UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                        Washington, DC   20549

                                FORM 10-Q

(Mark One)

XX  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
---  ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001

    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)


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


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act 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  XX      No
    ----         ----

The Company had 32,509,872 shares of common stock, par value $.0001 per
share, outstanding as of August 13, 2001.

                                     1
<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 March 31, 2001 and 2000

  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


   ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS........................8

PART II.  OTHER INFORMATION.............................................13

   ITEM 1    LEGAL PROCEEDINGS..........................................13

   ITEM 2    CHANGES IN SECURITIES AND USE OF PROCEEDS..................13

   ITEM 3    DEFAULTS ON SENIOR SECURITIES..............................13

   ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS........13

   ITEM 5    OTHER INFORMATION..........................................13

   ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K...........................13

      SIGNATURES........................................................15


                                     2

<PAGE>
         ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

            CONDENSED CONSOLIDATED BALANCE SHEET

                           ASSETS

                                June 30,       September
                                                  30,
                                  2001           2000
                               (Unaudited)         *
                               -----------     ----------
  Current Assets
    Cash and cash
     equivalents             $  457,991     $  115,736
    Accounts receivable
                              4,400,833      5,757,204
    Inventory
                                 48,795         30,684
    Prepaid expenses and
     other current assets       829,261        285,057
    Deferred income taxes       103,840        103,840
                              ---------      ---------
  Total current assets        5,840,720      6,292,521

  Property, plant and
   equipment                  1,506,282      1,671,254
  Less:  Accumulated
   depreciation                 838,225        950,258
                              ---------      ---------
  Net property, plant and
   equipment                    668,057        720,996

  Goodwill                      519,932        567,681
  Other assets                  267,870        311,002
                              ---------      ---------
  Total assets               $7,296,579     $7,892,200
                              =========      =========

            LIABILITIES AND STOCKHOLDERS' EQUITY

  Current Liabilities
    Accounts payable         $2,647,748     $3,206,463
    Accrued expenses            864,215      1,405,221
    Short-term bank
     borrowings               1,100,000        900,000
    Income taxes payable              0         20,480
    Notes payable               154,034        162,843
                              ---------      ---------
  Total current liabilities   4,765,997      5,695,007

  Long term portion of notes
   payable                    2,536,181      2,624,530

  Stockholders' equity
   (deficit)
    Common stock                  3,251          3,251
    Foreign currency
     translation adjustment      (2,584)        (3,651)
    Retained earnings
     (deficit)                   (6,266)      (426,937)
                              ---------      ---------
  Total stockholders' equity     (5,599)      (427,337)

  Total liabilities and
   stockholders' equity       $7,296,579    $7,892,200
                              =========      =========

 *  Condensed from audited financial statements.

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

                                     3

<PAGE>




         ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

       CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                         (Unaudited)

                             Three Months Ended       Nine Months Ended
                                  June 30,                 June 30,
                              2001       2000         2001         2000
                          ----------  ----------   -----------  -----------
Revenues (net of
 discounts)                9,187,421  $8,021,884   $32,969,165  $23,121,936
Cost of transportation     5,359,051   4,751,600    18,761,627   13,919,803
                          ----------  ----------   -----------  -----------
Gross profit               3,828,370   3,270,284    14,207,538    9,202,133

Selling, general and
 administrative expenses   3,795,568   3,125,331    13,461,676    9,175,383
                          ----------  ----------   -----------  -----------
Income from operations        32,802     144,953       745,862       26,750

Other income (expense):
   Interest, net             (66,254)    (57,505)     (183,389)    (156,079)
   Gain/(loss) on sale of
    assets                    (5,017)      9,603       154,994        3,260
   Other income/(expense)      7,666       5,850        24,898        2,890
                          ----------  ----------   -----------  -----------
Income before income tax
 provision                   (30,803)    102,901       742,365     (123,179)

Provision for income
 taxes                       (41,218)    (65,288)      321,694      (44,824)

Net income                  $ 10,415  $  168,189    $  420,671   $  (78,355)
                          ==========  ==========   ===========  ===========

Weighted average common
 shares - basic           32,509,872  32,509,872    32,509,872   32,509,872

Net income per common
 share - basic            $      .00  $      .01     $     .01   $      .00

Weighted average common
 shares - diluted         32,509,872  32,522,872    32,510,509   32,522,872

Net income per common
 share - diluted          $      .00  $      .01     $     .01   $      .00


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



                                     4

<PAGE>








        ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

  CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
                         (Unaudited)


<TABLE>
<S>                 <c>           <c>      <c>      <c>         <c>
                            Common Stock
                                             Other    Retained     Total
                        Number             Comprehen  Earnings  Stockholders'
                          of        Par      sive     (Deficit)    Equity
                        Shares     Value    Income                (Deficit)
                                            (Loss)
                    ___________   ______   _________  _________   _________

Balance at           32,509,872    3,251  $(3,651)   $(426,937)   $(427,337)
 September 30, 2000

Other Comprehensive
 Income (Currency
 translation
 adjustment) for the
 nine months ended
 June 30, 2001                              1,067                     1,067

Consolidated net
 income for the
 nine months ended
 June 30, 2001                                         420,671      420,671
                    ___________   ______   _________  _________   _________

Balance at June
 30, 2001            32,509,872  $3,251   $(2,584)   $( 6,266)   $( 5,599)
                    ===========  ======  =========  =========   =========

</TABLE>


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





                                     5

<PAGE>














         ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

       CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                         (Unaudited)

                                        Nine Months Ended
                                            June 30,
                                         2001       2000
                                     -----------  -----------
Cash flows from operating
 activities:
  Net income                           420,671     (78,355)
  Adjustments to reconcile net
  income to net cash provided
    by operating activities:
      Depreciation                     185,542     160,973
      Amortization                      51,247      51,247
      Provision for doubtful
       accounts                        112,600      84,498
      (Gain)/loss on sale of assets   (154,994)     (3,260)
      Deferred income taxes
      (Increase) decrease in assets:
          Accounts receivable        1,243,771    (105,857)
          Prepaid expenses and other
           assets                     (562,315)     (7,580)
       Increase (decrease) in
        liabilities:
          Accounts payable and
           accrued expenses         (1,099,720)    249,466
          Income tax payable           (20,480)    (526,873)
                                    -----------  -----------
  Net cash provided by/used for
   operating activities                176,322     (175,741)

  Cash flows from investing
   activities:
     Purchase of equipment            (144,495)   (168,570)
     Proceeds from sale of property
      and equipment                    207,589      34,168
     Cash received from e-tail
      Logistics stock subscriptions      1,199
     Purchase of treasury stock of
      subsidiary                                   (70,811)
     Security deposits                  38,434       4,025
                                    -----------  -----------
  Net cash provided by/used for
  investing activities                 102,727    (201,188)

  Cash flows from financing
   activities:
     Repayments under notes payable   (137,861)   (133,832)
     Repayments under short-term
      bank borrowings                             (120,000)
     Borrowing under short-term bank
      borrowings                       200,000     600,000
                                    -----------  -----------
  Net cash provided by financing
   activities                           62,139     346,168

  Net increase / (decrease) in cash
   and cash equivalents                341,188     (30,761)
  Currency translation adjustments       1,067      12,088
  Cash and cash equivalents,
   beginning of year                   115,736     406,842
                                    -----------  -----------
  Cash and cash equivalents,
   end of period                      $457,991    $388,169
                                    ===========  ===========




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



                                     6

<PAGE>

         ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        June 30, 2001

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 2000 Form 10-K
  filing dated December 28, 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, 2001 and
  September 30, 2000 and the results of operations for the
  three and nine months ended June 30, 2001 and 2000,
  respectively.

2.   Net income per common share appearing in the statements
  of operations for the three months and nine months ended
  June 30, 2001 and 2000, 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.

3.   On September 15, 2000, the Company discontinued freight
  operations at its UK branch location, Allstates Allcargo
  (UK) Ltd.  During the nine months ended  June 30, 2001, the
  Company continued to collect accounts receivable and sold
  the remaining fixed assets.  Comparisons of profit and loss
  activity between the three month and nine month periods
  ended June 30, 2001 and June 30, 2000, respectively, are
  impacted.




                                     7

<PAGE>


ITEM 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations.

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 19 offices throughout the United States,
and employs 89 people.

     Allstates has agreements with domestic and
international strategic partners and a network of agents
throughout the world.  In September, 2000, the Company
formed a strategic alliance with an established freight
forwarding company located in the United Kingdom, with its
principle office in the London Heathrow airport area.  This
strategic partner replaced the Company's UK branch office,
which had done business as Allstates Allcargo (UK) Ltd.
since January 1997.  The Company had decided to discontinue
freight operations at its branch office prior to the end of
its September 30, 2000 fiscal year end.

     In September, 2000, Allstates entered in to an
agreement with an unrelated freight and warehousing company
to provide them services which primarily include customer
invoicing and transportation vendor disbursements on
business that they provide to the Company.  Per the
agreement, Allstates paid a commission to this company based
on the invoiced amount, less deductions for transportation
cost and a fee for providing the service.  In May, 2001, the
assets of that company were purchased by another company
unrelated to Allstates WorldCargo, Inc., and consequently
the service agreement was terminated.


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,
                          2001        2000         2001      2000
                          ----        ----         ----      ----
Revenues                 100.0%      100.0%       100.0%    100.0%
Cost of transportation    58.3        59.2         56.9      60.2
                          ----        ----         ----      ----
Gross profit              41.7        40.8         43.1      39.8

Selling, general and
 administrative expenses  41.3        38.8         40.8      39.5
                          ----        ----         ----      ----
Operating income           0.4         2.0          2.3       0.3
                          ====        ====         ====      ====

Net income                  .1%        2.1%        1.3%      (0.3)%


Revenues

     Revenues  of  the Company represents gross consolidated
sales  less  customer discounts. For the quarter ended  June
30,  2001,  revenues increased by $1,166,000, or  14.5%,  to
$9,187,000, over the quarter ended June 30, 2000, reflecting
an  increase in the number of shipments and the total weight
of  cargo shipped.   Revenues for the nine months ended June
30,  2001  increased by $9,847,000, or 42.6%, to $32,969,000
as compared to the nine-month period end June 30, 2000.


                                     8

<PAGE>


       A  significant portion of the increase in revenue for
the  three and nine month comparative periods ended June  30
is   attributable   to  domestic  and  international   sales
generated  from one customer.  That customer  accounted  for
13.8%  of consolidated revenues during the nine months ended
June  30,  2001, and 6.7% of consolidated revenues  for  the
three months then ended.  Although Allstates is confident in
its  ability to continue providing freight services to  this
customer,  there is no contractual agreement in  place,  and
therefore  the Company can not guarantee that this  business
will continue indefinitely.

     Domestic  revenues  increased  by  approximately   $0.6
million or 9.3%, to $6,711,000 during the three-month period
ended  June  30,  2001, and increased by approximately  $6.4
million  or  36.5%,  to $24,018,000 during  the  nine  month
comparative period.  In addition to revenues earned from the
significant  customer, the increase  in  domestic  sales  is
primarily attributable to new business that was derived from
the  Company's  service agreement with an unrelated  freight
and  warehouse  services company. As  previously  mentioned,
that  agreement was terminated in May 2001 pursuant  to  the
sale  of  the  assets of that company to  another  unrelated
company.   International sales increased  during  the  three
months ended June 30, 2001 by approximately $0.6 million  or
31.5%,  to $1,884,000, and during the nine month comparative
period increased by approximately $3.4 million or 62.1%,  to
$8,951,000, despite the closing of the Company's  UK  branch
in  September,  2000.   For comparison purposes,  net  sales
generated from the UK branch totaled approximately  $140,000
and  $441,000 respectively during the three and nine  months
ended  June  30,  2000.   Sales to  international  customers
accounted  for 27.2% of total sales during the  nine  months
ended  June  30,  2001 as compared to 23.9% of  total  sales
during the nine months ended June 30, 2000.


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 decreased by 0.9%
for  the three months ended June 30, 2001, in comparison  to
the  same period in the previous year, and decreased by 1.1%
for the nine-month comparative period.  The net decrease  in
transportation costs during each of the comparative  periods
in Fiscal 2001 is primarily attributable to the new business
derived  from the Company's aforementioned service agreement
with an unrelated freight and warehouse services company, as
billing  for  the  warehousing  services  portion  of   this
business  does  not  carry  a related  cost  of  sales.   In
absolute terms, the cost of sales increased by approximately
$0.6 million or 12.8%, to $4,752,000 during the three months
ended  June  30, 2001 versus the comparative period  in  the
prior  year, reflecting the increased sales volume.   During
the  nine  month comparative period, cost of sales increased
by  approximately  $4.8  million or 34.8%,  to  $18,762,000.
Gross margins increased for the three months ended June  30,
2001  to  41.7%, from 40.8% during the same  period  of  the
previous  year,  and increased to 43.1% for the  first  nine
months  of Fiscal 2001 from 39.8% during the same period  in
the previous fiscal year.

        Gross profit increased by $558,000 to $3,828,000 for
the  three  months  ended June 30, 2001,  and  increased  by
$5,005,000 to $14,208,000 for the nine months ended on  that
date, in comparison to the prior year periods.


Selling, General and Administrative Expenses

     SG&A  expenses increased as a percentage  of  sales  by
2.3%  for  the three months ended June 30, 2001 compared  to
the  three  months ended June 30, 2000, to 41.3%,  primarily
reflecting  the  effect  of higher  commissions  paid  as  a
percent  of revenues during the period.  In absolute  terms,
operating expenses increased by $670,000 or 21.4% during the
three-month  period ended June 30, 2001 as compared  to  the
same  period in the prior fiscal year.  The increase in SG&A
expenses  reflects the growth in revenues and  gross  profit
during   the  quarter,  represented  primarily   by   higher
commissions expense, offset by the savings realized from the

                                     9

<PAGE>

discontinuation  of freight operations at the  Company's  UK
branch  in September, 2000.  Operating expenses incurred  by
the  Company's UK branch amounted to $128,000 for the  three
months ended June 30, 2000.

     Operating expenses increased for the nine months  ended
June  30, 2001 by $4,286,000, or 46.7% over the nine  months
ended June 30, 2000, primarily reflecting higher commissions
expense  resulting  from the growth  in  revenue  and  gross
profit  during  the period.  The increase  in  SG&A  expense
during this period was again offset by the resulting savings
that was realized from the discontinuation of operations  at
the  UK  branch  at the end of Fiscal 2000.   For  the  nine
months  ended June 30, 2000, operating expenses incurred  by
the  Company's UK branch amounted to $397,000.  The increase
in  operating expenses during the nine months ended June 30,
2001  was  further offset by the effect of certain  isolated
expenses  that  were recorded during the  first  quarter  of
fiscal 2000 related to the Company's restructuring.

     Licensee   commissions   increased   by   approximately
$332,000 for the three-month period ended June 30, 2001, and
increased  by  approximately $2,023,000 for  the  nine-month
period  then ended, as compared to the same periods  in  the
prior fiscal year, driven by a higher level of gross profits
at  certain  licensee operations.  Much of the increases  in
licensee  commissions during both comparative  periods  were
derived from the gross profit generated from the significant
customer that was mentioned previously.  During Fiscal  2001
the  Company  has  also  paid commissions  to  an  unrelated
freight  and  warehousing services company  pursuant  to  an
agreement  made between them and Allstates.  Allstates  paid
approximately   $228,000  and  $1,851,000  respectively   in
commissions to this company during the three and nine months
ended  June  30,  2001.  Cargo insurance increased  for  the
three  months ended June 30, 2001 by approximately  $20,000,
and  increased  for  the nine month  period  then  ended  by
approximately  $89,000, also reflecting the variable  effect
of higher sales volume.

     SG&A expenses presented for the three months ended June
30,  2001 and 2000 are inclusive of expenditures to  related
parties  totaling $119,990 and $86,349, respectively.   SG&A
expenses  presented for the nine months ended June 30,  2001
and  2000  are inclusive of expenditures to related  parties
totaling $487,688 and $432,418 respectively.


Income/(Loss) From Operations

     Income  from  operations  decreased  during  the  three
months  ended  June 30, 2001 by approximately  $112,000,  to
$33,000,  and  during the nine months  ended  on  that  date
increased by approximately $719,000, to $746,000 as compared
to the same three and nine month period in the previous year
for  the  reasons indicated above.  In comparison  to  their
respective periods in fiscal 2000, the operating margin  for
the  three  month  period ended June 30, 2001  decreased  by
1.4%,  to 0.4%, and increased by 1.2%, to 2.3% for the  nine
month period then ended.

Interest Expense and Income

     Net interest expense increased for the three months
ended June 30, 2001 by approximately $9,000, and increased
by approximately $27,000 during the nine months then ended
as compared to the same periods in the previous year,
reflecting the increased level of borrowing on the Company's
bank line of credit.

Gain/(Loss) on Sale of Assets

     Allstates realized a gain on the sale of property that
the Company co-owned with the Chairman, Joseph Guido.  The
property was sold on January 11, 2001 and the proceeds of
the sale were allocated between Mr. Guido and Allstates
WorldCargo.  The Company's portion of the net proceeds after
closing costs was $184,005.98, of which a gain of
approximately $153,000 was realized.  The total gain on the
sale of assets for the nine months ended June 30, 2001 was
approximately $155,000.

                                     10

<PAGE>



Net Income/(Loss)

     Income  before  income taxes decreased  to  a  loss  of
($31,000)  during the quarter ended June  30,  2001  from  a
profit of $103,000 during the same period in the prior year.
The  Company  recorded  a tax benefit  of  $41,000  for  the
quarter ended June 30, 2001 as compared to a net tax benefit
of  $65,000 for quarter ended June 30, 2000.  The net profit
amounted to $10,000 or 0.1% of revenues in the third quarter
of  Fiscal 2001 versus a net profit of $168,000 or  2.1%  of
revenues in the third quarter of Fiscal 2000.

     For  the nine months ended June 30, 2001, income before
income  taxes increased to $742,000 from a loss of  $123,000
during  the  same period in the previous fiscal  year.   The
Company  recorded a tax provision of $322,000 for  the  nine
months  ended June 30, 2001 as compared to a net tax benefit
of  $45,000 for nine-month period ended June 30, 2000.   Net
income  amounted  to $421,000 or 1.3% of  revenues  for  the
first  nine  months  of Fiscal 2001 versus  a  net  loss  of
$78,000 or (0.3)% of revenues for the same period of  Fiscal
2000.

Liquidity and Capital Resources

     Net   cash   provided  by  operating   activities   was
approximately  $176,000 for the nine months ended  June  30,
2001,   compared  to  cash  flow  used  for  operations   of
approximately  $176,000 for the nine months ended  June  30,
2000.  During the nine months ended June 30, 2001, cash  was
primarily  provided by the net income of the Company  and  a
decrease  in  accounts receivable, offset by an decrease  in
accounts payable and a short term loan that was extended  to
an  unrelated  freight and warehouse services company.   For
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.    Operating cash flows
for  the  nine  months  ended June 30, 2000  was  negatively
impacted by losses generated by the Company's UK subsidiary,
Allstates Allcargo, (UK) Ltd.

     At  June  30,  2001,  the Company  had  cash  and  cash
equivalents   of  $458,000  and  net  working   capital   of
$1,023,000,  compared  with cash  and  cash  equivalents  of
$388,000  and  net working capital of $656,000 respectively,
at  June 30, 2000.  The increase in working capital at  June
30,  2001  over the respective period in 2000  is  primarily
attributable  to  the net income of the Company  during  the
prior  twelve month period, augmented by the discontinuation
of  freight  operations  at the  Company's  UK  branch.   In
addition,  working  capital was  negatively  impacted  by  a
$200,000  loan  provided to an officer  of  the  Company  in
September  2000,  while the sale of company  owned  property
during  the  second quarter of Fiscal 2001  had  a  positive
effect.

     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,  2001,   capital
expenditures  amounted to approximately $185,000,  of  which
approximately  $41,000 was acquired through  notes  payable.
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.   In March, 2001, Allstates received proceeds  from
the  sale  of  real estate that was partially owned  by  the
Company  totaling  approximately $184,000.   Total  proceeds
from  the  sale of assets amounted to approximately $208,000
during the nine months ended June 30, 2001.

     In  September,  2000, Allstates extended  an  operating
loan to an unrelated freight and warehouse services company,
Q Logistics Solutions, Inc. ("QLS"), as part of an agreement
that  the Company entered into to provide customer invoicing
and vendor disbursement services.  The loan was secured by a
$750,000  promissory note signed by the  borrower,  and  for
which  a  Form  UCC-1  financing statement  was  filed.   In
February 2001, QLS filed for Chapter 11 protection under the


                                     11

<PAGE>

U.S.   bankruptcy   laws.   Pursuant   to   the   bankruptcy
proceedings,   another  company,  unrelated   to   Allstates
WorldCargo, Inc., purchased the assets of QLS in  May  2001.
Allstates  had  outstanding loan advances  of  approximately
$702,000 to QLS prior to the purchase.  As a contingency  of
that purchase, Allstates entered in to an agreement with the
other  company  whereby Allstates assigned  the  Form  UCC-1
filing  to  them  in  exchange for  their  promissory  note,
secured  by a personal guarantee made by an officer of  that
company,  to  pay  the  full loan  amount  of  approximately
$702,000,  plus  9% interest over six months,  beginning  in
April 2001.  The other company subsequently defaulted on the
loan  and  as  of the date of this filing has not  made  any
payments to Allstates.  Allstates has filed suit against the
other  company  and  is currently awaiting  their  response.
Based  on  information that Allstates has  obtained  through
public  press releases made by the other company,  Allstates
believes that the loan is collectable, although no assurance
can be made to that effect.


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.

                                    12

<PAGE>

PART II

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

ITEM 1    LEGAL PROCEEDINGS

There have been no material developments concerning the
Company's involvement in an ongoing environmental proceeding as set forth
in the Company's Form 10-K dated September 30, 2000, and
such information is incorporated herein by reference.

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

NONE


ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits

         None

     (b) Reports on Form 8-K

         None


                                      13


<PAGE>





SIGNATURES

Pursuant to the requirements of the Exchange Act of 1934, the registrant
has duly 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, 2001
        ---------------------------------               ---------------
          Sam DiGiralomo, President and CEO




BY:       /s/ Craig D. Stratton               DATED:    August 14, 2001
        ---------------------------------               ---------------
          Craig D. Stratton, CFO, Secretary,
        Treasurer and Principal Financial Officer




                                      14