SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the Quarterly Period ended June 30, 1998

                                       OR

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


               Commission File Number: 33-18099-NY and 33-23169-NY

                           QUEST PRODUCTS CORPORATION
        (Exact Name of small business issuer as specified in its charter)

           DELAWARE                                          11-2873662       
State or other jurisdiction of                         (IRS Employer I.D. No.)
Incorporation or organization)                  


                 6900 Jericho Turnpike, Syosset, New York 11791
                    (Address of principal executive offices)

Issuer's telephone number, including area code:                 (516) 364 - 3500
Securities registered pursuant to Section 12(b) of the Act:                None
Securities registered pursuant to Section 12(g) of the Act:                None

Indicate by check mark whether the registrant (1) filed all reports  required to
be filed by Section 13 or 15 (d) of the Securities  Exchange Act of 1934, during
the  preceding 12 months (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 last practicable date.

         Class                                     Outstanding at June 30, 1998
-----------------------                            ----------------------------
Common Stock, par value                                     155,912,985
$.00003 per share


<PAGE>



PART 1 FINANCIAL INFORMATION
Item 1, financial statements


QUEST PRODUCTS CORPORATION
FINANCIAL STATEMENTS (Unaudited)
June 30, 1998



Financial Statements                                                       Page
                                                                           ----

Balance Sheet                                                             3 - 4
                                                                 
                                                                 
Statements of Operations                                                  5 - 6
                                                                 
                                                                 
Statement of Shareholders' (Deficit)                                          7
                                                                 
                                                                 
Statements of Cash Flows                                                 8 - 11
                                                                 
                                                                 
Notes to Financial Statements                                           12 - 13
                                                                 
                                                                 
Management's Discussion and Analysis                                    14 - 16
                                                                 
                                                                 
Other Information                                                            17
                                                                 
                                                                 
Signatures                                                                   18
                                                           


                                       2
<PAGE>



QUEST PRODUCTS CORPORATION
Balance Sheet
June 30, 1998

(Unaudited)




Assets
     Current Assets
       Cash                                                             $  7,455

       Accounts receivable-net of allowance for doubtful
       accounts of $1,000                                                 65,477


       Inventory                                                          85,882


       Prepaid expenses                                                    1,496
                                                                        --------
                                                                         160,310

     Furniture and Equipment - at cost - net of accumulated
       depreciation of $20,695                                            27,720

     Patents - at cost - net of accumulated amortization of
       $11,320                                                            38,115


     Security  Deposits                                                    4,137
                                                                        --------
                                                                        $230,282
                                                                        ========

                                        
See notes to financial statements.      3
<PAGE>


QUEST PRODUCTS CORPORATION
Balance Sheet
June 30, 1998

(Unaudited)


Liabilities and Shareholders' (Deficit)
     Current Liabilities
       1992 convertible debentures - including accrued interest
         of $6,400                                                  $    16,400

       Shareholder's loan                                               184,026

       Accounts payable                                                 547,931

       Accrued officer and director's compensation                      305,493

       Loans from directors                                              33,952

       Accrued expenses                                                  25,413
                                                                    -----------

                                                                      1,113,215
                                                                    -----------

     Shareholders' (Deficit)
       Series A Convertible Preferred Stock - par value $.001
         authorized 600,000 shares - no shares issued and
         outstanding
       Series B Convertible Preferred Stock - par value $.001
         authorized 5,000,000 shares - no shares issued and
         outstanding
       Common Stock - par value $.00003 - authorized
         200,000,000 shares - 155,912,985 shares issued and
         outstanding                                                      4,677
       Capital in excess of par                                       3,506,075
       Accumulated (deficit)                                         (4,393,685)
                                                                    -----------

                                                                       (882,933)
                                                                    -----------

                                                                    $   230,282
                                                                    ===========


See notes to financial statements.      4
<PAGE>



QUEST PRODUCTS CORPORATION
Statements of Operations
(Unaudited)


                                                   For the Six Months Ended
                                                           June 30,
                                               --------------------------------
                                                    1998               1997 
                                               -------------      -------------


Sales - net                                    $     336,948      $     186,241

Cost of Sales                                         73,249             72,769
                                               -------------      -------------

                                                     263,699            113,472
                                               -------------      -------------

Selling Expenses                                     196,050             45,939

General and Administrative Expenses                  280,910            294,690
                                               -------------      -------------

                                                     476,960            340,629
                                               -------------      -------------

(Loss) Before Other Income (Expenses)               (213,261)          (227,157)
                                               -------------      -------------


Other Income (Expenses)
   Interest income                                        15              3,736
   Interest (expense)                                 (8,324)           (23,304)
   Settlement of trade payable claim                    --               61,000
                                               -------------      -------------
                                                       8,309             41,432
                                               -------------      -------------

Net (Loss)                                     $    (221,570)     $    (185,725)
                                               =============      =============


(Loss) Per Share                               $         NIL      $         NIL 
                                               =============      =============

Weighted Average Number of Shares
   Outstanding (to nearest 1,000,000)            124,000,000        112,000,000
                                               =============      =============


See notes to financial statements.      5
<PAGE>


QUEST PRODUCTS CORPORATION
Statements of Operations
(Unaudited)



                                                     For the Quarter Ended
                                                           June 30,          
                                               --------------------------------
                                                   1998                1997 
                                               -------------      -------------



Sales - net                                    $      54,876      $      83,281

Cost of Sales                                         23,924             31,622
                                               -------------      -------------

                                                      30,952             51,659
                                               -------------      -------------

Selling Expenses                                      24,979             24,324

General and Administrative Expenses                  132,600            153,927
                                               -------------      -------------

                                                     157,579            178,251
                                               -------------      -------------

(Loss) Before Other Income (Expenses)               (126,627)          (126,592)
                                               -------------      -------------

Other Income (Expenses)
   Interest income                                         8              1,503
   Interest (expense)                                 (4,162)            (8,684)
   Settlement of trade payable claim                    --               61,000
                                               -------------      -------------

                                                      (4,154)            53,819
                                               -------------      -------------

Net (Loss)                                     $    (130,781)     $     (72,773)
                                               =============      =============



(Loss) Per Share                               $         NIL      $         NIL
                                               =============      =============


Weighted Average Number of Shares
   Outstanding (to nearest 1,000,000)            125,000,000        116,000,000
                                               =============      =============


See notes to financial statements.      6
<PAGE>


QUEST PRODUCTS CORPORATION
Statement of Shareholders' (Deficit)
For the Six Months Ended June 30, 1998

(Unaudited)

<TABLE>
<CAPTION>
                                  Number of
                                Common  Stock      Amount        Capital in
                                   Shares         $.00003        Excess of      Accumulated
                               (Post-split)     Par Value       Par Value         Deficit   
                                -----------     -----------     -----------     -----------
<S>                             <C>             <C>             <C>             <C>         
Balance - December 31, 1997     138,083,713     $     4,142     $ 3,360,410     ($4,172,115)

Proceeds from sale of stock      17,829,272             535         145,665            --

Net (Loss)                             --              --              --          (221,570)
                                -----------     -----------     -----------     -----------
                                                                                   

Balance-June 30, 1998           155,912,985     $     4,677     $ 3,506,075     ($4,393,685)
                                ===========     ===========     ===========     ===========
</TABLE>


See notes to financial statements.      7
<PAGE>


QUEST PRODUCTS CORPORATION
Statements of Cash Flows                                             Page 1 of 2
(Unaudited)


<TABLE>
<CAPTION>
                                                           For the Six Months Ended
                                                                    June 30,                
                                                           ------------------------
                                                              1998            1997
                                                           ---------      ---------
<S>                                                        <C>            <C>       
Cash Flows from Operating Activities
   Net (loss)                                              $(221,570)     $(185,725)
   Adjustments to reconcile net (loss) to net cash
     (used for) operating activities:
       Depreciation and amortization                           2,898          2,810
       Expenses paid through the issuance of
           restricted common stock                              --          108,750
       Accrued interest                                        8,324         10,525
       (Increase) decrease in:
         Accounts receivable                                 (62,765)         4,287
         Inventories                                         (17,421)        20,812
         Advances to Automotive Marketing,Inc                   --          (18,200)
         Deferred preoperating and developmental costs          --          (20,328)
       Increase (decrease) in:
         Notes payable-vendor                                   --          (20,940)
         Accounts payable                                    (36,047)       (13,616)
         Accrued officers' and directors' compensation       162,000        (15,000)
         Taxes payable                                          --              108
         Loans from director and officer                      (1,863)         1,246
         Accrued expenses                                        111        (49,245)
                                                           ---------      ---------

                                                            (166,333)      (174,516)

Cash Flows from Investing Activities
   Acquisition of equipment                                     --           (5,500)
   Patent payments                                              --           (2,435)
                                                           ---------      ---------
                                                                --           (7,935)
                                                           ---------      ---------


Cash Flows from Financing Activities

   Proceeds from sale of common stock                        146,200           --

   Repayments to shareholder                                    --          (10,000)
                                                           ---------      ---------

                                                             146,200        (10,000)
                                                           ---------      ---------

Net Decrease in Cash                                         (20,133)      (192,451)

Cash - beginning                                              27,588        260,372
                                                           ---------      ---------

Cash - end                                                 $   7,455      $  67,921
                                                           =========      =========
</TABLE>


See notes to financial statements.      8
<PAGE>




QUEST PRODUCTS CORPORATION                                           Page 2 of 2
Statements of Cash Flows
(Unaudited)

<TABLE>
<CAPTION>
                                                           For the Six Months Ended
                                                                    June 30,                
                                                           ------------------------
                                                              1998            1997
                                                           ---------      ---------
<S>                                                        <C>            <C>       
Supplemental Disclosures

   Conversion of accrued officer salary to common stock    $      --      $   8,750
                                                           =========      =========

   Stock issued for accrued services rendered              $      --      $ 100,000
                                                           =========      =========
</TABLE>


     See notes to financial statements.  9


<PAGE>


QUEST PRODUCTS CORPORATION
Statements of Cash Flows                                             Page 1 of 2

(Unaudited)

<TABLE>
<CAPTION>
                                                            For the Quarter Ended
                                                                  June 30,            
                                                             1998           1997
                                                          ---------      ---------
<S>                                                       <C>            <C>       
Cash Flows from Operating Activities
   Net (loss)                                             $(130,781)     $ (72,773)
   Adjustments to reconcile net (loss) to net cash
     (used for) operating activities:
       Depreciation and amortization                          1,449          1,405
       Expenses paid through the issuance of
           restricted common stock                             --          100,000
       Accrued interest                                       4,162          5,150
   (Increase) decrease in:
       Accounts receivable                                   (7,126)         1,767
       Inventories                                            4,408        (13,918)
       Advances to Automotive Marketing,Inc                    --          (14,920)
       Deferred preoperating and developmental costs           --          (12,549)
   Increase (decrease) in:
       Accounts payable                                     (10,821)        (3,746)
       Accrued officers= and directors=  compensation        81,000        (57,500)
       Taxes payable                                           --            2,006
       Loans from directors                                    (463)           623
        Accrued expenses                                     (1,614)       (31,200)
                                                          ---------      ---------

                                                            (59,786)       (95,655)
                                                          ---------      ---------

Cash Flows from Investing Activities
   Acquisition of equipment                                    --           (5,500)
   Patent payments                                             --           (1,000)
                                                          ---------      ---------
                                                               --           (6,500)
                                                          ---------      ---------


Cash Flows from Financing Activities

   Repayments to shareholder                                   --           (2,500)
                                                          ---------      ---------

                                                               --           (2,500)
                                                          ---------      ---------




Net Decrease in cash                                        (59,786)      (104,655)

Cash - beginning                                             67,241        172,576
                                                          ---------      ---------

Cash - end                                                $   7,455      $  67,921
                                                          =========      =========

</TABLE>

     See notes to financial statements.  10

<PAGE>



QUEST PRODUCTS CORPORATION                                           Page 2 of 2

Statement of Cash Flows
(Unaudited)


<TABLE>
<CAPTION>
                                                            For the Quarter Ended
                                                                  June 30,            
                                                             1998           1997
                                                          ---------      ---------
<S>                                                       <C>            <C>       
Supplemental Disclosures

    Conversion of accrued officer salary to common stock  $      --      $   8,750
                                                          =========      =========

    Stock issued for accrued services rendered            $      --      $ 100,000
                                                          =========      =========

</TABLE>



     See notes to financial statements.  11

<PAGE>


QUEST PRODUCTS CORPORATION
NOTES TO FINANCIAL STATEMENTS (Unaudited)
June 30, 1998



1.   BACKGROUND AND BASIS OF PRESENTATION

     Quest  Products  Corporation  (the  "Company")  was organized as a Delaware
     Corporation  on July 17, 1987 and operated as a  development  stage company
     through  1993.  The  Company's  purpose  is to market  and  distribute  its
     patented phase-out system smoking cessation device (the "product").

     The Company had primarily marketed the product in the United States through
     direct  response   marketing   including   radio,   television   spots  and
     infomercials.  This  domestic  marketing  was  curtailed due to the ongoing
     negotiations  with the Federal Trade  Commission  ("FTC"),  which have been
     concluded. In March 1998, the Company reentered the domestic retail market.
     The Company also distributes the product overseas.

     The financial  statements have been prepared assuming that the Company will
     continue as a going concern. The Company has suffered recurring losses from
     operations  ($221,570  in 1998 and  $185,725 in 1997),  and has had limited
     liquidity  causing  difficulty  in meeting  its current  operating  expense
     obligations  and  debt  service  requirements.   The  Company  is  actively
     marketing  the product to help  improve  revenues  and may seek  additional
     financing through private  placement of debt and securities.  The financial
     statements  do not include any  adjustments  that might  result  should the
     continued existence of the Company be threatened by any continued losses or
     the failure of the above factors to influence  the  financial  viability of
     the Company.

     The interim  statements  were  prepared  pursuant to the  requirements  for
     reporting  on Form  10-QSB.  The  interim  financial  statements  and notes
     thereto  should be read in  conjunction  with the financial  statements and
     notes included in the Company's latest Annual Report on Form 10-KSB for the
     year ended  December 31, 1997.  In the opinion of  management,  the interim
     financial  statements  reflect all adjustments of a normal recurring nature
     necessary  for a fair  statement  of the results for interim  periods.  The
     current period results of operations are not necessarily  indicative of the
     results for the entire year ending December 31, 1998.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Changes  in  significant  accounting  policies  - There  were no changes in
     significant accounting policies during the current period.

3.   RELATED PARTY TRANSACTIONS

     Loans from  Director  and  Officer - A former  officer/shareholder,  who is
     still a director of the Company, is owed $33,952 by the Company. The amount
     is payable on demand with a stated interest rate of 11%. Effective June 30,
     1997, the former officer/shareholder agreed to no longer charge interest.



                                       12
<PAGE>


QUEST PRODUCTS CORPORATION
NOTES TO FINANCIAL STATEMENTS (Unaudited)
June 30, 1998



     Officer's and  Director's  Compensation  - During 1996,  an investor  group
     brought in by two individuals which acquired an 18% ownership  interest for
     $500,000 was awarded two seats on the Board of Directors  and one officer's
     position.  The two  individuals  had  consulting  agreements  for which the
     Company accrued fees of $5,000 per month for each individual from July 1996
     through   November  1997.  In  December  1997,  the  Company  entered  into
     employment  contracts with each of these two  individuals  for $150,000 per
     year for five years from  December  1997 through  November  2002 and issued
     options to purchase  7,500,000 shares each at an exercise price of $.03 per
     share. As of June 30, 1998, the two individuals  were owed $122,500 each in
     accrued consulting fees and salaries.

     A director,  who was  previously  the Company's  chief  executive  officer,
     entered into a consulting  agreement  with the Company for $2,000 per month
     from October 1997 through  September  1998. As of June 30, 1998, he is owed
     $60,030 in accrued salary, consulting fees and expenses.


4.   SHAREHOLDER'S LOAN

     During 1996, the Company received  $200,000 from a shareholder as a loan in
     connection with the Company's  media  campaign.  Repayments of $35,000 were
     made in cash  and  $7,500  in  stock.  The  repayment  of the  $157,500  of
     remaining  principal at June 30, 1998 and $26,526 of interest which accrues
     at 10% will be negotiated.

5.   COMMITMENTS, CONTINGENCIES AND OTHER COMMENTS.

     Dependence  on Major  Customers  and  Suppliers  -  Domestic  retail  sales
     represent  approximately  90%  of  sales  with  only  one  retail  customer
     representing more than 10% of total sales.

     The Company is currently purchasing 100% of its products from two vendors.

     Regulatory Matters - There have been no changes in the status of regulatory
     inquiries by the Food and Drug  Administration  (FDA) and the Federal Trade
     Commission (FTC).

     Litigation - In July 1997, the Company's former attorney, who is a relative
     of a  Director,  brought an action  against  the  Company in New York State
     Supreme Court,  New York County for unpaid attorney fees and  disbursements
     of approximately  $18,000.  Legal counsel has not rendered an opinion as to
     the ultimate outcome of this matter.


                                       13
<PAGE>


QUEST PRODUCTS CORPORATION
Management's Discussion and Analysis




                              Results of Operations
                     Six Months Ended June 30, 1998 Compared
                        to Six Months Ended June 30, 1997



     The Company  incurred a net loss of $221,570  for the six months ended June
30, 1998 as compared to the loss of $185,725  for the six months  ended June 30,
1997. Six-month sales increased $150,707.  The increase in sales resulted from a
retail sales program which began in March 1998.

     Selling  expenses  increased  from  $45,939 to  $196,050 as a result of the
additional  costs  associated  with the  distribution of the product into retail
chain drug stores.

     General and administrative  expenses decreased from $294,690 to $280,910 as
a result of an increase in officer salaries ($122,117) and rent ($10,391) less a
decrease in office salaries and consulting fees  ($109,607),  professional  fees
($29,609) and insurance ($7,809).

     The gross profit margin  increased  from 61% to 78%, due to the high volume
of domestic retail sales.

     The Company maintains a $1,000,000 liability insurance policy.




                                       14
<PAGE>




QUEST PRODUCTS CORPORATION
Management's Discussion and Analysis



                         Liquidity and Capital Resources

Cash of $166,333 was used for operations for the 6 months ended June 30, 1998 as
compared to $174,516 used in the same period of last year. Cash decreased during
the 6 months ended June 30, 1998 by $20,133.

The Company's  working capital has deteriorated due to the use of current assets
for operations. Working capital and current ratios were:

                             June 30,          December 31,        June 30,
                               1998               1997               1997
                             --------          ------------        --------
Working capital
(deficiency)                 ($952,905)        ($880,433)         ($548,893)
Current ratios                 0.14:1            0.10:1             0.29:1

In order to meet short-term  marketing  goals, in July 1997 certain officers and
directors  agreed to acquire an aggregate of 10,000,000  shares of the Company's
common  stock  (representing  8% of total shares  outstanding)  for an aggregate
purchase price of $100,000.  The Company is also seeking an additional  $240,000
of financing  under the same terms and conditions as offered to the officers and
directors.  As of June 30, 1998, the Company has received $318,700.  There is no
assurance that the Company will be able to obtain additional financing.


                           Distribution and Marketing

Marketing (Domestic)

     In March 31, 1998,  the Company  entered the U.S.  retail  market under the
category of smoke cessation products.

Marketing (International)

     On August 21, 1995,  the Company  entered  into an  agreement  with a South
Korean  trading  company  for the  distribution  and  manufacture  of a modified
(design)  PhaseOut  product in South Korea.  Because of the improved  design and
reduced size of this PhaseOut device, it will be utilized in the Japanese market
as well.  South Korea has 10 million  smokers and Japan has 35 million  smokers.
Distribution in South Korea is expected to begin in the 3rd quarter of 1998.



                                       15
<PAGE>


QUEST PRODUCTS CORPORATION
Management's Discussion and Analysis


New Products

     In May 1997,  the Company  entered  into a joint  venture  with  Automotive
Marketing,  Inc. to manufacture and distribute  aftermarket automobile products.
As of June 30,  1998,  the Company has  incurred  expenses of $130,716  with the
understanding  that any such expenses will be reimbursed when  revenue-producing
operations commence.


                               Regulatory Matters

     There have been no material changes in the status of matters pending before
the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC).




                                       16
<PAGE>


                           PART II - OTHER INFORMATION



Item 1.   Legal Proceedings

          The Company has been sued by a former attorney for fees it alleges are
          due but unpaid in the amount of approximately  $18,000.  Legal counsel
          has not rendered an opinion as to the ultimate outcome of this matter.

Item 2.   Changes in Securities

               None

Item 3.   Defaults Upon Senior Securities

               None

Item 4.   Submission of Matters to a Vote of Security Holders

               None

Item 5.   Other Information

               See notes to the financial statements

Item 6.   Exhibits and Reports

               None



                                       17
<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.


                                             QUEST PRODUCTS CORPORATION


Dated:  August 12, 1998

                                             /S/:                              
                                             ----------------------------------
                                             Herbert M. Reichlin, President