U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C. 20549

                                     FORM 10-QSB

(Mark One)

    X     Quarterly report under Section 13 or 15(d) of the Securities 
---------    Exchange Act of 1934


For the quarterly period ended     June 30, 1998
                               ----------------------

_______ Transition report under Section 13 or 15(d) of the Exchange Act

For the transition period from __________  to  ___________

Commission File Number    0-7855
                        ----------

                            UNITED-GUARDIAN, INC.
-------------------------------------------------------------------------
     (Exact Name of Small Business Issuer as Specified in Its Charter)

          Delaware                                11-1719724
-------------------------------      ------------------------------------
(State or Other Jurisdiction of      (I.R.S. Employer Identification No.)
  Incorporation or Organization)

              230 Marcus Boulevard., Hauppauge, New York 11788
-------------------------------------------------------------------------
                  (Address of Principal Executive Offices)

                              (516) 273-0900
-------------------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

-------------------------------------------------------------------------
       (Former Name, Former Address and Former Fiscal Year, if Changed
          Since Last Report)

         Check  whether the issuer (1) filed all  reports  required to be
filed by  Section  13 or 15(d) of the  Exchange  Act  during  the past 12
months (or for such shorter  period that the  registrant  was required to
file such reports),  and (2) has been subject to such filing requirements
for the past 90 days.

Yes      X                No
    ----------               -----------

         APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                        DURING THE PRECEDING FIVE YEARS

         Check  whether the  registrant  filed all  documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after
the distribution of securities under a plan confirmed by a court.

Yes _________             No ____________

                   APPLICABLE ONLY TO CORPORATE ISSUERS

         State the number of shares  outstanding  of each of the issuer's
classes of common equity, as of     June 30, 1998
                                 -------------------

                              4,881,239
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<PAGE>
                                 UNITED-GUARDIAN, INC.

                                       INDEX


                                                                   Page No.
                                                                   --------
Part I.  Financial Information:

         Consolidated Statements of Earnings -
                  Three and Six Months Ended
                  June 30, 1998 and 1997                               2

         Consolidated Balance Sheets -
                  June 30, 1998 and December 31, 1997                  3-4

         Consolidated Statements of Cash Flows -
                  Six Months Ended
                  June 30, 1998 and 1997                               5

         Consolidated Notes to Financial Statements                    6

         Management's Discussion and Analysis of
                  Financial Condition and Results of
                  Operations                                           7-8

Part II. Other Information                                             8
















                                          1


<PAGE>
                                    UNITED-GUARDIAN, INC.
                             CONSOLIDATED STATEMENTS OF EARNINGS
                                         (UNAUDITED)


                            SIX MONTHS ENDED           THREE MONTHS ENDED
                                JUNE 30,                     JUNE  30,
                            1998         1997          1998         1997   
                            ----         ----          ----         ----   
Revenue:
  Net sales            $ 4,499,595  $ 4,452,665    $ 2,110,696  $ 2,558,077
  Fees and retainers        ---          ---            ---          ---   
                         ---------    ---------      ---------    ---------
                         4,499,595    4,452,665      2,110,696    2,558,077
                         ---------    ---------      ---------    ---------
Costs and expenses:
  Cost of sales          2,623,760    2,728,722      1,190,605    1,536,665
  Operating expenses       973,838      998,620        480,439      528,596
                         ---------    ---------      ---------    ---------
                         3,597,598    3,727,342      1,671,044    2,065,261
                         ---------    ---------      ---------    ---------
      Earnings from
         operations        901,997      725,323        439,652      492,816

Other income (expense):
  Interest expense            (296)     (25,356)           -        (11,329)
  Gain on sale of assets    28,000         -            20,000         -    
  Other                     27,137       11,473         12,128        6,580
                          ---------    ---------      ---------    ---------
        Earnings before
         income taxes      956,838      711,440        471,780      488,067


Provision for
   income taxes            363,200      270,330        182,300      185,430
                         ---------    ---------      ---------    ---------

      Net earnings     $   593,638  $   441,110    $   289,480  $   302,637
                         =========    =========      =========    =========
Basic and diluted 
  earnings per share   $      0.12  $      0.09    $      0.06  $      0.06
                         =========    =========      =========    =========

Basic weighted average
  shares                 4,878,929    4,792,723      4,880,243    4,822,230
                         =========    =========      =========    =========
Diluted weighted
  average shares         4,906,147    4,802,161      4,908,874    4,831,668
                         =========    =========      =========    =========



                           See notes to financial statements.

                                         2

<PAGE>
                              UNITED-GUARDIAN, INC.
                           CONSOLIDATED BALANCE SHEETS



                                               JUNE 30,         DECEMBER 31,
                                                1998               1997
                                            ------------       -------------
              ASSETS                         (UNAUDITED)

Current assets:
    Cash and cash equivalents           $      764,933      $      822,596
    Investments--short term                    517,094             361,723
    Accounts receivable
         (less allowance for doubtful
          accounts of $32,300 at
          June 30, 1998 and 
          December 31, 1997)                 1,064,017             905,896
     Inventories                             1,245,893           1,372,067
     Prepaid expenses and other
          current assets                       221,161             225,854
     Deferred income taxes                     107,111             107,111
                                           -----------         -----------
              Total current assets           3,920,209           3,795,247
                                           -----------         -----------

Property, plant and equipment:
     Land                                       69,000              69,000
     Factory equipment and fixtures          2,302,928           2,333,654
     Building and improvements               1,897,333           1,843,171
     Waste disposal plant                      133,532             133,532
                                           -----------         -----------
                                             4,402,793           4,379,357
      Less: Accumulated depreciation         2,910,823           2,847,870
                                           -----------         -----------
                                             1,491,970           1,531,487
      Assets under capital leases, net           ---                 1,444
                                           -----------         -----------
                                             1,491,970           1,532,931
                                           -----------         -----------

Other assets:
      Processes and patents, net               461,837             533,984
      Split dollar life insurance              348,161             261,559
      Other                                      1,025               2,125      
                                           -----------         -----------
                                               811,023             797,668
                                           -----------         -----------
                                        $    6,223,202      $    6,125,846
                                           ===========         ===========



                         See notes to financial statements.

                                         3


<PAGE>
                              UNITED-GUARDIAN, INC.
                           CONSOLIDATED BALANCE SHEETS



                                             JUNE 30,          DECEMBER 31,
                                               1998                1997
                                          ---------------      ------------
LIABILITIES AND                             (UNAUDITED)
STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                        $  188,677          $  292,632
   Dividends payable                            ---               292,610
   Accrued expense and other                  125,491             165,841
   Taxes payable                                1,954              70,396
                                            ---------           ---------
         Total current liabilities            316,122             821,479
                                            ---------           ---------
Deferred income taxes                          20,116              20,116
                                            ---------           ---------

Stockholders' equity:
   Common stock $.10 par value,               488,124             487,684
      authorized 10,000,000 shares,
      issued and outstanding
       4,881,239 and 4,876,839
      shares respectively
   Capital in excess of par value           3,322,845           3,314,210
   Retained earnings                        2,075,995           1,482,357
                                            ---------           ---------
         Total stockholders' equity         5,886,964           5,284,251
                                            ---------           ---------
                                         $  6,223,202        $  6,125,846
                                            =========           =========





                        See notes to financial statements.


                                       4


<PAGE>
                              UNITED-GUARDIAN, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                                                       SIX MONTHS ENDED
                                                           JUNE 30,
                                                           --------
                                                      1998          1997
                                                    -------        ------

Cash flows provided by operating activities:
  Net earnings                                  $   593,638    $   441,110 
  Adjustments to reconcile net earnings
    to net cash flows from operations:
      Depreciation and amortization                 204,189        188,824 
      Gain on sale of equipment                     (28,000)
     (Increase) decrease in assets:
         Accounts receivable                       (158,121)      (143,193)
         Inventories                                126,174        377,710 
         Prepaid expense and other assets           (80,809)      (106,657)
      Increase (decrease) in liabilities:
         Accounts payable                          (103,955)       119,301 
         Accrued expenses and other                (108,792)       (24,151)
                                                   --------       -------- 
      Net cash provided by operating activities     444,324        852,944 
                                                   --------       -------- 

Cash flows from investing activities:
   Acquisition of property, plant and equipment     (91,081)      (130,258)
   Acquisition of intangible assets                   ---         (100,000)
   Proceeds from the sale of equipment               28,000          ---  
   Purchase of short term investments              (155,371)         ---   
                                                   --------       -------- 
      Net cash (used in) investing activities      (218,452)      (230,258)
                                                   --------       -------- 
Cash flows from financing activities:
   Principal payments on long-term debt               ---         (380,833)
   Principal payments on capital lease
     obligations                                      ---           (2,166)
   Proceeds from exercise of stock options            9,075          ---
   Dividends Paid                                  (292,610)      (238,144)
                                                   --------       -------- 
     Net cash (used in) financing activities       (283,535)      (621,143)
                                                   --------       -------- 

Net increase in cash and cash
  equivalents                                       (57,663)         1,543 

Cash and cash equivalents at beginning
  of period                                         822,596        826,079 
                                                   --------       -------- 
Cash and cash equivalents at end of period      $   724,933    $   827,622 
                                                   ========       ======== 


                       See notes to financial statements.
                                        5
<PAGE>
                CONSOLIDATED NOTES TO FINANCIAL STATEMENTS


          1. In the opinion of the Company,  the  accompanying  unaudited
financial  statements contain all adjustments  (consisting of only normal
recurring accruals) necessary to present fairly the financial position as
of June 30,  1998 and the  results  of  operations  for the three and six
months  ended  June 30,  1998 and 1997 and cash  flows for the six months
ended June 30, 1998 and 1997.  The  accounting  policies  followed by the
Company are set forth in the Company's  financial  statements included in
its December 31, 1997 Annual Report to Shareholders.

          2. The results of operations for the three and six months ended
June 30, 1998 and 1997 are not  necessarily  indicative of the results to
be expected for the full year.

          3. For  purposes of the  Statement  of Cash Flows,  the Company
considers  all highly  liquid  investments  purchased  with a maturity of
three months or less to be cash equivalents.

             Cash payments for interest were $296 and $27,246 for the six
months ended June 30, 1996 and 1997 respectively.

             Cash  payments for taxes were  $431,642 and $393,608 for the
six months ended June 30, 1998 and 1997 respectively.



                                   6

<PAGE>
                   MANAGEMENT'S DISCUSSION AND ANALYSIS
             OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS

          Gross revenue from operations
          -----------------------------

             Revenue increased $45,930 (1%) For the six months ended June
30,  1998  compared  to the  comparable  period  in  1997.  The  Guardian
Laboratories  division  ("Guardian")  had a sales  increase  of  $119,425
(3.3%)  while the Eastern  Chemical  subsidiary  ("Eastern")  had a sales
decrease of $72,495 (8.5%).

             For the three  month  period  ended June 30,  1998,  revenue
decreased  $447,381 (17.5%) over the comparable  period in 1997. Sales of
Guardian  decreased  $399,632  (18.9%)  while sales of Eastern  decreased
$47,749 (10.7%).

             The Guardian  sales  decreases  were mainly due to decreased
Asian sales,  particularly in Korea and Taiwan. The Company believes that
sales into this  region  will  continue  to be lower than last year until
such time as the economies in Asia improve.  The Eastern  decreases  were
due to both the ongoing  effort on the part of the Company to  streamline
the operations of the Eastern Division and reduce its older inventory, as
well as normal fluctuations in purchasing patterns of customers.

          Cost of sales
          -------------

             As a percentage of sales,  cost of sales  decreased to 58.3%
for the six  months  ended June 30,  1998 from  61.3% for the  comparable
period in 1997.  For the three  month  perid  ended June 30, 1998 cost of
sales  decreased to 56.4% from 60.1% for the  comparable  period in 1997.
The  decreases  are mainly  due to a  decrease  in the cost of one of the
Company's largest volume raw materials in 1998 as compared to 1997.
 
          Operating expenses
          ------------------

             Operating  expenses  decreased  $24,782  (2.5%)  in the  six
months ended June 30, 1998 compared to the comparable period in 1997. For
the three  months  ended June 30,  1998  there was a decrease  of $48,157
(9.1%) over the comparable period in 1997. These decreases were primarily
due to the  reversal  of an  accrued  rebate  expense that  the  Company
believes is no longer required.

          Interest expense
          ----------------

             Interest expense decreased $25,060 (98.9%) in the six months
ended June 30, 1998 compared to the comparable period in 1997 and $11,329
(100.%) in the three month period ended June 30, 1998 over the comparable
period in 1997.  These  decreases were mainly due to the repayment of all
debt in 1997.

          Gain on Sale of Assets
          ----------------------

             The Company  realized gains on the sale of assets of $28,000
and $20,000  during the six and three month  periods  ended June 30, 1998
respectively.  No such gains were realized during the comparable  periods
in 1997.

          Interest income
          ---------------

             Interest Income increased $10,810 (94.2%) for the six months
ended June 30, 1998 when  compared to the  comparable  period in 1997 and
$4,462  (67.8%) for the three months ended June 30, 1998 when compared to
the comparable  period in 1997.  These  increases are primarily due to an
increase in short term invested balances.

FINANCIAL CONDITION

             Working  capital  increased from  $2,973,768 at December 31,
1997 to $3,604,087 at June 30, 1998.  The current  ratio  increased  from
4.62 to 1 at December 31, 1997 to 12.4 to 1 at June 30, 1998. The Company
has no  commitments  for any  further  significant  capital  expenditures
during the remainder of 1998,  and believes  that its working  capital is
and will continue to be sufficient to support its operating requirements.

             Cash  flows from  operating  activities  decreased  $408,620
(47.9%)  for the six  month s ended  June  30,  1998  when  compared  the
comparable  period in 1997.  This  decrease  is mainly due to the Company
reducing its accounts payable and accrued expenses.


                                       7
<PAGE>


             Cash  flows  from  investing  activities  decreased  $11,806
(5.1%)  in the six  months  ended  June 30,  1998  when  compared  to the
comparable  period in 1997.  This  decrease  is mainly due to proceeds of
$28,000 received on the sale of plant equipment.

             Cash  flows from  financing  activities  increased  $337,608
(54.4%)  in the six  months  ended  June 30,  1998 when  compared  to the
comparable  period in 1997.  This increase is mainly due to the payoff of
all long term debt by the  Company  during the six months  ended June 30,
1997.


                          PART II - OTHER INFORMATION


Item 6 (b)   Exhibits and Reports on Form 8-K

             a. Exhibits

                Exhibit 27.  Financial Data Schedule

             b. Reports on Form 8-K

                No  reports  have  been  filed  on Form 8-K  during  this
quarter.


                           UNITED-GUARDIAN, INC.

                               SIGNATURES


     In accordance with 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.


                                       UNITED-GUARDIAN, INC.
                                       (Registrant)


                                       By: Alfred R. Globus
                                           Alfred R. Globus
                                           Chief Executive Officer


                                       By: Kenneth H. Globus
                                           Kenneth H. Globus
                                           Chief Financial Officer



Date:  August 6, 1998


                                     8