SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549





                                  FORM 10-Q

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


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



                         For Quarter Ended March 31, 1997


                         Commission File Number 0-18711





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




          Delaware                              13-3437739
(State or other jurisdiction of            (I.R.S. Employer
incorporation or organization)             Identification Number)


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


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


Indicate by check mark whether the Registrant (1) has filed all reports required
to be  filed by  Section  13 or 15(d) of the  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 April 28, 1997 there were
outstanding 6,330,681 shares of Common Stock, par value $.0001.






<PAGE>























                                                       INDEX



Part I.  Financial information



  Item 1.  Consolidated financial statements:


                 Balance sheets as of March 31, 1997 and June 30, 1996     F-2

                 Condensed consolidated statement of operations for the
                  nine and three months ended March 31, 1997 and 1996      F-3

                 Condensed consolidated statement of
                  shareholders' equity                                     F-4

                 Condensed consolidated statements of cash flows for the
                  nine months ended March 31, 1997 and 1996                F-5

                 Notes to consolidated financial statements          F-6 - F-9

  Item 2.  Management's discussion and analysis of
                  financial condition                                    1 - 5




Part II.         Other information

                 Exhibits and reports on Form 8-K                            5

                 Signatures                                                  6





<PAGE>



                                   ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

                                       CONDENSED CONSOLIDATED BALANCE SHEET

                                         MARCH 31, 1997 AND JUNE 30, 1996
                                                    (Unaudited)



                                                   ASSETS
                                                      March 31,        June 30,
                                                       1997              1996

Current assets:
  Cash, including time deposits at June 30, 1996   $  328,934        $1,924,805
  Accounts receivable, less allowance for
   doubtful accounts of $25,000                     5,395,586         3,361,821
  Trade acceptance draft receivable, bank           5,400,590         2,578,015
  Accounts receivable, other                            6,381            77,164
  Prepaid expenses                                     45,304            24,815
  Interest receivable                                                     3,162
                                                   -----------       ----------
     Total current assets                          11,176,795         7,969,782
                                                   -----------       ----------

Property and equipment:
  Furniture and fixtures                              250,800           161,829
  Leasehold improvements                              126,177           113,902
                                                   -----------       ----------
                                                      376,977           275,731
  Less accumulated depreciation                       200,204           172,026
                                                   -----------       ----------
                                                      176,773           103,705
                                                   -----------       ----------

Other asset, security deposits                         15,984            15,034
                                                   -----------       ----------

                                                  $11,369,552        $8,088,521
                                                  ===========        ==========



                                       LIABILITIES AND SHAREHOLDERS' EQUITY


Current liabilities:
  Cash advance from bank                         $    625,924        $1,178,551
  Accounts payable                                  1,707,476         1,872,880
  Consumer deposits                                                      55,954
  Accrued expenses                                     11,868            11,041
  Due to affiliates                                     3,126             3,126
  Income taxes payable                                  8,462            21,302
                                                    -----------      ----------
    Total current liabilities                       2,356,856         3,142,854
                                                    -----------      ----------

Commitments

Deferred rent liability                                48,414            55,960
                                                    -----------      ----------

Shareholders' equity:
  Common stock, $.0001 par value;
   authorized 100,000,000 shares, issued and
   outstanding 6,330,681 at March 31, 1997
   and 5,683,181 at June 30, 1996                         633               568
  Common stock purchase warrants                      987,500
  Additional paid in capital                        5,058,372         3,107,137
  Retained earnings                                 2,917,777         1,782,002
                                                   -----------       ----------
                                                    8,964,282         4,889,707
                                                   -----------       ----------

                                                  $11,369,552        $8,088,521
                                                  ===========        ==========




                            See  notes  to  condensed   consolidated  financial
statements.
                                                                           F-2


<PAGE>



                             ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

                            CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

                    FOR THE NINE AND THREE MONTHS ENDED MARCH 31, 1997 AND 1996
                                           (Unaudited)









<TABLE>
<CAPTION>

                                                        Nine Months Ended                     Three Months Ended
                 
              
                                                           March 31,                              March 31,
<S>                                             <C>                  <C>               <C>                 <C> 
                                                1997                 1996              1997                1996
                        
                                                ----                 ----              ----                ----


Net sales                                    $29,456,296        $17,075,672        $12,997,729         $5,883,602

Cost of sales                                 26,846,681         15,603,492         11,985,943          5,374,863
                                              -----------        -----------         ----------         ----------

Gross profit                                   2,609,615          1,472,180          1,011,786            508,739

Selling, general and
 administrative expenses                       1,436,053            934,756            532,694            334,504
                                             -----------        -----------         ----------         ----------

Income from operations                         1,173,562            537,424            479,092            174,235
                                             -----------        -----------         ----------         ----------

Other income (charges):
  Interest income                                 15,957             87,184                 76             28,802
  Interest expense                         (     34,839)      (    102,152)       (     3,277)       (    38,224)
                                            -----------        -----------         ----------         ----------
                                           (     18,882)      (     14,968)       (     3,201)       (     9,422)
                                            -----------        -----------         ----------         ----------

Income before income
 taxes                                         1,154,680            522,456            475,891            164,813

Income tax expense
 (benefit)                                        18,905             18,130       (    27,830)                551
                                             -----------        -----------        ----------          ----------

Net income                                   $ 1,135,775        $   504,326         $  503,721         $  164,262
                                             ===========        ===========         ==========         ==========

Earnings per common share:
  Primary                                $      0.18        $      0.09         $     0.08$                  0.03
                                         ===========        ===========         =============             =======
  Fully diluted                          $      0.18        $      0.09         $     0.08$                  0.03
                                         ===========        ===========         =============             =======

Weighted average common
 shares outstanding

   Primary                                     6,216,547          5,330,681          6,635,125          5,330,681
                                             ===========        ===========         ==========         ==========
   Fully diluted                               6,216,547          5,347,429          6,635,125          5,398,043
                                             ===========        ===========         ==========         ==========

</TABLE>











     See notes to condensed consolidated financial statements.
                                                                          F-3


<PAGE>



                      ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

                      FOR THE PERIOD JULY 1, 1994 TO MARCH 31, 1997
                                    (Unaudited)



<TABLE>

<CAPTION>


                                Common Stock                                    Additional
                                $.0001 Par Value        Common Stock             Paid in        Retained            
<S>                           <C>        <C>         <C>          <C>             <C>          <C>                  <C>
                                   
                              Shares     Amount      Warrants     Amount           Capital      Earnings            Total
                              ------     ------      --------     ------          -------       --------            -----



Balance at June 30, 1994     5,006,354    $ 501                                 $1,474,331    $  616,835         $2,091,667

Exercise of warrants           324,327       32                                    567,542                          567,574

Net income for the year
 ended June 30, 1995                                                                             407,793            407,793
                              ---------    ----       ------        -------      ----------    ----------        ----------

Balance at June 30, 1995      5,330,681     533                                   2,041,873     1,024,628         3,067,034

Issuance of common stock        352,500      35                                   1,065,264                       1,065,299

Net income for the year
 ended June 30, 1996                                                                              757,374           757,374
                              ---------     ----      ------        -------      ----------     ----------       ----------

Balance at June 30, 1996      5,683,181      568                                  3,107,137     1,782,002         4,889,707

Issuance of common stock        647,500       65                                  1,951,235                       1,951,300

Exercise of common stock
 purchase warrants                                    50,000        $87,500                                          87,500

Issuance of common shares
 on exercise of stock
 purchase warrants                                   400,000        900,000                                         900,000

Net income for the nine
 months ended March 31, 1997                                                                      1,135,775       1,135,775
                               ---------    ----     --------       --------     ----------      ----------      ----------

Balance at December 31, 1996   6,330,681    $633     $450,000       $987,500     $5,058,372      $2,917,777      $8,964,282
                               =========    ====     ========       ========     ==========      ==========      ==========



</TABLE>



     See notes to condensed consolidated financial statements.
                                                                          F-4


<PAGE>



                           ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

                          CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

                             NINE MONTHS ENDED MARCH 31, 1997 AND 1996
                                        (Unaudited)



                                                        1997             1996
                                                        ----             ----

Operating activities:
  Net income                                        $1,135,775      $  504,326
  Adjustments to reconcile net income
   to cash provided from operating
   activities:
     Depreciation                                       28,178          17,558
  Changes in other operating assets and liabilities:
    Accounts receivable                            ( 4,856,340)    ( 1,653,555)
    Accounts receivable, other                          70,783
    Prepaid expenses                               (    20,489)          7,980
    Interest receivable                                  3,162     (    21,326)
    Accounts payable                               (   165,404)        844,522
    Accrued expenses                                       827     (     8,016)
    Income taxes payable                           (    12,840)         14,041
    Customer deposits                              (    55,954)
    Security deposits                              (       950)
    Deferred rent                                  (     7,546)    (     5,427)
    Deferred taxes                                                      13,439
Changes in other assets and liabilities:
    Increase in amounts due affiliates                                 290,654
                                                      ----------       -------
                                                                      

      Net cash used in operating activities         ( 3,880,798)         4,196
                                                     ----------     ----------

Investing activities:
  Purchase of equipment                             (   101,246)   (    17,167)
                                                      ----------     ----------

      Net cash used in investing activities         (   101,246)   (    17,167)
                                                      ----------     ----------

Financing activities:
  Proceeds from issuance of common stock              2,938,800
  Proceeds from issuance of common stock
   purchase warrants                                                       125
  Increase in cash advances from bank                                  159,116
  Payment of long-term debt                                        (   135,000)
  Decrease in cash advances, bank                   (   552,627)
                                                     ----------   -------------

  Net cash provided from (used in)
   financing activities                               2,386,173         24,241
                                                     ----------     ----------

      Net increase (decrease) in cash               ( 1,595,871)        11,270

Cash, beginning of period                             1,924,805      1,769,049
                                                      ----------     ----------

Cash, end of period                                  $  328,934     $1,780,319
                                                      ==========    ==========

Supplemental disclosures from cash flow information:
   Cash paid during the year for:
     Interest                                        $   15,957     $  103,042
                                                      ==========     ==========
     Income taxes                                    $   39,361     $      700
                                                      ==========     ==========






                        See  notes  to  condensed   consolidated  financial
statements.
                                                                           F-5


<PAGE>



                               ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

                           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                     NINE MONTHS ENDED MARCH 31, 1997
                                             (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-Q.
    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, 1996, 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.   Actrade  Capital,   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,  Inc. 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 1994 and was inactive at September 1994.

    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.


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, Actrade Capital, Inc. and
      American Cooling, Inc. are included as the subsidiaries of Actrade
      International, Ltd.


                                                                          F-6


<PAGE>



                             ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

                         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                     NINE MONTHS ENDED MARCH 31, 1997
                                              (Unaudited)



4.  Related party transactions:

    During each of the three  years ended  March 31,  1997,  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.


5.  Leases:

     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.

      Inlieu 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 yea
    period under the above terms.

     In August 1996,  Actrade  entered into a 12 month lease expiring August 31,
     1997 with an Illinois  office  suite.  Both  parties  have the option to
     terminate  the lease  with 30 days  written  notice  to either  party on
     November 30, 1996. The lease provides for monthly  payments of $1,100 on
     the first day of each month.

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


                        March 31, 1998                               $ 82,758
                        March 31, 1999                               $ 71,674
                        March 31, 2000                               $ 68,657
                                                                     --------
                                                                     $223,089


     Lease expense  amounted  to $65,516 and $54,499 for the nine months  ended
       March 31, 1997 and 1996 respectively.


                                                                          F-7


<PAGE>



                             ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

                         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  NINE MONTHS ENDED MARCH 31, 1997
                                            (Unaudited)


6.  Income taxes:

    The components of income tax expense are:
                                                Nine months         Nine months
                                                  Ended               Ended
                                                March 31            March 31
                                                  1997                 1996
    Income taxes currently payable:
      Federal                                 $  7,750               $ 11,410
      State                                      8,462                  5,100
                                               --------              --------
                                                16,212                 16,510
                                               --------              --------

    Deferred tax expense arising from:
      Excess of Financial accounting
       depreciation over tax                 (   2,165)             (     330)

      Excess of tax deductible rent over rent
       expense for financial accounting purposes 7,800
      Other                                  (   2,942)                 1,950
                                               --------                --------
                                                 2,693                  1,620
                                               --------               --------

    Total income tax expense                  $ 18,905               $ 18,130
                                               ========              ========


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

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

                                                 Nine months      Nine months
                                                   Ended             Ended
                                                  March 31          March 31
                                                   1997               1996
                                                   ----               ----
      Computed tax at the expected
       statutory rate                            $442,952          $203,758

      Surtax exemption                          (  16,750)        (  17,483)

      State income taxes                            8,462            27,085

      Foreign income                            ( 418,452)        ( 193,464)

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

      Other                                     (   2,693)            1,620
                                                  --------          --------

      Income tax expense                         $ 18,905          $ 18,130
                                                  ========          ========

    The effective statutory rate for 1996 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
   $3,049,692 at March 31, 1997 and $1,765,525 at March 31, 1996.



                                                                           F-8


<PAGE>


                      ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

                  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                            NINE MONTHS ENDED MARCH 31, 1997
                                    (Unaudited)

 6. Income taxes (continued):

    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.

 7. Trade Acceptance Drafts receivable, bank:

    As  of March 31, 1996,  Actrade Capital,  Inc.,  formerly Amworld  Commerce,
    Inc., a wholly owned subsidiary of Actrade International, Ltd., had sold
    and assigned all outstanding  Trade  Acceptance  Drafts (TAD's) to Banco
    Portuguese De Atlantico (Bank). The total TAD amounts due from the banks
    were  $5,400,590 at March 31, 1997.  The bank purchases the TAD's at the
    face value and advances these amounts to Actrade Capital,  Inc. The bank
    purchases  the TAD's  without  recourse  and Actrade  Capital,  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 the above.  The bank will purchase each
    TAD by advancing to Actrade Capital, Inc. 75% of the face amount of each
    TAD assigned and  delivered  by overdraft on the Actrade  Capital,  Inc.
    account.  At  March  31,  1997 the  advances  on the  overdraft  account
    amounted to  $625,924.  As each TAD is  collateralized,  the face amount
    will  be  credited  to  the  Actrade  account  to  reduce  the  advanced
    overdraft.  Interest  is  payable  at 1% over  prime  per  annum  on the
    outstanding  advances,  which  will be  charged on the first day of each
    month.

 8. Outstanding warrants to purchase common stock:

    At December  31,  1996,  the Company had  outstanding  warrants to purchase
    135,000  shares of the  Company's  common  stock at prices  ranging from
    $1.75 to $2.25 per share.  The warrants  became  exercisable in 1996 and
    were to expire in 2001. At December 31, 1996,  135,000  shares of common
    stock were reserved for that purpose.

   In December  of 1996,  50,000  warrants  were  exercised  with  proceeds of
   $87,500 to the Company.  As of March 31, 1997,  the  remaining  warrants
    were cancelled due to  non-performance of service contracts as explained
    below.

 9.   Reconciliation of shares used in computation of earnings per share:

                                                         1997           1996
                                                         ----           ----
         Primary weighted average of shares
           actually outstanding                       6,216,547      5,330,681
         Common stock purchase warrants                                 16,748
                                                      ---------      ---------

         Fully diluted weighted average common
           shares outstanding                         6,216,547      5,347,429
                                                      =========      =========

10.     Pending litigation:

        The  Company  is  currently  engaged  in  litigation  against  a  former
        consultant  retained  to  assist  in  introducing  the  Company  to the
        brokerage  community and with it's investor  relations.  The consultant
        was paid a cash  retainer  and was to  receive  common  stock  purchase
        warrants for services rendered. The consultant, to the detriment of the
        Company,  terminated  services on behalf of Actrade. As a result of the
        termination, Actrade has refused to honor the warrants.

                                                                           F-9



<PAGE>




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

I.  Results of Operations

During the first nine months of fiscal 1997,  ended March 31, 1997,  the Company
had combined gross revenues of  $29,456,296,  as compared to $17,075,672 for the
first nine months of fiscal 1996, an increase of over $12,380,000 or 72.5% above
the same period in fiscal 1996. Equally  important,  total cost of revenues from
operations   during  this   period   continued   to  decrease  to   $26,846,681,
approximately 91.1% of gross revenues, as compared to cost of goods sold for the
same period in fiscal 1996 of $15,603,492,  or 91.4% of gross revenues, and down
from more than 91.7% at June 30, 1996, the end of fiscal 1996.  This resulted in
gross  profits from  operations  of  $2,609,615  for the nine month period ended
March 31, 1997, an increase of $1,137,434 (or approximately  77%) from the first
nine months of fiscal 1996,  with income from  operations of $1,173,562 for this
period,  as compared to $537,424 for the same period last year.  After  interest
income and expenses and provisions for income taxes, the Company experienced net
earnings of  $1,135,775,  as  compared to $504,326  for the first nine months of
fiscal 1996 (an increase of over 125%),  or $0.18 per share as compared to $0.09
per share for the same period last year.

With respect to the three months ended March 31, 1997,  gross  revenues  reached
$12,997,729 (up almost 121% from the third quarter of fiscal 1996); gross profit
climbed to  $1,011,786  (an  increase  of almost  99% from the third  quarter of
fiscal 1996);  income from operations  totaled $479,092 (up almost 175% from the
same period in fiscal 1996); and net earnings after interest income and expenses
and  allowances  for income taxes  reached  $503,721 (an increase of almost 205%
from fiscal  1996),  or $0.08 per share for the quarter ended March 31, 1997 (as
compared to $0.03 for the third quarter of fiscal 1996. Management believes that
operating  results  during  the first  nine  months of fiscal  1997  indicate  a
leveling off of the  increased  costs  associated  with the TAD Program which is
expected to rise during the final quarter of fiscal 1997 due to a renewal of the
Company's  expansion  of personnel  and office space  incurred at the end of the
third quarter primarily in connection with the Company's TAD Program.

Although  management  continues to estimate total gross revenues for fiscal 1997
will approach $40 Million,  due to the continued  uncertainty  of the cost which
will be incurred as Actrade Capital,  Inc.  ("Capital")  continues to expand its
TAD Program, 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
Capital's TAD Program,  discussed  separately  below (see "III.  Impact of Trade
Acceptance Draft Program and the Operations of Capital"), and (ii) the continued
growth  within  Actrade's   existing  product  lines,  in  particular  with  the
operations of Actrade S.A. As was the case during  fiscal 1996,  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 Capital.

During the nine months  ended March 31, 1997,  the  Company's  operating  income
expressed as a percentage  of gross  revenues  decreased  slightly to 3.98% from
4.2% at the end of fiscal  1996.  However,  this  ratio  remained  substantially
improved  from the  2.95%  level at the end of the first  nine  months of fiscal
1996.  The slight  decrease  from fiscal  year-end is due  principally  from the
resumed  expansion  activities  by  Capital,  the full  brunt  of which  are not
expected to be felt until the final quarter of fiscal 1997.  Management believes
that, apart from the impact of current expenditures by Capital,  this ratio will
continue to remain stable during the balance of fiscal 1997 and that 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 nine months of
fiscal 1997, Allstate's total sales have aggregated only $16,571, which continue
to account for only 1/20 of 1% of the Company's total revenues for this period.

II.  Discussion of Financial Condition

On a  consolidated  basis,  at March 31, 1996 the  Company  had total  assets of
$11,369,552,  compared with  $8,088,521 at June 30, 1996, the end of fiscal 1996
(an increase of  $3,281,030 or 40.6%),  with total  liabilities  of  $2,405,270,
compared with $3,198,814 at June 30, 1996 (a decrease of $793,544 or 24.4%).  Of
the  Company's  assets at March 31,  1997,  $328,934 was in the form of cash and
cash equivalent (compared to $1,924,805 at June 30, 1996), $5,395,586 represents
accounts  receivable,  excluding TADs, (compared to $3,361,821 at June 30, 1996)
and $6,474,447 in Trade Acceptance Drafts receivable  (compared to $2,578,015 at
June 30, 1996).

The Company's accounts payable are all current.

It is important to note that,  following the successful  completion of a private
placement  of its  securities  wherein the Company  raised over $3 Million  (see
discussion in the  Company's  Annual Report on Form 10-K for the year ended June
30,  1996),  the  Company  utilized a portion of the cash  proceeds  received to
reduce its liabilities,  which have been reduced by 24.4% from the end of fiscal
1996, and to pay down its bank credit lines and utilize the Company's  available
cash  in  connection  with  Capital's  TAD  Program.  This is  evidenced  by the
reduction  of the  Company's  liability  to its  bank in  connection  with  cash
advanced  for the  purchase  of TADs  ($625,924  at March 31,  1997  compared to
$1,214,014 at March 31, 1996) and $1,073,857  representing  "TADs in safe" (i.e.
TADs  purchased by Capital which have not been financed  with  Capital's  bank).
This  also  accounts  for the  decrease  in cash on hand at March  31,  1997,  a
reduction  of  $1,595,871  from the end of  fiscal  1996.  Both the  substantial
increase in accounts receivable,  including "Due from banks - TADs" and "TADs in
safe," and the decrease in accounts  payable,  all as discussed above,  were, in
management's  opinion,  caused  principally  by normal  variations  in Actrade's
business,  the  substantial  increase in sales by both Capital and Actrade S.A.,
and the application of the proceeds from the Company's recent private  placement
of its  securities,  and  not  due to any  trend  which  is  expected  to have a
continuing effect upon operations in the future.

At March 31, 1997 the Company had  Retained  Earnings of  $2,917,777  with total
Stockholder's  Equity of $8,964,282,  compared with  $1,782,002 and  $4,889,707,
respectively,  at June 30, 1995. The principal source of funds for the Company's
operations are revenues earned by its operating subsidiaries.

At March 31, 1997 the Company had property,  less accumulated  depreciation,  of
$176,773,  (compared  to $103,705  at June 30,  1996) and  security  deposits of
$15,984,  compared to $15,034 at the end of fiscal 1996. 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  March  31,  1997 the
Company continued to show $48,414 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  1997.  Thereafter,  future
capital  expenditures  will be decided  based  upon  operating  results  and net
revenues from operations.  The Company's principal expansion  activities involve
marketing  Capital'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 1997 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, 1996, in the amount of $3,361,821 have been collected.

III.  Impact of the Trade Acceptance Draft Program and the Operations of
Capital.

During  fiscal  1994,  the first full year of  operations  for the TAD  Program,
although still in its  development  stage,  Capital  generated gross revenues of
$927,757 (as compared to $247,809  during  fiscal 1993)  resulting in a net loss
from  operations  for  Capital  of  $50,390.  Although  showing  a modest  loss,
Capital'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,  Capital  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 Capital would have
been approximately $215,153.

During fiscal 1996, Capital generated gross revenues of $7,993,932,  almost 116%
higher than fiscal  1995,  with direct  general and  administrative  expenses of
$274,265,  a decrease of over 16% from  fiscal 1995 (as  adjusted to include the
1995  year-end  allocation).  For the fiscal year ended June 30,  1996,  Capital
operations  reflected a gross  profit of  $526,386,  with net pre-tax  income of
$106,377, an increase of more than 1,387% from fiscal 1995.

Capital's operating revenues during the first nine months of fiscal 1997 totaled
$14,066,755,  or approximately 47.8% of the Company's total revenues during this
period, as compared to total revenues of $5,770,196,  or approximately  33.8% of
total  revenues,  during  the first nine  months of fiscal  1996.  Perhaps  most
importantly however,  Capital's gross revenues during this period were more than
144% higher than the same period last fiscal year.

During this  period,  Capital  also had  interest  income of  $15,957,  interest
expenses of $34,594, while incurring direct selling,  general and administrative
expenses of $605,440, administration fees (representing a percentage of indirect
overhead costs) of $120,000, which resulted in net operating income before taxes
of $89,531,  with net income of $81,474  after an allowance for taxes of $8,057.
It must be noted that the  administration  fee  allocated  during  this  quarter
represents  fees  accrued  during the entire nine month  period since the end of
fiscal 1996 and are non-recurring allocations.

IV.  Trends Affecting Liquidity, Capital Resources and 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 in
recent  years of the US dollar as compared to other  major  foreign  currencies.
This formed the basis of the Company's  operating  philosophy since 1989 and, in
management's  opinion,  continues to favor growth over the  foreseeable  future.
Combined with recent changes in world political structures,  management believes
the demand for  American  products  will  continue  to  increase at least in the
foreseeable future.

Economic  conditions  in the United States over the past decade 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 this trend was accelerated by the renewed demand for American  products
following  the  Persian  Gulf  War and the  improved  buying  power  of  foreign
currencies during the past decade,  clearly benefited the Company and were major
factors in its growth over the past four years. This trend is now being affected
by a number of other  factors which could  adversely  affect future growth rates
for the Company's present operations.

As the US economy continues to improve and the dollar strengthens  significantly
with  respect  to other  currencies,  which  has been the case  during  the past
several months,  foreign buying power for American  products has decreased while
foreign buyers looking for comparable,  but less expensive,  products from other
sources has been on the rise.  With the collapse of  traditional  political  and
ideological  barriers over the past few years,  the demand for products from all
parts of the world has  increased  perceptibly  with many  developing  and third
world  nations  now  looking  for a wide range of  consumer  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.),  which at present are unable to pay
for their purchases in US dollars or the equivalent.

Management  believes that for the foreseeable future the greatest demand for all
kinds of foreign products (including those from industrialized nations including
the US) will  continue  to come  from  these  new  developing  and  third  world
countries.  As a result of the  elimination  of old  political  and  ideological
barriers, many other factors now have an effect upon the markets for US products
overseas including,  among others,  lower foreign labor costs and, probably most
important,  the  availability of (or lack of) trade  financing.  In management's
opinion,  the real "key" to success in  international  trading  has, at least at
present,   become  the  ability  to  provide  trade  financing  in  addition  to
competitive pricing for products.

To meet this changing market demand,  the Company  initiated an expansion of the
international trading operations of Actrade S.A., which was originally formed to
compliment  current operations by providing foreign sources for products to meet
foreign demand. Due to the financial  strength of the Company,  Actrade S.A. has
been in a position to fill the financing  void created by the dramatic  increase
in  worldwide  demand,  thereby  allowing  it to  capture a larger  share of the
current market demand.

The effects of this trend are evident in the Company's  operating results during
the current period. Sales of US products overseas (represented by the activities
of Actrade  International  Corp.) decreased to $4,936,755 from $5,786,213 during
the same period in fiscal 1996,  while sales by Actrade S.A.  rose  dramatically
from  $5,507,530  during the first  nine  months of fiscal  1996 to  $10,436,453
during the current period.  Apart from proving  management's  assumption that as
sales of US products  decrease,  sales of foreign products will increase,  these
results also point out another  important  factor, to wit, that worldwide demand
for all types of products is  increasing.  However,  management  can not predict
whether the  extraordinary  rise in sales  revenues  experienced by Actrade S.A.
will continue. At present,  while product demand is high and the availability of
trade financing is low, Actrade S.A. enjoys a favorable  position in the market.
As  these  factors  stabilize  and  as  trade  financing  becomes  more  readily
available, it is likely that this advantage will decrease.

Although it is  impossible  to predict the extent to which this trend may affect
the  competitiveness  of American  products  overseas  over the coming months or
years,  it is likely  that any  significant  decline in buying  power of foreign
currencies  will have an  adverse  impact  upon  Actrade's  present  sales of US
products overseas. 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,   particularly  through  its  Actrade  S.A.  division,  will  gain  the
flexibility needed to meet changing product demands over the coming years.

A review of the Company's  Statement of Operations  shows that the cost of goods
sold, as a percentage of total sales,  has increased from  approximately  83% in
fiscal 1990 to  approximately  91.1% for the first nine  months of fiscal  1997.
This  increase  has been  the  result  of three  principal  factors.  First,  as
recessionary  factors influenced  economic  conditions both in the United States
and other major industrial nations worldwide,  there was a significant  increase
in  competition  for a  shrinking  market.  This  resulted in the need to reduce
profit margins in order to remain  competitive in the world markets.  Second, as
discussed above, as the Company's operations have expanded the nature and mix of
the  products  sold by the  Company  it has  also  changed  from  smaller,  less
expensive products to larger or more expensive products,  such as the commercial
and industrial air  conditioning  and  refrigeration  equipment  which made up a
significant proportion of the Company's total sales since fiscal 1992. With such
higher priced  products,  the profit margins are typically  less.  Finally,  the
sales by Actrade S.A. have  typically  consisted of larger orders  primarily for
computer systems and related equipment from foreign sources, which typically are
based upon lower profit  margins.  In combination,  these factors  resulted in a
higher  percentage  cost of  sales  for the  Company,  particularly  as sales by
Actrade  S.A.  continue to account  for a greater  percentage  of the  Company's
overall revenues from its international trading operations.

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

VI  Inflation.

During the past few years  inflation  in the United  States has been  relatively
stable which, coupled with the relative strength of foreign currencies discussed
above,  has had a beneficial  effect upon the  Company's  operations in that the
products it offers  have been  competitively  priced in  relation to  comparable
foreign made products. In management's opinion, this is expected to continue for
the foreseeable  future.  However,  should the American economy again experience
double  digit  inflation  rates,  as was the case in the past,  the impact  upon
prices for  American  goods  could  adversely  affect the  Company's  ability to
effectively compete in its overseas markets.

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: April  29, 1997


ACTRADE INTERNATIONAL, LTD.



BY:__/s/Amos Aharoni_________
   Amos Aharoni,
  Chief Executive Officer