U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

(Mark One)

|X| Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
    1934

For the quarterly period ended        9/30/98
                                   -------------

|_|  Transition report under Section 13 or 15(d) of the Exchange Act

For the transition period from ___________ to ______________

Commission file number               811-3584
                      ----------------------------------------------------------

                           Levcor International, Inc.
--------------------------------------------------------------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)

          Delaware                                          06-0842701
-------------------------------                       --------------------------
(State or Other Jurisdiction of                          (I.R.S. Employer
Incorporation or Organization)                          Identification No.)

      1071 Avenue of the Americas, New York, NY 10018
--------------------------------------------------------------------------------
                    (Address of Principal Executive Offices)

      (203) 264-7428
--------------------------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)


--------------------------------------------------------------------------------
      (Former name, Former Address and Former Fiscal year, if Changes Since
                                  Last Report)

      Check whether the issuer; (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 |_|

      As of November 12, 1998, 1,764,299 shares of the issuer's common stock,
par value $.56 per share, were outstanding.

Transitional Small Business Disclosure Format(check one):

Yes  |_|      No |X|
<PAGE>

                           LEVCOR INTERNATIONAL, INC.

                                      INDEX

Part I.     FINANCIAL INFORMATION                                       Page No.

      Item 1.  Financial Statements
               Balance Sheet as of September 30, 1998 (Unaudited)          1

               Statements of Operations for the
               Nine Months Ended September 30, 1998 and
               September 30, 1997 (Unaudited)                              2

               Statements of Operations for the
               Three Months Ended September 30, 1998 and
               September 30, 1997 (Unaudited)                              3

               Statements of Cash Flows for the
               Nine Months Ended September 30, 1998 and
               September 30, 1997 (Unaudited)                              4

               Notes to Financial Statements (Unaudited)                   5

      Item 2.  Management's Discussion and Analysis of
               Financial Condition and Results of Operation                6

Part II.       OTHER INFORMATION

      Item 6.  Exhibits and Reports on Form 8-K                           10

Signatures                                                                11

Exhibit 10                                                                12

Exhibit 27                                                                24
<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                           LEVCOR INTERNATIONAL, INC.
                                  BALANCE SHEET

                               September 30, 1998

                                   (Unaudited)
                                     ASSETS

CURRENT ASSETS
      Cash and cash equivalent                                      $    32,485
      Accounts receivable                                                17,109
      Due from factor                                                   385,838
      Inventories                                                     1,570,471
      Prepaid expenses                                                   13,598
                                                                    -----------
              Total current assets                                    2,019,501

PLANT AND EQUIPMENT, net of accumulated
      Depreciation of $4,589                                             16,960

OIL AND GAS PROPERTIES (using full cost
      method), net of accumulated depletion
      and depreciation of $877,146                                       18,670

INTANGIBLE ASSETS, net of accumulated
      Amortization of $2,607                                             12,368
                                                                    -----------

                                                                    $ 2,067,499
                                                                    ===========

         LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES
      Accounts payable and accrued expenses                         $ 2,200,345

      Current maturities of long-term debt                              282,800
                                                                    -----------
              Total current liabilities                               2,483,145

LONG TERM DEBT, less current maturities                                 282,800

DUE TO OFFICER                                                        1,045,000

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIENCY)
      Common stock - par value $.56 per share; authorized
        15,000,000 shares, outstanding 1,764,299 shares                 987,242
      Capital in excess of par value                                  4,998,280
      Accumulated deficit                                            (7,728,968)
                                                                    -----------
                                                                     (1,743,446)
                                                                    -----------
                                                                    $ 2,067,499
                                                                    ===========

The accompanying notes are an integral part of this statement.    


                                       1
<PAGE>

                            LEVCOR INTERNATIONAL, INC

                            STATEMENTS OF OPERATIONS

                                   (UNAUDITED)

For the Nine Months Ended September 30                   1998           1997
                                                     -----------    -----------

    Woven Fabrics Division sales                     $ 8,227,546    $ 1,587,516
    Less: cost of sales                                7,347,014      1,404,768
                                                     -----------    -----------

        Gross profit - Woven Fabrics Division            880,532        182,748

    Oil and gas sales                                     24,229         32,362
    Less: cost of sales                                   26,046         28,308
                                                     -----------    -----------

        Gross profit (loss) - Oil and Gas                 (1,817)         4,054

                                                     -----------    -----------
        Total Gross Profits                              878,715        186,802
                                                     -----------    -----------

    Selling expenses: Woven Fabrics Division
        Salaries, benefits and payroll taxes             624,813         63,563
        Commissions                                      103,130         32,315
        Other selling expenses                           153,224         70,670
                                                     -----------    -----------
            Total selling expenses                       881,167        166,548

    General and administrative expenses
        Salaries, benefits and payroll taxes              41,909         40,985
        Accounting and administrative fees                43,942         43,606
        Audit fees                                        16,000         16,000
        Directors' fees and expenses                      (5,000)         3,750
        Factor's fees                                     64,082         19,179
        Insurance                                         10,556          9,724
        Interest expense                                 216,605        114,263
        Legal fees                                        14,990         11,729
        Transfer agent fees                                3,158          3,150
        Shareholders communications                       22,262             --
        Other business taxes                               2,287          2,949
        Other expenses                                    44,122         10,252
                                                     -----------    -----------
            Total general and administrative 
              expenses                                   474,913        275,587
                                                     -----------    -----------
            Total expense                              1,356,080        442,135
                                                     -----------    -----------
            Net  (loss)                                 (477,365)      (255,333)
    Accumulated deficit - beginning of year           (7,251,603)    (6,900,333)
                                                     -----------    -----------
    Accumulated deficit - end of quarter             $(7,728,968)   $(7,155,666)
                                                     ===========    ===========
    Average number of shares outstanding               1,751,399      1,730,999
    Net(loss) per common share                       $     (0.27)   $     (0.15)
                                                     ===========    ===========

      The accompanying notes are an integral part of this statement.


                                    2
<PAGE>

                           LEVCOR INTERNATIONAL, INC.

                            STATEMENTS OF OPERATIONS

                                   (UNAUDITED)

For the Three Months Ended September 30                  1998           1997
                                                     -----------    -----------

    Woven Fabrics Division sales                     $ 1,084,192    $   385,940
    Less: cost of sales                                1,053,348        400,984
                                                     -----------    -----------

       Gross profit (loss) - Woven Fabrics Division       30,844        (15,044)

    Oil and gas sales                                      7,111          9,079
    Less: cost of sales                                    9,289          7,799
                                                     -----------    -----------

       Gross profit (loss) - Oil and Gas                  (2,178)         1,280

                                                     -----------    -----------
       Total Gross Profits (Loss)                         28,666        (13,764)
                                                     -----------    -----------

    Selling expenses: Woven Fabrics Division
       Salaries, benefits and payroll taxes              206,760         22,018
       Commissions                                        24,548         11,861
       Other selling expenses                             32,959         36,656
                                                     -----------    -----------
           Total selling expenses                        264,267         70,535

    General and administrative expenses
       Salaries, benefits and payroll taxes               13,980         13,791
       Accounting and administrative fees                 14,642         14,377
       Audit fees                                             --             --
       Directors' fees and expenses                        1,250          1,250
       Factor's fees                                      12,354          1,179
       Insurance                                           4,027          2,524
       Interest expense                                   74,830         27,637
       Legal fees                                          7,427          2,500
       Transfer agent fees                                 1,050          1,050
       Shareholders communications                         7,802             --
       Other business taxes                                    7            106
       Other expenses                                     18,695          3,578
                                                     -----------    -----------
           Total general and administrative 
             expenses                                    156,064         67,992
                                                     -----------    -----------
           Total expense                                 420,331        138,527
                                                     -----------    -----------
           Net  (loss)                                  (391,665)      (152,291)
    Accumulated deficit - beginning of quarter        (7,337,303)    (7,003,375)
                                                     -----------    -----------
    Accumulated deficit - end of quarter             $(7,728,968)   $(7,155,666)
                                                     ===========    ===========
    Average number of shares outstanding               1,764,299      1,733,499
    Net (loss) per common share                      $     (0.22)   $     (0.09)
                                                     ===========    ===========

         The accompanying notes are an integral part of this statement.


                                       3
<PAGE>

                           LEVCOR INTERNATIONAL, INC.

                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

For the Nine Months Ended September 30                      1998         1997
                                                         ---------    ---------

Cash flows from operating activities                     $(477,365)   $(255,333)
    Net (loss)
    Adjustments to reconcile (net loss) to net
    cash (used in) operating activities
      Depletion and depreciation                            11,406       10,055
      Services paid in common stock                          5,000        5,000

      Changes in operating assets and liabilities,
      net of assets acquired
          Accounts receivable                               (7,456)         617
          Due from factor                                  141,354      131,329
          Inventories                                      456,117       84,035
          Prepaid expenses                                  (6,138)       6,068
          Accounts payable and accrued expenses           (224,887)      15,810
                                                         ---------    ---------
      Net cash (used in) operating activities             (101,969)      (2,419)
                                                         ---------    ---------

Cash flows from investing activities
    Purchase of property and equipment and
    intangible assets                                       (7,351)          --
                                                         ---------    ---------
      Net cash (used in) investing activities               (7,351)          --
                                                         ---------    ---------

Cash flows from financing activities
    Advances from shareholder                              375,000      300,000
    Exercise of stock options                                7,562           --
    Payment of long term debt                             (282,800)    (282,800)
                                                         ---------    ---------
      Net cash provided by financing activities             99,762       17,200
                                                         ---------    ---------

      NET INCREASE / (DECREASE) IN CASH
        AND CASH EQUIVALENTS                                (9,558)      14,781

    Cash and cash equivalents at beginning of year          42,043        4,904
                                                         ---------    ---------

    Cash and cash equivalents at end of quarter          $  32,485    $  19,685
                                                         =========    =========

    Supplemental disclosures of cash flow information:
      Cash paid during the year for interest             $ 216,605    $ 114,263

         The accompanying notes are an integral part of this statement.


                                       4
<PAGE>

                           LEVCOR INTERNATIONAL, INC.

          NOTES TO FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 1998

                                   (UNAUDITED)

NOTE 1.     The accompanying financial statements of Levcor International, Inc.
            (the "Company") have been prepared in accordance with the
            instructions to Form 10-QSB and do not include all of the
            information and footnote disclosures required by generally accepted
            accounting principles for complete financial statements. In the
            opinion of management, all adjustments (consisting of normal
            recurring accruals) necessary for a fair presentation have been
            included. Operating results for the nine months ended September 30,
            1998 are not necessarily indicative of the results that may be
            expected for the year ending December 31, 1998. These statements
            should be read in conjunction with the financial statements and
            related notes included in the Company's annual report on Form 10-KSB
            for the year ended December 31, 1997.

NOTE 2.     New Accounting Pronouncement

            Earnings (Loss) Per Share

            In 1997, the Company adopted Statement of Financial Accounting
            Standards No. 128 ("SFAS No. 128"), "Earnings Per Share," which
            requires public companies to present basic earnings per share and,
            if applicable, diluted earnings per share. All comparative periods
            must be restated as of December 31, 1997 in accordance with SFAS No.
            128.

            The computation of basic profit/(loss) per share of common stock is
            based upon the weighted average number of common shares outstanding
            during the period, plus (in periods in which they have a dilutive
            effect) the effect of common shares contingently issuable upon
            exercise of stock options. Diluted earnings per share are considered
            equal to basic earnings per share for all years presented as the
            effect of other potentially dilutive securities would be
            antidilutive.

            Reporting Comprehensive Income

            In June 1997, the Financial Accounting Standards Board ("FASB")
            issued Statement of Financial Accounting Standards No. 130 ("SFAS
            No. 130"), "Reporting Comprehensive Income," which is effective for
            the Company's year ending December 31, 1998. The statement addresses
            the reporting and displaying of comprehensive income and its
            components. Earnings per share will only be reported for net income
            and not for comprehensive income and its components. Adoption of
            SFAS No. 130 related to disclosure within the financial statements
            and is not expected to have a material effect on the Company's
            financial statements.


                                       5
<PAGE>

            Segment Information

            In June 1997, the FASB also issued Statement of Financial Accounting
            Standards No. 131 ("SFAS No. 131"), "Disclosure About Segments of an
            Enterprise and Related Information," which is effective for the
            Company's year ending December 31, 1998. SFAS No. 131 changes the
            way public companies report information about segments of their
            business in their financial statements and requires them to report
            selected segment information in their quarterly reports. Adoption of
            SFAS No. 131 relates to disclosure within the financial statements
            and is not expected to have a material effect on the Company's
            financial statements.

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

Results of Operations:

      Nine months ended September 30, 1998 as compared to nine months ended
September 30, 1997.

      The Company's gross profits for the nine months ended September 30, 1998
were $878,715, an increase of $691,913, or 370%, from $186,802 for the same
period in 1997. Such increase was attributable to the net of (i) an increase of
$697,784 in sales, less the cost of goods sold, from the Woven Fabrics Division
in the first nine months of 1998 compared to the same period in 1997, and (ii) a
decrease of $5,871 in sales, less the cost of goods sold, from oil and gas
operations in the first nine months of 1998 compared to the same period in 1997.

      The Company's expenses for the first nine months of 1998 were $1,356,080,
an increase of $913,945, or 207%, from $442,135 in the same period in 1997. Such
increase was due to an increase in (i) selling expenses of the Woven Fabrics
Division in the first nine months of 1998 of $714,619, or 429%, compared to the
same period in 1997, and (ii) general and administrative expenses in the first
nine months of 1998 of $199,326, or an increase of 72%, compared to the same
period in 1997.

      As a result of the foregoing, the Company reflected a net loss of $477,365
in the first nine months of 1998 compared to a net loss of $255,333 for the same
period in 1997.

      Three months ended September 30, 1998 as compared to three months ended
September 30, 1997.

      The Company's gross profits for the three months ended September 30, 1998
were $28,666, an increase of $42,430 from the gross loss of $13,764 for the same
period in 1997. Such increase was attributable to the net of (i) an increase of
$45,888 in sales, less the cost of goods sold, from the Woven Fabrics Division
in the third quarter of 1998 compared to the same period in 1997, and (ii) a
decrease of $3,458 in sales, less the cost of goods sold, from oil and gas
operations in the third quarter of 1998 compared to the same period in 1997.


                                       6
<PAGE>

      The Company's expenses for the third quarter of 1998 were $420,331, an
increase of $281,804, or 203%, from $138,527 in the same period in 1997. Such
increase was due to an increase in (i) selling expenses of the Woven Fabrics
Division in the third quarter of 1998 of $193,732, or 275%, compared to the same
period in 1997, and (ii) general and administrative expenses in the third
quarter of 1998 of $88,072, or an increase of 130%, compared to the same period
in 1997.

      As a result of the foregoing, the Company reflected a net loss of $391,665
in the third three months of 1998 compared to a net loss of $152,291 for the
same period in 1997.

Liquidity and Capital Resources

      The primary source of the Company's working capital during 1997 and 1998
was derived from proceeds from the sale of woven fabrics produced by the
Company's Woven Fabrics Division and, to a lesser extent, from proceeds from the
sale of oil and gas from the Company's ownership interest in oil and gas wells.
The Company's unrestricted cash and cash equivalents at September 30, 1998 was
$32,485, a decrease of $9,558 from $42,043 at December 31, 1997.

      In connection with the operation of the Woven Fabrics Division, the
Company entered into a Discount Factoring Agreement with Congress Talcott
Corporation ("Congress Talcott") as of November 14, 1997 (the "Congress Talcott
Factoring Agreement"). Pursuant to the terms of the Congress Talcott Factoring
Agreement, the Company, among other things: (i) had agreed to (a) assign to
Congress Talcott its interest in all receivables derived from the sale of woven
fabrics produced by the Woven Fabrics Division, and (b) pay Congress Talcott a
commission of 0.6% of the gross amount on such receivables, with a minimum
commission of $4,000 for each and every month of the term thereof; and (ii) was
entitled to (a) request advances up to 90% of the net purchase price of the
receivables, and (b) pay interest on such advances at the rate of 0.5% above
CoreStates Bank, N.A.'s prime rate for the term thereof. The Congress Talcott
Factoring Agreement expired on its terms on November 14, 1998, pursuant to
notice of non-renewal given by the Company on September 11, 1998.

      The Company entered into a Factoring Agreement with The CIT
Group/Commercial Services, Inc. ("CIT Group") on September 17, 1998 (the "CIT
Group Factoring Agreement"). Pursuant to the terms of the CIT Group Factoring
Agreement, the Company, among other things: (i) has agreed to (a) assign to CIT
Group its interest in all accounts receivable arising from the sale of inventory
or rendition of services (the "Accounts"), including those under any trade
names, through any divisions and through any selling agent, and (b) pay CIT
Group a factoring fee of (1) 0.6% of the gross face amount of the Accounts, with
a minimum commission of $3 per invoice and $48,000 per annum, (2) an additional
1/4 of 1% of the gross face amount of each Account for each 30-day period or
part thereof by which the longest terms of sale applicable to such Account
exceed 90 days, and (3) an additional 1% of the gross face amount of all
Accounts arising from sales to customers located outside the United States; and
(ii) may (a) request advances (which advances shall be made at the CIT Group's
sole discretion) on the net purchase price of the Accounts, and (b) pay interest
on such advances at the rate of 0.5% above The Chase Manhattan Bank's prime rate
for the term thereof. The CIT Group Factoring Agreement remains effective until
termination by either party. CIT Group may terminate the CIT Group Factoring
Agreement (i) at any time, upon 60 days' prior written notice or (ii)
immediately without prior


                                       7
<PAGE>

written notice, upon the occurrence of an Event of Default (as such term is
defined in the CIT Group Factoring Agreement). The Company may terminate the CIT
Group Factoring Agreement on any September 30th, upon 60 days' prior written
notice.

      In connection with the purchase in 1996 of the woven fabric inventory from
Andrex Industries Corp. ("Andrex"), the Company issued a promissory note to
Andrex which bears interest at the rate of 6% per annum, pursuant to which the
Company, commencing on May 1, 1996 and continuing through May 1, 2000, is
required to make five annual debt payments of $282,800 to Andrex. In order to
meet the $282,800 debt payments that were due on May 1, 1996, May 1, 1997 and
May 1, 1998, Robert A. Levinson, the Chief Executive Officer of the Company,
made loans to the Company on such dates of $370,000, $300,000 and $50,000,
respectively, which loans bear interest at a rate of 6% per annum. No repayment
date has yet been set for these loans. Mr. Levinson has also agreed to continue
to personally support the Company's cash requirements to enable it to meet its
current obligations through December 31, 1998; in this regard, Mr. Levinson made
loans to the Company in the third quarter of 1998 in an aggregate amount of
$325,000, which loans bear interest at a rate of 6% per annum. No repayment date
has yet been set for these loans. The Company also plans to continue to
aggressively market and sell its woven fabric products. Although there can be no
assurances that these measures will be successful, the Company believes that its
current operations and the financial arrangements described above will provide
sufficient liquidity to fund the Company's operations for 1998.

Seasonality

      The Company's Woven Fabrics Division business is seasonal and typically
realizes higher revenues and operating income in the first and fourth calendar
quarters, which, considering the standard lead time required by the fashion
industry to manufacture apparel, would correspond respectively to the autumn and
spring retail selling seasons.

Year 2000 Issue

      Computer programmers and other designers of equipment that use
microprocessors have long abbreviated dates by eliminating the first two digits
of the year. The "Year 2000 Issue" stems from the concern that as the year 2000
approaches, many computer and equipment systems may be unable to distinguish
those years which begin with the numerals "20" from those years which begin with
the numerals "19," and, as a result, may not accurately process certain
date-based information. This inaccuracy could cause a variety of significant
operational problems for businesses.

      The Company has completed a comprehensive review of its computer and
equipment systems to identify the systems that could be affected by the Year
2000 Issue. The Company is utilizing both internal and external resources to
modify or replace the affected portions of these systems and to test the new and
modified systems for Year 2000 compliance. The Company expects that its internal
Year 2000 compliance plan will be fully implemented by December 1998. The
Company estimates that its past and future expenditures to ensure that its
computer and equipment systems are fully Year 2000 compliant will not exceed
$10,000.


                                       8
<PAGE>

      Although the Company's Year 2000 compliance plan has not been fully
implemented, the Company does not believe that the Year 2000 Issue will pose
operational problems for its internal computer and equipment systems or have a
material adverse effect on the Company's results of operation, liquidity or
financial condition. There can be no assurances given in this regard, however;
if the Company's Year 2000 compliance plan is not fully implemented in a timely
manner, or if the systems do not operate as expected, then the Year 2000 Issue
could have a material adverse effect on the Company's results of operation,
liquidity or financial condition.

      The Company has determined that its computer and equipment systems do not
interface with the computer and equipment systems of any of its major suppliers,
customers or financial institutions. However, the Company recognizes that the
Year 2000 Issue is relevant to all parties with which it has business relations,
including its suppliers, customers and financial institutions, as well as
businesses such as utility and telecommunications companies, and is considering
contacting its major suppliers, customers and financial institutions in order to
determine whether the Year 2000 Issue will impact the ability of those companies
to transact business with the Company in the Year 2000 and beyond. There can be
no assurances that the Company's principal suppliers, customers or financial
institutions will achieve Year 2000 compliance in a timely manner. The inability
of the Company's principal suppliers, customers or financial institutions to
become Year 2000 compliant in a timely manner could have a material adverse
effect on the Company's results of operation, liquidity or financial condition.

      At present, the Company does not have a contingency plan in place to
specifically cover the Year 2000 Issue. The Company will closely monitor the
progress of its Year 2000 compliance plan, and will develop a Year 2000
contingency plan if and when it appears substantially likely that the Company or
any of its major suppliers, customers or financial institutions will not achieve
Year 2000 compliance in a timely manner.


                                       9
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 6. Exhibits and Reports on Form 8 - K.

(a) The following exhibits are included herein:

Exhibit 10 - Factoring Agreement, dated September 17, 1998, between the Company
and The CIT Group/Commercial Services, Inc.

Exhibit 27 - Financial Data Schedule (Article 5), included for Electronic Data
Gathering, Analysis, and Retrieval (EDGAR) purposes only. This Schedule contains
summary financial information extracted from the balance sheets and statements
of operations and deficit as of and for the three months ended September 30,
1998, and is qualified in its entirety by reference to such financial
statements.

No reports on Form 8-K were filed during the quarter for which this report is
being filed.


                                       10
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                         LEVCOR INTERNATIONAL, INC.


Date  November 16, 1998                  /s/ Rudolph E. Bremser
      ------------------------           -------------------------------------
                                             Rudolph E. Bremser
                                             Treasurer and
                                             Chief Financial Officer