U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-QSB

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

              For the quarterly period ended April 30, 1998

         [ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
              EXCHANGE ACT

              For the transition period from to .

                  Commission File Number 0 - 14835

                         TRANSNATIONAL INDUSTRIES, INC.
                     (Exact Name of small business issuer as
                          specified in its charter)


            Delaware                                        22-2328806
  (State or Other Jurisdiction of                        (I.R.S. Employer
   Incorporation or Organization)                      Identification Number)



                               Post Office Box 198
                                  U.S. Route 1
                         Chadds Ford, Pennsylvania 19317
                    (Address of principal executive offices)

                                 (610) 459-5200
                           (Issuer's telephone number)

Check  whether the Issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the Securities Act during the past 12 months (which is the period
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

State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date.

                          Common stock, $0.20 par value
                      Outstanding at May 31, 1998: 500,970

Transitional Small Business Disclosure Format (check one):
YES           NO    X

<PAGE>



                         TRANSNATIONAL INDUSTRIES, INC.

                                   INDEX                                    PAGE


Part I.    FINANCIAL INFORMATION

  Item 1.    Financial Statements

             Condensed consolidated balance sheets -- April 30, 1998,
             and January 31, 1998.                                          3-4

             Condensed consolidated statements of operations -- Three
             months ended April 30, 1998 and 1997.                            5

             Condensed consolidated statements of cash flows -- Three
             months ended April 30, 1998 and 1997.                            6

             Notes to condensed consolidated financial statements --
             April 30, 1998.                                                7-8

  Item 2.    Management's Discussion and Analysis of Financial
             Condition and Results of Operations                           9-11


Part II.   OTHER INFORMATION

  Item 6.    Exhibits and Reports on Form 8-K                                12


SIGNATURES  

                                       2
<PAGE>



                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements


                         Transnational Industries, Inc.

                      Condensed Consolidated Balance Sheets

                             (Dollars in thousands)
<TABLE>
<CAPTION>


                                                           April 30, January 31, 
                                                             1998        1998 
                                                         ----------- -----------
Assets                                                   (Unaudited)   (Audited)
<S>                                                         <C>         <C>
Current Assets:
  Cash                                                      $    293    $    471
  Accounts receivable                                            953         737
  Inventories                                                  1,488       1,412
  Other current assets                                           128         135
                                                         -----------  ----------

Total current assets                                           2,862       2,755



Machinery and equipment:
  Machinery and equipment                                    $ 2,695     $ 2,675
  Less accumulated depreciation                                1,986       1,927
                                                         -----------  ----------

Net machinery and equipment                                      709         748



Other assets:
  Repair and maintenance inventories, less provision
    for obsolescence                                             165         165
  Computer software, less amortization                           373         322
  Excess of cost over net assets of business acquired,
    less amortization                                          1,876       1,893
                                                         -----------  ----------

Total other assets                                             2,414       2,380
                                                         -----------  ----------

Total assets                                                $  5,985    $  5,883
                                                         ===========  ==========

</TABLE>


See notes to condensed consolidated financial statements.

                                       3
<PAGE>



                         Transnational Industries, Inc.

                Condensed Consolidated Balance Sheets (continued)

                             (Dollars in thousands)
<TABLE>
<CAPTION>


                                                           April 30, January 31, 
                                                               1998       1998
                                                          ---------- -----------
Liabilities and stockholders' equity                      Unaudited)   (Audited)
<S>                                                        <C>         <C>     
Current liabilities:
  Accounts payable                                         $    498    $    468
  Deferred maintenance revenue                                  507         641
  Accrued expenses                                              295         224
  Billings in excess of cost and estimated earnings             482         241
  Current portion of long-term debt                             228         215
                                                          ---------- -----------

Total current liabilities                                     2,010       1,789

Long-term debt, less current portion                          1,349       1,384

Stockholders' equity:
  Series B cumulative  convertible preferred stock, 
   $0.01 par value - authorized 100,000 shares;
   issued and outstanding 330 shares (liquidating 
   value $150,563)                                               76          76
  Common stock, $0.20 par value -authorized
    1,000,000 shares; issued and outstanding 500,970
     shares                                                     100         100
  Additional paid-in capital                                  8,482       8,479
  Accumulated deficit                                        (6,032)     (5,945)
                                                          ---------- -----------

Total stockholders' equity                                    2,626       2,710
                                                          ---------- -----------

Total liabilities and stockholders' equity                 $  5,985    $  5,883
                                                          ========== ===========

</TABLE>


See notes to condensed consolidated financial statements.


                                       4
<PAGE>


                         Transnational Industries, Inc.

                 Condensed Consolidated Statements of Operations

                                   (Unaudited)
                      (In thousands, except per share data)

<TABLE>
<CAPTION>

                                                      Three Months Ended
                                                           April 30,
                                                    --------------------
                                                         1998      1997
                                                    ---------- ---------
<S>                                                   <C>       <C>          
Revenues                                                1,513     2,324     
Cost of Sales                                           1,082     1,709
                                                    ---------- ---------
 Gross Margin                                             431       615
                
Selling expenses                                          189       126        
Research and development                                  105        73           
General and administrative expenses                       187       186
                                                    ---------- ---------
                                                          481       385
                                                    ---------- ---------
Operating income (loss)                                  (50)       230
                         
Interest expense (income)                                  37        28
                                                    ---------- ---------
Income (loss) before income tax                          (87)       202
                          
Provision for income taxes                                  -        11
                                                    ---------- ---------
Net income (loss)                                        (87)       191
                              
Preferred dividend requirement                              2        12
                                                    ========== =========
Income (loss)  applicable to common shares               (89)       179
                                                    ========== =========
                                                    
Basic and diluted income (loss) per common share     ($ 0.18)    $ 0.41
                                                    ========== =========
  
Weighted average common shares outstanding            500,970   433,133
                                                    ========== =========
</TABLE>


         See notes to condensed consolidated financial statements.



                                       5
<PAGE>




                         Transnational Industries, Inc.

                        Condensed Consolidated Statements
                                  of Cash Flows

                                   (Unaudited)
                                 (In thousands)
<TABLE>

                                                             Three Months Ended
                                                                    April 30,
                                                            --------------------
                                                                 1998      1997
                                                            ---------- ---------
<S>                                                           <C>         <C>           
       Net cash provided (used) by operating activities           (75)      197

                                                                          
       Net cash provided (used) by investing activities           (49)     (254)

                                                                          
       Net cash provided (used) for financing activities          (54)      (47)
                                                            ---------- ---------
                                                                       
       Increase (decrease) in cash                               (178)     (104)                                  
       Cash at beginning of period                                471       953
                                                            ---------- ---------
  
            Cash at end of period                             $   293     $  849
                                                            ========== =========
       
</TABLE>

     See notes to condensed consolidated financial statements.



                                       6
<PAGE>
 

                         Transnational Industries, Inc.

              Notes to Condensed Consolidated Financial Statements

                                   (Unaudited)

                                 April 30, 1998


Note A -- BASIS OF PRESENTATION

        The accompanying  unaudited condensed  consolidated financial statements
have been prepared in accordance with generally accepted  accounting  principles
for interim  financial  information and with the instructions to Form 10-QSB and
Regulation  S-B.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements.  In the opinion of management,  all adjustments considered
necessary for a fair presentation  have been included.  All such adjustments are
of a normal recurring nature. Operating results for the three-month period ended
April 30, 1998, are not necessarily indicative of the results to be expected for
the fiscal year. For further  information,  refer to the consolidated  financial
statements and footnotes thereto for the year ended January 31, 1998,  contained
in the Registrant's  Annual Report on Form 10-KSB for the year ended January 31,
1998.

Note B - EARNINGS PER SHARE

        SFAS No. 128,  Earnings  Per Share,  requires  restatement  of the prior
year's  earnings  per share to reflect  basic and  diluted  earnings  per share.
Common shares  potentially  issuable under the contractual  conversion rights of
the Preferred B shares and employee  stock  options  would have an  antidilutive
effect on earnings per share. As a result,  basic and diluted earnings per share
were the same for the periods  reported  herein.  Weighted average common shares
issuable  under the  contractual  conversion  rights of the  Preferred  B shares
amounted to 1,941 and 10,259 in the three  months ended April 30, 1998 and 1997,
respectively.

Note C - NEW ACCOUNTING PRONOUNCEMENTS.

        SFAS No. 130, Reporting Comprehensive Income,  establishes standards for
the reporting and display of comprehensive income in financial statements.  SFAS
No. 131,  Disclosures  about Segments of an Enterprise and Related  Information,
changes  the way  public  companies  report  segment  information  in  financial
statements.  The Statements  become  effective for all financial  statements for
fiscal years  beginning  after December 15, 1997. The Company has reviewed those
Statements  and does not  believe  that they will have a material  impact on its
financial statements and related disclosures.


                                       7
<PAGE>


Note D -- CONTINGENCIES

In 1995,  Spitz became involved in a dispute in connection with a public bid for
the  supply  of  planetarium  equipment  for an  expansion  project  at a public
community  college.  Spitz's  subcontract  bid was the lowest  submitted and the
general  contractor for the project allegedly used Spitz's pricing in submitting
its total  contract bid to the college.  After the total contract was awarded to
the general  contractor,  however,  the college's architect alleged that Spitz's
equipment did not conform to the bid  specifications.  The bid for the equipment
which the architect  deemed to be in  conformance  with the  specifications  was
allegedly approximately $150,000 higher than Spitz's bid. Because the Contractor
has been forced to supply the more  expensive  equipment,  it is  attempting  to
recover the $150,000  price  differential  plus alleged  related  amounts due to
adverse impacts on the project schedule from various parties.  At various times,
the  Contractor  has threatened to assert its claim against Spitz because it has
been  unsuccessful  in its  attempts  to recover its  alleged  damages  from the
College or other involved parties.  The Company believes the bid specifications,
to the extent that they  excluded  Spitz's  equipment,  constituted  an improper
sole-source  of equipment  which violates  competitive  bidding laws because the
specifications  appear to have been copied from a  competitor's  equipment.  The
Company also believes that the Spitz equipment meets all of the valid functional
requirements in the bid specifications.  No lawsuit has been filed against Spitz
or the  Company  and  the  parties  have  discussed  settling  the  matter.  The
Contractor has not communicated  any threats to carry out its assertion  against
Spitz since July 1996, but it has indicated to Spitz that  proceedings  continue
in an effort to recover  damages from the other  parties  involved.  The Company
believes that the parties will reach an agreement to resolve the dispute without
litigation  involving  Spitz. It is too early to estimate a probable outcome and
its effect, if any, on Spitz. Accordingly,  no liability for the potential claim
has been recorded at April 30, 1998.


                                       8
<PAGE>


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

Results of operations

Revenues  for the first  quarter  of fiscal  1999 were  $1,513,000  compared  to
$2,324,000  for the first quarter of fiscal 1998, a decrease of $811,000  (35%).
The decrease  resulted from lower  revenues from all of the Company's  products.
There  was no  revenue  from  ImmersaVision,  the  Company's  new  line of video
projection products, in the first quarter of fiscal 1999 compared to $155,000 in
the first quarter of fiscal 1998. The  ImmersaVision  revenue in fiscal 1998 was
attributable  to the first sale of an ElectricSky  system which was completed in
May 1997. Planetarium revenues were $370,000 in the first quarter of fiscal 1999
compared to $850,000 in the first quarter of fiscal 1998, a decrease of $480,000
(56%).  The decrease in  planetarium  revenues was due to a lack of sales of new
and refurbished systems for the educational market. Planetarium revenues include
$288,000 for the sale of  maintenance  and parts in the first  quarter of fiscal
1999  compared to $327,000 in the first  quarter of fiscal  1998,  a decrease of
$39,000 (12%).  The decrease in maintenance  and parts revenues was due to lower
sales to customers  without  preventive  maintenance  agreements  as well as the
timing of performance on preventive maintenance  agreements.  Dome revenues were
$1,143,000  in the first  quarter of fiscal 1999  compared to  $1,319,000 in the
first quarter of fiscal 1998, a decrease of $176,000 (13%).  The lower 1999 dome
revenues were  attributable to the absence of special dome projects  compared to
1998 which benefited from the completion of special  exterior and interior domes
for a new  museum  and a dome used for a  special  projection  application  at a
retail  complex.   Otherwise,  higher  1999  revenues  from  film  and  military
simulation domes were mostly offset by lower revenues from ride simulator domes.

Revenue  levels in the first quarter are not  indicative of the levels  expected
for the remaining  quarters of fiscal 1999. Several sales prospects have delayed
order  placement  decisions  which has delayed the expected  revenue impact from
ImmersaVision.  In June 1998, the Company was notified that it has been selected
to supply an ElectricSky  ImmersaVision  system to a new planetarium theater for
delivery in 2001. The actual  Contract is expected to be awarded within the next
quarter  at a total  contract  price in excess of  $1,500,000  depending  on the
selection  of system  options.  In May 1998,  the  Company won a bid to supply a
public high school with a new  planetarium  system to be  delivered in late 1998
for  approximately  $485,000.  The new orders along with other  promising  sales
prospects  are  expected to  positively  impact  ImmersaVision  and  planetarium
revenues  in the later part of fiscal 1999 and  beyond.  While  sales  prospects
remain good and bookings have  improved,  uncertainty in the timing and delivery
of new sales are  expected to cause  revenue  levels to continue to fluctuate in
future periods.

Gross margins  increased to 28.5% in the first quarter of fiscal 1999 from 26.5%
in the first  quarter of fiscal 1998. In the first quarter of fiscal 1999 margin
improvements   resulting  from  successful  efforts  on  certain  projects  were
partially  offset by a lower margin on a project which required a subcontract to
supply a special  device to rotate a large film theater  dome.  Gross margins in
the first quarter of fiscal 1998 were weighted down by low gross margins on dome
installation  activity  and  introductory  pricing  on the  sale  of  the  first
ImmersaVision  system.  The low margins on dome  installation  activity resulted
from the lower  profit  margins on change  orders to recover  costs  overruns as
dictated  by  construction  contract  terms  inherent  in many of the  Company's
customer  contracts.  Selling  expenses  increased by $63,000 (50%) in the first
quarter of fiscal 1999  compared to the first  quarter of fiscal 1998 due to the
use  of  engineering  resources  in  several  major  proposal  efforts  and  the
introduction  of  ImmersaVision  products.  Research  and  development  expenses


                                       9
<PAGE>

increased  32,000  (44%) in the first  quarter of fiscal 1999 as compared to the
first quarter of fiscal 1998 due to efforts in the  development  of  proprietary
programming  tools  for  software  content  development  for  ImmersaVision  and
improvements to the  electronics of optical  planetarium  products.  General and
administrative  expenses  were  relatively  constant,  increasing by only $1,000
(1%).

Interest  expense  amounted  to  $37,000  in the first  quarter  of fiscal  1999
compared to $28,000 in the first quarter of fiscal 1998. The $37,000 reported in
the  first  quarter  of  fiscal  1999  consisted  of  $29,000  paid on bank debt
agreements and $8,000 paid on capital lease.  The $28,000  reported in the first
quarter of fiscal 1999  consisted  of $36,000 paid on bank debt  agreements  and
$3,000 paid on capital lease  obligations,  offset by $11,000 of interest income
earned on cash invested. The Company continues to pay no federal income taxes as
federal  taxable  income is  offset by the  utilization  of net  operating  loss
carryforwards.  The  provision  for income taxes in the first  quarter of fiscal
1998 consists of state income taxes.

As a result  of the  above,  a net loss of  $87,000  was  recorded  in the first
quarter of fiscal 1999  compared to net income of $191,000 in the first  quarter
of fiscal 1998.  As stated  above,  revenue  levels are expected to fluctuate in
future  periods.  Accordingly,  the results of the first  quarter  should not be
considered  indicative  of the results  expected for the  remaining  quarters of
fiscal 1999.

Liquidity and Capital Resources

Net cash used by operating activities was $75,000 in the first quarter of fiscal
1999  compared to net cash  provided of $197,000 in the first  quarter of fiscal
1998.  The  $75,000  used by  operations  in the first  quarter  of fiscal  1999
consisted of $87,000 used by changes in operating assets and liabilities  offset
by $12,000  provided from earnings.  The $197,000  provided by operations in the
first quarter of fiscal 1998 consisted of $271,000 provided from earnings offset
by $74,000 used by changes in operating assets and liabilities.

In addition to the $75,000 used by  operations  in first quarter of fiscal 1999,
$54,000 was used for  principal  payments  on term debt and  capital  leases and
$49,000 was invested in capital assets.  The $197,000  provided by operations in
the first  quarter of fiscal 1998 was offset by $47,000  principal  paid on term
debt and capital leases and $254,000 invested in capital assets.  The net result
was a $178,000  reduction in cash  balances  during the first  quarter of fiscal
1999  compared to a reduction  of  $104,000  during the first  quarter of fiscal
1998.

The  $49,000  invested  in capital  assets in the first  quarter if fiscal  1999
consisted of computer software created to automate and integrate the control and
show production process of ImmersaVision  into a theater  environment with other
products.  In  addition,  $32,000 of computer  hardware for the  development  of
ImmersaVision software was financed through a capital lease.

Most of the $254,000  invested in capital  assets in the first quarter of fiscal
1998   consisted  of  equipment   to  create  an  in  house   demonstration   of
ImmersaVision.  Financing alternatives for the ImmersaVision demo equipment were
heavily  influenced  by the  outcome of  efforts to extend or replace  bank debt
agreements. Therefore the equipment was purchased for cash and the financing was
deferred.  On  June  12,  1997  the  existing  debt  agreements  were  replaced.
Subsequently,  in July 1997, a capital lease transaction was completed,  whereby
equipment  totaling $235,000 was sold to be leased back to the Company over five
years.

At April 30,  1998 the  balance on the new  revolving  credit  note  remained at


                                       10
<PAGE>

$600,000 as it was at January 31, 1998. The unused borrowing capacity on the new
$800,000  revolving  credit agreement was $200,000 at April 30, 1998 and January
31,  1998.  Additional  liquidity  was provided by  remaining  cash  balances of
$293,000 at April 30, 1998  compared to $471,000 at January 31,  1998.  The next
sources of liquidity  are trade  accounts  receivable  and contracts in process.
Trade  accounts  receivable  increased to $953,000 at April 30, 1998 compared to
$737,000 at January 31,  1998.  Liquidity  available  from  contracts in process
decreased from $372,000 of net revenue recorded in excess of billings at January
31, 1998 to $186,000 at April 30, 1998.

Total debt at January 31, 1998 was  $1,577,000,  an decrease of $22,000 from the
$1,599,000 at January 31, 1998. The decrease  resulted from $54,000 of principal
payments  on debt and lease  obligations  offset by a new lease  obligation  for
$32,000.

The new  debt  agreements  combined  with  current  assets  and cash  flow  from
operations,  assuming reasonably  consistent revenue levels,  should provide the
Company with adequate liquidity for the foreseeable future.

Forward-Looking Information

The statements in this  Quarterly  Report on Form 10-QSB that are not statements
of historical fact constitute "forward-looking statements." Said forward-looking
statements  involve risks and uncertainties  which may cause the actual results,
performance or achievements  of the Company to be materially  different from any
future results, performances or achievements,  expressly predicted or implied by
such forward-looking statements. These forward-looking statements are identified
by  their  use of forms of such  terms  and  phrases  as  "expects,"  "intends,"
"goals," "estimates,"  "projects," "plans,"  "anticipates,"  "should," "future,"
"believes," and "scheduled."

The  important  factors  which  may cause  actual  results  to  differ  from the
forward-looking statements contained herein include, but are not limited to, the
following:  general economic and business  conditions;  competition;  success of
operating initiatives; operating costs; advertising and promotional efforts; the
existence  or absence of adverse  publicity;  changes in  business  strategy  or
development plans; the ability to retain key management; availability, terms and
deployment   of  capital;   business   abilities   and  judgment  of  personnel;
availability  of  qualified   personnel;   labor  and  employee  benefit  costs;
availability and costs of raw materials and supplies; and changes in, or failure
to comply with, government  regulations.  Although the Company believes that the
assumptions  underlying  the  forward-looking  statements  contained  herein are
reasonable, any of the assumptions could be inaccurate, and therefore, there can
be no assurance that the forward-looking statements included in this filing will
prove to be accurate. In light of the significant  uncertainties inherent in the
forward-looking  statements  included herein,  the inclusion of such information
should not be regarded as a  representation  by the Company or any other  person
that the objectives and expectations of the Company will be achieved.


                                       11
<PAGE>


                              II. OTHER INFORMATION

6.   Exhibits and Reports on Form 8-K

(a)  Exhibits

Exhibit
   No.   Description of Document

   27    Financial Data Schedules


(b) The  Registrant did not file any reports on Form 8-K during the three months
ended April 30, 1998.



                                                             SIGNATURES

     In accordance  with the  requirements  of the Exchange Act, the  Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                               TRANSNATIONAL INDUSTRIES, INC.


                                               /s/   Paul L. Dailey, Jr.
                                               -------------------------
      Date:  June 15, 1998                     Paul L. Dailey, Jr.
                                               Secretary-Treasurer

                                               Signing on Behalf of Registrant
                                               and as Chief Financial Officer



                                       12