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


                                    FORM 10-Q

(Mark One)


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

                       For quarterly period ended September 30, 1998

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

                       For the transition period from _____ to _______

Commission file number:  0-28790


                           MEDCARE TECHNOLOGIES, INC.
                           --------------------------
             (exact name of registrant as specified in its charter)



DELAWARE                                            87-0429962 B
--------                                            ------------
(State or other                                     (IRS Employer
jurisdiction of                                     Identification No.)
incorporation  or
organization)

Suite 1210 - 1515 West 22nd Street, Oak Brook, Illinois       605232
-------------------------------------------------------       ------
(Address of principal executive offices)                      (Zip Code)

Registrant's telephone number, including area code:           (630) 472-5300
                                                              --------------

Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required 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 for the
past 90 days.               Yes   X      No


The number of shares of the Registrant's  Common Stock,  $0.001 par value, as of
September 30th, 1998: 7,384,529
                      ---------


<PAGE>



                           MEDCARE TECHNOLOGIES, INC.
                     FORM 10-Q, QUARTER ENDED JUNE 30, 1998

INDEX

PART I            FINANCIAL INFORMATION

Item 1            Financial Statements

Consolidated Balance Sheet at September 30, 1998 . . . . . . . . . .   F-1 - F-2

Consolidated Statement of Operations For The Quarter Ended
    September 30, 1998. . . . . . . . . . . . . . . . . . . . . . . . . .    F-3

Consolidated Statement of Cash Flows For The Quarter Ended
    September 30, 1998. . . . . . . .  . . . . . . . . . . . . . . .   F-4 - F-5

Notes to Interim Consolidated Financial Statements . . . . . . . . . . .    F- 6

All  schedules  are omitted  because  they are not  applicable  or the  required
information is shown in the financial statements or notes thereto.

Item 2    Management's Discussion and Analysis or
             Plan of Operations . . . . . . . . . . . . . . . . . . . . . .    9

PART II   OTHER INFORMATION

Item 1    Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . .   11

Item 2    Changes in Securities . . . . . . . . . . . . . . . . . . . . . .   11

Item 3    Defaults Upon Senior Securities . . . . . . . . . . . . . . . . .   11

Item 4    Submission of Matters to a Vote of Security Holders . . . . . . .   12

Item 5    Other Information . . . . . . . . . . . . . . . . . . . . . . . .   12

Item 6    Exhibits and Reports on Form 8-K  . . . . . . . . . . . . . . . .   12

          Signature Page . . . . . . . . . . . . . . . . . . . . . . . . .    12



<PAGE>



Item 1            Financial Statements

                   MEDCARE TECHNOLOGIES, INC. AND SUBSIDIARIES
                       INTERIM CONSOLIDATED BALANCE SHEET
                    SEPTEMBER 30, 1998 AND DECEMBER 31, 1997


<TABLE>
<CAPTION>
                                     ASSETS

                                                        SEPTEMBER 30,          DECEMBER 31,
                                                        1998                   1997
<S>                                                     <C>                    <C>
Current Assets
   Cash                                                 $   2,168,237          $  3,440,791
   Accounts Receivable, net of $17,795 
     at September 30, 1998                                    140,980                47,286
   Prepaid Expenses                                                 0                62,313
                                                        -------------          ------------
Total Current Assets                                        2,309,217             3,550,390

Property and Equipment, Net                                   122,503                33,526

Other Assets
   Intangible Assets-The MedCare Program, Net of
    Accumulated Amortization of $50 and $0 for
   September 30, 1998 and December 31, 1997                       950                 1,000
   Security Deposits                                            2,250                 1,500
   Escrow Funds (Note 2)                                    1,500,000                     0
                                                            ---------          ------------
Total Other Assets                                          1,503,200                 2,500
                                                            ---------          ------------

Total  Assets                                           $   3,934,920          $  3,586,416
                                                            =========             =========

</TABLE>



<PAGE>


                   MEDCARE TECHNOLOGIES, INC. AND SUBSIDIARIES
                       INTERIM CONSOLIDATED BALANCE SHEET
                    SEPTEMBER 30, 1998 AND DECEMBER 31, 1997



<TABLE>
<CAPTION>
                       LIABILITIES AND STOCKHOLDERS EQUITY

                                                           SEPTEMBER 30,      DECEMBER 31,
                                                           1998               1998
<S>                                                        <C>                <C>
Current Liabilities                                                                          
   Accounts Payable and Other Accrued Liabilities          $     61,768       $    15,796
   Notes Payable, Related Party                                       0             1,000
                                                              ---------           -------
Total Current Liabilities                                        61,768            16,796

Commitments and Contingencies                                         0                 0

Stockholders' Equity
   Preferred Stock: $0.25 Par Value, Authorized
    1,000,000; Issued and Outstanding, 235 and 165
    Convertible Series A Shares at September 30, 1998
    and December 31, 1997                                            59                41

   Common Stock: $0.001 Par Value, Authorized
    100,000,000; Issued and Outstanding, 7,384,529
    Shares at September 30, 1998, and 6,992,185 at
    December 31, 1997                                             7,385             6,992

   Additional Paid In Capital                                 8,941,815         6,284,505
   Loss Accumulated During The Development Stage             (5,076,107)       (2,721,918)
                                                              ---------         ---------
Total Stockholders Equity                                     3,873,152         3,569,620
                                                              ---------         ---------

Total Liabilities and Stockholders' Equity                 $  3,934,920       $ 3,586,416
</TABLE>


<PAGE>



                   MEDCARE TECHNOLOGIES, INC. AND SUBSIDIARIES
                  INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
          FOR THE NINE MONTHS PERIOD ENDED SEPTEMBER 30, 1998 AND 1997


<TABLE>
<CAPTION>
                                                                     For the Nine       For the Nine
                                                                     Months Period      Months Period
                                                                     Ended              Ended
                                                                     September 30,      September 30,
                                                                     1998               1997
                                                                     ----               ----
<S>                                                                  <C>                <C>
Cash and Cash Equivalents, Beginning of Period                       $   3,440,791      $   219,775
                                                                     ------------       -----------

Cash and Cash Equivalents, End of Period                             $   2,168,237      $ 4,041,324
                                                                     =============      ===========
Supplemental Information:
Cash paid for:
  Interest                                                           $           0      $         0
                                                                     =============      ===========
  Income taxes                                                       $           0      $         0
                                                                     =============      ===========

Noncash Financing Transactions:
   74 Shares of Preferred Stock Converted 
    to 128,506 Shares of Common Stock                                $         110      $         0
                                                                     =============      ===========
   8,990 Common Shares Issued in Exchange for Warrants Exercised     $           9      $         0
                                                                     =============      ===========
   6,000 Common Shares Issued for Services                           $      34,500      $         0
                                                                     =============      ===========
   1,194 Common Shares Issued to Correct a Prior Year Error          $       7,500      $         0
                                                                     =============      ===========
</TABLE>


<PAGE>


                   MEDCARE TECHNOLOGIES, INC. AND SUBSIDIARIES
                  INTERIM CONSOLIDATED STATEMENT OF OPERATIONS
       FOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 1998 AND 1997, AND
          FOR THE NINE MONTHS PERIOD ENDED SEPTEMBER 30, 1998 AND 1997



<TABLE>
<CAPTION>
                                               For the Three      For the Three    For the Nine      For the Nine
                                               Months Period      Months Period    Months Period     Months Period
                                               Ended              Ended            Ended             Ended
                                               September 30,      September 30,    September 30,     September 30,
                                               1998               1997             1998              1997
                                               ----               ----             ----              ----
<S>                                            <C>                <C>              <C>               <C>             
Revenues                                       $    158,775       $    8,366       $   537,598       $    56,175

Expenses
   General and Administrative                     1,757,578          442,104         3,013,919           973,345
                                                  ---------          -------         ---------           -------

Operating Loss                                   (1,598,803)        (433,738)       (2,476,321)         (917,170)

Other Income (Expense)
   Interest Income                                   27,004           53,969           122,132            66,926
   Loss From Discontinued Operations                                                                      (4,489)
   Gain on Sale of Subsidiary                                                                             15,770
                                                 -----------      ----------        ----------            ------
Total Other Income (Loss)                            27,004           53,969           122,132            78,207

Net Loss Available to Common
Stockholders                                   $ (1,571,799)      $ (379,769)      $(2,354,189)   $     (838,963)
                                                 ===========        =========       ===========          =======

Earnings Per Common Share and Common                                                         
  Share Equivalents                            $      (0.22)      $    (0.05) $          (0.33)$           (0.12)
                                                       =====            =====             =====             =====

Weighted Number of Common Shares
  Outstanding                                     7,217,964        7,052,442         7,217,964         7,052,442
                                                  =========        =========         =========         =========
</TABLE>


<PAGE>

                   MEDCARE TECHNOLOGIES, INC. AND SUBSIDIARIES
                  INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
          FOR THE NINE MONTHS PERIOD ENDED SEPTEMBER 30, 1998 AND 1997


<TABLE>
<CAPTION>
                                                                     For the Nine       For the Nine
                                                                     Months Period      Months Period
                                                                     Ended              Ended
                                                                     September 30,      September 30,
                                                                     1998               1997
                                                                     ----               ----
<S>                                                                  <C>                <C>
Cash Flows from Operating Activities
   Net Loss                                                          $  (2,354,189)     $  (838,963)
   Adjustments to Reconcile Net Loss to Net Cash Provided by 
    Operating Activities
     Depreciation and Amortization                                          15,920            3,336
     Bad Debt Adjustments                                                   17,795                0
     Common Stock Issued For Services                                       34,500                0
     Changes in Assets and Liabilities
       (Increase) Decrease in Accounts Receivable                         (111,489)         (58,164)
       (Increase) Decrease in Prepaid Expenses                              62,313            2,202
       (Increase) Decrease in Organizational Costs                               0                0
       (Increase) Decrease in Security Deposits                               (750)          (1,500)
       (Increase) Decrease in Escrow Funds                              (1,500,000)               0
        Increase (Decrease) in Accounts Payable                             45,973          102,767
                                                                      ------------          --------
     Total Adjustments                                                  (1,435,738)          48,641
                                                                      ------------          --------
Net Cash Used by Operating Activities                                   (3,789,927)        (790,322)

Cash Flows from Investing Activities
   Purchase of Property and Equipment                                     (104,847)         (25,879)
                                                                      -------------         --------
Net Cash Flows from Investing Activities                                  (104,847)         (25,879)

Cash Flows from Financing Activities
   Proceeds From Sale of Common Stock                                    1,123,220        4,761,500
   Net Proceeds From Escrow Funds                                        1,500,000                0
   Payments to Related Party                                                (1,000)               0
   Offering Costs                                                                0         (123,750)
                                                                     --------------     -----------
Net Cash Provided by Financing Activities                                2,622,220        4,637,750
                                                                     --------------     -----------

Increase (Decrease) in Cash and Cash Equivalents                        (1,272,554)       3,821,549

</TABLE>


<PAGE>


                           MEDCARE TECHNOLOGIES, INC.
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1998

NOTE 1.  Statement of Information Furnished
-------------------------------------------

The accompanying  unaudited interim consolidated  financial statements have been
prepared  in  accordance  with  Form  10Q  instructions  and in the  opinion  of
management  contains  all  adjustments  (consisting  of  only  normal  recurring
accruals) necessary to present fairly the financial position as of September 30,
1998, the results of operations for the three months period ended  September 30,
1998, and for the nine months period ended September 30, 1998, and the statement
of cash flows for the nine months period ended September 30, 1998. These results
have been determined on the basis of generally  accepted  accounting  principles
and practices and applied consistently with those used in the preparation of the
Company's 1997 Annual Report on Form 10-K.

Certain information and footnote  disclosures normally included in the financial
statements presented in accordance with generally accepted accounting principles
have  been  condensed  or  omitted.   It  is  suggested  that  the  accompanying
consolidated  financial  statements  be read in  conjunction  with the financial
statements  and notes thereto  incorporated  by reference in the Company's  1997
Annual Report on Form 10-K.


NOTE 2.  Escrow Funds
---------------------

An escrow fund was  established  for monies and documents  deposited and held in
connection  with the offer and sale of the  warrants  attached  to the  Series A
Preferred Stock,  which the Company issued and sold on or about July 8, 1997, at
a purchase price of $10,000 per share.  Total original escrow funds  established
were  $1,650,000.  On August  5,  1998,  $150,000  was  withdrawn  as part of an
election attached to the subscription for the Series A Preferred Stock,  leaving
a net escrow balance of $1,500,000. The escrow funds are noninterest bearing.



<PAGE>


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

When used in this discussion, the words "believes", "anticipates", "expects" and
similar expressions are intended to identify  forward-looking  statements.  Such
statements are subject to certain risks and  uncertainties,  which would,  could
cause actual  results to differ  materially  from those  projected.  Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date  hereof.  The  Company  undertakes  no  obligation  to
republish revised forward- looking statements to reflect events or circumstances
after the date  hereof or to reflect the  occurrence  of  unanticipated  events.
Readers are also urged to carefully review and consider the various  disclosures
made by the Company which attempt to advise interested parties of the factors

                                       9
<PAGE>



which affect the Company's  business,  in this report,  as well as the Company's
periodic  reports  on Forms  10-K,  10Q and 8-K filed  with the  Securities  and
Exchange Commission.

Overview
--------

The Company  has  developed  The  MedCare  Program,  a  non-surgical,  non-drug,
non-invasive and cost effective treatment program for urinary  incontinence,  as
well as pelvic pain, chronic  constipation,  fecal incontinence,  and disordered
defecation.  The MedCare program is a multi- modality program based primarily on
behavioural techniques for treatment. These techniques include biofeedback using
electromyography  (EMG),  pelvic floor muscle  exercises,  and bladder and bowel
re-training.  The program is designed to  activate  and  strengthen  the various
sensory-response mechanisms that maintain bladder and bowel control. The therapy
is provided through computerized instrumental  electromyography  biofeedback and
is based on  operant  conditioning  strategies  whereby  specific  physiological
responses are progressively shaped, strengthened, and coordinated.

The MedCare Program is available through the practices of physicians (urologist,
urogynecologist,  gastroenterologist,  and/or colon rectal surgeon), either in a
private office,  clinic,  or a hospital  setting.  As of September 30, 1998, the
Company  had 24 MedCare  Program  sites  established,  and was in the process of
opening an additional 12 MedCare  Program sites in various parts of the country.
In order to prepare for MedCare's expansion phase the company  transitioned away
from Solo Physician  Practices to Multi  Physician  Practices,  which  typically
offers a larger patient base,  greater referral network and greater Managed Care
influence.

The Company  plans to devote the majority of its resources to  establishing  new
MedCare  Program sites,  in operating  existing  centers,  and in developing new
business  models for the  introduction  of the MedCare Program into new markets,
such as nursing homes and other institutions, and possibly foreign countries.

Results of Operations
---------------------

The Company had revenues of $158,775 for the three-month period ending September
30, 1998  compared to $8,366 for the  three-month  period  ending  September 30,
1997.  Since the Company  transitioned  from Solo  Physician  Practices to Multi
Physician Practice offices,  22 of the 24 centers operating,  as of September 30
1998,  had just recently  opened in 1998.  Due to the early stage nature of each
office the majority of the Company's  first quarter  revenues were  generated by
the early established sites. Each site generates revenue through patient visits,
which come from referrals and direct to consumer education.  The Company expects
modest  revenues  from all  newly  opened  sites  during  the first 12 months of
operations.  To date, the Company has not relied on any revenues for funding its
activities and it does not expect to receive significant revenues from operation
in the immediate  future.  During the next several years, the Company expects to
derive the majority of its  potential  revenues  from the opening of new MedCare
Program centers in the United States, and possible abroad.

For the three-month  period ending September 30, 1998, the Company's general and
administrative  expenses  increased to  $1,757,578  compared to $442,104 for the
corresponding  period in 1997.  The 1998 amount  represents an increase of 397%,
due primarily to the hiring of additional  management and nursing staff, greater
advertising and marketing expenses, increased expenses related to financial

                                       10
<PAGE>



public relations and building processes and protocols to support future growth.

The Company's net loss was $1,571,799, or $0.22 per share, for the third quarter
of  1998  compared  to a net  loss of  $379,769  or  $0.05  per  share,  for the
corresponding period in 1997. This increase was primarily due to the increase in
general and administrative costs described above.

Liquidity and Capital Resources
-------------------------------

As of September 30, 1998, the Company's cash balance was $2,168,237  compared to
$4,041,324  as of September 30, 1997.  The Company has  financed its  operations
primarily through the exercise of Stock Options and Share Purchase Warrants from
a previous private placement.

The Company's future funding requirements will depend on numerous factors. These
factors  include the  Company's  ability to  establish  and  profitably  operate
current and future MedCare Program locations,  recruiting and training qualified
management and clinical personnel, competing against any potential technological
advances in the treatment of urinary  incontinence and other  afflictions of the
pelvic floor area,  and the  Company's  ability to compete  against other better
capitalized  corporations who offer alternative or similar treatment options for
urinary incontinence and other afflictions of the pelvic floor area.

Due to the "start up" nature of the Company's  business,  the Company expects to
incur  losses as it expands its  business.  While the Company has enough cash to
fund its early stage expansion plans, the Company may choose to raise additional
funds through  private or public equity  investment in order to expand the range
and  scope of its  business  operations.  Even if the  Company  does not have an
immediate  need for  additional  cash,  it may seek access to the public  equity
markets if and when  conditions are  favorable.  There is no assurance that such
additional  funds will be available for the Company to finance its operations on
acceptable terms, if at all.


                         PART II -- OTHER INFORMATION

Item 1    Legal Proceedings
------    -----------------

None

Item 2    Changes in Securities
------    ---------------------

     As detailed in the financial statements, the Company issued 6,000 shares of
its common stock in exchange for services, 8,990 shares in exchange for warrants
exercised  and 1,194  shares to correct a prior  year  error.  Additionally,  74
shares of Preferred  Stock of the Company were  converted into 128,506 shares of
common  stock.  The total  common  shares  issued  during the three month period
ending September 30, 1998 was 144,690 shares.

Item 3    Defaults Upon Senior Securities
------    -------------------------------

None


                                       11
<PAGE>

Item 4    Submission of Matters to a Vote of Security Holders
------    ---------------------------------------------------

None

Item 6    Other Information
------    -----------------

None

Item 6    Exhibits and Reports on Form 8-K
------    --------------------------------

None

Signature Page
--------------

Pursuant to the  requirements of section 13 or 15(d) 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.

                                                     MEDCARE TECHNOLOGIES, INC.


                                                     /s/ Jeffrey S. Aronin
                                                     ---------------------
                                                     Jeffrey S. Aronin
                                    President

Dated: November 12, 1998

                                       12


<PAGE>