SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D. C.

                                   FORM 10-Q

                  QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
                     OF THE SECURITIES E6XCHANGE ACT OF 1934

FOR QUARTER ENDED:  MARCH 31, 1998                   COMMISSION FILE NO. 0-4076
                   ---------------                                       ------



                              EXOTECH INCORPORATED
               --------------------------------------------------
               (Exact name of Registrant as Specified in Charter)


STATE OR JURISDICTION OF
INCORPORATION OR ORGANIZATION:                       DELAWARE

IRS IDENTIFICATION NO:                               54-0700888

ADDRESS OF PRINCIPAL OFFICE:                         8502 DAKOTA DRIVE
                                                     GAITHERSBURG, MD. 20877

REGISTRANT'S TELEPHONE NUMBER:                       (301) 948-3060

INDICATE BY CHECKMARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENT FOR THE PAST 90 DAYS.

                  YES      [X]              NO       [ ]

INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE CLOSE OF THE PERIOD COVERED BY THIS REPORT.

CLASS:                                            COMMON STOCK, PAR VALUE $0.10
                                                  -----------------------------
OUTSTANDING AT
  MARCH 31, 1998                            942,387
                                            -------

<PAGE>


                              EXOTECH INCORPORATED

                                     INDEX

PART I   FINANCIAL INFORMATION                                         PAGE NO.

                  CONSOLIDATED CONDENSED BALANCE SHEET
                  March 31, 1998  AND JUNE 30, 1997......................... 2

                  CONSOLIDATED CONDENSED STATEMENT OF
                  OPERATIONS - NINE MONTHS ENDED
                  MARCH 31, 1998 AND 1997................................... 3

                  STATEMENT OF CASH FLOWS FOR NINE
                  MONTHS ENDED MARCH 31, 1998 AND 1997...................... 4

                  NOTES TO CONSOLIDATED CONDENSED
                  FINANCIAL STATEMENTS...................................... 5

                  MANAGEMENT'S DISCUSSION AND ANALYSIS
                  OF CONSOLIDATED CONDENSED STATEMENT
                  OF OPERATIONS............................................. 6

PART II           OTHER INFORMATION

                  OTHER FINANCIAL INFORMATION............................... 8

                  SIGNATURES................................................ 9

                  FINANCIAL DATA SCHEDULES (EX-27)..........................10


<PAGE>



                              EXOTECH INCORPORATED
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                     ASSETS
                                                                   March 31,                June 30,
                                                                     1998                     1997
                                                               --------------            -------------
                                                                 (Unaudited)
<S><C>
CURRENT ASSETS

Accts. Receivable, Net                                           $  18,258                 $  18,225
Inventories
 Work in Process                                                   323,069                   261,034
 Raw Materials                                                      32,625                    32,625
 Finished Goods                                                     14,000                    14,000
Other Current Assets                                                   343                       -0-
Cash                                                                 1,098                     3,431
                                                                ----------                ----------
Total Current Assets                                               389,393                   329,315

PROPERTY, PLANT AND EQUIPMENT
 NET                                                                   206                       294
OTHER NON-CURRENT ASSETS                                             5,297                     5,993
                                                                ----------                ----------

TOTAL ASSETS                                                       394,896                   335,602
                                                                ==========                ==========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Accts. Payable & Other Accrued Expenses                             87,709                    99,369
Other Current Liabilities                                          391,550                   371,782
Notes Payable                                                      428,219                   385,294
                                                                ----------                ----------
Total Current Liabilities                                          907,478                   856,445

SHAREHOLDERS EQUITY
Common Stock, Par Value $.10 per share;
 1,500,000 shares authorized; 970,135
 issued; 942,387 outstanding                                        97,014                    97,014

Paid-in-Surplus                                                  1,169,645                 1,169,645
Deficit                                                         (1,666,821)               (1,675,082)
Treasury Stock (27,748 shares)                                    (112,420)                 (112,420)
                                                                ----------                ----------
Total Shareholders' Equity                                        (512,582)                 (520,843)

TOTAL LIABILITIES & SHAREHOLDERS'
 EQUITY                                                            394,896                   335,602
                                                                ==========                ==========
</TABLE>


See accompanying Notes to Consolidated Condensed Financial Statements.

                                       2


<PAGE>




                              EXOTECH INCORPORATED
                 CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                   1998                                       1997
                                      -----------------------------              ------------------------------
                                        3 Mos.             9 Mos.                   3 Mos.            9 Mos.
                                      ----------- ENDED -----------              ------------ ENDED -----------
                                       3/31                  3/31                  3/31                   3/31
<S><C>
REVENUE
Contract Sales                      $132,178               $327,189             $137,171                $335,175

EXPENSES
Direct Labor                           3,216                  8,954                2,573                   7,909
Overhead                               4,895                 15,615                6,054                  16,122
Materials                              2,230                  2,874                  149                     533
Other Direct Costs                         -                      -                5,000                   5,000
Travel                                     -                    650                2,316                   2,316
General & Administrative                 722                  3,170                2,114                   3,110
Inventory Costs                      100,889                258,034              111,669                 262,869
                                    --------               --------             --------                --------

Cost of Contract Services            112,602                289,297              129,875                 297,859

Operating Income (Loss)               19,576                 37,892                7,296                  37,316

Miscellaneous Income                      --                     --                   --                      --
Research and Development                  --                     --                   --                      --
Interest & Other                      (9,487)               (29,631)              (8,771)                (23,700)
                                    --------               --------             --------                --------

NET INCOME BEFORE
  TAXES                               10,089                  8,261               (1,475)                 13,616
State Income Tax
 Provision                                --                     --                   --                      --
                                    --------               --------             --------                --------
NET INCOME (LOSS)                     10,089                  8,261               (1,475)                 13,616

Weighted Average Number of
Common Shares
Outstanding                          942,387                942,387              942,387                 942,387

EARNINGS (LOSS) PER
COMMON SHARE                            0.01                   0.01                (0.00)                   0.01

DIVIDENDS PER
 COMMON SHARE                           None                   None                 None                    None
</TABLE>


See accompanying Notes to Consolidated Condensed Financial Statements. These
statements have been prepared from the books of account without audit.

                                       3


<PAGE>



                      EXOTECH INCORPORATED AND SUBSIDIARY
                          STATEMENT OF CASH FLOWS FOR
                          NINE MONTHS ENDED MARCH 31,
<TABLE>
<CAPTION>
                                                                                 1998                       1997
                                                                                 ----                       ----
<S><C>
CASH FLOWS FROM OPERATING TRANSACTIONS

Net Income (Loss)                                                                8,261                      13,616
Add: Non cash Income Determinants
     Depreciation and Amortization                                                 784                         826
Add (Deduct): Changes in Current Assets & Liabilities
     (Increase) Decrease in Accounts Receivable                                    (33)                     (3,362)
     (Increase) Decrease in Prepaid Expenses                                      (343)                        280
     (Increase) Decrease in Inventory                                          (62,035)                    (21,963)
     Increase (Decrease) in Accts. Payable                                     (11,660)                    (10,300)
     Increase (Decrease) in Payroll/Emp. Benefits                               (4,818)                     (9,177)
     Increase (Decrease) in Accrued Interest                                    24,586                      20,550
                                                                               -------                     -------

Cash Provided By or (Used) For Operating Transactions                          (45,258)                     (9,530)

CASH FLOWS FROM FINANCING TRANSACTIONS:

Proceeds from Notes                                                             66,789                      39,800
Payments on Notes                                                              (23,864)                    (30,000)
                                                                               -------                     -------

Cash Provided By or (Used For) Financing Transactions                           42,925                       9,800

CASH FLOWS FROM INVESTING TRANSACTIONS:

Purchase of Equipment                                                               --                          --
Deposits                                                                            --                          --
                                                                               -------                     -------

Cash Provided By or (Used For) Investing Transactions                               --                          --

INCREASE (DECREASE) IN CASH                                                     (2,333)                        270

CASH BALANCE - BEGINNING                                                         3,431                         105
                                                                               -------                     -------
CASH BALANCE - ENDING                                                           $1,098                        $375
                                                                               =======                     =======
</TABLE>


                                       4


<PAGE>



                              EXOTECH INCORPORATED
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

NOTE 1.

In the opinion of Management, the accompanying unaudited consolidated condensed
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position as of
March 31, 1998 and June 30, 1997 and the results of operations and changes in
financial position for the nine months ended March 31, 1998 and 1997 of Exotech
Incorporated and its inactive wholly-owned consolidated subsidiary, Exotech
Research & Analysis, Inc. There are no significant intercompany transactions.

NOTE 2.

Per share computations have been based on the weighted average shares
outstanding of 942,387 for the nine months ended March 31, 1998 and 1997.

NOTE 3.

Notes Payable at March 31, 1998 consist of four demand notes of $100,000, $8,000
and $47,000, payable with interest at 8.5% per annum to three of the Company's
former directors. In addition, one demand note of $252,775 is payable with
interest at 8.5% per annum to one officer/employee. Periodically, the Company
has obtained producer loans from Spiral Biotech, Inc. that are secured by
inventory instruments (Autoplaters). At March 31, 1998, there was an outstanding
Producer Loan of $20,444 without interest charge.

NOTE 4.

Inventory cost shown in the cost of sales, represents the cost of production of
goods sold that were incurred in the prior fiscal year.

                                       5


<PAGE>




                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                                     OF THE
                 CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

The following is Management's discussion and analysis of certain significant
factors which have affected the Company's earnings during the periods included
in the accompanying consolidated condensed statement of operations.

A summary of the period to period changes in the principal items included in the
consolidated statement of operations is shown below:

<TABLE>
<CAPTION>
                                 ------------------------------------------ COMPARISON  OF ----------------------------------------

                                       THREE MONTHS                         THREE MONTHS                        NINE MONTHS
                                  ----------------------                --------------------                --------------------
                                  Mar 31          Dec 31                Mar 31        Mar 31                Mar 31        Mar 31
                                   1998            1997                  1998          1997                  1998          1997
<S><C>
Net Sales                         132,178        143,076               132,178       137,171               327,189        335,175
Cost of Labor & Overhead            8,111          3,759                 8,111         8,627                24,589         24,031
G&A Expense                           722            690                   722         2,114                 3,170          3,110
Inventory Cost                    100,889        125,070               100,889       111,669               258,034        262,869
                                 --------       --------              --------      --------              --------       --------
Cost of Sales                     112,602        129,519               112,602       129,875               289,297        297,859
Interest & Other                    9,487         10,887                 9,487         8,771                29,631         23,700
</TABLE>


                                       6

<PAGE>




I.        CHANGE IN FINANCIAL POSITION IN THE NINE MONTHS ENDED
          MARCH 31, 1998.

          In the nine months period ended March 31, 1998, a reduction of the
          working capital deficit of $9,045 resulted from a net profit from
          operations of $8,261 and non-fund charges of $784. Producer loans
          totalling $40,500 - obtained from Spiral Biotech, Inc. in this period
          were paid-down prior to $20,444 to the end of the period. Additional
          loans amounting to $22,481 obtained from an officer of the Company in
          this period are outstanding.

          An order received in March 1998 from Spiral Biotech, Inc. increased
          backlog at the end of the period by $32,000 for instruments scheduled
          for deliveries in May 1998. Negotiations completed at the end of the
          most recent quarter will further increase backlog early in the next
          quarter by $150,000.

II.       INCOME AND EXPENSE IN THE MOST RECENT QUARTER AND NINE MONTH PERIOD
          AND THE SAME QUARTER AND NINE MONTHS PERIOD LAST YEAR.

          Revenue for the quarter ended March 31, 1998, at $132,178, was $4,993
          lower compared to the same period one year earlier. Operating income
          was $19,576 compared to $7,296 in the quarter ended March 31, 1997.
          The earlier period had higher indirect costs related to the hiring and
          training of an employee following the retirement of a key staff
          member. In the opinion of Management, results in the most recent
          quarter show a continuation of modest progress over the past three
          quarters toward profitable operations and recovery from the large
          losses incurred in the prior year.

          For the nine months period ended March 31, 1998, revenue of $327,189
          was two percent lower than that achieved one year earlier. On the same
          basis of comparison, the cost of sales was lower by about three
          percent. Interest expense in the recent period was higher by 25
          percent, reflecting the necessity of increased borrowing to provide
          for purchases of material at the outset of new production runs
          resulting in a net profit of $8,261, compared to $13,616 in the prior
          year. In the opinion of management, the increasing frequency of large
          increases in backlog for existing product lines will materially reduce
          the cash flow interruptions that have been experienced between the end
          of one production run and the first billable products of the
          subsequent production run. Furthermore, economies of scale will become
          available to reduce costs. These changes reflect progress toward
          improved operating conditions for the Company after an intense and
          very costly effort to develop a new product in prior fiscal years.

                                       7


<PAGE>




                      PART II. OTHER FINANCIAL INFORMATION

ITEM 5.

As in the past, a shortage of working capital continues to be a significant
problem, limiting efforts to develop new business to the fullest extent
possible, as well as causing occasional delays of 30 to 45 days in payments to
suppliers of materials for manufacturing. In the most recent nine months period,
the accounts payable more than 30 days old was reduced by about 65 percent, from
$66,800 to $24,000. Management also is continuing to pursue opportunities to
affiliate with other companies to increase marketing and sales of its products
and develop new products from Exotech's proprietary technology. In the opinion
of Management, the Company should be in a position to sustain operations at
least until such time as the results of current contracts and negotiations for
new business is determinable. Ultimate realization of the carrying value of
prepaid expenses and advances, property and equipment, and miscellaneous other
assets shown in the accompanying balance sheet depend on the effect of the
matters discussed herein.

The dollar amount of the backlog as of March 31, 1998 was $168,900, lower by
$97,000 compared to that of the prior year, and $48,200 lower than the backlog
at December 31, 1997. An order received in March, 1998 increased backlog by
$32,000 for products that will be purchased in May. Further orders have been
negotiated that will add a minimum of $150,000 to the backlog in the quarter
beginning April 1, 1998.

ITEM 6 (B)

There were no reports filed on Form 8-K for the nine months ended March 31,
1998.

                                       8


<PAGE>


                                   SIGNATURE

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

                                                   EXOTECH INCORPORATED

                                                       REGISTRANT


DATE:     May 13, 1998
      _____________________



____________________________________
ROBERT G. LYLE, PRESIDENT AND CHIEF
 EXECUTIVE OFFICER

                                       9