SECURITIES AND EXCHANGE COMMISSION
                                              Washington, D.C. 20549




                                                     FORM 10-Q

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

                      For the quarterly period ended   March 31, 1998

                                                        or

              ( )     Transition Report Pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1939

                      For the transition period from              to


Commission File Number:  0-18711




                                ACTRADE INTERNATIONAL, LTD.
             (Exact name of small business issuer 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, New York, NY  10001

                                     (Address of principal executive offices)


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


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

                                                  Yes X   No


Indicate the number of Shares  outstanding  of each of the  Issuer's  classes of
common stock, as of the latest practicable date.


            Class                            Outstanding at March 31, 1998

Common Stock, par value $0.0001
 per share                                               8,273,751




<PAGE>


















                                                       INDEX



Part I.  Financial information


  Item 1.  Condensed consolidated financial statements:


             Balance sheet as of March 31, 1998 and
             June 30, 1997                                              F-2

             Statement of operations for nine and three
             months ended March 31, 1998 and 1997                       F-3

             Statement of shareholders' equity                          F-4

             Statement of cash flows for the nine months
             ended March 31, 1998 and 1997                              F-5

             Notes to consolidated condensed financial statements    F-6 - F-13



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


Part II.  Other information


Signatures




















                                                                          F-1


<PAGE>



                                   ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

                                       CONDENSED CONSOLIDATED BALANCE SHEET

                                         MARCH 31, 1998 AND JUNE 30, 1997
                                                    (Unaudited)




                                    ASSETS
                                                     March 31,      June 30,
                                                       1998           1997
                                                       ----           ----

Current assets:
  Cash                                             $ 7,027,979     $ 7,352,465
  Accounts receivable, less allowance for
   doubtful accounts of $35,000                     13,524,446       5,269,516
  Accounts receivable, trade acceptance drafts       1,793,067       6,477,424
  Prepaid expenses                                      43,329           9,010
                                                    -----------     -----------
     Total current assets                           22,388,821      19,108,415
                                                    -----------     -----------

Property and equipment:
  Furniture and fixtures                               467,939         308,717
  Leasehold improvements                               143,915         142,672
                                                    -----------     -----------
                                                       611,854         451,389
  Less accumulated depreciation                        268,880         213,084
                                                    -----------     -----------
                                                       342,974         238,305
                                                     ----------     -----------

Other assets:
  Patent right                                               1
  Security deposits                                     27,135          17,742
                                                     -----------    -----------

                                                        27,136          17,742
                                                     -----------    -----------

                                                   $22,758,931     $19,364,462
                                                   ===========     ===========



                   LIABILITIES AND SHAREHOLDERS' EQUITY


Current liabilities:
  Cash advance from bank                                          $ 1,019,392
  Customer deposits                                                    26,587
  Accounts payable                                 $ 1,922,320      1,995,148
  Accrued expenses                                       9,644         11,759
  Deferred income                                       47,131
  Payroll taxes payable                                                 6,862
  Income taxes payable                                 206,939         67,432
                                                    -----------    -----------
    Total current liabilities                        2,186,034      3,127,180
                                                    -----------    -----------

Commitments

Deferred rent liability                                 35,404         45,165
                                                    -----------     -----------

Shareholders' equity:
  Common stock,  $.0001 par value;  authorized  100,000,000  shares,  issued and
  outstanding 8,273,751 shares at March 31, 1998 and
  7,470,681 at June 30, 1997                               827            747
  Common stock purchase warrants
  Additional paid in capital                        13,706,920     12,505,787
  Retained earnings                                  6,829,746      3,685,583
                                                    -----------    -----------
                                                    20,537,493     16,192,117
                                                    -----------    -----------

                                                   $22,758,931    $19,364,462
                                                   ===========    ===========




     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, 1998 AND 1997
                                      (Unaudited)









<TABLE>
<CAPTION>
<S>                                         <C>               <C>                 <C>              <C>    

                                                       Nine Months Ended                     Three Months Ended
                                                           March 31,                              March 31,
                                                1998                 1997              1998                1997
                                               ----                 ----              ----                ----


Net sales                                    $68,671,402        $29,456,296        $25,553,958        $12,997,729

Cost of sales                                 62,655,911         26,846,681         23,348,664         11,985,943
                                             -----------        -----------        -----------        -----------

Gross profit                                   6,015,491          2,609,615          2,205,294          1,011,786

Selling, general and
 administrative expenses                       2,544,461          1,436,053            955,388            532,694
                                             -----------        -----------        -----------        -----------

Income from operations                         3,471,030          1,173,562          1,249,906            479,092
                                             -----------        -----------        -----------        -----------

Other income (charges):
  Miscellaneous income                            30,508                                21,073
  Interest income                                 68,599             15,957              6,379                 76
  Interest expense                         (    148,265)      (     34,839)      (     85,725)      (      3,277)
                                            -----------        -----------        -----------        -----------

                                           (     49,158)      (     18,882)      (     58,273)      (      3,201)
                                            -----------        -----------        -----------        -----------

Income before income
 taxes                                         3,421,872          1,154,680          1,191,633            475,891

Income tax expense
 (benefit)                                       277,709             18,905             84,414      (     27,830)
                                             -----------        -----------        -----------       -----------

Net income                                   $ 3,144,163        $ 1,135,775        $ 1,107,219        $   503,721
                                             ===========        ===========        ===========        ===========

Earnings per common share:
  Primary                                    $       .37        $      0.18        $       .13$              0.08
                                             ===========        ===========        =============         =========
  Fully diluted                              $       .37        $      0.18        $       .13$              0.08
                                             ===========        ===========        =============         =========

Weighted average common shares outstanding:
   Primary                                     8,496,387          6,351,547          8,625,248          6,635,125
                                             ===========        ===========         ===========         ==========
   Fully diluted                               8,496,387          6,351,547          8,625,248          6,635,125
                                             ===========        ===========         ===========         ==========


</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, 1995 TO MARCH 31, 1998
                                              (Unaudited)








<TABLE>
<CAPTION>
<S>                                              <C>                         <C>                <C>              <C>   




                                                          Common Stock          Additional
                                                          $.0001 Par Value       Paid in           Retained
                                                  Shares         Amount          Capital           Earnings           Total


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                           652,500           65          1,922,214                           1,922,279

Issuance of common stock on
 exercise of stock purchase
 options                                           450,000           45            987,455                             987,500

Issuance of common stock                           685,000           69          6,488,981                           6,489,050

Net income for the year
 ended June 30, 1997                                                                              1,903,581          1,903,581
                                                 ---------         ----        -----------      -----------        -----------

Balance at June 30, 1997                         7,470,681          747         12,505,787        3,685,583         16,192,117

Issuance of common stock on
 exercise of stock purchase
 options                                           803,070           80          1,201,133                           1,201,213

Net income for the nine
 months ended March
 31, 1998                                                                                         3,144,163          3,144,163
                                                 ---------         ----        -----------       ----------        -----------

Balance at March 31, 1998                        8,273,751         $827        $13,706,920       $6,829,746        $20,537,493
                                                 =========         ====        ===========       ==========        ===========





</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, 1998 AND 1997
                                   (Unaudited)









                                                          1998          1997
                                                          ----          ----

Cash flow from operating activities:
  Net income                                          $3,144,163    $1,135,775
  Adjustments to reconcile net income
   to cash provided by operating activities:
     Depreciation                                         55,796        28,178
  Changes in assets and liabilities:
    Accounts receivable                              ( 3,570,573)  ( 4,856,340)
    Accounts receivable, other                                          70,783
    Prepaid expenses                                 (    34,319)  (    20,489)
    Interest receivable                                                  3,162
    Accounts payable                                 (    72,828)  (   165,404)
    Accrued expenses                                 (     8,977)          827
    Deferred income                                       47,131
    Income taxes payable                                 139,507   (    12,840)
    Customer deposits                                (    26,587)  (    55,954)
    Security deposits                                (     9,393)  (       950)
    Deferred rent                                    (     9,761)  (     7,546)
                                                       ----------   -----------
    Net cash used in operating activities            (   345,841)  ( 3,880,798)
                                                       ----------    ----------

Investing activities:
  Patent right                                       (         1)
  Purchase of property and equipment                 (   160,465)  (   101,246)
                                                       ----------    ----------

    Net cash used in investing activities            (   160,466)  (   101,246)
                                                       ----------    ----------

Financing activities:
  Proceeds from issuance of common stock               1,201,213     2,938,800
  Decrease in cash advances, bank                    ( 1,019,392)  (   552,627)
                                                       ----------    ----------

    Net cash provided by financing activities            181,821     2,386,173
                                                       ----------    ----------

Net decrease in cash                                 (   324,486)  ( 1,595,871)

Cash, beginning of period                              7,352,465     1,924,805
                                                       ----------   ----------

Cash, end of period                                   $7,027,979    $  328,934
                                                      ===========   ==========

Supplemental  disclosures from cash flow information:  Cash paid during the year
   for:
     Interest                                         $  148,265   $   15,957
                                                       ==========    ==========
     Income taxes                                     $  138,202   $   39,361
                                                       ==========    ==========







     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, 1998
                                           (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 three  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, 1997,  included in its Annual Report filed on Form 10-K.  All reference
to  Actrade  in these  footnotes,  relate to Actrade  International,  Ltd.,  the
Company's wholly owned subsidiaries.


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.  Actrade  Capital,  Inc. 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. On August 14, 1997, TAD
International Ltd. was incorporated  under the laws of Antiqua and Barluda.  TAD
International, Ltd. is a wholly owned subsidiary of Actrade International, Ltd.
and has been inactive since formation.



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  International Corp., Actrade Capital,  Inc., American Cooling, Inc. and
TAD   International,   Ltd.  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, 1998
                                        (Unaudited)




4. Risks and uncertainties:

    The Company sells in foreign markets. There is no guarantee that the foreign
    market  will  continue  to develop  since the  incorporation  of foreign and
    domestic  government  intervention,  economic  conditions world wide and any
    other unforeseen situations may occur.

    With respect to Actrade Capital, Inc. and its TAD Program, the Company faces
    strong competition from many established financial  institutions,  including
    banks,  insurance companies and receivables financing (factoring) companies.
    Actrade Capital, Inc.'s TAD Program (see Note 8)
     is based upon the introduction of a Trade Acceptance Draft (TAD).  There is
     no assurance  that  management  will be  successful  in either  gaining the
     necessary  market  acceptance  for the TAD Program or in securing  adequate
     additional capital to expand to its full commercial potential.


5. Related party transactions:

    During each of the three years ended  December 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.


6.  Leases:

    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 $734 plus cost of living increases  annually,  capped @ 5% per annum. The
    lease was renewed on December 24, 1994 for a three year term under the above
    terms and expires on December 24, 1997. This








                                                                          F-7


<PAGE>



                        ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

                    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                NINE MONTHS ENDED MARCH 31, 1998
                                        (Unaudited)




6.  Leases (continued):

     lease was not renewed as the Company moved its offices under the terms of a
     new lease  signed  December  16,  1997.  The lease is for a one year period
     expiring  December  25, 1998 and carries rent at $14,685 per year or $1,224
     per month.

    In August 1996, Actrade Capital, Inc. entered into a 12 month lease expiring
    on August 31, 1997 for space in an Illinois  office suite which was extended
    until October 31, 1997.  Both parties have the option to terminate the lease
    with thirty days  written  notice to either  party.  The lease  provides for
    monthly  payments of $1,100 on the first day of each  month.  This lease was
    extended until October 31, 1997, at which time the lease was terminated.

    On October 13, 1997 Actrade  Capital,  Inc.  entered into a three year lease
    expiring  October 31, 2000 in an illinois  office suite.  The lease provides
    for monthly payments of $2,502.00 increasing annually at a rate of 1.5%.

    In May 1997, Actrade Capital,  Inc. entered into a 15 month lease for office
    space in Utah.  This lease was  terminated  in January  1998. In April 1997,
    Actrade Capital, Inc. entered into a lease agreement for additional space in
    its New York office.  The lease expires on March 31, 2000 and calls for rent
    of $1,628 per month in the first  year,  $1,672 per month in the second year
    and $1,716 per month in the third year.

    Beginning  July  1,  1997,  Actrade  entered  into  a  lease  agreement  for
    additional space in its New York facility.  The lease, which carries rent at
    $3,000 per month, expires on October 31, 1998.

    On October 15, 1997, Actrade Capital, Inc. entered into a lease in
    Pennsylvania for a six and one-half month period with monthly rentals of
    $1,400 per month.

     Beginning March 1, 1998, Actrade Capital, Inc. entered into a lease in
     Kansas for a thirteen month period expiring March 31, 1999.  The lease
     calls for monthly rentals of $693.

    Effective March 15, 1998, Actrade Capital, Inc. entered into a lease in
    Houston, Texas.  The lease, which expires March 15, 1999, carries a rent
    of $850 per month.

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

                      March 31, 1999                 $163,817
                      March 31, 2000                 $113,757
                      March 31, 2001                 $ 12,890

    Rent  expense  amounted  to  $122,973  and  $65,516  for  1998  and  1997,
    respectively.






                                                                          F-8


<PAGE>



                         ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

                     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                 NINE MONTHS ENDED MARCH 31, 1998
                                           (Unaudited)




6.  Leases (continued):

     Actrade South America, maintains a separate sales office in Israel, held by
     a commissioned  sales agent of the Company.  The terms of the agreement are
     reviewable yearly and the annual fee was $9,000 in 1998 and $6,000 in 1997,
     subject to adjustment  based upon the commissions  paid to the agent during
     such year.


7. Income taxes:

    The components of income tax expense are:
                                                    Nine months     Nine months
                                                       Ended           Ended
                                                     March 31        March 31
                                                       1998            1997
                                                       ----            ----
    Income taxes currently payable:
      Federal                                       $176,417       $  7,750
      State                                          102,864          8,462
                                                    --------        --------
                                                     279,281         16,212
                                                    --------        --------

    Deferred tax expense arising from:
      Excess of Financial accounting
       depreciation over tax                      (   3,036)      (   2,165)

      Excess of tax deductible rent over rent
       expense for financial accounting purposes      1,464           4,858
                                                    --------        --------
                                                  (   1,572)          2,693
                                                    --------        --------

    Total income tax expense                       $277,709        $ 18,905
                                                   ========         ========


    Deferred income tax provisions resulting from differences between accounting
    for  financial  statement  purposes  and  accounting  for tax  purposes  are
    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
                                                       1998           1997
                                                       ----           ----
      Computed tax at the expected
       statutory rate                              $1,271,013       $442,952

      Surtax exemption                            (    16,750)    (  16,750)

      State income taxes                              102,864         8,462

      Foreign income                              ( 1,077,846)    ( 418,452)

      Other                                       (     1,572)        2,693
                                                    ----------     --------

      Income tax expense                           $  277,709      $ 18,905
                                                    ==========     ========



                                                                            F-9


<PAGE>



                          ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

                     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                 NINE MONTHS ENDED MARCH 31, 1998
                                          (Unaudited)







7.  Income taxes (continued):

    The effective statutory rate for 1998 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
    $6,571,412 at March 31, 1998 and $3,049,642 at March 31, 1997.

    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.



8. Trade Acceptance Drafts receivable, bank:

   As of March 31, 1998,  Actrade Capital,  Inc.'s,  formerly Amworld  Commerce,
   Inc., a wholly owned  subsidiary of Actrade  International,  Ltd.,  total TAD
   amounts due from the bank were  $1,793,067.  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 guarantees 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,
   1998, there were no advances on the overdraft. 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 shall be charged on the 1st day of each month.


   As of March 1, 1998,  Actrade  Capital,  Inc.  has  recorded  in income all
   TAD's issued with a 90 day expiration date. Any TAD's issued for over 90
   days have been recorded as deferred  income at March 31, 1998.  Deferred
   income from TAD's over 90 days amounted to $47,131.













                                                                          F-10


<PAGE>



                            ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

                       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   NINE MONTHS ENDED MARCH 31, 1998
                                            (Unaudited)





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



                                  Nine months ended         Three months ended
                                      March 31,                  March 31,
                                 1998          1997         1998        1997
                                 ----          ----          ----        ----



  Weighted average of shares
    actually outstanding        8,139,501   6,216,547     8,268,362   6,500,125
    Common stock purchase
     warrants and options         356,886     135,000       356,886     135,000
                                ---------   ---------     ---------   ---------

   Primary and fully diluted
    weighted average common
     shares outstanding         8,496,387   6,351,547     8,625,248   6,635,125
                               ==========   =========     =========   =========





10. Common stock purchase warrants and options outstanding:

    Summary of warrants (w) and options (o) outstanding:



                                   Warrants   (w)     Exercise    Expiration
                         Date      Options    (o)      Price         Date


    Amos Aharoni      06/30/95      38,318    (w)     $ 1.35       06/30/98
    Amos Aharoni      06/30/96     200,000    (w)       3.35       06/30/99
    Amos Aharoni      10/01/96     132,915    (w)       5.00       09/30/99
    Amos Aharoni      01/01/97     176,629    (w)       6.05       12/31/99
    Amos Aharoni      04/01/97     207,157    (w)       9.70       03/31/00
    Amos Aharoni      06/01/97       3,000    (o)       5.00       12/31/00
    Amos Aharoni      07/01/97     220,000    (o)      11.20       06/30/00
    Amos Aharoni      10/01/97      56,382    (o)      13.53       09/30/00
    Amos Aharoni      01/06/98       2,500    (o)      14.30       01/05/02
    Amos Aharoni      01/09/98      44,430    (o)      19.50       12/31/00
                                  ---------

                                 1,081,331
                                 ---------


    John Woerner     01/06/98       2,500     (o)      14.30       01/05/02
                                 ---------










                                                                          F-11


<PAGE>



                           ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

                       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                  NINE MONTHS ENDED MARCH 31, 1998
                                           (Unaudited)




10. Common stock purchase warrants and options outstanding (continued):

    Summary of warrants (w) and options (o) outstanding (continued):

                                     Warrants  (w)     Exercise    Expiration
                        Date         Options   (o)       Price        Date

     Leon Schorr     01/21/97         2,500    (w)       6.40       01/20/01
     Leon Schorr     02/06/97         2,500    (o)       5.00       12/31/00
                                   ---------
                                      5,000
                                      -----

     Elizabeth Melnick   11/30/95    20,000    (o)       1.50       11/29/99
     Elizabeth Melnick   08/08/96     5,000    (o)       3.00       08/08/99
     Elizabeth Melnick   01/01/97     2,500    (o)       5.00       12/31/00
     Elizabeth Melnick   01/01/97     3,000    (o)       5.00       12/31/00
     Elizabeth Melnick   01/21/97     2,500    (w)       6.40       01/20/01
     Elizabeth Melnick   01/06/98     2,500    (o)      14.30       01/05/02
                                    ---------
                                     35,500

     Other employees      various   120,407    (o)       1.50      2000-2002
                                   ---------         to 14.30

    Total                         1,244,738
                                  =========


    In the quarter ended December 31, 1997,  793,070  warrants were exercised at
    prices ranging from $1.25 to $6.40, resulting in net proceeds to the Company
    of $1,171,213 and the issuance of 793,070 common shares.

    In the quarter  ended March 31, 1998,  10,000  options  were  exercised at a
    price of $3.00  resulting  in net proceeds to the Company of $30,000 and the
    issuance of 10,000 common shares.

    On  January  22,  1998,  the  Company  issued  Amos  Aharoni,  as  part of a
    compensation  agreement,  an option for  1,000,000  shares of the  Company's
    common  stock at an  exercise  price of $15.40 per share with an  expiration
    date of January 22, 2005.  The exercise  price of the option is equal to the
    market value on the date of grant. This option was subsequently cancelled in
    February of 1998.

    In October 1995, the FASB issued  Statement 123,  Accounting for Stock-based
    Compensation  (SFAS 123). This statement is effective for transactions  that
    are entered into in fiscal years beginning after December 15, 1995. SFAS 123
    establishes  a fair  value-based  method of  accounting  for employee  stock
    options. This method provides for compensation cost to be charged to results
    of operations at the grant date. However,  the statement allows companies to
    continue  to  follow  the  accounting  treatment  prescribed  by  Accounting
    Principles Board Opinion 25. Opinion 25 generally requires compensation cost
    to be recognized only for the excess of the quoted market price at the grant
    date over the price that an employee  must pay to acquire  stock.  Companies
    electing to continue  with Opinion 25 must make  disclosure of net income as
    if SFAS 123 had
     been adopted.






                                                                          F-12


<PAGE>


                          ACTRADE INTERNATIONAL, LTD. AND SUBSIDIARIES

                     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                  NINE MONTHS ENDED MARCH 31, 1998
                                         (Unaudited)









10. Common stock purchase warrants and options outstanding (continued):

    The Company has determined the method of accounting  that it will follow for
    stock options by continuing the use of Opinion 25. However, the Company does
    not  expect  that  adoption  of the  requirements  of SFAS 123 would  have a
    material  impact on the  financial  position,  results of operations or cash
    flows. Accordingly, no compensation cost will be recognized in
     1998.



11. Patent rights:

    In January 1998, Amos Aharoni  assigned to the Company all patent rights for
    the trade acceptance draft process for $1.

                                                                           F-13

<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 1998,  ended March 31, 1998,  the Company
had combined gross revenues of  $68,671,402,  as compared to $29,456,296 for the
first nine months of fiscal 1997, an increase of over  $39,215,106 or 133%. Cost
of sales during this period totaled  $62,655,911,  or 91% of gross revenues, as
compared  to  cost  of  goods  sold  for  the  same  period  in  fiscal  1997 of
$26,846,681,  or 91.1% of gross  revenues.  This  resulted in gross profits from
operations  of  $6,015,491  for the nine  month  period  ended  March 31,  1998,
compared  to  $2,609,615  for the same  period in fiscal  1997,  an  increase of
$3,405,876  (or  approximately  130%) from the first nine months of fiscal 1997.
After general and administrative expenses of $2,544,461,  income from operations
increased  to  $3,471,030,  as compared to  $1,173,562  for the same period last
year, an increase of 190%. After interest income and expenses and provisions for
income taxes, the Company experienced net earnings of $3,144,163, as compared to
$1,135,775  for the first nine months of fiscal 1997 (an  increase of 177%),  or
$0.37 per share as compared to $0.18 per share for the same period last year.

The  substantial  increase  in gross  revenues  during the nine months of fiscal
1998, which equaled 157% of the Company's total revenues for all of fiscal 1997,
was  primarily  due to the  expansion of the  Company's  operations  through (i)
significantly increased revenues by Actrade Capital Inc. ("Capital") through its
TAD Program, discussed separately below (see "III. Actrade Capital, Inc. And The
Trade  Acceptance Draft Program") and (ii) the increased sales by its subsidiary
Actrade S.A.

With respect to the three months ended March 31, 1998,  gross  revenues  reached
$25,553,958 (up 97% from the third quarter of fiscal 1997); gross profit climbed
to  $2,205,294  (an  increase  of 118% from the third  quarter of fiscal  1997);
income  from  operations  totaled  $1,249,906  (up 161% from the same  period in
fiscal 1997); and net earnings after interest income and expenses and allowances
for income taxes reached  $1,107,216 (an increase of 120% from fiscal 1997),  or
$0.13 per share for the quarter  ended March 31, 1998 (as  compared to $0.08 for
the third  quarter of fiscal  1997.  Management  believes  that any  analysis of
operating  results for the first nine months of fiscal  1998 must  consider  the
escalating costs associated with the ongoing expansion of operations by Capital,
including both increased personnel and the opening of new regional sales offices
associated with the TAD Program which are discussed separately below.

During the nine months  ended March 31, 1998,  the  Company's  operating  income
expressed as a percentage of gross revenues decreased slightly to 5.1% from 5.2%
at the end of the first  half of  fiscal  1998.  However,  this  ratio  remained
substantially  improved  from the 4.2% level at the end of the first nine months
of fiscal 1997.  This continued the trend which began during fiscal 1997 and, in
significant part, reflected the success of the Company's commitment to Capital's
TAD Program.  Although  management believes that continued increases in revenues
by Capital and by Actrade S.A.  during the balance of fiscal 1998 will help this
ratio to remain  stable,  management  cannot  predict the impact  thereon of the
substantial  expenditures  anticipated  in  connection  with  Capital's  ongoing
expansion program.

In addition,  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  90.7% for fiscal 1997 (which
is slightly lower than the 91.7% level reached in fiscal 1996) and approximately
91% for the first nine  months of fiscal  1998  (which is down from 91.5% at the
end of the first half of fiscal 1998). This increase is the result of the markup
experienced by Capital being lower than the markup associated with the Company's
international  trade operations.  As revenues from the TAD Program increase as a
percentage  of overall  revenues,  the  Company's  overall  profit  margins will
decrease.

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 1997,  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.

Continuing the trend first established at the end of the first quarter of fiscal
1998,  the major portion of the Company's  revenues,  over 58% at the end of the
first nine months of fiscal  1998,  are now derived from  Capital's  TAD Program
($40,143,813   during  the  first  nine  months  of  fiscal   1998),   with  the
international  trading division accounting for slightly over 33.3% ($22,918,264)
of the Company's total gross revenues for this period.

As  stated  in the  Company's  Annual  Report  on Form  10-K  for  fiscal  1997,
management  may elect to terminate  Allstate's  operations and to phase out this
aspect of its operations during fiscal 1998. No final decision on this issue has
yet been reached.  During the first nine months of fiscal 1998, Allstate's total
sales  aggregated only $23,184,  which accounted for less than 1/10 of 1% of the
Company's total revenues.

II.  Discussion of Financial Condition

On a  consolidated  basis,  at March 31, 1998 the  Company  had total  assets of
$22,758,931, compared with $19,364,462 at June 30, 1997, the end of fiscal 1997,
(an increase of $3,394,469 or 17.5%).  Total  current  liabilities  at March 31,
1998  decreased to  $2,168,393,  compared  with  $3,127,180 at June 30, 1997, (a
decrease of $958,787 or almost 31%). Of the Company's  assets at March 31, 1998,
$7,027,979 was in the form of cash and cash  equivalent  (compared to $7,352,465
at June 30,  1997).  The decrease in cash and cash  equivalent at March 31, 1998
reflects the ongoing utilization of available cash by Capital in connection with
its TAD  Program.  Shortly  before the end of the third  quarter,  Capital  sold
approximately  $5 Million of TADs to a private overseas  financial  institution.
This sale was without  recourse to Capital.  Most of the proceeds  received from
this sale remained in the form of cash at March 31, 1998.

In  addition to cash,  $8,335,771  represents  trade  accounts  receivable,  and
$7,016,742 represented TADs receivable (including $1,793,067 of TADs, which have
been sold to a bank).  The  increase in the  Company's  assets at March 31, 1998
over fiscal year end was  principally  due to the  increase in trade  acceptance
drafts receivable, including both "TADs in safe" and "Due from banks," and trade
accounts receivable.

At March 31, 1998,  total  stockholders'  equity  increased to  $20,537,493,  as
compared to $16,192,117 at June 30, 1997. The principal  source of funds for the
Company's  operations  is  revenues  earned by its  operating  subsidiaries.  As
previously reported, on June 30, 1997, the Company concluded a private placement
of its common stock  pursuant to Regulation D promulgated  under the  Securities
Act of 1933 and received gross proceeds  therefrom of $6,850,000.  Virtually all
the proceeds from this offering were designated by the Company for the continued
expansion  of  Capital's  TAD  Program.  A  significant  portion of the proceeds
received were utilized for the purchase of TADs by Capital.

During the balance of the current fiscal year, ending June 30, 1998, the Company
projects no significant  additional capital  expenditures in connection with any
of the Company's operations except in connection with the continued expansion of
the operations of Capital.  Management plans to establish a number of additional
Sales and Marketing  Offices in  connection  with the marketing of Capital's TAD
Program.  During the third  quarter of fiscal 1998 Capital  opened two new sales
offices,  in Houston and Kansas City,  which are not expected to  contribute  to
Capital's revenues until late in the fourth quarter, although much of the set-up
costs of these offices were incurred during the third quarter.  Consequently, no
estimate can be made at this time of the potential  impact,  either  positive or
negative,  that these new  offices  will have upon  revenues  or profits  during
fiscal 1998.

At March 31, 1998 the Company also had property, less accumulated  depreciation,
of  $342,974  (compared  to $238,305 at June 30,  1997) and  security  deposits,
prepaid expenses and Patent rights of $27,135, $43,329 and $1 respectively.  The
Company's  Patent rights resulted from the sale by Mr. Amos Aharoni,  CEO of the
Company,  of all his right title and interest in the Patent obtained for the TAD
Program  process  (see  discussion  below).  In  connection  with the  Company's
relocation  during fiscal 1990, it received an 18-month rent  abatement from its
landlord.  To conform to  applicable  accounting  procedures,  the value of this
abatement is being  amortized over the life of the lease.  At March 31, 1998 the
Company continued to show $35,404 in deferred rent liability.

The Company's accounts payable are all current.

At December 31, 1997,  the Company had eliminated  outstanding  loans payable to
its bank,  which had  totaled  $339,815  at  September  30,  1997,  representing
advances  against  Capital's credit line. This credit line from a major European
Bank is fully  secured by the proceeds due from TADs which have been sold to the
bank but which have not yet been collected. Due to the Company's available cash,
management elected not to draw against this credit line thereby  eliminating the
interest expense associated  therewith.  However, this loan amount is constantly
changing based upon a number of factors  including the total amount of TADs sold
to the bank and the  extent  to which  Capital  needs  to  utilize  this  credit
facility. As of the date of this Report, the Company has a total credit facility
available of $3.5  Million,  in the  aggregate,  with this bank. As of March 31,
1998, no part of this facility was being used by Capital.

During June, 1997, Capital secured an additional credit facility from a major US
bank, in the amount of $3 Million which was never used by the Company.  At March
31, 1998  management  continues to discuss the possible  extension of the credit
facility. If these discussions come to fruition, this facility will be available
to finance the continued  purchase of TADs by Capital from its customers in much
the same manner as its other existing bank facility.

Effective December 15, 1997, the Company secured a third facility for up to $5.5
Million from a private  financial  overseas  institution.  This facility permits
Capital to sell TADs  received  from  qualified  customers  to this  institution
without  recourse to  Capital.  During any period  where this  facility is used,
Capital  will be charged  interest  on open  amount  during the time TADs remain
unpaid.

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 1998 and  management  expects
revenues  will be adequate to meet the  Company's  operating  cash needs for the
foreseeable future.

As of the date of this Report, all of the Company's total accounts receivable at
June 30, 1997, 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,
Capital generated gross revenues of $927,757 (compared to $247,809 during fiscal
1993).  During fiscal 1995,  management  implemented an aggressive new marketing
plan for the TAD Program,  which  resulted in gross  revenues of $3,703,493  for
fiscal 1995, almost 300% higher than fiscal 1994. During fiscal 1996, as Capital
continued to step-up its marketing program,  Capital generated gross revenues of
$7,993,932, almost 116% higher than fiscal 1995.

By fiscal 1997  Capital  began to expand its sales force and added new  regional
sales offices. As a result,  gross revenues increased to $21,668,573,  over 171%
higher than fiscal 1996. For fiscal 1997, Capital's operations reflected a gross
profit from operations of $1,366,322 with net pre-tax income of $224,669.

Capital's operating revenues during the first nine months of fiscal 1998 totaled
$40,143,813,  or approximately 58.5% of the Company's total revenues during this
period, as compared to total revenues of $14,066,755,  or approximately 47.8% of
total  revenues,  during  the first nine  months of fiscal  1997.  Perhaps  most
importantly   however,   Capital's   gross  revenues  during  this  period  were
$26,077,058  higher than in the same period last year,  an increase of more than
185%.

During this  period,  Capital  also had  interest  expenses of  $147,804,  while
incurring  direct  selling,  general and  administrative  expenses of $1,816,734
(which  included  both a  percentage  of indirect  overhead  costs and the costs
associated  with the addition of two new sales  offices),  which resulted in net
operating income before taxes of $606,909,  with net income of $517,472 after an
allowance for taxes of $89,437.

With respect to Capital's  expansion plan,  based upon  management's  experience
with the TAD Program  over the past four years,  management  has  determined  to
place its primary  emphasis on  developing a domestic  force of  aggressive  new
sales  representatives  with a solid  background in sales and the  experience to
present the TAD Program to large domestic and multi-national companies.

During the third quarter of fiscal 1998, two new sales offices were opened.  Due
to the need to train  personnel  and to  promote  the TAD  Program to the target
market in each region,  neither office  generated any revenues during the period
ended  March  31,  1998.  It has  been  management's  experience  that  a  newly
established  sales office will  require  from 3 to 6 months to begin  generating
revenues.  Consequently,  although  both the  Houston and Kansas City office are
expected to begin generating  revenues during the fourth quarter of fiscal 1998,
no projection of the extent of such revenues can be made at this time.

     As previously reported, on December 2, 1997 the United States Patent Office
officially granted to Mr. Amos Aharoni a patent with respect to the use of trade
acceptance drafts in Capital's TAD Program.  Mr. Aharoni has assigned all of his
right, title and interest in and to said patent to Actrade  International,  Ltd.
in  consideration  of the payment of $1.00.  Mr. Aharoni will not be entitled to
receive  any other  form of  compensation  or royalty  in  connection  with said
patent.



IV.  Trends Affecting Liquidity, Capital Resources and Operations.

A.  Actrade Capital, Inc.

With respect to the TAD Program,  management has not identified any trends which
have had, or which can reasonably be expected in the future to have, any adverse
impact upon the  operations of Capital or the TAD Program in general.  As of the
date of this Report,  management is not aware of any other  company  operating a
program similar to the TAD Program and, as demonstrated by Capital's growth rate
since the  introduction  of the TAD Program (see  discussion  above),  Capital's
revenues and profits continue to reach new record levels each quarter.

Actrade International Corp. - Export Division.

Over the years,  economic  conditions in the United States have caused  American
manufacturers to seek new markets for their products and, in particular, to turn
to foreign  markets to boost domestic sales.  Management  believes that over the
past several years this trend, coupled with renewed demand for American products
and improved  buying power of foreign  currencies,  has been  beneficial  to the
Company's  export  division  and has been a major  factor in the  growth of this
division.

This trend is now being  affected by a number of factors  which could  adversely
affect future growth rates for the Company's export operations. Most importantly
among these has been the renewed  strength of the  American  Dollar  compared to
other  currencies  which  has had the  effect of making  American  products  too
expensive to compete with foreign-made products.  Principally this is due to the
impact  that  reduced  foreign  labor  costs have upon the price of  competitive
merchandise.

In addition,  the recent turmoil in the Asian  financial  markets is expected to
translate into a slow down in orders for American made products from this market
segment  which is expected to adversely  affect the Company's  export  division.
However,  to date,  the Company has been able to offset this negative trend with
increased orders from other markets around the world,  although no assurance can
be given as to future  results,  particularly if the crisis in the Asian markets
continues.

 Actrade S.A. - International Trade Division.

The  operations of Actrade S.A.  have been designed to compliment  the Company's
export operations by providing foreign sources for products. Management believes
that by utilizing the foreign  network  available to Actrade S.A. 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 and
adequately  offset any decline in its export  operations.  These changing trends
have been the principal  reason for the dramatic  increase in sales  revenues by
Actrade S.A.

Another result of these changing  world  conditions,  which recently have had an
adverse   impact  on  foreign   markets  for  US  products  (and  probably  most
importantly)  has been the  impact  of 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.  During fiscal 1997 the Company
experienced  a further  expansion of the  international  trading  operations  of
Actrade S.A. Due to the financial strength of the Company, Actrade S.A. has been
in a position  to  benefit  from 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 for
both fiscal  1997 and during the  current  period.  Sales by Actrade  S.A.  rose
dramatically  from  $7,689,000  during fiscal 1996 to $14,743,695  during fiscal
1997 and  $22,918,264  for the first nine  months of fiscal  1998  (compared  to
$10,436,453  for the first  nine  months of fiscal  1997).  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  cannot  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.

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.  Although the recent  strength of the  American  dollar
abroad  has  served  to  diminished  the  demand  for  American   products,   in
management's  opinion,  the impact on its  export  sales is not  expected  to be
significant within 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 export
division'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  23, 1998



ACTRADE INTERNATIONAL, LTD.



BY:__/s/Alexander C. Stonkus_________
     Chief Operating Officer and Chief
      Financial Officer