SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB
(Mark One)
[X]      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

         For the quarterly period ended   June 30, 1999
                                          ----------------------

[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

    For the transition period from                   to
                                      ---------                ---------

                          Commission File No. 811-08469

                               ACORN HOLDING CORP.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

        Delaware                                  59-2332857
--------------------------------------------------------------------------------
(State or other jurisdiction           (IRS  Employer  Identifition No.)
of incorporation organization)

     1251 Avenue of the Americas, 45th Floor, New York, New York 10020-1104
--------------------------------------------------------------------------------
  (Address of principal executive offices)                       (Zip code)

Issuer's telephone number, including area code     (212) 536-4089
                                                 -------------------------------
                                       N/A
--------------------------------------------------------------------------------
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 Securities Exchange Act of 1934 during the past 12 months (or
for such shorter  period that the issuer was required to file such  reports) and
(2) has been subject to such filing requirements for the past 90 days.
                  Yes             X               No
                           -------------             ------------

APPLICABLE ONLY TO CORPORATE ISSUERS:  State the number of shares outstanding of
each of the  issuer's  classes of common  equity,  as of the latest  practicable
date:  1,408,750  shares of common stock,  $.01 par value, as of August 13, 1999
(which reflects the two-for-five reverse stock split effective April 19, 1999).


<PAGE>
                      ACORN HOLDING CORP. AND SUBSIDIARIES
                       Consolidated Interim Balance Sheet
                       June 30, 1999 and December 31, 1998


                                                June 30, 1999  December 31, 1998
                                                 (Unaudited)
                                                ------------   -----------------
                                 ASSETS
CURRENT ASSETS
   Cash and cash equivalents                    $    863,229    $  1,126,838
   Restricted cash                                       --           11,798
   Investment in marketable securities               642,555         668,439
   Accounts receivable - trade                       265,781          84,817
   Current portion of note receivable
     from sale of subsidiary                         110,236         110,235
   Current portion of note receivable
     - employee                                       40,000          40,000
   Inventories                                     1,856,528       2,055,827
   Prepaid expenses and other                         39,768          22,337
   Deferred income tax assets                        121,770          70,881
                                                ------------    ------------
   Total current assets                            3,939,867       4,191,172
                                                ------------    ------------

MACHINERY AND EQUIPMENT, net of accumulated
   depreciation of $2,255,282 as of
   December 31, 1998 and $2,424,889
   as of June 30, 1999                             1,918,488       1,978,743
                                                ------------    ------------
OTHER ASSETS
   Note receivable from sale of
     subsidiary, less current portion                    --          110,236
   Note receivable, less current portion
     - employee                                       40,000          80,000
   Other investments                                   9,108           9,108
   Goodwill, net of amortization                     256,591         299,357
   Deferred income tax assets                      1,385,491       1,322,583
                                                ------------    ------------
         Total other assets                        1,691,190       1,821,284
                                                ------------    ------------
                                                   7,549,545       7,991,199
                                                ============    ============
       LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Current maturities of long-term debt              121,062         121,062
   Accounts payable                                  100,705          20,157
   Accrued expenses                                  103,355         127,021
   Machine purchase deposit liability                    --           11,798
   Deferred income                                   300,000         300,000
                                                ------------    ------------
         Total current liabilities                   625,122         580,038
                                                ------------    ------------
LONG-TERM DEBT, less current maturities               60,531         121,061
                                                ------------    ------------
DEFERRED INCOME                                      375,000         525,000
                                                ------------    ------------
DEFERRED INCOME TAXES                                189,791             --
                                                ------------    ------------

STOCKHOLDERS' EQUITY
   Common stock                                       40,684          40,684
   Additional paid-in capital                     11,823,449      11,823,449
   Accumulated deficit                            (5,580,185)     (5,083,839)
   Accumulated other comprehensive
     income (loss)                                    15,153         (15,194)
                                                ------------    ------------
         Total stockholders' equity                6,299,101       6,765,100
                                                ------------    ------------

                                                $  7,549,545    $  7,991,199
                                                ============    ============

                                      -2-

<PAGE>

                      ACORN HOLDING CORP. AND SUBSIDIARIES
                  Consolidated Interim Statements of Operations
                         June 30, 1999 and June 30, 1998
                                   (Unaudited)

<TABLE>
<CAPTION>

                                           Three Months Ended             Six Months Ended
                                                June 30,                      June 30,
                                           1999           1998            1999           1998
                                        -----------    -----------    -----------    -----------
<S>                                     <C>            <C>            <C>            <C>
Net sales                               $ 1,103,469    $ 2,140,993    $ 1,980,924    $ 4,197,009
                                        ===========    ===========    ===========    ===========

Costs and expenses
  Costs of sales                            888,870      1,526,730      1,693,988      2,945,601
  Selling, general and administrative       359,023        453,584        769,101        929,376
                                        -----------    -----------    -----------    -----------

                                          1,247,893      1,980,314      2,463,089      3,874,977

  Operating profit (loss)                  (144,424)       160,679       (482,165)       322,032
                                        -----------    -----------    -----------    -----------

Other income (expense)
  Loss on investment                             --         18,000           (754)        18,000
  Interest income, net                       49,805         (4,565)        62,567         (1,919)
                                        -----------    -----------    -----------    -----------
                                             49,805         13,435         61,813         16,081
                                        -----------    -----------    -----------    -----------

  Income (loss) before income taxes         (94,619)       174,114       (420,352)       338,113
Income taxes expense (benefit)
  Current                                   (30,355)       (28,160)           --          57,705
  Deferred                                  173,155         81,270         75,994          5,405
                                        -----------    -----------    -----------    -----------
                                            142,800         53,110         75,994         63,110
                                        -----------    -----------    -----------    -----------

  Net Income (Loss)                     $  (237,419)   $   121,004    $  (496,346)   $   275,003
                                        -----------    -----------    -----------    -----------
Earnings per share                      ($     .146)   $      .073    ($     .305)   $      .161

Weighted average shares
   outstanding                            1,627,362      1,668,751      1,627,362      1,711,307
                                        ===========    ===========    ===========    ===========

See accompanying notes.

</TABLE>
                                      -3-
<PAGE>


                      ACORN HOLDING CORP. AND SUBSIDIARIES
                  Consolidated Interim Statements of Cash Flows
                         June 30, 1999 and June 30, 1998
                                   (Unaudited)


                                           June 30, 1999    June 30, 1998
                                           -------------    -------------

Net income (loss) from operations           $  (496,346)   $   275,003

Adjustments to reconcile net income to
   net cash provided by (used in)
   operating activities
     Depreciation and amortization              190,990        186,354
     Deferred income taxes                       75,944         58,205
(Increase) decrease in assets
   Accounts receivable                         (180,964)        51,057
   Inventory                                    199,299        145,949
   Prepaid expenses                             (17,431)       (40,985)
   Deposits and other assets                      3,185           --
Increase (decrease) in liabilities
   Accounts payable                              80,548       (117,670)
   Accrued expenses                             (23,666)          --
   Deferred income                             (150,000)      (233,341)
                                            -----------    -----------

   Net cash provided by (used in)
     operating activities                      (318,441)       324,572
                                            -----------    -----------
Cash flows from investing activities
   Purchase of machinery and equipment          (87,969)      (479,089)
   Purchase of marketable securities               --         (337,855)
   Proceeds of marketable securities             53,095           --
   Proceeds notes receivable                    150,236        184,618
                                            -----------    -----------
   Net cash provided by (used in)
     investing activities                       115,362       (632,326)
                                            -----------    -----------
Cash flows from financing activities
   Payment of debt                              (60,530)       (50,441)
   Purchase of treasury stock                      --       (2,102,475)
                                            -----------    -----------

   Net cash used in financing activities        (60,530)    (2,152,916)

Net decrease in cash and cash equivalents      (263,609)    (2,460,670)

Cash and cash equivalents at
   beginning of year                          1,126,838      2,882,526
                                            -----------    -----------
Cash and cash equivalents at end of year    $   863,229    $   421,856
                                            -----------    -----------

See accompanying notes

                                      -4-
<PAGE>


                      ACORN HOLDING CORP. AND SUBSIDIARIES
               Notes to Consolidated Interim Financial Statements
                                  June 30, 1999
                                   (Unaudited)



NOTE A - ORGANIZATION AND PURPOSE

Interim financial  statements  reflect all adjustments which are, in the opinion
of management, necessary to a fair statement of the results for the periods. The
1998  balance  sheet has been  derived  from the  audited  financial  statements
contained in the 1998 Annual Report to  Stockholders.  These  interim  financial
statements  conform with the requirements for interim  financial  statements and
consequently do not include all the disclosures  normally  required by generally
accepted accounting principles.  The results for the three months ended June 30,
1999 are not  necessarily  indicative of the results to be expected for the full
year.  Reporting  developments  have been  updated  where  appropriate.  In this
connection,  there are no  significant  changes in  disclosures,  except for the
following:

Acorn  Holding  Corp.  filed  an  election  with  the  Securities  and  Exchange
Commission to be treated as a business  development company under the Investment
Company Act of 1940, as amended,  and operated as such until  November  1997. In
November  1997,  Acorn  Holding  Corp.  withdrew its  election as an  investment
company,  ceased to be a business development company, and commenced business as
an operating company. At that date, the name of the company was changed to Acorn
Holding Corp. The financial  statements presented reflect Acorn Holding Corp. as
an operating company.

NOTE B - NEW ACCOUNTING PRONOUNCEMENTS

The Financial  Accounting  Standards Board (FASB) issued  Statement of Financial
Accounting Standards (SFAS) No. 133 which amends the implementation date of SFAS
No. 133,  "Accounting  for  Derivative  Instruments  and Hedging  Activity." The
statement   establishes   accounting  and  reporting  standards  for  derivative
instruments,   including  certain  derivative   instruments  imbedded  in  other
contracts, and for hedging activities.  It requires that an entity recognize all
derivatives  as either  assets or  liabilities  in the  statement  of  financial
position and measure those instruments at fair value. If certain  conditions are
met, a derivative may be specifically  designated as a hedge. The accounting for
changes in the fair value of a  derivative  (gains and loses)  depends  upon the
intended use of the  derivative  and  resulting  designation.  The  statement is
effective for all fiscal quarters of fiscal years beginning after June 15, 2000.
The Company is currently reviewing the provisions of the statement.

The  American  Institute  of  Certified  Public  Accountants   ("AICPA")  issued
Statement of Option ("SOP") 98-1, "Accounting for the Costs of Computer Software
Developed  or  Obtained  for  Internal  Use."  The SOP  was  issued  to  provide
authoritative  guidance on the subject of  accounting  for the costs  associated
with the  purchase  or  development  of  computer  software.  The  statement  is
effective for fiscal years beginning after December 15, 1998. This statement has
been  implemented  and has no impact  on the  Company's  consolidated  financial
statements.

NOTE C - REVERSE STOCK SPLIT

On April 19,  1999 the  Company  approved a  resolution  to amend the  Company's
certificate  of  incorporation  to decrease the  authorized  common  shares from
approximately  4 million to 1.3  million and to effect a 5-for-2  reverse  stock
split.  Earnings  per share and  weighted  average  shares  outstanding  for all
periods presented have been changed to reflect the 5 for 2 reverse stock split.

                                      -5-
<PAGE>

NOTE D - Legal Matters

On May 14, 1999, the Chapter 7 Trustee in Bankruptcy for ServiceMax  Tire & Auto
Center of Michigan,  Inc.,  (ServiceMax) filed an avoidance action in the United
States  Bankruptcy Court for the Eastern District of Michigan seeking to recover
$1,750,000  from the Company on account of payments  made to the Company and its
subsidiary, Automotive Industries Inc. (Automotive).

During 1996,  ServiceMax  was forced into Chapter 7 bankruptcy.  ServiceMax is a
wholly owned  subsidiary of ServiceMax  Tire & Auto  Centers,  Inc.  (ServiceMax
Inc.) which is a wholly owed subsidiary the Company.

During  1996,  $1,750,000  was  received by the Company  from a third party with
respect to certain  claims in exchange  for  certain  releases  with  respect to
Service Max Tire & Auto Centers,  of which  $752,0000 was remitted  directing to
the Company and the remaining  balance of $997,500 was remitted to the Company's
subsidiary, Automotive in settlement of outstanding liens and payables.

During 1997, the Company sold the assets and liabilities of Automotive.

ServiceMax Inc. is not included in the consolidated financial statements of the
Company, because the majority owned subsidiary's control does not rest with the
Company.

The  Company  has filed an answer to the  avoidance  action and  intends to
vigorously defend this action


                                      -6-
<PAGE>

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS

         Sales  for  the  three-month  period  ended  June  30,  1999  decreased
$1,037,524 from the three-month  period ended June 30, 1998, while sales for the
six-month  period ended June 30, 1999  decreased  $2,216,085  from the six-month
period ended June 30, 1998. The Company  incurred  operating  losses of $144,424
and  $482,165  for the  three  months  and  six  months  ended  June  30,  1999,
respectively,  as  compared  to  operating  profits of  $160,679  and  $322,032,
respectively,  over the comparable prior year periods.  The principal reason for
the decline in profitability was due to pricing pressures resulting from a lower
demand for the Company's products,  without a corresponding decrease in the cost
of  sales.  The  Company  does not  foresee,  based on its  present  orders,  an
increased demand for its products for the next several months.

         Although  the  business  in which  the  Company  is  engaged  is highly
competitive and cyclical in nature and has been recently  incurring  losses from
operations, the Company believes that it has sufficient short-term and long-term
liquidity  either  from  cash on hand,  credit  arrangements  or cash  flow from
operations.


                                     PART II
                                OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

         On May 14, 1999,  the Chapter 7 Trustee in  Bankruptcy  for  ServiceMax
Tire & Auto Centers of Michigan,  Inc.,  filed an avoidance action in the United
States  Bankruptcy Court for the Eastern District of Michigan seeking to recover
$1,750,000  from the Company on account of payments  made to the Company and its
subsidiary,  Automotive Industries,  Inc., during 1996 and 1997. The Company has
filed an answer to the avoidance action and will vigorously defend this action.

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

         A Special  Meeting of Stockholders of the Company was held on April 15,
1999 (the  "Meeting")  to  consider  and vote upon a proposed  amendment  of the
Company's  Certificate of Incorporation to effect a combination of the Company's
issued and  outstanding  shares of Common  Stock on the basis that each five (5)
shares of Common Stock then  outstanding  would be converted into two (2) shares
of Common Stock. A majority of the  outstanding  shares of the Company's  Common
Stock in accordance with Delaware General  Corporation Law voted on and approved
the proposal as follows:  by the holders of :  3,465,091  shares of Common Stock
cast in favor of such  proposal,  164,195  shares of Common Stock voted  against
such proposal, and 5,300 shares abstained.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

         Exhibit No. 27 - Financial Data Schedule

     (b) Reports on Form 8-K:

     There  were no reports on Form 8-K filed by the  Company  filed  during the
quarter ended June 30, 1999.

                                      -6-
<PAGE>


                                   SIGNATURES


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


                                        ACORN HOLDING CORP.



Date: August    , 1999                  /s/ Larry V. Unterbrink
                                        ----------------------------------------
                                        Larry V. Unterbrink, Treasurer
                                        (Principal Financial and
                                        Accounting Officer)


                                        /s/ Stephen A. Ollendorff
                                        ----------------------------------------
                                        Stephen A. Ollendorff,
                                        Chairman, Chief Executive Officer,
                                        and Secretary


                                      -7-