<PAGE>



                       SECURITIES AND 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, 2001

                         Commission File Number 0-18711

                       ACTRADE FINANCIAL TECHNOLOGIES LTD.
                     (formerly Actrade International, 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 (2) has been subject to such filing
requirements for the past 90 days.

                             Yes [X] No [ ]

Indicate the number of Shares outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date. As of April 30, 2001 there were
outstanding 9,070,020 shares of Common Stock, par value $.0001.








<PAGE>




                                      INDEX


Part I.  Financial Information

                                                                            Page

<TABLE>
<CAPTION>

<S>                                                                           <C>
Item 1.  Consolidated Financial Statements (Unaudited)

         Consolidated Balance Sheets as of March 31, 2001 and
             June 30, 2000                                                     3
         Consolidated Statements of Income for the nine and
            three months ended March 31, 2001 and 2000                         4

         Consolidated Statements of Cash Flows for the nine
           months ended March 31, 2001 and 2000                                5

         Notes to Consolidated Financial Statements                            6

Item 2.  Management's Discussion and Analysis of Financial Condition and
                Results of Operations                                          8

Part II. Other Information

Item 4.  Submission of Matters to a Vote of Security Holders                  16

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

Signatures                                                                    17

</TABLE>


                                       2







<PAGE>




ACTRADE FINANCIAL TECHNOLOGIES LTD. AND SUBSIDIARIES
(Formerly Actrade International, Ltd.)

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

<TABLE>
<CAPTION>

                                                                                          March 31,        June 30,
                                                                                            2001             2000
                                                                                         (Unaudited)
<S>                                                                                         <C>              <C>
     ASSETS
       CURRENT ASSETS:
          Cash and cash equivalents                                                         $14,867         $ 9,424
          Accounts receivable - trade                                                        27,192          18,202
          Trade acceptance drafts receivable and investment in and due from
            qualifying special purpose entity (net of deferred income
            and allowance for doubtful accounts of $1,400 and $3,042 at
            March 31, 2001 and $1,311 and $3,044 at June 30, 2000)                           37,921          44,717
          Deferred income taxes                                                                 934             905
          Other current assets                                                                  286             423
                                                                                            -------         -------
              Total Current Assets                                                           81,200          73,671

        PROPERTY AND EQUIPMENT, NET                                                           1,873           1,844

        OTHER ASSETS                                                                            659             401
                                                                                            -------         -------
     TOTAL ASSETS                                                                           $83,732         $75,916
                                                                                            =======         =======
     LIABILITIES AND STOCKHOLDERS' EQUITY
       CURRENT LIABILITIES:
          Short-term borrowings                                                             $23,458         $32,707
          Other current liabilities                                                           2,213           2,731
                                                                                            -------         -------
              Total Current Liabilities                                                      25,671          35,438
                                                                                            =======         =======
       STOCKHOLDERS' EQUITY:
          Common stock, $0.0001 par value; authorized 100,000,000 shares, issued
            and outstanding 9,446,350 and 9,070,020 shares at March 31, 2001 and
            9,332,865 and 8,983,695 shares at June 30, 2000                                       1               1
          Additional paid-in capital                                                         22,691          21,505
          Retained earnings                                                                  42,829          25,640
          Accumulated other comprehensive income (loss)                                          67              (9)
          Treasury stock at cost                                                             (7,527)         (6,659)
                                                                                            -------         -------
               Total Stockholders' Equity                                                    58,061          40,478
                                                                                            -------         -------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                             $83,732         $75,916
                                                                                            =======         =======

</TABLE>


     See notes to consolidated financial statements.

                                       3





<PAGE>


              ACTRADE FINANCIAL TECHNOLOGIES LTD. AND SUBSIDIARIES
                     (Formerly Actrade International, Ltd.)

                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)

--------------------------------------------------------------------------------
                  Dollars in thousands except per share amounts

<TABLE>
<CAPTION>
                                                         Nine months ended                Three months ended
                                                             March 31,                         March 31,
                                                      ------------------------         ------------------------
                                                        2001           2000              2001            2000
<S>                                                   <C>             <C>              <C>             <C>
Revenue:
          Trade Acceptance Drafts                     $ 21,231        $ 12,832         $ 7,988         $ 4,681
          International Merchandise Trade               21,658           9,007           7,987           3,483
                                                      --------        --------         -------         -------
Total Revenue                                           42,889          21,839          15,975           8,164
                                                      --------        --------         -------         -------

Operating Expenses:
          General and administrative                    (8,166)         (6,910)         (2,837)         (2,847)
          Bad debt                                      (2,273)         (3,626)         (1,012)         (1,310)
          Interest, net                                (13,040)         (3,443)         (4,710)         (1,127)
                                                      --------        --------         -------         -------
Total Operating Expenses                               (23,479)        (13,979)         (8,559)         (5,284)
                                                      --------        --------         -------         -------

Income before Provision for Income Taxes                19,410           7,860           7,416           2,880

Provision for Income Taxes - (Expense) Benefit          (2,221)           (166)           (883)            307
                                                      --------        --------         -------         -------

Net Income                                            $ 17,189         $ 7,694         $ 6,533         $ 3,187
                                                      ========         =======         =======         =======

Net Income per Common Share:
Basic                                                    $1.90           $0.89           $0.72           $0.36
Diluted                                                  $1.61           $0.86           $0.60           $0.35

Weighted Average Number of Shares Outstanding:
Basic                                                9,031,990       8,661,434       9,064,937       8,810,196
Diluted                                             10,698,237       8,926,306      10,907,023       9,203,399

</TABLE>


See notes to consolidated financial statements.


                                       4





<PAGE>



ACTRADE FINANCIAL TECHNOLOGIES LTD. AND SUBSIDIARIES
(Formerly Actrade International, Ltd.)

CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

-------------------------------------------------------------------------------
                              Dollars in thousands
<TABLE>
<CAPTION>

                                                                                       Nine months ended March 31,
                                                                                       --------------------------
                                                                                           2001           2000
<S>                                                                                       <C>            <C>
     CASH FLOWS FROM OPERATING ACTIVITIES
       Net income                                                                         $17,189        $7,694
       Adjustments to reconcile net income to net cash provided by
          (used in) by operating activities:
           Depreciation and amortization                                                      699           355
           Bad debt expense                                                                 2,273         3,626
           Deferred income                                                                     89           909
           Loss (income) from qualifying special purpose entity                               639        (1,108)
           Compensation expense-amortization of warrants issued                                 0           186
           Deferred income taxes                                                              (29)         (181)
      Changes in operating assets and liabilities:
           Accounts receivable - trade and
            trade acceptance drafts receivable and investment in and
            due from qualifying special purpose entity                                     (5,195)      (34,339)
          Other assets                                                                       (116)       (1,410)
          Other current liabilities                                                          (518)        1,676
                                                                                          -------      --------
     Net cash provided by (used in) operating activities                                   15,031       (22,592)
                                                                                          -------      --------
     CASH FLOWS FROM INVESTING ACTIVITIES
          Purchase of property and equipment                                                 (657)         (835)
                                                                                          -------      --------
     Net cash used in investing activities                                                   (657)         (835)
                                                                                          -------      --------
     CASH FLOWS FROM FINANCING ACTIVITIES
          Change in short-term borrowings                                                  (9,249)       25,093
          Proceeds from stock option exercise                                                 318           145
                                                                                          -------      --------
     Net cash (used in) provided by financing activities                                   (8,931)       25,238
                                                                                          -------      --------
     NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                   5,443         1,811
     Cash, beginning of period                                                              9,424         5,199
                                                                                          -------      --------
     CASH, END OF PERIOD                                                                  $14,867        $7,010
                                                                                          =======      ========
     Supplemental disclosures of cash flow information:
          Interest paid during the fiscal period                                          $13,156        $1,441
                                                                                          =======      ========

          Income taxes paid during the fiscal period                                       $2,887          $991
                                                                                          =======      ========
          Exercise of options in exchange for common stock                                   $868        $3,743
                                                                                          =======      ========
</TABLE>

See notes to consolidated financial statements.

                                       5





<PAGE>


              ACTRADE FINANCIAL TECHNOLOGIES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                              Dollars in thousands



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 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
    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, 2000.

    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.

    The Company has adopted the Securities and Exchange Commission Staff
    Accounting Bulletin No. 101 ("SAB 101") - Revenue Recognition in Financial
    Statements. SAB 101 was issued to provide guidance in applying generally
    accepted accounting principles to the large number of revenue recognition
    issues that registrants encounter. Accordingly, the Company changed the
    income statement presentation of Revenue - International Merchandise Trade
    from reflecting sales and cost of sales to a net basis. In addition, the
    Company will no longer disclose, in the consolidated statements of income,
    Gross Sales - Trade Acceptance Drafts and Gross Sales - International
    Merchandise Trade. The prior period presentation has been changed to conform
    to the current period presentation. The adoption of SAB 101 did not have any
    impact on the net income of the Company.

2.  Segment Information

    The Company's business operations are divided into two principal business
    segments: the trade acceptance draft 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.

                                       6




<PAGE>



    The following is a summary of the Company's segment information:




<TABLE>
<CAPTION>
                                                                 Nine months ended   Three months ended
                                                                      March 31,           March 31,
                                                                 -----------------   ------------------
                                                                   2001      2000      2001      2000
<S>                                                              <C>       <C>       <C>       <C>
Revenue:
  Trade Acceptance Drafts                                        $21,231   $12,832   $ 7,988    $4,681
  International Merchandise Trade                                 21,658     9,007     7,987     3,483
                                                                 -------   -------   -------    ------
                                                                 $42,889   $21,839   $15,975    $8,164
                                                                 =======   =======   =======    ======

Income before Provision for
  Income Taxes:
  Trade Acceptance Drafts                                        $ 4,346   $ 1,516   $ 1,651    $  324
  International Merchandise Trade                                 15,064     6,344     5,765     2,556
                                                                 -------   -------   -------    ------
                                                                 $19,410   $ 7,860   $ 7,416    $2,880
                                                                 =======   =======   =======    ======

Depreciation and Amortization:
  Trade Acceptance Drafts                                        $   688   $   340   $   242    $  219
  International Merchandise Trade                                     11        15         4         7
                                                                 -------   -------   -------    ------
                                                                 $   699   $   355   $   246    $  226
                                                                 =======   =======   =======    ======


Interest, Net:
  Trade Acceptance Drafts                                        $ 7,386   $ 1,464   $ 2,757    $  561
  International Merchandise Trade                                  5,654     1,979     1,953       566
                                                                 -------   -------   -------    ------
                                                                 $13,040   $ 3,443   $ 4,710    $1,127
                                                                 =======   =======   =======    ======
</TABLE>


<TABLE>
<CAPTION>

                                                March 31,                June 30,
                                                  2001                     2000
                                                ---------                --------
<S>                                              <C>                     <C>
Total Assets:
  Trade Acceptance Drafts                        $28,332                 $34,356
  International Merchandise Trade                 55,400                  41,560
                                                 -------                 ------
                                                 $83,732                 $75,916
                                                 =======                 =======

</TABLE>






                                       7




<PAGE>


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.

    To the extent possible, the following discussion will highlight the relative
    needs of the Company with respect to both its international merchandise
    trade activities and in connection with the ongoing expansion of its E-TAD
    Program.

        Segment Reporting Disclosures.

    The Company's sales are generated from two major business segments: the
    trade acceptance draft program ("TAD Program") including the recently
    introduced E-TAD Program, and international merchandise trade. For purposes
    of this Report, references to the E-TAD Program include the original TAD
    Program. A TAD is a post-dated payment draft prepared by the seller of goods
    or services ("Supplier") and accepted by the buyer of the goods or services
    ("Buyer") 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 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 and Actrade
    Capital Canada, Inc. ("Actrade Canada") in Canada. The Company's
    international merchandise trade operations are conducted through Actrade
    International Corp. ("International"), which is engaged in the re-sale of
    American made products to foreign buyers and Actrade S.A., including its
    wholly owned subsidiary Actrade Resources, Inc. ("Resources"), which engage
    in the sale of non-US products to foreign buyers. See discussion immediately
    below.

                                       8




<PAGE>



        Changes in Income Statement Information


    Beginning with the Company's 10-K Report for fiscal 2000, the Company
    adopted Securities and Exchange Commission Staff Accounting Bulletin No. 101
    ("SAB101") - Revenue Recognition in Financial Statements. In essence, the
    adoption of SAB101 changed the presentation of revenue information on the
    Consolidated Statements of Income of the Company. In conformity with the
    requirements of SAB101, the Company's Consolidated Statements of Income
    simply reflect "Revenue". In the case of Capital, "Revenue" represents the
    net of total TAD originations (i.e. the face amount of the TADs purchased by
    Capital) less the cost of purchasing those TADs. Similarly "Revenue" from
    its International Merchandise Trade activities is also reported on a net
    basis. This change provides uniformity of presentation among the Company's
    two major revenue sectors.

    On a combined basis the term "Revenue" is the equivalent of the amount
    reported as "Gross Profit" in prior periods. All prior period amounts and
    discussions have been changed to reflect the new presentation of revenue.

    The adoption of SAB 101 did not have any impact on the net income of the
    Company.


I.  Results of Operations - Nine and Three Months Ended March 31, 2001, Fiscal
    2001 Compared to Nine and Three Months Ended March 31, 2000, Fiscal 2000.

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

        A. Nine Months Ended March 31, 2001 vs. March 31, 2000:

         Revenue:

    For the first nine months of fiscal 2001, the Company had consolidated
    revenue of $42,889,000 as compared to $21,839,000 for the same period in
    fiscal 2000, an increase of 96.4%. This increase resulted from substantial
    revenue increases in each of the Company's business segments as outlined
    below.


    E-TAD Program

    Revenue for the nine months ended March 31, 2001 from the E-TAD Program
    totaled $21,231,000, as compared to $12,832,000 for the nine months ended
    March 31, 2000, an increase of 65.5%. This increase represents a higher
    volume of E-TAD transactions that management believes were a direct result
    of the accelerated marketing and expansion program begun during the prior
    fiscal year and which continues today. (See also "Expenses" and "Liquidity
    and Capital Resources" below).

                                       9




<PAGE>



    For the nine months ended March 31, 2001, total TAD originations
    (representing the face amount of all TAD transactions) totaled $267,827,000.

    International Merchandise Trade

    Revenue from international merchandise trade during this period climbed to
    $21,658,000 for the first nine months of fiscal 2001, as compared to
    $9,007,000 for the first nine months of fiscal 2000, an increase of 140.5%.
    This increase was the result of increased product 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. During the first nine months of fiscal 2001,
    the Company's principal overseas markets continued to be (i) South America
    (ii) Europe, (iii) the Pacific Rim and (iv) Middle East.

    See "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, 2001
    were $8,166,000, as compared to $6,910,000 for the same period last year, an
    increase of 18.2%. This increase includes $559,000 of additional fees paid
    in connection with the increased international trade revenue noted above as
    well as increased legal fees. The legal fee increase of $981,000 reflects
    increased litigation costs to recover monies from defaulted TADs. Most of
    these costs have been incurred in connection with the litigation described
    in Note 13 to the financial statements of the Company's Annual Report on
    Form 10-K for the fiscal year ended June 30, 2000. Other professional fees
    decreased $443,000 due to non-recurring financial and e-commerce-consulting
    projects undertaken during the nine months ended March 31, 2000.
    Compensation (including commissions and facility costs) declined to
    $3,632,000 in the first nine months of fiscal 2001 from $3,837,000 in the
    prior period. This reflected cost reductions arising from the closing of
    Capital's offices in California and Georgia and the associated reduction in
    personnel, offset in part by the expansion of sales force and back-office
    support personnel and additional office space to support the new E-TAD
    Program. This expansion also accounted for the $548,000 increase in other
    components of general and administrative expenses.

    With respect to the balance of fiscal 2001, management projects that the
    costs related to the E-TAD Program operations will continue to escalate,
    particularly as marketing efforts for the E-TAD Program increase and Capital
    implements its E-Commerce program. However, management believes that the
    impact of these continued increased costs would be outweighed by increased
    revenue as the benefits of the fiscal 2001 business and system development
    mature.

                                       10




<PAGE>


    Bad Debt

    Bad debt expense arises almost exclusively from the TAD business segment.
    International merchandise trade transactions are generally secured and the
    Company has had no history of losses. For the first nine months of fiscal
    2001, the Company provided for bad debt expense in the amount of $2,273,000
    as compared to $3,626,000 in the first nine months of fiscal 2000. In
    evaluating bad debt, management looks at the adequacy of its allowance for
    doubtful accounts based on the status of individual past due accounts as
    well as estimating the aggregate amount realizable based on aging.

    Interest

    For the first nine months of fiscal 2001, the Company incurred net interest
    expense of $13,040,000 as compared to $3,443,000 in the same period last
    year. This increase is due to volume growth in both business segments. Fees
    and other expenses resulting from the ongoing need for new credit facilities
    are expensed as incurred due to the short-term nature of these facilities.
    Interest expense is expected to rise consistent with expected revenue growth
    in both business segments noted above.

            Pre-tax Income:

    E-TAD Program

    Pre-tax income attributable to the TAD business segment was $4,346,000 for
    the first nine months of fiscal 2001, as compared to $1,516,000 for the
    first nine months of fiscal 2000, an increase of 186.7%. Management believes
    that this significant improvement reflects the investment made in the
    expansion of the E-TAD program during fiscal 2000 and that such improvement
    will continue during the balance of fiscal 2001.

    International Merchandise Trade

    Pre-tax income for the nine months ended March 31, 2001 from international
    merchandise trade operations totaled $15,064,000 as compared to $6,344,000
    for the first nine months of fiscal 2000, an increase of 137.5%. 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, the Company reported net income for the
    first nine months of fiscal 2001 of $17,189,000, or $1.61 per share
    (diluted), as compared to $7,694,000 or $0.86 per share (diluted), for the
    first nine months of fiscal 2000. This represented an increase in net income
    of 123.4% over the same period last year and an

                                       11




<PAGE>


    increase in earnings per share of 87.2% over last year. The income tax
    provision increased from $166,000 in the first nine months of fiscal 2000 to
    $2,221,000 in the current period primarily due to increased pre-tax income
    from the TAD segment. Income tax has not been provided on unrepatriated
    earnings of foreign subsidiaries, as currently it is the intention of the
    Company to reinvest such earnings in their foreign operations. Substantially
    all of the pre-tax income for the International Merchandise Trade segment is
    comprised of such unrepatriated earnings.

         B. Three Months Ended March 31, 2001 vs. March 31, 2000:

         Revenue:

    For the three months ended March 31, 2001 of fiscal 2001, the Company had
    consolidated revenue of $15,975,000 as compared to $8,164,000 for the same
    period in fiscal 2000, an increase of 95.7%. This increase resulted from
    substantial revenue increases in each of the Company's business segments as
    outlined below.

    E-TAD Program

    Revenue for the third quarter of fiscal 2001 from the E-TAD Program totaled
    $7,988,000, as compared to $4,681,000 in the third quarter of fiscal 2000,
    an increase of 70.6%. This increase represents a higher volume of E-TAD
    transactions that management believes were a direct result of the
    accelerated marketing and expansion program begun during the prior fiscal
    year and which continues today. (See also "Expenses" and "Liquidity and
    Capital Resources" below).

    For the third quarter of fiscal 2001, total TAD originations (representing
    the face amount of all TAD transactions) totaled $102,879,000.

    International Merchandise Trade

    Revenue from international merchandise trade during this period climbed to
    $7,987,000 for the third quarter of fiscal 2001, as compared to $3,483,000
    for the third quarter of fiscal 2000, an increase of 129.3%. This increase
    was the result of increased product 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. During the third quarter of fiscal 2001, the Company's
    principal overseas markets continued to be (i) South America (ii) Europe,
    (iii) the Pacific Rim and (iv) Middle East.

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

                                       12




<PAGE>


    Expenses:

    General and Administrative

    General and administrative expenses for the three months ended March 31,
    2001 were $2,837,000, as compared to $2,847,000 for the same period last
    year, a decrease of 0.4%. This includes a legal fee increase of $158,000
    reflecting increased litigation costs to recover monies from defaulted TADs.
    Most of these costs were incurred in connection with the litigation
    described in Note 13 to the financial statements of the Company's Annual
    Report on Form 10-K for the fiscal year ended June 30, 2000. Other
    professional fees decreased $227,000 due to non-recurring financial and
    e-commerce-consulting projects undertaken during the nine months ended March
    31, 2000. Compensation (including commissions and facility costs) increased
    to $1,353,000 in this quarter from $1,216,000 in the same period last year.
    The expansion of the sales force and back-office support personnel and
    additional office space to support the new E-TAD program were offset in part
    by cost reductions arising from the closing of Capital's offices in
    California and Georgia and the associated reduction in personnel. This
    expansion also accounted for a $127,000 increase in other components of
    general and administrative expenses.

    With respect to the balance of fiscal 2001, management projects the costs
    related to the E-TAD Program operations will continue to escalate,
    particularly as marketing efforts for the E-TAD Program increase and Capital
    implements its E-Commerce program. However, management believes that the
    impact of these continued increased costs would be outweighed by increased
    revenue as the benefits of the fiscal 2001 business and system development
    mature.

    Bad Debt

    Bad debt expense arises almost exclusively from the TAD business segment.
    International merchandise trade transactions are generally secured and the
    Company has had no history of losses. For the three months ended March 31,
    2001, the Company provided for bad debt expense in the amount of $1,012,000
    as compared to $1,310,000 during the same quarter of fiscal 2000. In
    evaluating bad debt, management looks at the adequacy of its allowance for
    doubtful accounts based on the status of individual past due accounts as
    well as estimating the aggregate amount realizable based on aging.

    Interest

    For the third quarter of fiscal 2001, the Company incurred net interest
    expense of $4,710,000 as compared to $1,127,000 in the same period last
    year. This increase is due to volume growth in both business segments. Fees
    and other expenses resulting from the ongoing need for new credit facilities
    are expensed as incurred due to the short-term nature of these facilities.
    Interest expense is expected to rise consistent with expected revenue growth
    in both business segments noted above.

                                       13





<PAGE>


           Pre-tax Income:

    E-TAD Program

    Pre-tax income attributable to the TAD business segment was $1,651,000 for
    the third quarter of fiscal 2001, as compared to $324,000 for the third
    quarter of fiscal 2000, an increase of 409.6%. Management believes that this
    significant improvement reflects the investment made in the expansion of the
    E-TAD program during fiscal 2000 and that such improvement will continue
    during the balance of fiscal 2001.

    International Merchandise Trade

    Pre-tax income for the three months ended March 31, 2001 from international
    merchandise trade operations totaled $5,765,000 as compared to $2,556,000
    for the three months ended March 31, 2000, an increase of 125.5%. 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, the Company reported net income for the
    third quarter of fiscal 2001 of $6,533,000, or $0.60 per share (diluted), as
    compared to $3,187,000, or $0.35 per share (diluted), for the third quarter
    of fiscal 2000. This represented an increase in net income of 105.0% over
    the same period last year and an increase in earnings per share of 71.4%
    over last year. The tax benefit of $307,000 for the third quarter of fiscal
    2000 changed to a provision for $883,000 in the current period primarily due
    to increased pre-tax income from the TAD segment. Income tax has not been
    provided on unrepatriated earnings of foreign subsidiaries, as currently it
    is the intention of the Company to reinvest such earnings in their foreign
    operations. Substantially all of the pre-tax income for the International
    Merchandise Trade segment is comprised of such unrepatriated earnings.

    II. Discussion of Financial Condition - Liquidity and Capital Resources

    At March 31, 2001, the Company had working capital of $55,529,000 as
    compared to working capital of $38,233,000 at June 30,2000. As of March 31,
    2001 the Company had cash and cash equivalents of $14,867,000 as compared to
    $9,424,000 at June 30, 2000. Short-term borrowings decreased $9,249,000 from
    June 30, 2000 to March 31, 2001. Such changes in working capital, short-term
    borrowings, and cash and cash equivalents resulted from normal variations in
    the utilization of these items by Capital in its operations, and not due to
    any trend which is expected to have a continuing effect upon operations in
    the future. However, consistent with prudent business practice, management
    attempts to minimize cash at Capital so as to reduce short-term borrowings
    and related interest expense.

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<PAGE>



    At March 31, 2001, Capital had approximately $33.8 million in Surety bonds
    guaranteeing payment of E-TADs it had purchased, in addition to $12.5
    million in credit insurance.

    At March 31, 2001, the Company's total stockholders' equity increased to
    $58,061,000 as compared to $40,478,000 at June 30, 2000. The principal
    source of funds for the Company's operations continues to be the net
    earnings of its operating subsidiaries.

    During the balance of fiscal 2001, 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 trade
    operations principally for (i) general working capital reserves to meet any
    extraordinary or unexpected expenses; (ii) and to finance, if required, the
    Company's trade operations.

    However, in connection with the E-TAD Program, management expects that it
    will have significant additional capital expenditures relating to the
    ongoing expansion of sales and marketing operations, including
    implementation of its E-Commerce initiative.

    At March 31, 2001, there existed four credit facilities with four different
    banks through which the purchase of TADs were financed: a $25 million
    securitization facility; $20 million and $40 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.

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


  Recent Accounting Pronouncements

In September 2000, the Financial Accounting Standards Board issued Statement of
Financial Standards ("SFAS") No. 140, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities. SFAS No. 140 replaces SFAS
No. 125, issued in June 1996. It revises the standards for accounting for
securitizations and other transfers of financial assets and collateral and
requires certain disclosures, but it carries over most of the provisions of SFAS
No. 125 without reconsideration. SFAS No. 140 is effective for transfers and
servicing of financial assets and extinguishments of liabilities occurring

                                       15




<PAGE>


after March 31, 2001. SFAS No. 140 is effective for recognition and
reclassification of collateral and for disclosures relating to securitization
transactions and collateral for fiscal years ending after December 15, 2000. The
Company is currently evaluating this pronouncement; however, the Company does
not expect it to have a material effect on its financial position or results of
operations.

Part II. OTHER INFORMATION

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

The Annual Meeting of the Shareholders of the Company was held on March 23, 2001
at which meeting the shareholders voted upon the election of the current Board
of Directors. Voting for directors was as follows:

<TABLE>
<CAPTION>
                                            Number of Shares
                                         --------------------
                                         For          Withheld
                                         ---          --------
<S>                                   <C>              <C>
   Amos Aharoni                       5,196,957        768,110

   Prof. Harry Friedman               5,950,280         14,787

   Robert Furstner                    5,951,380         13,687

   Elizabeth Melnik                   5,701,651        263,416

   Alexander C. Stonkus               5,246,779        718,288

   John Woerner                       5,952,480         12,587

</TABLE>


Item 6. Exhibits and Reports on Form 8-K

  The Company filed a report on Form 8-K dated January 3, 2001 describing recent
additions and changes to the Company's key executive personnel.


                                       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 30, 2001

ACTRADE FINANCIAL TECHNOLOGIES LTD.

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

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