SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                   FORM 10-QSB

               [ X ] QUARTERLY REPORT UNDER SECTION 13 or 15(d)
                     OF THE SECURITIES EXCHANGE ACT of 1934

                  For the quarterly period ended March 31, 1998


                                       OR


                 [ ] TRANSITION REPORT UNDER SECTION 13 or 15(d)
                     OF THE SECURITIES EXCHANGE ACT of 1934


                        For the Transition Period From to


                           Commission File No. 0-16293


                               LANXIDE CORPORATION
              (Exact name of Small Business Issuer in its charter)


            Delaware                                    51-0270253
 (State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)             

            1300 Marrows Road
              P.O. Box 6077
               Newark, DE                              19714-6077
(Address of principal executive offices)               (Zip Code)

                                 (302) 456-6200
                 Issuer's telephone number, including area code


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.
                                [ X ] Yes [ ] No

Transitional Small Business Disclosure Format (check one):
                                [ ] Yes [ X ] No

The  number  of  shares  of Common  Stock  outstanding  as of May 12,  1998 was:
1,325,598.
<PAGE>
        THIS FORM 10-QSB CONTAINS CERTAIN FORWARD-LOOKING  STATEMENTS WITHIN THE
MEANING OF THE PRIVATE SECURITIES  LITIGATION REFORM ACT OF 1995 WITH RESPECT TO
THE  FINANCIAL  CONDITION,   RESULTS  OF  OPERATIONS  AND  BUSINESS  OF  LANXIDE
CORPORATION, INCLUDING STATEMENTS UNDER ITEM 1. FINANCIAL STATEMENTS AND ITEM 2.
MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF RESULTS OF  OPERATIONS  AND  FINANCIAL
CONDITION.   THESE   FORWARD-LOOKING   STATEMENTS   INVOLVE  CERTAIN  RISKS  AND
UNCERTAINTIES. NO ASSURANCE CAN BE GIVEN THAT ANY SUCH MATTERS WILL BE REALIZED.
FACTORS  THAT  MAY  CAUSE  ACTUAL  RESULTS  TO  DIFFER   MATERIALLY  FROM  THOSE
CONTEMPLATED  BY SUCH  FORWARD-LOOKING  STATEMENTS  INCLUDE,  AMONG OTHERS,  THE
FOLLOWING  POSSIBILITIES:  (I) COMPETITIVE CONDITIONS IN THE INDUSTRIES IN WHICH
LANXIDE  OPERATES;  (II)  FAILURE  TO FURTHER  COMMERCIALIZE  ONE OR MORE OF THE
TECHNOLOGIES  OF  LANXIDE;  (III)  GENERAL  ECONOMIC  CONDITIONS  THAT  ARE LESS
FAVORABLE THAN EXPECTED AND (IV) ABILITY TO SECURE ADEQUATE FUNDING.
<PAGE>
                               LANXIDE CORPORATION


                                TABLE OF CONTENTS



                                                                        Page
                                                                       Number
                                                                       ------
PART I.      FINANCIAL INFORMATION

     Item 1. Financial Statements:

             Consolidated Balance Sheet at
             March 31, 1998 and 1997 (Unaudited).........................2

             Consolidated Statement of Operations
             for the Three Months and Six Months Ended
             March 31, 1998 and 1997 (Unaudited).........................3

             Consolidated Statement of Cash Flows
             for the Six Months Ended
             March 31, 1998 and 1997 (Unaudited).........................4

             Notes to Consolidated Financial
             Statements (Unaudited)..................................5 - 9

     Item 2. Management's Discussion and Analysis
             of Results of Operations and Financial
             Condition.............................................10 - 12

PART II.     OTHER INFORMATION


     Item 6. Exhibits and Reports on Form 8-K...........................15
<PAGE>
<TABLE>
<CAPTION>
                               Lanxide Corporation
                           Consolidated Balance Sheet
                  (Amounts in thousands, except per share data)
                                   (Unaudited)
                                                                                          March 31,          September 30,
                                                                                            1998                 1997
                                                                                         -----------          -----------
<S>                                                                                      <C>                  <C>
Assets 
------
Cash and cash equivalents, including amounts restricted for use
  by majority owned affiliate                                                                $1,769               $3,892
Accounts receivable                                                                           1,967                2,738
Inventories                                                                                     453                3,036
Other current assets                                                                                                 447
                                                                                         -----------          -----------
  Total current assets                                                                        4,189               10,113

Property and equipment, net                                                                   3,132                9,681
Investment in affiliate                                                                           0                  377
Other assets                                                                                    290                  346
                                                                                         ===========          ===========
                                                                                             $7,611              $20,517
                                                                                         ===========          ===========
Liabilities and Shareholders' Deficit
-------------------------------------
Current portion of long term debt                                                            10,076                6,789
Accounts payable and accrued expenses                                                         3,501                4,237
Deferred compensation                                                                           539                1,357
Deferred revenue                                                                                390                  380
                                                                                         -----------          -----------
  Total current liabilities                                                                  14,506               12,763

Long-term debt                                                                                  253               14,079
Deferred credit                                                                               1,050                  357
Deferred compensation                                                                           899                   20
                                                                                         -----------          -----------
                                                                                              2,202               14,456

Minority interest in consolidated affiliates                                                  1,254                2,006

Redeemable Series E preferred stock (aggregate liquidation value, $261);                        231                  225
                                                                                         -----------          -----------

<PAGE>
<CAPTION>
                               Lanxide Corporation
                           Consolidated Balance Sheet
                  (Amounts in thousands, except per share data)
                                   (Unaudited)
                                                                                          March 31,          September 30,
                                                                                            1998                 1997
                                                                                         -----------          -----------
<S>                                                                                      <C>                  <C>
Shareholders' deficit
   Preferred stock 15,000,000 shares authorized
       Series A preferred stock (aggregate liquidation value,$2,000) $.01 par value;
        1,101,683 shares issued and outstanding                                                  11                   11
       Series H preferred stock (aggregate liquidation value,$2,000) $.01 Par value;
        20,000  shares  issued  and  outstanding  Common  stock,$.01  par value,
   25,000,000 shares authorized:
        1,325,598 issued and outstanding                                                         13                   13
   Additional paid-in capital                                                               191,006              191,006
   Accumulated deficit                                                                     (202,734)            (200,883)
   Cumulative translation adjustment                                                          1,122                  920
                                                                                         ===========          ===========
                                                                                            (10,582)              (8,933)
                                                                                         ===========          ===========
                                                                                             $7,611              $20,517
                                                                                         ===========          ===========
</TABLE>

                 See notes to consolidated financial statements



                                     Page 2
<PAGE>
<TABLE>
<CAPTION>
                               Lanxide Corporation
                      Consolidated Statement of Operations
                  (Amounts in thousands, except per share data)
                                   (Unaudited)
                                                            Three Months ended March 31,                Six Months ended March 31,
                                                            ----------------------------                --------------------------
                                                               1998                 1997                 1998                 1997
                                                               ----                 ----                 ----                 ----
<S>                                                       <C>                  <C>                  <C>                 <C>
Revenue:
  Sales                                                       1,051                2,778                4,299                4,634
  Licensing revenue                                           5,300                                     7,177                8,200
  Research and development contract revenue                     329                1,256                1,397                2,984
                                                          ----------           ----------           ----------           ----------
                                                              6,680                4,034               12,873               15,818
                                                          ----------           ----------           ----------           ----------
Operating costs:
  Cost of sales                                               1,502                2,573                3,893                4,248
  Research and development costs                                388                1,188                3,236                2,767
  Product development and engineering                            42                1,551                1,074                3,003
  Selling, general and administration                         1,562                2,053                3,317                4,248
                                                          ----------           ----------           ----------           ----------
                                                              3,494                7,365               11,520               14,266
                                                          ----------           ----------           ----------           ----------
Income (loss) from operations before
minority allocation                                           3,186               (3,331)               1,353                1,552

Minority allocation of operating income                          81                   51                  173               (1,146)
                                                          ----------           ----------           ----------           ----------
Income (loss) from operations                                 3,267               (3,280)               1,526                  406

Write off of investment in affiliate                           (377)                                     (377)
Loss on sale of affiliates                                   (2,028)                                   (2,028)
Interest expense                                               (349)                (456)                (841)                (857)
Other income                                                     16                  166                   34                  314
                                                          ----------           ----------           ----------           ----------
Income (loss) before income taxes                               529               (3,570)              (1,686)                (137)

Income tax expense                                                                                       (150)                  40
                                                          ----------           ----------           ----------           ----------
Net income (loss)                                               529               (3,570)              (1,836)                (177)

Dividends on mandatorily redeemable                              (8)                  (8)                 (15)                 (15)
preferred stock

Gain on redemption of of subsidiary's preferred stock                                                                          680

                                                          ==========           ==========           ==========           ==========
Net income (loss) applicable to common shares                   521               (3,578)              (1,851)                 488
                                                          ==========           ==========           ==========           ==========
Income (loss) per share
  Basic                                                        $0.39              ($2.70)              ($1.40)               $0.37
  Diluted                                                      $0.30              ($2.70)              ($1.40)               $0.37
</TABLE>

                 See notes to consolidated financial statements

                                     Page 3
<PAGE>
<TABLE>
<CAPTION>
                               Lanxide Corporation
                      Consolidated Statement of Cash Flows
                             (Amounts in thousands)
                                   (Unaudited)
                                                                                             Six Months ended March 31,
                                                                                             --------------------------
                                                                                               1998                 1997
                                                                                               ----                 ----
<S>                                                                                      <C>                  <C>
Cash flows from operating activities:
Net income (loss)                                                                           ($1,836)               ($177)
Adjustments to reconcile net loss to net cash (used in) provided by
   operating activities:
Depreciation and amortization                                                                   615                  946
Loss on sale of affiliate                                                                     2,028
Write off of affiliate investment                                                               377
Minority allocation of operating (loss) income                                                 (226)               1,146
Gain on the sale of equipment                                                                    (6)                 (45)
 Change in assets and liabilities:
   Increase in receivables                                                                      (72)              (1,033)
   Decrease(increase) in inventories                                                            205                 (280)
   Decrease (increase) in other assets                                                          466                  420
   Decrease (increase) in accounts payable and accrued expenses                                 787                  (50)
   Increase in deferred revenue and deferred credit                                             703                  868
   Increase in other liabilities                                                                                      75
                                                                                         ===========          ===========
Net cash provided by operating activities                                                     3,041                1,870
                                                                                         ===========          ===========

Cash flows from investing activities
 Capital additions                                                                             (573)                (312)
 Proceeds from the sale of equipment                                                              6                   90
                                                                                         ===========          ===========
    Net cash used in investing activities                                                      (567)                (222)
                                                                                         ===========          ===========

Cash flows from financing activities
  Redemption of a subsidiary's preferred stock                                                    0               (4,000)
  Proceeds from issuance of debt obligations                                                      0                3,825
  Repayment of debt obligations                                                              (4,799)                 (32)
                                                                                         ===========          ===========
    Net cash used in financing activities                                                    (4,799)                (207)
                                                                                         ===========          ===========

Effect of exchange rate translations                                                            202                 (616)
                                                                                         -----------          -----------

Net (decrease) increase                                                                      (2,123)                 825

Cash and cash equivalents, beginning of period                                                3,892                3,458
                                                                                         ===========          ===========
Cash and cash equivalents, end of period                                                     $1,769               $4,283
                                                                                         ===========          ===========

Cash paid for interest                                                                         $621                 $776
                                                                                         ===========          ===========
</TABLE>
<PAGE>
                               Lanxide Corporation
                      Consolidated Statement of Cash Flows
                             (Amounts in thousands)
                                   (Unaudited)


Supplemental Schedule of Noncash investing and Financing Activities

The Company sold all of the capital stock of Lanxide Electronic Components, Inc.
and Lanxide Armor Products,  Inc for the cancellation of bank debt of $5,740. In
conjunction with the sale, bank debt was satisfied as follows:

     Net book value of assets disposed of                        $7,831
     Cancellation of debt                                        (5,740)
     Minority interest in accounts payable                          (63)
                                                              ==========
     Loss on disposal                                            $2,028
                                                              ==========





                 See notes to consolidated financial statements

                                     Page 4
<PAGE>
                               LANXIDE CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


1.   CONSOLIDATED FINANCIAL STATEMENTS

     The  consolidated  balance  sheet  at  March  31,  1998,  the  consolidated
     statements of  operations  and of cash flows for the six months ended March
     31, 1998 and 1997 have been prepared by Lanxide  Corporation  (the Company)
     and have not been audited by the  Company's  Independent  Auditors.  In the
     opinion of management, all adjustments (which include only normal recurring
     adjustments) necessary to present fairly the financial position, results of
     operations  and cash flows at March 31, 1998 and for all periods  presented
     have been made.

     These consolidated  financial statements should be read in conjunction with
     the financial statements and notes thereto included in the Company's Annual
     Report on Form 10-KSB for the fiscal year ended  September 30, 1997,  filed
     with the Securities and Exchange Commission.  The results of operations for
     the period ended March 31, 1998 are not necessarily indicative of operating
     results for the full year.

2.   CASH AND CASH EQUIVALENTS

     All highly liquid  investments with a maturity of three months or less when
     purchased  are  considered  to be cash  equivalents.  Included  in the cash
     balances at March 31, 1998 are $939,000 held by a subsidiary  company which
     amounts are not generally available to the Company.

3.   INVENTORIES

     Inventories  are valued at the lower of cost  (primarily  average  cost) or
     market  and  consists  of raw  materials  and  supplies  and are  held by a
     subsidiary  company  which  amounts  are  not  generally  available  to the
     Company.

4.   PER SHARE DATA

     Net income (loss) per share is computed  using the weighted  average number
     of common shares and potentially dilutive securities outstanding during the
     period. The Company adopted the Financial Accounting Standards Board (FASB)
     statement No. 128 "Earnings Per Share" for the periods presented below:

                                     Page 5
<PAGE>
4. PER SHARE DATA (continued)
<TABLE>
<CAPTION>
                                                                   Three Months ended March 31,           Six Months ended March 31,
                                                                   ----------------------------           --------------------------
                                                                     1998               1997               1998               1997
                                                                    ------             ------             ------             ------
<S>                                                                 <C>                <C>                <C>                <C>   
Net income (loss)                                                      529             (3,570)            (1,836)              (177)
Dividends on mandatorily redeemable
  preferred stock                                                       (8)                (8)               (15)               (15)
Gain on redemption of
  subsidiary's preferred stock                                                                                                  680

Net income (loss) applicable                                        ------             ------             ------             ------
  to common shareholders                                               521             (3,578)            (1,851)               488
                                                                    ------             ------             ------             ------

Weighted average common
  shares outstanding (basic)                                         1,326              1,326              1,326              1,326

Employe stock options                                                  (a)                (b)                (b)                (b)
Warrants to purchase common shares                                     (a)                (b)                (b)                (b)
Convertible preferred stock                                            410                (b)                (b)                (b)
                                                                    ------             ------             ------             ------

Weighted average common
  shares outstanding (diluted)                                       1,736              1,326              1,326              1,326
                                                                    ======             ======             ======             ======

Earnings (loss) per share-basic                                     $ 0.39             ($2.70)            ($1.40)            $ 0.37
                                                                    ======             ======             ======             ======

Earnings (loss) per share-diluted                                   $ 0.30             ($2.70)            ($1.40)            $ 0.37
                                                                    ======             ======             ======             ======
</TABLE>

(a)  For the three  months  ended  March 31,  1998,  all  employee  options  and
     warrants to purchase common stock would have an  anti-dilutive  effect upon
     earnings per share as calculated in accordance with SFAS 128.

(b) Due to the Company's net loss during these periods,  a dilutive  calculation
in accordance with SFAS 128 is not required.


As of March 31,  1998,  the  following  employee  stock  options and warrants to
purchase shares of common stock were outstanding:

                                                                    Exercise
                                                   Number             Price
                                                   ------             -----
 Employee stock options                           665,393           $1 - $320


 Warrants to purchase common stock                354,763           $4.5 - $14

                                     Page 6
<PAGE>
5.   SIGNIFICANT EVENTS

     Loan from Lanxide K.K.

     On December 29, 1997, Lanxide K.K., a 65% owned Japanese subsidiary, agreed
     to loan $1.8 million to the Company (the  Lanxide K.K.  Loan).  The Company
     received  $1.3 million on December 29, 1997 and an  additional  $.5 million
     was  received on January 12,  1998.  Cash held by Lanxide K.K. is generally
     unavailable to the Company for general corporate purposes. The Lanxide K.K.
     Loan was to mature on January 31, 1998 and bears interest at the rate of 6%
     per annum.  Upon an event of  default  under the  Lanxide  K.K.  Loan,  the
     Company shall  transfer to Lanxide K.K. its 10% ownership in DuPont Lanxide
     Composites, Inc. (the DLC interest). The loan came due on February 10, 1998
     and the Company is negotiating with Lanxide K.K.  regarding the disposition
     of the loan.

     Termination of Employees

     On February 3, 1998, the Company  terminated all of its employees,  as well
     as those of three of its  subsidiaries  located  at the  Company's  Newark,
     Delaware  offices,  as a result of its inability to secure adequate funding
     to  continue  its  operations.  The  Company  has  subsequently  hired back
     approximately  30  employees  and is in the  process of  restructuring  its
     operations.

     Assignment of Option; Transfer of Subsidiaries

     E.I Dupont de Nemours and Company,  Inc. (Dupont) entered into an agreement
     with PNC Bank (the Bank),  pursuant to which DuPont agreed to guarantee the
     Company's  obligations to the Bank under a Revolving  Credit and Term Note,
     dated  February 24, 1993,  in the original  principal  amount of $5,970,000
     (the PNC Bank Loan). In consideration  for DuPont's  guaranty,  the Company
     and  DuPont had  entered  into a Loan  Guarantee  Letter  Agreement,  dated
     December 15, 1992 (as amended, the Guarantee Agreement),  pursuant to which
     the Company  granted to DuPont,  as  collateral,  an option (the Option) to
     acquire all of the  outstanding  common equity  securities of Lanxide Armor
     Products,  Inc.  (LAP)  and  Lanxide  Electronic  Components,  Inc.  (LEC).
     DuPont's  exercise  of the  Option  would  release  the  Company  from  all
     obligations and liabilities under the PNC Bank Loan. Under the terms of the
     Guarantee Agreement, the Option would become exercisable by DuPont upon the
     Company's  notification  to DuPont of the  Company's  inability to meet its
     obligations under the PNC Bank Loan.

     In a letter  agreement  entered into between the Company and DuPont,  dated
     February 6, 1998 (the Letter  Agreement),  the Company notified DuPont that
     the Company  would not be able to meet its  obligations  under the PNC Bank
     Loan. In the Letter Agreement, the Company consented to DuPont's assignment
     of its right to exercise the Option to DHB Capital  Group,  Inc.  (DHB) and
     DuPont agreed to repay the Bank all amounts owed by the Company to the Bank
     under the PNC Bank Loan.

     Concurrent  with the assignment of the Option by DuPont to DHB, the Company
     entered  into a  Transfer  Agreement,  dated as of  February  6,  1998 (the
     Transfer  Agreement),  by and among the Company,  DHB, LAP, LEC and Lanxide
     Technology Company,  L.P. (LTC),  pursuant to which DHB elected to exercise
     the Option  and,  accordingly,  the Company  transferred  to DHB all of the
     outstanding  common  equity  securities  of LEC and  LAP.  Pursuant  to the
     Transfer Agreement, DHB has agreed to use its best efforts to cause LEC and
     LAP to hire,  at a minimum,  all of the persons  employed as of February 2,
     1998, by LEC and LAP, respectively. Pursuant to the Transfer Agreement, DHB
     further  agreed to  transfer  to LTC  certain  assets of LAP set forth on a
     schedule  attached to the Transfer  Agreement  (the Asset Sale) and (i) LTC
     and LEC have each agreed to amend the License  Agreement,  dated as of July
     25,  1995,  between  LTC and LEC and (ii) LTC and LAP have  each  agreed to
     amend the License  Agreement,  dated as of March 31, 1987,  between LTC and
     LAP  to  provide  for a  royalty  to LTC of  all  products  containing  the
     Company's technology that are sold by LEC or LAP.

                                     Page 7
<PAGE>
     Termination of Voting Agreement; Resignation of Directors and Officers

     As previously  disclosed on the Company's  Current Report on Form 8-K dated
     July  3,  1997,  Commodore   Environmental   Services,   Inc.,  a  Delaware
     corporation (COES),  assumed effective control of the Company pursuant to a
     Voting Agreement,  dated July 3, 1997, among the Company and certain of its
     stockholders  (the Voting  Agreement) which was executed in connection with
     certain transactions contemplated by a Securities Purchase Agreement, dated
     July 3,  1997,  between  the  Company  and COES  (the  Securities  Purchase
     Agreement).  Pursuant to the Voting Agreement,  stockholders of the Company
     who owned  664,329  shares of common  stock,  par value $.01 per share (the
     Common Stock), or 50.1% of the outstanding Common Stock, granted proxies to
     the members of the Board of  Directors of COES (the  Proxyholders)  to vote
     all shares of Common Stock held by each such stockholder until December 31,
     1998.

     In  accordance  with  the  Securities  Purchase  Agreement,  the  Board  of
     Directors of the Company  increased  the number of members on the Company's
     Board of  Directors  to seven and  elected  Messrs.  Michael  Fullwood  and
     William Toller to fill the newly created  directorships.  In addition,  the
     Board of Directors of the Company  appointed  Mr. Toller to the position of
     Vice Chairman and Senior Executive  Officer of the Company and Mr. Fullwood
     to  the   position  of  Senior  Vice   President,   Chief   Financial   and
     Administrative Officer and General Counsel of the Company.

     On February 3, 1998,  COES  terminated  the Voting  Agreement in accordance
     with its  terms  and  Messrs.  Fullwood  and  Toller  resigned  from  their
     respective  positions as directors and officers of the Company. On February
     6, 1998,  Paul E.  Hannesson,  chairman  of the Board of  Directors  of the
     Company and COES,  resigned  from his  position on the  Company's  Board of
     Directors.  Messrs.  Stephen A. Weiss and J.  Frederick  Van  Vranken,  Jr.
     resigned  from their  positions  on the  Company's  Board of  Directors  on
     February 11 and 12, 1998, respectively. On March 5, 1998 Michael J. Hollins
     was appointed to serve on the Board of Directors,  which currently consists
     of three directors: Messrs. Bentley J. Blum, Marc S. Newkirk and Michael J.
     Hollins.


     Transactions with Commodore Environmental Services, Inc.

     On March 5, 1998 the Company  entered  into a series of  transactions  with
     Commodore  Environmental  Services,  Inc.  ("Commodore") and certain of its
     subsidiaries pursuant to which, among other things, Commodore paid $500,000
     cash and its subsidiaries  agreed to cancel $4,500,000 in indebtedness plus
     accrued  interest  to  subsidiaries  of Lanxide  (which was  guaranteed  by
     Lanxide) in exchange for the issuance of a  royalty-bearing  license to use
     CERASET (TM) on a worldwide  basis,  excluding Japan (the  "License").  The
     License, which was issued pursuant to the terms of a Settlement and Release
     agreement(the  "Release Agreement"),  grants Commodore certain business and
     technology  rights that do not conflict with the rights of Lanxide's  other
     licenses,  or future licenses in the fields for metal matrix composites and
     ceramic matrix composites.  In connection with the issuance of the License,
     Lanxide and Commodore amended the Securities Purchase agreement, dated July
     3, 1997 (the  "Purchase  Agreement" and as amended,  the "Amended  Purchase
     Agreement").  Pursuant  to the  Amended  Purchase  Agreement,  among  other
     things, (i) Lanxide and Commodore each agreed to exchange all of the issued
     and  outstanding  shares of Series G Preferred  stock of Lanxide  (Series G
     Preferred  Stock),  which  are held by  Commodore,  for an equal  number of
     Series H preferred  Stock of Lanxide (the Series H Preferred  Stock),  (ii)
     Commodore's right to purchase additional shares of Series G Preferred Stock
     pursuant to the terms of the original  purchase  agreement was  cancelled.;
     (iii) Lanxide  issued a warrant (the Warrant) to Commodore for the purchase
     of up to 270,000 shares of Lanxide's  common stock, at an exercise price of
     $7.41 per share; and (iv)  Commodore's  right to purchase 250,000 shares of
     Series F Preferred Stock of Lanxide  ("Series F Preferred  Stock") pursuant
     to a warrant  issued to Commodore on July 3, 1997 (the "1997  Warrant") was
     cancelled.

     The Company is considering  alternatives  to attempt to further resolve its
     financial situation.  No assurances can be given that any such alternatives
     will allow the Company to continue any of its operations.

                                     Page 8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
        FINANCIAL CONDITION

         The following is a discussion of the consolidated  financial  condition
and results of  operations  of the Lanxide  Corporation  and its  majority-owned
affiliates  (the  Company) for the six months ended March 31, 1998 and 1997,  as
well as certain  factors  that may affect the  Company's  prospective  financial
condition.  This section  should be read in  conjunction  with the  Consolidated
Financial Statements and the Notes thereto included elsewhere in this 10-QSB.

Overview

         Historically,  the Company's  revenues have been derived primarily from
research  contracts  and  development   agreements  with  DuPont  and  the  U.S.
Government and a substantial portion of the Company's research,  development and
engineering and other operating costs were funded by Alcan Aluminium Limited and
its affiliates (Alcan), DuPont and Kanematsu Corporation (Kanematsu) through the
Company's consolidated affiliates. More recently, the Company's revenues consist
mainly of technology  licensing revenue and sales to outside customers and, to a
lesser degree,  contract funding. The Company operates principally in the United
States and to some degree in Japan through its subsidiary, Lanxide K.K.

         During fiscal year 1995,  the Company  embarked on a program to license
its  technology in certain  specific  market sectors by product and geography in
order to  generate  immediate  cash for the  Company.  Since  implementing  this
strategy, the Company consummated license agreements with A.P. Green Industries,
Inc. (A.P. Green), Waupaca Foundry, Inc. (Waupaca),  Sturm Ruger & Company, Inc.
(Sturm Ruger), Brembo S.p.A.  (Brembo), AKN Corporation (AKN), Nihon Cement Co.,
Ltd.  (Nihon  Cement) and COES which have  generated  license  fees,  as well as
future royalties.  In addition,  the Company entered into two license agreements
pursuant to the sale of two  wholly-owned  subsidiaries  and converted its joint
venture with Nihon Cement into a license arrangement.

         In fiscal year 1998,  the Company  anticipates  that its revenues  will
continue to be derived  primarily from  technology  licensing  revenue,  product
sales, and research and development contract revenue.

Results of Operations

         Results  of  operations  may vary from  period to period  depending  on
several  factors  including  licensing   transactions.   Revenues  from  license
agreements often do not occur evenly in each reporting  period,  which can cause
the results to fluctuate.

         "Licensing and other related revenues"  represent amounts earned by the
Company from  licensing its  technology by product and  geographic  area and are
recognized  as  revenue  when the  Company  fulfills  its  obligation  under the
applicable  license  agreement.  Also  included  in this  revenue  category  are
ancillary  product  sales that are  produced  solely in support of  existing  or
potential license  agreements.  Costs incurred by the Company from licensing its
technology are included in "Product  development and engineering"  (PD&E) costs.
PD&E also includes costs  incurred for projects  sponsored by the Company and/or
its joint  venture  partners  through  the  Company's  consolidated  affiliates.
Operating income and losses allocated to commercial venture partners through the
Company's  consolidated  affiliates are reported under  "Minority  allocation of
operating (income) loss."

         Revenues  from  research  and  development   contracts  and  commercial
development   agreements   (other  than  the  Company's   agreements   with  its
consolidated  affiliates) are reported under "Research and development  contract
revenue" in the Company's Consolidated Statement of Operations. Expenses related
to  these  contracts  and  agreements  are  reported  under  operating  costs as
"Research and development contract costs."

         The Company's  significant  revenue sources in the first half of fiscal
year 1998 consist  primarily of (i) technology  licensing  revenues;  (ii) sales
revenues of consolidated  subsidiaries of the Company; and (iii) revenues from a
brake component development program between the Company and AKN;

                                     Page 9
<PAGE>
         Percentage Relationship to Net Revenues

         The  following  table sets  forth the  percentage  relationship  to net
revenues of certain items in the Company's  Consolidated Statement of Operations
for the periods presented:
<TABLE>
<CAPTION>
                                                              Six months ended March 31,
                                                              --------------------------
                                                               1998                1997
                                                               ----                ----
<S>                                                            <C>                 <C>
Revenues                                                        100%                 100%
Operating costs:
   Cost of sales                                                (30)                 (27)
   Product development and engineering                           (8)                 (19)
   Research and development contract costs                      (26)                 (17)
   Selling, general, and administrative                         (26)                 (27)
Minority allocation of operating loss (income)                    1                   (7)
Interest expense                                                 (7)                  (5)
Other income                                                                           6
Net (loss) income                                               (14)                   3
</TABLE>

         Six months ended March 31, 1998 compared to six months ended
         March 31, 1997

         The Company  recorded a net loss of $1,851,000 for the six months ended
March 31,  1998,  as compared to a $488,000  net income for the six months ended
March 31, 1997. The reduction in  profitability  was due to the loss on the sale
of  affiliates  of  $2,028,000  and a write off an  investment  in  affiliate of
$377,000.

         Net Sales and Cost of Sales

         Sales for the six months ended March 31, 1998 were $4,299,000  compared
to $4,634,000 for the six months ended March 31, 1997.The cost of goods sold for
the most recent six month period was $3,893,000 yielding a gross profit on sales
of $406,000,  consistent  with the gross profits earned for the six months ended
March 31, 1997.

         Licensing and Other Related Revenues

         Licensing and other related revenues were $7,177,000 and $8,200,000 for
the six months  ended March 31, 1998 and 1997,  respectively.  During the second
quarter  of this  fiscal  year the  Company  executed a license  with COES,  for
$5,300,000 in cash and debt cancellation and royalties on future sales .

         Product Development and Engineering

         Due  to  the  employee  lay-off  and  restructuring  activities  of the
Company,  product development and engineering  activities were sharply curtailed
in the three months ended March 31, 1998.

         Research and Development Contract Revenue and Contract Costs

         Due to the lay-off of the employees in early February 1998, the Company
booked  significantly less research and development  contract revenue during the
quarter ended March 31, 1998.  For the six months ended March 31, 1998 and 1997,
revenue from  research  and  development  contract  revenue was  $1,397,000  and
$2,984,000  respectively,  representing  a gross revenue  reduction for the most
recent six months of $1,587,000.

         Selling, General and Administrative Expenses

         Selling,  general and  administrative  expenses were reduced during the
quarter ended March 31, 1998 due to the reduced number of administrative  staff.
For the six months ended March 31, 1998 selling general and



                                    Page 10
<PAGE>
administrative  expenses of $3,317,000 were approximately $931,000 less than the
six months ended March 31, 1997.

         Interest Expense

         As a result of the  cancellation of $5,740,000 bank debt by the sale of
two  affiliates  and the reduction of  $4,500,000 of Commodore  debt and accrued
interest through a licensing  agreement,  interest expense was reduced by 23% in
the quarter ended March 31, 1998.

         Income Tax Expense

         Income tax expense reflects taxes withheld on foreign source income for
the quarters presented.

Liquidity and Capital Resources

         Since its inception,  the Company has financed its working  capital and
capital  expenditure  requirements  with the  proceeds  from the sale of  stock,
borrowings,   product  sales,  research  and  development  contracts  and,  more
recently,  technology  licensing  revenues.  The Company's working capital was a
deficit  $10,317,000  at March 31, 1998, as compared to a deficit  $2,650,000 at
September  30,  1997.  The  consolidated  cash  balance  at March  31,  1998 was
$1,769,000  (including  $939,000 held by a subsidiary company which is generally
unavailable to the Company for general  corporate  purposes).  At March 31,1998,
the Company had no significant commitments to purchase capital equipment.

The Company has a $10.0 million secured note payable with Kanematsu. The Company
is presently  renegotiating this loan to be repaid over a period of seven years.
No assurance  can be given that the Company will be able to make these  payments
when they become due.

No assurances can be given that any financing  options will be obtained to allow
the Company to continue any of its operations.

                                    Page 11
<PAGE>
PART II.  OTHER INFORMATION


ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K


    (a)  27           Financial Data Schedule




                                    Page 12
<PAGE>
                                   SIGNATURES

         In accordance with the  requirements of the Securities  Exchange Act of
1934,  the  registrant  caused  this  report to be  signed on its  behalf by the
undersigned thereunto duly authorized.



                                     LANXIDE CORPORATION



Date:  May 14, 1998                  By: /s/Marc Newkirk
                                         ---------------
                                         Marc S. Newkirk
                                         President and Chief Executive Officer



                                    Page 13