UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

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

For the quarterly period ended May 31, 1998
                                       OR

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transition period from ________ to ___________

                         Commission file number: 0-1460

                              ANDERSEN GROUP, INC.
             (Exact name of Registrant as specified in its charter)

                DELAWARE                                         13-4008747
(State or other jurisdiction of incorporation                 (I.R.S. Employer
           or organization)                                  Identification No.)


515 Madison Avenue, New York, New York                             10022
(Address of principal executive offices)                     (Zip Code)

                                 (212) 826-8942
              (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  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ____


    As of July 6, 1998,  there were 1,935,378  shares of the Registrant's no par
value common stock outstanding.

Title                                               Outstanding

Common Stock, $0.01 par value per share             Authorized 6,000,000 shares;
                                                         Issued 1,958,478









                              ANDERSEN GROUP, INC.
                                    FORM 10-Q

                                TABLE OF CONTENTS


                                                                        Page No.

Part I - Financial Information

     Item 1 - Financial Statements:

              Consolidated Balance Sheets
                  May 31, 1998 and February 28, 1998                          3

              Consolidated Statements of Operations for the
                  Three Months Ended May 31, 1998 and 1997                    4

              Consolidated Statements of Cash Flows for the
                  Three Months Ended May 31, 1998 and 1997                    5

              Notes to Consolidated Financial Statements                      6

      Item 2 - Management's Discussion and Analysis of
                   Financial Condition and Results of Operations              8

      Item 3 - Quantitative and Qualitative Disclosures About Market Risk     9


Part II - Other Information

      Item 1 - Legal Proceedings                                             10

      Item 4 - Submission of Matters to a Vote of Security Holders           11

      Item 6 - Exhibits and Reports on Form 8-K                              11


Signatures                                                                   12







<PAGE>


Part I.  Financial Information
Item 1.  Financial Statements

                              ANDERSEN GROUP, INC.
                           Consolidated Balance Sheets
                                 (In thousands)

                                                                       
                                             May 31, 1998      February 28, 1998
                                             ------------      -----------------
ASSETS                                       (Unaudited)
Current assets:
   Cash and cash equivalents                  $ 4,160              $ 2,516
   Marketable securities                        9,607                9,001
   Receivable from sale of subsidiary             621                3,521
   Accounts and other receivables less
     allowances of $133 and $130                4,588                3,870
   Inventories                                  5,508                8,076
   Prepaid expenses and other assets              158                  142
                                              --------             --------

     Total current assets                      24,642               27,126
                                              --------             --------

Property, plant and equipment                  21,940               21,854
Accumulated depreciation                      (12,690)             (12,411)
                                              --------             --------

     Property, plant and equipment, net         9,250                9,443
                                              --------             --------

Prepaid pension expense                         4,735                4,665
Investments                                     1,830                1,815
Other assets                                    1,961                1,722
                                              --------             --------

                                              $42,418              $44,771
                                              ========             ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Current maturities of long-term debt       $   595              $   595
   Short-term borrowings                          952                2,183
   Accounts payable                               646                  951
   Other current liabilities                    2,726                3,352
   Deferred income taxes                        1,122                1,286
                                              --------             --------

     Total current liabilities                  6,041                8,367
                                              --------             --------

Long-term debt, less current maturities         4,407                4,459
Subordinated note payable, 
     net of unamortized discount                7,307                7,300
Other liabilities                               1,963                1,888
Deferred income taxes                           2,567                2,561
                                              --------             --------
     Total liabilities                         22,285               24,575
                                              --------             --------
   
Stockholders' equity:
   Cumulative convertible preferred stock       4,776                4,769
   Common stock                                 2,103                2,103
   Additional paid-in capital                   3,249                3,248
   Retained earnings                           10,107               10,158
   Treasury stock                                (102)                 (82)
                                              --------             --------
     Total stockholders' equity                20,133               20,196
                                              --------             --------

                                              $42,418              $44,771
                                              ========             ========
                    
See accompanying notes to consolidated financial statements.




<PAGE>




                              ANDERSEN GROUP, INC.
                      Consolidated Statements of Operations
                      (In thousands, except per share data)
                                   (unaudited)

                                                        Three months ended
                                                  May 31, 1998      May 31, 1997
                                                  ------------      ------------
Revenues:
   Net sales                                         $ 7,685           $ 6,048
   Investment and other income                           146               290
                                                     --------          --------

                                                       7,831             6,338
                                                     ---------         --------

Costs and expenses:
   Cost of sales                                       5,170             3,975
   Selling, general and administrative                 1,624             1,438
   Research and development                              487               345
   Interest expense                                      461               228
                                                      --------         --------

                                                       7,742             5,986
                                                      --------         --------

Income from continuing operations before income taxes     89               352
Income tax expense                                        36               135
                                                      --------         --------

Income from continuing operations                         53               217
Income from discontinued operations net of income taxes    -                50
                                                      --------         --------

Net income                                                53               267
Preferred dividends                                     (103)             (126)
                                                      --------         -------- 

Income (loss) applicable to common shares              ($ 50)            $ 141
                                                      ========         ========

Earnings (loss) per common share, basic and diluted:
   Continuing operations                              ($0.03)            $0.05
   Discontinued operations                              0.00              0.02
                                                      --------         --------
   Net income (loss)                                  ($0.03)            $0.07
                                                      ========         ========


See accompanying notes to consolidated financial statements.


<PAGE>


                              ANDERSEN GROUP, INC.
                      Consolidated Statements of Cash Flows
                                 (In thousands)
                                   (unaudited)
                                                        Three months ended
                                                  May 31, 1998      May 31, 1997
                                                  ------------      ------------


Cash flows from operating activities:
Net income                                            $ 53              $ 267

Adjustments to reconcile net income to net cash
 provided by (used in) operating activities:
  Depreciation, amortization and accretion             367                384
  Deferred income taxes                               (158)                23
  Pension income                                       (70)               (61)
  Net losses (gains) from marketable securities
    and investments                                    229                (78)
  Purchases of marketable securities                (1,405)              (512)
  Proceeds from sales of marketable securities         570                  -
  Proceeds from redemption of Digital Graphix 
    investment                                           -              1,066

Changes in operating assets and liabilities:
  Accounts and notes receivable                       (718)            (1,056)
  Inventories                                        2,568               (538)
  Prepaid expenses and other assets                    (18)               354
  Accounts payable                                    (305)               106
  Accrued expenses and other long-term obligations    (112)                 1
                                                    --------           --------

  Net cash provided by (used in) operating 
    activities                                        1,001               (44)
                                                    --------           -------- 

Cash flows from investing activities:
  Purchases of property and equipment, net             (343)              (714)
  Proceeds from sale of subsidiary                    2,400                  -
                                                    --------           --------
 
  Net cash provided by (used in) investing 
    activities                                        2,057               (714)
                                                    --------           --------

Cash flows from financing activities:
  Principal payments on long-term debt                  (52)              (105)
  Issuance (repayment) of short term debt, net       (1,231)               510
  Stock options exercised                                23                  -
  Purchase of treasury stock                            (42)                 -
  Preferred dividends paid                             (112)                 -
                                                    --------           -------- 

  Net cash provided by (used in) financing
    activities                                       (1,414)               405
                                                    --------           --------

  Net increase (decrease) in cash and cash 
    equivalents                                       1,644               (353)

  Cash and cash equivalents--beginning of period      2,516              3,219
                                                    --------           --------

  Cash and cash equivalents--end of period           $4,160             $2,866
                                                    ========           ========

See accompanying notes to consolidated financial statements.




<PAGE>


ANDERSEN GROUP, INC.
Notes to Consolidated Financial Statements

(1)      Accounting Policies

         The accompanying  interim financial statements and related notes should
be read in conjunction  with the Consolidated  Financial  Statements of Andersen
Group, Inc. and related notes as contained in the Annual Report on Form 10-K for
the fiscal  year ended  February  28,  1998.  The interim  financial  statements
include all adjustments  (consisting only of normal  recurring  adjustments) and
accruals necessary in the judgment of management for a fair presentation of such
statements.  In addition,  certain reclassifications have been made to the prior
period  financial  information  so  that  it  conforms  to  the  current  period
presentation.

(2)      Marketable Securities

Marketable securities consisted of the following (in thousands):


                                              May 31, 1998     February 28, 1998
                                              ------------     -----------------
Common stock of savings banks                    $6,711             $5,611
Common stock of Centennial Cellular                   -                430
C A Emerging Russia Fund                          1,767              2,422
Portfolio of Ukraine stocks                         232                314
Common stock of Bank Handlowy                       378                348
Renaissance Russian Bond Fund                       503                  -
Valuation reserve - foreign investments            (475)              (617)
Municipal bonds                                     491                493
                                                 --------          --------

                                                  $9,607            $9,001
                                                 ========          ========

(3)      Inventories

Inventories consisted of the following (in thousands):

                                              May 31, 1998     February 28, 1998
                                              ------------     -----------------
Raw material                                     $1,862             $2,989
Work in process                                   3,979              6,509
Finished goods                                    2,115                657
                                                --------           --------    
                                                  7,956             10,155
LIFO Reserve                                      2,448              2,079
                                                --------           --------
                                                $ 5,508             $8,076
                                                ========           ========

 (4)      Discontinued Operations

         Effective  February  28,  1998,  the Company sold the net assets of Ney
Ultrasonics Inc., and recorded a net gain of $97,000 after income taxes.  During
the quarter ended May 31, 1998, the Company received  $2,400,000 of the purchase
price and an  additional  $500,000 was being held by an escrow  agent  pending a
review of the year-end  financial  information and  finalization of the purchase
price.  While this process has not yet been  completed,  the Company  expects to
receive less consideration from the sale than originally estimated. However, the
estimate  of the net gain on sale has not  changed  because,  in the  opinion of
management,  accruals made at the Company's  fiscal year end will be adequate to
cover the change in consideration.

(5)      Income Taxes

         Income tax expense  represents an estimate of the effective  income tax
rate for the current fiscal year.


(6)      Dividends

         During   February  1998, the  Company   amended  its   certificate   of
incorporation  to modify the terms of the  Company's  Series A  Preferred  Stock
(Preferred  Stock) to provide  for an annual  fixed  dividend  rate of $1.50 per
share of Preferred  Stock and to eliminate the mandatory  redemption  feature of
the preferred stock.


(7)      Earnings Per Share

         Earnings per share are computed based on the weighted average number of
common and common  equivalent shares  outstanding.  Diluted net income per share
assumes full conversion of all  convertible  securities into common stock at the
later of the beginning of the year or date of issuance, unless antidilutive. For
the  three-month  period ended May 31, 1998, the effect of such  conversions has
been antidilutive.

(8)      Business Segments and Export Sales

During  the  three  months ended May 31,  1998,  the  Company  operated  in  two
continuing segments, Electronics, which comprises the operations of The J.M. Ney
Company (J.M. Ney), and Corporate, which includes the Company's investment, real
estate and corporate administrative activities. Operating income consists of net
sales, investment and other income, less cost of sales and selling,  general and
administrative  expenses directly allocated to the industry segments.  Corporate
revenues  consist of investment and other income not  attributable  to J.M. Ney.
Corporate  identifiable  assets  include  marketable  securities  and short-term
investments, and assets not directly attributable to J.M. Ney.

Summarized  financial  information  for  business  segments  is as  follows  (in
thousands):

Three months ended:                              May 31, 1998       May 31, 1997
                                                 ------------       ------------

Revenues:
  Electronics                                       $7,661             $6,046
  Corporate                                            170                292
                                                   --------           --------
                                                    $7,831             $6,338
                                                   --------           --------
Operating income (loss):
  Electronics                                       $1,036             $  795
  Corporate                                           (486)              (215)
                                                   --------           --------
                                                    $  550             $  580
                                                   --------           --------
Interest expense:
  Electronics                                       $ 342              $   50
  Corporate                                           119                 178
                                                   --------           --------
                                                    $ 461              $  228
                                                   --------           --------
Depreciation, amortization and accretion:
  Electronics                                       $ 331              $  323
  Ultrasonics                                           -                  23
  Corporate                                            36                  38
                                                   --------           --------
                                                    $ 367              $  384
                                                   --------           --------
Capital expenditures:
  Electronics                                       $ 335              $  711
  Ultrasonics                                           -                   3
  Corporate                                             8                   -
                                                   --------           --------
                                                    $ 343              $ 714
                                                   --------           --------

As of:                                      May 31, 1998       February 28, 1998
                                            ------------       -----------------
Identifiable assets:
  Electronics                                  $25,831              $25,337
  Corporate                                     16,587               19,434
                                               --------             --------
                                               $42,418              $44,771
                                               --------             --------

Export sales for the three  months  ended May 31, 1998 and 1997 were  $1,091,000
and  $1,054,000,  respectively.  Such sales were made  primarily to customers in
Europe and the Pacific Rim.

During the three months ended May 31, 1998, sales to two customers accounted for
12.0% and 10.3% of net sales, respectively.


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

REVENUES
Revenues for the three months ended May 31, 1998 totaled $7,831,000, which was a
23.6% increase from revenues from continuing  operations during the prior fiscal
year's first quarter.  The increase  represents the net of 27.1% increase in net
sales and $144,000 decline in investment and other income.

Sales  generated  by  J.M.  Ney,  the  Company's  wholly-owned  manufacturer  of
electronic  materials and components,  increased due to higher volumes of molded
contacts sold to customers in the automotive  market,  increased  precious metal
materials  sold into the dental implant market, and the impact of higher selling
prices for many of its  products  due to a  significant  increase  in the market
price of palladium,  a critical  element in J.M.  Ney's  products.  For the most
recent quarter, the average market price for palladium was approximately $315.00
per troy ounce,  versus an average  price of $160.00  per troy ounce  during the
quarter ended May 31, 1997.

Investment and other income totaled  $146,000 for the three months ended May 31,
1998,  versus  $290,000  of such  income  for the  quarter  ended May 31,  1997.
Significant  components of these revenues during each period were as follows (in
thousands):
                                                       Three Months ended
                                                  May 31, 1998      May 31, 1997
                                                  ------------      ------------
Net gains from domestic investment portfolio         $ 334            $   9
Net (losses) gains from Russian and
  Eastern European portfolio                          (561)              70
Interest and dividends                                  82               48
Rental income                                          132              108
Other, net                                             159               55
                                                    -------         --------

                                                     $ 146            $ 290
                                                    ========        ========

The  net  gains from  the  domestic  investment  portfolio  in  the  most recent
quarter  represents  unrealized  appreciation of investment  holdings,  with the
exception of $140,000 of  appreciation  since  February 28, 1998 relating to the
Company's investment in Centennial Cellular,  which was sold during the quarter.
Net (losses) gains from the Russian and Eastern European portfolio for the three
month  period  ended May 31,  1998 and 1997 are  presented  net of a decrease of
$142,000  and an increase  of  $602,000,  respectively,  in  valuation  reserves
established  to  provide  for  liquidity  and   volatility   concerns  of  these
investments.  Other income during the most recent quarter includes approximately
$85,000  of  charges  by J.M.  Ney to its  refining  customers  to  reflect  the
significant  increase of financing  precious metal hedges for this aspect of the
business.

COST OF SALES
Cost of sales during the three months  ended May 31, 1998  represented  67.3% of
net sales,  versus cost of sales  during the prior fiscal  year's first  quarter
which were 65.7% of net sales. The decline in average margin from 34.3% to 32.7%
is due primarily to higher costs for palladium, which were passed on in the form
of higher selling prices, but without the same degree of mark-up, and to product
mix of sales,  which was more heavily  weighted to sales of precious metal alloy
material than in the prior year's first quarter.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and  administrative expenses for the three months ended May 31,
1998  totaled $1,624,000, which is a 12.9% increase from the prior fiscal year's
first quarter.  The increase was due to additional  costs associated with higher
sales volume,  including higher marketing and product  management  costs, and to
costs  incurred in connection  with  computer  systems  enhancements to position
the Company to be Year 2000 compliant on a timely basis.


RESEARCH AND DEVELOPMENT EXPENSES
Research and  development  expenses for  the  three  months  ended  May 31, 1998
increased  by  $142,000,  or  41.2%,  because  of  an  increased  commitment  to
engineering and research projects, and as a result of lower allocations of these
costs to cost of sales.

INTEREST EXPENSE
Interest  expense  during the three months ended May 31, 1998 totaled  $461,000,
versus  $228,000  during the prior  fiscal year.  Of this  amount,  $342,000 was
incurred by J.M. Ney from $7.5 million of subordinated  debt, high interest rate
palladium  consignment  leases  to  hedge  certain  manufacturing  and  refining
precious  metal  positions,  and from various  capitalized  leases.  The Company
incurred  lower levels of interest as a result of prior year  payments to reduce
outstanding  balances  of its  10  1/2%  debentures  and to  repay  certain  IRB
obligations.  The Company also  incurred  interest on a demand  loan,  which was
secured by a portion of the Company's portfolio of marketable securities.

INCOME TAX EXPENSE
Income taxes have been accrued based on estimated effective tax rates.

PREFERRED DIVIDENDS
For the three months ended May 31, 1998,  dividends  were accrued based upon the
revised terms,  which provide for quarterly  payments of dividends at the annual
rate of $1.50 per share. For the three months ended May 31, 1997, dividends were
accrued at the rate of $.4375 per preferred  share in accordance with the former
terms of this security.

LIQUIDITY AND CAPITAL RESOURCES
At May 31, 1998 the Company's  consolidated  cash and marketable  securities was
nearly $13.8 million,  an increase of $2.25 million during the quarter.  Reduced
inventory levels, and the collection of a portion of the purchase price from the
sale of Ney Ultrasonics provided the increased liquidity.

During the quarter, the Company made additional  investments in its portfolio of
domestic  savings bank stocks,  and J.M. Ney made a short-term  investment  in a
Russian  bond  fund.  At May 31,  1998,  33.3%  of  the  Company's  consolidated
stockholders'  equity was  invested  in  domestic  common  stocks  of  financial
institutions, while 21.0% of consolidated stockholders' equity is represented by
short-term and longer term  investments in emerging  markets of Russia,  Ukraine
and Poland.

During the three  months ended May 31, 1998,  the market price of  palladium,  a
primary  component in most of J.M. Ney's products,  increased  dramatically  and
fluctuated from a low of $234.50 per ounce to a high of $417.00 per ounce due to
reduced  shipments of palladium from Russia.  While J.M. Ney believes its metals
hedging   program  and   development  of  proprietary   alloys  and  new  metals
technologies  will protect both its sales and earnings for the near term,  there
can be no assurance  that J.M. Ney will not suffer from adverse  affects if this
market condition persists.

As a result of  covenants  contained  in its  borrowing  agreement,  J.M. Ney is
restricted from paying dividends or otherwise  transferring funds to the Company
outside the ordinary course of business except as defined in certain  covenants.
At May 31, 1998,  J.M.  Ney's  working capital and net worth (net of liabilities
to  the  Company)  totaled  approximately  $9.55  million  and   $7.11  million,
respectively.  The Company  believes that income generated  from its investments
or funds  generated from  liquidation  of existing  investments,  and  permitted
payments from J.M. Ney  will be sufficient to meet anticipated  working  capital
and debt service requirements.


Item 3.  Quantitative and Qualitative About Market Risk

         Not required.




<PAGE>


Part II.  Other Information

Item 1.  Legal Proceedings

         Morton International, Inc. v. A.E. Staley Mfg. Co. et al. and Velsicol 
Chemical Corp. v. A.E. Staley Mfg. Co. et al.

As previously  reported in the Company's  Form 10-K for the year ended  February
28, 1997, in July 1996,  two companion  lawsuits were filed in the United States
District  Court for the District of New Jersey,  by various owners and operators
of  the  Ventron-Velsicol  Superfund  Site  (Site).  The  lawsuits,  which  were
subsequently  consolidated,  were filed  under the  Comprehensive  Environmental
Resource Compensation and Liability Act (CERCLA),  the Resource Conservation and
Recovery Act, the New Jersey Spill Act and New Jersey common law,  alleging that
the  defendants  (over 100  companies,  including  J.M. Ney) were  generators of
certain  wastes  allegedly  processed at the site. The lawsuits seek recovery of
costs incurred and a declaration of future liability for costs to be incurred by
the owners and operators in studying and remediating the Site.

Based on preliminary  disclosure of  information  relating to the claims made by
plaintiffs and defendants,  J.M. Ney, which produced and refined precious metals
used  in  dental  amalgams,  is one of the  smaller  parties  to  have  had  any
transactions  with one of the  plaintiff's  predecessors  in interest.  However,
under both CERCLA and the New Jersey Spill Act, a party is jointly and severally
liable,  unless  there  is a basis  for  divisibility.  At this  time,  there is
insufficient  information  to determine the  appropriate  allocation of costs as
between or among the defendant  group, if liability to the generator  defendants
is ultimately proven.  Moreover,  because of the incomplete status of discovery,
the Company is unable to predict the probable  outcome of the  lawsuit,  whether
favorable or unfavorable,  and has no basis to ascertain a range of loss, should
any  occur,   with  respect  to  an  outcome  that  might  be  characterized  as
unfavorable.

The Company continues to investigate whether any liability,  which may accrue at
some  future  date,  may be  subject to  reimbursement  in whole or in part from
insurance  proceeds.  The Company  intends to continue to vigorously  defend the
lawsuit.

         James S. Cathers and Sylvia Jean Cathers, his wife v. Kerr Corporation,
Whip-Mix  Corporation,  The J.M. Ney Company and Dentsply Corporation, Inc.

As previously  reported in the Company's  Form 10-Q for the Quarter ended August
31, 1997,  in August  1997,  J.M. Ney was included as a defendant in an asbestos
related civil action for negligence and product  liability filed in the Court of
Common Pleas of Allegheny  County,  Pennsylvania,  in which the Plaintiffs claim
damages in excess of $30,000 (the  jurisdictional  limit) from being  exposed to
asbestos and asbestos products alleged to have been manufactured and supplied by
the  defendants,  including  Ney's  former  Dental  Division,  while  one of the
Plaintiffs  worked in a dental lab from 1960 to 1986 at an unspecified  location
in  Pittsburgh,  Pennsylvania.  The  Plaintiffs  allege  that this  exposure  to
asbestos  and  asbestos  products  caused  the  wrongful  death  of  one  of the
Plaintiffs  from cancer  (mesothelioma).  The  Plaintiffs  have not provided any
specific  allegations of facts as to which  defendants may have  manufactured or
supplied  asbestos  and asbestos  products  which are alleged to have caused the
injury.

The Company has determined  that it has insurance that  potentially  covers this
claim and has called upon the  insurance  carriers to provide  reimbursement  of
defense costs and liability,  should any arise. As of this date, the Company has
no basis to  conclude  that the  litigation  may be  material  to the  Company's
financial  condition or business.  The Company intends to vigorously  defend the
lawsuit.

         Anthony  Nicholas  Georgiou,  et al. v. Mobil Exploration and Producing
Services, Inc., Metromedia International Telecommunications, Inc., et al.

As  previously  reported  in  the  Company's   Form  10-K  for  the  year  ended
February 28, 1998, on January 14, 1998,  Anthony  Nicholas  Georgiou,  et al. v.
Mobil  Exploration  and  Producing  Services,   Inc.,  Metromedia  International
Telecommunications,  Inc., et al., was filed in the United States District Court
for the  Southern  District  of Texas.  Plaintiffs  claim  that the  defendants,
including  Registrant and Oliver R. Grace,  Jr. the  Registrant's  President and
Chief Executive Officer, interfered with plaintiffs' business relationships with
several companies involving certain oil exploration and production  contracts in
Siberia and telecommunications contracts in the Russian Federation. The specific
counts   are  civil   conspiracy,   tortious   interference   with   contractual
relationships   and   tortious   interference   with   prospective   contractual
relationships.  Plaintiffs have alleged actual damages in excess of $500,000,000
and have sought  punitive  damages of three times alleged  actual  damages.  The
Company  filed  its  answer  denying  each  of the  substantive  allegations  of
wrongdoing  contained in the  complaint.  In addition,  the Company has moved to
dismiss this case in Texas against it for lack of personal jurisdiction.

The Company  believes that this action  against it will be dismissed for lack of
personal  jurisdiction.  If the action were not dismissed,  the Company believes
that it has  meritorious  defenses and will  continue to  vigorously  defend the
action. The Company is investigating whether any liability,  which may accrue at
some  future  date,  may be  subject to  reimbursement  in whole or in part from
insurance  proceeds.  As of this date,  the Company has no basis to conclude the
litigation may be material to the Company's financial condition or business.

Item 4.  Submission of Matters to a Vote of Security Holders

(a)      The  Registrant's  Annual Meeting of Stockholders  was held on June 23,
         1998 for the purpose of (i) electing Directors and (ii) the approval of
         a merger of the Company  into a  wholly-owned  Delaware  subsidiary  in
         order to effect the change of the Company's state of incorporation (the
         "Reincorporation").


(b) The following Directors were elected:

                  Oliver R. Grace, Jr.
                  Francis E. Baker
                  Peter N. Bennett
                  John S. Grace
                  Louis A. Lubrano
                  James J. Pinto

(c)      The  only  other  matter  voted  upon  at the  Annual  Meeting  was the
         Reincorporation.   The  Company's  Common  and  Preferred  Stockholders
         approved this.

The number of votes of Common Stock for or against each of the  Directors was as
follows:
<TABLE>
<CAPTION>
<S>                                     <C>                                    <C>    
--------------------------------------------------------------------------------------------
Director                                Votes For                              Votes Against
--------                                ---------                              -------------
Oliver R. Grace, Jr.                    1,779,548                              8,165
Francis E. Baker                        1,779,425                              8,288
Peter N. Bennett                        1,780,795                              6,918
John S. Grace                           1,778,925                              8,788
Louis A. Lubrano                        1,779,548                              8,165
James J. Pinto                          1,780,795                              6,918
---------------------------------------------------------------------------------------------
</TABLE>

The number of votes  cast for,  against  or  withheld,  as well as the number of
abstentions and broker non-votes of each class of capital stock entitled to vote
on the reincorporation proposal is set for below:
<TABLE>
<CAPTION>
<S>                      <C>                    <C>                    <C>                     <C>

-----------------------------------------------------------------------------------------------------------
Class of stock           For                    Against                Abstain                 Non-Vote
--------------           ---                    -------                -------                 --------
Common                   1,438,454              6,501                  3,605                   343,153
Preferred                204,136                40                     0                       52,240
-----------------------------------------------------------------------------------------------------------
</TABLE>


Item 6.  Exhibits and Reports on Form 8-K

(a) Exhibits required by Item 601 of Regulation S-K:

     Exhibit               Description
    ---------             -------------

     Exhibit 27            Financial Data Schedule.

     Exhibit 27.1          Restated Financial Data Schedule Quarter
                           Ended May 31, 1997.

No reports on Form 8-K were filed during the quarter ended May 31, 1998.


<PAGE>


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


ANDERSEN GROUP, INC.

By:      /s/ Oliver R. Grace, Jr.
         Oliver R. Grace, Jr.
         President and Chief Executive Officer

Date:    July 13, 1998



By:      /s/ Andrew M. O'Shea
         Andrew M. O'Shea
         Chief Financial Officer
         The J.M. Ney Company
         (Principal Financial Officer of the Company)

Date:    July 13, 1998