UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-QSB

(Mark One)

            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
    [X]     THE SECURITIES EXCHANGE ACT OF 1934
            For the quarterly period ended September 30, 1998

                                       OR

    [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
            OF THE SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number 0-22365

                     APOLLO INTERNATIONAL OF DELAWARE, INC.
          -----------------------------------------------------------
         (Exact name of Small Business Issuer specified in its charter)

         DELAWARE                                  59-3285046
-------------------------------                  -----------------
(State or other jurisdiction of                  (I.R.S. Employer
incorporation or organization)                   Identification No.)

                         6542 U.S. HIGHWAY 41, SUITE 215
                           APOLLO BEACH, FLORIDA 33572
                     ---------------------------------------
                    (Address of principal executive offices)

                                 (813-645-7677)
                            --------------------------
                           (Issuer's telephone number)

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

The number of shares of the Registrant's common stock outstanding at November
10, 1998 was 3,655,115 shares.

Transitional Small Business Disclosure Format.   Yes [ ]   No [X]

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1:  FINANCIAL STATEMENTS

                     APOLLO INTERNATIONAL OF DELAWARE, INC.
                                 AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEET


                                   ASSETS          (UNAUDITED)
                                                   SEPTEMBER 30,    DECEMBER 31,
                                                       1998              1997
                                                   ------------     ------------
CURRENT ASSETS
  Cash                                              $   16,214        $   41,600
  Accounts receivable                                   29,604            57,512
  Inventory                                          1,009,979         1,121,870
  Other assets                                         147,593            89,541
                                                    ----------        ----------
         TOTAL CURRENT ASSETS                        1,203,390         1,310,523

DEFERRED SOFTWARE COSTS                              2,810,403         2,425,583
FIXED ASSETS                                           223,155           207,077
OTHER ASSETS                                            16,804            15,492
                                                    ----------        ----------
         TOTAL ASSETS                               $4,253,752        $3,958,675
                                                    ==========        ==========

                                   (CONTINUED)


                                       2
<PAGE>
<TABLE>
<CAPTION>


                     APOLLO INTERNATIONAL OF DELAWARE, INC.
                                 AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEET

                                   (CONTINUED)


                      LIABILITIES AND STOCKHOLDER'S EQUITY
                                                    (UNAUDITED)
                                                    SEPTEMBER 30,   DECEMBER 31,
                                                         1998            1997
                                                     -----------    ------------
<S>                                                  <C>            <C>
CURRENT LIABILITIES
  Overdraft                                          $         0     $     7,047
   Trade notes and accounts payable
     and accrued expenses                              1,499,903         718,550
   Payroll taxes payable                                 216,315          55,153
   Notes payable - stockholders                        1,612,732       1,399,321
   Current portion of notes
     Payable equipment                                     5,149           4,871
                                                     -----------     -----------
         TOTAL CURRENT LIABILITIES                   $ 3,334,099     $ 2,184,942

ACCOUNTS PAYABLE - NONCURRENT                            125,000         125,000
NOTES PAYABLE - EQUIPMENT                                  9,036           9,720
NOTES PAYABLE - LONG-TERM                              1,612,983            --
                                                     -----------     -----------
         TOTAL LIABILITIES                           $ 5,081,118     $ 2,319,662
                                                     ===========     ===========
STOCKHOLDERS' EQUITY
  Preferred stock, $.01 par value;
    Authorized: 5,000,000 shares;
    Issued and outstanding: none
  Common stock, $.01 par value;
    Authorized: 15,000,000 shares;
    Issued and outstanding: 3,655,115
    as of September 30, 1998 and 3,555,115 as of
    December 31, 1997                                     29,717          28,717
  Additional paid-in capital                           7,014,805       6,830,725
  Common stock warrants                                  200,000            
  Deficit                                             (8,067,421)     (5,193,170)
  Less prepaid rent                                       (4,467)        (27,259)
                                                     -----------     -----------
         TOTAL STOCKHOLDERS' EQUITY                  $  (827,366)    $ 1,639,013
                                                     -----------     -----------
            TOTAL LIABILITIES
           AND STOCKHOLDER'S EQUITY                  $ 4,253,752     $ 3,958,675
                                                     -----------     -----------
</TABLE>


                                       3
<PAGE>
<TABLE>
<CAPTION>


                     APOLLO INTERNATIONAL OF DELAWARE, INC.

                                 AND SUBSIDIARY

                             STATEMENT OF OPERATIONS

                                   (UNAUDITED)


                                        THREE MONTHS                     NINE MONTHS
                                     ENDED SEPTEMBER 30,              ENDED SEPTEMBER 30,
                                     1998             1997            1998            1997
                                 -------------    ------------    ------------    -----------
<S>                               <C>             <C>             <C>             <C>        
SALES                             $       541     $     9,499     $   147,803     $   311,758
COST OF SALES                          (2,280)           (493)       (128,474)       (147,068)
                                  -----------     -----------     -----------     -----------

            GROSS PROFIT               (1,739)          9,006          19,329         164,690
                                  -----------     -----------     -----------     -----------
EXPENSES
  Research and development            (23,115)        (73,511)       (199,311)       (274,707)
  General and administrative         (573,281)       (803,160)     (2,470,553)     (1,640,567)
                                  -----------     -----------     -----------     -----------

            TOTAL EXPENSES           (596,396)       (876,671)     (2,669,864)     (1,915,274)
                                  -----------     -----------     -----------     -----------

    LOSS FROM OPERATIONS             (598,135)       (867,665)     (2,650,535)     (1,750,584)

INTEREST EXPENSE AND
  AMORTIZATION OF DISCOUNT
  AND DEFERRED FINANCING COSTS        (73,916)        (81,570)       (201,393)       (174,662)
                                  -----------     -----------     -----------     -----------
LOSS BEFORE INCOME TAXES             (672,051)       (949,235)    $(2,851,928)     (1,925,246)

INCOME TAXES
                                  -----------     -----------     -----------     -----------

            NET LOSS              $  (672,051)    $  (949,235)    $(2,851,928)    $(1,925,246)
                                  ===========     ===========     ===========     ===========

AVERAGE NUMBER OF COMMON
  SHARES OUTSTANDING                3,655,115       3,168,051       3,655,115       2,941,956
                                  ===========     ===========     ===========     ===========

LOSS PER COMMON SHARE             $     (0.18)    $     (0.30)    $     (0.78)    $     (0.65)
                                  ===========     ===========     ===========     ===========
</TABLE>


                                       4
<PAGE>


                     APOLLO INTERNATIONAL OF DELAWARE, INC.
                                 AND SUBSIDIARY

                      CONSOLIDATED STATEMENT OF CASH FLOWS

                                   (UNAUDITED)


                                                            NINE MONTHS
                                                        ENDED SEPTEMBER 30,
                                                       1998             1997
                                                     -----------     -----------
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                          ($2,851,928)    ($1,925,246)
    Adjustments to reconcile net loss
    to net cash used in operating
    Activities:
      Amortization of discount
        And deferred financing costs                                     25,962
      Amortization of deferred software cost            296,137         140,035
      Depreciation and amortization                      47,204          25,972
      Amortization of prepaid rent                       22,792           9,167
      Capitalization of software costs                 (303,049)       (284,547)
      Increase (decrease) in cash from
        Accounts receivable                              27,907        (382,789)
        Inventory                                       111,891        (457,440)
        Other current assets                           (254,697)       (104,855)
        Other assets                                                     (2,337)
        Trade notes and accounts
          Payable and accrued expenses                1,032,443        (305,182)
        Payroll taxes payable                           175,452         (83,449)
                                                    -----------     -----------
          NET CASH USED IN OPERATING ACTIVITIES     ($1,695,848)    ($3,344,709)
                                                    -----------     -----------
NET CASH USED IN INVESTING ACTIVITIES
  Purchases of fixed assets                         ($   62,974)    ($   81,071)
                                                    ===========     ===========


                                   (CONTINUED)

                                       5
<PAGE>


                     APOLLO INTERNATIONAL OF DELAWARE, INC.
                                 AND SUBSIDIARY

                      CONSOLIDATED STATEMENT OF CASH FLOWS

                                   (UNAUDITED)

                                   (CONTINUED)


                                                             NINE MONTHS
                                                         ENDED SEPTEMBER 30,
                                                        1998           1997

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from issuance of common Stock            $   200,000     $ 3,235,980
  Proceeds from loans payable -  stockholders                           537,084
  Proceeds from loans payable - line of credit                          257,241
  Proceeds from note payable - other                  1,612,983         194,200
  Payments of loans payable - line of credit                           (257,241)
  Proceeds from note payable - other                    (72,500)       (183,700)
  Payments of loans payable -  stockholders                            (160,993)

         NET CASH PROVIDED BY FINANCING
           ACTIVITIES                                 1,740,483       3,622,571
                                                    -----------     -----------
         INCREASE (DECREASE) IN CASH                    (18,339)        196,791

CASH - beginning                                         34,553          34,099
                                                      ---------      ----------
CASH - ending                                       $    16,214     $   230,890
                                                    ===========     ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
  Cash paid for interest                            $    50,178     $   127,119
                                                    ===========     ===========


                                       6
<PAGE>


                     APOLLO INTERNATIONAL OF DELAWARE, INC.

                          NOTES TO FINANCIAL STATEMENTS

                                   (UNAUDITED)


1.   DESCRIPTION OF BUSINESS

     Apollo International of Delaware, Inc. (Company) develops, manufactures and
     distributes worldwide electric power protection and control products,
     utilizing computer and fiber optics technologies for industry and electric
     utilities.

2.   FINANCIAL STATEMENTS

     The accompanying unaudited financial statements have been prepared in
     accordance with generally accepted accounting principles for interim
     financial information. Accordingly, they do not include all the information
     and footnotes required by generally accepted accounting principles for
     financial statements. For further information, refer to the audited
     financial statements and notes thereto for the year ended December 31,
     1997.

     In the opinion of the Company, all adjustments, consisting only of normal
     recurring adjustments necessary for a fair presentation of the financial
     statements have been made.

     The accompanying unaudited financial statements have been prepared assuming
     that the Company will continue operations on a going-concern basis, which
     contemplates the realization of assets and the satisfaction of liabilities
     in the normal course of business. However, the Company has incurred net
     losses since inception and, as of September 30, 1998, its current
     liabilities exceeded its current assets by approximately $2,130,709. These
     factors raise doubt about the Company's ability to continue as a going
     concern. The Company's ability to continue as a going concern is dependent
     upon obtaining additional financing and significantly increasing its sales.
     Management has received additional financing intermittently for working
     capital, and additional financing as necessary; however, there is no
     assurance that the Company will be able to obtain additional financing, or
     if such financing is obtained, attain profitable operations and continue
     operations as a going concern.

3.   LOSS PER SHARE

     Loss per share was computed based upon the weighted average number of
     common shares and common share equivalents outstanding during the three
     months and nine months ended September 30, 1998 and 1997. Fully-dilutive
     loss per common share has not been presented because it was anti-dilutive.

     In February 1997, the FASB issued Statement No. 128, "Earnings Per Share",
     which changes the calculations and disclosures of earnings per share. As of
     January 1, 1997 the Company adopted Statement No. 128 without material
     effect.


                                       7
<PAGE>


4.   PUBLIC OFFERING

     In July 1997, the Company closed its initial public offering and sold
     800,000 shares of common stock at $5.00 per share, and 920,000 warrants at
     $.25 per warrant, resulting in net proceeds of approximately $3.16 million,
     all of which proceeds have been utilized.

5.   CONVERTIBLE NOTES PAYABLE

     Through March 19, 1998, the Company borrowed an aggregate of $1,000,000,
     payable in two years, with interest at 8%, per annum, payable quarterly as
     to $250,000 and monthly as to $750,000. The notes are collateralized by
     accounts receivable and inventory and are convertible into common stock at
     $3.25 per share. In connection with the borrowing, the Company paid a fee
     to a consultant of $100,000 and 325,000 warrants. Each warrant is
     exercisable to purchase one share of common stock at $3.25 per share,
     commencing July 11, 1999 through February 8, 2003. The conversion rate of
     the convertible debt and the exercise price of the warrants are subject to
     reduction under the terms of a subsequent agreement, described below.

     On June 22, 1998, the Board of Directors of the Company approved the terms
     of an agreement (Omnibus Agreement) with Oak Point Investments, Inc. as
     Lender, and Frank J. Mancini as Line Lender, whereby the Company would
     receive cash advances up to an aggregate of $790,000 for operating capital,
     and up to a total of $250,000 as a creditors fund for the payment of
     outstanding accounts payable of the Company. In addition, a revolving line
     of credit up to $100,000 was set up for the sole purpose of purchasing
     material required to produce products. The cash advances and funds paid
     from the creditors fund shall be evidenced by a secured convertible
     promissory note, which note shall be convertible into the Company's common
     stock at a $1.00 per share conversion price (subject to underwriter's
     lock-up until July 10, 1999). The security for the cash advances and
     creditors funds drawn down by the Company will be a first security interest
     in the common stock of the Company's subsidiary, Trans-World Powernet, Inc.
     The line of credit will be evidenced by a secured promissory note, and will
     be secured by the Company's accounts receivable. Through November 10, 1998,
     the Company received $663,000 in cash advances for operating capital and
     $50,000 through the revolving line of credit.

     As part of the above Omnibus Agreement, the Company's outstanding debt as
     of May 31, 1998, in the amount of $2,428,045 (exclusive of accounts payable
     or funds subsequently received under the Omnibus Agreement) shall be
     convertible on a pro rata basis into the Company's common stock at a $1.00
     per share conversion price subject to the underwriter's lock-up, and the
     exercise price for certain outstanding common stock purchase warrants shall
     be reduced to $1.00 per share also on a pro rata basis. The pro rata basis
     will be equal to the amount Lender provides the Company as a percentage of
     the total funding of $1,040,000. A finders fee is payable to G.A.R., Inc.,
     equal to 4% of the loan proceeds actually advanced to or on behalf of the
     Company under the Omnibus Agreement.

6.   LOANS PAYABLE

     On April 24, 1998, the Company entered into a 60 day loan agreement with
     Rainfest, Ltd. in the amount of $50,000. The loan was non-interest bearing,
     but included the issuance of


                                       8
<PAGE>


     20,000 shares of common stock of the Company, subject to the underwriter's
     lock-up. The loan was secured by the accounts receivable of Trans-World
     Powernet, Inc., a subsidiary of Apollo, and personal guarantees by David W.
     Clarke, President, and Christine Clewes, Vice President of Marketing. On
     June 2, 1998, the loan to Rainfest was repaid through a personal loan by
     John Tang, President of Trans-World Powernet, Inc. in the amount of
     $25,000, and a personal loan by Christine Clewes in the amount of $13,000.
     The balance of the amount due Rainfest of $12,000 was paid by the Company
     from operating funds. Both John Tang and Christine Clewes have their loan
     secured by the accounts receivable of Trans-World.

     On June 5, 1998,  the Company  entered into a loan agreement with Oak Point
     Investments,  Inc. in the amount of $60,000. Repayment of the loan is to be
     made  from  the  first  $60,000  received  by the  Company  of  Trans-World
     Powernet, Inc. accounts receivable, with said receivables secured by a Lock
     Box.  As part of this  loan,  24,000  shares  of the  common  stock  of the
     Company, subject to the underwriter's lock-up, shall be issued to Oak Point
     Investments, Inc.

7.   SECURITIES AND EXCHANGE COMMISSION

     In March 1998 the Company received an informal letter of inquiry from the
     Securities and Exchange Commission ("SEC") requesting copies of certain
     documentation. The letter indicated that the inquiry was confidential and
     should not be regarded as an indication by the SEC that any violation of
     law has occurred, or as a reflection upon the merits of the Company's
     securities or upon any person or entity who effected transactions in the
     Company's securities. However, although the inquiry is informal, there is
     no assurance that a more formal inquiry will not follow. As a result of the
     preliminary nature of the inquiry, the Company is unable to predict whether
     this will result in adverse consequences to the Company. As of September
     30, 1998, the Company had provided the SEC with copies of all requested
     documentation. The Company has not been notified by the SEC of any change
     to the status of this informal inquiry.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

This report contains forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
which represent the Company's expectations and beliefs, including, but not
limited to statements concerning the Company's expected growth. The words
"believe," "anticipate," "estimate," "project," "intend," and similar
expressions identify forward looking statements, which speak only as of the date
such statements were made. These statements by their nature involve substantial
risks and uncertainties, certain of which are beyond the Company's control and
cannot be predicted or quantified. Actual results may differ materially
depending on a variety of important factors, including, among others referenced
herein and in the Company's annual report on Form 10-KSB (File No. 0-22365),
problems commonly encountered by companies seeking to commercialize new products
such as unexpected delays in product development, production, and marketing;
sources for sufficient capital for the Company's growth and operations; economic
and political factors in nations of the


                                       9
<PAGE>


Company's international customers; changes in economic conditions; demand for
the Company's products and changes in the competitive environment.


                  [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]


                                       10
<PAGE>


RESULTS OF OPERATIONS

The following table sets forth for the periods indicated certain selected
historical operating results for the Company as a percentage of net sales.


                                                   NINE MONTHS
                                               ENDED SEPTEMBER 30,
                                           1998                 1997
                                           ----                 ----
Net Sales                                  100.0%             100.0%
Cost of Goods Sold                          87.0%              47.2%
                                          ------              -----
Gross Profit                                13.0%              52.8%
Operating Expenses                        1806.3%             614.4%
                                          ------              -----
Loss from Operations                     (1793.3)%           (561.6)%


     REVENUES. Gross revenues for the three months and nine months ended
September 30, 1998 were $541 and $147,803 respectively, generating gross profits
of $(1,739) and $19,329 for those same periods. During the comparable prior year
periods, revenues were $9,499 and $311,758 which generated gross profits of
$9,006 and $164,690. The decrease in revenues between the third quarter of 1998
as compared to the same quarter in 1997 is due to a decrease in the number of
relays that were shipped during the period. For the nine months ended September
30, 1998 and 1997, revenues were $163,955 less in 1998 primarily because of
fewer overall relays that were shipped. This reduction in shipments was due to
both financial constraints as well as the impact on sales caused by the need for
the Company to redesign its FPR1 relay. Because of problems encountered in the
field, a quality committee was formed late in 1997 to analyze all the problems
experienced in the field and to determine and correct all of the root causes for
defects. Based on this approach, it was decided by the Company that the
mechanical portion of the relay had to be redesigned. The Company has engineered
additional mechanical features into the FPR1 feeder protection relay, now called
the FPR1A, which the Company completed on June 15, 1998. Subject to test
results, this improved version of the FPR1 was to be in production in the third
quarter of 1998 , however, financial constraints delayed production. If the
Company obtains needed additional financing under the Omnibus Agreement or other
sources in the short term, production of the FPR1A should begin in the fourth
quarter of 1998.

     OPERATING EXPENSES. Operating expenses for the three months ended September
30, 1998 and 1997 were $596,396 and $876,671, respectively. This decrease of
$280,275, or 32%, while extremely significant, was primarily due to the
transition undertaken by the Company in moving forward from a development stage
company with no infrastructure to an operating company. For the nine months
ended September 30, 1998 and 1997, operating expenses were $754,590 greater in
1998 as compared to 1997. Through most of 1997, the Company proceeded to slowly
build the infrastructure, leased its own manufacturing facility, developed sales
and marketing literature, hired several regional sales managers, and other
personnel as needed. Because of the transition from a development stage company
to an operating company, the increase in operating expenses is not entirely
comparable. Some of the major increases are the amortization of deferred
software costs, payroll expenses, rent, telephone, travel, professional fees
including legal, accounting, consulting, manufacturing rework, the scrapping of
obsolete inventory (See Note 8 to Financial Statements)), and business
insurance. Further, some of these increases relate to the integration of
Trans-World Powernet, Inc., an acquisition the Company made on November 24,
1997.


                                       11
<PAGE>


     When sales did not grow as expected (due to product and production
difficulties), the Company embarked on a cost reduction program in December 1997
which continued into 1998. In order to reduce its payroll and payroll related
costs, the Company terminated some employees and eliminated certain personnel
positions at the start of 1998. The Company also combined some other positions
and responsibilities as it deemed necessary. On April 24, 1998, Steven D. Smith,
the Company's Executive Vice President of Operations and a Director resigned
both his position as an executive of the Company as well as his position as a
member of the Company's Board of Directors. In April, 1998, the Company reduced
the salary of David W. Clarke, the Company's President and Chief Executive
Officer, to $100,000 from $150,000. On May 27, 1998, Christine Clewes, the
Company's Vice President of Marketing and a Director resigned from her position
as an executive of the Company. On June 22, 1998 the Board of Directors accepted
her resignation. On June 22, 1998, the Employment Agreement between David W.
Clarke, President, and the Company was mutually terminated, except that the
confidentiality and non-competition provisions of the Employment Agreement shall
survive termination of such agreement. Mr. Clarke will be employed by the
Company on an "at will" basis as the Company's President at a base salary of
$100,000 per year. On June 22, 1998, Stuart M. Frank, the Company's Chief
Financial Officer was appointed Chief Executive Officer, replacing Mr. Clarke in
that position. Mr. Frank retained his duties and position as Chief Financial
Officer of the Company. The net dollar effect reduction of these personnel
changes will amount to approximately $1,000,000 on an annualized basis.

     RESEARCH AND DEVELOPMENT. Research and development expenses consist
primarily of salaries and consulting fees to support technological product
development. Costs of software to be sold and incurred after technological
feasibility has been established and available for general release are
capitalized. Salaries and other material costs are expensed. The Company
believes that continuous development will occur for new products and to enhance
and upgrade existing products to provide an extra package of protective relay
products for the Company's heavy industrial and utility customers.

     For the three months ended September 30, 1998 and September 30, 1997, the
Company incurred $23,115 and $73,511 of research and development costs
respectively. The decrease of $50,396 was due primarily to less development
costs being capitalized during this comparable period. For the nine months ended
September 30, 1998 and 1997, research and development costs were $199,311 and
$274,707 respectively. The reduction in engineering staff also contributed to
this decrease.

FACTORS AFFECTING OPERATING RESULTS

     As a result of the Company's limited operating history, the Company does
not have historical financial data for a significant number of periods on which
to base planned operating expenses. Additionally, the Company's expense levels
are based entirely on its expectations as to future revenues and to a large
extent are variable.

     The Company anticipated that beta testing of the CMPR1, FPR2, and FPR3
products would commence in the second quarter of 1997 and would be ready for
commercial marketing in the second and third quarter of 1997. Further, the
Company anticipated that its most advanced NOVA relays would commence beta
testing in the third quarter of 1997. However, the development, testing and
commercialization of these products were delayed beyond the control of


                                       12
<PAGE>


the Company. The Company experienced some difficulty with field units of the
CMPR2, which product is the foundation from which the CMPR1 and other motor
protection relays are derived. After various modifications and tests done
in-house by the Company, the Company realized that a major redesign of the
hardware was necessary in order to satisfy customer demands and to enhance the
product's marketability. This project, which began in August, 1997, was
completed in February 1998. The focusing of engineering on the further
enhancement of the CMPR2 caused delays in anticipated shipments. However, the
redesigned CMPR2 has been successfully shipped and installed beginning in
February, with current outstanding orders from a number of customers for this
unit. Although the Company believes that all issues regarding the CMPR2 product
have been resolved, there is no assurance that new issues will not arise in the
field which would require further modification.

     The Company also experienced some difficulty with the FPR1, a feeder
protection relay in the Company's Solaris family of products. A team of
engineers was established as a "quality circle" to identify and correct the root
causes for each reported problem. Although the FPR1 was marketable in its
present form, the Company redesigned the unit in order to improve its
performance and to make manufacturing the product easier by significantly
reducing the production labor content of each unit. The Company recently
completed the engineering phase and is in the process of beta testing this unit,
now known as the FPR1A. Depending on test results, and subject to receipt of
additional financing, it is anticipated that marketing and production will
commence in the fourth quarter of this year.

     Although the Company believes that it has resolved functional and quality
control issues with its commercialized CMPR2 and FPR1 products, there is no
assurance that new issues regarding these or other products will not arise in
the future. Any delays in production and marketing as a result of new problems
with existing products or products in development may demand more financial and
other resources than available to the Company which will have a material adverse
effect on the Company and its operations.

     In early 1998 the Company signed strategic partnering agreements with three
companies. Protecta Electronics, Budapest, Hungry is an established and well
respected manufacturer of more than twenty-five (25) protection relays. The
Company has signed a five year exclusive OEM agreement for worldwide marketing
rights, (except Hungry) to market Protecta's products under Apollo's name and
logo. The Company and its European counterpart are currently having translated
into English the product software, documentation and spec sheets, which, for the
most part, has been accomplished. These products have enabled the Company to
market this proven technology in the third quarter of 1998 while continuing to
develop strategically positioned advanced products. Purchase orders have been
received for our relays as well as the Hungarian relays with shipments scheduled
for mid-December, 1998.

     An agreement was also reached with Liberty Technologies, Inc. for a similar
arrangement marketing their preventative maintenance product under the Apollo
name.

     In February 1998 Apollo signed an exclusive five year OEM agreement with
Infoware, a Hungarian corporation that provides complete substation automation
systems, which agreement gives us the right to market Infoware's automation
systems under the Apollo name.

     In May 1998, the Company signed a product development agreement with a
Fortune 100 company. The company, a large manufacturer and distributor of
electrical circuit protection


                                       13
<PAGE>


products, engaged the services of Apollo to design, develop and supply a motor
protection product. It will acquire the product exclusively from Apollo for
worldwide marketing and distribution under it's own brand name. It is
anticipated that the product development agreement will evolve into a
manufacturing agreement, with production estimated to begin by the end of the
first quarter, 1999.

     The Company expects to experience significant fluctuations to future
quarterly operating results that may be caused by many factors, including demand
for the Company's products, introduction of new technological developments, the
introduction, enhancement, and market acceptance of new and existing products,
the introduction of competing products, and general economic conditions.
Further, the Company's products have long sales cycles. As a result, the Company
believes that period to period comparisons of its results of operations will not
necessarily be meaningful and should not be relied upon as any indication of
future performance.

IMPACT OF THE YEAR 2000

     The Year 2000 issue is the result of computer programs and other business
systems being written using two digits rather than four to represent the year.
These programs were designed and developed without considering the impact of the
upcoming change in the year 2000. Some older computer systems stored dates with
only a two-digit year with an assumed prefix of "19". Consequently, this limits
those systems to dates between 1900 and 1999. If not corrected, many computer
systems and applications could fail or create erroneous results by or at the
year 2000.

     Apollo has undertaken to review the potential impact of the Year 2000
issue. Such assessment has included a review of the impact of the issue in
primarily four areas: products, manufacturing systems, business systems, and
other areas. Based on the results of our initial review, Apollo does not
anticipate that the Year 2000 issue will impact operations or operating results.
Apollo has not found any systems within the four areas mentioned which may be
affected by the Year 2000 issue, but estimates that should an area be found to
be affected, the relevant systems can be tested, upgraded, and replaced before
they cause any operational problems. Apollo will create a task force to
periodically review all areas of concern. Management believes that any
incremental costs associated with achieving Year 2000 compliance will not be
material to Apollo's operating results.

     Apollo relies on its suppliers, utility service providers, financial
institutions and other partners in order to continue normal business operations.
At this time, it is impossible to assess the impact of the Year 2000 issue on
each of these organizations. There can be no guarantee that the systems of other
unrelated entities on which Apollo relies will be corrected on a timely basis
and will not have a material adverse effect on Apollo. The Company's task force
will be assigned to identify other organizations which are critical to Apollo's
continued operations. Apollo intends to survey these organizations to determine
the impact of the Year 2000 issue on their operations and their plans for
addressing any potential concerns. Apollo expects that this assessment will be
completed and any issues that surface will be resolved by the end of the second
quarter of 1999.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's principal sources of capital have been the sales of its
equity securities in the form of an initial public offering of common stock
which occurred on July 16, 1997, proceeds from stockholders loans, proceeds from
a line of credit, and the proceeds from other loans payable.


                                       14
<PAGE>


     The Company's negative cash flow from operating activities was $1,695,848
in the first nine months of 1998 as compared to a negative cash flow of
$3,344,709 during the comparable prior year period.

     The Company received $1,740,483 net cash provided by financing activities
for the nine months ended September 30, 1998 as compared to $3,622,571 in the
first nine months of 1997. Proceeds from loans in the amount of $1,612,983 and
the conversion of warrants in the amount of $200,000 accounted for the net cash
provided by financing activities in 1998 whereas in 1997 the proceeds from
issuance of common stock accounted for 89.4% of net cash provided by financing
activities.

     As is typical of Company's which seek to develop new technologies or
introduce products to a new market, delays in development and production of the
Company's products have occurred, resulting in decreased revenues which the
Company had otherwise anticipated would be available. The Company's learning
curve and production problems encountered in the past resulted in higher costs
than anticipated, which will be reflected in a higher cost of sales and
continued pressure on gross profit margins for the products the Company delivers
during 1998. Thus, the Company will not show profitability during 1998 and will
show losses at the end of the 1998 fiscal year. Further, as indicated in Note 2
in the Notes to Financial Statements accompanying this Report, the Company has
incurred net losses since inception and, as of September 30, 1998, its current
liabilities exceeded its current assets by approximately $2,130,709. These
factors raise doubt about the Company's ability to continue as a going concern.
The Company's ability to continue as a going concern is dependent upon its
ability to obtain additional financing and significantly increase sales. The
Company is in the process of seeking immediate additional financing for
operations and to further fund product development and expansion through
marketing existing products during the next three months. Such additional
capital may be accomplished through equity or debt financings. Although the
Company expected certain funding under the Omnibus Agreement (See Note 5 to the
Financial Statement), as of November 10, 1998, the Company has received net cash
advances of $663,000. The Company is in the process of attempting to raise
additional capital through a private placement. There is no assurance that any
additional financing will be available to the Company on acceptable terms, or at
all. To the extent that the Company's available cash resources are insufficient
to allow the Company to engage in operations sufficient to generate meaningful
revenues or achieve profitable operations, the inability to obtain additional
financing will have a material adverse effect on the Company and the Company may
have to curtail its operations. Additional equity financing may involve
substantial dilution to the interests of the Company's existing shareholders.


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                                       15
<PAGE>


                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     The Company's subsidiary, Trans-World, and certain of Trans-World's
employees, and Chihkai John Tang, President of Trans-World and a director of the
Company, are defendants in a suit instituted by Tasnet, Inc. ("Tasnet") in or
about May 1997 in the Circuit Court for the 6th Judicial District of Pinellas
County, Florida. The plaintiff's complaint seeks injunctive relief and
unspecified damages against certain employees of Trans-World based upon their
alleged violations of covenants not to compete and against Trans-World and Mr.
Tang for tortious interference with contractual relationships between Tasnet and
the defendant-employees, and seeking to enjoin Trans-World from marketing its
products and disgorgement of profits from sale of its products. Trans-World and
the other defendants have denied liability. Mr. Tang and the other selling
shareholders of Trans-World have agreed to indemnify the Company against any
losses incurred in connection with this litigation and plan to vigorously defend
the lawsuit. Trans-World and the Company believe that the lawsuit is without
merit. However, there can be no assurance as to the outcome of the litigation. A
result adverse to Trans-World would have a material adverse impact on the
Company's business.

     The Company is involved in other litigation relating to claims arising out
of its operations in the normal course of business, none of which claims exceed
ten percent of the Company's current assets. The Company does not believe that
the adverse outcome of any such litigation would have a material adverse effect
on the Company's operations.


ITEM 5.  OTHER INFORMATION

     On September 28, 1998, James Plemmons submitted his resignation to the
Board of Directors of the Company which was accepted. The Board appointed Barry
Jordan as a Director of the Company to fill the vacancy.


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                                       16
<PAGE>


ITEM 6.  EXHIBITS AND FORM 8-K.

         REPORTS ON FORM 8-K: NONE

         EXHIBITS:

<TABLE>
<CAPTION>

EXHIBIT                                                                          FILING-STATUS-INCORPORATED
NUMBER                            EXHIBIT DESCRIPTION                                  BY REFERENCE TO
-------                           --------------------                   -------------------------------------------
<S>              <C>                                                      <C> 
     3.1         Amended and Restated Articles of Incorporation          Exhibit 3.1 to Form SB-2 Registration
                                                                         Statement, filed on December 17, 1997,
                                                                         File No. 333-18071

     3.2         Amended and Restated ByLaws                             Exhibit 3.2 to Form SB-2 Registration
                                                                         Statement, filed on December 17, 1996,
                                                                         File No. 333-18071

     3.2.1       Amendment to ByLaws                                     Exhibit 3.2.1 to Amendment No.2 to Form
                                                                         SB-2 Registration Statement, filed on
                                                                         April 29, 1996, File No. 333-18071

     4.1         Specimen of Common Stock Certificate                    Exhibit 4.1 to Amendment No.2 to Form
                                                                         SB-2 Registration Statement, filed on
                                                                         April 29, 1997, File No. 333-18071

     4.2         Specimen of Warrant Certificate                         Exhibit 4.2 to Report on Form 10-QSB,
                                                                         filed on August 14, 1997, File No. 0-22365

     4.3         Warrant Agreement between the Company and               Exhibit 4.3 to Report on Form 10-QSB,
                 American Stock Transfer & Trust Company, as             filed on August 14, 1997, File No.
                 Warrant Agent, dated July 16, 1997                      0-22365

    10.1         Form of Warrant issued to investors in the              Exhibit 4.4 to Form SB-2 Registration
                 Company's private placement, dated August 5, 1996       Statement, filed on December 17, 1996,
                 through November 14, 1996                               File No. 333-18071

    10.2         Warrant dated September 26, 1996 in favor of Steven     Exhibit 4.5 to Form SB-2 Registration
                 D. Smith, as amended                                    Statement, filed on December 17, 1996,
                                                                         File No. 333-18071

    10.3         Warrant dated September 26, 1996 in favor of Don P.     Exhibit 4.6 to Form SB-2 Registration
                 Louw, as amended                                        Statement, filed on December 17, 1996,
                                                                         File No. 333-18071

    10.4         Amended Warrant dated October 29, 1996 in favor of      Exhibit 10.4 to Form 10-QSB filed on
                 Perryman Corporation N.V.                               August 14, 1997, File No. 0-22365

    10.5         Warrant dated June 25, 1996 in favor of Imagine         Exhibit 4.10 to Form SB-2 Registration
                 Holdings                                                Statement filed on December 17, 1996, File
                                                                         No. 333-18071
</TABLE>


                                       17
<PAGE>
<TABLE>
<CAPTION>

EXHIBIT                                                                          FILING-STATUS-INCORPORATED
NUMBER                            EXHIBIT DESCRIPTION                                  BY REFERENCE TO
-------                           --------------------                   -------------------------------------------
<S>              <C>                                                      <C> 
    10.6         Warrant dated December 15, 1996 in favor of Matthias    Exhibit 4.11 to Amendment No.1 to Form
                 E. Lukens, Jr.                                          SB-2 filed on March 6, 1997, File No.
                                                                         333-18071

    10.7         Form of Registration Rights Agreement between the       Exhibit 4.12 to Form SB-2 Registration
                 Company and private placement investors dated           Statement filed on December 17, 1996,
                 August 5, 1996 through November 14, 1996                File No. 333-18071

    10.8         Form of Registration Rights Agreement between the       Exhibit 4.13 to Form SB-2 Registration
                 Company and certain investors dated in May, 1996        Statement filed on December 17, 1996,
                                                                         File No. 333-18071

    10.9         Warrant dated June 30, 1996 in favor of Imagine         Exhibit 4.14 to Amendment No.1 Form SB-2
                 Holdings                                                Registration  Statement filed on March 6,
                                                                         1996, File No. 333-18071

    10.10        Warrant dated November 1, 1996 in favor of Robert       Exhibit 4.15 to Amendment No.1 to Form 
                 Swatland                                                SB-2 Registration Statement filed on
                                                                         March 6, 1997, File No. 333-18071

    10.11        Underwriters' Warrant dated July 16, 1997               Exhibit 10.11 to Form 10-QSB filed on
                                                                         August 14, 1997, File No. 0-22365

    10.12        1996 Stock Option Plan                                  Exhibit 10.1 to Form SB-2 Registration
                                                                         Statement filed on December 17, 1996,
                                                                         File No. 333-18071

    10.13        Stock Purchase Agreement between the Company and        Exhibit 10.2 to Form SB-2 Registration 
                 Christine Clewes, dated June 13, 1996                   Statement filed on December 17, 1996, File
                                                                         No. 333-18071

    10.14        Stock Purchase Agreement between the Company and        Exhibit 10.3 to Form SB-2 Registration
                 Frank Mancini, dated June 24, 1996                      Statement filed on December 17, 1996,
                                                                         File No. 333-18071

    10.15        Stock Purchase Agreement between the Company and        Exhibit 10.4 to Form SB-2 Registration
                 Framan, a business entity, dated June 24, 1996          Statement filed on December 17, 1996,
                                                                         File No. 333-18071

    10.16        Consulting Agreement between the Company and Perryman   Exhibit 10.5 to Form SB-2 Registration
                 Corporation, N.V., dated May 10, 1996                   Statement filed on December 17, 1996,
                                                                         File No. 333-18071

    10.17        Amended and Restated Consulting Agreement between the   Exhibit 10.6 to Form SB-2 Registration
                 Company and Imagine Holdings, dated June 1, 1996        Statement filed on December 17, 1996,
                                                                         File No. 333-18071

    10.18        Lease between the Company and South Hillsborough        Exhibit 10.7 to Amendment No.1 to Form
                 Community Bank Office/Complex, Richard L. Phagan,       SB-2 Registration Statement, filed
                 dated October 31, 1995                                  on March 6, 1997, File No. 333-18071
</TABLE>


                                       18
<PAGE>
<TABLE>
<CAPTION>

EXHIBIT                                                                          FILING-STATUS-INCORPORATED
NUMBER                            EXHIBIT DESCRIPTION                                  BY REFERENCE TO
-------                           --------------------                   -------------------------------------------
<S>              <C>                                                      <C> 
    10.18.1      Lease between the Company and South Hillsborough        Exhibit 10.7.1 to Form SB-2 Registration
                 Community Bank Office/Complex, dated October            Statement filed on December 17, 1996, File
                 24, 1996                                                No. 333-18071

    10.19        Amended and Restated Consulting Agreement between the   Exhibit 10.8 to Form SB-2 Registration
                 Company and Matthias E. Lukens, Jr. dated November      Statement filed on December 17, 1996,
                 30, 1996                                                File No. 333-18071

    10.20        Consulting Agreement between the Company and Frank J.   Exhibit 10.9 to Form SB-2 Registration
                 Mancini dated December 20, 1996                         Statement filed on December 17, 1996,
                                                                         File No. 333-18071

    10.21        Agreement between the Company and Phasetronics, Inc.    Exhibit 10.10 to Form SB-2 Registration
                 dated January 31, 1996                                  Statement filed on December 17, 1996,
                                                                         File No. 333-18071

    10.22        Agreement between the Company and Phasetronics, Inc.    Exhibit 10.11 to Form SB-2 Registration
                 dated January 31, 1996                                  Statement filed on December 17, 1996,
                                                                         File No. 333-18071

    10.23        Sale of Accounts Receivable Agreement between the       Exhibit 10.12 to Form SB-2 Registration
                 Company and Queensbury, Inc. dated October 31, 1996     Statement filed on December 17, 1996,
                                                                         File No. 333-18071

    10.24        Cash Advance and Security Agreement and amendment       Exhibit 10.13 to Form SB-2 Registration 
                 thereto between Frank J. Mancini and the Company        Statement filed on December 17, 1996,
                                                                         File No. 333-18071

    10.24.1      Second Amendment to Cash Advance and Security           Exhibit 10.13.1 to Form SB-2 Registration
                 Agreement dated May 19, 1997                            Statement filed on December 17, 1996,
                                                                         File No. 333-18071

    10.24.2      Third Amendment to Cash Advance and Security            Exhibit 10.13.2 to Form SB-2 Registration
                 Agreement dated May 27, 1997                            Statement filed on December 17, 1996,
                                                                         File No. 333-18071

    10.25        Form of Indemnification Agreement for directors and     Exhibit 10.14 to Form SB-2 Registration
                 officers                                                Statement filed on December 17, 1996,
                                                                         File No. 333-18071

    10.26        Revolving Line of Credit Agreement between the          Exhibit 10.15 to Form SB-2 Registration
                 Company and Queensbury, Inc.                            Statement filed on December 17, 1996, 
                                                                         File No. 333-18071

    10.27        Amended and Restated License Agreement between the      Exhibit 10.16 to Form SB-2 Registration
                 Company and Matthias E. Lukens, Jr., d/b/a WHR          Statement filed on December 17, 1996,
                 Partners, dated December 16, 1997                       File No. 333-18071
</TABLE>


                                       19
<PAGE>
<TABLE>
<CAPTION>

EXHIBIT                                                                          FILING-STATUS-INCORPORATED
NUMBER                            EXHIBIT DESCRIPTION                                  BY REFERENCE TO
-------                           --------------------                   -------------------------------------------
<S>              <C>                                                      <C> 
    10.28        Stock Purchase Agreement between the Company and         Exhibit 10.17 to Form SB-2 Registration
                 Matthias E. Lukens, Jr., d/b/a WHR Partners dated        Statement filed on December 17, 1996,
                 December 16, 1997                                        File No. 333-18071

    10.29        Executive Employment Agreement between the Company       Exhibit 10.18 to Form SB-2 Registration
                 and David W. Clarke                                      Statement filed on December 17, 1996,
                                                                          File No. 333-18071

    10.30        Executive Employment Agreement between the Company       Exhibit 10.19 to Form SB-2 Registration
                 and Christine Clewes                                     Statement filed on December 17, 1996, File
                                                                          No. 333-18071

    10.31        Executive Employment Agreement between the Company       Exhibit 10.20 to Form SB-2 Registration
                 and Donald P. Louw                                       Statement filed on December 17, 1996,
                                                                          File No. 333-18071

    10.32        Executive Employment Agreement between the Company       Exhibit 10.21 to Form SB-2 Registration
                 and Steven D. Smith                                      Statement filed on December 17, 1996,
                                                                          File No. 333-18071

    10.33        Executive Employment Agreement between the Company       Exhibit 10.22 to Form SB-2 Registration
                 and Robert Swatland                                      Statement filed on December 17, 1996,
                                                                          File No. 333-18071

    10.34        Financial Advisor and Investment Banking Agreement       Exhibit 10.23 to Amendment No. 1 to Form
                 between the Company and May Davis Group, Inc. dated      SB-2 Registration Statement filed on March
                 July 16, 1997                                            6, 1997, File No. 333-18071.

    10.35        Lease Agreement dated September 1, 1997                  Exhibit 10.35 to Form 10QSB filed on
                                                                          November 18, 1997, File No. 0-22365

    10.36        Agreement and Plan of Merger                             Exhibit 10.1 to Form 8-K filed on December
                                                                          9, 1997, File 0-22365

    10.37        Executive Employment Agreement between Trans-World       Exhibit 10.2 to Form 8-K filed on December
                 and Chihkai J. Tang                                      9, 1997, File 0-22365

    10.38        Shareholder's Voting Agreement dated November 24, 1997   Exhibit 10.3 to Form 8-K filed on December
                                                                          9, 1997, File 0-22365

    10.39        Form of Loan and Security Agreement                      Exhibit 10.39 to Form 10-KSB filed on May
                                                                          15, 1998, File 0-22364

    10.40        Secured Convertible Note for $750,000                    Exhibit 10.40 to Form 10-KSB filed on
                                                                          May 15, 1998, File 0-22364

    10.41        Secured Convertible Note for $100,000                    Exhibit 10.41 to Form 10-KSB filed on
                                                                          May 15, 1998, File 0-22364
</TABLE>

                                       20
<PAGE>
<TABLE>
<CAPTION>

EXHIBIT                                                                          FILING-STATUS-INCORPORATED
NUMBER                            EXHIBIT DESCRIPTION                                  BY REFERENCE TO
-------                           --------------------                   -------------------------------------------
<S>              <C>                                                      <C> 
    10.42        Secured Convertible Note for $100,000                    Exhibit 10.42 to Form 10-KSB filed on
                                                                          May 15, 1998, File 0-22364

    10.43        Secured Convertible Note for $50,000                     Exhibit 10.43 to Form 10-KSB filed on
                                                                          May 15, 1998, File 0-22364

    10.44        Form of Registration Rights Agreement                    Exhibit 10.44 to Form 10-KSB filed on
                                                                          May 15, 1998, File 0-22364

    10.45        Consolidated Promissory Note for $750,000                Exhibit 10.45 to Form 10-KSB filed on
                                                                          May 15, 1998, File 0-22364

    10.46        Warrant in favor of Polynos Investments, N.V.            Exhibit 10.45 to Form 10-KSB filed on
                                                                          May 15, 1998, File 0-22364

    10.47        Warrant in favor of East Jet, Inc.                       Exhibit 10.47 to Form 10-QSB filed on
                                                                          May 20, 1998, File 0-22365

    10.48        Warrant in favor of East Jet, Inc.                       Exhibit 10.48 to Form 10-QSB filed on
                                                                          May 20, 1998, File 0-22365

    27           Financial Data Schedule                                  Filed herewith


    99.1         Form of domestic distribution agreement                  Exhibit  99.3 to Amendment No.1 to Form
                                                                          SB-2 Registration Statement filed on March
                                                                          6, 1997, File No. 333-18071

    99.2         Form of international distribution agreement             Exhibit  99.4 to Amendment No.1 to Form
                                                                          SB-2 Registration Statement filed on March
                                                                          6, 1997, File No. 333-18071
</TABLE>


                                       21
<PAGE>


                                   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.

Date:    November _____, 1998.              APOLLO INTERNATIONAL OF
                                               DELAWARE, INC.

                                               By:
                                                  ------------------------
                                                  David W. Clarke
                                                  President

                                                By:
                                                   -----------------------
                                                   Stuart M. Frank
                                                   Chief Financial Officer


                                       22
<PAGE>

EXHIBIT                  DESCRIPTION
-------                  -----------

27        Financial Data Schedule