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SECURITIES AND EXCHANGE
COMMISSIONWASHINGTON, D.C. 20549

FORM 10- QSB

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

|FOR
  QUARTER ENDED: | JUNE 30, 2002 |  | COMMISSION
  FILE NO: | 0-2172
|-------------------- | ------------- |  | --------------------- | ------
|                     |               |  |                       |       



|THE FLAMEMASTER CORPORATION                             
|--------------------------------------------------------
|                                                        
|(Exact name of
  Registrant as specified in its Charter)



|NEVADA                                                           | 95-2018730                            
|---------------------------------------------------------------- | --------------------------------------
|                                                                 |                                       
|(State or other
  jurisdiction of incorporation or organization) | (IRS Employer
  identification Number)



|11120 SHERMAN WAY, SUN VALLEY, CALIFORNIA 91352
|-----------------------------------------------
|                                               
|(Address
  of Principal Executive Office)      



Registrant's telephone number including area
  code:
  (818) 982-1650Registrant's facsimile number including area
  code:
  (818) 765-5603


Indicate by
check mark whether 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.

|YESý | NOo
|---- | ---

Indicate the
number of shares outstanding of each of the issuer's classes of common stock,
as of the latest practicable date:

|June 30, 2002 | 1,413,013
|------------- | ---------

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Item 1 Financial Information
Item 1 Financial Statement

THE FLAMEMASTER CORPORATION
CONDENSED BALANCE SHEET

|                                                                                                                             | June 302002(Unaudited) |          
|---------------------------------------------------------------------------------------------------------------------------- | ---------------------- | ---------
|                                                                                                                             |                        |          
|A S S E T S :                                                                                                                |                        |          
|Current Assets:                                                                                                              |                        |          
|Cash and cash
  equivalents                                                                                                  | $                      | 1,636,148
|Marketable securities                                                                                                        | 3,671,934              |          
|Accounts receivable,
  less allowance of $5,000                                                                              | 616,178                |          
|Notes Receivable                                                                                                             | 587                    |          
|Inventories                                                                                                                  | 1,133,333              |          
|Prepaid expenses                                                                                                             | 39,578                 |          
|Deferred income taxes                                                                                                        | 28,380                 |          
|Other investments                                                                                                            | 46,287                 |          
|                                                                                                                             |                        |          
|Total current assets:                                                                                                        | 7,172,425              |          
|                                                                                                                             |                        |          
|Machinery &
  improvements, net of accumulated depreciation                                                                  | 150,002                |          
|License agreement, net
  of accumulated amortization                                                                         | 41,697                 |          
|                                                                                                                             |                        |          
|TOTAL ASSETS                                                                                                                 | $                      | 7,364,124
|                                                                                                                             |                        |          
|LIABILITIES AND STOCKHOLDERS EQUITY:                                                                                        |                        |          
|Current Liabilities:                                                                                                         |                        |          
|Accounts payable                                                                                                             | $                      | 138,297  
|Accrued liabilities                                                                                                          | 10,111                 |          
|Income tax payable                                                                                                           | 70,350                 |          
|                                                                                                                             |                        |          
|Total current liabilities:                                                                                                   | 218,758                |          
|                                                                                                                             |                        |          
|Long-term
  liabilities:                                                                                                     |                        |          
|Notes payable                                                                                                                | 1,710,800              |          
|                                                                                                                             |                        |          
|Total Liabilities:                                                                                                           | 1,929,558              |          
|                                                                                                                             |                        |          
|SHAREHOLDERS EQUITY:                                                                                                        |                        |          
|Common Stock,par value, $.01
  per share, authorized 6,000,000 shares; issued and outstanding 1,413,013
  shares at 06/30/02 | 14,127                 |          
|Additional paid-in
  Capital                                                                                                 | 3,327,202              |          
|Retained earning                                                                                                             | 2,259,893              |          
|Allowance for
  marketable securities                                                                                        | (166,656               | )        
|                                                                                                                             |                        |          
|TOTAL STOCKHOLDERS EQUITY                                                                                                   | $                      | 5,434,566
|                                                                                                                             |                        |          
|TOTAL LIABILITY AND EQUITY                                                                                                   | $                      | 7,364,124
|                                                                                                                             |                        |          

See notes to condensed financial
statements.

2

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Item 1  Financial Statements (continued)

THE FLAMEMASTER CORPORATION
CONDENSED  STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED JUNE 30,

|                                       | 2002                         |           | 2001      |          
|-------------------------------------- | ---------------------------- | --------- | --------- | ---------
|                                       |                              |           |           |          
|Net
  sales                            | $                            | 1,329,107 |           | $        
|Royalties                              | 435                          |           |          |          
|Interest
  and Other Income            | 55,846                       |           | 88,663    |          
|                                       |                              |           |           |          
|Total
  Revenues                       | 1,385,388                    |           | 1,094,062 |          
|                                       |                              |           |           |          
|Costs
  and expenses:                  |                              |           |           |          
|                                       | Cost
  of sales              | 630,169   |           | 525,288  
|                                       | Selling                      | 95,785    |           | 83,736   
|                                       | General
  and administrative | 170,403   |           | 146,278  
|                                       | Laboratory
  costs           | 99,331    |           | 77,233   
|                                       | Other
  expenses             | 28,475    |           | 29,014   
|                                       |                              |           |           |          
|Total
  costs and expenses:            | 1,024,163                    |           | 861,549   |          
|                                       |                              |           |           |          
|Income
  before income taxes           | 361,225                      |           | 232,513   |          
|                                       |                              |           |           |          
|Income
  taxes                         | 178,523                      |           | 80,238    |          
|                                       |                              |           |           |          
|Net  income                            | 182,702                      |           | 152,275   |          
|                                       |                              |           |           |          
|Other
  comprehensive income           |                              |           |           |          
|                                       | Net
  of income tax          |           |           |          
|Unrealized
  Holding Gains (Losses)    | (17,107                      | )         | 145,021   |          
|                                       |                              |           |           |          
|Comprehensive
  Income                 | $                            | 165,595   |           | $        
|                                       |                              |           |           |          
|Net
  income per share, basic          | $                            | .13       |           | $        
|                                       |                              |           |           |          
|Net
  income per share, diluted        | ****                         |           | ****      |          
|                                       |                              |           |           |          
|Weighted
  average shares outstanding: |                              |           |           |          
|                                       | Basic                        | 1,434,123 |           | 1,580,833
|                                       |                              |           |           |          
|                                       | Diluted                      | 1,477,663 |           | 1,616,966
|                                       |                              |           |           |          

---

****Diluted
earnings per share are not presented, as effect of the assumed conversion of
Notes Payable is anti-dilutive.

See notes to condensed financial
statements.

3

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Item 1  Financial Statements (continued)

THE FLAMEMASTER CORPORATION
CONDENSED STATEMENTS OF INCOME (UNAUDITED)
NINE MONTHS ENDED JUNE 30,

|                                       | 2002                            |           | 2001      |          
|-------------------------------------- | ------------------------------- | --------- | --------- | ---------
|                                       |                                 |           |           |          
|Net
  Sales                            | $                               | 3,711,461 |           | $        
|Royalties                              | 6,865                           |           |          |          
|Interest
  and Other Income            | 222,283                         |           | 280,600   |          
|                                       |                                 |           |           |          
|Total
  Revenues                       | 3,940,609                       |           | 3,251,775 |          
|                                       |                                 |           |           |          
|Costs
  and expenses:                  |                                 |           |           |          
|                                       | Cost
  of Sales                 | 1,946,928 |           | 1,548,905
|                                       | Selling                         | 274,115   |           | 253,505  
|                                       | General
  and administrative    | 481,524   |           | 450,925  
|                                       | Laboratory                      | 279,593   |           | 218,596  
|                                       | Other
  (income)/ Expenses, Net | 86,120    |           | 71,722   
|                                       |                                 |           |           |          
|Total
  Costs and Expenses             | 3,068,280                       |           | 2,543,653 |          
|                                       |                                 |           |           |          
|Income
  before income taxes           | 872,329                         |           | 708,122   |          
|                                       |                                 |           |           |          
|Income
  taxes                         | 358,514                         |           | 228,909   |          
|                                       |                                 |           |           |          
|Net
  income                           | 513,815                         |           | 479,213   |          
|                                       |                                 |           |           |          
|Other
  comprehensive income           |                                 |           |           |          
|                                       | Net
  of income taxes           |           |           |          
|Unrealized holding gains (losses)      | 36,882                          |           | (891,489  | )        
|                                       |                                 |           |           |          
|Comprehensive
  Income                 | $                               | 550,697   |           | $        
|                                       |                                 |           |           |          
|Net
  income per share, basic          | $                               | .36       |           | $        
|                                       |                                 |           |           |          
|Net
  income per share, diluted        | ***                             |           | ***       |          
|                                       |                                 |           |           |          
|Weighted
  average shares outstanding: |                                 |           |           |          
|                                       | Basic                           | 1,443,005 |           | 1,584,868
|                                       |                                 |           |           |          
|                                       | Diluted                         | 1,484,845 |           | 1,623,789
|                                       |                                 |           |           |          

See notes to
condensed financial statements

4

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Item 1  Financial Statements (continued)

THE FLAMEMASTER CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE  MONTHS ENDED JUNE 30,

|                                                    | 2002      |          
|--------------------------------------------------- | --------- | ---------
|                                                    |           |          
|Net
  cash provided (used) by operating activities: | $         | 577,218  
|                                                    |           |          
|CASH
  FLOWS FROM INVESTING ACTIVITIES:             |           |          
|Purchase
  of equipment & improvements              | (50,483   | )        
|Net
  purchases and sales of investment securities  | (866,337  | )        
|                                                    |           |          
|NET
  CASH USED IN INVESTING ACTIVITIES:            | (916,820  | )        
|CASH
  FLOWS FROM FINANCING ACTIVITIES:             |           |          
|Increase
  in notes payable                         | 450,291   |          
|Purchase
  of Companys Common Stock                | (507,500  | )        
|Dividends
  paid                                    | (92,618   | )        
|                                                    |           |          
|NET
  CASH USED IN FINANCING ACTIVITIES             | (149,827  | )        
|                                                    |           |          
|                                                    |           |          
|NET
  INCREASE, (DECREASE), IN CASH                 | (489,429  | )        
|                                                    |           |          
|Cash,
  beginning of period                         | 2,125,577 |          
|                                                    |           |          
|Cash,
  end of period                               | $         | 1,636,148
|                                                    |           |          
|Cash
  paid during period for income taxes          | $         | 304,500  
|                                                    |           |          
|Cash
  paid during period for interest expense      | $         | 43,837   

See notes to
Condensed Financial Statements.

5

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Item 1  Financial Statements (continued)

THE FLAMEMASTER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 2002

|Note 1: |  | Forward-Looking
and Cautionary Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        |  | The  Company  and  its
representatives  may from  time to time  make  written  or oral  forward-looking
statements,  including statements  contained in the Companys  filings with
Securities  and  Exchange  Commission  and  its  reports  to  stockholders.   In
connection with the safe harbor provisions of the Private Securities
Litigation  Reform Act of 1995,  the Company is hereby  identifying  information
that  is  forwardlooking,   including,  without  limitations,   statements
regarding  the  Companys  future  financial  performance,  the  effect  of
government regulations,  national and local economic conditions, the competitive
environment  in which the Company  operates,  results or success of  discussions
with other  entities on mergers,  acquisitions,  or alliance  possibilities  and
expansion of product offerings.  Actual results may differ materially from those
described in the  forwardlooking  statement. The Company cautions that the
foregoing  list of  important  factors is not  exclusive.  The Company  does not
undertake to update any  forwardlooking  statements  that may be made from
time to time by or on behalf of the Company.



|Note 2: |  | Basis of
Presentation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        |  | The  accompanying
unaudited condensed  financial  statements have been prepared in accordance with
generally accepted accounting  principles for interim financial  information and
with  the  instructions  to  Form  10QSB  and  Article  10 of  Regulation  SX.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of management,  all adjustments  (consisting of normal  recurring
accruals),  considered  necessary for a fair  presentation  have been  included.
Operating  results for the nine months ended June 30, 2002 are not indicative of
the results that may be expected  for the year ending  September  30, 2002.  For
further  information,   refer  to  the  consolidated  financial  statements  and
footnotes  thereto  included in the Companys annual report on Form 10K for the
year ended September 30, 2001.

6

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Item 1  Financial Statements (continued)

THE FLAMEMASTER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 2002

|Note 3: |  | Summary of
Significant Accounting Policies:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        |  | Investment in Debt and Equity
Securities:The   Company   adopted   Statement  of
Financial Accounting Standards No: 115 (SFAS No: 115),  Accounting for Certain
Investments in Debt and Equity Securities,  effective January 1, 1995. Management
determines the appropriate  classification of its Investments in debt and equity
securities at the time of purchase and reevaluates  such  determination  at each
balance  sheet date.  Debt  securities  for which the Company  does not have the
intent or ability to hold to maturity  are  classified  as  available  for sale,
along with the Companys  investment in equity securities.  Securities available
for sale are  carried  at fair  value,  with the  unrealized  gains  and  losses
reported in a separate  component of  shareholders'  equity net of income taxes,
until realized.  At June 30, 2002 the Company had no investments  that qualified
as  trading  or  held to  maturity.  The  amortized  cost  of  zerocoupon  debt
securities  classified  as  available  for sale is  adjusted  for  accretion  of
discounts to maturity.  Such  amortization and interest are included in interest
income.  Realized gains and losses are included in other income or expense.  The
cost of securities sold is based on specific identification  method.



| |  | Reclassification
of  Financial  Statements:Beginning  in  the  first
quarter of fiscal 2000, various items of portfolio income, which were previously
classified  as  other  (income),  expenses,  net  are  classified as
interest  and other  income  in the condensed  Statements of Income.
Amounts reported for the prior quarters have been reclassified to conform to the
quarter 2000 presentation.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7

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Item 1  Financial Statements (continued)

THE FLAMEMASTER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 2002

|Note 4: |  | Inventories are summarized as follows:
|------- |  | --------------------------------------

| |                      | June 30,
  2002 |          
| | -------------------- | --------------- | ---------
| |                      |                 |          
| | Raw
  materials      | $               | 561,127  
| | Shipping
  materials | 164,682         |          
| | Finished
  goods     | 407,524         |          
| |                      |                 |          
| |                      | $               | 1,133,333
| |                      |                 |          
| |                      |                 |          



|Note 5: |  | During the three months ended June 30, 2002, the Company
  purchased 31,225 shares of its outstanding common stock at a cost of $191,169.11.
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------



|Note 6: |  | MARKETABLE SECURITIES:
Marketable securities classified as current assets at June 30, 2002 include the following:
|------- |  | -----------------------------------------------------------------------------------------------------------------



Fair Value
  
  
  CostU.S.
  Treasury obligations
  $
  682,846
  
  $
  636,085Other
  Government Bonds
  
  37,671
  
  
  36,250Corporate
  debt securities
  
  8,165
  
  
  27,770Mortgage
  backed securities
  
  405,982
  
  
  408,468Marketable
  equity securities
  
  2,537,270
  
  
  2,784,942$
  3,671,934
  
  $
  3,893,515




| |  | The contractual maturities of debt
securities available for sale at June 30, 2002 is as follows:
| |  | ------------------------------------------------------------------------------------------------



Fair Value
  
  
  CostDue
  within one year
  $
  129,686
  
  $
  129,245Due
  after one year thru 5 years
  
  311,054
  
  
  312,845Due
  after 5 years thru 10 years
  
  141,131
  
  
  119,062Due
  after 10 years
  
  146,811
  
  
  138,953Not
  due at single maturity date
  
  405,982
  
  
  408,468$
  1,134,664
  
  $
  1,108,573


Gross unrealized holding gains and losses at
June 30, 2002 were $449,285 and $670,867, respectively.  Realized gains and losses from the sale of
securities for the nine months ended June 30, 2002 were $79,760 and $4,394
respectively.

8

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THE FLAMEMASTER CORPORATIONItem 2:Management's Discussion and Analysis of Financial Condition and Results of
Operations:

June 30, 2002 compared to September 30, 2001 and June 30,
2002 compared to June 30, 2001.

FINANCIAL CONDITION AND LIQUIDITY:

The  Companys financial condition is strong with current assets
of $7,172,425  compared to current liabilities of $218,758 at June 30, 2002, for
a current ratio of more than 32.75 to 1. Working capital increased to $6,953,667
on June 30, 2002,  compared to  $6,563,805  at September  30, 2001.  Cash,  cash
equivalents, and marketable securities stood at $5,308,082.  Accounts receivable
expanded to $616,178  from  $561,663 in the prior years  quarter ended June 30,
2001,  due to the  increase  level of  business  the  Company  is  experiencing.
Inventories  grew to  $1,133,333 on June 30, 2002 from $988,073 at September 30,
2001 also due to the  increased  volume of  business.  Revenues for the June 30,
2002 quarter increased to $1,385,388  compared to $1,094,062 in the year earlier
quarter.  Sales from  operations  expanded to  $1,329,107  for the June 30, 2002
quarter, compared to $1,005,399 in the year earlier period.

Management  believes that future working  capital  requirements
will be provided primarily from operations and that the Companys  liquidity and
working capital  requirements  are adequate for the next 12 months of operation.
Management believes that the Companys  creditworthiness is substantial relative
to its size.

The  Company paid a $.032 cash dividend on its company stock in
April 2002 and in July 2002.

RESULTS OF OPERATIONS:

For the three months ended June 30, 2002,  income before income
taxes  expanded to $361,225  compared to $232,513 in the prior year.  Net income
after taxes rose to $182,702 or $.13 per share  compared to $152,275 or $.10 per
share for the June 30, 2001 quarter.  Laboratory  costs  including  research and
development  for the quarter  increased  to $99,331 from $77,233 in the year ago
period.  The  Company has  expanded  its  development  efforts for more high end
products  in its core  aircraft  sealants  market.  General  and  Administration
expenses  increased to $170,403 in the quarter  from  $146,278 in the prior year
due to wage increases and additional expenses.

9

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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 hereunto duly
authorized.

|               | THE FLAMEMASTER CORPORATION            
|-------------- | ---------------------------------------
|               |                                        
|               | (Registrant)                           
|               |                                        
|DATE:          | JOSEPH MAZIN                           
|August 2, 2002 |                                        
|               | (Signature)                            
|               | Joseph Mazin, President and Chairman   
|               | and Chief Executive Officer            
|               |                                        
|DATE:          | MARY KAY EASON                         
|August 2, 2002 |                                        
|               | (Signature)                            
|               | Mary Kay Eason, Treasurer and Secretary
|               |                                        
|               |                                        
|DATE:          | DONNA MAZIN                            
|August 2, 2002 |                                        
|               | (Signature)                            
|               | Donna Mazin, Director                  



10

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