SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

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

For the Quarter Ended:   MAY 31, 1998            Commission File No.: 2-76262-NY
                         ------------                                 ----------
       
                        LASER MASTER INTERNATIONAL, INC.
--------------------------------------------------------------------------------
             (Exact name of Registrant as Specified in its charter)

           New York                                        11-2564587
------------------------------                 ---------------------------------
   (State of Incorporation)                    (IRS Employee Identification No.)

                  1000 First Street, Harrison, New Jersey 07029
--------------------------------------------------------------------------------
                         (Address of Principal Offices)

                                 (973) 482-7200
                                ----------------
                                Telephone Number

                                       N/A
--------------------------------------------------------------------------------
      (Former name, address and fiscal year if changed since last report)

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 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
                              ---------       ---------

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report:

Common Stock - 10,615,380 shares - each share $0.01 par value.

<PAGE>



LASER MASTER INTERNATIONAL, INC. 
INDEX

PART I - FINANCIAL INFORMATION                                              PAGE

Item 1. Financial Statements

     Condensed Consolidated Balance Sheets - May 31, 1998                     3

     Condensed Consolidated Statements of Operations for 
          the Three Months Ended May 31, 1998 and May 31, 1997                 5

     Condensed Consolidated Statements of Operations for 
          the Six Months Ended May 31, 1998 and May 31, 1997                   6

     Condensed Consolidated Statements for Cash Flows for 
          the Six Months Ended May 31, 1998 and May 31, 1997                   7

     Notes to Condensed Consolidated Financial Statements                      8

Item 2. Management's Discussion and Analysis of Financial 
        Condition and Results of Operations.                                  12

PART II. OTHER INFORMATION                                                    13



                                     - 2 -
<PAGE>
 



                         PART I. FINANCIAL INFORMATION

                        LASER MASTER INTERNATIONAL, INC.
                         AND WHOLLY OWNED SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>


                                     ASSETS

                                                                       MAY 31,
                                                                        1998    
                                                                     -----------

<S>                                                                 <C>    
CURRENT ASSETS:
     Cash in Banks                                                   $    54,346
     Marketable Securities                                               484,106
     Accounts Receivable - Net                                         2,474,305
     Merchandise Inventory                                             2,047,584
     Prepaid Expenses                                                     65,405
                                                                     -----------
TOTAL CURRENT ASSETS                                                 $ 5,125,746
                                                                     -----------
FIXED ASSETS:
     Factory Building & Improvements                                 $ 4,945,501
     Land - Factory Site                                                 215,000
     Machinery & Equipment                                             8,336,755
     Engraving Inventory                                                 909,029
     Installation Cost                                                   946,560
     Furniture & Fixtures                                                134,849
                                                                     -----------
TOTAL                                                                $15,487,694

Less:  Accum. Depreciation                                             5,795,284
                                                                     -----------
TOTAL FIXED ASSETS                                                   $ 9,692,410
                                                                     -----------
OTHER ASSETS:
     Deferred Charges                                                $    75,631
     Restricted Cash                                                     441,084
     Loans Receivable                                                    306,524
                                                                     -----------
TOTAL OTHER ASSETS                                                   $   823,239
                                                                     -----------
TOTAL ASSETS                                                         $15,641,395
                                                                     ===========

</TABLE>




The accompanying notes to financial statements are an integral part of this
statement and should be read in conjunction herewith.



                                     - 3 -
<PAGE>





                        LASER MASTER INTERNATIONAL, INC.
                         AND WHOLLY OWNED SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>


                                  LIABILITIES

                                                                        MAY 31,
                                                                         1997 
                                                                     -----------
<S>                                                                 <C>    
CURRENT LIABILITIES:
     Accounts Payable                                                $   695,837
     Accrued Expenses & Taxes                                            111,601
     Current Portion of Long Term Debt                                   555,001
     Loan - Merrill Lynch                                              1,861,770
                                                                     -----------
TOTAL CURRENT LIABILITIES                                            $ 3,224,209
                                                                     -----------
LONG TERM LIABILITIES:
     Non-Current Portion of Long Term
          Debt                                                         4,753,332
                                                                     -----------
TOTAL LONG TERM LIABILITIES                                          $ 4,753,332
                                                                     -----------
TOTAL LIABILITIES                                                    $ 7,977,541
                                                                     -----------
STOCKHOLDERS' EQUITY:
     Capital Stock - Authorized
       50,000,000 Shares at 1c Par Value
       Issued and Outstanding 10,615,380                             $   106,154
       Shares at 5/31/98 Paid in Capital                               5,424,412
       Unrealized Gain                                                    10,000
       Retained Earnings                                               2,123,288
                                                                     -----------
TOTAL STOCKHOLDERS' EQUITY                                           $ 7,663,854
                                                                     -----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                             $15,641,395
                                                                     ===========

</TABLE>





The accompanying notes to financial statements are an integral part of this
statement and should be read in conjunction herewith.



                                     - 4 -
<PAGE>




                        LASER MASTER INTERNATIONAL, INC.
                         AND WHOLLY OWNED SUBSIDIARIES
                        CONSOLIDATED STATEMENT OF INCOME
                           FOR THE THREE MONTHS ENDED
<TABLE>
<CAPTION>

                                                      MAY 31,           MAY 31, 
                                                       1998              1997   
                                                  -----------       ----------- 

<S>                                               <C>               <C>        
REVENUES                                          $ 3,321,955       $ 2,405,049
                                                  -----------       -----------
Depreciation Expense                              $   113,626       $   147,618

Cost of Sales                                       2,141,129         1,631,159
                                                  -----------       -----------
TOTAL COST OF SALES                               $ 2,254,755       $ 1,778,777
                                                  -----------       -----------
GROSS PROFIT                                      $ 1,067,200       $   626,272
                                                  -----------       -----------
OPERATING EXPENSES:
     Selling Expenses                             $   448,654       $   507,602
     General & Administrative Expenses                469,463           261,800
                                                  -----------       -----------
TOTAL OPERATING EXPENSES                          $   918,117       $   769,402
                                                  -----------       -----------
NET EARNINGS - OPERATIONS                         $   149,083       $  (143,130)
     Interest Expense                                  98,877            93,131
     Interest & Dividend Income                       (19,769)          (19,288)
                                                  -----------       -----------
NET EARNINGS BEFORE FIT                           $    69,975       $  (216,973)
     Less: FIT Provision - Current                      --                --   
     Tax Effect of NOL Carryforward                     --                --
                                                  -----------       -----------
NET EARNINGS FOR THE PERIOD                       $    69,975       $  (216,973)
                                                  ===========       ===========
EARNINGS PER SHARE *                              $       .01       $      (.02)
                                                  ===========       ===========
DIVIDENDS PER SHARE                                    -0-               -0-
                                                  ===========       ===========

<FN>

* Earnings per share are based on 10,615, 380 shares outstanding at May 31, 1998
  and on May 31, 1997 10,615,207.
</FN>
</TABLE>




The accompanying notes to financial statements are an integral part of this
statement and should be read in conjunction herewith.



                                     - 5 -
<PAGE>





                        LASER MASTER INTERNATIONAL, INC.
                         AND WHOLLY OWNED SUBSIDIARIES
                        CONSOLIDATED STATEMENT OF INCOME
                            FOR THE SIX MONTHS ENDED
<TABLE>
<CAPTION>


                                                     MAY 31,           MAY 31, 
                                                      1998              1997
                                                  -----------       -----------
 
<S>                                               <C>               <C>        
REVENUES                                          $ 6,465,070       $ 4,899,843
                                                  -----------       -----------
Depreciation Expense                              $   236,695       $   295,236

Cost of Sales                                       4,438,259         3,202,455
                                                  -----------       -----------
TOTAL COST OF SALES                               $ 4,674,954       $ 3,497,691
                                                  -----------       -----------
GROSS PROFIT                                      $ 1,790,116       $ 1,402,152
                                                  -----------       -----------
OPERATING EXPENSES:
     Selling Expenses                             $   778,605       $   894,314
     General & Administrative Expenses                789,568           526,418
                                                  -----------       -----------
TOTAL OPERATING EXPENSES                          $ 1,568,173       $ 1,420,732
                                                  -----------       -----------
NET EARNINGS - OPERATIONS                            221,943           (18,579)
     Interest Expense                                210,324           200,749
     Interest & Dividend Income                      (22,738)          (27,674)
                                                  -----------       -----------
NET EARNINGS BEFORE FIT                          $    34,357       $  (191,654)
     Less: FIT Provision - Current                      --                --   
     Tax Effect of NOL Carryforward                     --                --
                                                  -----------       -----------
NET EARNINGS FOR THE PERIOD                       $    34,357       $  (191,654)
                                                  ===========       ===========
EARNINGS PER SHARE *                                     (.00)             (.02)
                                                  ===========       ===========
DIVIDENDS PER SHARE                                   -0-               -0-
                                                  ===========       ===========

<FN>

* Earnings per share are based on 10,615,380 shares outstanding at May 31, 1998
  and on May 31, 1997 10, 615,207.
</FN>
</TABLE>






The accompanying notes to financial statements are an integral part of this
statement and should be read in conjunction herewith.



                                     - 6 -
<PAGE>




                        LASER MASTER INTERNATIONAL, INC.
                         AND WHOLLY OWNED SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                SIX MONTHS ENDED
<TABLE>
<CAPTION>


                                                       MAY 31           MAY 31
                                                        1998             1997 
                                                     -----------     -----------

NET CASH FLOW FROM
OPERATING ACTIVITIES:

<S>                                                  <C>              <C>       
     Net Income                                      $  34,357        $(191,654)

Items Reflected in Net Income
Not Requiring Cash:
     Depreciation & Amortization                       241,241          295,236
                                                     ---------        ---------
                                                     $ 275,598        $ 103,582

Cash Flow Provided From Operations
     Accounts Receivable                             $(236,801)       $ 390,130
     Inventories                                      (100,144)          89,887
     Prepaid Expenses                                     (683)         (53,708)
     Accounts Payable                                 (245,385)        (290,494)
     Accrued Expenses                                  (96,428)         (37,663)
                                                     ---------        ---------
Cash Flow Provided by Operations                     $(403,843)       $ 201,734

Cash Flow Provided from (used for)
Investment Purposes:
     Additions to Fixed Assets                       $(218,282)       $ (47,544)
     Increase in Other Assets                         (439,177)        (249,306)
     Marketable Securities                             (21,481)         (19,397)
                                                     ---------        ---------
Total Cash Flow Provided from                        $(478,940)       $(316,247)
Investment Purposes

Cash Flow Provided From (used for)
Financing Purposes:
     Payment of Debt                                   (23,334)        (340,709)
     Capital Contributed                               748,110          150,000
                                                     ---------        ---------
Cash Flow Used for Financing                         $ 724,776        $(190,709)
                                                     ---------        ---------

Net Cash Flow                                        $ 358,007        $(305,222)
Cash and Cash Equivalents at
     Beginning of Period                               412,353          396,777
                                                     ---------        ---------
Cash and Cash Equivalents at
     End of Period                                   $  54,346        $  91,555
                                                     =========        =========
</TABLE>





The accompanying notes to financial statements are an integral part of this
statement and should be read in conjunction herewith.



                                     - 7 -
<PAGE>


NOTE 1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS AND CONSOLIDATING
        PRINCIPLES

        The consolidated financial statements include the accounts of Laser
        Master International Inc. and its wholly owned subsidiaries. All
        significant intercompany balances and transactions have been eliminated
        in consolidation.

        The company was founded in 1981 and prints for the textile industry and
        the gift wrap paper industry. The company sells its products and
        services nationwide through its direct sales force and resellers. In
        addition the company has a real estate division that rents space in the
        factory buildings owned by the company.

        All intercompany transactions and balances have been eliminated in
        accordance with established accounting principles.

        Name and brief description of companies under common control:

        1.  FLEXO-CRAFT PRINTS INC.

            This company has for approximately 15 years been engaged in the
            business of commercial printing and engraving, utilizing a laser
            technique. The company principally produces an extensive line of
            patterns and designs which are sold to industrial customers engaged
            in the manufacture of varied end products.

        2.  HARRISON REALTY CORP.

            This company owns and operates a 240,000 sq. ft. factory building
            in Harrison, New Jersey. There are two unaffiliated tenants
            currently occupying 49% of the space.

        3.  PASSPORT PAPERS INC & EAST RIVER ARTS INC.

            These Companies are Sales Corporations which sell products printed
            by Flexo Craft Prints Inc. They each sell under their own labels and
            in their respective markets.

        a.  METHOD OF ACCOUNTING FOR THE BUSINESS COMBINATION:

            This business combination has been accounted for as a reorganization
            under common control.

        b.  PERIOD FOR WHICH RESULTS OF OPERATIONS OF THE MERGED COMPANIES ARE
            INCLUDED IN THE INCOME STATEMENT OF THE PARENT COMPANY:

            The income statement of Laser Master International Inc. reflects the
            result of its operations on a consolidated basis for the three
            months ended May 31, 1998 and May 31, 1997.



                                     - 8 -
<PAGE>


NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

        (a) The statements are prepared on the accrual basis of accounting.

        (b) Inventory valuation:

            Inventories are stated at the lower of cost (first-in, first-out) or
            market.

        (c) Depreciation of property, plant, equipment and furniture is
            calculated on the straight line method based on estimated useful
            lives of 10 to 33 years for buildings and improvements and 3 to 10
            years for machinery, equipment and furniture.

        (d) Taxes:

            Laser Master International, Inc. is a "C" corporation with the
            Federal, State and City taxing authorities. All corporate taxes are
            accrued and paid on the corporate level.

NOTE 3. ACCOUNTS RECEIVABLE

        The account on the balance sheet of Laser Master International Inc.
        referred to as "Accounts Receivable-Net" represents amounts due from
        customers for goods sold and delivered on a current basis. The accounts
        receivable so stated are encumbered to one of the company's lenders.

NOTE 4. INVENTORIES

        The inventories are valued at the lower of cost or market on a first-in,
        first-out basis.

NOTE 5. FACTORY BUILDING AND IMPROVEMENTS 

        One of the wholly owned subsidiaries of the company, Harrison Realty
        Corp., owns the land and the building situated at 1000 First Street,
        Harrison, New Jersey. The building is encumbered by a mortgage obtained
        from Fleet Bank and the New Jersey EDA.

NOTE 6. MACHINERY AND EQUIPMENT 

        The machinery and equipment is owned by the wholly owned subsidiary
        Flexo-Craft Prints Inc. It consists of various pieces of heavy
        equipment, the acquisition of which has been financed on an individual
        basis at the time of purchase and installation. For details of these
        encumbrances, reference is made to the consolidated schedule of total
        debt in the 10K.





                                     - 9 -
<PAGE>



NOTE 7. DEPRECIATION

        Property, plant and equipment is stated at cost. Depreciation is
        computed by applying the straight-line method to individual items.
        Where accelerated depreciation methods are used for tax purposes,
        deferred income taxes may be recorded. Maintenance and repairs were
        charged to expenses as incurred.

                                              05/31/98    05/31/97  
                                              --------    --------         
        Depreciation charged to 
        Cost of Sales                         $236,695     $295,236
                                              ========     ========    
     
        The annual depreciation rates used are as follows:
  
        Building and Improvements                    3%  

        Machinery and Equipment                  10% - 14.3%        

        Furniture and Fixtures                      10%

NOTE 8. ENGRAVING INVENTORY

        The company's principal operating subsidiary, Flexo-Craft Prints Inc. is
        engaged in the manufacture of designs and patterns which by means of a
        laser engraving process grooves are engraved on a rubber sleeve, and by
        means of a computer color separation (up to six colors) fabricate the
        matrix for the printing phase of operations.

        In order to present to the trade a wide selection of proprietary
        patterns and designs, the company maintains a constant library of
        approximately 5,000 sleeves. In case of obsolete or discontinued
        designs, sleeves become reusable after mechanically grinding flat the
        old pattern and vulcanizing the surface.

        For accounting purposes, an obsolescence factor is charged based on the
        entire cost of discontinued patterns, exclusive of the extended life of
        the reusable rubber sleeves. Historically this method results in a
        provision for depreciation of l0% per year of the total library
        inventory of complete patterns on sleeves.

NOTE 9. TAX LOSS CARRYFORWARD 

        On November 30, l997 the company had a net operating loss carryforward
        of $174,018.



                                     - 10 -
<PAGE>




NOTE 10.REMUNERATION OF DIRECTORS AND OFFICERS

                                                                         ANNUAL
NAME            CAPACITY IN WHICH REMUNERATION WAS RECEIVED              SALARY
------------    -------------------------------------------             --------
Mendel Klein    President, Treasurer, Chairman of the Board             $100,000
Leah Klein      Vice President, Secretary, Director                        -0- 
Mirel Spitz     Vice President, Office Manager, Director                   -0-  

        Mr. Mendel Klein, pursuant to an employment contract entered into with
        the company which became effective upon completion of the public
        offering, receives an annual salary of $100,000. Additionally, Mr. Klein
        will participate in group life, accident and hospitalization insurance,
        provide for all key employees, and he will have the use of a company
        owned automobile. No other officer or director has a contract of
        employment with the company. There are no consulting agreements in
        existence between the company and any officers.

NOTE 11.CONTINGENT LIABILITIES          

        The Company is contingently liable to Fleet Bank of New Jersey for
        letters of credit in the amount of $4,825,972 issued in conjunction with
        the New Jersey Tax Exempt Bonds which financed the company's new factory
        building and 8 color press. Fleet Bank has a 1st lien on the assets of
        Harrison Realty and 2nd and 3rd liens on the assets of Flexo-Craft.

NOTE 12.EARNINGS PER SHARE - 10,615,380 SHARES COMMON STOCK - PAR VALUE $0.0l
        at 5/31/98 and 10,615,207 shares at 5/31/97.

                                                            Six Months ended
                                                  05/31/98            05/31/97 
                                                  --------            --------  
        Net earnings per share -                   $ (.01)             $ (.02) 

NOTE 13.ALLOWANCE FOR DOUBTFUL ACCOUNTS           

        Bad debts are written off as they occur. An allowance for doubtful
        accounts has been established in the amount of $254,500 or 4% of
        accounts receivable.




                                     - 11 -
<PAGE>

              MANAGEMENT'S COMPARATIVE DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                       FOR THE THREE AND SIX MONTHS ENDED
                         MAY 31, 1998 AND MAY 31, 1997

                              RESULTS OF OPERATIONS
                              ---------------------

REVENUES 

For the six months ended May 31, 1998 revenues increased 32% from the prior
year. For the quarter ended May 31, 1998 revenues increased 39% from the same
period from the prior year. This increase was primarily the result of increased
sales volume through orders from existing customers. Management has hired
additional sales people to develop business in new markets such as home
furnishing, packaging and plates which the company is capable of servicing. The
8 color press is working properly and has allowed the company to triple its
capacity and to open new markets due to the expanded printing capabilities.

GROSS PROFIT 

For the three months ended May 31, 1998 gross profit was 33% as compared to 26%
for the same period in the previous year. The increase in gross profit was due
to the increased sales volume which allows the company to operate more
efficiently.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses decreased 4% for the three months
ended May 31, 1998 over the same period for the previous year. This was as a
result of the Company's attempt to control costs through significant reductions
of general and administration costs and because of the increased sales volume.

INTEREST EXPENSE

Interest expense increased for the first six months of 1998 as compared to the
same period for the previous year. This was as a result of higher levels of
debt.

FINANCIAL CONDITION AND LIQUIDITY

The Company is well positioned to meet anticipated future capital requirements
necessary for purchase of equipment and financing of current operations. At May
31, 1998 the Company had working capital of $1,901,537. Liquidity is sustained
principally through funds provided from operations with unused bank lines of
credit available to provide additional sources of capital when required.
Management does not anticipate any difficulties in financing existing
operations.



                                     - 12 -
<PAGE>




                           PART II. OTHER INFORMATION

ITEM 1. LITIGATION  
        None

ITEM 2. CHANGES IN SECURITIES 
        None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES       
        None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS    
        None 



                                     - 13 -
<PAGE>



                                   SIGNATURES

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


                                                LASER MASTER INTERNATIONAL, INC.
                                                ________________________________
                                                           (Registrant)


    7/12/98                                     /S/ MENDEL KLEIN
-----------------                               --------------------------------
     Date                                           MENDEL KLEIN, PRESIDENT

    7/12/98                                     /S/ LEAH KLEIN 
-----------------                               --------------------------------
     Date                                       LEAH KLEIN, VICE PRESIDENT/SEC'Y



                                     - 14 -
<PAGE>








        The Registrant or any of its consolidated subsidiaries have not
consummated, not have they participated in a business combination during any of
the periods covered by the report, nor has a business combination occurred
during the current fiscal year.

        There have been no material retroactive prior period adjustments made
during any period included in this report. Accordingly, there have been no
material prior period adjustments which had an effect upon net income, total and
per share, nor upon the balance of retained earnings.



                                     - 15 -