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               March 31, 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  of     (IRS  Employer  Identification No.)
incorporation  or organization)

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

Issuer's telephone number, including area code         (212) 536-4089
                                                    --------------------

                                       N/A
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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:  1,627,359  shares of common  stock,  $.01 par value,  as of May 21,  1999
(which reflects the two-for-five reverse stock split effective April 19, 1999).


<PAGE>

                      ACORN HOLDING CORP. AND SUBSIDIARIES
                       Consolidated Interim Balance Sheet
                      March 31, 1999 and December 31, 1998

                                                  March 31, 1999   December 31,
                                                    (Unaudited)        1998
                        ASSETS
CURRENT ASSETS
   Cash and cash equivalents                        $   791,428     $ 1,126,838
   Restricted Cash                                        9,896          11,798
   Investment in marketable securities                  589,928         668,439
   Accounts receivable - trade                          241,186          84,817
   Current portion  of  note
     receivable  from  sale  of
     subsidiary                                         110,235         110,235
   Current portion of note receivable
     - employee                                          40,000          40,000
   Inventories                                        1,980,360       2,055,827
   Prepaid expenses                                     109,318          22,337
   Deferred income tax assets                           121,770          70,881
                                                    -----------     -----------

   Total Current Assets                               3,994,121       4,191,172
                                                    -----------     -----------
MACHINERY  AND  EQUIPMENT, net of
   accumulated depreciation  of
   $2,255,282 as of December 31,
   1998 and $793,593 as of March 31,
   1999                                               1,947,375       1,978,743
                                                    -----------     -----------
OTHER ASSETS
   Note receivable from sale of
     subsidiary, less current                           110,236         110,236
     portion
   Note receivable, less current portion
     - employee                                          40,000          80,000
   Other investments                                      9,108           9,108
   Goodwill, net of amortization                        277,974         299,357
   Deferred income tax assets                         1,284,167       1,322,583
                                                    -----------     -----------

         Total Other Assets                           1,721,485       1,821,284
                                                    -----------     -----------
                                                      7,662,981       7,991,199
                                                    ===========     ===========
         LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Current Maturities of long-term debt                 121,062         121,062
   Accounts Payable                                     113,614          20,157
   Accrued Expenses                                     107,522         127,021
   Machine Purchase Deposit Liability                     9,896          11,798
   Deferred income                                            0         300,000
                                                    -----------     -----------
         Total Current Liabilities                      352,094         580,038
                                                    -----------     -----------

LONG-TERM DEBT, less current liabilities                 90,796         121,061
                                                    -----------     -----------

DEFERRED INCOME                                         750,000         525,000
                                                    -----------     -----------
STOCKHOLDERS' EQUITY
   Common Stock                                          40,684          40,684
   Additional paid-in capital                        11,874,338      11,823,449
   Accumulated deficit                               (5,444,931)     (5,083,839)
   Accumulated other comprehensive
     income (loss)                                            0         (15,194)
                                                    -----------     -----------
          Total Stockholders' Equity                  6,470,091       6,765,100
                                                    -----------     -----------

                                                    $ 7,662,981     $ 7,991,199
                                                    ===========     ===========
See accompanying notes


<PAGE>


                      ACORN HOLDING CORP. AND SUBSIDIARIES
                    Consolidated Interim Statement of Income
                        March 31, 1999 and March 31, 1998

                                                March 31, 1999    March 31, 1998
                                                 (Unaudited)        (Unaudited)

Net Sales                                          $   877,455      $ 2,056,016
                                                   -----------      -----------

Costs and expenses
   Costs of sales                                      805,118        1,418,871
   Selling, general and administrative                 380,641          475,792
                                                   -----------      -----------
                                                     1,185,759        1,894,663

   Operating Profit                                   (308,304)         161,353
                                                   -----------      -----------

Other income
   Gain on investment                                     (214)               0
   Interest income, net                                 26,944            2,646
                                                   -----------      -----------
                                                        26,730            2,646
                                                   -----------      -----------

   Income before income taxes                         (281,574)         163,999
Income taxes expense (benefit)
   Current                                              64,323           85,865
   Deferred                                                  0          (75,865)
                                                   -----------      -----------
                                                        64,323           10,000
   Deferred income tax assets                        1,284,167        1,322,583
                                                   -----------      -----------

   Net Income                                         (345,897)         153,999
                                                   -----------      -----------

Earnings per share                                 ($     .085)     $     0.034

Weighted average shares outstanding                  4,066,406        4,490,502
                                                   ===========      ===========

See accompanying notes.


<PAGE>


                      ACORN HOLDING CORP. AND SUBSIDIARIES
                  Consolidated Interim Statement of Cash Flows
                        March 31, 1999 and March 31, 1998

                                                      March 31,       March 31,
                                                        1999            1998
                                                     (Unaudited)     (Unaudited)

Net Income from operations                           $  (345,898)   $   153,999

Adjustments to reconcile net income to
   net cash  provided by
   operating activities
   Depreciation and amortization                          94,921         94,921
(Increase) decrease in assets
    Accounts Receivable                                 (156,369)        36,928
    Inventory                                             75,467         55,106
    Prepaid expenses                                     (86,981)       (89,351)
    Deferred taxes                                       (12,473)       (17,798)
    Deposits and other assets                                  0         82,563
    Accounts payable                                      93,457         17,327
    Accrued expenses                                     (19,499)        85,641
    Deferred income                                      (75,000)      (116,671)
    Other liabilities                                          0         11,990
    Customer machinery acquisition liability                   0         (4,704)
                                                     -----------    -----------

    Net Cash provided by operating activities           (432,375)       293,645
                                                     -----------    -----------

Cash flows from Investing Activities
    Purchase of property, plant and equipment            (42,170)      (447,611)
    Purchase of company stock                                  0     (2,094,375)
    Redemption of U.S. Treasury Bill                           0        501,140
    Investment in marketable securities                   78,511              0
    Proceeds notes receivable                             40,000         40,000
                                                     -----------    -----------
Net cash used in investing activities                     76,341     (2,000,846)
                                                     -----------    -----------

Cash Flows from Financing Activities
    Payment of debt                                      (30,265)       (30,264)
    Additional paid-in capital                            50,889              0
                                                     -----------    -----------

    Net cash used in investing activities                 20,624        (30,264)
                                                     -----------    -----------

Net decrease in cash and cash equivalents               (335,410)    (1,737,465)

Cash and cash equivalents at beginning of year         1,126,838      2,923,965
                                                     -----------    -----------

Cash and cash equivalents at end of year             $   791,428    $ 1,186,500
                                                     ===========    ===========

See accompanying notes



<PAGE>

                      ACORN HOLDING CORP. AND SUBSIDIARIES
               Notes to Consolidated Interim Financial Statements
                                 March 31, 1999


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 March 31,
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

In June 1998, the Financial  Accounting  Standards Board (FASB) issued Statement
of Financial  Accounting  Standards  (SFAS) No. 133,  "Accounting for Derivative
Instruments  and Hedging  Activity."  SFAS No. 133  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.  SFAS No. 133 is effective for all fiscal  quarters of fiscal years
beginning after June 15, 1999.  Earlier  application is permitted only as of the
beginning  of any  fiscal  quarter.  The  Company  is  currently  reviewing  the
provisions of SFAS No. 133.



<PAGE>


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

     Sales for the three-month period ended March 31, 1999 decreased  $1,178,561
from the three-month period ended March 31, 1998. The Company incurred operating
losses of  ($308,304)  as compared to an operating  profit of $161,353  over the
comparable  prior  year  period.   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.  However, it is cautiously  optimistic
that the Company may see an increased demand for its products in the second half
of the 1999 fiscal year.

         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.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

      Exhibit No. 3 - Certificate of Amendment of  Certificate of  Incorporation
of the Company, filed with the Secretary of State of Delaware on April 19, 1999.

      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 March 31, 1999.




<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: May 24, 1999                      Larry V. Unterbrink
                                        -------------------------------
                                        Larry V. Unterbrink, Treasurer
                                        (Principal Financial and
                                        Accounting Officer)


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