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   September 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.
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         (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
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                    (Address of Principal Executive Offices)

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

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         (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 the latest practicable date

                              4,881,639
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<PAGE>

                          UNITED-GUARDIAN, INC.

                                  INDEX


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

         Consolidated Statements of Earnings -
                  Three and Nine Months Ended
                  September 30, 1998 and 1997                       2

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

         Consolidated Statements of Cash Flows -
                  Nine Months Ended
                  September 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                                          9




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



                                NINE MONTHS ENDED         THREE MONTHS ENDED
                                  SEPTEMBER 30,              SEPTEMBER 30,
                                1998        1997           1998        1997
                             ---------    ---------      ---------   ---------
Revenue:
 Net sales                 $ 6,605,874  $ 6,665,342    $ 2,106,279  $ 2,212,677 
                             ---------    ---------      ---------    --------- 
                             6,605,874    6,665,342      2,106,279    2,212,677 
                             ---------    ---------      ---------    --------- 
Costs and expenses:
 Cost of sales               3,848,171    4,101,482      1,224,411    1,372,760 
 Operating expenses          1,446,513    1,491,821        472,675      493,201 
                             ---------    ---------      ---------    --------- 
                             5,294,684    5,593,303      1,697,086    1,865,961 
                             ---------    ---------      ---------    --------- 
     Earnings from
         operations          1,311,190    1,072,039        409,193      346,716 

Other income (expense):
 Interest expense                 (391)     (29,140)           (95)      (3,784)
 Interest income and other      36,420       22,555          9,283       11,082
 Gain on sale of assets         28,000         -              -            -
                             ---------    ---------      ---------    --------- 
     Earnings before
        income taxes         1,375,219    1,065,454        418,381      354,014 

Provision for income
     taxes                     522,500      399,800        159,300      129,470 
                             ---------    ---------      ---------    --------- 
     Net earnings          $   852,719  $   665,654      $ 259,081    $ 224,544 
                             =========    =========      =========    ========= 
Earnings per share
 (basic and diluted)       $       .17  $       .14      $     .05    $     .05 
                             =========    =========       =========   =========

Basic weighted average
  shares                     4,879,769    4,818,243      4,881,422    4,868,450
                             =========    =========      =========    =========

Diluted weighted
  average shares             4,901,604    4,834,402      4,892,493    4,898,052
                             =========    =========      =========    =========






                      See notes to financial statements.


                                     2
<PAGE>

                          UNITED-GUARDIAN, INC.
                       CONSOLIDATED BALANCE SHEETS



                                     SEPTEMBER 30, 1998     DECEMBER 31, 1997
                                     ------------------     -----------------
              ASSETS                     (UNAUDITED)      (DERIVED FROM AUDITED
                                                           FINANCIAL STATEMENTS)
Current assets:
     Cash and cash equivalents          $    1,172,200        $      822,596  
     Investments--short term                   511,813               361,723
     Accounts receivable
      (less allowance for doubtful
        accounts of $52,258 at
        September 30, 1998 and
        $32,300 at December 31,1997)         1,020,605               905,896 
     Inventories                             1,188,945             1,372,067 
     Prepaid expenses and other
          current assets                       197,759               225,854 
     Deferred income taxes                     107,111               107,111 
                                           -----------           -----------
              Total current assets           4,198 433             3,795,247 
                                           -----------           -----------

Property, plant and equipment:
     Land                                       69,000                69,000 
     Factory equipment and fixtures          2,365,672             2,333,654 
     Building and improvements               1,941,046             1,843,171 
     Waste disposal plant                      133,532               133,532 
                                           -----------           -----------
                                             4,509,250             4,379,357 
      Less: Accumulated depreciation         2,979,348             2,847,870 
                                           -----------           -----------
                                             1,529,902             1,531,487 
      Assets under capital leases,net             -                    1,444 
                                           -----------           -----------
                                             1,529,902             1,532,931 
                                           -----------           -----------
Other assets:
     Processes and patents, net                425,763               533,984
     Split dollar life insurance               348,161               261,559
     Other                                       1,525                 2,125 
                                           -----------           -----------
                                               775,449               797,688 
                                           -----------           -----------
                                          $  6,503,784          $  6,125,846 
                                           ===========           ===========









                    See notes to financial statements.


                                    3


<PAGE>


                          UNITED-GUARDIAN, INC.
                       CONSOLIDATED BALANCE SHEETS



                                     SEPTEMBER 30, 1998      DECEMBER 31,1997
                                     ------------------     -----------------
LIABILITIES AND                           (UNAUDITED)     (DERIVED FROM AUDITED
STOCKHOLDERS' EQUITY                                       FINANCIAL STATEMENTS)

Current liabilities:
      Accounts payable                $        185,577       $        292,632
      Dividends payable                          -                    292,610
      Accrued expense and other                122,522                165,841
      Current portion of long-term
        debt                                     9,953                  -
      Taxes payable                               -                    70,396
                                           -----------            -----------
            Total current liabilities          318,052                821,479
                                           -----------            -----------
Long-term debt                                  18,746                   -
                                          ------------            -----------
Deferred income taxes                           20,116                 20,116
                                           -----------            -----------
Stockholders' equity:
     Common stock $.10 par value,             
       authorized 10,000,000 shares,
       issued and outstanding
       4,881,639 and 4,876,839 shares          488,164                487,684
     Capital in excess of par value          3,323,630              3,314,210
     Retained earnings                       2,335 076              1,482,357
                                           -----------            -----------
        Total stockholders' equity           6,146,870              5,284,251
                                           -----------            -----------
                                        $    6,503,784        $     6,125,846
                                           ===========            ===========






                    See notes to financial statements.

                                    4


<PAGE>


                          UNITED-GUARDIAN, INC.
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (UNAUDITED)
                                                           NINE MONTHS ENDED
                                                             SEPTEMBER 30,
                                                         1998            1997
                                                      ---------        --------
Cash flows provided by operating activities:
    Net earnings                                   $   852,719     $    665,654
    Adjustments to reconcile net earnings
          to net cash flows from operations:
             Depreciation and amortization             308,788          296,769
             Gain on sale of equipment                 (28,000)            -   
             Provision for doubtful accounts            19,958           14,000
             (Increase) decrease in assets:
               Accounts receivable                    (134,667)        (374,098)
               Inventories                             183,122          363,058 
               Prepaid expense and other assets        (57,907)         (61,718)
              Increase (decrease) in liabilities:
               Accounts payable                       (107,055)         268,902 
               Accrued expenses and other             (113,715)          10,611 
                                                     ---------        ---------
         Net cash provided by operating activities     923,243        1,183,178 
                                                     ---------        ---------

Cash flows from investing activities:
     Acquisition of property, plant and equipment     (197,538)        (234,520)
     Acquisition of processes and patents                 -            (100,000)
     Proceeds from sale of equipment                    28,000             -    
     Purchase of short term investments               (150,090)            -
                                                     ---------        ---------
             Net cash used in investing activities    (319,628)        (334,520)
                                                     ---------        ---------

Cash flows from financing activities:
   Proceeds from installment note                       30,339             -    
   Principal payments on long-term debt                 (1,640)        (584,167)
   Principal payments on capital lease
      obligations                                         -              (3,249)
   Proceeds of stock options exercised                   9,900           18,763 
   Dividends paid                                     (292,610)        (238,144)
                                                     ---------        ---------
             Net cash used in financing activities    (254,011)        (806,797)
                                                     ---------        ---------
Net increase in cash and cash equivalents              349,604           41,861 

Cash and cash equivalents at beginning
  of period                                            822,596          826,079 
                                                     ---------       ----------
Cash and cash equivalents at
  end of period                                   $  1,172,200     $    867,940 
                                                     =========       ==========





                    See notes to financial statements.

                                    5

<PAGE>

                          UNITED-GUARDIAN, INC.
                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  September  30, 1998 and the results of  operations  for the three and
nine months ended September 30, 1998 and 1997 and cash flows for the nine
months  ended  September  30,  1998 and  1997.  The  accounting  policies
followed  by  the  Company  are  set  forth  in the  Company's  financial
statements included in the December 31, 1997 Annual Report.

     2. The results of  operations  for the three and nine  months  ended
September 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 $391 and $32,283 for the nine months
ended September 30, 1998 and 1997 respectively.

     Cash  payments  for taxes were  $602,107  and  $490,108 for the nine
months ended September 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  decreased $59,468 (.9%) for the nine months ended September
30, 1998 as  compared  to the  comparable  period in 1997.  The  Guardian
Laboratories division ("Guardian") had a sales increase of $69,101 (1.3%)
while the Eastern Chemical subsidiary ("Eastern") had a sales decrease of
$128,569 (9.9%).

     For the  three  month  period  ended  September  30,  1998,  revenue
decreased  $106,398 (4.8%) over the comparable  period in 1997.  Sales of
Guardian  decreased  $50,325  (2.8%)  while  sales of  Eastern  decreased
$56,073 (12.7%).

     The Guardian  nine month sales  increase was due mainly to increases
in sales of  Guardian's  core  product  lines in the  United  States  and
Europe,  which offset some decreases  experienced by the Company in Asian
markets.  The three month sales  decrease was due mainly to a decrease in
the  Company's  sales into Asia.  The sales  increase  for the nine month
period in the cosmetic  product  lines were the result of an expansion of
the marketing of the Company's core product lines in conjunction with the
company's marketing partners in the United States and Europe. The Eastern
decreases  in the nine and three month  periods  were due  primarily to a
slight  downsizing  of the  Eastern  operations  intended  to  streamline
Eastern's  business,  which  resulted in a reduction in inventory and the
consequent loss of some sales.

     Cost of Sales
     -------------

     As a percentage of sales,  cost of sales  decreased to 58.3% for the
nine months ended September 30, 1998 from 61.5% in the comparable  period
in 1997.  As a percentage  of sales cost of sales  decreased to 58.1% for
the  three  month  period  ended  September  30,  1998  from  62% for the
comparable period in 1997.

     The  decreases in cost of sales for the nine and three month periods
were due mainly to a decrease in the cost of one of the Company's largest
volume inventory items in 1998.



                                      7
<PAGE>

     Operating expenses
     ------------------

     Operating  Expenses  decreased $45,308 (3%) in the nine months ended
September 30, 1998 when compared to the  comparable  period in 1997.  For
the three months ended September 30, 1998 there was a decrease of $20,526
(4.2%) over the comparable period in 1997.

     The  decreases  in  operating  expenses for the nine and three month
periods were due primarily to the reversal of an accrued  rebate  expense
that the Company has determined is no longer required.

     Interest Expense
     ----------------

     Interest Expense  decreased $28,749 (98.7%) in the nine months ended
September  30, 1998 when  compared to the  comparable  period in 1997 and
$3,689  (97.5%) in the three month period ended  September  30, 1998 over
the  comparable  period in 1997.  These  decreases were mainly due to the
substantial reduction of long term debt.

     Interest Income and Other
     -------------------------

     Interest  income and other  increased  $13,865  (61.5%) for the nine
months ended September 30, 1998 when compared to the comparable period in
1997 and decreased  $1,799  (16.2%) for the three months ended  September
30, 1998 when compared to the comparable period in 1997. The increase for
the nine month  period was  primarily  due to an  increase  in short term
invested balances.  The decrease for the three month period was primarily
due to a decrease in short term invested balances.

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

     The  Company  realized  a gain  on sale of  equipment  amounting  to
$28,000 during the nine months period ended September 30,1998.

FINANCIAL CONDITION

     Working  capital  increased from  $2,973,768 at December 31, 1997 to
$3,880,381 at September 30, 1998.  The current ratio  increased from 4.62
to 1 at December 31, 1997 to 13.2 to 1 at September 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  $259,935 (22%) for
the nine months ended  September 30, 1998 when compared to the comparable
period in 1997.  This decrease is mainly due to the Company  reducing its
accounts payable and accrued expenses.

     Cash flows from investing activities increased $14,892 (4.5%) in the
nine months  ended  September  30, 1998 when  compared to the  comparable
period in 1997.  This  increase is due mainly due to proceeds on the sale
of equipment.

     Cash flows from financing  activities increased $552,786 (68.5%) for
the nine months ended  September 30, 1998 when compared to the comparable
period in 1997. This increase is mainly due to the substantial  reduction
of long term debt.




                                    8
<PAGE>
                       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: November 10, 1998


                                     9