SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                   Quarterly Report Under Section 13 or 15(d)

                     of the Securities Exchange Act of 1934

             For Quarter Ended June 30, 1997...Commission File Number 1-155

                              THE LEHIGH GROUP INC.

                 (Exact name of Registrant as specified in its charter)

          Delaware                                         13-1920670
--------------------------------------------------------------------------------
State or other jurisdiction of                           (I.R.S. Employer
Incorporation or Organization)                           Identification No.)

1055 Washington Blvd., Stamford, CT                                 06903
--------------------------------------------------------------------------------
(Address of principal executive offices)                         (Zip Code)

Registrant's telephone number, including area code               (203) 327-0900
--------------------------------------------------------------------------------

          Former name, former address and former fiscal year,
                    if changed since last report

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the  Securities  and  Exchange Act of 1934
during the preceding 12 months (or for such shorter  period that the  Registrant
was  required  to file such  reports)  and (2) has been  subject to such  filing
requirements for the past 90 days.

                                                              YES     X      NO

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

        Class                                   Outstanding at July 31, 1997
------------------------------------            ----------------------------
Common Stock, par value                               22,553,500 shares
    $.001 per share
<PAGE>
                     THE LEHIGH GROUP INC. AND SUBSIDIARIES

                                      INDEX

                                                                         Page
                                                                        Number
                                                                        ------

PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements

           Consolidated Statements of Operations -
           Three Months Ended June 30, 1997 and 1996
           and Six Months Ended June 30, 1997 and 1996                    1

           Consolidated Balance Sheets -
           June 30, 1997 and December 31, 1996                            2-3

           Consolidated Statements of Changes in
           Shareholders' Deficit - Six Months
           Ended June 30, 1997                                            4

           Consolidated Statements of Cash Flows-
           Six Months Ended June 30, 1997 and 1996                        5

           Notes to Consolidated Financial Statements                     6

Item 2.    Management's Discussion and Analysis of

           Financial Condition and Results of Operations                  7-8

PART II.   OTHER INFORMATION

Item 1.    Legal Proceeding                                               9

Item 3.    Defaults upon Senior Securities                                9
Item 5.    Other Information                                              9
Item 6.    Exhibits and Reports on Form 8-K                               9


<PAGE>
                         PART I - FINANCIAL INFORMATION
                     THE LEHIGH GROUP INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)

                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                 Three Months Ended               Six Months Ended
                                                                       June 30,                        June 30,

                                                                1997            1996             1997           1996
                                                                ----            ----             ----           ----

<S>                                                           <C>             <C>             <C>             <C>     
Sales                                                         $  3,240        $  2,868        $  5,765        $  5,988

Cost of Sales                                                    2,171           1,998           3,776           4,201
                                                              --------        --------        --------        --------
Gross profit                                                     1,069             870           1,989           1,787

Selling, general and administration expenses                     1,121             970           1,966           1,969
                                                              --------        --------        --------        --------
   Operating income (loss)                                         (52)           (100)             23            (182)
                                                                                                              --------

Other income (expense):
   Interest expense                                               (118)           (113)           (236)           (220)
   Interest and other income                                         6               4              12               7
    Amortization of deferred financing                              (7)           --               (14)           --
                                                              --------        --------        --------        --------
                                                                  (119)           (109)           (238)           (213)
Loss from continuing operations
   before income taxes                                            (171)           (209)           (215)           (395)

Income taxes                                                         0               0               1               1
                                                              --------        --------        --------        --------

Net loss                                                      $   (171)       $   (209)       $   (216)       $   (396)
                                                              ========        ========        ========        ========

Loss per share
  Primary and fully diuluted                                  $   (.01)       $   (.02)       $   (.02)       $   (.04)
                                                              ========        ========        ========        ========

Weighted average number of common shares
 and share equivalents outstanding

Primary and Fully diluted                                       11,276          10,339          11,089          10,339
                                                              ========        ========        ========        ========

</TABLE>



                                       1
<PAGE>
           THE LEHIGH GROUP INC. AND SUBSIDIARIESCONSOLIDATED BALANCE

                              SHEETS(IN THOUSANDS)

                                                     June 30,     December 31,
                                                      1997           1996
                                                     ------         ------

                                                   (Unaudited)     (Audited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents                            $  463         $  471
Accounts receivable, net of allowance
 for doubtful account of $404 and $342                4,897          3,581
Inventories, net                                      1,645          1,215
Prepaid expenses and other current assets                91            279
                                                     ------         ------

     Total current assets                             7,096          5,546

Property, plant and equipment, net of 
 accumulated depreciation and
  amortization                                           55             50
                                                                 
                                                                 
Other assets                                             26             29
                                                                 
       Total assets                                  $7,177         $5,625
                                                     ======         ======
                                                               


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

                                       2
<PAGE>
               THE LEHIGH GROUP INC. AND SUBSIDIARIES CONSOLIDATED
                                 BALANCE SHEETS
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                            June 30,             December 31,
                                                                              1997                  1996
                                                                              ----                  ----
                                                                           (Unaudited)            (Audited)

<S>                                                                        <C>                   <C>      
LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES:

Current maturities of long-term debt                                       $     390             $     390
Accounts payable                                                               1,585                   954
Accrued expenses and other liabilities                                         1,775                 1,642
                                                                           ---------             ---------

        Total current liabilities                                              3,750                 2,986
                                                                           ---------             ---------

Long-term debt, net of current maturities                                      3,429                 2,725

Commitments and contingencies                                                   --                    --

Preferred stock, par value $.001;
 authorized 5,000,000 shares none issued

Common stock, par value $.001
 authorized shares 100,000,000 shares
 issued 10,339,250 in 1996 and 1995;
 which excludes 3,016,249 shares held as
 treasury stock in 1996 and 1995                                                  12                    11
Additional paid-in capital                                                   106,893               106,594
Accumulated deficit from January 1, 1986                                    (105,253)             (105,037)
Treasury stock - at cost                                                      (1,654)               (1,654)
                                                                           ---------             ---------

        Total shareholders' deficit                                               (2)                  (86)
                                                                           ---------             ---------

        TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT                        $   7,177             $   5,625
                                                                           =========             =========
</TABLE>

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


                                       3
<PAGE>
         THE LEHIGH GROUP INC. AND SUBSIDIARIESCONSOLIDATED STATEMENT OF
        CHANGESIN SHAREHOLDERS' EQUITY (DEFICIT)(UNAUDITED)(IN THOUSANDS)

<TABLE>
<CAPTION>
                                                 Additional        Accumulated        Treasury
                                Common            Paid In         Deficit From         Stock
                                 Stock            Capital         Jan. 1, 1986         At Cost           Total
                                --------------------------------------------------------------------------------

<S>                              <C>               <C>              <C>               <C>               <C>      
Balance January 1, 1996          $      11         $ 106,594        $(104,749)        $  (1,654)        $     202


Net loss                                --                --             (396)               --              (396)
                                 ---------         ---------        ---------         ---------         ---------
Balance June 30, 1996            $      11         $ 106,594        $(105,145)        $  (1,654)        $    (194)
                                                   =========        =========         =========         =========




Balance January 1, 1997          $      11         $ 106,594        $(105,037)        $  (1,654)        $     (86)

Debenture conversion                     1               299               --                --               300
Net Loss                                --                --        $    (216)               --              (216)
                                 ---------         ---------        ---------         ---------         ---------
Balance June 30, 1997            $      12         $ 106,893        $(105,253)        $  (1,654)        $      (2)
                                 =========         =========        =========         =========         =========


</TABLE>

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


                                       4
<PAGE>
          THE LEHIGH GROUP INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS
                                  OF CASH FLOWS

                                   (UNAUDITED)
<TABLE>
<CAPTION>

Six Months Ended June 30,                                                        1997                  1996
------------------------------------------------------------------------------------------------------------

                                                                                     (in thousands)

<S>                                                                           <C>                   <C>    
Cash flows from operating activities:

Net loss                                                                      $  (216)              $  (396)

Adjustments to reconcile net loss to net
    cash provided by (used in) operating activities:
  Depreciation and amortization                                                    43                    18
  Changes in assets and liabilities:
     Accounts Receivable                                                       (1,316)                 (134)
     Inventories-net                                                             (430)                  230
     Prepaid and other current assets                                             188                   (28)
     Accounts payable                                                             631                   159
     Accrued expenses                                                             129                   155
                                                                              -------               -------

     Net cash provided by (used in) operating activities                         (971)                    4
                                                                              -------               -------

Cash flows from investing activities:

  Capital expenditures                                                           --                    --
     Net cash provided by (used in) investing activities                          (41)                  (11)
                                                                              -------               -------

Cash flows from financing activities
  Net borrowings from C.I.T. Revolver                                           1,004                     0
  Net payments under bank debt                                                      0                  (180)
  Repayment of Capital leases                                                       0                    (7)
  Convertible Debenture                                                             0                   300
                                                                              -------               -------
     Net cash provided by financing activities                                  1,004                   113
                                                                              -------               -------

Net changes in cash                                                                (8)                  106
Cash at beginning of period                                                       471                   347
                                                                              -------               -------

Cash at end of period                                                         $   463               $   453
                                                                              =======               =======

</TABLE>

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


                                       5
<PAGE>
                     THE LEHIGH GROUP INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

1.  BASIS OF PRESENTATION

     The  financial  information  for the three months and six months ended June
30,  1997  and  1996  is  unaudited.   However,  the  information  reflects  all
adjustments  (consisting  solely of normal recurring  adjustments) which are, in
the opinion of  management,  necessary for the fair statement of results for the
interim periods.

     Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted.  These consolidated  financial statements should
be read in conjunction  with the consolidated  financial  statements and related
notes included in the Company's December 31, 1996 Report on Form 10-K.

     The results of operations  for the six month period ended June 30, 1997 are
not necessarily indicative of the results to be expected for the full year.

    Loss per common  share is  calculated  by dividing  net loss by the weighted
average number of common shares and share  equivalents  outstanding  during each
period.  For the  periods  presented,  there  were no common  stock  equivalents
included in the calculation, since they would be anti-dilutive.

2.   SUPPLEMENTARY SCHEDULE

                                                      1997            1996
--------------------------------------------------------------------------------
                                                         (in thousands)

Statement of cash flows
Six months ended June 30,

Cash paid during the six months for:
Interest                                           $   155          $   134
Income taxes                                             1                1


Supplemental Disclosure of non-cash financing activities:

On  February 7, 1997, First Medical Corporation elected to convert the debenture
into 937,500 shares of the Company's common stock.



                                       6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
        CONDITION AND RESULTS OF OPERATIONS



RESULTS OF OPERATIONS 
SECOND QUARTER OF 1997 IN COMPARISON
WITH SECOND QUARTER OF 1996

      Revenues for the second quarter of 1997 were $3.2 million,  an increase of
$372,000  or 12.97%  compared  to the second  quarter of 1996.  The  increase in
revenues  is due in part to Hallmark  hiring two  additional  sales  people with
in-depth knowledge of the electrical industries.

     Gross profit as a percentage  of sales  increased  from 30.3% in the second
quarter of 1996 to 33% in the second quarter of 1997. This increase is primarily
due to the closing of the Miami export operation, whose profit margins were much
lower than Hallmark's New York operation.

     Selling, general and administrative expenses increased by $151,000 or 15.6%
in the second  quarter of 1997 as  compared to the second  quarter of 1996.  The
increase was primarily due to Hallmark  hiring two  additional  sales people and
providing for additional bad debt reserve.

     The factors  discussed  above  resulted in an operating  loss in the second
quarter of 1997 of $52,000 as compared to an  operating  loss of $100,000 in the
second quarter of 1996.  There is no provision for income taxes in both 1997 and
1996 due to the Company's operating losses.

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

RESULTS OF OPERATIONS
FIRST HALF OF 1997 IN COMPARISON
WITH FIRST HALF OF 1996

     Revenues earned for the first half of 1997 were  approximately $5.8 million
a decrease  of  approximately  $200,000  or 3.72%  compared to the first half of
1996.  This  decrease  in  revenues  was due largely to the closing of the Miami
export operation.  Gross profit as a percentage of sales increased from 29.9% in
the first  half of 1996 to 34.5% in the first  half of 1997.  This  increase  is
primarily due to the closing of the Miami export operation, whose profit margins
were much lower than Hallmark's New York operation.

Selling general and  administrative  expenses decreased by $3,000 or .15% in the
first half of 1997 as compared to the first half of 1996.  This decrease was due
in part to the closing of the Miami export  operation and the reduction of legal
fees.




                                       7
<PAGE>
The factors  discussed above resulted in an operating  income of $23,000 for the
first half of 1997,  as compared to an operating  loss of $182,000 for the first
half of 1996.  There was no provision for income taxes in both 1997 and 1996 due
to the Company's operating losses.

LIQUIDITY AND CAPITAL RESOURCES

     At June 30, 1997,  the Company had working  capital of  approximately  $3.3
million  (including cash and cash equivalents of $463,000),  compared to working
capital of $2.6 million at December 31, 1996.

On October 29, 1996 in  connection  with the  execution of a  definitive  merger
agreement between the Company and First Medical Corporation,  the Company issued
a  convertible  debenture  in the amount of $300,000  plus  interest at two (2%)
percent per annum over the prime  lending  rate of Chase  Manhattan  Bank,  N.A.
payable  on the  1st day of each  subsequent  month  next  ensuing  through  and
including 24 months  thereafter.  On the 24th month,  the outstanding  principal
balance and all accrued interest shall become due and payable.

The proceeds of the loan from First Medical Corporation were used to satisfy the
loan the Company  previously  obtained from DHB on June 11, 1996. On February 7,
1997,  First Medical  Corporation  elected to convert the debenture into 937,500
shares of the Company's common stock.

The Company continues to be in default in the payment of interest (approximately
$704,000  interest was past due as of June 30,  1997) on the $390,000  aggregate
principal  amount of its  13-1/2%  Senior  Subordinated  Notes due May 15,  1998
("13-1/2%  Notes")  and  14-7/8%  Subordinated  Debentures  due October 15, 1995
("14-7/8%  Debentures") that remain  outstanding and were not surrendered to the
Company in connection with its financial restructuring  consummated in 1991. The
Company has been  unable to locate the holders of the 13-1/2%  Notes and 14-7/8%
Debentures (with the exception of certain of the 14-7/8 Subordinated  Debentures
which were retired during 1996).

On April 10, 1995 a judgement was entered  against the Company for $260,969 plus
interest and legal fees (see "Part II, Item 1 Legal Proceedings).



                                       8
<PAGE>
                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The State of Maine and Bureau of Labor  Standards  commenced  an action in Maine
Superior  Court on or about  November 29, 1990 against the Company and Dori Shoe
Company (an indirect former  subsidiary) to recover  severance pay under Maine's
plant  closing law. The case was tried  without a jury in December  1994.  Under
that  law,  an  "employer"  who  shuts  down a large  factory  is  liable to the
employees  for  severance  pay at the rate of one  week's  pay for each  year of
employment.  Although  the law did not apply to the  Company  when the Dori Shoe
plant  was  closed,  it was  amended  so as to  arguably  apply  to the  Company
retroactively.

The Superior  Court by decision  docketed  April 10, 1995  entered  judgement in
favor of the former  employees  of Dori Shoe  Company  against Dori Shoe and the
Company in the amount of $260.969.11  plus  prejudgment  interest and reasonable
attorney's  fees and costs to the Plaintiff upon their  application  pursuant to
Maine Rules of Civil  Procedure 54(b) (3) (d). The Company filed a timely appeal
appealing  that  decision  and the matter was  argued  before the Maine  Supreme
Judicial  Court on  December  7, 1995.  Prejudgment  interest  will accrue at an
annual rate of  approximately  $20,800 from  November 29, 1990.  On February 18,
1997,  the  Supreme  Judicial  Court  of Maine  affirmed  the  Superior  Court's
decision.  In July 1997,  the  Company  and the State of Maine  agreed to accept
$215,000 to satisfy the judgment.

The Company is involved in other minor  litigation,  none of which is considered
by management to be material to its business or, if adversely determined,  would
have a material adverse effect on the Company's financial condition.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

The Company continues to be in default in the payment of interest (approximately
$704,000 interest is past due as of June 30, 1997) on $390,000  principal amount
of 13-1/2% Notes and 14-7/8 Debentures.

ITEM 5. OTHER INFORMATION.

Subsequent to the end of the period, as reported on a Form 8-K filed on July 24,
1997, Lehigh Management Corp., a subsidiary of the Company,  was merged with and
into First  Medical  Corporation  ("FMC") and each  outstanding  share of common
stock of FMC was exchanged for (i)  1,127.675  shares of Lehigh's  Common Stock,
par value $.001 per share ("Lehigh Common  Stock"),  and (ii) 103.7461 shares of
Lehigh's Series A Convertible  Preferred  Stock,  par value $.001 per share (the
"Lehigh  Preferred  Stock"),  each of which is  convertible  into 250  shares of
Lehigh  Common Stock and has a like number of votes per share,  voting  together
with the Lehigh Common Stock.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

No reports on Form 8-K were filed during the quarter ended June 30, 1997.


                                       9
<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.

                                         THE LEHIGH GROUP INC.

                                         By: /s/ Salvatore J. Zizza
                                            -----------------------
                                             Salvatore J. Zizza
                                               Executive Vice President
                                               and Chief Financial Officer

Dated:  August 18, 1997