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, 1998
                                     ------------------

[ ] 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  Identifi-  
incorporation or organization)             cation No.)

100 Park Avenue, 23rd Floor, New York, New York      10017
-------------------------------------------------------------
(Address of principal executive offices)           (Zip code)


Issuer's telephone number, including area code (212) 685-5654
                                               --------------
                           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: 4,172,906 shares of common stock, $.01
par value, as of May 18, 1998.


                                    Page -1-

<PAGE>
                      ACORN HOLDING CORP. AND SUBSIDIARIES
                       Consolidated Interim Balance Sheet
                      March 31, 1998 and December 31, 1997

                                               March 31, 1998  December 31, 1997
                                               --------------  -----------------
            ASSETS                              (Unaudited)
CURRENT ASSETS
   Cash and cash equivalents                     $  1,149,765    $  2,882,526
   Restricted cash                                     36,735          41,439
   U.S. Treasury bills                                452,959         986,706
   Accounts receivable - trade                        392,965         429,893
   Other receivables                                   33,480               0
   Current portion of note receivable
      from sale of subsidiary                         121,696         121,696
   Current portion of note receivable
      - employee                                       40,000          40,000
   Inventories                                      2,451,657       2,506,763
   Prepaid expenses                                   103,194          13,843
   Deferred income tax asset                          155,592         179,000
                                                 ------------    ------------

   Total Current Assets                             4,938,043       7,201,866
                                                 ------------    ------------

MACHINERY AND EQUIPMENT, net of accumulated
 depreciation of $1,998,010 as of December 31,
  1998 and $2,055,333 as of March 31, 1998          2,097,111       1,706,823
                                                 ------------    ------------

OTHER ASSETS
  Deposits and other                                        0          82,563
  Note receivable from sale of subsidiary,
     less current portion                             243,393         243,393
  Note receivable, less current portion
     - employee                                        80,000         120,000
  Other investments                                     9,108           9,981
  Goodwill, net of amortization                       363,505         384,887
  Deferred income tax asset                         1,347,206       1,306,000
                                                 ------------    ------------
                                                    2,043,212       2,146,824
                                                 ------------    ------------

                                                 $  9,078,366    $ 11,055,513
                                                 ============    ============
      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Current maturities of long-term debt          $    121,062    $    121,062
   Accounts payable                                   321,913         303,474
   Accrued expenses                                   310,809         213,519
   Machine purchase deposit liability                  36,735          41,439
   Deferred income                                    383,315         466,680
                                                 ------------    ------------

       Total Current Liabilities                    1,173,834       1,146,174
                                                 ------------    ------------

LONG-TERM DEBT, less current maturities               211,858         242,122
                                                 ------------    ------------

DEFERRED INCOME                                       750,000         783,306
                                                 ------------    ------------
COMMITMENTS                                                 0               0

STOCKHOLDERS' EQUITY
  Common Stock                                         55,389          55,389
  Additional paid-in capital                       14,090,156      14,090,156
  Accumulated deficit                              (5,094,546)     (5,247,684)
  Less common stock in treasury,
     at cost - 9,000 shares                        (2,108,325)     (   13,950)
                                                 ------------    ------------

       Total stockholders' equity                   6,942,674       8,883,911
                                                 ------------    ------------

                                                 $  9,078,366    $ 11,055,513
                                                 ============    ============
See accompanying notes 

                                    Page -2-

<PAGE>



                      ACORN HOLDING CORP. AND SUBSIDIARIES
                    Consolidated Interim Statement of Income
                        March 31, 1998 and March 31, 1997

                                          March 31, 1998   March 31, 1997
                                          --------------   --------------
                                           (Unaudited)      (Unaudited)

Net sales                                    $ 2,056,016    $ 6,551,995
                                             -----------    -----------

Costs and expenses
       Costs of sales                          1,418,871      3,411,797
       Selling, general and administrative       475,792      3,045,032
                                             -----------    -----------
                                               1,894,663      6,456,829

       Operating profit                          161,353         95,166
                                             -----------    -----------

Other income
       Gain on investment                              0        108,456
       Interest income, net                        2,646        (10,226)
                                             -----------    -----------
                                                   2,646         98,230
                                             -----------    -----------

       Income before income taxes                163,999        193,396

Income taxes expense (benefit
       Current                                    85,865         66,000
       Deferred                                  (75,865)       (59,000)
                                             -----------    -----------
                                                  10,000          7,000

       Net Income                            $   153,999    $   186,396
                                             ===========    ===========

Earnings per share                           $     0.034    $     0.034
                                             ===========    ===========

Weighted average shares outstanding            4,490,502      5,538,906
                                             ===========    ===========








See accompanying notes.

                                    Page -3-

<PAGE>



                      ACORN HOLDING CORP. AND SUBSIDIARIES
                  Consolidated Interim Statement of Cash Flows
                        March 31, 1998 and March 31, 1997

                                              March 31, 1998   March 31, 1997
                                              --------------   --------------
                                                (Unaudited)     (Unaudited)

Net income from operations                     $   153,999    $   186,396

Adjustments to reconcile net income to
 net cash used in
 operating activities
       Depreciation                                 57,323        190,779
       Amortization                                 21,382         42,862
(Increase) decrease in assets
       Trade receivable                             36,928         49,775
       Notes and other receivable                        0         (8,605)
       Inventory                                    55,106        (46,159)
       Prepaid expenses                            (89,351)       (42,617)
       Deferred taxes                              (17,798)        (3,726)
       Deposits and other assets                    82,563         48,417
       Accounts payable                             17,237       (162,413)
       Accrued expenses                             85,641        (97,169)
       Deferred income                            (116,671)      (608,380)
       Other liabilities                            11,990              0
       Customer machinery acquisition
         liability                                  (4,704)       (64,136)
                                               -----------    -----------

       Net cash provided by operating
         activities                                293,645       (514,976)
                                               -----------    -----------

Cash flows from Investing Activities
       Purchase of property, plan and
          equipment                               (447,611)      (185,000)
       Purchase of company stock                (2,094,375)             0
       Redemption of U.S. Treasury Bill            501,140              0
       Purchase of investments, net                      0       (468,382)
       Proceeds notes receivable                    40,000              0
                                               -----------    -----------

Net cash used in investing activities           (2,000,846)      (653,382)
                                               -----------    -----------

Cash Flows from Financing Activities
       Payment of debt                             (30,264)       (30,654)
       Proceeds from line of credit                      0        200,000
       Proceeds from long-term debt                      0        458,160
       Payment of capital lease obligations              0         (7,370)
                                               -----------    -----------

       Net cash used in investing activities       (30,264)       620,136
                                               -----------    -----------

Net decrease in cash and cash equivalents       (1,737,465)      (548,222)
                                               -----------    -----------


Cash and cash equivalents at beginning
  of year                                        2,923,965      2,594,050
                                               -----------    -----------

Cash and cash equivalents at end of year         1,186,500      2,045,828
                                               ===========    ===========



See accompanying notes.

                                    Page -4-

<PAGE>




                      ACORN HOLDING CORP. AND SUBSIDIARIES
               Notes to Consolidated Interim Financial Statements
                                 March 31, 1998


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
1997  balance  sheet has been  derived  from the  audited  financial  statements
contained in the 1997 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.  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.



                                    Page -5-

<PAGE>


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

       During the fiscal year ended December 31, 1997, the Company completed the
divestiture  of  all  of  its  major   operating   assets  other  than  Recticon
Enterprises,  Inc. (its principal  subsidiary)  ("Recticon") and, on November 4,
1997,  pursuant to the  approval of the  Company's  stockholders,  withdrew  its
election with the Securities and Exchange Commission to be treated as a Business
Development  Company  under  the 1940  Act.  Accordingly,  the  Company  will be
operating in the foreseeable  future as a holding company with one  wholly-owned
subsidiary, Recticon. 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. Although the business in which the Company is engaged is highly
competitive  and  cyclical in nature,  the Company does not foresee any material
impact  during  the  upcoming  calendar  year on its net  sales or  income  from
continuing operations.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

     Exhibit No. 27 -- Financial Data Schedule

     (b) Reports on Form 8-K:

     On January 26, 1998,  the Company  filed with the  Securities  and Exchange
Commission a Current Report on Form 8-K, dated January 22, 1998, relating to the
repurchase of shares of its Common Stock.

                         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 19, 1998       Larry V. Unterbrink
                         ----------------------------------
                         Larry V. Unterbrink, Treasurer
                         (Principal Financial and
                         Accounting Officer)


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



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