FORM 10-Q

                    SECURITIES AND EXCHANGE COMMISSION

                          Washington, D.C. 20549

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
                      SECURITIES EXCHANGE ACT OF 1934

               For the quarterly period ended March 31, 1998

                                    OR

[  ] 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 0-15374

                       PENTECH INTERNATIONAL, INC.             
          (Exact name of registrant as specified in its charter)

          Delaware                          23-2259391      
(State or other jurisdiction of         (IRS Employer 
incorporation or organization)           Identification No.)

             195 Carter Drive, Edison, New Jersey  08817         
                 (Address of principal executive offices)
                                (Zip Code)

                             (732) 287-6640                      
           (Registrant's telephone number, including area code)

                                                                      
     (Former name, former address and former fiscal year, if changed  
since last report)

     Indicate by check mark 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 requirements
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 March 31, 1998;
12,530,258 shares of common stock, par value $.01 per share.

                               Page 1 of 19

                        There is no Exhibit Index.

                                   INDEX




Part I.  Financial Information:


    Item 1. Financial Statements.                                      Page


    Condensed Consolidated Balance Sheets as of 
    March 31, 1998 and September 30, 1997                               3-4


    Condensed Consolidated Statements of Operations for the
    three and six months ended March 31, 1998 and 1997                    5


    Condensed Consolidated Statements of Cash Flows 
    for the three and six months ended March 31, 
    1998 and 1997                                                       6-7


    Notes to Condensed Consolidated Financial Statements               8-14


    Item 2. Management's Discussion and 
            Analysis of Financial Condition 
            and Results of Operations.                                15-17


Part II.  Other Information:

    Item 1. Legal Proceedings.                                          18

    Item 5. Other Material Events.                                      18

    Item 6. Exhibits and Reports on Form 8-K.                           18

Signatures                                                              19


<PAGE>
                         PART I.  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

                          PENTECH INTERNATIONAL, INC.
                                AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS

                                     ASSETS
                                (000's omitted)
                    (Substantially all pledged or assigned)


                                  March 31, 1998   September 30, 1997
                                     (unaudited)       
    Current Assets:

    Cash                                  $   -          $    649
    Accounts receivable, net of
     allowances for doubtful
     accounts of $138 at
     March 31, 1998 and 
     $30 at September 30,
     1997                              10,215              16,293
    Settlement receivable (Note 9)        965                -
    Inventories (Note 1)               19,112              18,481
    Income taxes receivable             1,236                 422
    Prepaid expenses and other          1,677               1,648
    Deferred tax asset (Note 5)          -                    271
                                       ------              ------
     Total current assets              33,205              37,764
                                       ------              ------
    Furniture and equipment (Note 1)    8,630               8,895
     Less accumulated depreciation     (4,895)             (4,931)
                                       ------              ------ 
                                        3,735               3,964
                                       ------              ------
    Other assets:

    Deferred tax assets, long-term
     (Note 5)                             186                 364
    Trademarks, net of amortization
     (Note 1)                             235                 270
    Due from officer                      174                 142
                                       ------              ------
                                          595                 776
                                       ------              ------
                                     $ 37,535            $ 42,504
                                       ======              ======





           See notes to condensed consolidated financial statements.

                          PENTECH INTERNATIONAL, INC.
                                AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED BALANCE SHEETS (Cont.)

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                                (000's omitted)

                             March 31, 1998        September 30, 1997
                                 (unaudited)

Current liabilities:
  Notes payable, banks
    (Note 2)                         $ 13,614              $ 17,238
  Accounts payable                      2,408                 1,334
  Accrued expenses                      1,613                 3,441
  Settlement note payable                 300                   300
  Deferred tax liability (Note 5)         108                  -   
                                       ------                ------

  Total current liabilities            18,043                22,313
                                       ------                ------
Other liabilities:
  Royalty payable, long-term              200                   300
  Settlement note payable,
   long-term                            2,100                 2,300
                                       ------                ------
                                        2,300                 2,600
                                       ------                ------
Commitments and contingencies
(Note 4)

Shareholders' equity (Note 3):

  Preferred stock, par value $.10
  per share; authorized 500,000
  shares; issued and outstanding
  none                                 -                     -

  Common stock, par value $.01
  per share; authorized 20,000,000
  shares; 12,530,258 shares issued
  and outstanding at March 31, 1998
  and 12,504,258 shares issued
  and outstanding at September 30,
  1997                               125                   125

  Capital in excess of par            6,808                 6,789

  Retained earnings                  10,259                10,677
                                     ------                ------

                                     17,192                17,591
                                     ------                ------          
                                   $ 37,535              $ 42,504
                                     ======                ======
           See notes to condensed consolidated financial statements.<PAGE>
     
                  
                           PENTECH INTERNATIONAL, INC.
                                AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (000's omitted except for per share amounts)
                                  (unaudited)


                        Three Months Ended          Six Months Ended
                             March 31,                  March 31,
                        ------------------          ----------------
                            1998      1997            1998      1997
                            ----      ----            ----      ----

Net sales                 $10,480   $10,852          $21,368   $23,392   

Cost of sales               7,312     7,118           13,958    15,165       
                           ------    ------           ------    ------
Gross profit                3,168     3,734            7,410     8,227
                           ------    ------           ------    ------
Selling, general and
 administrative expenses    4,515     3,809            8,377     7,853

(Income) from Lawsuit 
 Settlement (Note 9)        (965)        -             (965)        -

Loss from Cosmetics
 operation                      -       687                -       687     

Interest expense              332       340              681       707

Interest (income)              (8)       (1)              (9)       (9)      
                           ------    ------           ------    ------  
                            3,874     4,835            8,084     9,238       
                           ------    ------           ------    ------ 
(Loss) before taxes          (706)   (1,101)            (674)   (1,011)

Income tax (benefit)         (268)    (440)             (256)     (404) 
                           ------   ------            ------    ------ 

Net (loss)                $  (438)  $  (661)         $  (418)  $  (607)     
                           ======    ======           ======    ====== 
Net (loss) per share      $  (.03)  $  (.05)         $  (.03)  $  (.05)  
  basic and diluted        ======    ======           ======    ======     
 (Note 1)








           See notes to condensed consolidated financial statements.
<PAGE>
                          PENTECH INTERNATIONAL, INC.
                                AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (000's omitted)
                                  (unaudited)

                                              Six Months Ended
                                                  March 31,    
                                              ---------------- 
                                              1998      1997
                                              ----      ----
Cash flows from operating activities:

    Net (loss)                              $   (418) $   (607)
                                              ------     ------
    Adjustments to reconcile net 
    income to net cash provided for
     operating activities:

    Depreciation and amortization                466       767 
    Sale of Cosmetic assets                      758        -
    (Increase) decrease in:
         Accounts receivable                   5,993     3,795
         Settlement receivable                  (965)       -
         Inventories                          (1,054)      472
         Prepaid expenses and other             (122)     (493)
         Income taxes receivable                (814)     (244)
         Due from officer                        (32)      (32)
         Deferred tax asset                      557       752 

    Increase (decrease) in:                   

         Bankers' acceptances payable            -      (1,489)
         Accounts payable                      1,074        23 
         Accrued expenses                     (1,828)   (1,956)
         Deferred income taxes payable           -         145 
          Settlement payable                    (300)     (900)
                                              ------    ------   
    Total adjustments                          3,733       840 
                                              ------    ------     
         Net cash provided by 
         operating activities                  3,315       233  
                                              ------    ------          
                        
Cash flows (used in) investing activities:

    (Purchase) of furniture/equipment           (394)     (305)
    Decrease (Increase) in trademarks             35        (8)
                                              ------    ------   
     Net cash (used in) investing 
      activities                                (359)     (313)
                                              ------    ------ 



           See notes to condensed consolidated financial statements.<PAGE>
      
          
                           PENTECH INTERNATIONAL, INC.
                                AND SUBSIDIARIES

          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
                                (000's omitted)
                                  (unaudited)


                                               Six Months Ended
                                                   March 31,      
                                               ---------------- 
                                             1998           1997     
                                             ----           ----

Cash flows from financing activities:

    Net (decrease) in notes
      payable                                 $ (3,624)    $ (7,947) 
    Issuance of Common Stock                       -             20     
    Increase in additional paid in
      capital                                       19          943  
                                                ------       ------
         Net cash (used in) 
          financing activities                  (3,605)      (6,984) 
                                                ------       ------  
Net (decrease) in cash and                      
   cash equivalents                               (649)      (7,064) 
                                                ------       ------
Cash and cash equivalents,      
beginning of period                                649        7,064
                                                ------       ------
Cash and cash equivalents, end of period      $   -         $  -       
                                               =======       ======

Supplemental disclosures of cash flow 
information:

Cash paid during the period for:

    Interest                                 $    686      $   834






           See notes to condensed consolidated financial statements.
<PAGE>
                        PENTECH INTERNATIONAL, INC.
                             AND SUBSIDIARIES 

           Notes to Condensed Consolidated Financial Statements
      (The information for the three and six months ended
                  March 31, 1998 and 1997 is unaudited.)

1.  Summary of significant accounting policies:

    Organization:

         Pentech International, Inc. (the "Company") was formed in
         April 1984.  A wholly-owned subsidiary, Sawdust Pencil
         Company ("Sawdust") was formed in November 1989 and
         commenced operations in January 1991.  The Company and
         its subsidiary are engaged in the production, design and
         marketing of writing and drawing instruments.  In October
         1993, the Company formed a wholly-owned subsidiary,
         Pentech Cosmetics, Inc. to manufacture and distribute
         cosmetic pencils.  During its fiscal year ended September
         30, 1997, the Company decided to dispose of this product
         line.  The Company primarily operates in one business
         segment:  the manufacture and marketing of pens, markers,
         pencils and other writing instruments and related
         products to major mass market retailers located in the
         United States, under the "Pentech" name or licensed
         trademark brand.  The Company's fiscal year ends
         September 30.

    Principles of consolidation:  

         The consolidated financial statements include the
         accounts of the Company and its subsidiaries.  All
         significant intercompany balances and transactions have
         been eliminated.

    Cash Equivalents:

         The Company considers all time deposits with a maturity
         of three months or less to be cash equivalents.

    Unaudited financial statements:

         All unaudited financial information includes all
         adjustments (consisting of normal recurring adjustments)
         which the Company considers necessary for a fair
         presentation of the financial position at March 31, 1998
         and the results of operations for the three and six month
         periods ended March 31, 1998 and 1997 and cash flows for
         the six months ended March 31, 1998 and 1997.

<PAGE>
                        PENTECH INTERNATIONAL, INC.
                             AND SUBSIDIARIES 

           Notes to Condensed Consolidated Financial Statements
      (The information for the three and six months ended
                  March 31, 1998 and 1997 is unaudited.)

    Inventory and Cost of Sales:

         Inventory is stated at the lower of cost or market
         (first-in, first-out).  Interim inventories are based on
         an estimated gross profit percentage by product,
         calculated monthly.  Cost of Sales for imported products
         includes the invoice cost, duty, freight in, display and
         packaging costs.  Cost of domestically manufactured
         products includes raw materials, labor, overhead and
         packaging costs.

    Equipment and depreciation:

         Equipment is stated at cost.  Depreciation is provided by
         the straight-line method over the estimated useful lives
         of the assets, which range from five to ten years.  Major
         improvements to existing equipment are capitalized. 
         Expenditures for maintenance and repairs which do not
         extend the life of the assets are charged to expense as
         incurred.

    Use of Estimates:

          The preparation of financial statements in conformity
          with generally accepted accounting principles requires
          management to make estimates and assumptions that affect
          the reported amounts of assets and liabilities and
          disclosure of contingent assets and liabilities at the
          date of the financial statements and the reported amounts
          of revenues and expenses during the reporting period. 
          Actual results could differ from those estimates.
          
         Stock Based Compensation:
          
          Statement of Financial Accounting Standards No. 123,
          "Accounting for Stock Based Compensation," encourages,
          but does not require companies to record compensation
          cost for stock-based employee compensation plans at fair
          value.  The Company has elected to follow Accounting
          Principles Board Opinion No. 25, "Accounting for Stock
          Issued to Employees" (APB 25) and related interpretations
          in accounting for its employee stock options.  Under APB
          25, because the exercise price of the Company's employee
          stock options equals the market price of the underlying
          stock on the date of grant, no compensation expense is
          recognized.
          
          
          
                         PENTECH INTERNATIONAL, INC.
                              AND SUBSIDIARIES 

             Notes to Condensed Consolidated Financial Statements
      (The information for the three and six months ended
                    March 31, 1998 and 1997 is unaudited.)

Earnings per common equivalent shares:

         In February 1997, the Financial Accounting Standards Board issued
         Statement No. 128, Earnings Per Share, which was adopted by the
         Company in December, 1997.  The Company is required to change the
         method currently used to compute earnings per share and to
         restate all prior periods.  Under the new requirements for
         calculating basic earnings per share, the dilutive effect of
         stock options will be excluded.

The following table sets for the computation of basic and diluted
earnings per share:

                             Three months ended       Six months ended
                                  March 31,              March 31,
                             ------------------       ----------------
                              1998       1997        1998       1997
                              ----       ----        ----       ----

Numerator:
    Net (loss)            $(438,000)  $(661,000)  $(418,000)  $(607,000)
                           --------    --------    --------    --------
Numerator for basic and
  diluted earnings per 
  share                   $(438,000)  $(661,000)  $(418,000)  $(607,000)
                          ==========  ==========  ==========  ==========

Denominator:
    Denominator for basic
      earnings per share -
      weighted average
      shares              12,530,258  12,496,758  12,517,592  11,496,758

Effect of dilutive
  securities:
    Employee stock 
   options                  344,597     312,018     414,703     156,009
                          ---------   ---------   ---------   ---------     
                        
Denominator for diluted
  earnings per share -
  adjusted weighted 
  average shares and 
  assumed conversions:    12,874,855  12,808,776  12,932,295  11,652,767
                          ==========  ==========  ==========  ==========

Basic and diluted (loss)
  per share                   $(.03)     $(.05)       $(.03)      $(.05)
                          ==========  ==========  ==========  ==========
                         PENTECH INTERNATIONAL, INC.
                              AND SUBSIDIARIES 

             Notes to Condensed Consolidated Financial Statements
      (The information for the three and six months ended
                    March 31, 1998 and 1997 is unaudited.)


    Trademarks:

         Costs related to trademarks are being amortized over a five-year
         period on a straight-line basis.


2.  Notes payable, bank:

                                  March 31,              September 30,
                   Rate            1998        Rate          1997    
                   ----           --------     ----      ------------
Notes payable     8.375%       $10,000,000     8.128%    $13,000,000
                  8.125%         1,000,000                      -

Notes payable     9.00 %         2,613,955      9.00%      4,238,066
                                 ---------                ----------

    Total                      $13,613,955               $17,238,066
                                ==========                ==========


    Notes payable as of March 31, 1998 and September 30, 1997 were
advanced under a three year $30,000,000 Revolving Credit Agreement with
BankAmerica Business Credit, Inc. ("BABC") (the "Credit Agreement"). 
Borrowings under the Credit Agreement are subject to limitations based
upon eligible inventory and accounts receivable as defined in the Credit
Agreement.

    The Credit Agreement is collateralized by a security interest in
substantially all of the assets of the Company.  In connection with the
Credit Agreement, the Company has agreed, among other things, to the
maintenance of certain minimum amounts of tangible net worth and interest
coverage ratios.  The financial results of the current quarter caused the
Company to be in technical violation of its tangible net worth covenant,
which violation was waived by BABC.

3.  Shareholders' Equity:

    In December 1997 and January 1998, options to purchase an aggregate
of 26,000 shares of Common Stock were exercised at $.75 per share
resulting in the issuance of 26,000 shares of Common Stock and proceeds
of $19,500.

4.  Contingency:

    At March 31, 1998, the Company was contingently liable for outstanding
letters of credit of $303,370.

                         PENTECH INTERNATIONAL, INC.
                              AND SUBSIDIARIES 

         Notes to Condensed Consolidated Financial Statements (cont.)
      (The information for the three and six months 
                 ended March 31, 1998 and 1997 is unaudited.)


5.   Income taxes:                                                  
                            Three Months Ended  Six Months Ended
                              March 31, 1998     March 31, 1998 
                            ------------------  ---------------- 
           Federal:                 
           Current                  $ (20,500)         $ (20,000) 
           Deferred                  (184,000)          (176,000)

            State:
           Current                    (31,750)           (30,000)
           Deferred                   (31,750)           (30,000)
                                     --------           -------- 
                                    $(268,000)         $(256,000)
                                     ========           ========
    Income tax at Federal
      statutory rate applied to
      income before taxes           $(240,000)         $(229,000)

   Add:  state income taxes          (63,500)           (60,000)

   Less: effect of deduction of
      state income taxes for 
           Federal purposes            35,500             33,000
                                     --------           --------         
                          
    Income tax (benefit)            $(268,000)         $(256,000)
                                     =========          =========<PAGE>
         
                           PENTECH INTERNATIONAL, INC.
                              AND SUBSIDIARIES 

             Notes to Condensed Consolidated Financial Statements
             (The information for the three and six months ended
                    March 31, 1998 and 1997 is unaudited.)

    Significant components of the Company's deferred tax assets and
liability as of March 31, 1998 and September 30, 1997 are as follows:

                                      March 31,    September 30,
                                        1998           1997    
                                     ---------     ----------- 
Current deferred tax liability:
   State taxes on deferred
     federal items                 $  (108,044)   $  (149,823)
                                     ---------      ---------          
Current deferred tax assets:
   Bad debts                       $    59,278    $    12,938
   Inventory reserve                   348,300        520,300
   Reserve for returns and
     allowances                         49,259        313,042
   Unicap                               12,813         12,813
   Cosmetics fixed asset reserve          -           123,410 
                                      --------       --------         
   Total current deferred
     tax assets                        469,650        982,503

Valuation allowance on current
  deferred tax assets                 (469,650)      (561,500)
                                      --------       --------  
                                  
                                          -           421,003 
                                   
   Net current deferred tax 
     (liability) assets            $  (108,044)   $   271,180
                                   ============   ============

Long-term deferred tax liabilities:
   Depreciation                    $  (832,800)   $  (832,800)
                                   -----------    ----------- 
Long-term deferred tax assets:
   Reserve for litigation          $ 1,204,000    $ 1,290,000
   State net operating loss
     carryforwards                     310,700        310,700 
                                     ---------      ---------        
Total long-term deferred
  tax assets                         1,514,700      1,600,700

Valuation allowance on
  long-term deferred tax assets       (495,915)      (404,065)
                                     ---------       ---------             
                                   $ 1,018,785    $ 1,196,635 
                                     ---------      ----------
   Net long-term deferred tax
    assets                         $   185,985    $   363,835
                                   ============   ============

                         PENTECH INTERNATIONAL, INC.
                              AND SUBSIDIARIES 

             Notes to Condensed Consolidated Financial Statements
             (The information for the three and six months ended
                    March 31, 1998 and 1997 is unaudited.)

6.  Paradise Settlement

    In October, 1987, the Company commenced an action against Leon
Hayduchok, All-Mark Corporation and Paradise Creations, Inc.,
(collectively, "Paradise") in the United States District Court for the
Southern District of New York which resulted in an adverse multi-million
dollar judgment against Pentech.  In December 1996, the parties to such
litigation entered into a settlement agreement providing, among other
things, for Pentech to pay $500,000, deliver a $3,000,000 promissory note
plus interest at the rate of 7% per annum and enter into a five year non-
exclusive license to sell such products for a 10% royalty, with a minimum
royalty of $500,000 (the "Paradise Settlement").  The Company paid
Paradise $400,000 in February 1997, $500,000 in January 1997, and
$200,000 of the minimum royalty.  In addition, the note requires $100,000
quarterly principal payments commencing January 1, 1998.  Quarterly
principal payments were made in December 1997 and April 1998.

7.  Private Placement

    In January 1997, the Company completed a private offering of 20 Units,
each Unit consisting of 100,000 shares of Common Stock of the Company for
$50,000 per Unit (the "Private Offering").  The Company received net
proceeds of $975,000 from the Private Offering.  Officers and directors
of the Company acquired 52.5% of the Units sold in the Private Offering
and participated on the same terms as the other investors in the Private
Offering.  The terms of the Private Offering were established by a
Special Committee of the Board of Directors who did not participate in
the Private Offering.  The Company was required by its banks (at that
time) to raise funds in the Private Offering in order to fund the
$500,000 payment referred to in Note 6 and to enable the Company to fund
its requirements for capital expenditures.

8.  Sale of Cosmetic Assets

    In November 1997, the Company entered into an agreement to sell fixed
assets and inventory of its Cosmetics subsidiary to an outside company
(significantly owned by a former employee) for its book value.  In
December 1997, $100,000 was received as a down payment, $150,000 received
at closing and a note was issued for approximately $508,000 bearing
interest at a rate of 9% per annum.  The terms of the note provide that
the principal be reduced by $150,000 a month commencing February 1998,
until repaid.  This note was paid in full in March 1998.

9.  Income from Lawsuit Settlement

    In March 1998, the Company executed a settlement agreement providing
for the Company to receive a payment in the amount of $965,000, net of
legal fees, which payment was received in April, 1998.  



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

    (1)  Material Changes in Results of Operations

    Net sales decreased in the three and six months ended March 31,
1998 3.4% and 8.7%, respectively, from the same periods a year ago. 
These decreases were primarily due to the success of the Company's
licensed products and holiday programs in the prior year.

    Gross profit as a percentage of net sales decreased in the three
and six months ended March 31, 1998 to 30.2% and 34.7% from 34.4% and
35.2%, respectively in the same 1997 periods.  This was due to an
aggressive program by the company to gain shelf space for some of its
new products.  In addition, one of the company's licensed products was
used by a national office superstore as its lead icon causing
significant returns from other office superstores adversely affecting
gross profit.  The company also had a large concentration of sales
from its direct product offerings, which are sold at a lower gross
profit.  Finally, the company had a lower percentage of sales from its
licensed products, which historically has had a higher gross profit.

    Selling, general and administrative ("SG&A") expenses as a
percentage of sales for the three and six month periods ended March
31, 1998 increased to 43.1% and 39.2%, respectively, from 35.1% and
33.6% in the same prior periods.  This was due to incurring a similar
level of fixed costs as in the prior year over a lower sales volume. 
In addition, the Company recorded a severance accrual associated with
the termination of some high level employees.  The company also
incurred a higher bad debt expense as a result of two bankruptcies and
higher advertising costs associated with in-store promotions.  This
was offset by a decrease in royalty expenses associated with the lower
sales volume of the licensed products.

    For the second quarter ended March 31, 1998, the Company was
awarded a Settlement in the amount of $965,000, net of legal fees. 
During the second quarter ended March 31, 1997, the Company wrote down
the fixed assets of its Cosmetics operation approximately $687,000 to
its net realizable value.

    For the three and six month periods ended March 31, 1998, interest
expense decreased as compared to the same periods a year ago.  This
was due to lower interest rates and a lower outstanding balance.

    For the three and six months ended March 31, 1998, the net loss was
$438,000 or $.03 per share and $418,000 or $.03 per share,
respectively, as compared to a net loss of $661,000 or $.05 per share
and $607,000 or $.05 per share for the same prior periods.  The
increase in income was primarily due to the income from the lawsuit
settlement, the absence of a loss on Cosmetics offset by the lower
sales volume, lower gross profit and higher SG&A.

    (2)  Material Changes in Financial Condition

    In January 1997, the Company entered into a three year $30,000,000
revolving credit facility with BankAmerica Business Credit Inc.
("BABC") (the "New Credit Agreement").  The amount of drawings under
the facility is subject to limitations based upon eligible inventory
and accounts receivable as described in the New Credit Agreement.  The
New Credit Agreement is collateralized by a security interest in
substantially all of the assets of the Company.  In addition, in
accordance with the New Credit Agreement, the Company has agreed,
among other things, to the maintenance of certain minimum amounts of
tangible net worth and interest coverage ratios.  The financial
results for the current quarter caused the Company to be in technical
violation of its tangible net worth covenant, which violation was
waived by BABC.

    The $3,000,000 note (the "Note") issued in connection with the
Paradise Settlement requires $100,000 quarterly principal payments
commencing January 1, 1998.  The first quarterly payments were made in
December 1997 and April 1998.  The Note also required a prepayment of
$400,000 as a result of tax benefits received by the Company.  The
Company does not anticipate any difficulty meeting this payment
schedule.

    The Company initiated several actions to increase its liquidity. 
It established a policy obtaining thirty to sixty day open credit to
finance a majority of its purchases that historically have been
financed pursuant to letters of credit.

    In January 1997, the Company completed a private offering of
securities raising net proceeds of approximately $975,000.

    In November 1997, the Company entered into an agreement to sell the
fixed assets and inventory of its Cosmetics subsidiary to an outside
company (significantly owned by a former employee) for its book value. 
In December 1997, $100,000 was received as a down payment, $150,000
received at closing an a note was issued for approximately $508,000
bearing interest at a rate of 9% per annum.  The terms of the note
provide that the principal be reduced by $150,000 a month commencing
February 1998, until repaid.  This note was paid in full in March,
1998.

    In March, 1998, the Company was awarded a Settlement in the amount
of $965,000, net of legal fees.

    The Company is exploring its options with respect to software in
order to be in compliance with year 2000.  The Company does not expect
the costs associated with this to be material.

    Working capital decreased $289,000 to $15,162,000 during the six
months ended March 31, 1998.

    The Company anticipates that its revolving credit line with
BankAmerica Business Credit together with anticipated revenues from
operations, will be sufficient to provide liquidity on both a-short-
term and long-term basis to finance its future operations.  The
Company believes these resources are sufficient to support its
operating expenses.

    (3)  Safe Harbor Statement

    Statements which are not historical facts, including statements
about the Company's confidence and strategies and its expectations
about new and existing products, technologies and opportunities,
market and industry segment growth, demand and acceptance of new and
existing products are forward looking statements that involve risks
and uncertainties.  there include, but are not limited to, product
demand and market acceptance risks; the impact of competitive products
and pricing; the results of financing efforts; the loss of any
significant customers of any business; the effect of the Company's
accounting policies; the effects of economic conditions and trade,
legal, social, and economic risks, such as import, licensing, and
trade restrictions; the results of the Company's business plan and the
impact on the Company of its relationship with its lenders.

<PAGE>
                        PART II.  OTHER INFORMATION



Item 1.  Legal Proceedings.

    On April 10, 1998, the Company terminated the action it filed in
June 1997 described in the Company's Form 10-K Annual Report for its
fiscal year ended September 30, 1997, the only remaining action
arising from a judgement holding the Company liable to Paradise
Creations, Inc. ("Paradise") for patent infringement.  The Company
received a payment of $1,250,000, thereby partially offsetting its
liability to Paradise, and all actions arising from the Paradise
dispute have now been discontinued with prejudice.


Item 5.  Other Material Events.

    On March 27, 1998, the Company was informed by an attorney for a
recently terminated executive that Mr. Norman Melnick had engaged in
a conflict of interest which possibly violated Company policies and
some laws.  Several weeks earlier, at a meeting of the Board of
Directors held on March 2, 1998, Mr. Melnick had formally notified the
Company (after informally notifying counsel for the Company two weeks
earlier) that his daughter was about to begin a stationery business
attempting to sell stickers, stampers and musical pens.  He advised
the Board that he would not own any of this Company, but that he would
assist his daughter in training and getting started.  Mr. Melnick did
not believe this created a conflict of interest, nor that it would
interfere with his duties at Pentech, but he offered to resign as an
officer and director of the Company.  During its March 2, 1998
meeting, the Board of Directors established a Special Committee of
disinterested directors (the "Committee") to conduct an independent
investigation of this matter.  To date, the Committee has held one
meeting at which it interviewed Mr. Melnick about his activities.  It
learned that the activities were not material and at a very early
stage.  It did not appear that such limited activities under the
circumstances violated any Company policies or laws.  Following the
interview, the Committee appointed counsel to further investigate this
matter and report back to the Committee.  This investigation is
presently underway.


Item 6.  Exhibits and Reports on Form 8-K.

    (b)  None. 
     
<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.


                                PENTECH INTERNATIONAL, INC.



Dated:  May 14, 1998            By: s/William Visone              
                                William Visone, Vice President -    
                                 Finance and Administration
                                (Duly authorized officer and
                                 Chief Financial Officer)




































WPDOCS\PTK\10Q-MAR.98