UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                 FORM 10-KSB/A1

(X)    ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
       1934 (Fee Required)

       For the fiscal year ended May 31, 1998.

( )    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
       ACT OF 1934 (No Fee Required)

                         Commission File Number: 1-4676

                            The Bethlehem Corporation
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

                  Pennsylvania                               24-0525900
         -------------------------------                 ----------------
         (State or other jurisdiction of                 (I.R.S. Employer
         incorporation or organization)                  Identification No.)

         25th and Lennox Streets, Easton, Pennsylvania        18044-0348
         ----------------------------------------             ----------
         (Address of principal executive offices)             (Zip Code)

Issuer's telephone number including Area Code:  (610) 258-7111.

Securities registered under Section 12(b) of the Act:

                                                    Name of each exchange
         Title of each class                         on which registered
         -------------------                         -------------------

         Common Stock, no par value             American Stock Exchange, Inc.

Securities registered under Section 12(g) of the Exchange Act:  None.

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

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure  will be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year:  $16,271,000

As of August 18, 1998,  2,288,520 shares of the  registrant's  Common Stock were
outstanding  and the  aggregate  market  value  of  such  Common  Stock  held by
non-affiliates was approximately  $1,802,210 based on the average of the bid and
asked prices on that date of $1.75.

<PAGE>
                                    Part III

Item     9.  Directors,  Executive  Officers,  Promoters  and  Control  Persons;
         compliance with Section 16(a) of the Exchange Act.

         The directors are elected at the Annual Meeting of the  Stockholders of
the Company and each  director  elected  holds  office  until his  successor  is
elected  and  qualified.  The Board  currently  consists of eight  members.  The
stockholders vote at the Annual Meeting for the election of directors. There are
no family  relationships  among  any  directors  or  executive  officers  of the
Company, except that directors Jan P. Gale and Ronald H. Gale are brothers.

         The names of the directors, together with certain information regarding
them, are as follows:

<TABLE>
<CAPTION>
                                                                                                          Year First Became a
         Name                  Age                            Principal Occupation                             Director
-----------------------    ------------     ---------------------------------------------------------    ----------------------

<S>                            <C>          <C>                                                                  <C> 
Salvatore J. Zizza             52           Chairman of the Board of Directors since 1995; Chairman              1995
                                            and Principal of Hallmark Electrical Supplies Corp.,
                                            since May of 1998; from 1991 to April 1998, Chairman
                                            and Executive Vice President and Treasurer of The
                                            Lehigh Group, a public company listed on the New York
                                            Stock Exchange with subsidiaries in the distribution of
                                            electrical products

Alan H. Silverstein            49           President and Chief Executive Officer of the Company                 1994
                                            since December 1995; President and Chief Operating
                                            Officer of the Company from February 1994 to November
                                            1995; from July 1992 to February 1994, President of
                                            Universal Industrial Gas, Inc., a rebuilder of
                                            industrial gas plants

James L. Leuthe                56           Chairman of the Board of First Lehigh Corporation, a                 1976
                                            bank  holding  company,  since 1982;
                                            from 1977  until  1995 held  various
                                            positions    with    the    Company,
                                            including  most  recently  President
                                            and Chief Executive Officer

Jan P. Gale(1)                 44           Vice President since 1978 of UPE, an international                   1991
                                            supplier of complete process plants and equipment and
                                            manufacturer of new equipment in the United States and
                                            Europe

Ronald H. Gale(1)              47           President and Chief Executive Officer of UPE since 1978              1990

Harold Bogatz                  60           Vice President and General Counsel of UPE since 1987;                1995
                                            Secretary of the Company since 1996

James F. Lomma                 52           President, J.F. Lomma Inc. since 1975, a trucking,                   1998
                                            rigging and export packaging firm located in South
                                            Kearney, N.J.  Mr. Lomma also serves as the Chairman of
                                            the Special Carrier & Rigging Association

B. Ord Houston                 85           Secretary of the Company from June 1983 to December                  1976
                                            1995, otherwise retired for at least
                                            the last five  years;  held  various
                                            positions with the Company from 1966
                                            until   1984,   most   recently   as
                                            Executive Vice President
</TABLE>
(1) Jan P. Gale and Ronald H. Gale are brothers.

                                       2
<PAGE>
Item 10. Executive Compensation

         The  following  table  summarizes  compensation   information  for  the
Company's  President and Chief Executive Officer,  and two executive officers of
the Company whose  compensation  exceeded $100,000 for the Fiscal Year ended May
31, 1998. The table presents for such  individuals  information  with respect to
compensation  paid or accrued by the Company for  services  rendered  during the
Fiscal Years ended May 31, 1996, 1997 and 1998.  Messrs.  Silverstein,  Lind and
Mrs.  Martin  are  collectively  referred  to  herein  as the  "Named  Executive
Officers."
<TABLE>
<CAPTION>
                                            Summary Compensation Table

                                            Fiscal Year Compensation                 Long Term Compensation
                                            ------------------------                 ----------------------

Name and Principal                                           Other Annual              Stock          All Other
Position                 Year       Salary        Bonus      Compensation (3)         Option      Compensation (1)
                                                                                      Awards
------------------------ -------- ------------ ------------- ---------------------- ------------ --------------------

<S>                      <C>       <C>          <C>                <C>               <C>              <C>    
Alan H. Silverstein      1998      $ 154,789    $   91,214         $ 6,607           50,000           $11,865
President and Chief      1997        140,441        83,570           7,295               -             11,925
Executive Officer (2)    1996        118,655        46,850           7,295               -             11,925

Clarence T. Lind         1998        104,923        21,303           5,849               -                612
Vice President of        1997         99,000        25,907           4,369               -                672
Sales, Marketing and     1996         90,000        26,350           4,369            20,000              672
Technology (4)

Antoinette L. Martin     1998        100,000        10,900           5,539            10,000              612
Vice President of        1997         89,038           890           5,902               -                612
Finance, Chief           1996         63,754           638           5,902            20,000              612
Financial Officer (5)

</TABLE>
(1)  Represents life insurance premiums paid by the Company.

(2)  Mr.  Silverstein was elected  President and Chief Operating  Officer of the
     Company in February 1994 and was appointed Chief  Executive  Officer of the
     Company on December 12, 1995.

(3)  Represents lease and insurance payments made by the Company with respect to
     use of an automobile.

(4)  Mr. Lind was elected Vice  President of Sales,  Marketing and Technology of
     the Company on December 12, 1995.

(5)  Mrs.  Martin was elected  Vice  President  of Finance  and Chief  Financial
     Officer of the Company on September 12, 1995.


                                       3
<PAGE>
Option Grants in Last Fiscal Year

         The following table sets forth information  concerning  options granted
during the fiscal year ended May 31, 1998 under the Company's stock option plans
or pursuant to grants to the Named Executive Officers.

<TABLE>
<CAPTION>
                                  Number of           Percent of Total
                                 Securities           Options Granted
                             Underlying Options       to Employees in           Per Share            Expiration 
          Name                     Granted              Fiscal Year           Exercise Price            Date
-------------------------    --------------------    -------------------     -----------------    -----------------
<S>                                <C>                     <C>                    <C>               <C>    
Alan H. Silverstein                50,000                  5.8%                   $1.88             June 2, 2007

Antoinette L. Martin               10,000                  1.17%                  $1.88             June 2, 2007

</TABLE>
Aggregated Fiscal Year-End Options

         The   following   table  sets  forth  certain   information   regarding
unexercised stock options held by each of the Named Executive Officers as of May
31, 1998. No stock options were exercised by any Named Executive  Officer during
the 1998 Fiscal Year.
<TABLE>
<CAPTION>
                        AGGREGATED FISCAL YEAR-END OPTION VALUES

                                  Number of
                             Unexercised Options                       Value of Unexercised
                               at May 31, 1998              in-the-Money Options at May 31, 1998 ($)(1)
                         -----------------------------    ------------------------------------------------

                                                                           Exercisable/
Name                      Exercisable/Unexercisable                        Unexercisable
----                      -------------------------                        -------------

<S>                             <C>                                        <C>
Alan H. Silverstein               310,000/0                                  439,625/0

Clarence T. Lind                 9,999/10,001                               3,932/4,768

Antoinette L. Martin             23,333/6,667                              10,066/3,734

</TABLE>

(1)      On May 31, 1998 the last reported  sale price of the Common  Stock,  as
         reported by the American Stock Exchange, was $2.56 per share.


                                       4
<PAGE>

Compensation of Directors

         Directors  are not  compensated  in  general  for their  services  as a
director but are entitled to  reimbursement  of expenses  incurred in connection
with their  attendance at meetings.  In the past the Company has granted options
to certain directors.

Employment Agreements

         Alan H. Silverstein, President and Chief Executive Officer, is employed
by the Company  pursuant to an  agreement  (the  "Employment  Agreement")  dated
February 1, 1994. The Employment  Agreement  provides for a five year term, with
automatic renewal for successive terms of two years,  subject to a mutual right,
exercisable  within 120 days prior to the  expiration of any term,  not to renew
the Employment Agreement.  The salary paid to Mr. Silverstein for the first year
under the Employment  Agreement is $110,000  increasing to $165,000 in the fifth
year.  Mr.  Silverstein  is entitled  to a quarterly  bonus based on the defined
earnings of the Company.


                                       5
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management

         The following table sets forth,  as of September 28, 1998,  information
regarding  ownership of the  outstanding  Common Stock of the Company by (i) all
persons who are known to the Company to be the beneficial  owner of more than 5%
of the Common  Stock;  (ii) each director and Named  Executive  Officer (as such
term is hereinafter defined);  and (iii) all directors and executive officers of
the Company as a group:
<TABLE>
<CAPTION>
                                                                                             Percentage of
   Name and Address of Beneficial Owner*           Shares Owned Beneficially (1)          Outstanding Shares
---------------------------------------------     ---------------------------------      ----------------------
<S>                                                                <C>                           <C>  
Universal Process Equipment, Inc.                                  2,706,600(2)(3)               63.5%
PO Box 338
Roosevelt, NJ  08555

Ronald H. Gale                                                     2,779,100(4)(5)               65.2%

Jan P. Gale                                                        2,777,100(4)(5)               65.1%

James L. Leuthe                                                      339,124(4)(6)               14.0%

Alan H. Silverstein                                                     310,000(7)               11.9%

Salvatore J. Zizza                                                      188,000(8)               7.6%

B. Ord Houston                                                            6,365(4)                (9)

Harold Bogatz                                                           10,000(10)                (9)

James F. Lomma                                                                   -                (9)

Clarence T. Lind                                                        13,999(11)                (9)

All directors and executive officers as a                            3,767,921(12)                76%
group (12 persons)

</TABLE>

* Unless otherwise noted the address of the Beneficial Owner is c/o the Company,
25th & Lennox Streets, Easton, Pennsylvania 18044.

(1)  All  persons  identified  as holding  options  are deemed to be  beneficial
     owners of shares of Common Stock subject to such options by reason of their
     right to acquire such shares within 60 days after September 28, 1998.

(2)  Includes  1,975,000 shares subject to options.  See "Certain  Relationships
     and Transactions."

(3)  Does not include shares owned by Ronald H. Gale and Jan P. Gale.

(4)  Includes 500 shares subject to options.

(5)  Includes  2,706,600  shares   beneficially  owned  by  UPE,  of  which  the
     individual is an officer, director and principal stockholder.

(6)  Of this total,  52,281 shares are owned by Nikki,  Inc., a  corporation  of
     which Mr.  Leuthe is an  officer  and  director  and the sole  stockholder,
     161,343  shares are owned by Mr.  Leuthe and 125,500  shares are subject to
     options. This total does not include 640 shares owned by Mr. Leuthe's adult
     children as to which he disclaims beneficial ownership.



                                       6
<PAGE>
(7)  Consists of 310,000 shares subject to options.

(8)  Consists of 188,000 shares subject to options.

(9)  Less than 1.0%.

(10) Consists of 10,000 shares subject to options.

(11) Includes 9,999 shares subject to options.

(12) Includes 2,657,999 shares subject to options.




                                       7
<PAGE>
Item 12. Certain Relationships and Transactions

         Ronald H. Gale and Jan P. Gale are  Directors and  Stockholders  of the
Company  and are  officers,  directors  and  principal  stockholders  of UPE,  a
principal  stockholder  of the Company.  UPE and/or Ronald H. Gale and/or Jan P.
Gale are also majority stockholders or otherwise affiliated with other companies
that engage in  transactions  with the Company.  UPE and related  entities  have
purchased  process  equipment  manufactured by the Company and have utilized the
Company's  remanufacturing services. The approximate total revenues derived from
sales to UPE and related  parties was  approximately  $1,318,000  for the Fiscal
year ended May 31, 1998 ("Fiscal 1998").

         On March 26, 1996,  the Board of  Directors of the Company,  subject to
the approval of the Company's stockholders, granted an option to UPE to purchase
350,000  shares of the Common  Stock at an exercise  price of $1.8125 per share.
Such option was issued in  consideration  for debt guarantees by UPE for various
borrowings  by the  Company.  This  transaction  was  approved by the  Company's
Stockholders at the Annual Meeting of the Stockholders held on April 23, 1998. A
financing  charge of $296,000  related to these options was recognized in Fiscal
1998. The value  ascribed to these options is  approximately  $424,000,  and the
balance  of  $128,000  will be  amortized  over  the  terms  of the  outstanding
guarantees.

         On March 26, 1996,  the Board of Directors,  subject to the approval of
the Company's stockholders,  authorized the issuance to UPE of 350,000 shares of
Common Stock in  consideration  for a 50% ownership  interest in certain  resale
inventory,  which consists  primarily of heat transfer  equipment  owned by UPE.
This  transaction  was  approved  by the  Company's  Stockholders  at the Annual
Meeting  of  Stockholders   held  on  April  23,  1998.  The  Company   recorded
approximately   $126,000  of  non-cash  compensation  expense  related  to  this
transaction in Fiscal 1998.

         On August 21, 1998,  the Board of  Directors of the Company  authorized
the issuance to UPE of 175,000  shares of Common  Stock at an exercise  price of
$1.63,  which  represented the fair market value of the stock at the date of the
grant.  Such  option  was  issued  in  consideration  for  guarantees  by UPE of
borrowings  by the Company from PNC Bank  National  Association.  The  financing
consists of a $4 million line of credit and term loan,  secured by the Company's
inventory,  accounts  receivable,  machinery and equipment and other assets. The
value ascribed to such options will be amortized over the term of the guarantee.

         In May 1998,  the Company  transferred  inventory  with a book value of
approximately  $1,924,000  to UPE.  As part of  this  transaction,  UPE  assumed
obligations  of $1,390,000 and $534,000 of related bank debt.  This  transaction
did not  result in a gain or loss in the  Company's  Fiscal  1998  statement  of
income.

         From time to time in the  ordinary  course of  business,  UPE  advances
funds to the  Company  to enable  the  Company to meet  certain  temporary  cash
requirements.  The interest on the advances is prime rate (Chase Bank, New York)
plus 1%. In August 1996, UPE advanced  $250,000 to the Company.  UPE advanced an
additional  $250,000 to the Company in October  1996.  As of September 23, 1998,
$538,000 of these advances remains outstanding.

         On  February  28,  1997,  the Company  purchased  a complete  two stage
environmental thermal process system in Alberta,  Canada. In order to effect the
acquisition  of the  equipment,  the Company  borrowed  $225,000  from UPE at an
interest  rate of prime rate  (Chase  Bank,  New York) plus 2.5%.  This loan was
repaid in full during the third and fourth quarter of Fiscal 1998.

         As of June 1,  1996,  the  Company  began a three year  profit  sharing
arrangement  with UPE. This  arrangement  was agreed upon as  consideration  for
UPE's  role in  introducing  the  Company  to  Third  Millenium  Products,  Inc.
("Millenium"),  assisting in  negotiating  the  acquisition of the assets of the
American  Furnace  Division  of  Millenium  by  Bethlehem   Advanced   Materials
Corporation ("BAM"), a wholly-owned subsidiary of the Company, and UPE's role in
originating, negotiating, developing and assisting in the marketing of the Tower
Filter Process product line. Under this arrangement,  which expires in May 1999,
UPE is entitled to receive  25% of the  defined  pre-tax  profits of BAM and the
Tower Filter Press product line. For the Fiscal Year 1998, no provision for this
profit sharing arrangement was required.

         The  Company  and  Salvatore  J.  Zizza,  Chairman  of the Board of the
Company,  are parties to an  agreement  under which Mr.  Zizza  renders  certain
financial  advisory  services,  including those relating to proposed mergers 


                                       8
<PAGE>
and  acquisitions and equity and debt financing and relations with the financial
community  and  investors.  Mr.  Zizza  receives  compensation  in the amount of
$120,000 per annum.

         On March 26, 1996,  the Board of Directors,  subject to the approval of
the  Company's  Stockholders,  authorized  the  issuance  of 125,000 and 178,000
shares of Common  Stock to James L. Leuthe,  a director and former  Chairman and
Chief Executive officer of the Company, and Salvatore J. Zizza,  Chairman of the
Board of  Directors  of the  Company,  respectively.  On April  23,  1998,  this
transaction was approved at the Company's  Stockholder's meeting.  During Fiscal
1998, the Company  recorded  approximately  $32,000 in compensation  expense for
these options. The balance of the option's fair value of approximately  $335,000
will be expensed as services are rendered over the three year vesting  period of
the options.





                                       9
<PAGE>
SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange  Act of 1934,  the  Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.



                                         THE BETHLEHEM CORPORATION
Dated:  September 28, 1998

                                    By:  /s/ Alan H. Silverstein
                                         -----------------------
                                             Alan H. Silverstein
                                             President and Chief
                                             Executive Officer



                                       10