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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON D. C. 20549

                                   FORM 10-QSB/A

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the three months ended September 30, 1998

                         Commission File Number 0-10683

                                 HYDROMER, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

       NEW JERSEY                                                22-2303576
------------------------                                    -------------------
(State of incorporation)                                     (I.R.S. Employer
                                                            Identification No.)

35 INDUSTRIAL PKWY, SOMERVILLE, NEW JERSEY                      08876-3518
------------------------------------------                      ----------   
 (Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code:           (908) 526-2828
                                                              --------------
Securities registered pursuant to Section 12(b) of the Act:        None

Securities registered pursuant to Section 12(g) of the Act:

                         COMMON STOCK WITHOUT PAR VALUE
                         ------------------------------
                                (Title of class)

     Check whether the issuer (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 report(s,) and (2) has been subject to such filing requirements for the
past 90 days. Yes (X) No( )

     Indicate the number of shares outstanding or each of the issuer's classes
of Common Stock as of the close of the period covered by this report.


        Class                                Outstanding at September 30, 1998
        -----                                ---------------------------------
                                                        4,367,987
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<PAGE>


                                 HYDROMER, INC.


                              INDEX TO FORM 10-QSB
                               September 30, 1998

                                                                        Page No.
                                                                        --------
Part I -  Financial Information
           Condensed Financial Statements     
          Balance Sheets - September 30, 1998 & June 30, 1998............   2

          Statements of Income for the three months ended
           September 30, 1998 and 1997...................................   3

          Statements of Cash Flows for the three months ended
           September 30, 1998 and 1997...................................   4

          Notes to Financial Statements..................................   5

          Management's Discussion and Analysis of the Financial Condition
           and Results of Operation......................................   6


Part II - Other Information..............................................   7


<PAGE>

<TABLE>
<CAPTION>

                                              HYDROMER, INC.
                                              BALANCE SHEETS


                                                                               September 30,     June 30,
                                                                                (UNAUDITED)     (AUDITED)
                                                                                   1998            1998
                                                                               -------------    ---------
<S>                                                                             <C>            <C>
ASSETS
Current Assets:
    Cash and  cash equivalents .............................................    $   569,105    $   783,475
    Trade receivables less allowance for doubtful accounts of $8,831 for                                 
      both periods .........................................................        500,271        497,579
    Inventory ..............................................................        178,630        176,131
    Other ..................................................................         38,047         42,083
    Prepaid expenses .......................................................        101,979         71,708
    Deferred tax asset .....................................................        200,227        236,235
                                                                                -----------    -----------
Total Current Assets .......................................................      1,588,259      1,807,211

Property and Equipment, net ................................................      1,586,471      1,585,209
Other Assets ...............................................................        126,809        100,117
                                                                                -----------    -----------
                                                                                $ 3,301,539    $ 3,492,537
                                                                                ===========    ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
    Accounts payable .......................................................    $   116,468    $    42,563
    Accrued expenses .......................................................         60,818        232,432
    Current portion of mortgage payable ....................................         56,667         56,667
    Current portion of deferred rental income ..............................        115,500        115,500
    Income tax payable .....................................................         10,641              0
                                                                                -----------    -----------
Total Current Liabilities                                                           360,094        447,162
                                                                                -----------    -----------
Long-term portion of mortgage payable ......................................        779,167        793,333
Long-term portion of deferred rental income ................................        196,793        224,906
                                                                                -----------    -----------
Total Liabilities ..........................................................      1,336,053      1,465,401
                                                                                -----------    -----------
Stockholders' Equity
    Common stock - no  par value, authorized 6,000,000 shares, issued
      and outstanding, 4,378,904 shares ....................................      2,922,708      2,922,708
    Contributed capital ....................................................        577,750        577,750
    Accumulated deficit ....................................................     (1,397,464)    (1,467,182)
    Cash Dividends paid ....................................................       (131,368)          --
    Treasury stock, 10,917 common shares at cost ...........................         (6,140)        (6,140)
                                                                                -----------    -----------
Total Stockholders' Equity                                                        1,965,486      2,027,136
                                                                                -----------    -----------
                                                                                $ 3,301,539    $ 3,492,537
                                                                                ===========    ===========

                                                    2                           


</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                              HYDROMER, INC.
                                           STATEMENTS OF INCOME


                                                                                    Three Months Ended
                                                                                       September 30,
                                                                                    1998           1997
                                                                                 UNAUDITED       UNAUDITED
                                                                                 ------------------------- 
<S>                                                                              <C>            <C>
REVENUES:
    Product sales and services .............................................     $  278,760     $  198,335
    Royalties, options and licenses Fees ...................................        338,180        307,770
                                                                                 ----------     ----------
                                                                                    616,940        506,105
Cost of Product Sales ......................................................         62,194         58,814
                                                                                 ----------     ----------
    Gross profit ...........................................................        554,746        447,291
Selling, General and Administrative ........................................        432,957        349,927
                                                                                 ----------     ----------
    Operating Income .......................................................        121,789         97,364
Interest Income ............................................................          9,457          7,421
Interest Expense ...........................................................         15,204           --
Other Income ...............................................................            328           --
                                                                                 ----------     ----------
    Income before provison for income taxes ................................        116,370        104,785
Provision for Income Taxes Expense .........................................         46,650         41,851
                                                                                 ----------     ----------
    Net Income .............................................................     $   69,720     $   62,934
                                                                                 ==========     ==========
    Income Per Common Share ................................................     $    0.016     $    0.015
                                                                                 ==========     ==========
    Dividends paid, per share ..............................................     $     0.03     $    0.030
                                                                                 ==========     ==========
Weighted Average Common Shares Outstanding .................................     $4,367,987     $4,367,987
                                                                                 ==========     ==========

                                                    3
</TABLE>
<PAGE>


<TABLE>
<CAPTION>
                                              HYDROMER, INC.
                                         STATEMENTS OF CASH FLOWS


                                                                                     Three Months Ended
                                                                                        September 30,
                                                                                     1998          1997
                                                                                  ------------------------
<S>                                                                               <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net Income .............................................................      $  69,720      $  62,934
    Adjustments to reconcile net income to net cash provided by
     operating activities
      Depreciation and amortization ........................................         26,594         11,572
      Gain on sale of securities ...........................................           --             --
      Changes in Assets and Liabilities
        Trade receivables...................................................         (2,693)        10,433
        Inventory ..........................................................         (2,499)        (1,662) 
        Prepaid expenses ...................................................        (30,270)       (41,454)
        Deferred tax asset .................................................         36,008         32,421
        Other assets .......................................................        (22,656)           622
        Accounts payable and accrued liabilities ...........................        (97,710)      (110,834)
        Mortgages and deferred rent payable.................................        (42,280)
        Income taxes payable ...............................................         10,641        (30,793)
                                                                                  ---------      ---------
           Net Cash (Used in) Operating Zctivities .........................        (55,145)       (66,581)
                                                                                  ---------      ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Cash dividends paid ....................................................       (131,367)      (131,368)
    Cash purchases of property and equipment ...............................        (27,858)       (13,212)
                                                                                  ---------      ---------
           Net Cash Provided by (Used in) Investing Activities .............       (159,225)      (144,580)
                                                                                  ---------      ---------
Net Increase (Decrease) in Cash and Cash Equivalents .......................       (214,370)      (211,161)
Cash and Cash Equivalents at Beginning of  Year ............................        783,475        716,045
                                                                                  ---------      ---------
Cash and Cash Equivalents at End of Year ...................................      $ 569,105      $ 504,884
                                                                                  =========      =========


                                                    4
</TABLE>
<PAGE>


                                 HYDROMER, INC.


                          Notes to Financial Statements


In the opinion of management, the accompanying unaudited financial statements
include all adjustments (consisting of only normal adjustments) necessary for a
fair presentation of the results for the interim periods.



                                       5


<PAGE>


                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

The Company's revenues for the quarter ended September 30, 1998 were $616,940 as
compared to $506,105 for the same period last year, or an increase of 21.9%
Revenue is comprised of:

    Royalty revenue from patented products grew to $338,180 up 9.9% over the
    same period last year. There are 23 clients who use our patented
    technologies on their products and this growth is purely from our client's
    increased sales of their products. No new licensees were added during this
    quarter. The company is currently testing other products that have exclusive
    and non-exclusive licensing opportunities.

    Product sales and technology sales were $278,760 for the quarter ended
    September 20, 1998 as compared to $198,335 for the same period last year, an
    increase of 40.6%. This increase is attributable, for the most part, to the
    increase in sales to two clients who are paying a use fee for the
    technology. Actual sales of product were down 21% over the same period last
    year. This decrease was anticipated as many clients accelerated their orders
    in the fourth quarter of last year.

The Company's gross profit was up 24.0% to $554,746 from $447,291 for the same
period last year.

    Gross Profit percentage on sales was 90.0% for the quarter ended September
    30, 1998 as opposed to 88.3% for the same period last year. This increase is
    due to the increase in sales reported for technology sales which carry no
    associated direct costs.

    Royalty income is included in gross profit at 100%.

SG&A expenses increased $83,030 or 23.7% to $432,957, in the quarter ended
September 30, 1998, up from $349,927 for the same period last year.

    This increase is attributable, in part to the increase in depreciation
    expense ($13,000) due to the upgrade of the company's systems and employee
    costs ($66,018) reflecting the increased level of management and technical
    resources.

Earnings before taxes were $116,370 up 11.1% from prior year's results of
$104,785 for the same quarter.

Net earnings were $69,720 for the quarter ended 9/30/98, an increase of 10.8%
over the quarter ended 9/30/98.

Earnings per share were $0.016 for the quarter, up 10.8% over the same period
last year.


                                       6


<PAGE>



Financial Condition

Working capital decreased $131,884 for the quarter, which includes a dividend
payment of $131,367, which was paid to shareholders in September 1998. Excluding
the dividend payment, working capital was flat for the quarter. Management
believes that its current working capital, along with expected income and
expense streams, are sufficient to maintain its current level of operations.

State of Y2K Preparedness

In 1998, the Company formed a Y2K committee of its President and three
Vice-Presidents. The committee has determined:

    1.  The contents of the previous disclosure remain accurate. 
    2.  Re-affirm that the design of all the Company's products do not contain
        any characteristics that will be affected by the Y2K issue.

As to its operations, the Company is still evaluating its suppliers and vendors
for any potential business interruption against a worst case scenario of:

    1.  Loss of power for 14 days, brownouts for 14 days
    2.  Loss of gas for 23 days after 5 days
    3.  Disruption in transportation for 30 days
    4.  Banking failures for 4 weeks

It is anticipated that the costs associated with preparation for the above
business will not have a material effect on the financial statements.
Additionally, the Company anticipates being able to supply its customers with
sufficient products prior to Dec 1, 1999 to cover their needs beyond April 1,
2000.

Should any of the above business interruptions occur beyond 4/1/2001, there will
be a material effect on the Company's financial statements.


                                       7


<PAGE>


PART II  - Other Information


The Company currently has two facilities located in New Jersey. The
manufacturing and quality assurance functions of the Company are located at 35
Columbia Road, Branchburg, New Jersey. The Company signed a five year lease with
a party not affiliated with the Company for the Columbia Rd facility.

    In June 1998, the company purchased the building and land at 35 Industrial
Parkway for expansion. The new facility is secured by a mortgage with a bank and
is partially occupied by Biosearch Medical Products, Inc., the prior owner of
the facility and an affiliated party. The Company has moved its Research and
Development as well as its administrative staff to the new facility. See the
financial statements included herein for the terms of the agreements.

    The facilities will be adequate for the Company's operations for the
foreseeable future.

Item 6. Exhibits and Reports on form 8-K:


a)      Exhibits - none

b)      Reports on form 8-K - There were no reports on Form 8-K filed for 
        the quarter ending September 30, 1997


                                       8


<PAGE>


                                   SIGNATURES


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









                                                   HYDROMER, INC.

                                                   /s/ KEN BRICE
                                                   -------------      
                                                   Ken Brice
                                                   Vice President
                                                   Finance & Administration
                                                   Chief Financial Officer


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