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, 2004

    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
    ----         ----

Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act).

Yes          No   XX
    ----         ----

The Company had 32,509,872 shares of common stock, par value $.0001 per
share, outstanding as of August 13, 2004.

                                     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 JUNE 30, 2004 and 2003

  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

   ITEM 3.   CONTROLS AND PROCEDURES....................................13

PART II.  OTHER INFORMATION.............................................14

   ITEM 1    LEGAL PROCEEDINGS..........................................14

   ITEM 2    CHANGES IN SECURITIES AND USE OF PROCEEDS..................14

   ITEM 3    DEFAULTS ON SENIOR SECURITIES..............................14

   ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS........14

   ITEM 5    OTHER INFORMATION..........................................15

   ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K...........................14

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


                                     2

<PAGE>



         ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

            CONDENSED CONSOLIDATED BALANCE SHEET

                           ASSETS

                                June 30,    September 30,
                                  2004           2003
                              (Unaudited)         *
                              ---------      ---------
  Current Assets
    Cash                     $  105,621     $  516,639
    Accounts receivable, net
    of allowance for          7,254,168      6,226,209
          bad debt of
    $248,000 and $229,000
    Prepaid expenses and
    other current assets        156,003        155,191
    Deferred income taxes       277,000        490,000
                              ---------      ---------
  Total current assets        7,792,792      7,388,039

  Property, plant and
  equipment                   1,538,037      1,268,632
  Less:  Accumulated
   depreciation                 974,675        943,070
                              ---------      ---------
  Net property, plant and
    equipment                   563,362        325,562

  Goodwill, including
    acquisition cost, net       535,108        535,108
  Other assets                   92,782         38,571
                              ---------      ---------
  Total assets               $8,984,044     $8,287,280
                              =========      =========

            LIABILITIES AND STOCKHOLDERS' EQUITY

  Current Liabilities
    Accounts payable         $4,363,313     $4,336,623
    Accrued expenses          1,142,354        823,029
    Short-term bank
     borrowings               1,249,500      1,149,500
    Notes payable                25,000         28,836
                              ---------      ---------
  Total current liabilities   6,780,167      6,337,988

  Deferred tax liability -
   non current                   61,000         25,000
  Long term portion of notes
   payable                    2,361,730      2,386,730

    Stockholders' equity
    Common stock                  3,251          3,251
    Retained deficit           (222,104)      (465,689)
                              ---------      ---------
  Total stockholders' deficit  (218,853)      (462,438)
                              ---------      ---------
  Total liabilities and
  stockholders' deficit      $8,984,044     $8,287,280
                              =========      =========
 *  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,
                            2004       2003         2004          2003
                         ----------  ----------   -----------  -----------
Revenues (net of
discounts)              $14,565,851 $11,048,891   $40,119,401  $33,831,855
Cost of transportation    9,886,379   7,045,480    27,038,830   21,683,479
                         ----------  ----------   -----------  -----------
Gross profit              4,679,472   4,003,411    13,080,571   12,148,376

Selling, general and
administrative expenses   4,287,461   3,941,956    12,377,372   12,514,525
                         ----------  ----------   -----------  -----------
Income (loss) from
   operations               392,011      61,455       703,199    ( 366,149)

Other income (expense):
   Interest, net            (54,636)  ( 55,718)     ( 162,321)   ( 170,591)
   Gain/(loss) on sale
    of assets                 2,000         50       (  1,587)   (   6,873)
   Other income/(expense)     9,294                     9,294    ( 372,477)
                         ----------  ----------   -----------  -----------
Income (loss) before
income tax provision        348,669      5,787        548,585    ( 916,090)

Provision for income
taxes                       184,000                   305,000    ( 398,813)

Net income (loss)         $ 164,669  $   5,787     $  243,585   $( 517,277)
                         ==========  ==========   ===========  ===========
Weighted average common
shares - basic           32,509,872 32,509,872     32,509,872   32,509,872

Net income per common
 share - basic             $    .01 $      .00     $      .01   $     (.02)

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

Net income per common
share - diluted            $    .01 $     .00     $      .01   $     (.02)

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>
                            Common Stock
                                             Retained     Total
                        Number               Earnings  Stockholders'
                          of        Par      (Deficit)    Equity
                        Shares     Value                 (Deficit)

                    ___________  ______  ___________   _________

Balance at           32,509,872  $ 3,251   $(465,689)  $(462,438)
 September 30, 2003


Consolidated net
 profit for the
 nine months ended
 June 30, 2004                               243,585     243,585
                    ___________  ______  ___________   _________

Balance at June
 30, 2004            32,509,872   3,251    $(222,104)  $(218,853)
                    ===========  ======    =========   =========

</TABLE>


                                 5
<PAGE>



         ALLSTATES WORLDCARGO, INC. AND SUBSIDIARIES

       CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                         (Unaudited)
                                         Nine Months Ended
                                            June 30,
                                         2004       2003
  Cash flows from operating
  activities:
  Net income (loss)                $ 243,585    $(517,277)
  Adjustments to reconcile net
  income to net cash provided
    by operating activities:
      Depreciation                   122,478      139,957
      Amortization                       -0-        1,166
      Provision for doubtful
        accounts                     116,113      141,166
      (Gain)/loss on sale of assets    1,587        6,873
      Deferred income taxes          249,000     (403,001)
      (Increase) decrease in assets:
          Accounts receivable     (1,201,483)      37,437
          Prepaid expenses and other
            assets                   (   813)     835,553
       Increase (decrease) in
          liabilities:
          Accounts payable and
           accrued expenses          346,015     (144,749)
                                   ---------    ---------
  Net cash provided by (used for)
  operating activities              (123,518)      97,125

  Cash flows from investing
  activities:
     Purchase of equipment          (382,014)    ( 67,220)
     Proceeds from sale of property
      and equipment                   20,150       21,388
     Deposits                          3,200          775
                                   ---------    ---------
  Net cash used for
  investing activities              (358,664)    ( 45,057)

  Cash flows from financing
  activities:
     Repayments under notes payable  (28,836)     (75,789)
     Repayments under short-term
      bank borrowings               (100,000)  (1,100,000)
     Borrowing under short-term
      Bank borrowings                200,000    1,000,000
                                   ---------    ---------
  Net cash (used for) provided by
     financing activities            71,164    ( 175,789)

  Net (decrease) in cash
  and cash                         (411,018)     (123,721)
  Cash, beginning of year           516,639       173,277
                                   ---------     ---------
  Cash, end of period              $105,621      $ 49,556
                                   =========     =========

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, 2004

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 2003 Form 10-K
  filing dated December 29, 2003 (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, 2004 and
  September 30, 2003 and the results of operations for the
  three and nine months ended June 30, 2004 and 2003,
  respectively.

2.   Net income per common share appearing in the statements
  of operations for the three and nine months ended June 30,
  2004 and 2003, 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.    The line of credit with the Sun National Bank contains
  a  covenant  pertaining to maintenance of a  Debt  Service
  Coverage Ratio.  At December 31, 2003, the Company was  in
  breach of the Debt Service Coverage Ratio.  Under the terms
  of the agreement, the bank may call the loan if the Company
  is in violation of any restrictive covenant.  Per the banks
  requirement,  Allstates underwent an independent  accounts
  receivable audit.  Based on the results of the audit,  the
  bank  waived the covenant default for the period  covering
  February  28,  2003 to February 28, 2004.   The  bank  has
  extended the maturity date of the loan through January 31,
  2005 and a new covenant is in place.

4.   During the fiscal quarter ended December 31, 2003,
  Allstates entered into a ten-year licensee agreement with
  another party.   This agreement would result in the creation
  of a new station in Nashville, Tennessee, the conversion of
  the Company-owned Raleigh, North Carolina station to a
  licensee operation, and the rights to the Atlanta, Georgia
  licensee operation.  Operations related to this agreement
  started January 31, 2004.  As part of the agreement,
  Allstates WorldCargo agreed to pay a sum of $300,000 to the
  licensee as a start-up fee.  That amount has been paid in
  full.  The Company has capitalized this expenditure as a
  leasehold improvement and is depreciating (straight-line)
  the $300,000 payment over the ten-year life of the contract.

                                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.  Allstates is principally
engaged in the business of providing global freight
forwarding and other transportation and logistics services
for its customers.  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 1,700 customers utilizing ground
transportation, commercial air carriers, and ocean vessels.
Allstates supplements its freight forwarding services to
include truck brokerage, warehousing and distribution, and
other logistics services.  Allstates operates 22 offices
throughout the United States, and employs 94 people.

     Allstates has agreements with domestic and
international strategic partners and a network of agents
throughout the world, and continues to pursue opportunities
to forge additional strategic alliances in order to increase
its global market share.  The Company is a party to several
site licensing agreements in which those licensees have
contracted with Allstates to provide exclusive freight
forwarding services, including sales and operating
functions, under the Allstates name.  Of the 22 domestic
locations, 14 are licensee operations, while 8 are company
owned and staffed operations.




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,
                          2004        2003         2004      2003
                          ----        ----         ----      ----
Revenues                 100.0%      100.0%       100.0%    100.0%
Cost of transportation    67.9        63.8         67.4      64.1
                          ----        ----         ----      ----
Gross profit              32.1        36.2         32.6      35.9

Selling, general and
 administrative expenses  29.4        35.6         30.8      37.0
                          ----        ----         ----      ----
Operating income           2.7         0.6          1.8      (1.1)
Net income                 1.1%        0.1%         0.6%     (1.5)%

                                8
<PAGE>




Revenues

     Revenues  of  the Company represents gross consolidated
sales  less  customer  discounts.  Total  revenues  for  the
quarter ended June 30, 2004 increased by approximately  $3.5
million,  or  31.8%, to $14,566,000, from the quarter  ended
June  30, 2003, reflecting a higher volume of shipments  and
total  weight  of  cargo shipped.  The  increase  in  volume
reflects  the  overall growth of the  Company,  led  by  new
business that Allstates acquired during fiscal 2004  from  a
significant   customer   that   accounted   for   11.3%   of
consolidated  revenues  during the quarter  ended  June  30,
2004.   The  growth  in volume was driven  as  well  by  the
addition  of new licensee operations within the  past  year,
the  maturation  of  the two Florida company  stations  that
opened  during  the third quarter of fiscal  2002,  and  the
Allstates  truck brokerage operation.  Sales  for  the  nine
month  period ended June 30, 2004 increased by approximately
$6.3  million, or 18.6%, to $40,119,000 compared to the nine
month period ended June 30, 2003, for the same reasons.

                                8
<PAGE>

     Domestic revenues increased by approximately $3,513,000
or 40.7%, to $12,150,000 during the three-month period ended
June  30,  2004  in  comparison to the same  period  in  the
previous year, and increased by approximately $6,921,000  or
27.3%, to $32,314,000 during the nine months ended June  30,
2004  compared  to  the  same  period  in  the  prior  year.
International  revenues of $2,415,000  for  the  three-month
period  ended June 30, 2004 approximated that  of  the  same
period  of the previous year.  International sales generated
during  the  nine  months ended June 30, 2004  decreased  by
approximately $634,000 or (7.5%), to $7,806,000,  reflecting
the  effect  of  the  chartered aircraft  service  that  the
Company    provided   in   the   previous    fiscal    year.
International revenues of the comparative nine-month  period
ended  June 30, 2003 included approximately $1.8 million  of
one-time  billing  to one customer for  the  arrangement  of
international chartered aircraft.  The Company was asked  to
make  these  special  arrangements by  its  customer  as  an
emergency   response  to  the  backlog  of   ocean   freight
deliveries  that resulted from the lock out  of  West  Coast
ports.


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 4.1%,
to  67.9%,  for  the three months ended June 30,  2004,  and
increased by 3.3%, to 67.4% for the nine months then  ended,
in  comparison  to the respective periods  in  the  previous
year.   This  higher  cost of sales percentage  during  both
periods can be attributed primarily to increased competition
for  freight  business in the marketplace  as  well  as  the
addition  of certain lower margin business that the  Company
attained  during the nine months ended June 30,  2004.    In
absolute terms, the cost of sales increased by approximately
$2,841,000  or 40.3%, to $9,886,000 during the three  months
ended  June 30, 2004, and increased approximately $5,355,000
or  24.7%,  to $27,039,000 for the nine months  then  ended,
versus  each  of the comparative periods in the prior  year,
reflecting  the  increased  sales  volume.   Gross   margins
decreased  to 32.1% during the quarter ended June  30,  2004
from  36.2% in the same quarter of the previous fiscal year.
For the nine-month period ended June 30, 2004, gross margins
decreased  to  32.6% from 35.9% in the same  period  of  the
prior  fiscal year.  Gross profit increased by approximately
$676,000  to $4,679,000 for the three months ended June  30,
2004, and increased by approximately $932,000 to $13,081,000
during   the  nine  months  then  ended,  versus  the   same
respective periods of the prior year.


Selling, General and Administrative Expenses

     As  a percentage of sales, operating expenses decreased
by  6.2%  for  the  three  months ended  June  30,  2004  in
comparison  to  the  three  months  ended  June  30,   2003,
primarily reflecting a reduction in personnel and facilities
expenses,  as well as licensee commissions, in  relation  to
total sales.  For the nine month period ended June 30, 2004,
operating  expenses decreased as a percentage  of  sales  by
6.2%  in comparison to the nine months ended June 30,  2003,
for the same reasons.  In absolute terms, operating expenses
increased  by approximately $346,000 or 8.8%, to  $4,287,000
during  the  three-month  period  ended  June  30,  2004  as
compared  to  the  same  period in the  prior  fiscal  year,
primarily  due  to  higher licensee commission  expense  and
higher  personnel costs for the period.  For the nine months
ended  June  30,  2004,  operating  expenses  decreased   by
approximately $137,000 or 1.1%, to $12,377,000  compared  to
the  same period of the previous fiscal year.  This decrease
primarily reflects a reduction in personnel costs, offset by
increases in other administrative expenses.

     Allstates pays commissions to licensees as compensation
for generating profits to the Company.  Licensee commissions
and royalties paid pursuant to licensee agreements increased
by  approximately $225,000 for the three-month period  ended
June  30,  2004  in  comparison to the same  period  in  the
previous  year,  reflecting the addition  of  four  licensee
operations  over  the past year.  Licensee  commissions  and
royalties  increased modestly by approximately  $26,000  for
the  nine  months ended June 30, 2004 in comparison  to  the
same  period  of  the previous fiscal year,  reflecting  the
offsetting impact of the chartered airline service that  the
Company provided in the prior year nine month period through
one of its licensees.

                                9
<PAGE>

     Personnel  expenses increased by approximately  $56,000
during  the three months ended June 30, 2004 as compared  to
the  same  period  of  the prior year, primarily  reflecting
higher  sales  commission costs and executive bonus  accrual
due  to the increase in sales and profits during the period.
For  the  nine  months ended June 30, 2004, personnel  costs
decreased  by  approximately $212,000 in comparison  to  the
same  period  of  the  prior year,  primarily  reflecting  a
reduction in sales and operations personnel during the third
quarter   of  fiscal  2003,  as  well  as  the   effect   of
transferring   two  company  stations  to   licensee   owned
operations during the past year.

     Travel and entertainment expense increased for the nine
month comparative period by approximately $31,000, primarily
reflecting  the  overall growth in  sales  as  well  as  the
specific  demands  of  some of the Company's  new  business.
Accounting  fees  increased  by  approximately  $36,000  and
$60,000  for  the  three and nine month comparative  periods
respectively, primarily based on an under accrual of fees as
they related to the fiscal 2003 audit.

     Liability  insurance costs increased  by  approximately
$22,000 and $61,000 for the three and nine months ended June
30,  2004  respectively, as compared to the same periods  of
the previous year.  Primarily, this relates to the Directors
and Officers liability policy that the Company initiated  in
the  fourth quarter of fiscal 2003, as well as higher  cargo
insurance expense due to the increased sales activity.

     MIS  fees,  which represent the expense of  maintaining
the computer system and programming modifications to improve
its  output  and  performance,  decreased  by  approximately
$37,000  during the nine month period ended  June  30,  2004
versus  the  same  period  ended June  30,  2003,  primarily
reflecting enhancements to the Company's EDI capability  and
streamlining  of  customer order entry during  the  previous
fiscal year.

     SG&A expenses presented for the three months ended June
30,  2004 and 2003 are inclusive of expenditures to  related
parties totaling $392,485 and $354,486, respectively.   SG&A
expenses  presented for the nine months ended June 30,  2004
and  2003  are inclusive of expenditures to related  parties
totaling $1,141,830 and $1,069,285, respectively.

Income/(Loss) From Operations

     Operating  income  increased during  the  three  months
ended  June 30, 2004 by approximately $331,000, to $392,000,
as compared to operating income of $61,000 in the same three
month period in the previous year, for the reasons indicated
above.   In  comparison to the respective period  in  fiscal
2003,  the operating margin for the three-month period ended
June 30, 2004 increased by 2.1%, to 2.7% of sales.

     Operating income increased during the nine months ended
June  30, 2004 by approximately $1,069,000, to $703,000,  as
compared to an operating loss of ($366,000) in the same nine
month period in the previous year, for the reasons indicated
above.   In  comparison to the respective period  in  fiscal
2003,  the operating margin for the nine-month period  ended
June 30, 2004 increased by 2.9%, to 1.8% of sales.

Interest Expense

     Interest expense decreased slightly for the three and
nine months ended June 30, 2004 by approximately $1,000 and
$8,000, respectively as compared to the same periods in the
previous year, reflecting lower interest rates on borrowed
funds.

                                10
<PAGE>

Net Income/(Loss)

     Income before income taxes increased to $349,000 during
the  quarter ended June 30, 2004 from $6,000 during the same
period  in  the  prior  year.  The Company  recorded  a  tax
provision  of $184,000 for the quarter ended June  30,  2004
versus zero provision for quarter ended June 30, 2003.   Net
income after tax amounted to approximately $165,000 or  1.1%
of  revenues during the third quarter of fiscal 2004  versus
net  income  of  $6,000  or 0.1% of revenues  in  the  third
quarter of fiscal 2003.

     Income before income taxes increased to $549,000 during
the  nine  months  ended  June  30,  2004  from  a  loss  of
($916,000)  during the same period in the prior  year.   The
Company  recorded a tax provision of $305,000 for  the  nine
months  ended June 30, 2004 as compared to a tax benefit  of
$399,000  for nine months ended June 30, 2003.   Net  income
after  tax  amounted to approximately $244,000  or  0.6%  of
revenues during the first nine months of fiscal 2004  versus
a  net loss of ($517,000) or (1.5%) of revenues in the first
nine months of fiscal 2003.




Liquidity and Capital Resources

     Net    cash   used   for   operating   activities   was
approximately  $124,000 for the nine months ended  June  30,
2004,  compared  to  cash  flow provided  by  operations  of
approximately  $97,000 for the nine months  ended  June  30,
2003.   For  the nine months ended June 30, 2004,  cash  was
used  to finance an increase in accounts receivable,  offset
by  the  Company's profit during the period as  well  as  an
increase in accounts payable. For the nine months ended June
30, 2003, cash was primarily provided by the receipt of loan
funds due from a third party, as well as a refund of federal
tax  payments, offset by a decrease in accounts payable  and
the net losses of the Company during the period.

     At  June 30, 2004, the Company had cash of $106,000 and
net  working  capital of $1,013,000, compared with  cash  of
$50,000  and net working capital of $1,075,000 respectively,
at  June 30, 2003.  The decrease in working capital at  June
30, 2004 over June 30, 2003 is primarily attributable to the
payment  made  in connection with a licensee agreement  that
Allstates  entered  in  to in fiscal  2004,  offset  by  the
profits of the Company over the past twelve months.

     During the first quarter of fiscal 2004, Allstates
entered into a licensee agreement with another party that
would result in that party owning the rights to three
licensee operations commencing January 31, 2004.  As part of
the agreement, Allstates WorldCargo agreed to pay in
installments a sum of $300,000 to the licensees as a start-
up fee.  As of June 30, 2004, the Company paid that amount
in full.  Allstates has capitalized this expenditure as a
leasehold improvement and will depreciate it over the ten-
year life of the contract

     The  Company's investing activities were  comprised  of
expenditures  for capital equipment, primarily  representing
purchases of computer hardware and software.  For  the  nine
months  ended  June 30, 2004, capital equipment expenditures
amounted    to   approximately   $82,000,   while    capital
expenditures amounted to approximately $67,000 for the  nine
months ended June 30, 2003.


     The  Company  has a commercial line of  credit  with  a
bank,  pursuant  to  which  the Company  may  borrow  up  to
$2,000,000,  based on a maximum of 70% of eligible  accounts
receivable.   Per the agreement, which expires  January  31,
2005, interest on outstanding borrowings accrues at the Wall
Street  Journal's prime rate of interest (4.00% at June  30,
2004).   The  interest  rate is predicated  on  the  Company
maintaining a compensating account balance in a non-interest
bearing account equal to at least $230,000.  If such average
compensating balances are not maintained, the interest  rate
will  increase  by  1%  over  the rate  currently  accruing.
Outstanding  borrowings  on  the  line  of  credit   totaled
$1,250,000 as of June 30, 2004.

                                11
<PAGE>

Forward Looking Statements

The Company is making this statement in order to satisfy the
"safe harbor" provisions contained in the Private Securities
Litigation Reform Act of 1995.  The statements contained in
all parts of this document (including the portion, if any,
appended to the Form 10-K) including, but not limited to,
those relating to the availability of cargo space; the
Company's 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; 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>

ITEM 3    CONTROLS AND PROCEDURES

(a)     Evaluation of Disclosure Controls and Procedures.  The Company's
principal executive officer and principal financial officer, based on their
evaluation of the Company's disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) as of a date within 90 days prior to
the filing of this Quarterly Report on Form 10Q, concluded that the Company's
disclosure controls and procedures are adequate and effective for the
purposes set forth in the definition in the Exchange Act rules.

(b)     Changes in Internal Controls.  There were no significant changes in
the Company's internal controls or in other factors that could significantly
affect the Company's internal controls subsequent to the date of the
evaluation.

                                     13
<PAGE>


PART II

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

ITEM 1    LEGAL PROCEEDINGS

There has been no material change in our legal proceedings since
the filing of our Form 10-K for the period ended September 30, 2003.



ITEM 2    CHANGES IN SECURITIES AND USE OF PROCEEDS

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


                                      14


<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 13, 2004
        ---------------------------------               -----------------
          Sam DiGiralomo, President and CEO




BY:       /s/ Craig D. Stratton               DATED:    August 13, 2004
        ---------------------------------               -----------------
          Craig D. Stratton, CFO, Secretary,
        Treasurer and Principal Financial Officer




                                     -15-