SECURITIES AND EXCHANGE COMMISSION
                  Washington, D.C. 20549
               ----------------------------------


                           FORM 10-QSB

           Quarterly Report Under Section 13 or 15(d)
             of the Securities Exchange Act of 1934

                ----------------------------------

               For Quarter Ended December 31, 1995

                 Commission File Number 0-18711

                   ACTRADE INTERNATIONAL, LTD.
             (formerly Acquisition Capability, Inc.)
     (Exact name of Registrant as specified in its Charter)

          Delaware                      13-3437739
     (State or other Jurisdiction                      (I.R.S.
Employer Ident-
     of incorporation or organization)             ification
Number)


       7 Penn Plaza, Suite 422, New York, N.Y.       10001
     (Address of principal executive offices)    (Zip Code)


                         Same
                    (Former Address)    (Zip Code)

                              (212) 563-1036
                    (Registrant's telephone number, including
area code)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the  Securities  and  Exchange Act of 1934
during the preceding 12 months (or for such shorter  period that the  Registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                      Yes_X__ No____

Indicate the number of Shares  outstanding  of each of the  Issuer's  classes of
common stock,  as of the latest  practicable  date. As of February 1, 1996 there
were outstanding 5,330,681 shares of Common Stock, par value $.0001.


<PAGE>



                              INDEX


Part I.  Financial Information



Item 1.   Consolidated Financial Statements

Balance Sheets as of December 31, 1995 (UNAUDITED) . . . . . . .. . F-2

Consolidated Statements of Operations for the
Six and Three Months Ended December 31, 1995 And 1994  . . . . .. . .F-3

Consolidated Statements of Cash Flows For
Three Months Ended December 31, 1995 And 1994. . . . . . . . . .. .  F-4

Notes to Consolidated Financial
Statements . . . . . . . . . . . . . . . . . . . . . . . . . . ..F-5-9

Item 2.   Management's  Discussion  and
Analysis of Financial Condition    . . . . . . . . . . . . . . ..F-10-14



Part II.  Other Information


Exhibits and reports on Form  8-K. . . . . . . . . . . . . . . .. . 15

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 16



<PAGE>



                 ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 1995
                                   (Unaudited)

                                     ASSETS

Current assets:
  Cash, including time deposits of $1,750,000             $1,874,115
  Accounts receivable, less allowance for
   doubtful accounts of $62,500                            3,414,626
  Trade acceptance draft receivable, bank (Note 8)         2,314,231
  Loans receivable from affiliates                             2,500
  Prepaid expenses                                            39,911
  Interest receivable                                         85,898

    Total current assets                                   7,731,281

Property and equipment:
  Furniture and fixtures                                     143,927
  Leasehold improvements                                     110,902


  Less accumulated depreciation                              158,897
                                                              95,932

Other asset, security deposit                                 15,034

                                                           7,842,247



                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Current portion of long-term debt (Note 4)                  59,881
  Cash advance from bank (Note 8)                          1,470,625
  Accounts payable                                         2,783,447
  Accrued interest                                               439
  Payroll taxes payable                                       35,093
  Accrued expenses                                             4,508
  Advances from affiliates                                     3,400
  Income taxes payable (Note 7)                               18,681

    Total current liabilities                              4,376,074

Commitments (Note 6)

Deferred rent liability (Note 6)                              60,284

Shareholders' equity:
  Common stock, $.0001 par value; authorized
   100,000,000 shares, issued and outstanding
   5,330,681 shares                                              533
  Additional paid in capital                               2,041,873
  Retained earnings                                        1,363,483

                                                           3,405,889

                                                          $7,842,247


                                                                             F-2




<PAGE>



                 ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

         FOR THE SIX AND THREE MONTHS ENDED DECEMBER 31, 1995 AND 1994
                                   (Unaudited)



                                    Six months              Three months
                                       Ended                    Ended
                                   December 31,              December 31,
                                1995         1994         1995         1994


Net sales                  $11,192,070   $7,835,200   $5,710,294   $3,978,110

Cost of sales               10,228,629    6,956,547    5,189,983    3,551,547

Gross profit                   963,441      878,653      520,311      426,563

Selling, general and
 administrative expenses       600,252      549,858      313,400      258,388

Income from operations         363,189      328,795      206,911      168,175

Other income (charges):
  Interest income               58,382       39,206       29,284       34,206
  Interest of expense     (     63,928) (    17,905) (    39,119) (     9,761)
                          (      5,546)      21,301  (     9,835)      24,445

Income before income
 taxes                         357,643      350,096      197,076      192,620

Income taxes                    18,681       50,515        1,910       42,275


Net income                 $   338,962   $  299,581   $  195,166   $  150,345

Earnings per common
 share                     $      0.06   $     0.06   $     0.04   $     0.03

Weighted average common
 shares outstanding          5,330,681    5,282,032    5,330,681    5,330,681










                                                                             F-3


<PAGE>



                 ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

         FOR THE SIX AND THREE MONTHS ENDED DECEMBER 31, 1995 AND 1994
                                   (Unaudited)



                                                            1995         1994

Cash flows from operating activities:
  Net income                                          $  338,962   $  299,581
  Adjustments to reconcile net income
   to cash provided from operating activities:
     Depreciation                                         11,487       10,921
     Decrease in deferred tax asset                                       897
  Changes in operating assets and liabilities:
    Increase in accounts receivable                  ( 1,660,030) ( 2,674,859)
    Increase in prepaid expenses                     (    10,917) (     5,588)
    Increase in interest receivable                  (    58,335) (    38,926)
    Increase in accounts payable                       1,018,461    1,910,287
    Decrease in accrued expenses                     (     5,341) (        62)
    Increase in payroll taxes payable                     25,880        4,811
    Increase in income taxes payable                      17,981       49,815
    Decrease in deferred rent                        (     3,618) (     2,264)
    Decrease in deferred taxes                            13,439        7,316

    Net cash used in operating activities            (   312,031) (   438,071)

Investing activities, use of cash, purchase
 of property and equipment                           (    14,352) (    11,132)

Financing activities:
  Source of cash:
    Proceed from issuance of common stock                             567,574
    Increase in cash advances from bank                  415,727      422,610
    Decrease in loans receivable, affiliates             105,984       18,485
  Use of cash:
    Decrease in current portion f long-term debt     (    90,000) (    90,000)
    Decrease in due from affiliates                  (       262)

    Net cash provided from financing activities          431,449      918,669

Net increase in cash                                     105,066      469,466

Cash, beginning of period                              1,769,049    13,11,569

Cash, end of period                                   $1,874,115   $1,781,035

Supplemental  disclosures  of cash flow  information:  Cash paid during the year
  for:
    Interest                                          $   25,109   $   17,967
    Income taxes                                      $        0   $        0






                                                                             F-4


<PAGE>



                 ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                       SIX MONTHS ENDED DECEMBER 31, 1995
                                   (Unaudited)








1. The  accompanying  unaudited  financial  statements  have  been  prepared  in
accordance with generally accepted  accounting  principles for interim financial
information and with the instructions to Form 10-QSB.  Accordingly,  they do not
include all of the  information  and  footnotes  required by generally  accepted
accounting  principles  for  complete  financial  statements.  In the opinion of
management,  all adjustments  considered  necessary for a fair presentation have
been  included.  The  results  of  operations  for the six  months  ended is not
necessarily  indicative  of the  results to be expected  for the full year.  For
further  information,   refer  to  the  consolidated  financial  statements  and
footnotes  thereto  included in the  Company's  annual report for the year ended
June 30, 1994, included in its Annual Report filed on Form 10-KSB. All reference
to  Actrade  in these  footnotes,  relate to Actrade  International,  Inc.,  the
Company's wholly owned subsidiary.  Actrade International,  Ltd., "The Company,"
is referred to as ACI.



     2.  Organization  of  the  Company:   The  Company,   formerly  Acquisition
Capability, Inc., was incorporated in the State of Delaware on April 3, 1987. On
September  2, 1988,  the  Company  acquired  100% of the issued and  outstanding
shares of Allstate Travel Corp., a New York  corporation  incorporated on August
13, 1985 and Actrade International,  Corp., a New York corporation  incorporated
on July 18,  1985.  Allstate  operates as a travel  agency.  Actrade  represents
various U. S.  manufacturers  and  distributors  by buying and  exporting  their
products overseas.  Amworld Commerce, Inc., a wholly owned subsidiary of Actrade
International, Ltd., was incorporated in Delaware in May of 1991. Amworld offers
alternatives  to existing  accounts  receivable  financing to both  domestic and
foreign companies.  Standard Corporation, a wholly owned foreign corporation and
subsidiary of Actrade  International,  Corp.,  was  incorporated  in Antigua and
Bermuda on February 12, 1988 and was acquired in January  1990.  On December 22,
1991, Standard  Corporation changed its corporate name to Actrade South America.
American Cooling, Inc., a wholly owned subsidiary of Actrade International, Ltd.
was incorporated in Delaware in 1992 and was inactive. American Care Industries,
was incorporated in 1993 and was inactive.  American Care Industries,  Inc. is a
wholly owned subsidiary of Actrade International,  Ltd. Amworld Credit, Inc. was
incorporated   in  and  was  inactive  at  December   1995.  The  Company  sells
predominantly in the foreign market through its wholly owned foreign subsidiary,
Actrade  South  America.  There is no  guarantee  that the  foreign  market will
continue to develop  since the  possibility  of foreign and domestic  government
intervention, economic conditions world wide and any other unforeseen situations
may occur. F-5


<PAGE>



                  ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                       SIX MONTHS ENDED DECEMBER 31, 1995
                                   (Unaudited)






3. Principles of consolidation:

The consolidated financial statements of Actrade International, Ltd. and
subsidiaries include the accounts of all significant wholly owned
subsidiaries, after elimination of all significant intercompany
transactions and accounts. The accounts of Allstate Travel Corp.,
Actrade South America, a foreign corporation, Amworld Commerce, Inc. and
American Cooling, Inc. are included as the subsidiaries of Actrade
International, Ltd.



4. Notes payable, bank:


Rate

Note payable, Banca
Nazionale Del Lavoro (a) LIBOR + 1% $59,881



(a) On August 30, 1993, a final loan restructuring agreement was signed with the
bank. Under the terms of the agreement,  a $50,000 principal payment was made at
the  signing  with  another  $50,000  payment  due on both  August 31,  1993 and
September  30,  1993.  On October  31,  1993,  and on the last day of each month
thereafter,  the Company will make payments of $15,000 plus  interest  until the
loan and interest is repaid in full. Based on this restructuring  agreement, the
total future annual note payments are as follows:


April 30, 1996 $59,881


The note is collateralized by accounts receivable.


5. Related party transactions:

During each of the three  years ended  December  31,  1995,  the Company and its
subsidiaries have advanced and received funds to and from related parties.  Such
receivable and payables are non-interest bearing and are due on demand.

The Company has entered into several employment agreements with its officers and
shareholders.



                                                                             F-6





<PAGE>



                  ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                       SIX MONTHS ENDED DECEMBER 31, 1995
                                   (Unaudited)






6. Leases:

    From March 1, 1989 to February  28, 1990,  the Company and its  subsidiaries
     used office facilities under a non-cancelable  operating  sublease of which
     commenced  March 1, 1989 and was to expire  February 28, 1992.  The related
     sublease  agreement  provided  for  monthly  rentals  of $4,000  and gave a
     subsidiary  of the Company  the option to renew,  for an  additional  three
     years (to February 28, 1995), at the same monthly rental.

    In February  1990,  the Company  agreed with the lessor and sublessor of its
     facilities to discontinue its sublease. In the year ended June 30, 1991 the
     Company  received  $12,750  in  settlement  of the  lease.  The  amount was
     recorded as a reduction in selling, general and administrative expenses. In
     February  1990,  the  Company  executed  a lease  agreement  with a related
     corporation  who was the lessor of the  facility  from an  unrelated  third
     party.  The lease in  August  1991 was  assigned  to the  Company  from the
     related party. The Company simultaneously assigned said lease to Actrade in
     accordance with the terms of the lease. The agreement  provides for monthly
     rentals of $4,200  (commencing  June 1, 1991) and annual  increases of 4.5%
     and expires February 28, 2000.

    In lieu of rent for the first  fifteen  (15)  months,  the Company  incurred
     costs  totaling  approximately  $87,000  for  leasehold  improvements.  The
     leasehold  improvements  and the total rent concessions are being amortized
     using the  straight  line  method  over the entire  term of the lease.  The
     resulting  unpaid  rent over the  abatement  period is included in deferred
     rent liability.

    In December 1991,  Actrade entered into a non-cancelable  36 month operating
     lease to house its Florida office.  The lease provides for monthly payments
     of $653 plus cost of living increases annually,  capped @ 5% per annum. The
     lease was  renewed on December  24, 1994 for a three year period  under the
     above terms.


    Future minimum lease payments required under non-cancelable operating leases
     by fiscal year are as follows:


                December 31, 1996                 $60,328
                December 31, 1997                 $63,043
                December 31, 1998                 $69,359
                December 31, 1999                 $72,471
                December 31, 1999-2002            $95,602


    Lease  expense  amounted to $37,780  and  $36,372  for the six months  ended
     December 31, 1995 and 1994 respectively.









                                                                             F-7


<PAGE>



                 ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                       SIX MONTHS ENDED DECEMBER 31, 1995
                                   (Unaudited)



7.  Income taxes:

    The components of income tax expense are:

                                                 Six months       Six months
                                                    Ended            Ended
                                                December 31,     December 31,
                                                    1995             1994
    Income taxes currently payable:
      Federal                                      $12,828          $42,143
      State                                          4,773            8,642
                                                    17,601           50,785

    Deferred tax expense arising from:
      Excess of Financial accounting
       depreciation over tax                      (    220)        (  1,020)

      Charges to allowance for doubtful accounts
       over tax write offs for bad debts

      Excess of rent expense for financial
       accounting over tax deductible rent           1,300              750
                                                     1,080         (    270)

    Total income tax expense                       $18,681          $50,515


    Deferred income tax provisions resulting from differences between accounting
     for  financial  statement  purposes  and  accounting  for tax  purposes are
     reflected above.

    Areconciliation  of income tax expense at the  statutory  rate to income tax
     expenses at the Company's effective rate is as follows:

                                                 Six months       Six months
                                                   Ended             Ended


                                                December 31,     December 31,
                                                    1995             1994
      Computed tax at the expected
       statutory rate                             $137,620         $119,032

      Surtax exemption                           (  15,863)       (  16,750)

      State income taxes, net of federal
       tax benefit                                  18,304            8,642

      Foreign income                             ( 119,074)       (  60,139)

      Tax benefit from utilization of net
       operating loss carryover                  (   3,386)

      Other                                          1,080        (     270)
      Income tax expense                          $ 18,681         $ 50,515






                                                                             F-8


<PAGE>



                 ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                       SIX MONTHS ENDED DECEMBER 31, 1995
                                   (Unaudited)






7.  Income taxes (continued):

    The effective statutory rate for 1995 was 39% for federal tax purposes.

    The Company has made adjustments to eliminate the tax provisions for foreign
     earnings  since said  earnings are  undistributed  and will be  permanently
     invested.  The  cumulative  amounts of foreign  undistributed  earnings are
     $1,683,200 at December 31, 1995 and $1,047,856 at December 31, 1994.

    The Company has adopted SFAS 109 for the fiscal year beginning July 1, 1993.
     SFAS 109 changes  accounting  for income  taxes from the  deferred  method,
     required by APB-11 to the asset/liability  method,  commonly referred to as
     the liability  method.  The deferred method places primary  emphasis on the
     matching of revenues and  expenses.  The liability  method  places  primary
     emphasis  on  the   valuation  of  current  and  deferred  tax  assets  and
     liabilities.  The significance of the impact that SFAS 109 will have on the
     financial  statements is expected to be immaterial  and will have no impact
     on any other  significant  matters of the Company.  The effect of initially
     adopting SFAS 109 will be reported as the cumulative  effect of a change in
     accounting principle in accordance with APB-20.

    The  Company  has   available  a  net   operating   loss  carry  forward  of
     approximately  $60,000  against  future  earnings  through  the fiscal year
     ending June 30, 2009.



8.  Trade Acceptance Drafts receivable, bank:

    As of December 31, 1995,  Amworld Commerce,  Inc., a wholly owned subsidiary
     of Actrade International, Ltd., had sold and assigned all outstanding Trade
     Acceptance Drafts (TAD's) to Banco Portugues De Atlantico (Bank). The total
     TAD amounts due from the banks were  $2,314,231  at December 31, 1995.  The
     bank  purchases  the TAD's at the face value and advances  these amounts to
     Amworld Commerce,  Inc. The bank purchases the TAD's without  recourse.  To
     the extent  any TAD is in excess of  $3,000,  payment is insured by Capital
     Factors,  Inc.  The bank will  purchase  each TAD by  advancing  to Amworld
     Commerce, Inc. 75% of the face amount of each TAD assigned and delivered by
     overdraft on the Amworld Commerce,  Inc. account. At December 31, 1995, the
     advances on the overdraft  account  amounted to $1,470,625.  As each TAD is
     collected,  the face amount  will be  credited  to the  Amworld  account to
     reduce the  advanced  overdraft.  Interest  is payable at 1% over prime per
     annum on the outstanding advances, which shall be charged on the 1st day of
     each month. In addition the bank charges a $10 per daily deposit to service
     the account.  Amworld Commerce, Inc. has granted a security interest in all
     TAD's  purchased  by the bank and all  accounts  represented  by the  TAD's
     together with all  guaranties and  collateral,  and all proceeds of all the
     above.







                                                                             F-9


<PAGE>



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

I.  Results of Operations

During the first six months of fiscal 1996, ended December 31, 1995, the Company
had combined  gross revenues of  $11,192,070,  as compared to $7,835,200 for the
first six months of fiscal 1995. Despite an increase of over $3,350,000 in gross
revenues  (over 42% above fiscal 1995),  total cost of revenues from  operations
during this period increased dramatically to $10,228,629, or approximately 91.3%
of gross  revenues,  as  compared  to cost of goods sold for the same  period in
fiscal  1995 of  $6,956,547,  or  88.8%  of gross  revenues.  Although  slightly
improved from the first  quarter of fiscal 1996 when cost of revenues  reached a
high of 92% of gross revenues, this resulted in gross profits from operations of
$963,441  for  the  first  the  current  period,  an  increase  of  $84,788  (or
approximately  9.6%) from the first half of fiscal  1995,  with net incomes from
operations  of $363,189  for this  period,  as compared to $328,795 for the same
period last year.  After interest  income and expenses and provisions for income
taxes, the Company experienced net earnings of $338,962, as compared to $299,581
for the first half of fiscal 1995 (an increase of over 13%), or $0.06 per share.

With respect to the three months ended December 31, 1995, gross revenues reached
$5,710,294 (up over 43.5% from the second quarter of fiscal 1995); gross profits
climbed to $520,311  (an  increase of just under 22% from the second  quarter of
fiscal 1995); net income from operations  totaled $206,911 (up over 23% from the
same period in fiscal 1995); and net earnings after interest income and expenses
and allowances for income taxes reached $195,166 (an increase of over 29.8% from
fiscal 1995),  or $0.04 per share for the quarter ended December 31, 1995.  Most
importantly,  however,  the results for this three month  period  shows that the
cost of revenues  dipped below 91% (having  reached  90.9% for the three months)
for the first time since the Company  introduced  on a commercial  basis its TAD
Program (see

 FINANCIAL SERVICES DIVISION" below).  Management believes that this indicates a
leveling off of the increased costs associated with the TAD Program which should
continue at least for the balance of fiscal 1996.

 There  were two basic  reasons  for the  higher  cost of  revenues  and  modest
increases experienced in net operating profits during the past several quarters:

    1. The first reason relates to Amworld Commerce, Inc. ("Amworld"). Amworld's
    gross margins are lower than for the export division, typically in the range
    of 7 - 8%. Consequently, as Amworld accounts for an increasing percentage of
    the Company's overall revenues, the Company's overall margins will decrease.
    During this period Amworld generated $3,598,931 in gross revenues,  over 32%
    of the Company's total revenues.

    2. The second  reason  relates to the nature of the sales made  during  this
    period  by  Actrade  S.A.  which  continues  to be a  significant,  although
    decreasing,  segment of the Company's revenues.  As in the past, during this
    period Actrade S.A. derived most of its gross revenues from a few very large
    sales of  computer  systems to Europe,  which  sales  typically  are made at
    profit margins of approximately 5%. Since Actrade S.A.  represented over 33%
    of the  Company's  total  revenues  during  this  period,  this  contributed
    significantly  to the higher overall cost of goods sold for the Company.  As
    in the past, management is unable to predict whether or not these relatively
    low profit margins will persist with respect to revenues from Actrade S.A.
    during the balance of fiscal 1996.

Although  management  continues to estimate total gross revenues for fiscal 1996
will exceed $20 Million, due to the continued uncertainty of the cost which will
be incurred as Amworld continues to expand, no estimate of operating results can
be made at this time.

The increase in gross revenues during this period  continues to be due primarily
to the expansion of Actrade's operations through (I) the continued growth of its
Financial Services  Division,  discussed  separately below (see "III.  Financial
Services  Division"),  and (ii) the continued growth within  Actrade's  existing
product  lines,  including  Actrade S.A. As was the case during fiscal 1995, the
increase in revenues  during this period  resulted from increased  product sales
rather  than from price  increases  for the  Company's  products  and  operating
revenues derived from Amworld.

As a result  of the  foregoing  factors,  the  Company's  net  operating  income
expressed as a percentage of gross  revenues  decreased  from 3.8% at the end of
the first half of fiscal 1995 to slightly over 3.0% at the end of the first half
of fiscal 1996. Although lower than last year, this ratio is up from 2.6% at the
end of the first  quarter of fiscal 1996 and  considerably  higher than the 2.5%
reached at the end of fiscal 1995.  Compared to 1995 fiscal year end, therefore,
net operating  income  expressed as a percentage of gross  revenues  continue to
showed an  increase.  Although  management  believes  that this ratio may remain
stable during fiscal 1996,  management  believes the results of operations  show
the success of the Company's expansion program and of its cost cutting measures.

Allstate had, and continues to have,  extremely limited operations,  a situation
expected to continue for the foreseeable future. During the first half of fiscal
1996,  Allstate's  total sales have  aggregated  only $9,841,  which continue to
account  for less  than  1/10 of 1% of the  Company's  total  revenues  for this
period.


II.  Discussion of Financial Condition

On a  consolidated  basis,  at December 31, 1995 the Company had total assets of
$7,842,247  (compared with  $5,987,746 at June 30, 1995, the end of fiscal 1995)
with total  liabilities  of  $4,436,358  (compared  with  $3,057,530 at June 30,
1995). Of the Company's assets at December 31, 1995,  $1,874,115 was in the form
of  cash  and  cash  equivalent  (compared  to  $1,769,049  at June  30,  1995),
$3,414,626   represents  accounts  receivable,   excluding  TADs,  (compared  to
$2,560,827  at  June  30,  1995)  and  $2,314,231  in  Trade  Acceptance  Drafts
receivable  (with a  corresponding  liability of  $1,470,625  representing  cash
advanced from Amworld's bank). The increase in cash on hand at December 31, 1995
was principally  due to routine  fluctuations in cash on hand from the Company's
operations.  The  increase of $853,799 in accounts  receivables  outstanding  at
December 31, 1995, as well as the increase in accounts  payable  ($2,783,447  at
December 31, 1995 compared to $1,764,986 at June 30, 1995) was  principally  due
to the  increased  revenues  generated  by  Amworld  and the  normal  effects of
increased sales by Actrade and Actrade S.A. Despite the substantial  increase in
both trade accounts  receivable and payable,  management  believes that this was
caused principally by normal variations in Actrade's business and not due to any
trend which is  expected to have a  continuing  effect  upon  operations  in the
future.

At December 31, 1995 the Company had Retained  Earnings of $1,363,483 with total
Stockholder's  Equity of $3,405,889,  compared with  $1,024,628 and  $3,067,034,
respectively,  at June 30, 1995. The principal source of funds for the Company's
operations are revenues earned by its operating subsidiaries.

At December 31, 1995 the Company had property, less accumulated depreciation, of
$95,932,  (compared to $93,174 at June 30, 1995) and deferred taxes and deposits
of $15,034,  compared to $28,473 at the end of fiscal 1995. In  connection  with
the  Company's  relocation  during  fiscal  1990,  it  received an 18 month rent
abatement. In conformity with accounting procedures, the value of this abatement
is amortized over the life of the lease. Consequently, at September 30, 1995 the
Company continued to show $60,284 in deferred rent liability.

Based upon  available  cash on hand,  and  expected  revenues  from  operations,
management is of the opinion that it will have adequate  available funds to meet
its capital  expenditures  for the balance of fiscal  1996.  Thereafter,  future
capital  expenditures  will be decided  based  upon  operating  results  and net
revenues from operations.  The Company's principal expansion  activities involve
marketing  Amworld's accounts  receivable  financing  program,  which activities
involve no significant capital expenditures.

With respect to the Company's  working capital needs,  management  believes that
operating  revenues from its subsidiaries will continue to reflect a profit on a
consolidated  basis  during the  balance of fiscal 1996 and  management  expects
revenues  will be  adequate to meet the  Company's  operating  cash  needs.  The
Company plans to draw working  capital from cash on hand and operating  revenues
which are  expected to be adequate to meet the  Company's  requirements  for the
foreseeable future.

As of the date of this Report, all of the Company's total accounts receivable at
June 30, 1995, in the amount of $2,560,827 have been collected.


III.  Impact of Financial Service Division.

During  fiscal  1994,  the first full year of  operations  for the TAD  Program,
although still in its  development  stage,  Amworld  generated gross revenues of
$927,757 (as compared to $247,809  during  fiscal 1993)  resulting in a net loss
from  operations  for  Amworld  of  $50,390.  Although  showing  a modest  loss,
Amworld's operating results for fiscal 1994 exceeded management's  expectations.
During fiscal 1995, management  implemented an aggressive new marketing plan for
the TAD  Program,  principally  in  response  to the  perceived  need to educate
potential  participants in the TAD Program about how trade  acceptances work and
how they could benefit from the TAD Program.


As a result,  during  fiscal 1995,  Amworld  generated  total gross  revenues of
$3,703,493,  almost  300%  higher  than  fiscal  1994,  which  resulted in a net
operating profit for fiscal 1995 of $7,153 - however, had management not elected
to make a year-end  allocation of indirect general and administrative  over-head
costs in the amount of $208,000,  net  operating  profits for Amworld would have
been approximately $215,153.

Amworld's  operating  revenues  during  the first  half of fiscal  1996  totaled
$3,598,931,  or approximately  32.2% of the Company's total revenues during this
period, as compared to total revenues of $1,509,065,  or approximately  19.2% of
total revenues,  during the first half of fiscal 1995.  Perhaps most importantly
however,  Amworld's gross revenues during this period were more than 138% higher
than the same period last fiscal year, and over 97% of the total revenues earned
by Amworld during all of fiscal 1995.

During this  period,  Amworld  also had  interest  income of  $25,159,  interest
expenses of $59,698 and incurred selling, general and administrative expenses of
$156,981 which resulted in net operating income before taxes of $77,080.


 IV.  Trends Affecting Operations

Over the years  management  has  observed a  substantial  increase in demand for
American  made  products.  In  management's  opinion,  this is due to a  renewed
confidence in the quality of American  products and the relative weakness of the
US dollar as  compared to other major  foreign  currencies.  This has formed the
basis of the  Company's  operating  philosophy  since 1989 and, in  management's
opinion,  continue's  to favor  continued  growth over the  foreseeable  future.
Combined with the recent changes in world political structures,  particularly in
Eastern Europe, management believes that world demand for American products will
continue to increase at least over the foreseeable future.

Economic conditions in the United States have caused many American manufacturers
to seek new markets for their  products and, in  particular,  to turn to foreign
markets to boost domestic sales.  Management  believes that this trend,  coupled
with renewed demand for American  products and improved  buying power of foreign
currencies,  has been  beneficial  to the Company and has been a major factor in
its growth over the past three years. This trend,  although expected to continue
for the foreseeable  future,  is now being affected by a number of other factors
which could  adversely  affect  future  growth rates for the  Company's  present
operations.

Recently,  management  has  observed  that,  with the  collapse  of  traditional
political and  ideological  barriers,  the demand for products from all parts of
the world has increased perceptibly with many developing and third world nations
now  looking  for  products  from  many  different  countries.   This  has  been
particularly  true of countries  with "soft"  currencies  (i.e.  currencies  not
readily  exchangeable  into  established  currencies such as British pounds,  US
dollars,  etc.),  such as the  emerging  countries of Eastern  Europe,  which at
present are unable to pay for their purchases in US dollars. Management believes
that the greatest demand for all kinds of foreign products (including those from
the US and other  industrial  nations) will be seen from these newly  developing
third world  countries  over the next few years.  To meet this  changing  market
demand,  the Company initiated an expansion of Actrade's  operations through the
establishment  of  Actrade  S.A.,  which  is  intended  to  compliment   current
operations by providing foreign sources for products.

Over the long  term,  as the US  economy  continues  to  improve  and the dollar
strengthens with respect to other currencies,  foreign buying power for American
products may decrease  causing foreign buyers to look for  comparable,  but less
expensive,  products from other sources. Although it is impossible to predict at
this time the  extent to which this  trend may  affect  the  competitiveness  of
American products overseas,  it is likely that any significant decline in buying
power of foreign  currencies  will have an  adverse  impact  upon the  Company's
present  operations.  Although no assurances can be given,  management  believes
that by  utilizing  its  foreign  network  both to promote new sales of American
products and as a source of comparable,  less  expensive  foreign made products,
the Company will gain the  flexibility  needed to meet changing  product demands
over the coming years.

Management  knows of no other  trends  reasonably  expected  to have a  material
impact upon the Company's operations or liquidity in the foreseeable future.


          Part II.  OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

    None during this period.







<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.



Dated: February 2, 1996



                   ACTRADE INTERNATIONAL, LTD.



                        /s/Amos Aharoni
                   BY:__________________________
                      Amos Aharoni,
                      Chief Executive Officer