SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-QSB


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


For the quarterly period ended December 31, 1997
                                                 Commission File Number: 0-10707


                              THERMODYNETICS, INC.
        (Exact name of small business issuer as specified in its charter)


           Delaware                                    06-1042505
(State or other Jurisdiction                (I.R.S. Employer Identification No.)
of Incorporation or Organization)                   


651 Day Hill Road, Windsor, CT               06095               860 683-2005
(Address of Principal Executive Offices)   (Zip Code)         (Telephone Number)


________________________________________________________________________________
              (Former name, former address and former fiscal year,
                         if changed since last report.)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15 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___


State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.


           Class                                Outstanding at December 31, 1997
 Common stock $.01 Par Value                               12,569,591 Shares


<PAGE>


                      THERMODYNETICS, INC. AND SUBSIDIARIES


                                      INDEX


                                                                     Page Number
                                                                     -----------


 PART I            FINANCIAL INFORMATION

       Item 1.     Financial Statements

                   Consolidated Balance Sheet
                      December 31, 1997 and March 31, 1997.................    3

                   Consolidated Statement of Income
                      Three Months Ended December 31,
                      1997 and 1996........................................    4

                   Consolidated Statement of Income
                      Nine Months Ended December 31,
                      1997 and 1996........................................    5

                   Consolidated Statement of Cash Flows
                      Nine Months Ended December 31,
                      1997 and 1996........................................    6

                   Notes to Consolidated Financial Statements..............  7-8

       Item 2.     Management's Discussion and Analysis ................... 9-10


 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.....   11

       Item 5.     Other Information.......................................   11

       Item 6.     Exhibits and Reports on Form 8-K........................   11


SIGNATURE PAGE ............................................................   12

                                     Page 2

<PAGE>



                      THERMODYNETICS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                     ASSETS

<TABLE>
<CAPTION>
                                                            December 31,     March 31,
                                                               1997            1997
                                                            (Unaudited)      (Audited)
CURRENT ASSETS
<S>                                                        <C>            <C>        
  Cash                                                     $     2,604    $     2,550
  Accounts Receivable, Net                                   1,002,302      1,227,155
  Inventories                                                1,520,522      1,230,566
  Prepaid Expenses and Other Current Assets                    281,816        250,956
                                                           -----------    -----------
    Total Current Assets                                     2,807,244      2,711,227
                                                           -----------    -----------

PROPERTY , PLANT AND EQUIPMENT
  Property, Plant and Equipment - At Cost                    8,799,248      8,615,418
  Less: Accumulated Depreciation                             4,371,166      4,132,228
                                                           -----------    -----------
   Property, Plant, and Equipment - Net                      4,428,082      4,483,190
                                                           -----------    -----------

OTHER ASSETS
  Undeveloped Land Held for Investment                         116,593        115,111
  Intangible Assets - Net of Amortization                      129,424        142,136
  Officers' Life Insurance                                     908,789        719,881
  Deferred Assets                                                3,143          8,468
  Deposits                                                       6,462          5,612
  Marketable Equity Securities, at Market                      416,500        392,000
                                                           -----------    -----------
    Total Other Assets                                       1,580,911      1,383,208
                                                           -----------    -----------

TOTAL ASSETS                                               $ 8,816,237    $ 8,577,625
                                                           ===========    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts Payable                                         $   646,155    $   758,914
  Accrued Taxes and Expenses                                    97,939        120,454
  Current Portion of Long Term Debt                            291,567        253,178
  Notes Payable - Bank                                       1,083,636      1,303,813
                                                           -----------    -----------

    Total Current Liabilities                                2,119,297      2,436,359
                                                           -----------    -----------

LONG TERM DEBT                                               2,447,412      2,101,458
                                                           -----------    -----------

STOCKHOLDERS' EQUITY
  Common Stock, Par Value $.01/Share,
  Authorized 25,000,000 shares, issued 12,569,591 shares
      At 12/31/97 and 12,476,057 shares at 3/31/97             125,696        124,761
    Additional Paid-in Capital                               5,411,525      5,404,037
  Less:  Treasury Stock, at Cost                               320,521        320,521
  Less:  Valuation Reserve for Long-Term Investments           171,500        196,000
  Retained Earnings (Deficit)                                 (795,672)      (972,469)
                                                           -----------    -----------
    Total Stockholders' Equity                               4,249,528      4,039,808
                                                           -----------    -----------

TOTAL LIABILITIES AND                                      $ 8,816,237    $ 8,577,625
  STOCKHOLDERS' EQUITY                                     ===========    ===========
</TABLE>



   The accompanying notes are an integral part of these financial statements.


<PAGE>


                      THERMODYNETICS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENT OF INCOME
                     FOR THE THREE MONTHS ENDED DECEMBER 31,
                                   (UNAUDITED)



                                                        1997            1996
                                                     -----------    -----------

Net Sales                                            $ 2,031,411    $ 2,174,916
                                                   
Cost of Goods Sold                                     1,502,137      1,549,216
                                                     -----------    -----------
                                                   
Gross Profit                                             529,274        625,700
                                                   
Selling, General & Administrative Expenses               388,701        476,759
                                                     -----------    -----------
                                                   
Income From Operations                                   140,573        148,941
                                                     -----------    -----------
                                                   
Other Income (Expense)                             
     Interest Expense, Net                               (90,245)       (84,391)
     Other - Net                                          (6,624)        (6,624)
                                                     -----------    -----------
     Total Other Income (Expense)                        (96,869)       (91,015)
                                                     -----------    -----------
                                                   
Income Before Income Taxes                                43,704         57,926
                                                   
Provision for Income Taxes                                   -0-            -0-
                                                     -----------    -----------
                                                   
Net Income                                           $    43,704    $    57,926
                                                     ===========    ===========
                                                   
                                                   
Earnings per Share - Basic and Diluted                      NIL     $       NIL
                                                     ===========    ===========

Weighted Average Shares Outstanding - Basic           12,569,646     12,476,002
                                                     ===========    ===========
Weighted Average Shares Outstanding - Diluted         15,595,138     16,022,026
                                                     ===========    ===========


    The accompanying notes are an integral part ofthese financial statements.


                                     Page 4

<PAGE>


                      THERMODYNETICS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENT OF INCOME
                     FOR THE NINE MONTHS ENDED DECEMBER 31,
                                   (UNAUDITED)



                                                       1997             1996
                                                   ------------    ------------

Net Sales                                          $  6,446,283    $  6,612,854

Cost of Goods Sold                                    4,671,598       4,847,601
                                                   ------------    ------------

Gross Profit                                          1,774,685       1,765,253

Selling, General & Administrative Expenses            1,303,840       1,268,718
                                                   ------------    ------------

Income From Operations                                  470,845         496,535
                                                   ------------    ------------

Other Income (Expense)
     Interest Expense, Net                             (274,176)       (235,570)
     Other - Net                                        (19,872)        (21,145)
                                                   ------------    ------------
     Total Other Income (Expense)                      (294,048)       (256,715)
                                                   ------------    ------------

Income Before Income Taxes and
   Extraordinary Item                                   176,797         239,820
Provision for Income Taxes                                  -0-             -0-
                                                   ------------    ------------
Net Income Before Extraordinary Item                    176,797         239,820

Extraordinary Item:
     Gain on Forgiveness of Indebtedness                    -0-         121,004
                                                   ------------    ------------
Net Income                                         $    176,797    $    360,824
                                                   ============    ============

Earnings per Share-Basic and Diluted
     Net Income Before Extraordinary Item          $        .01    $        .01
     Extraordinary Item                                     -0-             .01
                                                   ------------    ------------

Earnings Per Share-Basic and Diluted               $        .01    $        .02
                                                   ============    ============

Weighted Average Shares Outstanding-Basic            12,543,781      12,434,431
                                                   ============    ============
Weighted Average Shares Outstanding-Diluted          15,605,390      16,370,649
                                                   ============    ============


    The accompanying notes are an integral part ofthese financial statements.


                                     Page 5

<PAGE>


                      THERMODYNETICS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                     FOR THE NINE MONTHS ENDED DECEMBER 31,
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                           1997           1996
                                                                       -----------    -----------
<S>                                                                    <C>            <C>        
OPERATING ACTIVITIES:
  Net income before extraordinary item                                 $   176,797    $   239,820
         Adjustments to reconcile net income to net 
         cash provided by operating activities:

  Depreciation and amortization                                            256,975        277,301
  Gain on forgiveness of indebtedness                                          -0-        121,004
  Changes in operating assets and liabilities:
    Increase (decrease) in accounts payable                               (112,759)      (199,256)
    Decrease (increase) in prepaid expenses                                (31,710)       (66,213)
     and other assets
    Decrease (increase) in accounts receivable                             224,853        219,784
    Decrease (increase) in inventories                                    (289,956)      (134,526)
    Increase (decrease) in accrued expenses                                (14,092)       (29,213)
                                                                       -----------    -----------

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
                                                                           210,108        428,701
                                                                       -----------    -----------
INVESTING ACTIVITIES;
  Purchases of property, plant and equipment                              (183,830)      (231,438)
  Increase in other investments                                             (1,482)        (1,406)
  Increase in life insurance premiums receivable                          (188,908)      (137,864)
                                                                       -----------    -----------

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
                                                                          (374,220)      (370,708)
                                                                       -----------    -----------

FINANCING ACTIVITIES
  Sale of common stock                                                         -0-            550
  Principal payments on debt obligations                                  (449,008)    (1,607,606)
  Net proceeds from revolving and term debt                                613,174      1,549,083
                                                                       -----------    -----------

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
                                                                           164,166        (57,973)
                                                                       -----------    -----------

INCREASE (DECREASE) IN CASH                                                     54             20

CASH AT BEGINNING OF PERIOD                                                  2,550          2,529
                                                                       -----------    -----------

CASH AT END OF PERIOD                                                  $     2,604    $     2,549
                                                                       ===========    ===========
</TABLE>

    The accompanying notes are an integral part of these financial statements


                                     Page 6

<PAGE>



                      THERMODYNETICS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1: BASIS OF PRESENTATION

     The  financial  information  included  herein is unaudited;  however,  such
information  reflects all  adjustments  (consisting  solely of normal  recurring
adjustments)  which are,  in the  opinion of  management,  necessary  for a fair
statement of results for the interim  period.  Certain  information and footnote
disclosures  normally  included in financial  statements  prepared in accordance
with generally  accepted  accounting  principles have been condensed or omitted.
The results of operations  for the three and nine months ended December 31, 1997
and  December  31,  1996 are not  necessarily  indicative  of the  results to be
expected for the full year.

NOTE 2: INVENTORIES

     Inventories consist of the following at December 31:

                                                    1997                 1996
                                                 ----------           ----------
            Raw materials                        $  956,375           $  880,199
            Work-in-process                         208,625              355,296
            Finished goods                          355,522              215,689
                                                 ----------           ----------
                                                 $1,520,522           $1,451,184
                                                 ==========           ==========
            
NOTE 3: EARNINGS PER SHARE

     During the period ended December 31, 1997, the Company  adopted  "Statement
of Accounting  Standards No. 128,  Earnings per Share" (SFAS 128).  Earnings per
share for the three and nine months  ended  December  31, 1997 and  December 31,
1996 have been  computed in  accordance  with this  pronouncement,  based on the
weighted average of outstanding shares during the periods.  The weighted average
number of shares outstanding used in the calculations are as follows:

<TABLE>
<CAPTION>
                                         Three Months Ended        Nine Months Ended
                                         1997          1996         1997       1996
                                         ----          ----         ----       ----
<S>                                    <C>          <C>          <C>          <C>       
Weighted Average Shares Outstanding-
        (Basic)                        12,569,646   12,476,002   12,543,781   12,434,431

Assumed Conversion of Stock Options     3,025,492    3,546,024    3,361,608    3,936,218
                                       ----------   ----------   ----------   ----------

Weighted Average Shares Outstanding-
         (Diluted)                     15,595,138   16,022,026   15,605,390   16,370,649
                                       ----------   ----------   ----------   ----------
</TABLE>


                                     Page 7


<PAGE>


NOTE 4: INCOME TAXES

     The Company adopted "Statement of Accounting  Standards No. 109, Accounting
For Income Taxes" (SFAS 109)  effective  April 1, 1994.  The statement  requires
that deferred  income taxes reflect the future tax  consequences  of differences
between the tax bases of assets and  liabilities  and their bases for  financial
reporting purposes. In addition, SFAS 109 requires the recognition of future tax
benefits,  such  as  net  operating  loss  carryforwards,  to  the  extent  that
realization of such benefits are more likely than not.

     The primary components of the Company's deferred tax assets and liabilities
and the related valuation allowance are as follows:

Assets:
  Uniform capitalization adjustment                        $   2,351
  Net operating loss carryforward                            501,997
  Other                                                        5,728
                                                           ---------
                                                             510,076
Liabilities:
  Accelerated depreciation                                    29,424
                                                              29,424
Net deferred tax asset
  before valuation allowance                                 480,652

Less: Valuation allowance                                   (480,652)
                                                           ---------
Net deferred tax asset                                     $     -0-
                                                           =========


     The Company  established a valuation reserve for the full amount of the net
deferred  tax  asset  due to the  uncertainty  associated  with its  realization
through future operating results.

     At December 31, 1997, the Company had net operating loss  carryforwards  of
$1,476,000  expiring  from 2001 to 2007.  In  addition,  unused  tax  credits of
$144,000 expire from 1998 to 2001 and are also being carried forward.


NOTE 5: CASH FLOW INFORMATION AND NON CASH INVESTING ACTIVITIES

     The  following  supplemental  information  is  disclosed  pursuant  to  the
requirements of Financial  Accounting Standards Board's "Statement of Accounting
Standards No 95, Statement of Cash Flows".

                                                       9 Months Ended Dec. 31,
                                                         1997           1996
                                                         ----           ----

Cash payments for interest                             $ 274,176      $ 235,570
 Issuance of common stock to 401(k) plan               $   8,423      $   3,011
Valuation reserve to reflect long-term equity
      securities at market                             $ (24,500)     $(147,000)


                                     Page 8

<PAGE>

                      THERMODYNETICS, INC. AND SUBSIDIARIES

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

     RESULTS OF OPERATIONS

     Sales for the three and nine months ended December 31, 1997 were lower than
the respective periods in fiscal 1997 as atypical weather patterns in the United
States  reduced sales of space  conditioning  products  throughout the industry.
Moderate temperatures during the summer season followed a generally cool spring,
creating over-inventory positions at many large HVAC manufacturers. Accordingly,
the sales growth  expected for the quarter did not  materialize.  The Company is
currently developing other heat transfer products to broaden its customer base.

     Sales for the three  months ended  December 31, 1997 were  $143,505 or 6.5%
below the level of the comparable prior year period. For the nine months,  sales
were  $166,571  or 2.5%  lower  than the  December  1996  year-to-date  results.
Projected shipment levels for the fourth quarter,  period ending March 31, 1998,
are expected to be comparable to the most recently  completed  quarter as milder
than  normal  winter  climates in many parts of the country  have  continued  to
depress sales of space conditioning products.

     In late January,  the Company  introduced a new product line,  suction line
heat exchangers, primarily geared to the commercial refrigeration market. At the
January 1998  Air-conditioning,  Heating and Refrigeration  Exposition,  a large
international  trade show, these products were well received by both the OEM and
wholesale/distribution  markets.  Initial orders have already been received with
shipments scheduled to commence within the current quarter.

     Gross profit margins  remained  relatively flat for both the three and nine
month  periods  and  compared to the prior year.  For fiscal  1998,  the current
quarter resulted in a 26% gross margin;  while  year-to-date the result was 27%.
In the prior  year,  gross  margins for the quarter and nine months were 29% and
27%, respectively. In December, additional manufacturing cells were installed in
many  production  areas that are expected to increase  future  productivity  and
improve  scheduling  flexibility;  this resulted in additional labor costs which
adversely impacted manufacturing margins. Some carryover of these one-time costs
will also be reflected  in  January's  results.  The  favorable  impact of these
changes  are  expected  to begin to be  reflected  in the latter  stages of this
fiscal year (March 1998) and into the first and second quarters of fiscal 1999.

     Selling,  general and administrative expenses ranged between 19% and 22% of
net sales for the current  three and  nine-month  periods of both  years.  These
expenses declined in the current quarter compared to the third quarter of fiscal
1997 due to the timing of certain  expenditures  in the current and prior years.
Overall, the Company continues to expand its engineering and marketing functions
in support of new product development and market diversification.  This trend is
reflected in the increase in  operating  expenses on a year to date  comparative
basis.

     Other  expense  remained  constant  at 4% of net  sales  for  all  periods.
Interest paid to banks  represents the largest portion of this category.  During
the current  quarter,  the Company  completed a refinancing  of a portion of its
term debt, which was used to reduce its revolving line of credit.

     An extraordinary gain of $121,004,  net of related expenses was recorded in
the prior year pursuant to the refinancing of a real estate mortgage  secured by
one of the Company's manufacturing plants.

                                     Page 9

<PAGE>


     LIQUIDITY AND CAPITAL RESOURCES

     Working  capital at December 31, 1997 was $687,947  compared to $274,868 at
March 31, 1997 and  $468,400 at December 31, 1996.  The  improvement  in working
capital was largely due to the refinancing of certain term debt,  which resulted
in lower  levels  of trade  debt  and the  reduction  of  borrowings  under  the
revolving line of credit.

     Cash  provided by  operating  activities  totaled  $210,108 for the current
period  as net  income  and  depreciation,  coupled  with a  reduction  in trade
receivables  offset continuing  investments in operating assets. The increase in
inventory  of $289,956  was  primarily  created by the need to  generate  higher
levels of finished goods due to the manufacturing  realignment at the end of the
quarter.  Inventory  levels are  anticipated  to remain  higher  than prior year
levels as the Company  must  maintain a higher  level of raw  material  stock in
order to meet customer  requirements for shorter lead-times.  In the prior year,
slightly higher levels of operating income,  together with an extraordinary gain
of  $121,004  resulting  from a  refinancing,  resulted  in cash  provided  from
operations of $428,701 for the same period.

     Cash used in investing  activities was level for both the current and prior
years.  During the current  year, a  substantial  investment in plant assets was
made to enable  the  conversion  of a portion of the  factory  to  manufacturing
cells.

     Financing activities relate to refinancings and repayments of the Company's
term and  revolving  debt.  During the  current  year the Company  refinanced  a
portion of term debt  secured by plant  assets and used the  proceeds  to reduce
short-term borrowings.  The lower interest rate negotiated is expected to reduce
debt  service  expense  in future  periods.  In the prior  year,  a real  estate
mortgage was refinanced which generated an extraordinary gain of $121,004 on the
retirement of the then-existing mortgage.

     No further refinancings are under consideration, as the Company believes it
has  sufficient  resources  available  to  fund  current  development  programs.
However, as the Company is investigating acquisition  opportunities,  additional
capital to  finance  such  activities  may be  necessary.  It is  believed  that
financing is available for suitable investments.


     FORWARD LOOKING STATEMENTS

     This quarterly report contains certain forward-looking statements regarding
the Company,  its business  prospects and results of operations that are subject
to certain risks and  uncertainties  posed by many factors and events that could
cause the  Company's  actual  business,  prospects  and results of operations to
differ  materially  from those that may be anticipated  by such  forward-looking
statements.  Factors that may affect such  forward-looking  statements  include,
without limitation: the Company's ability to successfully and timely develop and
finance new projects,  the impact of competition on the Company's revenues,  and
changes in unit  prices,  supply and demand for the  Company's  tubing  products
especially in applications  serving the  commercial,  industrial and residential
construction industries.

     When used words such as "believes," "anticipates," "expects," "intends" and
similar expressions are intended to identify forward-looking statements, but are
not the exclusive means of identifying forward-looking  statements.  Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date of this report.  The Company  undertakes no obligation
to  revise  any  forward-looking  statements  in  order  to  reflect  events  or
circumstances that may subsequently arise. Readers are urged to carefully review
and consider the various  disclosures  made by the Company in this report,  news
releases,  and other reports filed with the Securities  and Exchange  Commission
that  attempt to advise  interested  parties of the risks and  factors  that may
affect the Company's business.

                                     Page 10

<PAGE>


                      THERMODYNETICS, INC. AND SUBSIDIARIES


                           PART II - OTHER INFORMATION


Item 1. Legal Proceedings.

     There are no material  legal  proceedings  known or threatened  against the
Company.

Item 2. Change in Securities.

     No class of  registered  securities  of the  Company  have been  materially
modified,  and no class of registered securities have been materially limited or
qualified by the issuance or  modification  of any other class of  securities of
the Company.

Item 3. Defaults Upon Senior Securities.

     There have been no defaults of any terms of the Company's securities.

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

     No  matters  were  submitted  to a vote of the  Securities  Holders  of the
Company during the quarterly period for which this report is filed.

Item 5.  Other Information.

         None

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

     (a)  Exhibit 27,  Financial  Data  Schedule,  has been  submitted with this
          report.

     (b)  No reports on Form 8-K were filed  during the  quarter  for which this
          report is filed.


                                    Page 11

<PAGE>


                      THERMODYNETICS, INC. AND SUBSIDIARIES


                                    SIGNATURE



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


                                      THERMODYNETICS, INC.



Date: February 13, 1998               By:  /s/Robert A. Lerman
                                           ------------------------------------
                                           Robert A. Lerman
                                           President


Date: February 13, 1998               By:  /s/Robert I. Lieberman
                                           ------------------------------------
                                           Robert I. Lieberman
                                           Treasurer and Chief Financial Officer

                                    Page 12