.6            Stock Purchase  Warrant  Certificate for Purchase of Common Stock
               of  Questron  Technology,  Inc.,  incorporated  by  reference  to
               Exhibit  4.6 to  Amendment  No. 1 to the  Registrant's  Form SB-2
               filed with the Securities and Exchange Commission on February 25,
               1997 (File No. 333-18243)
</TABLE>


715300.3 

<PAGE>



<TABLE>
<CAPTION>
Exhibit                                                                                             Sequential
  No.                                        Description                                             Page No.
  ---                                        -----------                                             --------

<S>            <C>                                   
27.1           Financial Data Schedule
</TABLE>



715300.3