<PAGE>


                        SECURITIES & EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q

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

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

                  For the quarterly period ended March 31, 2002

                         Commission File Number 0-18711


                       ACTRADE FINANCIAL TECHNOLOGIES LTD.

              Incorporated under the laws of the State of Delaware
                I.R.S. Employer Identification Number 13-3437739


                  7 Penn Plaza, Suite 422, New York, N.Y. 10001
                         Telephone Number (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 Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and 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 29, 2002 there were
10,510,077 shares of Common Stock, par value $0.0001.





<PAGE>


                                      INDEX


Part I. Financial Information

<TABLE>
<S>                                                                                                 <C>
Item 1.  Condensed consolidated financial statements (Unaudited)

         Condensed consolidated balance sheets as of March 31, 2002 and June 30, 2001                3

         Condensed consolidated statements of income for the nine and three months ended
         March 31, 2002 and 2001                                                                     4

         Condensed consolidated statements of cash flows for the nine and three months ended
         March 31, 2002 and 2001                                                                     5

         Notes to condensed consolidated financial statements                                        6-8


Item 2.  Management's discussion and analysis of financial condition and results of operations       8-14

Item 3.  Quantitative and qualitative disclosures about market risk                                  15

PART II. Other Information

Item 1.  Legal proceedings                                                                           15

Item 6.  Exhibits and reports on Form 8-K                                                            16

Signatures                                                                                           17
</TABLE>


                                       2





<PAGE>


ACTRADE FINANCIAL TECHNOLOGIES AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
                  Dollars in thousands except per share amounts

<TABLE>
<CAPTION>
                                                                                      March 31, 2002
                                                                                       (Unaudited)     June 30, 2001
<S>                                                                                    <C>             <C>
ASSETS
   CURRENT ASSETS:
          Cash and cash equivalents                                                      $ 39,765       $ 42,155
          Accounts receivable - trade                                                      24,139          5,786
          Trade acceptance drafts receivable (net of deferred income
             and allowance for doubtful accounts of $1,289 and $4,263 at
             March 31, 2002 and $1,209 and $2,012 at June 30, 2001                         44,659         40,680
          Investment in and due from qualifying special purpose entity                         23          2,217
          Income tax refund receivable                                                       -             2,823
          Deferred income taxes                                                             1,758            800
          Other current assets                                                                388            647
                                                                                         --------       --------

                    Total Current Assets                                                  110,732         95,108

   NON-CURRENT RECEIVABLE                                                                   8,000           -
   PROPERTY AND EQUIPMENT, NET                                                              1,223          1,731
   OTHER ASSETS                                                                                35            341
                                                                                         --------       --------

TOTAL ASSETS                                                                             $119,990       $ 97,180
                                                                                         ========       ========

LIABILITIES AND STOCKHOLDERS' EQUITY
   CURRENT LIABILITIES:
          Short-term borrowings                                                          $ 24,204       $ 30,615
          Other current liabilities                                                         3,264          1,316
                                                                                         --------       --------
                    Total Current Liabilities                                              27,468         31,931
                                                                                         --------       --------

   COMMITMENTS AND CONTINGENCIES

   STOCKHOLDERS' EQUITY:
          Common stock, $0.0001 par value, authorized
               100,000,000 shares, issued and outstanding
                11,844,375 shares and 10,510,077 shares at March 31, 2002 and
                10,565,514 shares and 9,880,151 shares at June 30, 2001                         1              1
          Additional paid-in capital                                                       58,018         38,881
          Retained earnings                                                                73,604         47,065
          Accumulated other comprehensive income (loss)                                        63            (13)
          Treasury stock at cost, 1,334,298 shares at March 31, 2002 and
                685,363 shares at June 30, 2001                                           (39,164)       (20,685)
                                                                                         --------       --------
                      Total Stockholders' Equity                                           92,522         65,249
                                                                                         --------       --------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                               $119,990       $ 97,180
                                                                                         ========       ========

</TABLE>

See notes to condensed consolidated financial statements.


                                       3





<PAGE>


ACTRADE FINANCIAL TECHNOLOGIES AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
               (Unaudited)
--------------------------------------------------------------------------------
                  Dollars in thousands except per share amounts

<TABLE>
<CAPTION>
                                                   Nine months ended              Three months ended
                                                       March 31,                      March 31,
                                                       ---------                      ---------
                                                  2002           2001            2002           2001
<S>                                             <C>             <C>             <C>            <C>
Revenue:
    Trade Acceptance Drafts                     $ 25,839        $ 16,440        $ 8,009        $ 6,257
    International Merchandise Trade             $ 23,653        $ 21,658        $ 6,964        $ 7,987
                                                --------        --------        -------        -------
Total Revenue                                   $ 49,492        $ 38,098        $14,973        $14,244
                                                --------        --------        -------        -------

Operating Expenses:
    General and administrative                    (9,115)         (8,166)        (2,505)        (2,837)
    Bad debt expense                              (2,400)         (2,273)          (600)        (1,012)
    Securitization (loss)/income, net               (266)         (1,110)             8           (519)
    Interest, net                                 (5,449)         (7,139)        (1,223)        (2,460)
                                                --------        --------        -------        -------
Total Operating Expenses                         (17,230)        (18,688)        (4,320)        (6,828)
                                                --------        --------        -------        -------

Income before Provision for Income Taxes          32,262          19,410         10,653          7,416

Provision for Income Taxes                        (5,723)         (2,221)        (1,995)          (883)
                                                --------        --------        -------        -------

Net Income                                      $ 26,539        $ 17,189        $ 8,658        $ 6,533
                                                ========        ========        =======        =======

Net Income per Common Share:
Basic                                              $2.60           $1.90          $0.83          $0.72
Diluted                                            $2.35           $1.61          $0.77          $0.60

Weighted Average Number of Shares Outstanding:
Basic                                           10,203,276       9,031,990     10,492,074     9,064,937
Diluted                                         11,308,270      10,698,237     11,195,665    10,907,023
</TABLE>

See notes to condensed consolidated financial statements


                                       4





<PAGE>


ACTRADE FINANCIAL TECHNOLOGIES AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
--------------------------------------------------------------------------------
                  Dollars in thousands except per share amounts

<TABLE>
<CAPTION>
                                                                                Nine months ended
                                                                                    March 31,
                                                                               2002          2001
<S>                                                                          <C>            <C>
   CASH FLOWS FROM OPERATING ACTIVITIES
   Net Income                                                               $ 26,539        $17,189
   Adjustments to reconcile net income to net cash provided
     By operating activities:
        Depreciation and amortization                                            958            699
        Bad debt expense                                                       2,400          2,273
        Deferred income                                                           80             89
        Securitization loss, net                                                 266          1,110
        Deferred income taxes                                                   (958)           (29)
   Changes in operating assets and liabilities:
        Accounts receivable - trade and trade
           acceptance drafts receivable                                      (32,812)        (5,539)
        Other assets                                                           5,139           (243)
        Other current liabilities                                              1,948           (518)
                                                                            --------        -------
   Net cash provided by operating activities                                   3,560         15,031
                                                                            --------        -------

   CASH FLOWS FROM INVESTING ACTIVITIES
        Purchase of property and equipment                                      (197)          (657)
                                                                            --------        -------

   CASH FLOWS FROM FINANCING ACTIVITIES
        Proceeds from issuance of common stock                                   658            318
        Change in short-term borrowings                                       (6,411)        (9,249)
                                                                            --------        -------
   Net cash used in financing activities                                      (5,753)        (8,931)
                                                                            --------        -------

   CHANGE IN CASH AND CASH EQUIVALENTS                                        (2,390)         5,443

   CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                               42,155          9,424
                                                                            --------        -------

   CASH AND CASH EQUIVALENTS, END OF PERIOD                                 $ 39,765        $14,867
                                                                            ========        =======


   SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
        Interest paid during the period                                       $5,938        $13,156
                                                                              ======        =======

        Income taxes paid during the period                                   $2,288         $2,887
                                                                              ======         ======

         Exercise of options in exchange for common stock                    $18,479           $868
                                                                             =======           ====

</TABLE>

   See notes to condensed consolidated financial statements.


                                       5




<PAGE>


              ACTRADE FINANCIAL TECHNOLOGIES LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1.       Summary of Significant Accounting Policies:

         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 disclosures
         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 interim periods are 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 Annual Report of Actrade Financial
         Technologies Ltd. (the "Company") and subsidiaries on Form 10-K for the
         fiscal year ended June 30, 2001.

         The consolidated financial statements include the accounts of the
         Company and its subsidiaries. All intercompany balances and
         transactions have been eliminated in consolidation.

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make certain
         estimates and assumptions that affect the reported amounts of assets
         and liabilities. It also requires disclosure of contingent assets and
         liabilities at the date of the financial statements and the reported
         amounts of revenues and expenses during the reporting period. Actual
         results could differ from these estimates.

         Certain prior period amounts have been reclassified to conform to the
         current period presentation. Income/loss from securitization
         transactions has been reclassified from Revenue - Trade Acceptance
         Drafts to Securitization (Loss)/Income. The reclassification was made
         to more clearly reflect the effects of securitization transactions in
         the consolidated statements of income. The reclassification of
         securitization (loss)/income resulted in revenue increases of
         $1,111,000 and $520,000 for the nine and three-month periods ended
         March 31, 2001, respectively. In addition, certain expenses have been
         reclassified from Interest Expense to Revenue - Trade Acceptance Drafts
         in the amounts of $5,901,000 and $2,250,000 for the nine and
         three-month periods ended March 31, 2001, respectively. Also, the
         Company's stock option plan permits the exchange of existing owned
         shares of the Company's common stock, valued at the market price on the
         exercise date, to pay for any option exercise in lieu of cash. Amounts
         totaling $18,479,000 and $868,000 for the nine months ended March 31,
         2002 and March 31, 2001, respectively, were used for such option
         exercises and are recorded as treasury stock purchases.

         Actrade Commerce Ltd. ("Commerce"), which began operations in fiscal
         2002 and was previously included in the IMT business segment, has been
         reclassified to the E-TAD segment since its operations are more
         analogous with E-TADs. Commerce purchases Bills of Exchange outside
         North America. A Bill of Exchange is an unconditional order in writing
         signed by the person originating it, requiring the person to whom it is
         addressed to pay on demand, or at a fixed or determinable future time,
         a sum certain in money, to or to the order of, a specified person, or
         to bearer. A Bill of Exchange involves the payment of money only. As
         such, all prior periods amounts have been reclassified to reflect this
         change.

         None of the above reclassifications had any impact on total assets,
         stockholders' equity, net income or earnings per share of the Company.

         Actrade Funding Corp. ("Funding") is a wholly owned subsidiary of
         Actrade Capital, Inc. ("Capital") with the specific purpose of
         purchasing trade acceptance draft receivables from Capital. Funding is
         considered as a qualifying special purpose entity. During the quarter
         ended December 31, 2001, the Company ended this securitization
         arrangement.


                                       6





<PAGE>


2.       Segment Information:

         The Company's business operations at March 31, 2002 are divided into
         two principal business segments: the E-TAD program and international
         merchandise trade activities. The Company's business segments are based
         on business units or entities that offer different products and
         services. They are managed separately because each business segment
         requires different strategic initiatives and marketing.

         Revenue, income before provision for income taxes, depreciation and
         amortization, net interest expense and total assets for each segment
         for the nine and three months ended March 31, 2002 and 2001 were as
         follows:

<TABLE>
<CAPTION>
                                                Nine months ended      Three months ended
                                                      March 31,               March 31,
                                                 2002        2001        2002        2001
<S>                                           <C>         <C>         <C>         <C>
Revenue:
   Trade Acceptance Drafts                    $25,839     $16,440     $ 8,009     $ 6,257
   International Merchandise Trade            $23,653     $21,658     $ 6,964     $ 7,987
                                              -------     -------     -------     -------
                                              $49,492     $38,098     $14,973     $14,244
                                              =======     =======     =======     =======

Income before Provision for Income Taxes:
   Trade Acceptance Drafts                    $13,976     $ 4,346     $ 4,947     $ 1,651
   International Merchandise Trade            $18,286     $15,064     $ 5,706     $ 5,765
                                              -------     -------     -------     -------
                                              $32,262     $19,410     $10,653     $ 7,416
                                              =======     =======     =======     =======

Depreciation and Amortization:
   Trade Acceptance Drafts                    $   949     $   688     $   226     $   242
   International Merchandise Trade            $     9     $    11     $     3     $     4
                                              -------     -------     -------     -------
                                              $   958     $   699     $   229     $   246
                                              =======     =======     =======     =======

Interest Expense, net:
   Trade Acceptance Drafts                    $   581     $ 1,485     $    33     $   507
   International Merchandise Trade            $ 4,868     $ 5,654     $ 1,190     $ 1,953
                                              -------     -------     -------     -------
                                              $ 5,449     $ 7,139     $ 1,223     $ 2,460
                                              =======     =======     =======     =======

<CAPTION>
                                                        March 31, 2002              June 30, 2001
                                                        --------------              -------------
<S>                                                         <C>                        <C>
Total Assets:
   Trade Acceptance Drafts                                 $ 57,985                    $50,425
   International Merchandise Trade                         $ 62,005                    $46,755
                                                           --------                    -------
                                                           $119,990                    $97,180
                                                           ========                    =======
</TABLE>

3.       Non-current Receivable:

         In January 2002, Capital tentatively agreed to modify the terms of
         certain TADs it held from one customer for the amount of $8,845,000;
         $8,500,000 of these TADs are supported by surety bonds. Capital plans
         to exchange these TADs for: (1) a long-term note receivable of
         $8,000,000 bearing an interest rate at Prime plus 1% with the entire
         principal payable in 2006, (2) an installment note receivable of
         $500,000 bearing an interest rate of 4.75% with the final payment due
         in December 2002, and (3) an installment note receivable of $345,000,
         with the final payment due in 2006. The notes receivable of $8,000,000
         and $500,000 would continue to be secured by the surety bond companies.
         During the quarter ended March 31, 2002, $91,000 was collected on these
         TADs; $14,000 was a pay-down of the aforementioned $345,000 and the
         remaining $77,000 was an interest payment for the period ended March
         31, 2002 on the $8,500,000.

         On April 24, 2002, Capital was informed by the surety bond company
         and customer that the parties were proceeding with the financial
         restructure of the customer's business in order to finalize the
         foregoing long-term notes but that an additional thirty (30) days
         (until May 25, 2002) was required to complete the additional financing
         and restructuring of the customer. Capital agreed to this extension of
         its current terms


                                       7





<PAGE>


         through May 25, 2002 to allow the parties time to complete this
         financing arrangement.

         Based on the creditworthiness of the surety companies, management
         believes that the $8,500,000 currently supported by surety bonds is
         fully collectible. At March 31, 2002, the Company provided a specific
         reserve of $331,000 (original $345,000 less $14,000 principal payment
         received) for the receivable, which was not covered by the surety
         bonds. Consistent with the expected payment terms outlined above, the
         Company recorded $8,000,000 as non-current receivable at
         March 31, 2002.


ITEM 2. Management's discussion and analysis of financial condition and results
of operations.

General Statement - Factors That May Affect Future Results.

With the exception of historical information, the matters discussed in
Management's Discussion and Analysis of Financial Condition and Results of
Operations contain forward looking statements under the 1995 Private Securities
Litigation Reform Act (the "Reform Act") that involve various risks and
uncertainties. Typically, these statements are indicated by words such as
"anticipates," "expects," "believes," "plans," "could," and similar words and
phrases. Factors that could cause the Company's actual results to differ
materially from management's projections, forecasts, estimates and expectations
include but are not limited to, the following:

o    Changes in the Company's currently available credit facilities;
o    The inability of the Company to extend or secure additional credit
     facilities to fund the anticipated expansion of sales under its E-TAD
     Program as defined below;
o    Unexpected economic changes both in the United States and overseas;
o    The imposition of new restrictions or regulations affecting either the
     Company's international merchandise trade activities or its E-TAD Program,
     either in the United States or in Canada.
o    Unanticipated economic impacts of the Middle East crisis.
o    Unanticipated economic impact of non-current receivable default.

Segment Reporting Disclosures.

Currently, the Company's revenue is generated from two business segments: the
E-TAD Program and IMT.

An E-TAD is a post-dated payment draft prepared by the buyer of goods or
services ("Buyer") and accepted by the seller of the goods or services
("Supplier") by the Buyer signing and delivering the draft back to the Supplier.
The E-TAD Program denotes the Company's ongoing plan for all aspects of E-TADs
to be processed, marketed, and fulfilled electronically, including prospective
E-commerce applications. The E-TAD Program is operated by Actrade Capital, Inc.
("Capital") in the United States, Actrade Capital Canada, Inc. ("Actrade
Canada") in Canada and Actrade Commerce Ltd., which purchases Bills of Exchange
outside of North America. Pre-tax income of the E-TAD Program also includes the
results of its investment in and transactions with its unconsolidated
subsidiary, Actrade Funding Corp. (`Funding").

IMT operations are conducted through Actrade International Corp.
("International"), which resells American-made products to foreign buyers;
Actrade S.A., including its wholly-owned subsidiary Actrade Resources, Inc.
("Resources"), which resells non-US products to foreign buyers.

Results of Operations - Nine months ended March 31, 2002 Compared to Nine months
ended March 31, 2001.

All figures included in the following discussion have been rounded to the
nearest $1,000 for presentation purposes.


                                       8




<PAGE>


Revenue:

For the nine months ended March 31, 2002, the Company had consolidated revenue
of $49,492,000 as compared to $38,098,000 for the same period in fiscal 2001, an
increase of 30%. This increase resulted from revenue increases in each of the
Company's business segments as outlined below.

         E-TAD Program Revenue

Revenue for the nine months of fiscal 2002 from the E-TAD program totaled
$25,839,000, as compared to $16,440,00 in the same period of fiscal 2001, an
increase of 57.2%. This increase represents a higher volume of transactions that
management believes were a result of the marketing efforts targeting larger
companies who are able to have larger credit limits because of reduced credit
risk. Thus the Company is able to increase originations and revenues and
correspondingly reduce bad debt expense by executing transactions with these
companies. The E-TAD segment also had increased repeat business with its
existing customer base. The sales staff expansion program (staff increase from
10 to 20 ) begun during the prior fiscal year is also a part of this increase.
(See also Expenses: General and Administrative and Liquidity and Capital
Resources below). A summary of originations (representing the face amount of all
transactions) and revenue for the nine months of fiscal 2002 and fiscal 2001 is
as follows:

<TABLE>
<CAPTION>
                                                  March 31, 2002                 March 31, 2001
                                                  --------------                 --------------
                                           Originations      Revenue        Originations    Revenue
                                           ------------      -------        ------------    -------
<S>                                        <C>             <C>            <C>             <C>
E-TAD: Capital and Canada                  $412,986,000    $25,415,000    $268,937,000    $16,440,000
       Commerce                            $  6,765,000    $   424,000    $     -         $    -
                                           ------------    -----------    ------------    -----------
                                           $419,751,000    $25,839,000    $268,937,000    $16,440,000
                                           ============    ===========    ============    ===========
</TABLE>

         International Merchandise Trade Revenue

Revenue from International Merchandise Trade during this period climbed to
$23,653,000 as compared to $21,658,000 in the same period of fiscal 2001, an
increase of 9.2%. This increase was the result of increased unit sales by
Resources, rather than from price increases for the products sold. Management
attributes the continued growth in this business sector to the ability to
provide immediate payment to foreign suppliers as well as facilitating access to
flexible payment terms for the buyers. In addition, part of the increase is due
to the increase in the sales force (2 to 6) begun during the prior fiscal year.
During the first nine months of fiscal 2002, the Company's principal overseas
markets continued to be (i) South America (ii) Eastern Europe, (iii) Western
Europe, (iv) Far East, (v) Middle East and (vi) Central America and the
Caribbean.

See "Condensed Consolidated Financial Statements - Note 2, Segment Information"
for additional information.

Expenses:

         General and Administrative

General and administrative expenses for the nine months ended March 31, 2002
were $9,115,000, as compared to $8,166,000 for the same period last year, an
increase of 11.6%. The major component of this increase was compensation for the
E-TAD segment (including commissions and other related costs), which increased
to $4,699,000 in the nine months ended March 31, 2002 from $3,632,000 in the
same period last year. This reflected the expansion of sales, back office and
technology personnel to support the various Company business efforts under
development.

Professional fees for the nine months ended March 31, 2002 decreased to
$1,671,000 from $2,468,000 for the same period last quarter principally due to
reduced legal fees associated with surety bond company litigation (see Part II-
Other Information).

Depreciation and amortization increased to $958,000 during the nine months ended
March 31, 2002 as compared to $699,000 in the same period last year. Most of
this increase was due to the accelerated amortization of capitalized initial
costs for the securitization arrangement as the Company decided to end the
arrangement. Other components


                                       9





<PAGE>


of general and administrative expenses increased $421,000 for the nine months
ended March 31, 2002 as compared to the same period in fiscal 2001.

With respect to the balance of fiscal 2002, management projects that costs
related to E-TAD operations will remain at present levels, even as marketing
efforts for the Company's E-Commerce program continues. However, management
believes that the impact of these continued costs will be outweighed by
increased revenue as the benefits of the fiscal 2002 business and system
development mature.

         Bad Debt

Bad debt expense arises from the E-TAD business segment. IMT transactions have
had no history of losses. For the nine months of fiscal 2002, the Company
provided for bad debt expense in the amount of $2,400,000 as compared to
$2,273,000 in the same period of fiscal 2001. In evaluating bad debt, management
looks at the adequacy of its allowance for doubtful accounts based on a
percentage (%) of originations versus defaults over the preceding twelve months,
as well as the status of individual past due accounts. In addition, credit
insurance; surety bond and collateral assets cover the Company's portfolio of
receivable items.

         Interest

For the nine months of fiscal 2002, the Company incurred net interest expense of
$5,449,000 as compared to $7,139,000 in the same period last year. This decrease
is due to the reduction of revenue in the IMT segment and by lower interest
rates during the nine months of fiscal 2002 as well as reduced debt needs due to
the utilization of internally generated cash flow from the Company's operations.

         Securitization Loss

For the nine months of fiscal 2002, the Company realized a $266,000
securitization loss as compared to a loss of $1,111,000 in the same period last
year. In the securitization arrangement, Capital sold to Funding certain TADs
receivables it originated. Capital continued to have risk (and benefits) with
respect to the TADs receivables sold to Funding up to (or for) the amount of
interests it retained in the securitized receivables pool. The interests
retained by Capital were initially recorded at there allocated carrying amounts
based on the relative fair value of receivables sold and retained. Retained
interests were subsequently carried on the Company's balance sheets at fair
value, which was estimated based on the net present value of expected future
cash flows of Funding (i.e., expected proceeds from TADs receivables portfolio
minus expected payments of the borrowings and certain expenses), calculated
using the management's best estimates and assumptions. Capital's retained
interests were subordinated to the lenders' interest. Gains on sale of the
receivables to Funding, the revaluation gains and losses of the retained
interests and servicing fees were included in securitization loss in the
statements of income.

For the nine months ended March 31, 2001, relatively large amounts of TADs
receivable held by Funding were determined to be uncollectible. At March 31,
2001, the interests retained by Capital were revalued based on the revised
assumptions reflecting the write-offs. The securitization loss of $1,111,000 for
the nine months ended March 31, 2002 was mainly due to the revaluation loss of
retained interests. During the first quarter of fiscal 2002, the Company ended
its securitization arrangement.

Pre-tax Income:

         E-TAD Program

Pre-tax income attributable to the E-TAD business segment was $13,976,000 for
the nine months ended March 31, 2002, as compared to $4,346,000 for the March
2001 period, an increase of 221.6%. Management believes that this significant
improvement reflects the investment made in the continued expansion of the E-TAD
program and that such expansion will continue during fiscal 2002. Management
believes that these operations will continue to grow during the foreseeable
future although no assurance can be given that the rate of growth will continue
to be sustained.


                                       10




<PAGE>


         International Merchandise Trade

IMT pre-tax income for the nine months ended March 31, 2002 totaled $18,286,000
as compared to $15,064,000 for the same period last year, an increase of 21.4%,
consistent with the revenue growth noted above. Management believes that these
operations will continue to grow during the foreseeable future although no
assurance can be given that the rate of growth will continue to be sustained.

Net Income:

After provision for income taxes, net income for the nine months ended March 31,
2002 was $26,539,000, or $2.35 per share (diluted), as compared to $17,189,000
or $1.61 per share (diluted) for the comparable period in fiscal 2001. This
represented an increase in net income of 54.4% over last year and an increase in
diluted earnings per share of 46% over last year. The income tax provision
increased to $5,723,000 in the nine months ended March 31, 2002 from $2,221,000
for the nine months ended March 31, 2001, primarily due to increased pre-tax
income from the E-TAD segment. Income tax has not been provided on unrepatriated
earnings of foreign subsidiaries, as it is the intention of the Company to
reinvest such earnings in its foreign operations. Substantially all of the
pre-tax income for the IMT segment is comprised of such unrepatriated earnings.


Results of Operations - Third Quarter, Fiscal 2002 Compared to Third Quarter,
Fiscal 2001.

Revenue:

For the quarter ended March 31, 2002, the Company had consolidated revenue of
$14,973,000 as compared to $14,244,000 for the same period in fiscal 2001, an
increase of 5.1%. This increase is explained below.

         E-TAD Program Revenue

Revenue for the third quarter of fiscal 2002 from the E-TAD program totaled
$8,009,000, as compared to $6,257,000 in the third quarter of fiscal 2001, an
increase of 28%. This increase represents a higher volume of transactions that
management believes were a result of the marketing efforts targeting larger
companies who are able to have larger credit limits because of reduced credit
risk. Thus the Company is able to increase originations and revenues and
correspondingly reduce bad debt expense by executing transactions with these
companies. The E-TAD segment also had increased repeat business with its
existing customer base. The sales staff expansion program (staff increase from
10 to 20) begun during the prior fiscal year is also a part of this increase.
(See also Expenses: General and Administrative and Liquidity and Capital
Resources below). A summary of originations (representing the face amount of all
transactions) and revenue for the third quarter of fiscal 2002 and fiscal 2001
is as follows:

<TABLE>
<CAPTION>
                                                    March 31, 2002                      March 31, 2001
                                                    --------------                      --------------
                                          Originations     Revenue            Originations     Revenue
                                          ------------     -------            ------------     -------
<S>                                       <C>              <C>               <C>               <C>
E-TAD: Capital and Canada                 $135,438,000     $7,905,000        $103,398,000      $6,257,000
       Commerce                           $  2,765,000     $  104,000        $          0      $        0
                                          ------------     ----------        ------------      ----------
                                          $138,203,000     $8,009,000        $103,398,000      $6,257,000
                                          ============     ==========        ============      ==========
</TABLE>

         International Merchandise Trade Revenue

Revenue from International Merchandise Trade during this period was $6,964,000
as compared to $7,987,000 in the third quarter of fiscal 2001, a decrease of
12.8%. This decrease was the result of decreased unit sales by Resources.
Management attributes this decline to the political tensions in the Middle East
business sector. In addition, part of the increase is due to the increase in the
sales force (2 to 6) begun during the prior fiscal year. Management cannot
estimate what impact this may ultimately have on this sector in the next
quarter. During the third quarter of fiscal 2002, the Company's principal
overseas markets continued to be (i) South America (ii) Eastern Europe, (iii)
Western Europe, (iv) Far East, (v) Middle East and (vi) Central America and the
Caribbean.


                                       11





<PAGE>


See "Condensed Consolidated Financial Statements - Note 2, Segment Information"
for additional information.

Expenses:

         General and Administrative

General and administrative expenses for the quarter ended March 31, 2002 were
$2,505,000, as compared to $2,837,000 for the same period last year, a decrease
of 11.7%. The major component of this decrease was legal fees that decreased by
$443,000 from the same period last year due to decreased legal fees associated
with the surety company liquidation. Compensation, principally for the E-TAD
segment (including commissions and other related costs), increased to $1,545,000
in the three months ended March 31, 2002 from $1,354,000 in the same period last
year. This reflected the expansion of sales and support personnel to support the
E-TAD Program.

With respect to the balance of fiscal 2002, management projects that costs
related to E-TAD operations will continue as marketing efforts increase for the
E-TAD and Commerce programs. In addition, management expects marketing, and
related technology costs to increase next quarter as the Company expands its
E-Commerce initiatives.

         Bad Debt

Bad debt expense arises from the E-TAD business segment. International
Merchandise Trade transactions have never had any losses. In the third quarter
of fiscal 2002, the Company provided for bad debt expense in the amount of
$600,000 as compared to $1,012,000 in the third quarter of fiscal 2001. In
evaluating bad debt, management looks at the adequacy of its allowance for
doubtful accounts based on a percentage (%) of originations, as well as the
status of individual past due accounts. See complete analysis of allowance for
doubtful accounts in discussion of bad debt above.

         Interest

In the third quarter of fiscal 2002, the Company incurred net interest expense
of $1,223,000 as compared to $2,460,000 in the same period last year. This
decrease is due to lower interest rates during the quarter of fiscal 2002 as
well as reduced debt needs due to the utilization of internally generated cash
flow from the Company's operations.

         Securitization Income/(Loss)

In the third quarter of fiscal 2002, the Company realized an $8,000 income on
securitization as compared to a loss of $520,000 in the same quarter last year.
In the securitization arrangement, Capital sold to Funding certain TADs
receivables it originated. Capital continued to have risk (and benefits) with
respect to the TADs receivables sold to Funding up to (or for) the amount of
interests it retained in the securitized receivables pool. The interests
retained by Capital were initially recorded at their allocated carrying amounts
based on the relative fair value of receivables sold and retained. Retained
interests were subsequently carried on the Company's balance sheets at fair
value, which was estimated based on the net present value of expected future
cash flows of Funding (i.e., expected proceeds from TADs receivables portfolio
minus expected payments of the borrowings and certain expenses), calculated
using the management's best estimates and assumptions. Capital's retained
interests were subordinated to the lenders' interest. Gains on sale of the
receivables to Funding, the revaluation gains and losses of the retained
interests and servicing fees were included in securitization loss in the
statements of income.

For the three months ended March 31, 2001, relatively large amounts of TADs
receivable held by Funding were determined to be uncollectible. At March 31,
2001, the interests retained by Capital were revalued based on the revised
assumptions reflecting the write-offs. The securitization loss of $520,000 for
the three months ended March 31, 2001 was mainly due to the revaluation loss of
retained interests. During the first quarter of fiscal 2002, the Company ended
its securitization arrangement.


                                       12





<PAGE>


Pre-tax Income:

         E-TAD Program

Pre-tax income attributable to the E-TAD business segment was $4,947,000 for the
three months ended March 31, 2002, as compared to $1,651,000 for the March, 2001
period, an increase of 199.6%. Management believes that this significant
improvement reflects the investment made in the expansion of the E-TAD program
and that such improvement will continue during fiscal 2002 although no assurance
can be given that the rate of growth will continue to be sustained.

         International Merchandise Trade

IMT pre-tax income for the quarter ended March 31, 2002 totaled $5,706,000 as
compared to $5,765,000 for the same period last year, a decrease of 1%,
consistent with the revenue reduction noted above. Management believes that
these operations will continue to have positive financial results for the
foreseeable future, although no assurance can be given that segment growth will
be sustained.

Net Income:

After provision for income taxes, the Company reported net income for the third
quarter of fiscal 2002 of $8,658,000 or $0.77 per share (diluted), as compared
to $6,533,000 or $0.60 per share (diluted) for the comparable period in fiscal
2001. This represented an increase in net income of 32.5% over last year and an
increase in earnings per share of 28.3% over last year. The income tax provision
increased to $1,995,000 in the three months ended March 31, 2002 compared to
$883,000 in the same period last year, primarily due to increased pre-tax income
from the E-TAD segment. Income tax has not been provided on unrepatriated
earnings of foreign subsidiaries, as it is the intention of the Company to
reinvest such earnings in their foreign operations. Substantially all of the
pre-tax income for the IMT segment is comprised of such unrepatriated earnings.

Discussion of Financial Condition - Liquidity and Capital Resources

At March 31, 2002, the Company had working capital of approximately $83,264,000
as compared to working capital of $63,177,000 at June 30,2001 or an increase of
$20,087,000. The principal reason for such a working capital increase is
reflective of increased business in both business segments as explained in the
succeeding statements. The majority of the cash is in the IMT business segment
and represents the unrepatriated earnings of the business segment since
inception. IMT cash is used for revenue generating activities and any changes in
cash are associated with the accounts receivable at a balance sheet date.
Changes in E-TADs cash balances are reflective of collections of TADs receivable
and the income tax receivable at June 30, 2001.

Gross TAD receivables at March 31, 2002 increased $14,310,000 from June 30, 2001
even though the June 30, 2001 balance contained the $8,000,000 now classified as
non-current receivable. This increase was due to increased originations of
E-TADs during the quarter. The allowance for doubtful accounts account was
$2,251,000 higher at March 31, 2002 than June 30, 2001 due to the higher volume
of E-TAD business. Accounts receivable - trade at March 31, 2002 increased
$18,353,000 from June 30, 2001. This increase was due to as higher volume of
unit sales during quarter.

The decrease of $2,194,000 in investment in special purpose entity reflects the
closure of the securitization facility since June 30, 2001.

The increase in deferred taxes of $958,000 since June 30, 2001 is due to timing
differences as a result of the increase in the allowance for doubtful accounts
without any major write-off during the nine month fiscal period ended
March 31, 2002.

Short-term borrowings in the E-TAD segment decreased $6,411,000 from June 30 to
March 31, 2002. Such changes in working capital, short-term borrowings, and cash
and cash equivalents resulted from normal variations in the utilization of these
items by the Company in its operations, and not due to any trend that is
expected to have a continuing effect upon operations in the future. However,
consistent with prudent business practice, management attempts to minimize cash
so as to reduce short-term borrowings and related interest expense. Such
decisions


                                       13





<PAGE>


significantly impact (in offsetting ways) the Company's cash and receivable
positions as well as utilization of existing credit lines.

At March 31, 2002, Capital had approximately $25,000,000 in Surety bonds
(exclusive of the $8,000,000 relating to the non-current receivable mentioned in
Note 3 to the condensed consolidated financial statements) guaranteeing payment
of E-TADs it had purchased, in addition to $25,000,000 in credit insurance.
During the year ended June 30, 2001, the Company wrote-off (directly and via
Funding) approximately $5,500,000 of past due TADs that had been guaranteed by a
surety that subsequently became insolvent. While impacting earnings, this
write-off did not materially affect the Company's liquidity or its ability to
finance its operations in fiscal 2001 or 2002. As noted in its Annual Report on
Form 10-K for the fiscal year ended June 30, 2001, management has taken various
steps to assure itself that it is dealing with creditworthy sureties with a
reputation for dealing appropriately with their obligations. Management is not
aware of any current issues that would materially impair its ability to collect
from its sureties in the event that its customers default on the TADs supported
by the surety obligations. In addition, the non-current receivable is using some
of the Company's liquidity position until the amounts are paid by the customer
and/or the bond companies. However, this situation has not had a material effect
on the Company's ability to raise capital or conduct its operations. At March
31, 2002, the Company's total stockholders' equity increased to $92,522,000 as
compared to $65,249,000 at June 30, 2001. The principal source of funds for the
Company's operations continues to be revenues earned by its operating
subsidiaries.

During the balance of fiscal 2002, the Company projects no significant
additional capital expenditures in connection with any of the Company's
International Merchandise Trade operations. Management plans to utilize current
cash on hand in connection with its international merchandise trading operations
principally for (i) general working capital reserves to meet any extraordinary
or unexpected expenses; (ii) and to finance, if required, the Company's trading
operations.

With regard to the E-TAD Program, management expects that it will have modest
capital expenditures relating to its existing operations, including
implementation of its E-Commerce initiatives.

Also, the Company's stock option plan permits the exchange of existing owned
shares of the Company's common stock, valued at the market price on the exercise
date, to pay for any option exercise in lieu of cash. Shares with market values
on the date of exercise totaling $18,479,000 and $868,000, for the nine months
ended March 31, 2002 and 2001, respectively, were used for such option exercises
and are recorded as treasury stock purchases.

During fiscal 2002, the Company incorporated in the State of Delaware a wholly
owned subsidiary named E-TAD Clearing Center, Inc. ("ECC"). This subsidiary is
expected to begin operations during the fourth quarter of fiscal 2002. This new
segment will utilize the E-TAD technology and is being introduced as an E-TAD
processing center for financial institutions and their customers where the
Company takes no risk with respect to the E-TAD, but only creates and processes
the E-TAD activity between the parties for which it earns fee income. There are
no current plans to have significant capital expenditures for this segment
during the quarter, but if the market introduction is successful, additional
system servers may be required.

At March 31, 2002, there existed three credit facilities with three different
banks through which the purchase of TADs were financed: $40 million and $15
million credit facilities with two financial institutions in the United States;
and a CN$5 million (Canadian) credit facility with a financial institution in
Canada. In order to sustain a future growth rate comparable to that experienced
in the past few years, management will need to further expand its credit
facilities and other means for financing its purchase of E-TADs. Although
discussions are ongoing with several other financial institutions to add
additional credit facilities to fund the future expansion of the TAD Program, no
assurance can be given that such discussions will result in the completion of
any new financing facilities. However, based upon its experience with its
present lenders, as well as discussions with other financial institutions,
management believes that it will be able to secure adequate financing to sustain
the growth of the TAD Program in the foreseeable future.

On April 24, 2002, Capital was informed by the surety bond company and
customer that the parties were proceeding with the financial restructure of the
customer's business in order to finalize the foregoing long-term notes but that
an additional thirty (30) days (until May 25, 2002) was required to complete the
additional financing and restructuring of the customer. Capital agreed to this
extension of its current terms through May 25, 2002 to allow the parties time to
complete this financing arrangement. Based on the creditworthiness of the surety
companies, management believes that the $8,500,000 currently supported by surety
bonds is fully collectible.


                                       14





<PAGE>


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


ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of loss from adverse changes in market conditions and
interest rates. Operating margins are dependent upon the ability of the Company
to maintain the spread or interest differential between the discount it charges
the customer for E-TAD transactions and the interest the Company is charged for
the financing of those transactions.

Management knows of no other trends reasonably expected to have a material
impact upon the Company's operations or liquidity in the foreseeable future
except for the effects of consequences as a result of actions in the Middle
East. In the short run, management believes that the aftermath of these events
delayed may delay completion of certain IMT transactions that would otherwise
have taken place. The long run effects on the Company's businesses are less
clear. Possible decreases (or slower rates of increases) in economic activity
might be reflected in lower revenues (and profits) from the Company's business
segments. However, this impact might be offset or exceeded either by the effects
of proposed economic stimuli, the cost savings from lower interest rates, or
increased E-TAD originations due to decreased availability of more conventional
credit sources to the Company's customers.

In summary, the Company would be negatively impacted by rapidly rising
short-term interest rates. Rising interest rates would adversely affect the
levels of gains achieved upon the sale of those E-TAD transactions.


Part II. Other Information

Item 1. Legal Proceedings

On March 20, 2002, the United States District Court for the Northern District of
Georgia, Atlanta Division, entered judgment in favor of Actrade Capital Inc. and
against Premier Holidays International, Inc. and Daniel D. Delpiano in the
amount of $4,602,594.18 plus interest, attorneys' fees and expenses. In the
judgment, the federal court further denied Premier and Delpiano's request for
judgment against Actrade. Premier and Delpiano alleged that Actrade had
committed fraud against them; however, the federal court held specifically that
these parties produced no competent evidence supporting any aspect of their
fraud claim. Additionally, the court held that the transactions at issues were
not usurious.

Following the Company's second quarter earnings release on January 23, 2002 and
an article that appeared in BARRON'S TECHNOLOGY WEEK SECTION (For The Week of
February 4 Through February 8, 2002), several holders of the Company's common
stock purporting to represent a class of similarly aggrieved stockholders have
filed lawsuits against the Company and certain directors and senior officers.
These complaints allege that from March 11, 1999 through February 8, 2002,
inclusive (the "Class Period"), the Company and certain of its officers and
directors violated Section 10(b) of the Securities Exchange Act of 1934 (the
"Exchange Act"), and Rule 10b-5 promulgated thereunder, and Section 20(a) of the
Exchange Act, by issuing a series of press releases and public filings
containing materially false or misleading statements representing that the
Company provided short-term loans to businesses to finance commercial
transactions. The complaints allege that these statements were false and
misleading because the defendants knew, or recklessly disregarded, that the
Company loaned millions of dollars to individuals for non-commercial purposes,
defrauded its sureties into providing coverage for these loans, and had
overstated its financial results based on these fraudulent lending practices.
The complaints further allege that defendants' actions artificially inflated the
price of the Company's common stock during the Class Period. The plaintiffs are
seeking unspecified damages for the class and unspecified costs and expenses.
The Company disputes the plaintiffs' claims and intends to defend the lawsuits
vigorously.

Depending on the timing and the amount, an unfavorable resolution of some or all
of these matters could materially affect the Company's business, future results
of operations, financial position or cash flows in a particular period.


                                       15





<PAGE>


Item 6.  Exhibits and Reports on Form 8-K

         None during this period.









                                       16





<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, 2002



ACTRADE FINANCIAL TECHNOLOGIES LTD.


BY: /s/ Joseph P. D'Alessandris
    --------------------------------
    Chief Financial Officer






                                       17