SECURITIES AND EXCHANGE COMMISSION

                            Washington, D. C. 20549

                                   FORM 10-Q


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

        For Quarter Ended December 31, 1997 Commission File Number 0-9998


                          THE METAL ARTS COMPANY, INC.
                          ----------------------------
             (Exact name of registrant as specified in its charter)

           New York                                     06-0945588
           --------                                     ----------
 (State or other jurisdiction of                       (IRS Employer
  incorporation or organization)                      Identification No.)

 1 American Center, Geneva, New York                     14456-1188
 -----------------------------------                     ----------
(Address of principal executive offices)                 (Zip Code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements  for the past 90 days.                         
Yes X     No
   ---

The number of shares of common stock,  $.01 par value,  outstanding  at December
31,1997 was 7,407,402.







                               Page 1 of 12 Pages
                           Exhibit Index is on Page 2





<PAGE>



                          THE METAL ARTS COMPANY, INC.
                          ----------------------------

                                   I N D E X
                                   ---------


PART I    Financial Information:

          Consolidated Condensed Balance Sheets,
          December 31, 1997 and June 30, 1997.                      4 and 5

          Consolidated condensed Statements of
          Operations, six months ended December 31,
          1997 and 1996.                                             6

          Consolidated Condensed Statement of
          Cash Flows, six months ended
          December 31,1997 and 1996.                                 7

          Notes to Consolidated Condensed
          Financial Statements.                                      8

          Management's Discussion and Analysis
          of Financial Condition and Results
          of Operations.                                             9

PART II   Other Information                                         10







                                       (2)





<PAGE>




                          PART I FINANCIAL INFORMATION
                         -------------------------------








                                       (3)




<PAGE>


<TABLE>
<CAPTION>


                          THE METAL ARTS COMPANY, INC.
                          ----------------------------

                     CONSOLIDATED CONDENSED BALANCE SHEETS
                     -------------------------------------

                                  (UNAUDITED)
                                  -----------

ASSETS

                                                           12/31/97        6/30/97
                                                           --------        -------
Current Assets:
<S>                                                     <C>            <C>        
           Cash                                         $    51,036    $    53,241
           Trade accounts receivable - net                  268,339        223,791
           Current portion of due from NYSERDA                    0         32,501
           Due from former subsidiary - net                       0          2,862
           Current portion of deferred tax asset             26,600         26,600
           Prepaid expenses and other current assets         20,787          8,364
                                                        -----------    -----------
                                                            366,762        347,359

PROPERTY, PLANT AND EQUIPMENT                               966,616        929,629
           Less accumulated depreciation                   (515,669)      (469,469)
                                                        -----------    -----------
                                                            450,947        460,160
OTHER ASSETS
           Due from shareholders                                  0         13,009
           Cash value of life insurance                       7,893          7,893
           Operating rights - net                            16,750         16,750
           Debt issuance costs - net                         10,622         10,622
           Deferred tax asset, net of current portion       178,300        178,300
           Other assets                                      57,227         30,543
                                                        -----------    -----------
                                                            270,792        257,117
                                                        -----------    -----------
TOTAL ASSETS                                            $ 1,088,501    $ 1,064,636
                                                        ===========    ===========

</TABLE>







                                       (4)




<PAGE>



                          THE METAL ARTS COMPANY, INC.
                     CONSOLIDATED CONDENSED BALANCE SHEETS

                                  (UNAUDITED)

                                  (CONTINUED)

               LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

                                                       12/31/97        6/30/97
                                                       --------        -------
CURRENT LIABILITIES

           Current portion of long-term debt        $    56,613    $    56,613
           Accounts payable - trade                     206,168        220,809
           Accrued expenses                               6,214          8,207
           Accrued payroll and related taxes             26,193         21,702
           Accrued commissions                           34,248         34,401
                                                   ---------------------------
                                                        329,436        341,732

LONG-TERM LIABILITIES
           Long-term debt, net of current portion       328,387        348,332
           Other long-term liability                    243,222        243,222
           Deferred tax liability                        14,800         14,800
                                                   ---------------------------
                                                        586,409        606,354

MINORITY INTEREST IN SUBSIDIARY                         164,881        142,181

STOCKHOLDERS' EQUITY
Common stock- $.01 par value, 15,000,000 shares
authorized; issued and outstanding; 7,407,402 at
Dec. 31, 1997 and  June 30, 1997                         74,074         74,074
     Paid-in capital in excess of par value           2,407,188      2,407,188
     Accumulated deficit                             (2,473,487)    (2,506,893)
                                                   ---------------------------
                                                          7,775        (25,631)
                                                   ---------------------------


TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY                                $ 1,088,501    $ 1,064,636
                                                    ==========================

                                       (5)




<PAGE>


<TABLE>
<CAPTION>

                          THE METAL ARTS COMPANY, INC.
                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

                                  (UNAUDITED)

                                             THREE MONTHS ENDED                  SIX MONTHS ENDED
                                                  DECEMBER 31,                      DECEMBER 31,
                                             1997         1996             1997                   1996
                                             ----          ----            ----                   ----


<S>                                    <C>            <C>            <C>                     <C>        
SALES - NET                            $   468,373    $   374,471    $   939,379             $   781,747

COST OF SALES                             (345,016)      (319,515)      (699,646)               (655,552)
                                       -----------------------------------------------------------------
GROSS MARGIN                               123,357         54,956        239,733                 126,195

SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES                    (85,940)       (67,775)      (167,785)
                                       -----------------------------------------------------------------
RESEARCH AND DEVELOPMENT                         0         23,463              0                  35,980

OPERATING INCOME (LOSS)                     37,417         10,644         71,948                  34,651

INTEREST EXPENSE                            (7,936)        (8,545)       (15,991)                (18,203)
INTEREST INCOME                                 68            264            149                     806
MINORITY INTEREST IN INCOME
OF SUBSIDIARY                              (11,050)          (180)       (22,700)                (10,116)
                                       -----------------------------------------------------------------
                                           (18,918)        (8,461)       (38,542)                (27,513)
                                       -----------------------------------------------------------------
NET INCOME (LOSS)
FOR THE PERIOD                         $    18,499    $     2,183    $    33,406             $     7,138
                                       =================================================================
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES

OUTSTANDING                              7,407,402      7,357,402      7,404,402               7,332,402
EARNINGS PER SHARE OF
COMMON STOCK:
    Net income (loss) for the period   $      0.00    $      0.00    $      0.00             $      0.00
                                       =================================================================




</TABLE>







                                      (6)


<PAGE>

<TABLE>
<CAPTION>


                            METAL ARTS COMPANY, INC.
                CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)


                                                                  SIX MONTHS ENDED
                                                                   DECEMBER  31,
                                                                 1997         1996

                                                                 ----         ----
<S>                                                           <C>         <C>      
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss) for the period                            $ 33,406    $   7,138
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS)
TO NET CASH PROVIDED BY OPERATING ACTIVITIES
  Rent expense offset against advances to former subsidiary      3,000        3,000
  Depreciation and amortization                                 46,200       46,200
  Minority interest in income of subsidiary                     22,700       10,116
  Change in operating accounts:
     Accounts receivable                                       (12,047)     (13,336)
     Prepaid expenses and other                                (39,107)        (726)
     Accounts payable                                          (14,641)     (32,529)
     Accrued expenses                                           (1,993)       9,900
     Accrued payroll and commissions                             4,220       (5,649)
                                                             -----------------------
                                                                41,718       24,114
CASH FLOWS FROM INVESTING ACTIVITIES
  Capital expenditures                                         (36,987)     (40,145)
  Repayment of advance to shareholder                           13,009            0
                                                             -----------------------
                                                               (23,978)     (40,145)
CASH FLOWS FINANCING ACTIVITIES
  Proceeds from issuance of common stock                             0        6,000
            Payments on long term debt                         (19,945)     (20,007)
                                                             -----------------------
                                                               (19,945)     (14,007)
                                                             -----------------------

NET INCREASE IN CASH                                            (2,205      (30,038)

CASH - BEGINNING                                                53,241      112,215
                                                             -----------------------

CASH ENDING                                                   $ 51,036    $  82,177
                                                             ======================
SUPPLEMENTAL CASH FLOW INFORMATION
           Cash Paid for interest expense                     $ 15,991    $  18,203
                                                             ======================
SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
           Accounts payable-trade staisfied                   $      0    $  44,000
           Common stock issued                                       0      (44,000)
                                                             ======================
           Cash paid                                          $      0    $       0
                                                             ======================

</TABLE>

                                      (7)


<PAGE>



                          THE METAL ARTS COMPANY, INC.




              Notes to Consolidated Condensed Financial Statements






1.  These statements  should be read in conjunction  with the audited  financial
    statements  and the  notes  thereto  and with  Management's  Discussion  and
    Analysis of Financial  Condition and Results of  Operations  included in the
    Company's  Form 10-K for the fiscal year ended June30,  1997. In the opinion
    of management,  the accompanying consolidated condensed financial statements
    contain all adjustments of a normal  recurring nature necessary for the fair
    presentation of the Company's financial position as of Dec. 31, 1997 and the
    results of operations for the six months ended Dec. 31, 1997and 1996

2.  The results of  operations  for the six months  ended Dec.  31, 1997 are not
    necessarily indicative of the results to be expected for the full year.

3.  Earnings  (loss)  per  share of common  stock is  computed  on the  weighted
    average  number of shares  outstanding  during the six months ended Dec. 31,
    1997 and 1996. The weighted average number of shares  outstanding at the end
    of each period is determined by totaling the number of shares outstanding at
    the end of each month in the period  and  dividing  the sum by the number of
    months in the period.






                                      (8)


<PAGE>



                          THE METAL ARTS COMPANY, INC.
                          ----------------------------
               Management's Discussion and Analysis of Financial
               -------------------------------------------------
                       Condition and Results of Operation
                       ----------------------------------


Certain  statements  contained in this filing are  "forward-looking  statements"
within the meaning of the Private Securities Litigation Reform Act of 1995, such
as  statements  relating  to  financial  results  and plans for future  business
development   activities,   and  are  thus  prospective.   Such  forward-looking
statements  are subject to risks,  uncertainties  and other  factors which could
cause  actual  results to differ  materially  from future  results  expressed or
implied by such forward- looking  statements.  Potential risks and uncertainties
include,  but are not limited to,  economic  conditions,  competition  and other
uncertainties  detailed  from  time  to  time in the  Company's  Securities  and
Exchange Commission filings.

LIQUIDITY AND CAPITAL RESOURCES

PRIVATE PLACEMENT OF DEBENTURES

The company  sold, as of September 30, 1994,  eleven  debentures  for a total of
$275,000. The purpose of the private placement was to acquire the technology for
plating  electroless nickel on aluminum,  complete all research and development,
conduct test trials with potential customers leading up to commercialization .

NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY FUNDING

The company  signed an  agreement  with the New York State  Energy  Research and
Development  Authority (NYSERDA) dated June 22, 1995 for funding of $325,000 for
its new  technology.  This  was  done as a part of  NYSERDA's  Industrial  Waste
Minimization  Program.  The purpose of the  funding is to provide  money for the
completion of research and development,  test trials,  commercial demonstrations
and  commercialization  of the  technology.  To date, the company has received a
total of $325,000 on this contract.

OPERATING ACTIVITIES

Over the past three fiscal years Coating  Technology  has shown steady growth in
sales and  earnings.  Cash  flow,  along  with  term  loans  from the  company's
commercial  bank,  was  adequate  to  provide  for the  acquisition  of  capital
equipment  and provide the working  capital  necessary to run the  business.  In
addition,  all relevant  measures  relating to: Debt to Equity;  current  ratio;
working capital; and net worth increased.

Through the first six months of fiscal year 1998,  Coating  Technology  operated
profitably with sufficient resources to sustain operations.

MICROSMOOTH(TM)

The Company initially applied for a patent on  Microsmooth(TM),  its proprietary
activator  for  plating  electroless  nickel on aluminum  in March,  1994.  That
application  was then split  into  three  separate  applications;  the  chemical
formula; the process and; the resulting product.




                                       (9)


<PAGE>



Subsequently, and as a result of significant chemical formula modifications, the
original  formula  application  was abandoned and a new patent  application  was
filed in June, 1997.

On July 30, 1997 the Company  entered into an exclusive  license  agreement with
Alyn  Corporation,  Inc. for Alyn to use the  Microsmooth(TM)  process on Alyn's
Boralyn  alternate  computer  memory  disks.  The Company will receive  material
royalties from the Alyn Corporation to retain Alyn's excluseve  worldwide rights
to the Microsmooth(TM) technology on alternate computer memory disks.

In order to commercialize its new technology it will be necessary for Metal Arts
to raise additional  capital.  The amount of capital required will depend on how
rapidly  market  acceptance  might occur.  If this does occur it could result in
growth in the company's sales and earnings over the next few years.  The company
will seek, if commercial sales commence, to raise additional capital in the form
of receivables  financing,  warrant conversion or other investment mechanisms to
sustain operations.

On December 8, 1997 the Company  was  notified by the United  States  Patent and
Trademark  Office  that a Notice  of  Allowance  had been  granted  the  Company
covering its Microsmooth(TM) formula and an Allowance for the process.






                                      (10)




<PAGE>



                          The Metal Arts Company, Inc.

                    Management's discussion and Analysis of
                  financial Condition and Results of Operation



B.  RESULTS OF OPERATIONS:  
    ----------------------  
    The following table illustrates the major components of consolidated net 
    sales and net income (loss).


                                                         Six Months Ended
                                                             December 31
                                                       1997              1996
                                                       ----              ----
Consolidated Net Sales:
           Metal Arts                               $  80,000         $   9,800
           Coating Technology                         859,000           772,000
                                                    ---------------------------
                                                    $ 939,000         $ 781,800
                                                    ===========================
Consolidated Net Income (Loss)
           Metal Arts                               ($ 19,500)        ($ 16,500)
           Coating Technology                          75,600            33,700
            Minority Interest                         (22,700)          (10,100)
                                                    ---------------------------
                                                    $  33,400         $   7,100
                                                    ===========================

THE METAL ARTS COMPANY, INC.
----------------------------
The net sales for the Company for the six (6) months ended December 31,1997 were
$80,000  compared with $9,800 in the previous year. The Company showed a loss of
$19,500 versus a loss of $16,500 the previous year.

COATING TECHNOLOGY, INC.
------------------------
Coating  Technology's  sales for the six (6) months ended December 31, 1997 were
$859,000 as compared with $772,000 in the previous  year.  The Company  showed a
profit of $75,600 as compared with a profit of $33,700 in the previous year.







                                      (11)



<PAGE>



THE METAL ARTS COMPANY, INC.

Part II - Other Information:

           Item 6 - Exhibits and Reports on form 8-K

           A.  Exhibits - None

           B.  Reports on Form 8 - K - None

Signatures:

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

THE METAL ARTS COMPANY, INC.
----------------------------

Date:February  6, 1998              /s/  Stanley J. Dahle
     -----------------              ---------------------
                                    Stanley J. Dahle
                                    President

Date:February  6, 1998              /s/  Albert A. Cauwels
     -----------------              ----------------------
                                    Albert A. Cauwels
                                    Secretary













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