UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                        Washington, DC   20549

                              FORM 10-QSB

(Mark One)

XX  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
---  ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000

    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
---  ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO ______.


    Commission file number        000-24991
                             ____________________


                         ALLSTATES WORLDCARGO, INC.
     -------------------------------------------------------------------
     (Exact name of small business issuer as specified in its charter)


          New Jersey                            22-3487471
        --------------                 -------------------------------
  (State or other jurisdiction        (IRS Employer Identification No.)
     of incorporation)


           4 Lakeside Drive South, Forked River, New Jersey, 08731
          ----------------------------------------------------------
                 (Address of principal executive offices)

               7 Doig Road, Suite 3, Wayne, New Jersey   07470
          ----------------------------------------------------------
              (Former address of principal executive offices)

                             609-693-5950
            --------------------------------------------------
            (Registrant's telephone number, including area code)

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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  XX      No
    ----         ----
The Company had 32,509,872 shares of common stock, par value $.0001 per
share, outstanding as of August 11, 2000

                                     1
<PAGE>
<PAGE>
            ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES


                              INDEX

                                                                       PAGE
PART 1.   FINANCIAL INFORMATION                                        ----

  ITEM 1.   FINANCIAL STATEMENTS

   Financial Statements with Supplemental Information
   For the Period Ending June 30, 2000 and 1999

  Financial Statements:

    Condensed Consolidated Balance Sheet                                 3

    Condensed Consolidated Statement of Operations                       4

    Condensed Consolidated Statements of
        Stockholders' Equity (Deficit)                                   5

    Condensed Consolidated Statement of Cash Flows                       6

  Notes to the Financial Statements                                      7

  Supplemental Information:                                              8

       Unaudited Pro Forma Combined Statements of Operations
          For the Period Ended June 30, 1999                             9


   ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS........................11

PART II.  OTHER INFORMATION..............................................18

   ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K............................19

      SIGNATURES.........................................................20


                                     2

<PAGE>
<PAGE>
            ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES
               Condensed Consolidated Balance Sheets

                             ASSETS
                                            June 30              September 30
                                             2000                     1999
                                             ----                     ----
                                          (Unaudited)                   *
Current Assets
        Cash                               $388,169                 $406,842
        Accounts Receivable               3,941,854                3,920,495
        Inventory                            40,509                   39,139
        Prepaid Expenses and
         Other Current Assets               289,468                  100,006
        Deferred Income Taxes               128,028                  128,028
                                         ----------                ---------
           Total Current Assets           4,788,028                4,594,510
                                         ----------                ---------
Property, Plant and Equipment             1,621,316                1,394,998
Less:  Accumulated Depreciation             886,148                  869,945
                                         ----------                ---------
    Net Property, Plant and Equipment       735,168                  525,053

Goodwill                                    583,597                  631,347
Other Assets                                127,979                  318,754
                                         ----------                ---------
Total Assets                             $6,234,772               $6,069,664
                                         ==========                =========

                LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
        Accounts Payable                   $2,535,717       $2,408,239
        Accrued Expenses                      882,164          755,177
        Short-Term Bank Borrowings            480,000             -
        Income taxes payable                     -             526,873
        Shareholder Loan Payable                 -               5,000
        Notes payable                         155,846          116,245
                                            ---------        ---------
                Total Current Liabilities   4,053,727        3,811,534

Long-Term Portion of Notes Payable          2,624,057        2,564,064

Stockholders' Equity (Deficit)
        Common Stock                            3,251            3,251
        Foreign currency
              translation adjustments         (2,235)          (14,323)
        Retained Earnings (Deficit)         (444,028)         (294,862)
                                            ---------        ---------
    Total Stockholders' Equity (Deficit)    (443,012)         (305,934)
                                            ---------        ---------
Total Liabilities and
  Stockholders' Equity (Deficit)          $6,234,772        $6,069,664
                                          ==========        ==========

*Condensed from audited financial statements
 The accompanying notes are an integral part of these consolidated
 financial statements
                                      3
<PAGE>
<PAGE>
            ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES
                Consolidated Statements of Operations

<TABLE>
<S>                                          <C>              <C>                  <C>              <C>
                                              Three Months Ended June 30,          Nine Months Ended June 30,
                                               2000               1999                2000               1999
                                               ----               ----                ----               ----

Revenues (Net of Discounts)                  $8,021,884        7,625,239           $23,121,936      $23,498,617
Cost of transportation                        4,751,600        4,508,575            13,919,803       14,067,069
                                             ----------       ----------            ----------       ----------
                Gross Profit                  3,270,284        3,116,664             9,202,133        9,431,548

Selling, General and Administrative Expenses 3,108,249        2,663,911              9,124,136        8,397,055
                                             ----------       ----------            ----------       ----------
                Income from Operations          162,035          452,753                77,997        1,034,493

Other Income (Expense)
        Interest, net                           (57,505)        ( 7,480)             (156,079)          (34,716)
        Goodwill amortization                   (17,082)                              (51,247)
        Other income and expense                 15,453           7,234                 6,150            60,092
                                             ----------       ----------            ----------       ----------
Income Before Income Tax Provision              102,901          452,507             (123,179)        1,059,869

(Benefit)/Provision for income taxes            (65,288)         205,915              (44,824)         508,476
                                             ----------       ----------            ----------       ----------
     Net Income                              $ 168,189          $246,592            ($ 78,355)         $551,393
                                             ==========       ==========            ==========       ==========

Weighted average common shares - basic      32,509,872        32,509,872           32,509,872        32,509,872
Net income per common share - basic              $0.01             $0.01                $0.00             $0.02

Weighted average common shares - diluted    32,522,872        32,522,872           32,522,872        32,522,872
Net income per common share - diluted            $0.01             $0.01                $0.00             $0.02

</TABLE>
The accompanying notes are an integral part of these consolidated
 financial statements.

                                      4

<PAGE>
<PAGE>
            ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES
       Consolidated Statements of Stockholders' Equity (Deficit)
                           (Unaudited)

<TABLE>
<S>                                           <C>          <C>          <C>              <C>           <C>
                                                   Common Stock             Other                          Total
                                                   ------------         Comprehensive     Retained     Stockholders'
                                              Number of                    Income         Earnings        Equity
                                                Shares      Par Value      (Loss)         (Deficit)      (Deficit)
                                              ---------     ---------    ----------      ----------    ------------

Balance at September 30, 1999                 32,509,872     $3,251        $(14,323)      ($294,862)    $(305,934)

Other Comprehensive Income
 (Currency translation adjustment)
 for the nine months ended
 June 30, 2000                                                              12,088                         12,088

Adjustment to retained earnings
 resulting from the elimination
 of investment in subsidiary                                                              ( 70,811)      ( 70,811)

Consolidated net loss for the nine
 months ended June 30, 2000                                                               ( 78,355)     (  78,355)
                                              ----------    ---------    ----------      ----------      ---------
Balance, June 30, 2000                       32,509,872     $3,251        $ (2,235)     $ (444,028)     ($443,012)
                                              ==========    =========    ==========      ==========      =========


</TABLE>


                                      5


<PAGE>
            ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES
                Consolidated Statements of Cash Flows
                            (Unaudited)
                                                 Nine Months Ended June 30,
                                                     2000            1999
                                                     ----            ----
Cash flows from operating activities:
  Net Income                                      $( 78,355)       $551,393
    Adjustments to reconcile net income
    to net cash provided by operating activities:
       Depreciation                                 160,973          137,794
       Amortization                                  51,247            -
       Provision for doubtful account                84,498          77,834
       (Gain) Loss on sale of assets                 (3,260)          1,377
       Deferred income taxes                            -           (23,715)
       (Increase) decrease in assets:
          Accounts receivable                      (105,857)        174,028
          Prepaid expenses and other assets        (  7,580)         (2,952)
          Security deposits                           4,025          29,663
       Increase (decrease) in liabilities:
          Accounts payable and accrued expenses     249,466        (591,618)
          Income tax payable                       (526,873)        440,641
                                                  ---------        ---------
            Net cash used for/provided by
             operating activities                  (171,716)        794,445

Cash flows from investing activities:
  Purchase of equipment                            (168,570)       (140,193)
  Proceed from sale of equipment                     34,168          16,571
  Purchase of treasury stock of subsidiary         ( 70,811)       (202,597)
                                                  ---------        ---------
     Net cash used in investing activities        (205,213)        (326,219)

Cash flows from financing activities:
  Repayments under notes payable                  (133,832)         (86,303)
  Repayments under short-term bank borrowings     (120,000)        (500,000)
  Borrowing under short-term bank borrowings       600,000          100,000
  Deferred financing costs                             -             60,000
                                                  ---------        ---------
     Net cash provided by/
       used for financing activities               346,168         (426,303)
                                                  ---------        ---------
Net increase/(decrease) in cash
  and cash equivalents                            (30,761)           41,923
Currency translation adjustments                    12,088           10,627
Cash and cash equivalents, beginning of year       406,842          175,673
                                                  ---------        ---------
Cash and cash equivalents, end of period          $388,169         $228,223
                                                  =========        =========


The accompanying notes are an integral part of these consolidated
 financial statements.

                                      6
<PAGE>

<PAGE>
                  ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 June 30, 2000


1.     The accompanying unaudited condensed consolidated financial statements
have been prepared by Allstates WorldCargo, Inc. (the "Company") in
accordance with the rules and regulations of the Securities and Exchange
Commission (the "SEC") for interim financial statements and accordingly do
not include all information and footnotes required under generally accepted
accounting principles for complete financial statements.  The financial
statements have been prepared in conformity with the accounting principles
and practices disclosed in, and should be read in conjunction with, the
annual financial statements of the Company included in the Company's Fiscal
year 1999 Form 10-KSB filing dated January 12, 2000 (File No. 000-24991).  In
the opinion of management, these interim financial statements contain all
adjustments necessary for a fair presentation of the Company's financial
position at June 30, 2000 and 1999 and the results of operations for the
three months and nine months ended June 30, 2000 and 1999, respectively.

2.     Net income per common share appearing in the statements of operations
for the three months and nine months ended June 30, 2000 and 1999,
respectively, have been prepared in accordance with Statement of Financial
Accounting Standards No. 128 ("SFAS No. 128").  SFAS No. 128 establishes
standards for computing and presenting earnings per share ("EPS") and
requires the presentation of both basic and diluted EPS.  As a result primary
and fully diluted EPS have been replaced by basic and diluted EPS.  Such
amounts have been computed based on the profit or (loss) for the respective
periods divided by the weighted average number of common shares outstanding
during the related periods.  As a result of the reverse acquisition in which
the sole shareholder of Allstates Air Cargo, Inc. acquired a controlling
interest in Audiogenesis Systems, Inc., the shares issued during the fiscal
year ended September 30, 1999 are treated as being outstanding for each
fiscal quarter presented.

3.     During the quarter ended March 31, 2000, the Company invested
$3,250.98 in a start-up operation, e-tail Logistics, Inc., a New Jersey
corporation.  As of June 30, 2000, e-tail Logistics, Inc. has not conducted
any business.

4.     Pursuant to the Stock Purchase Agreement and Plan of Reorganization
between Audiogenesis Systems, Inc. and Allstates Air Cargo, Inc., the Company
had assumed 101 Notes payable from Joseph Guido to the Estate of A.G.
Hoffman, Jr.  In April 2000, the Company made a payment to Joseph Guido for
$200,821.10, including $25,000 of principal, to satisfy the current year
obligation, of which he remains personally liable.  In exchange, the Company
received one share of Allstates Air Cargo, Inc. common stock that is held as
security under the notes.


                                      7


<PAGE>


<PAGE>
                         SUPPLEMENTAL INFORMATION

                ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

                BASIS OF PRESENTATION TO UNAUDITED PRO FORMA
                     COMBINED STATEMENTS OF OPERATIONS
                  For the Nine Months Ended June 30, 1999


The Unaudited Pro Forma Combined Statement of Operations gives effect to the
merger of Audiogenesis Systems, Inc. and Allstates Air Cargo, Inc. as a
recapitalization of Allstates with Allstates as the acquirer (reverse
acquisition).  This event has been presented as if it had occurred at the
beginning of the quarter.  The Unaudited Pro Forma Combined Statement of
Operations gives effect to the merger under the purchase method of accounting
in accordance with Accounting Principles Board Opinion No. 16.  In the
opinion of management, all significant adjustments necessary to reflect the
effects of the merger have been made.

The Unaudited Pro Forma Combined Statement of Operations is presented for
comparative purposes only and is not necessarily indicative of what the
actual combined financial position of Audiogenesis and Allstates would have
been, nor does it purport to represent the future combined financial position
of Audiogenesis and Allstates.  This Unaudited Pro Forma Combined Statement
of Operations should be read in conjunction with, and is qualified in its
entirety by, the financial statements and notes thereto referenced into the
10-QSB.



                                      8



<PAGE>


<PAGE>
            ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

           UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
                 For Nine Months Ended June 30, 1999
                                                                  Allstates
                         Allstates Air Audiogenesis Pro Forma     WorldCargo
                         Cargo, Inc.   Systems Inc   Merger       Pro Forma
                          Historical   Historical  Adjustments    Combined
                         -----------  -----------  ----------    ------------
Revenues                 $23,498,617   $ 611,971  $(300,000)(A)  $23,810,588
Cost of transportation    14,067,069      131,118                 14,198,187
                           ---------  -----------  ----------    ------------
Gross profit               9,431,548      480,853   (300,000)      9,612,401
                           ---------  -----------  ----------    ------------
 Selling, general
  and administrative       8,397,055      347,681   (248,753)(A)   8,495,983
                           ---------  -----------  ----------(B) ------------
Income from operations     1,034,493      133,172   ( 51,247)      1,116,418

Other income (expense):
 Interest, net               (34,716)      (5,175)  (132,813)(C)    (172,704)
 Other income                 60,092       98,645                    158,737
                           ---------  -----------  ----------    ------------
Income before
   income taxes            1,059,869      226,642   (184,060)      1,102,451

Provision for
   income taxes              508,476         -      ( 54,453)(D)     454,023
                           ---------  -----------  ----------    ------------

Net income                  $551,393    $ 226,642  $(129,607)     $  648,428
                           =========  ===========  ==========    ============
Weighted average of
 common shares
 - basic                  18,000,000   14,509,872                  32,509,872
                          ==========  ===========  ==========    ============

Net income per common
 share - basic            $     0.03   $     0.02                 $     0.02
                          ==========  ===========  ==========    ============
Weighted average of
 common shares
 - diluted                18,000,000   14,522,872                  32,522,872
                          ==========  ===========  ==========    ============

Net income per common
 share - diluted          $     0.03   $     0.02                 $     0.02
                          ==========  ===========  ==========    ============

(A)  Represents an adjustment to eliminate inter-company
      transaction ($300,000).

(B)  Charges nine months of amortization of goodwill ($51,247).

(C)  Represents interest on the assumed note payable of $2,536,730 for 9
      months at 7%.

(D)  Represents the tax adjustment for the additional interest expense.

                                     9
<PAGE>
ITEM 2.     MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


General Overview

     Allstates WorldCargo, Inc. (the "Company" or "Allstates") is a New Jersey
Corporation formed on January 14, 1997 as Audiogenesis Systems, Inc.
("Audiogenesis"), pursuant to a corporate reorganization of Genesis Safety
Systems, Inc.  On August 24, 1999, Audiogenesis acquired 100 percent of the
common stock of Allstates Air Cargo, Inc. in a reverse acquisition, and on
November 30, 1999, changed its name to Allstates WorldCargo, Inc.  The Company's
business is comprised of freight forwarding, distribution and sales of safety
equipment, and development and sales of audio-visual products.  Allstates is
headquartered in Forked River, New Jersey.

     The freight forwarding business of Allstates opened its first terminal in
Newark, New Jersey in 1961.  Allstates provides domestic and international
freight forwarding services to over 1,300 customers utilizing ground
transportation, commercial air carriers, and ocean vessels.  Allstates operates
22 offices throughout the United States, including Hawaii, and employs 99
people.  In addition, Allstates has a European branch office located in London,
England that does business as Allstates Allcargo (UK), Ltd.


Results of Operations

     The following table sets forth for the periods indicated certain financial
information derived from the Company's consolidated statement of operations
expressed as a percentage of net sales:

                             Three Months Ended       Nine Months Ended
                                  June 30,                 June 30,
                             2000      1999            2000      1999
                             ----      ----            ----      ----
Revenues                    100.0%      100.0%        100.0%      100.0%
Cost of transportation       59.2        59.1          60.2        59.9
                             ------    ------          ------    ------
Gross profit                 40.8        40.9          39.8        40.1

Selling, general and
  administrative expenses    38.8        35.0          39.5        35.7
                             ------    ------          ------    ------
Operating income              2.0         5.9           0.3         4.4
                             ======    ======          ======    ======
Net income                    2.1%        3.2%         (0.3)%       2.3%


Revenues

     Revenues of the Company represents gross consolidated sales less customer
discounts. For the quarter ended June 30, 2000, revenues increased by $397,000,
or 5.2%, to $8,022,000, over the quarter ended June 30, 1999, primarily
attributable to the higher volume of sales to international customers.  During
the period, international sales increased by $389,000, or 26.1% in comparison
to

                                     10
<PAGE>
<PAGE>
the same quarter in Fiscal 1999, reflecting an increase in the number of
shipments and the total weight of international cargo shipped.  Sales to
international customers accounted for 23.5% of total sales during the three
months ended June 30, 2000 as compared to 19.6% of total sales during the three
months ended June 30, 1999.

     Revenues for the nine-month period ended June 30, 2000 decreased by
$377,000, or 1.6%, to $23,122,000 in comparison to the nine-month period ended
June 30, 1999, primarily reflecting a lower volume of domestic cargo weight
shipped.  Sales during the current fiscal year period were effected by the loss
of a significant domestic customer account, due to circumstances beyond the
Company's control.  Prior year sales to that customer during the three and nine
months ended June 30, 1999 accounted for approximately 8.6% and 9.4%,
respectively, of total company revenues.  The Company believes that it can
replace the loss of any significant account from its customer base but there is
no guarantee of that occurring.

     Sales for the three and nine months ended June 30, 2000 include
approximately $96,000 and $286,000 respectively, generated by the Company's
Audiogenesis Systems division that was added as a result of the reverse
acquisition of August 24, 1999.  For comparative purposes, a supplemental pro
forma statement of operations is provided which gives effect to the merger as
if it took place at the beginning of the prior fiscal year nine-month period
ended June 30, 1999.


Gross Profit

     Gross profit represents the difference between net revenues and the cost
of sales.  The cost of sales is composed primarily of amounts paid by the
Company to carriers and cartage agents for the transport of cargo.  Cost of
sales as a percentage of revenues increased by 0.1% and 0.3% respectively for
the three and nine months ended June 30, 2000, in comparison to the same periods
in the previous year.  The increases primarily reflects the higher mix of
international sales volume as a percentage of total sales, which generally
carries a higher percentage cost of transportation than domestic sales.  In
absolute terms, the cost of sales increased by $243,000 to $4,752,000 during the
three months ended March 31, 2000 versus the comparative period in the prior
year, primarily as a result of the higher international sales volume.  Cost of
sales decreased by $147,000 to $13,920,000 for the nine months ended June 30,
2000 in comparison to the previous year period due to the lower volume of sales
to domestic customers.  Gross margins decreased for the three and nine months
ended June 30, 2000 to 40.8% and 39.8% respectively, from 40.9% and 40.1% during
the same periods of the previous year.  Gross profit increased by $154,000 to
$3,270,000 for the three months ended June 30, 2000 and decreased by $229,000
to $9,202,000 for the nine months ended June 30, 2000, in comparison to their
respective periods.

     Gross margins have been affected to a limited extent during these periods
by the increased cost of fuel.  Certain carriers have begun to add surcharges
to their freight bills to cover the higher fuel costs.  The Company has itself
imposed a surcharge on all transportation charges to its customers in an effort
to offset these increased fuel costs.

                                      11
<PAGE>
Selling, General and Administrative Expenses

     SG&A expenses increased as a percentage of sales by 3.8% for both the
three and nine months ended June 30, 2000 compared to the same periods in 1999,
to 38.7% and 39.5% respectively.  Operating expenses increased by $444,000 or
16.7% during the three-month period and by $727,000 or 8.7% for the nine-month
period ended June 30, 2000 as compared to the same periods in the prior fiscal
year.  The increase in SG&A expenses for both periods primarily reflect the
combination of higher administrative personnel expenses associated with the
Company's efforts to build its corporate infrastructure and support its future
growth plans, higher licensee commissions resulting from increases in the gross
profits of a significant licensee operation, and the incremental effect of the
Audiogenesis Systems division.

     Licensee commissions increased by approximately $225,000 and $625,000 for
the three month and nine month periods respectively, as compared to the same
periods in the prior fiscal year.  A portion of those increases, approximately
$104,000 and $284,000 respectively, reflect the incremental effect of the
addition of two licensee operations during the fourth quarter of Fiscal 1999.
Those licensee operations replaced existing company locations in their local
markets.  The Company realized an offsetting operating cost savings for the
three and nine month periods ended June 30, 2000 of approximately $123,000 and
$442,000 respectively with the replacement of these company locations with
licensee operations, primarily due to the related reduction of personnel and
facilities costs.

     The increase in operating expenses for the nine months ended June 30, 2000
also reflects isolated costs incurred by the Company in connection with the
reverse acquisition of Allstates Air Cargo, Inc by Audiogenesis Systems, Inc.
on August 24, 1999.  During the first quarter of Fiscal 2000, the Company
recorded $140,500 in additional expense as reimbursement to one officer, three
employees and three consultants for income taxes due the IRS in connection with
non-cash compensation received for their participation in the Company's
restructuring (see financial statement note #11 included in Fiscal 1999 Form 10-
KSB).  Also, in accordance with Employment Agreements that the Company entered
into with three stockholders on August 24, 1999, a bonus equating to 3% of the
Fiscal 1999 increase in before-tax profits over Fiscal 1998 was accrued for
approximately $82,000.  This amount was paid to the three stockholders within
30 days of the issuance of the Fiscal 1999 audited financial statements, in
accordance with the employment agreements.

     Operating expenses for the three and nine month periods ended June 30,
2000 included approximately $48,000 and $154,000 respectively of costs incurred
by the Audiogenesis Systems division, which are fully incremental versus the
comparable periods in Fiscal 1999.


                                     12
<PAGE>
Income/(Loss) From Operations

     Income from operations decreased during the quarter ended June 30, 2000
by approximately $291,000, to $162,000, and decreased during the nine months
then ended by approximately $956,000 to $78,000, as compared to the same three
and nine month periods in the previous year for the reasons indicated above.
Operating margins for both the three and nine month periods ended June 30, 2000
decreased by 3.9%, to 2.0% and 0.3% respectively, in comparison to the same
periods in the prior year, primarily as a result of the higher selling, general
and administrative expenses as described above.

Interest Expense and Income

     Net interest expense increased for the three month and nine months
ended June 30, 2000 by approximately $50,000 and $121,000 respectively,
compared to the same periods in the previous year, primarily due to the note
payable to the Estate of A.G. Hoffman, Jr. that the Company assumed from
Joseph M. Guido as provided in the terms of the reverse acquisition.
Interest expense on the note was approximately $43,000 and $131,000 for the
three and nine month periods ended June 30, 2000.


Net Income/(Loss)

     Income before income taxes decreased to $103,000 during the quarter ended
June 30, 2000 from $453,000 during the same period in the prior year.  The
Company recorded a net tax benefit of $65,000 for the quarter ended June 30,
2000, compared to a tax provision of $206,000 for quarter ended June 30, 1999.
Net income amounted to $168,000 or 2.1% of revenues in the third quarter of
Fiscal 2000 versus net income of $247,000 or 3.2% of revenues in the third
quarter of Fiscal 1999.

     For the nine months ended June 30, 2000, income before income taxes
decreased to a loss of ($123,000) from a profit of $1,060,000 during the same
period in the prior year.  The Company recorded a net tax benefit of $45,000 for
the nine month period ended June 30, 2000 as compared to a provision for income
taxes of $508,000 for nine months ended June 30, 1999.  The net loss amounted
to ($78,000) or (0.3%) of revenues for the nine-month period versus a net profit
of $551,000 or 2.3% of revenues in the same period of the prior year.


Liquidity and Capital Resources

     Cash used for operating activities was approximately $172,000 for the nine
months ended June 30, 2000, compared to cash flow provided from operations of
approximately $794,000 for the nine months ended June 30, 1999.  During the nine
months ended June 30, 2000, cash was used primarily to satisfy income tax
obligations from Fiscal 1999, offset by an increase in accounts payable.  For
the nine months ended June 30, 1999, cash flow was primarily provided by the net
income of the Company and an increase in income taxes payable, offset by a
decrease in accounts payable.  Operating cash flows for the nine-month periods
in both years were negatively impacted by losses generated by the Company's UK
subsidiary, Allstates Allcargo, (UK) Ltd.

                                     13
<PAGE>
     At June 30, 2000, the Company had cash and cash equivalents of $388,000
and net working capital of $656,000, compared with cash and cash equivalents of
$228,000 and net working capital of $824,000 respectively, at June 30, 1999.
The decrease in working capital at March 31, 2000 over the respective period in
1999 is primarily attributable to the loss for the nine-month period then ended.

     The Company's investing activities were comprised of expenditures for
capital equipment, primarily representing purchases of computer hardware and
software, as well as company owned automobiles used by its sales
representatives.  For the nine months ended June 30, 2000, capital expenditures
amounted to approximately $402,000, of which approximately $233,000 was acquired
through notes payable.  For the nine months ended June 30, 1999, capital
expenditures amounted to     approximately $182,000, of which approximately
$42,000 was acquired through notes payable.

     Domestically, the Company has a commercial line of credit with a bank,
pursuant to which the Company may borrow up to $1,350,000, based on a maximum
of 70% of eligible accounts receivable.  Per the agreement, interest on
outstanding borrowings accrues at the Wall Street Journal's prime rate of
interest less .25% per annum (9.0% at June 30, 2000).  The interest rate is
predicated on the Company maintaining a compensating account balance in a non-
interest bearing account equal to at least 15% of the outstanding principal
balance.  If such average compensating balances are not maintained, the interest
rate will increase by 1% over the rate currently accruing.  At June 30, 2000,
$350,000 of the line of credit was restricted as collateral for a letter of
credit opened in support of a duty deferment guarantee and overdraft facility
for the Company's UK branch.  As of June 30, 2000, there was $480,000 of
outstanding borrowings on the line of credit.

     The Company's branch location in the United Kingdom relies primarily on
its ultimate parent company, Allstates WorldCargo, Inc., as well as a bank
facility for its financing.  The parent company has provided cash advances in
the form of loans to the UK branch to support its working capital needs and
purchase computer equipment.  As of June 30, 2000, the UK branch had L286,000
in loans payable to the parent (the equivalent of approximately $434,000).  On
September 27, 1999, the UK branch entered in to an agreement with its bank to
provide an overdraft facility and an HM Customs and Excise bond.  The bond is
a requirement to guarantee the payment of VAT and excise taxes to UK Customs on
cargo imports, which the Company collects from its customers. The agreement
allows the UK branch to draw to a maximum of L100,000 (the equivalent of
approximately $152,000 at June 30, 2000).  Interest is calculated on the cleared
daily balance of the account, and is payable on the amount owing up to the limit
at 3% per annum over the bank's base rate (8.5% at June 30, 2000).  The
overdraft facility and HM Customs guarantee is collateralized by a $350,000
letter of credit opened at the Company's US bank.  At June 30, 2000, the bank
overdraft totaled L125,065 (the equivalent of approximately $190,000).


                                     14
<PAGE>
Forward Looking Statements

The statements contained in all parts of this document including, but not
limited to, those relating to the availability of cargo space; the Company's
overseas presence and the plans for, effects, results and expansion of
international operations and agreements for international cargo; future
international revenue and international market growth; the future expansion and
results of the Company's terminal network; plans for local delivery services and
truck brokerage; future improvements in the Company's information systems and
logistic systems and services; technological advancements; future marketing
results; construction of the new facilities; the effect of litigation; future
costs of transportation; future operating expenses; future margins; any
seasonality of the Company's business; future dividend plans; future
acquisitions and the effects, benefits, results, terms or other aspects of any
acquisition, effects of the Year 2000 issue; Ocean Transportation Intermediary
License; ability to continue growth and implement growth and business strategy;
the ability of expected sources of liquidity to support working capital and
capital expenditure requirements; future expectations; and any other statements
regarding future growth, future cash needs, future terminals, future operations,
business plans, future financial results, financial targets and goals; and any
other statements which are not historical facts are forward-looking statements.
When used in this document, the words "anticipate," "estimate," "expect," "may,"
"plans," "project" and similar expressions are intended to be among the
statements that identify forward-looking statements. Such statements involve
risks and uncertainties, including, but not limited to, those relating to the
Company's dependence on its ability to attract and retain skilled managers and
other personnel; the intense competition within the freight industry; the
uncertainty of the Company's ability to manage and continue its growth and
implement its business strategy; the Company's dependence on the availability
of cargo space to serve its customers; the effects of regulation; results of
litigation; the Company's vulnerability to general economic conditions; the
control by the Company's principal shareholder; risks of international
operations; risks relating to acquisitions; the Company's future financial and
operating results, cash needs and demand for its services; and the Company's
ability to maintain and comply with permits and licenses, as well as other
factors detailed in this document and the Company's other filings with the
Securities and Exchange Commission. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual outcomes may vary materially from those indicated. The Company undertakes
no responsibility to update for changes related to these or any other factors
that may occur subsequent to this filing.



                                      15


<PAGE>


PART II

OTHER INFORMATION
------------------

ITEM 1    LEGAL PROCEEDINGS

The Company is involved in an ongoing environmental proceeding.  In December
1996, five underground storage tanks ("UST's") and two above ground storage
tanks were removed from a facility in which the Company leases office space.
Post-excavation sampling results confirmed that certain soil contamination
remained present after the removals at the location of two of the UST's.  Also,
at the time of the removals, free-floating groundwater contamination was
observed in the area of these two former UST's.  During 1999, the Company
engaged Carpenter Environmental Associates ("Carpenter")to prepare a Preliminary
Assessment/Site Investigation Report ("PA/SI Report").  Carpenter's PA/SI Report
stated that the chlorinated groundwater contamination is emanating from an
off-site source.  The New Jersey Department of Environmental Protection approved
Carpenter's PA/SI Report and agreed that no further investigation of the
chlorinated solvents in the groundwater was needed.  A Remedial Investigation
Work Plan was submitted in November 1999.  The NJDEP approved the work plan on
November 24, 1999.  The approved work was performed by Carpenter in December
1999, as set forth in Carpenter's report dated March 13, 2000.  The Carpenter
report indicated that benzene contamination was delineated and proposed the
installation of one additional monitoring well and natural remediation and
monitoring of remaining groundwater contamination.  The NJDEP approved the
additional work and Carpenter is now proceeding with the work.  The Company has
made claims against their liability insurance carriers for coverage.  Due to the
uncertain nature and extent of any additional remedial activities that may be
required regarding the existing site conditions, potential future costs cannot
be estimated by management or its counsel at this time.  If an adverse judgment
is entered, the potential effect on the consolidated financial position and
consolidated results of operations, in the period in which resolved, cannot be
ascertained at this time, but may be material.


ITEM 2    CHANGES IN SECURITIES

NONE


ITEM 3    DEFAULTS ON SENIOR SECURITIES

NONE


ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

NONE


ITEM 5    OTHER INFORMATION


Effective June 1, 2000, the Company adopted the Allstates WorldCargo, Inc. 2000
Stock Option and Stock Issuance Plan (the "Plan").  The Plan is intended to
promote the interests of the Company by providing eligible persons with the
opportunity to acquire a proprietary interest or to increase their proprietary
interest in the Company.

                                      16


<PAGE>
The Plan is divided into three separate equity programs.

     1. the Discretionary Option Grant Program under which eligible persons may,
at the discretion of the Plan Administrator, be granted options to purchase
shares of Common Stock,
     2. the Stock Issuance Program under which eligible persons may, at the
discretion of the Plan Administrator, be issued shares of Common Stock directly,
either through the immediate purchase of such shares or as a bonus for services
rendered the Company (or any Parent or Subsidiary), and
     3. the Automatic Option Grant Program under which Eligible Directors shall
automatically receive option grants at periodic intervals to purchase shares of
Common Stock.

The stock issuable under the Plan shall be shares of authorized but unissued or
reacquired Common Stock, including shares repurchased by the Company on the open
market. The maximum number of shares of Common Stock which may be issued over
the term of the Plan shall not exceed 4,500,000 shares, plus an annual increase
to be added on the first day of January of each calendar year, beginning on
January 1, 2001, equal to the lesser of (i) 500,000 shares, (ii) 4% of the
outstanding shares of Common Stock of the Company or (iii) such lesser number
of shares as determined by the Board.

No one person participating in the Plan may receive options, separately
exercisable stock appreciation rights and direct stock issuances for more than
250,000 shares of Common Stock in the aggregate per calendar year, beginning
with the 2000 calendar year.

Further details concerning the Plan may be obtained by reference to the Plan
which is filed as Exhibit 4.1 to this Form 10-QSB.



                                      17


<PAGE>
ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits

         Exhibit 4.1 - Allstates WorldCargo, Inc.
                       2000 Stock Option and Stock Issuance Plan

         Exhibit 27FDS - Financial Data Schedule

     (b) Reports on Form 8-K

         None


                                      18


<PAGE>



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.


ALLSTATES WORLDCARGO, INC.


BY:       /s/ SAM DIGIRALOMO                  DATED:    August 14, 2000
        ---------------------------------               ---------------
          Sam DiGiralomo, President and CEO




BY:       /s/ Craig D. Stratton               DATED:    August 14, 2000
        ---------------------------------               ---------------
          Craig D. Stratton, CFO, Secretary,
        Treasurer and Principal Financial Officer





                                      19