UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


                    For the quarter ended SEPTEMBER 30, 1998


             [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

               For the transition period from _________to_________

                           Commission File No. 0-12374

                                  EQUITEX, INC.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)


Delaware                                                              84-0905189
-------------------------------                              -------------------
(State or other jurisdiction of                                    (IRS Employer
incorporation or organization)                               Identification No.)


7315 East Peakview Avenue
Englewood, Colorado                                                        80111
----------------------------------------                              ----------
(Address of principal executive offices)                              (Zip code)


                                 (303) 796-8940
               ---------------------------------------------------
               (Registrant's telephone number including area code)


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months,  and (2) has been subject to such filing  requirements
for the past 90 days.    Yes [X]    No [ ]


Number of shares of common stock outstanding at November 13, 1998: 5,352,315

<PAGE>
                                  EQUITEX, INC.


Part 1.  FINANCIAL INFORMATION

Item 1.  FINANCIAL STATEMENTS

     The accompanying interim unaudited condensed financial statements have been
prepared in accordance  with the  instructions to Form 10-QSB and do not include
all the  information  and footnotes  required by generally  accepted  accounting
principles for complete financial statements. In the opinion of management,  all
adjustments  (consisting of normal recurring  adjustments)  considered necessary
for a fair presentation have been included,  and the disclosures are adequate to
make the information  presented not misleading.  Operating results for the three
and nine months ended September 30, 1998 are not  necessarily  indicative of the
results  that may be  expected  for the year  ended  December  31,  1998.  These
statements should be read in conjunction with the financial statements and notes
thereto  included in the Annual  10-KSB Report  (filed with the  Securities  and
Exchange Commission) for the year ended December 31, 1997.




                                       F-1
<PAGE>
                                  EQUITEX, INC.
                      Statements of Assets and Liabilities



                                                       SEPT. 30,     DEC. 31,
                                                         1998          1997
                                                      -----------   ----------
                                                      (Unaudited)
ASSETS

Investments, at fair value:

 Securities (cost of $5,017,639 and
   $3,568,045 in 1998 and 1997, respectively) ....    $4,362,728    $4,165,993
 Notes receivable, net of allowance
   for uncollectible accounts of $40,293
   in 1998 and 1997, respectively ................       942,552       418,210
 Accrued interest receivable, net of
   allowance for uncollectible interest
   of $35 ........................................        30,945         5,701
 Trade receivables, net of allowance
   for uncollectible accounts of $69,445
   and $53,742 in 1998 and 1997, respectively ....       204,098       110,954
                                                      ----------    ----------
                                                       5,540,323     4,700,858

Cash .............................................       193,737         9,187

Accounts receivable - brokers ....................          --          73,741

Subscriptions receivable .........................         1,446          --

Note receivable  - director ......................        45,472          --

Contract deposit receivable, net of
   allowance for uncollectibility of $150,000 ....       150,000       150,000

Income taxes refundable ..........................         2,150         2,150

Furniture and equipment, net of
   accumulated depreciation of $125,320
   and $117,750 in 1998 and 1997, respectively ...        28,710        29,204

Deferred income tax benefit ......................          --          63,180

Other ............................................        33,819        10,105
                                                      ----------    ----------
                                                      $5,995,657    $5,038,425
                                                      ==========    ==========

                                                                     (Continued)
The accompanying notes are a part of this statement.

                                       F-2
<PAGE>
                                  EQUITEX, INC.
                      Statements of Assets and Liabilities


                                                       SEPT. 30,     DEC. 31,
                                                         1998          1997
                                                      -----------   ----------
                                                      (Unaudited)

LIABILITIES AND NET ASSETS

Liabilities
   Notes payable - related parties ...............    $  242,328    $  177,599
   Notes payable - others ........................       247,500       250,000
   Accounts payable and other
     accrued liabilities .........................       201,797       121,349
   Accounts payable to brokers ...................       863,864       650,302
   Accrued bonus to officer ......................       646,835       299,259
                                                      ----------    ----------
                                                       2,202,324     1,498,509

Net Assets
   Preferred stock, par value $.01;
     2,000,000 shares authorized; no
     shares issued
   Common stock,  par value $.02;
     a 7,500,000 shares authorized; 5,206,665
     and 3,494,465 shares issued; 5,173,315
     and 3,461,115 shares outstanding in
     1998 and 1997, respectively .................       104,133        69,889
   Additional paid-in capital ....................     6,840,022     4,644,275

   Retained earnings
     Accumulated deficit prior to
       becoming a BDC ............................      (118,874)     (118,874)
     Accumulated net investment loss .............    (14,914,865)  (13,431,269)
     Accumulated net realized gains from
       sales and permanent write-downs
       of investments ............................    12,885,066    12,125,185
     Unrealized net gains (losses) on
       investments (net of deferred income
       taxes of $233,201 in 1998
       and 1997, respectively) ...................      (888,112)      364,747
   Less: treasury stock at cost
       (33,350 shares) ...........................      (114,037)     (114,037)
                                                      ----------    ----------
                                                       3,793,333     3,539,916
                                                      ----------    ----------
                                                      $5,995,657    $5,038,425
                                                      ==========    ==========

The accompanying notes are a part of this statement.

                                       F-3
<PAGE>
                                  EQUITEX, INC.
                             Schedule of Investments
                               September 30, 1998
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                   NUMBER        COST
                                                     OF         AND/OR       FAIR
COMPANY                                         SHARES OWNED    EQUITY       VALUE
-------                                         ------------    ------       -----
<S>                                          <C>              <C>          <C>
CONTROLLED COMPANIES
COMMON STOCKS - PRIVATE
  MARKET METHOD OF VALUATION (a)(e)
VP Sports, Inc. .........................
  Entity formed to seek acquisitions
  in the manufacturing segment of
  the sporting goods and leisure-
  time industry .........................         2,000,000   $  250,000   $1,000,000

COMMON STOCKS - BOARD APPRAISAL
  METHOD OF VALUATION
First Teleservices Corporation
  Fee-based financial services ..........               100      565,639      565,639

COMMON STOCKS - COST METHOD
  OF VALUATION
Triumph Sports Group
  Entity formed to seek acquisitions
  in the non-manufacturing licensed
  and supplemental segments of the
  sporting goods and leisure-time
  industry ..............................         1,500,000      375,000      375,000
First Telebank Corporation
  Bank acquisition company ..............            20,000      200,000      200,000

AFFILIATED COMPANIES
COMMON STOCKS - PUBLIC MARKET
  METHOD OF VALUATION (c)(e)
RDM Sports Group
  Manufacturer of fitness
  equipment and juvenile products .......         4,979,437    1,088,815       22,407

OTHER - PUBLIC MARKET METHOD
  OF VALUATION
RDM Sports Group                             8% Convertible
  Manufacturer of fitness                      Subordinated
  equipment and juvenile products .......        Debentures      150,682         --
                                                              ----------   ----------

   Sub-Total
   CONTROLLED AND AFFILIATED COMPANIES ..                      2,630,136    2,163,046
                                                              ----------   ----------
</TABLE>
                                                                     (Continued)
The accompanying notes are a part of this statement.

                                       F-4
<PAGE>
                                  EQUITEX, INC.
                        Schedule of Investments (Page 2)
                               September 30, 1998
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                   NUMBER        COST
                                                     OF         AND/OR       FAIR
COMPANY                                         SHARES OWNED    EQUITY       VALUE
-------                                         ------------    ------       -----
<S>                                          <C>              <C>          <C>
UNAFFILIATED COMPANIES
COMMON STOCKS - PUBLIC MARKET
  METHOD OF VALUATION
IntraNet Solutions, Inc. (formerly
  MacGregor Sports & Fitness, Inc.)
  Document management services,
    web-based internet software,
    electronic document management
    and demand printing .................           348,250    1,399,096    1,349,468
Zamba (formerly Racotek)
  Medical technology ....................           200,000      814,907      375,000
NevStar Gaming Corporation
  Gaming development ....................             7,000       38,500        7,000

COMMON STOCKS - PRIVATE MARKET
  METHOD OF VALUATION (a)(e)

All Systems Go
  Software development ..................         20,000(b)       25,000       25,000

Ocean Power Technology
  Alternative energy ....................         35,714(b)       40,000       98,214
  research and development ..............           100,000         --        275,000

Gain, Inc. ..............................
  Male vascular devices .................         20,000(b)       50,000       50,000

Juice Island
  Health food stores ....................         10,000(b)       20,000       20,000

WARRANTS (f)(e)
Juice Island
  Health food stores ....................             2,500         --           --
                                            ---------------   ----------   ----------

  Sub-total
  UNAFFILIATED COMPANIES ................                      2,387,503    2,199,682
                                                              ----------   ----------

  Total
  ALL COMPANIES .........................                     $5,017,639   $4,362,728
                                                              ==========   ==========
</TABLE>

                                                                     (Continued)
The accompanying notes are a part of this statement.

                                       F-5
<PAGE>
                                  EQUITEX, INC.
                        Schedule of Investments (Page 3)
                               September 30, 1998
                                   (Unaudited)

RESTRICTIONS AS TO RESALE

(a)  Non-public  company  whose  securities  are privately  owned.  The Board of
     Directors  determines fair value in good faith using cost information,  but
     also  taking into  consideration  the impact of such  factors as  available
     financial  information  of the  investee,  the nature and  duration  of any
     restrictions  on resale,  and other factors  which  influence the market in
     which a security is purchased and sold.

(b)  May be sold under the  provisions of Rule 144 of the Securities Act of 1933
     after an initial holding period expires.

(c)  Since the Company is an affiliate,  it may be affected by sales limitations
     of one  percent  of the  investee's  outstanding  common  stock  during any
     three-month   period,  or  four-week  average  trading  volume  during  any
     three-month period.

(e)  Since certain of these  securities have certain  restrictions as to resale,
     the Board of  Directors  determines  fair value in good faith using  public
     market  information,  but also taking into consideration the impact of such
     factors as available financial information of the investee,  the nature and
     duration  of  restrictions  on the  disposition  of  securities,  and other
     factors  which  influence  the market in which a security is purchased  and
     sold.

(f)  Valued at higher of cost or fair  market  value of  underlying  stock  less
     exercise  price,  subject to valuation  adjustments  as  determined in good
     faith by the Board of Directors,  taking into  consideration  the impact of
     such factors as available financial information of the investee, the nature
     and  duration  of any  restrictions  on  resale,  and other  factors  which
     influence the market in which a security is purchased and sold.


The accompanying notes are a part of this statement.

                                       F-6
<PAGE>
                                  EQUITEX, INC.
                             Schedule of Investments
                                December 31, 1997

<TABLE>
<CAPTION>
                                                   NUMBER        COST
                                                     OF         AND/OR       FAIR
COMPANY                                         SHARES OWNED    EQUITY       VALUE
-------                                         ------------    ------       -----
<S>                                          <C>              <C>          <C>
CONTROLLED COMPANIES
COMMON STOCKS - PRIVATE
  MARKET METHOD OF VALUATION (a)(e)
VP Sports, Inc. .........................
  Entity formed to seek-out
  acquisitions in the sports
  and health products industries ........         2,000,000   $  250,000   $1,000,000

AFFILIATED COMPANIES
COMMON STOCKS - PUBLIC MARKET
  METHOD OF VALUATION (c)(e)
IntraNet Solutions, Inc. (formerly
  MacGregor Sports & Fitness, Inc.)
  Document management services,
    web-based internet software,
    electronic document management
    and demand printing .................           473,250    1,410,776    2,498,529

RDM Sports Group (formerly
  Roadmaster Industries, Inc.)
  Manufacturer of fitness
  equipment and juvenile products .......         4,979,437    1,088,815        4,481

OTHER - PUBLIC MARKET METHOD
  OF VALUATION
RDM Sports Group                             8% Convertible
  Manufacturer of fitness                      Subordinated
  equipment and juvenile products .......        Debentures      150,682        1,750
                                                              ----------   ----------

   Sub-Total
   CONTROLLED AND AFFILIATED COMPANIES ..                      2,900,273    3,504,760
                                                              ----------   ----------

UNAFFILIATED COMPANIES
COMMON STOCKS - PUBLIC MARKET
  METHOD OF VALUATION
IVI Publishing
  Publishing technology .................            25,000      116,881       64,063
Racotek
  Medical technology ....................            75,000      377,391      110,156
NevStar Gaming Corporation
  Gaming development ....................             7,000       38,500       18,750
</TABLE>

The accompanying notes are a part of this statement.

                                       F-7
<PAGE>
                                  EQUITEX, INC.
                        Schedule of Investments (Page 2)
                                December 31, 1997

<TABLE>
<CAPTION>
                                                   NUMBER        COST
                                                     OF         AND/OR       FAIR
COMPANY                                         SHARES OWNED    EQUITY       VALUE
-------                                         ------------    ------       -----
<S>                                          <C>              <C>          <C>
COMMON STOCKS - PRIVATE MARKET
  METHOD OF VALUATION (a)(e)
All Systems Go
  Software development ..................         20,000(b)       25,000       25,000

Ocean Power Technology
  Alternative energy
  research and development ..............         35,714(b)       40,000       98,214
                                                    100,000         --        275,000
Gain, Inc.
  Male vascular devices .................         20,000(b)       50,000       50,000

Juice Island
  Health food stores ....................         10,000(b)       20,000       20,000

WARRANTS (f)(e)
Nationsmart
  Consumer services .....................            10,000         --             50

Juice Island
  Health food stores ....................             2,500         --           --
                                            ---------------   ----------   ----------

  Sub-total
  UNAFFILIATED COMPANIES ................                        667,772      661,233
                                                              ----------   ----------

  Total
  ALL COMPANIES .........................                     $3,568,045   $4,165,993
                                                              ==========   ==========
</TABLE>

                                                                     (Continued)
The accompanying notes are a part of this statement.

                                       F-8
<PAGE>
                                  EQUITEX, INC.
                        Schedule of Investments (Page 3)
                                December 31, 1997


RESTRICTIONS AS TO RESALE

(a)  Non-public  company  whose  securities  are privately  owned.  The Board of
     Directors  determines fair value in good faith using cost information,  but
     also  taking into  consideration  the impact of such  factors as  available
     financial  information  of the  investee,  the nature and  duration  of any
     restrictions  on resale,  and other factors  which  influence the market in
     which a security is purchased and sold.

(b)  May be sold under the  provisions of Rule 144 of the Securities Act of 1933
     after an initial holding period expires.

(c)  Since the Company is an affiliate,  it may be affected by sales limitations
     of one  percent  of the  investee's  outstanding  common  stock  during any
     three-month   period,  or  four-week  average  trading  volume  during  any
     three-month period.

(e)  Since certain of these  securities have certain  restrictions as to resale,
     the Board of  Directors  determines  fair value in good faith using  public
     market  information,  but also taking into consideration the impact of such
     factors as available financial information of the investee,  the nature and
     duration  of  restrictions  on the  disposition  of  securities,  and other
     factors  which  influence  the market in which a security is purchased  and
     sold.

(f)  Valued at higher of cost or fair  market  value of  underlying  stock  less
     exercise  price,  subject to valuation  adjustments  as  determined in good
     faith by the Board of Directors,  taking into  consideration  the impact of
     such factors as available financial information of the investee, the nature
     and  duration  of any  restrictions  on  resale,  and other  factors  which
     influence the market in which a security is purchased and sold.

The accompanying notes are a part of this statement.

                                       F-9
<PAGE>
                                  EQUITEX, INC.
                            Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                             FOR THE THREE                  FOR THE NINE
                                              MONTHS ENDED                  MONTHS ENDED
                                              SEPTEMBER 30,                 SEPTEMBER 30,
                                           1998          1997            1998          1997
                                       -----------    -----------    -----------    -----------
<S>                                    <C>            <C>            <C>            <C>        
Revenues
   Interest and dividends ..........   $    16,128    $       130    $    40,324    $    30,731
   Consulting fees .................          --             --          375,000           --
   Administrative fees .............           120             43          2,325         26,315
   Miscellaneous ...................          --              652           --           67,112
                                       -----------    -----------    -----------    -----------
                                            16,248            825        417,649        124,158
Expenses
   Salaries and consulting fees ....        75,154         87,147        225,460        241,017
   Officer's bonus .................       714,777        (16,120)       802,342        125,462
   Office rent .....................         7,501         11,724         23,689         26,724
   Legal and accounting ............       225,288         37,304        276,077         69,864
   Employee benefits ...............        37,186         97,811        169,947        173,823
   Advertising and promotion .......         9,510            465         15,065          1,959
   Other general and administrative         53,589         19,554        224,759        103,972
   Interest ........................        29,606         23,931         77,135         59,874
   Loss on indemnification agreement          --          599,813           --          599,813
   Bad debt expense ................          --            7,036         15,703          7,036
   Depreciation and amortization ...         2,532          2,801          7,888          8,623
                                       -----------    -----------    -----------    -----------
                                         1,155,143        871,466      1,838,065      1,418,167

Net investment gain (loss) .........    (1,138,895)      (870,641)    (1,420,416)    (1,294,009)

Net realized gain on investments
   and net unrealized gain on
   investments:

   Proceeds from sales
   of investments ..................       156,853        364,455      1,018,446        424,713
   Less: cost of investments .......       (19,902)      (417,531)      (258,565)      (499,509)
                                       -----------    -----------    -----------    -----------

Net realized gain (loss) on
   investments before income taxes .       136,951        (53,076)       759,881        (74,796)

Net investment gain (loss) and
   net realized gain on investments
   before income taxes .............    (1,001,944)      (923,717)      (660,535)    (1,368,805)

Income tax benefit (provision) -
   current .........................          --             --             --          (56,307)
Income tax benefit (provision) -
   deferred ........................        87,370        104,385        (63,180)       (16,858)

Recovery of income taxes through
   utilization of net operating
   loss carryforward ...............          --             --             --             --
                                       -----------    -----------    -----------    -----------0
</TABLE>

The accompanying notes are a part of this statement.                 (Continued)

                                      F-10
<PAGE>
                                  EQUITEX, INC.
                        Statements of Operations (Page 2)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                             FOR THE THREE                  FOR THE NINE
                                              MONTHS ENDED                  MONTHS ENDED
                                              SEPTEMBER 30,                 SEPTEMBER 30,
                                           1998          1997            1998          1997
                                       -----------    -----------    -----------    -----------
<S>                                    <C>            <C>            <C>            <C>        
Net investment gain (loss)
   and net realized gain
   on investments ..................   $  (914,574)   $  (819,332)   $  (723,715)   $(1,441,970)
                                       -----------    -----------    -----------    -----------

Increase (decrease) in
   unrealized appreciation
   on investments ..................      (822,396)    (3,429,554)    (1,252,859)    (4,271,643)

Less income tax benefit
   (provision) applicable to
   decrease (increase) in
   realized appreciation ...........       320,734      1,649,526        488,616      1,977,940
Add: allowance for income
   tax benefit .....................      (488,616)          --         (488,616)          --
                                       -----------    -----------    -----------    -----------
                                          (990,278)    (1,780,028)    (1,252,859)    (2,293,703)
                                       -----------    -----------    -----------    -----------

Net increase (decrease)
   in net assets resulting
   from operations .................   $(1,904,852)   $(2,599,360)   $(1,976,574)   $(3,735,673)
                                       ===========    ===========    ===========    ===========

Increase (decrease) in net
   assets per share ................   $      (.41)   $      (.81)   $      (.48)   $     (1.17)
                                       ===========    ===========    ===========    ===========

Weighted average number
   of common shares ................     4,700,532      3,191,115      4,096,403      3,191,115
                                       ===========    ===========    ===========    ===========
</TABLE>

The accompanying notes are a part of this statement.

                                      F-11
<PAGE>
                                  EQUITEX, INC.
                            Statements of Cash Flows
                                   (Unaudited)

                                                          FOR THE NINE MONTHS
                                                          ENDED SEPTEMBER 30,
                                                          1998          1997
                                                      -----------   -----------
Cash flows from operating activities:
   Net change in net assets ......................    $(1,976,574)  $(3,735,673)
      Adjustments to reconcile net change in
      net assets to net cash provided by
      operating activities:
        Depreciation and amortization ............         7,888         8,623
        Donation of stock ........................          --           4,136
        Realized (gain) loss on sale of
          investments ............................      (759,881)       74,796
        Unrealized (gain) loss on investments ....     1,252,859     4,271,643
   Proceeds from sales of investments ............     1,018,446       424,713
   Purchase of investments .......................    (1,142,520)      (61,215)
   Collection of notes receivable ................       173,083        20,250
   Issuance of notes receivable ..................      (742,897)      (45,000)
   Transfer of cash to escrow account ............          --        (300,000)
   Changes in assets and liabilities:
      (Increase) decrease in interest receivable .       (25,244)          120
      (Increase) decrease in trade receivables ...       (93,144)       29,339
      (Increase) decrease in accounts
        receivable - brokers .....................        73,741         3,992
      (Increase) in subscriptions receivable .....        (1,446)         --
      (Increase) in prepaid expense ..............       (23,714)      (26,003)
      Decrease in income taxes refundable ........          --         164,459
      (Increase) decrease in deferred income
        tax benefit ..............................        63,180
      Increase in accounts payable and
        other accrued liabilities ................        80,448        37,522
      Increase in accrued liability -
        indemnification agreement ................          --         564,755
      Increase (decrease) in accounts payable
        to brokers ...............................       213,562       (54,405)
      Increase (decrease) in accrued bonus
        to officer ...............................       347,576       125,462
      Increase in income taxes payable ...........          --            --
      Increase (decrease) in deferred income taxes          --      (1,961,081)
                                                      ----------    ----------

      Net cash (used) by operating
        activities ...............................    (1,534,637)     (453,567)

Cash flows from investing activities:
   Purchase of furniture and equipment ...........        (7,394)         --
                                                      ----------    ----------

      Net cash (used) by investing activities ....        (7,394)         --

                                                                     (Continued)
                                      F-12
<PAGE>
                                  EQUITEX, INC.
                        Statements of Cash Flows (Page 2)
                                   (Unaudited)


                                                          FOR THE NINE MONTHS
                                                          ENDED SEPTEMBER 30,
                                                          1998          1997
                                                      -----------   -----------
Cash flows from financing activities:
   Issuance of notes payable - officer ...........    $  142,328    $  321,519
   Issuance of notes payable - other .............       247,500       100,000
   Repayment of notes payable ....................      (327,599)         --
   Common stock issued for cash ..................     1,664,352          --
                                                      ----------    ----------

       Net cash provided (used) by
          financing activities ...................     1,726,581       421,519

Increase (decrease) in cash ......................       184,550       (32,048)

Cash, beginning of period ........................         9,187        53,795
                                                      ----------    ----------

Cash, end of period ..............................    $  193,737    $   21,747
                                                      ==========    ==========

Supplemental disclosures of cash flow information:
       Interest paid .............................    $   67,874    $   55,332
                                                      ==========    ==========

       Interest received .........................    $   15,079    $   30,851
                                                      ==========    ==========

Non-cash financing activities:
   Common stock issued for common
       stock of previously unrelated
       entity ....................................    $  565,639    $     --
                                                      ==========    ==========


                                      F-13
<PAGE>
                                  EQUITEX, INC.
                     Selected Notes to Financial Statements
                               September 30, 1998
                                   (Unaudited)


NOTE 1.   INVESTMENTS
          a. Investment in Triumph Sports 
          During the first and second  quarter of 1998, the Company has received
1,000,000  and  500,000  shares,  respectively,  of the common  stock of Triumph
Sports, a private company formed for the purpose of seeking out and acquiring an
operating entity in the non-manufacturing  licensed and supplemental segments of
the sporting goods and leisure-time industry. The stock was received in exchange
for consulting services valued at $375,000.  The Company's president is also the
President and a director of Triumph Sports.

          b. Investment in First Teleservices Corporation (FTC) 
          Effective August 13, 1998, the Company acquired all of the outstanding
common  shares of FTC in exchange  for 625,000  shares of Equitex,  Inc.  common
stock.  The Company is holding this  investment as part of its  investment  pool
until such time as it might elect to de-certify as a BDC. The Board of Directors
used the Board  appraisal  method of valuation for this  investment and recorded
this investment at $565,639,  which was the net asset value of FTC's  underlying
assets and liabilities at the acquisition date.

NOTE 2.   RELATED PARTY TRANSACTION
          In May 1998 a director of the Company  executed a promissory  note for
$45,472 in payment for 39,200 shares of Equitex,  Inc. common stock at $1.16 per
share purchased pursuant to the March 1998 private placement. The note is due in
December 1998 and bears interest at 8%.

NOTE 3.   NOTE PAYABLE     
          In September  1998 an  unrelated  entity  loaned the Company  $247,000
pursuant  to a note  agreement.  The note bears  interest  at 10% per annum,  is
personally  guaranteed  by the  Company's  President,  and is secured by 200,000
shares of  Equitex,  Inc.  common  stock  owned by an entity  controlled  by the
Company's  President.  Both  principal  and  interest are due in one lump sum on
December 15, 1998. In addition, the Company has promised, subject to stockholder
approval,  to issue warrants to the noteholder to purchase  25,000 shares of the
Company's  common stock  exercisable  at $5 per share for a period of five years
from the date of issuance.  If shareholder  approval is not obtained by December
31, 1998, then the Company's  President must transfer to the noteholder,  10,000
shares of his personal shares of the Company's common stock.

NOTE 4.   BONUS ARRANGEMENT WITH OFFICER
          In August 1998 the Company's Board of Directors  finalized a new bonus
arrangement with the Company's president as recommended by an outside consulting
firm.  The  annual  bonus  is to be  calculated  quarterly  and  is  based  on a
combination of 1 percent of the Company's  assets combined with 5 percent of the
increase in the market value of the Company's common stock each quarter.

          The new bonus  arrangement  is  effective  January 1, 1998.  The bonus
accrual at September  30, 1998 has been adjusted to reflect the terms of the new
bonus arrangement. 

                                                                     (Continued)
                                      F-14
<PAGE>
                                  EQUITEX, INC.
                     Selected Notes to Financial Statements
                               September 30, 1998
                                   (Unaudited)


NOTE 5.   PRIVATE PLACEMENTS OF COMMON STOCK
          In March 1998 the  Company's  Board of Directors  authorized a private
placement  offering of the Company's common stock. The Company was authorized to
sell up to  500,000  shares of its common  stock at $1.16 per  share.  As of the
close of the private placement on May 21, 1998, 499,200 shares were sold.

          On June  29,  1998 the  Company's  Board of  Directors  authorized  an
additional  private  placement of the  Company's  common  stock.  The Company is
authorized to sell up to 750,000  shares of its common stock at $3.25 per share.
As of September 30, 1998, 246,000 shares have been sold. Subsequent to September
30, 1998, an additional 120,000 shares were sold.

NOTE 6.   STOCK OPTIONS
          In June 1998 the  Board of  Directors  granted  stock  options  to two
independent  directors  to  purchase up to 75,000  shares each of the  Company's
common stock at $3.19 per share which was the closing stock price at the date of
grant. Such options are subject to the Company's decertification as a BDC.

          The Board also  granted the  following  stock  options to officers and
employees of the Company:

OPTION TYPE                TO WHOM         NO. OF SHARES            OPTION PRICE
Incentive                  Officer             31,000                  $3.19
Non-qualified              Officers           478,655                  $3.19
Non-qualified              Employees           28,800                  $3.19

          All of these options were issued at the closing stock price at date of
grant, and all options expire five years from date of grant. As of September 30,
1998, 12,000 shares of non-qualified options issued to employees were exercised.
Subsequent to September 30, 1998, an additional  59,000 shares of  non-qualified
stock options were exercised.

NOTE 7.   PROPOSED DECERTIFICATION AS A BDC
          At a  meeting  held on  April  3,  1998,  the  Company's  stockholders
approved a proposal authorizing the Company to change the nature of its business
and  withdraw  its election as a Business  Development  Company  (BDC) under the
Investment  Company Act of 1940. The withdrawal  will become  effective when the
Securities and Exchange  Commission  receives the Company's  official  notice of
election  of  withdrawal.  The Company  does not intend to file its  election of
withdrawal  until such time as it is relatively  certain that it will qualify as
an operating business rather than an investment company.

                                      F-15
<PAGE>

PART I.    FINANCIAL INFORMATION
Item 2.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations.

     FORWARD-LOOKING STATEMENTS
     The report may contain certain "forward-looking" statements as such term is
defined  in the  Private  Securities  Litigation  Reform  Act of  1995 or by the
Securities and Exchange Commission in its rules, regulations and releases, which
represent the  Registrant's  expectations or beliefs,  including but not limited
to, statements  concerning the Registrant's  operations,  economic  performance,
financial condition, growth and acquisition strategies,  investments, and future
operational  plans. For this purpose,  any statements  contained herein that are
not  statements  of  historical  fact  may  be  deemed  to  be   forward-looking
statements.  Without  limiting the  generality of the  foregoing,  words such as
"may", "will", "expect", "believe", "anticipate", "intent", "could", "estimate",
"might", or "continue" or the negative or other variations thereof or comparable
terminology  are  intended  to  identify   forward-looking   statements.   These
statements by their nature involve substantial risks and uncertainties,  certain
of which are beyond the  Registrant's  control,  and actual  results  may differ
materially  depending on a variety of important factors,  including  uncertainty
related  to  acquisition,  governmental  regulation,  managing  and  maintaining
growth,  the  value  of the  Registrant's  investments,  the  operations  of the
Registrant's investee companies, volatility of stock price and any other factors
discussed in this and other Registrant  filings with the Securities and Exchange
Commission.

     LIQUIDITY AND CAPITAL RESOURCES
     Of the  Registrant's  liabilities  of $2,202,324 at September 30, 1998, the
Registrant  had no amounts due to banks.  This compares to total  liabilities of
$1,498,509 at December 31, 1997.  The Registrant is not obligated to discharge a
significant  portion of its  liabilities  in the near  future  except for a note
payable of $247,500  which matures in December  1998.  However,  the  Registrant
intends to extinguish these remaining  liabilities to make other  investments as
cash flow permits.

     In connection with its investments,  the Registrant is required,  from time
to time, to make loans to its investees in order to protect its investments.  As
a result  of  these  loans as well as other  notes  receivable,  the  Registrant
carried  notes  receivable  of $942,552 and  $418,210 at September  30, 1998 and
December  31,  1997,  respectively.  The  majority  of  the  increase  in  notes
receivable  at both of these  dates as  compared  to 1996 is the  result  of the
Registrant  covering  portions  of  expenses  and  start-up  costs for three new
investees  during the latter  part of 1997 and  continuing  into 1998.  As these
companies complete mergers or acquisitions,  or raise capital through private or
public offerings,  these notes may be repaid or otherwise  extinguished although
no assurance can be given at this time that such repayments will take place.

     The Registrant's cash position  increased by $193,737 at September 30, 1998
as compared to December 31,  1997.  Net cash used by  operating  activities  was
$1,534,637 for the first nine months of 1998 as compared to $453,567 used in the
first  nine  months of 1997.  No one use or  provision  of cash  from  operating


                                                                     (Continued)
                                      F-16
<PAGE>
PART I.  FINANCIAL INFORMATION
Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations (Continued).

activities accounted for the change from 1998 to 1997. Cash flows from investing
activities  used $7,394 for the purchase of fixed assets in 1998  compared to $0
in the first nine months of 1997.  The cash provided by financing  activities of
$1,726,581 in 1998 was derived  primarily from sales of the Registrant's  common
stock in private  placement  offerings  combined with an overall net increase in
notes payable of $62,000.

     The Registrant's sources of income to defray operating overhead are derived
from consulting fees, transaction fees gained from the Registrant assisting both
existing and new investees in structuring and completing  mergers,  acquisitions
or asset-based  financing  transactions,  administrative  fees through which the
Registrant  directly  apportions a certain  amount of its operating  overhead to
investees  as  warranted  to help  defray  operating  costs,  and  sales  of the
Registrant's  investments.  During 1997 and the first nine  months of 1998,  the
Registrant's  sources  of income  were not  sufficient  to cover  its  operating
overhead and it is anticipated  this trend will continue during the remainder of
1998.  In order to cover its  operating  costs,  additional  cash was  generated
through sales of the Company's common stock,  the sale of portfolio  securities,
and through issuance of net additional notes payable of $62,000 in 1998.

     The Registrant's  liquidity is affected  primarily by the business success,
securities prices and marketability of its investee  companies and by the amount
and timing of any new or incremental  investments  it makes.  The Registrant has
sold and anticipates  that it will continue to offer limited private  placements
of the  Registrant's  common  stock in order to maintain or increase its present
liquidity.  Although  the  Registrant's  ability to  liquidate  portions  of its
portfolio  companies  have increased as the  restrictions  as to resale end, the
Registrant generally is a long-term holder of its investments and therefore does
not necessarily liquidate them upon the expiration of these restrictions. As the
Registrant  cannot  forecast  the  types of  large-scale  sales  which  generate
significant  profits,  the Registrant has not typically  relied on sales of this
large nature for its financing needs.  However,  as the Registrant expects lower
transaction and consulting fees and therefore reduced revenue during 1998, sales
of portfolio securities may be necessary for its financing needs. The Registrant
expects that  additional  funds from sales of its common stock through a private
placement will continue during the fourth quarter of 1998.

     The  Registrant's  largest  investee  company is IntraNet,  a publicly held
company which provides  document  handling,  storage and retrieval  solutions to
Fortune 1000 companies utilizing internet and intranet technologies. For the six
months ended September 30, 1998, the latest  available date,  IntraNet had total
revenues of $8.4 million and a net loss of $700,000. Highlights for IntraNet for
the six months ended September 30, 1998 included the sale of IntraNet's hardware
integration unit to Osage Systems Group, Inc. effective  September 30, 1998. The
sale was completed  for a purchase  price of $1.6  million,  and certain  future
financial consideration,  dependent on the performance of the unit divested over
the next two years. IntraNet also posted its first  profitable  quarter  for the

                                                                     (Continued)
                                      F-17
<PAGE>
PART I.  FINANCIAL INFORMATION
Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations (Continued).

quarter  ended  September  30,  1998  with net  income  attributable  to  common
stockholders of $242,000.  In addition,  in May 1998, IntraNet issued $3,000,000
of Series B 4% Convertible Preferred Stock.

     On August  29,  1997 RDM  Sports  Group,  Inc.  ("RDM")  filed  Chapter  11
bankruptcy  petitions for the company and all of its subsidiaries  with the U.S.
Bankruptcy Court for the Northern District of Georgia and ceased all operations.
As part of the ongoing bankruptcy proceedings, certain of RDM's assets have been
sold to pay  creditors  and no plan of  reorganizations  has been filed to date.
Following the initiation of this  bankruptcy  proceeding,  the fair value of the
Registrant's  investment in RDM was  substantially  reduced so that at September
30, 1998 and December 31, 1997, the Registrant had a cost basis of $1,239,497 in
its investment in RDM with fair value of $22,407 and $6,231, respectively.

     As of  September  30,  1998,  the  Registrant  had made no  other  material
commitments  for  capital  expenditures  or loans  to  investees.  However,  the
Registrant  may be  required  to make  such  expenditures  or loans  during  the
remainder of 1998,  the amount of which is unknown at this time.  The Registrant
expects that it will continue to sell certain of its  investments,  resulting in
additional  realized  gains,  during the  remainder of the current  year. At the
discretion of the Board of Directors,  the  Registrant  also may sell certain of
its investments  resulting in a realized loss in order to prevent further losses
from occurring.

     RESULTS OF OPERATIONS
     Revenues  for the three  and nine  months  ended  September  30,  1998 were
$16,248  and  $417,649,   respectively,   as  compared  to  $825  and  $124,158,
respectively,  for the three and nine  months  ended  September  30,  1997.  The
increase  in  revenues  for  1998  over  1997 is  primarily  the  result  of the
consulting fee revenue recognized  relative to the Registrant's  newest investee
company,  Triumph Sports (Triumph).  The Registrant received stock in Triumph in
exchange  for  consulting  services.  In the  first  nine  months  of 1997,  the
Registrant  received  payments  of  $65,850 on notes  receivable  which had been
written off in prior years. In the past, the Registrant has received  consulting
fees on both a monthly contract basis as well as on a per transaction basis when
assisting  investees with acquisitions,  refinancing or restructuring,  however,
the timing, nature and amount of these fees cannot be predicted.  The Registrant
expects that overall 1998 revenues, other than the Triumph consulting fees, will
be similar to those of 1997.

     The realized gain on investments  before income taxes for year-to-date 1998
was  $759,881 as compared to a loss of $74,796 in 1997.  Proceeds  from sales of
investments were significantly higher in 1998 than 1997. A majority of the sales
of  investments  in  1998  was  IntraNet   Solutions  common  stock.  While  the
restrictions as to resale on many of the  Registrant's  investments  continue to
diminish,  the  opportunity  for the sale of large  portions of the  investments
cannot be predicted.  However,  the Registrant  currently has fewer positions in
its portfolio which are valued  utilizing the public market method and presently
believes there is sufficient  market  liquidity for the Registrant to conduct an
orderly sale of any position over a relatively short period of time. 

                                                                     (Continued)
                                      F-18
<PAGE>
PART I.  FINANCIAL INFORMATION
Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations (Continued).


     Expenses for the first nine months of 1998 were  $1,838,065  as compared to
$1,418,167  in the first nine  months of 1997,  an  increase  of 30%.  While the
Registrant's  expenses  were  fairly  similar  in many  categories,  significant
changes  were  recorded  in  officer's  bonus,  legal and  accounting,  bad debt
expense,  and other general and  administrative in 1998. The officer's bonus was
significantly higher as a result of the Registrant's finalization of a new bonus
arrangement with the Company's president as recommended by an outside consulting
firm.  The  annual  bonus  is to be  calculated  quarterly  and  is  based  on a
combination of 1 percent of the Company's  assets combined with 5 percent of the
increase in the market value of the Company's common stock each quarter. The new
bonus  arrangement is effective  January 1, 1998. The bonus accrual at September
30, 1998 has been adjusted to reflect the terms of the new bonus arrangement. In
addition,  legal and accounting  expense  increased during 1998 primarily due to
legal fees associated with the RDM bankruptcy situation, and with the litigation
relative to the Registrant's contract deposit receivable. The bad debt provision
increased  as a result of  additional  lending  activity  which  occurred in the
latter half of 1997. Other general and  administrative  expenses  increased as a
result of additional costs associated with the April shareholders  meeting,  and
the private  placements.  The 1998  increases in these expense  categories  were
offset  somewhat  by the  nonrecurring  loss  on  indemnification  agreement  of
$599,813 which  occurred in the third quarter of 1997. The Registrant  currently
believes  that  expenses for the fourth  quarter of 1998 will continue at levels
similar to those of 1997  should the  Registrant  continue  to operate as a BDC.
Should the Registrant  decertify as a BDC as set forth below,  the Registrant is
unable to estimate its expenses for later in 1998.

     For the nine months ended  September 30, 1998,  unrealized  appreciation of
investments decreased $1,252,859 as compared to a decrease of $4,271,643 for the
comparable  period  of 1997.  The  decrease  in 1998 was  caused  by some of the
unrealized  gains of IntraNet  being  converted  to realized  gains during 1998.
During the nine months ended September 30, 1997, the Registrant's investments in
RDM and IntraNet were experiencing  significant market value declines.  As there
is no way to predict the future value of the Registrant's  investment portfolio,
the Registrant  cannot  predict  future  changes in the unrealized  value of its
investments,  however,  the Registrant is encouraged by recent developments with
respect to IntraNet,  and a new investee,  VP Sports, which the Registrant added
during 1997,  and which the  Registrant  believes  will enhance its portfolio in
1998.  Overall,  the net decrease in net assets  resulting  from  operations was
$1,976,574  for 1998 as compared to a decrease of $3,735,673  for the comparable
period of 1997.

     In 1987 the Registrant  began  concentrating  on investments in more mature
investee  companies.  Due to this change,  the  Registrant's net asset value and
cash flows have fluctuated as a result of the market fluctuations of its largest
investees.  The Registrant  must increase the number of its investments in order
to  reduce  its   susceptibility   to  the  operating   performance  and  market

                                                                     (Continued)
                                      F-19
<PAGE>
PART I.  FINANCIAL INFORMATION
Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations (Continued).


fluctuations  of its investee  companies  that have  occurred  over the past few
years.  During the past several years, the Registrant had been concentrating its
efforts on assisting its existing portfolio companies and therefore had not made
any  major  new  investments.  During  1997,  the  Registrant  added a major new
investee company,  VP Sports, and in the first quarter of 1998 added another new
investee,  Triumph Sports.  Effective August 1998,  another new investee,  First
Teleservices  Corporation  (FTC) was  added.  The  Company  acquired  all of the
outstanding  common shares of FTC, a development  stage company which intends to
operate in the fee-based  financial services  industry,  in exchange for 625,000
shares of Equitex, Inc. common stock. Until such time as more mature investments
are added, the Registrant will continue to be susceptible to market fluctuations
as long as it continues to operate as a BDC.

     At  a  special  meeting  of  stockholders   held  on  April  3,  1998,  the
Registrant's  stockholders  approved a proposal  authorizing  the  Registrant to
change the nature of its  business  and withdraw its election as a BDC under the
Investment  Company Act. The Registrant's  Board of Directors has adopted a plan
which began with  stockholder  approval for the Registrant to withdraw as a BDC,
with the intent of becoming an operating  company.  The  Registrant  is actively
pursuing  business  opportunities  to acquire or  otherwise  purchase an ongoing
operating   business  in  the  banking   industry   while  also  pursuing  other
alternatives in other industries.  The Registrant has not reached a level in its
discussions  which  would lead it to believe  that any  particular  acquisition,
purchase  or  merger is likely  to occur  with any of the  opportunities  it has
pursued to date;  however,  based on the types of  discussions  held so far, the
Registrant  believes that a transaction of this nature could be completed within
twelve months following stockholder approval of the proposal. Further, the Board
believes that with the  flexibility  and authority to withdraw as a BDC prior to
entering into any definitive acquisition or merger agreement, the Registrant has
increased its ability to attract  interested  businesses which it may acquire or
consider merging with.

     The  Registrant  does not intend to file its  election to withdraw as a BDC
with the Securities and Exchange  Commission until such time as it is relatively
certain  that  it  will  qualify  as an  operating  business  rather  than as an
investment  company. A voluntary election to withdraw as a BDC becomes effective
upon filing with the Securities and Exchange  Commission  unless a later date is
specified  in the  election  form.  The  Board of  Directors  has opted for this
approach because it believes that if it does not qualify as an operating company
within a short period of time after the  Registrant  withdraws its election as a
BDC, the  Registrant  could  possibly be considered an  unregistered  investment
company  which  is not in  compliance  with  the  Investment  Company  Act.  The
Registrant  will  continue  to conduct  business as a BDC until such time as the
election to withdraw becomes effective.

     Presently,  the Company has determined it should not be at risk  internally
as a  result  of  year  2000  date  conversions  and  does  not  anticipate  any
significant  expenditures will be required for internal software failures. There
can be no assurance,  however,  that the company will not be affected by outside

                                                                     (Continued)
                                      F-20
<PAGE>
PART I.  FINANCIAL INFORMATION
Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations (Continued).


and third party failures from service  providers such as banks,  stock brokerage
firms,  transfer  agents,  and  other  businesses  with  whom the  Company  does
business.  While the Company will make every  effort to  determine  its exposure
with respect to such  businesses,  there can be no assurance  such failures will
not take place and presently there is no accurate way to determine any costs the
Company may incur should such failures occur.

PART II.       OTHER INFORMATION

Item 1.        Legal Proceedings
               None

Item 2.        Changes in Securities
               None

Item 3.        Defaults Upon Senior Securities
               None

Item 4.        Submission of Matters to a Vote of Security Holders
               None

Item 5.        Other Information
               None

Item 6.        Exhibits and Reports of Form 8-K

                  (a)     Financial data schedule for SEC registrants
                  (b)     The Company filed no reports on Form 8-K during 
                          the quarter covered by this report




                                      F-21
<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.



                                  EQUITEX, INC.

                                  (Registrant)



                                   By /s/ Henry Fong
                                      ------------------------------------
                                      Henry Fong
                                      President, Treasurer and Chief
                                      Financial Officer


Date: November 19, 1998