U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB


X    Quarterly  report  pursuant to Section 13 or 15(d) of the Securities Act of
     1934 

For the quarterly period 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 number 0-25336


                              KIRLIN HOLDING CORP.
         --------------------------------------------------------------- 
        (Exact Name of Small Business Issuer as Specified in its Charter)



       Delaware                                         11-3229358
--------------------------------                    ------------------
(State or Other Jurisdiction of                      (I.R.S. Employer
 Incorporation or Organization)                     Identification No.)


                 6901 Jericho Turnpike, Syosset, New York 11791
                -----------------------------------------------
                    (Address of Principal Executive Offices)

                                 (800) 899-9400
                   -------------------------------------------- 
                 (Issuer's Telephone Number Including Area Code)

   ---------------------------------------------------------------------------
               Former Name, Former Address and Former Fiscal Year,
                          if Changed Since Last Report


Check  whether  the issuer:  (1) has filed all  reports  required to be filed by
Section 13 or 15(d) of the Exchange  Act 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___.


State the number of shares outstanding of each of the issuer's classes of common
equity,  as of the latest  practicable  date:  At November 12, 1998,  Issuer had
outstanding 2,802,764 shares of Common Stock, par value $.0001 per share.


<PAGE>


PART 1:           FINANCIAL INFORMATION
ITEM 1:           FINANCIAL STATEMENTS

KIRLIN HOLDING CORP. and SUBSIDIARY



Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
                                                                                        September 30,       December 31,
                                                                                            1998                1997
                                                                                      ------------------  ------------------
                                                                                         (Unaudited)
                                     ASSETS:
<S>                                                                                  <C>                  <C>

Cash                                                                                  $         170,693   $         316,219
Securities Owned, at market value:
   U.S. government and agency obligations                                                     3,513,641           2,949,723
   State and municipal obligations                                                            1,677,394           1,618,284
   Corporate bonds and other securities                                                       7,726,156          10,063,391
Furniture, Fixtures and Leasehold Improvements, at cost, net of
   accumulated depreciation of $898,397 and $713,626 for
   September 30, 1998 and December 31, 1997, respectively                                       696,886             836,832
Other Assets                                                                                  1,401,990           1,109,559
                                                                                      ------------------  ------------------

               Total assets                                                           $      15,186,760   $      16,894,008
                                                                                      ==================  ==================

                      LIABILITIES and STOCKHOLDERS' EQUITY:

Liabilities:
   Securities sold,  not yet purchased, at market value                               $       2,174,198   $       1,599,279
   Payable to clearing broker                                                                 1,490,709           2,828,519
   Accrued compensation                                                                         496,941           2,194,143
   Accounts payable and accrued expenses                                                        599,090             509,649
   Deferred taxes payable                                                                     1,188,531           1,197,696
                                                                                      ------------------  ------------------

               Total liabilities                                                              5,949,469           8,329,286
                                                                                      ------------------  ------------------

Commitments

Stockholders' Equity (Note 2):
   Common stock, $.0001 par value; authorized 15,000,000 shares,
      issued and outstanding 2,802,764 and 2,720,264 shares, respectively                           280                 272
   Additional paid-in capital                                                                 6,354,187           5,869,508
   Retained earnings                                                                          2,882,824           2,694,942
                                                                                      ------------------  ------------------

               Total stockholders' equity                                                     9,237,291           8,564,722
                                                                                      ------------------  ------------------

               Total liabilities and stockholders'  equity                            $      15,186,760   $      16,894,008
                                                                                      ==================  ==================
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                       2
<PAGE>


KIRLIN HOLDING CORP. and SUBSIDIARY

Consolidated Statements of Income
<TABLE>
<CAPTION>

                                                                Three-Months Ended                 Nine-Months Ended
                                                                   September 30,                     September 30,
                                                          --------------------------------  --------------------------------
                                                               1998              1997            1998             1997
                                                          ----------------   -------------  ---------------  ---------------
                                                                    (Unaudited)                       (Unaudited)
<S>                                                      <C>                <C>             <C>                 <C>
Revenues:
    Principal transactions, net                           $      (116,383)  $   5,452,833   $    5,981,017   $   11,994,578
    Commissions                                                 1,364,755       1,157,605        4,268,030        3,519,476
    Other income                                                  542,990          98,436          958,584          294,344
                                                          ----------------  --------------  ---------------  ---------------

                                                                1,791,362       6,708,874       11,207,631       15,808,398
                                                          ----------------  --------------  ---------------  ---------------
Expenses:
    Employee compensation and benefits                          1,764,074       4,441,795        7,357,155       10,512,874
    Promotion and advertising                                     158,851          88,827          464,377          233,932
    Clearance and execution charges                               173,442         233,934          568,926          671,363
    Occupancy and communications                                  453,155         463,744        1,293,485        1,301,885
    Professional fees                                             189,603          70,765          473,677          195,922
    Interest                                                      102,093          64,934          292,162          190,179
    Other                                                          78,528         112,726          418,346          374,644
                                                          ----------------  --------------  ---------------  ---------------

                                                                2,919,746       5,476,725       10,868,128       13,480,799
                                                          ----------------  --------------  ---------------  ---------------

          (Loss) income before (benefit) provision
                    for income taxes                           (1,128,384)      1,232,149          339,503        2,327,599

(Benefit) provision for income taxes (Note 3)                    (504,843)        543,128          151,621        1,038,900
                                                          ----------------  --------------  ---------------  ---------------

          Net (loss) income                               $      (623,541)  $     689,021   $      187,882   $    1,288,699
                                                          ================  ==============  ===============  ===============

Basic (loss) earnings per common share (Note 4)           $         (0.22)  $        0.26   $         0.07   $         0.49
                                                          ================  ==============  ===============  ===============

Diluted (loss) earnings per common share (Note 4)         $         (0.22)  $        0.25   $         0.07   $         0.45
                                                          ================  ==============  ===============  ===============
                                                          
</TABLE>


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                       3
<PAGE>
KIRLIN HOLDING CORP. and SUBSIDIARY

Consolidated Statement of Changes in Stockholders' Equity

For the nine months ended September 30, 1998
(Unaudited)
<TABLE>
<CAPTION>

                                                            
                                   Common Stock              Additional
                            ----------------------------     Paid-in         Retained
                               Shares       Par Value        Capital         Earnings        Total
                            -------------  -------------   -------------   -------------  ------------
<S>                           <C>          <C>            <C>             <C>            <C> 
Stockholders' equity,
  January 1, 1998              2,720,264   $        272    $  5,869,508    $  2,694,942   $  8,564,722

Issuance of common stock          82,500              8         484,679                        484,687

Net income                                                                      187,882        187,882
                            -------------  -------------   -------------   -------------  ------------

Stockholders' equity,
  September 30, 1998           2,802,764   $        280    $  6,354,187    $  2,882,824   $  9,237,291
                            =============  =============   =============   =============  ============
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                       4
<PAGE>

KIRLIN HOLDING CORP. and SUBSIDIARY

Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                                              Nine Months Ended
                                                                                                September 30,
                                                                                    --------------------------------------
                                                                                          1998                 1997
                                                                                    ------------------   -----------------
                                                                                                 (Unaudited)
<S>                                                                                <C>                  <C>   
Cash flows from operating activities:
   Net income                                                                       $       187,882      $    1,288,699
                                                                                    ------------------   -----------------
   Adjustments  to  reconcile  net  income  to net cash  (used in)  provided  by
      operating activities:
         Depreciation and amortization                                                      184,771             136,529
         Deferred income taxes                                                               (9,165)            219,029
         Noncash compensation                                                                                   138,614
         Decrease in securities owned, at market value                                    1,714,207           1,803,445
         (Increase) in other assets                                                        (406,062)           (145,223)
         Decrease (increase) in income taxes receivable                                     113,631             (80,818)
         Increase in securities sold, not yet purchased, at market value                    574,919             309,092
         (Decrease) in payable to clearing broker                                        (1,337,810)         (3,877,067)
         (Decrease) increase in accrued compensation                                     (1,697,202)            909,193
         Increase (decrease) in accounts payable, taxes payable
           and accrued expenses                                                              89,441            (533,456)
                                                                                    ------------------   -----------------

               Total adjustments                                                           (773,270)         (1,120,662)
                                                                                    ------------------   -----------------

               Net cash (used in) provided by operating activities                         (585,388)            168,037
                                                                                    ------------------   -----------------

Cash flows from investing activities:
   Purchase of furniture, fixtures and leasehold improvements                               (44,825)           (183,022)
                                                                                    ------------------   -----------------

               Net cash used in investing activities                                        (44,825)           (183,022)
                                                                                    ------------------   -----------------

Cash flows from financing activities:
   Issuance of common stock                                                                 484,687             209,000
                                                                                    ------------------   -----------------

               Net cash provided by financing activities                                    484,687             209,000
                                                                                    ------------------   -----------------

               Net (decrease) increase in cash                                             (145,526)            194,015

Cash, beginning of period                                                                   316,219              75,304
                                                                                    ------------------   -----------------

               Cash, end of period                                                  $       170,693      $      269,319
                                                                                    ==================   =================

Supplemental information:
   Interest paid                                                                    $       292,162      $      190,179
   Income taxes paid                                                                $        47,205      $    1,568,920

</TABLE>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                       5
<PAGE>


KIRLIN HOLDING CORP. and SUBSIDIARY

Notes to Consolidated Financial Statements
(Unaudited)

1.       Organization and Summary of Significant Accounting Policies


         The consolidated  financial  statements  include the accounts of Kirlin
         Holding Corp. and its wholly owned subsidiary,  Kirlin Securities, Inc.
         (collectively the "Company").  The Company,  through Kirlin Securities,
         Inc.  ("Kirlin"),  is a  full-service,  retail-oriented  brokerage firm
         specializing  in the  trading  and  sale of  fixed  income  securities,
         including collateralized mortgage obligations,  corporate and municipal
         bonds, and government and government agency securities and, to a lesser
         extent,  mutual funds and equity securities.  Primarily all activity of
         the  Company  has  been  through  Kirlin.  All  material   intercompany
         transactions and balances have been eliminated in consolidation. Kirlin
         has offices in New York, New Jersey and California.

         The accompanying  consolidated  financial statements have been prepared
         in accordance with generally accepted accounting principles for interim
         financial  information  and  with  the  instructions  to  Form  10-QSB.
         Accordingly,  they do not include all of the  information and footnotes
         as required by  generally  accepted  accounting  principles  for annual
         financial statements.  In the opinion of management of the Company, all
         adjustments (consisting only of normal recurring adjustments) necessary
         in order to make the  financial  statements  not  misleading  have been
         included.  The operations  for the three and  nine-month  periods ended
         September 30, 1998 are not  necessarily  indicative of the results that
         may be expected for the full year ending December 31, 1998. For further
         information,   refer  to  the  consolidated  financial  statements  and
         footnotes  thereto  included  in the  Company's  Annual  Report on Form
         10-KSB for the fiscal year ended December 31, 1997.


2.       Stockholders' Equity

         On January 5, 1998,  the Company's  Board of Directors  authorized  the
         issuance of 82,500  shares of common stock (valued at the closing price
         on that  date) to  officers  of the  Company in  connection  with their
         bonuses  related to the year ended  December 31, 1997.  Following  this
         action, the Company had 2,802,764 shares of Common Stock outstanding.


3.       Income Taxes

         The Company files consolidated  federal income tax returns and separate
         Company  state income tax returns.  The (benefit)  provision for income
         taxes  differs from  the amount of income taxes  determined by applying
         the  federal statutory rates principally because of the effect of state
         taxes.


4.       Earnings Per Share

         Net (loss) income per common share is calculated by dividing net(loss) 
         income (loss) by  the weighted average number of shares of common stock
         outstanding.  The following  is a reconciliation  of the numerators and
         denominators of the basic and diluted earnings per share computations:

                                       6
<TABLE>
<CAPTION>

<PAGE>

KIRLIN HOLDING CORP. and SUBSIDIARY

Notes to Consolidated Financial Statements
(Unaudited)
                                                                    (Loss)
                                                                    Income            Shares         Per-Share
                                                                 (Numerator)       (Denominator)       Amount
                                                                 -------------     --------------    -----------

<S>                                                           <C>                    <C>             <C>      
                        Three months ended September 30, 1998:

                               Basic EPS:

                                   Loss available to
                                     Common stockholders          $ (623,541)          2,802,764      $  (0.22)

                                   Effect of Dilutive
                                     Securities - options                                 11,813
                                                                 -- ----------     --------------    -- --------

                               Diluted EPS:

                                   Loss available to common
                                     Stockholders and assumed
                                     Exercise                     $ (623,541)          2,814,577      $  (0.22)
                                                                 == ==========     ==============    == ========


                        Three months ended September 30, 1997:

                               Basic EPS:

                                   Income available to
                                     common stockholders          $   689,021          2,692,189      $    0.26

                                   Effect of Dilutive
                                     Securities - options                                 78,010
                                                                 -- ----------     --------------    -- --------

                               Diluted EPS:

                                   Income available to common
                                     stockholders and assumed
                                     exercise                     $   689,021          2,770,199      $    0.25
                                                                 == ==========     ==============    == ========
</TABLE>

                                       7
<PAGE>
KIRLIN HOLDING CORP. and SUBSIDIARY

Notes to Consolidated Financial Statements
(Unaudited)
<TABLE>
<CAPTION>


                                                                    Income             Shares         Per-Share
                                                                  (Numerator)       (Denominator)       Amount
                                                                 --------------     --------------    -----------
<S>                                                             <C>                   <C>             <C>  

                        Nine months ended September 30, 1998:

                               Basic EPS:

                                   Income available to
                                     common stockholders          $    187,882          2,801,555      $    0.07

                                   Effect of Dilutive
                                     Securities - options                                  34,575
                                                                 -- -----------     --------------    -- --------

                               Diluted EPS:

                                   Income available to common
                                     stockholders and assumed
                                     exercise                     $    187,882          2,836,130      $    0.07
                                                                 == ===========     ==============    == ========


                        Nine months ended September 30, 1997:

                               Basic EPS:

                                   Income available to
                                     common stockholders          $  1,288,699          2,634,156      $    0.49

                                   Effect of Dilutive
                                     Securities - options                                 210,427
                                                                 -- -----------     --------------    -- --------

                               Diluted EPS:

                                   Income available to common
                                     stockholders and assumed
                                     exercise                     $  1,288,699          2,844,583      $    0.45
                                                                 == ===========     ==============    == ========
</TABLE>



         In 1997,  the  Company  adopted  SFAS No.  128,  "Earnings  per Share."
         Accordingly, the above amounts for 1997 have been restated.

                                       8

<PAGE>

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

Forward-Looking Statements

         When used in this Form 10-QSB and in future filings by the Company with
the Commission,  the words or phrases "will likely result," "management expects"
or "the Company  expects,"  "will  continue," "is  anticipated,"  "estimated" or
similar expressions are intended to identify "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Readers are
cautioned not to place undue  reliance on any such  forward-looking  statements,
each of which  speak only as of the date made.  Such  statements  are subject to
certain  risks and  uncertainties  that  could  cause  actual  results to differ
materially  from  historical   earnings  and  those  presently   anticipated  or
projected.  The Company has no obligation to publicly  release the result of any
revisions  which  may be  made  to any  forward-looking  statements  to  reflect
anticipated or unanticipated events or circumstances occurring after the date of
such statements.

Results of Operations

         Total revenues for the three and nine-month periods ended September 30,
1998 decreased 73.3% and 29.1%, respectively, to $1,791,362 and $11,207,631 from
the  comparable  periods in 1997.  The decrease is primarily  attributable  to a
reduction in the value of the firm's investment account and a decrease in income
generated  from  the  Company's   proprietary   trading  and  retail   brokerage
activities, which is reflective of sluggish investor interest.

         Employee compensation and benefits for the three and nine-month periods
ended September 30, 1998 decreased 60.3% and 30.0%, respectively,  to $1,764,074
and $7,357,155 from the comparable periods in 1997. Since employee  compensation
to the Company's traders and registered  representatives  is directly related to
revenue, a portion of employee  compensation follows the change in the Company's
revenues.

         Promotion and  advertising  for the three and nine-month  periods ended
September  30, 1998  increased  78.8% and 98.5%,  respectively,  to $158,851 and
$464,377  from the  comparable  periods  in 1997  primarily  as a result  of the
Company's planned increase in advertising expenditures to attract new customers.

         Clearance and execution  charges for the three and  nine-month  periods
ended  September 30, 1998 decreased 25.9% and 15.3%,  respectively,  to $173,442
and  $568,926  from the  comparable  periods in 1997 as a result of lower ticket
volume and a shift towards commission products carrying lower ticket charges.

         Occupancy and communications costs for the three and nine-month periods
ended September 30, 1998 and 1997 were comparable.

         Professional fees for the three and nine-month  periods ended September
30,  1998  increased  167.9%  and  141.8%  to  $189,603  and  $473,677  from the
comparable  periods in 1997 as a result of an increase in external  consultation
with outside professionals related to litigation commenced by the Company.

         Interest  expense for the three and nine-month  periods ended September
30, 1998 increased 57.2% and 53.6%, respectively,  to $102,093 and $292,162 from
the comparable periods in 1997 as a result of inventory  positions  purchased on
margin and  securities  sold short,  which are held at the  clearing  broker and
charged interest.  The Company seeks to minimize its cash balances and withdraws
cash  for  operations  from  its  trading  accounts  as  needed.  To the  extent
necessary, inventory positions are utilized as collateral for such withdrawals.

                                       9
<PAGE>

         Other expenses for the three and nine-month periods ended September 30,
1998  decreased  and  increased  30.3% and 11.7%,  respectively,  to $78,528 and
$418,346 from the comparable  periods in 1997.  The decrease in the  three-month
period is a result of a  reduction  of general  office  expenses  related to the
closing of a branch office during the past quarter,  while the nine-month period
is  reflective of the  write-off of a receivable  related to computer  equipment
purchased by one of the Company's  ventures,  which arose since this venture has
been discontinued.

         Income tax benefit and provision for the three and  nine-month  periods
ended  September 30, 1998 were $504,843 and  $151,621,  respectively,  which was
consistent  with the decrease and increase in loss and income before this income
tax benefit and provision.

         Net loss and income of $623,541  and  $187,882,  respectively,  for the
three and nine-month  periods ended September 30, 1998 compares to net income of
$689,021 and  $1,288,699,  respectively,  for the three and  nine-month  periods
ended September 30, 1997 primarily as a result of a reduction in revenues during
the past quarter as a result of sluggish investor interest.


Liquidity and Capital Resources

         Securities   owned,  at  market  value,  at  September  30,  1998  were
$12,917,191 as compared to $14,631,398 at December 31, 1997. This 11.7% decrease
is  primarily  attributable  to a decrease  in the value of  securities  held in
inventory for resale to its customers. Approximately 58% of the Company's assets
at September 30, 1998 were comprised of cash and highly liquid securities.

         Furniture,  fixtures and leasehold improvements,  net, at September 30,
1998,  decreased to $696,886 as compared to $836,832 at December 31, 1997.  This
16.7%  decrease  primarily  results  from  the  depreciation  of  the  Company's
furniture, fixtures and leasehold improvements.

         Other  assets  increased to  $1,401,990  at  September  30, 1998,  from
$1,109,559  at December 31, 1997, a 26.4%  increase.  This increase is primarily
attributable to advances to registered representatives.

         Securities  sold short  amounted to $2,174,198 at September 30, 1998 as
compared to $1,599,279 at December 31, 1997. Management monitors these positions
on a daily basis and covers short positions when deemed  appropriate.  A portion
of the short  position at September 30, 1998 was covered  during the  subsequent
month.

         Payable to clearing broker amounted to $1,490,709 at September 30, 1998
as compared to $2,828,519 at December 31, 1997.  This 47.3% decrease is a result
of decreased inventory purchases on margin.

         Accrued  compensation was $496,941 at September 30, 1998 as compared to
$2,194,143 at December 31, 1997, a 77.4% decrease attributable to the payment of
bonuses, which were accrued at December 31, 1997.

         Accounts  payable and accrued  expenses  were $599,090 at September 30,
1998 as compared to $509,649 at December 31, 1997,  a 17.5%  increase  primarily
attributable to accrued promotion.

         Deferred  Income Taxes Payable were $1,188,531 at September 30, 1998 as
compared to $1,197,696 at December 31, 1997.

                                       10
<PAGE>

         The Company,  as  guarantor  of its  customer  accounts to its clearing
broker, is exposed to off-balance-sheet  risk in the event that its customers do
not fulfill their  obligations  with the clearing  broker.  In addition,  to the
extent the Company  maintains  a short  position  in certain  securities,  it is
exposed to further  off-balance-sheet  market risk, since the Company's ultimate
obligation may exceed the amount recognized in the financial statements.

         The Company believes its financial resources will be sufficient to fund
the Company's operations and capital requirements for the foreseeable future.


Year 2000 Issue

         The Company has been  evaluating the potential  impact of the situation
commonly  referred  to as the "Year 2000  Issue"  ("Y2K").  The Y2K issue is the
result of computer systems and applications that currently use two digits rather
than four to recognize a particular year (e.g., "98" for "1998").  The Y2K issue
affects the Company's  information  technology systems (i.e.,  computer systems,
network  elements and software  applications)  as well as other business systems
that might have time-sensitive programs or microprocessors that may not properly
reflect or recognize the year 2000 ("non-IT systems"). The failure to reflect or
recognize dates after 1999 could cause the Company's information  technology and
non-IT  systems  to fail or cause  errors  which  could lead to  disruptions  in
operations  or  increased  costs.  The  Company,   similar  to  most  securities
institutions,  is significantly subject to the potential impact of the Y2K issue
due to the nature of the  industry.  Potential  impacts to the Company may arise
from software,  computer hardware, and other equipment both within the Company's
direct control and outside the Company's  ownership,  yet with which the Company
interfaces either  electronically or operationally.  The Company has commenced a
review of its internal systems and programs to determine the extent to which its
information  technology  systems  are Y2K  compliant.  The  Company  has not yet
commenced a review of whether its non-IT systems are Y2K compliant,  but intends
to start such review in the near future.  Since much of the  Company's  internal
information  technology has been developed fairly recently, the Company does not
anticipate  that  its  internal   information   technology   systems  will  face
significant issues of non-compliance. The Company has completed an evaluation of
its  mission  critical  systems  and  remediation  of  certain  systems  will be
necessary.  It is expected that such remediation will be completed by the second
quarter of 1999 and that testing will be completed by the third quarter of 1999.
Based on current  information,  the Company believes it will spend approximately
$50,000 to $100,000  in each of 1998,  1999 and 2000,  although  there can be no
assurance that such amounts will be sufficient  due to unforeseen  difficulties,
to complete  the review and address the Y2K issue with  respect to its  internal
information technology systems and non-IT systems.

         However, even if the Company's internal systems are Y2K compliant,  the
Company  remains at risk from Y2K failure caused by third  parties.  The Company
has  commenced to contact third parties with which it interacts to determine the
state of their  assessment and remediation of any Y2K issues they face. To date,
the Company has not received  sufficient  information from such third parties to
complete its assessment of their Y2K  readiness.  Some of the third parties with
which the Company has significant  interaction include, most significantly,  its
clearing  broker,  Correspondence  Services  Corporation  ("CSC"),  and  vendors
providing phone service,  payroll services and banking services. The Company has
not  yet  determined  whether  CSC is Y2K  compliant.  If  the  Company's  major
third-party vendors do not confirm to the Company that they are Y2K compliant by
the second  quarter of 1999 or provide  assurances  of  subsequent,  but timely,
compliance,  the Company  will  determine  whether it is necessary to retain the
services of other third-party  vendors who are Y2K compliant in order to prevent
a disruption  in the  Company's  business.  The Company has not yet  developed a
contingency  plan for those areas where  plans to achieve Y2K  compliance  fail,
although it intends to develop such a plan.

                                       11
<PAGE>

         The  failure to  correct a  material  Y2K  problem  could  result in an
interruption   in,  or  failure  of,  certain  normal  business   activities  or
operations.  Such failures could  materially and adversely  affect the Company's
results of  operations,  liquidity and financial  condition.  Due to the general
uncertainty inherent in the Y2K problem,  resulting in part from the uncertainty
of the Y2K readiness of third-party  vendors, the Company is unable to determine
at this time  whether  the  consequences  of Y2K  failures  will have a material
impact on the Company's results of operations, liquidity or financial condition.
Although the Company expects that its mission critical systems will be compliant
and  tested by the third  quarter  of 1999,  there is no  guarantee  that  these
results will be achieved.  Specific  factors that give rise to this  uncertainty
include a possible loss of technical  resources to perform the work,  failure to
identify all susceptible systems,  non-compliance by third parties whose systems
and operations impact the Company, and other similar uncertainties. A reasonably
possible  worst case  scenario  might  include one or more of the Company's or a
third-party  vendor's  significant  systems being  non-compliant.  Such an event
could result in a material disruption to the Company's  operations,  which would
adversely  affect the Company's  results of operations,  liquidity and financial
condition.



                                       12
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PART II: OTHER INFORMATION

ITEM 6:           EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

                  27.1     Financial Data Schedule (9/30/98)

                  27.2     Restated Financial Data Schedule (9/30/97)

         (b)      Reports on Form 8-K

                  None

                                       13
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                                   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.



                                          Kirlin Holding Corp.
                                              (Registrant)




Dated:   November 12, 1998               By: /s/ Anthony J. Kirincic
                                         -------------------------------- 
                                         Anthony J. Kirincic
                                         President and Chief Financial Officer




                                       14
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                                  EXHIBIT INDEX

Exhibit
Number            Description
--------          -----------------------------------

27.1              Financial Data Schedule (9/30/98)

27.2              Restated Financial Data Schedule (9/30/97)


                                       15

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