UNITED STATES
                       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 June 30, 1998

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ______________to_______________

Commission file number  0-21489

                      International Dispensing Corporation
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


          Delaware                                        13-3856324
-------------------------------                ---------------------------------
(State of other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)


          2500 Westchester Avenue, Suite 304, Purchase, New York 10577
          ------------------------------------------------------------
                    (Address of principal executive offices)


                                 (914) 251-0336
                           ---------------------------
                           (Issuer's telephone number)


                                 Not applicable
              ----------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

Check  whether  the  issuer  (1) filed all  reports 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 [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes or common
equity, as of the latest  practicable date:  9,566,668 shares of Common Stock as
of July 23, 1998

Transitional Small Business Disclosure Format (Check One): Yes [ ]     No [X]


                                        1

<PAGE>


                      International Dispensing Corporation
                          (A Development Stage Company)


                                Table of Contents



Part I  FINANCIAL INFORMATION                                        Page Number

Item 1.  Financial Statements

         Balance Sheets at June 30, 1998 (unaudited)                        3
         and December 31, 1997

         Statements of Operations for the Six and Three Months              4
         Ended June 30, 1998 and 1997 and for the Period from 
         Inception (October 10, 1995) through June 30, 1998

         Statements of Cash Flows for the Six Months Ended                  5
         June 30, 1998 and 1997 and for the Period from Inception
         (October 10, 1995) through June 30, 1998

         Notes to Financial Statements                                      6

Item 2.  Management's Discussion and Analysis of Financial                  7
         Condition and Results of Operations

Part II  OTHER INFORMATION                                                  10


                                        2

<PAGE>
                      INTERNATIONAL DISPENSING CORPORATION
                          (A Development Stage Company)

                                  BALANCE SHEET

                                                        June 30,    December 31,
                                                          1998          1997
                                                      -----------   ------------
                                                      (unaudited)
Assets
Current Assets:
Cash and cash equivalents ........................   $ 1,771,966    $ 3,138,204
Accounts receivable ..............................       343,670           --
Prepaid expenses .................................        12,333         46,333
                                                     -----------    -----------
                              Total current assets     2,127,969      3,184,537
Fixed Assets:
Leasehold improvements ...........................         7,270          7,270
Office equipment .................................         4,350          4,350
Automobile .......................................        21,920         21,920
Accumulated Depreciation and Amortization ........        (9,558)        (6,559)
                                                     -----------    -----------
                                  Net fixed assets        23,982         26,981
Other Assets .....................................       676,413         57,786
                                                     -----------    -----------
                                      Total Assets   $ 2,828,364    $ 3,269,304
                                                     ===========    ===========

Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable .................................        26,760         12,255
Accrued expenses .................................        36,601         49,766
                                                     -----------    -----------
Total current liabilities ........................        63,361         62,021
                                                     -----------    -----------
                                 Total liabilities        63,361         62,021
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $.001 par value; ................          --             --
2,000,000 shares authorized, no
shares issued or outstanding
Common stock, $.001 par value; ...................         9,567          9,567
40,000,000 shares authorized;
9,566,668 issued and outstanding
as of Dec. 31, 1997 and June 30,
1998 respectively
Additional paid-in capital .......................     9,895,286      9,895,286
Deficit accumulated during .......................    (7,139,850)    (6,697,570)
development stage
                                                     -----------    -----------
                        Total stockholders' equity     2,765,003      3,207,283
                                                     -----------    -----------
        Total liabilities and stockholders' equity   $ 2,828,364    $ 3,269,304
                                                     ===========    ===========


    The accompanying notes are an integral part of these financial statements

                                        3


<PAGE>

<TABLE>
<CAPTION>

                                                INTERNATIONAL DISPENSING CORPORATION
                                                   (A Development Stage Company)

                                                       STATEMENT OF OPERATIONS

                                                                                                                          Cumulative
                                                              Six Months                        Three Months          from Inception
                                                                 ended                             ended            October 10, 1995
                                                       ----------------------------    -----------------------------         through
                                                       June 30, 1998  June 30, 1997    June 30, 1998   June 30, 1997   June 30, 1998
                                                        -----------    -----------      -----------     -----------      -----------
                                                        (unaudited)    (unaudited)      (unaudited)     (unaudited)      (unaudited)

<S>                                                     <C>             <C>             <C>             <C>             <C>        
Revenues ...........................................    $   332,750     $      --       $   275,294     $      --       $   332,750

Cost of goods sold .................................        187,095            --           149,511            --           187,095
                                                        -----------     -----------     -----------     -----------     -----------
Gross margin .......................................        145,655            --           125,783            --           145,655
                                                        -----------     -----------     -----------     -----------     -----------
Operating expenses:
General and Adminstrative ..........................        646,694         438,533         345,368         258,537       3,258,944
Depreciation and Amortization ......................          3,000             442           1,500             221           9,560
                                                        -----------     -----------     -----------     -----------     -----------

Total operating expenses ...........................        649,964         438,975         346,868         258,758       3,268,504
                                                        -----------     -----------     -----------     -----------     -----------

Loss from operations ...............................       (504,039)       (438,975)       (221,085)       (258,758)     (3,122,849)
Other income (expense) .............................           --              --              --              --              --
Interest expense ...................................           --              --              --              --            66,665

Interest income ....................................         61,759          98,987          26,975          49,880         299,664
                                                        -----------     -----------     -----------     -----------     -----------

Net loss before extraordinary loss .................    ($  442,280)    ($  339,988)    ($  194,110)    ($  208,878)    ($2,889,850)

Extraordinary loss on retirement of debt ...........           --              --              --              --          (250,000)
                                                        -----------     -----------     -----------     -----------     -----------


Net loss ...........................................    ($  442,280)    ($  339,988)    ($  194,110)    ($  208,878)    ($3,139,850)
                                                        ===========     ===========     ===========     ===========     ===========

Basic and diluted loss per share ...................    $     (0.05)    $     (0.04)    $     (0.02)    $     (0.02)

Basic and diluted weighted average
shares outstanding .................................      9,566,668       9,533,333       9,566,668       9,533,333


                                        The accompanying notes are an integral part of these financial statements

</TABLE>

                                                                 4

<PAGE>

<TABLE>
<CAPTION>

                                                INTERNATIONAL DISPENSING CORPORATION
                                                    (A Development Stage Company)

                                                       STATEMENT OF CASH FLOWS
                                                                                                                          Cumulative
                                                                                                                      from Inception
                                                                               Six Months           Six Months      October 10, 1995
                                                                                 ended                ended                  through
                                                                             June 30, 1998        June 30, 1997        June 30, 1998
                                                                             -------------        -------------        -------------
                                                                               (unaudited)          (unaudited)          (unaudited)
<S>                                                                           <C>                  <C>                  <C>         
Cash flows from operating activities:
Net Loss ............................................................         ($  442,280)         ($  339,988)         ($3,139,850)
Adjustments to reconcile net loss to
 net cash used in operating activities:
  Depreciation and amortization .....................................               2,999                  442                9,557
  Non-cash compensation .............................................                --                   --                 76,238
  Loss on retirement of debt ........................................                --                   --                250,000
  Changes in operating assets and liabilities .......................                --                   --                   --
  Increase in accounts receivable ...................................            (343,670)             (29,709)            (343,670)
  (Increase) decrease in prepaid expenses ...........................              34,000               17,424              (12,333)
  Increase in other assets ..........................................            (618,627)                --               (670,163)
  Increase (decrease) in accrued expenses ...........................               1,340              (98,421)              63,361
                                                                              -----------          -----------          -----------
Net cash used in operating activities: ..............................         ($1,366,238)         ($  450,252)         ($3,767,310)
                                                                              -----------          -----------          -----------
Cash flows from operating activities:
  Purchase of fixed assets ..........................................                --                (21,920)             (33,539)
  Purchase of license ...............................................                --                   --             (4,000,000)
                                                                              -----------          -----------          -----------
Net cash used in investing activities ...............................                --                (21,920)         ($4,033,539)
Cash flows from financing activities:
  Proceeds from private placement ...................................                --                   --              2,100,000
  Proceeds from issuance of convertible debt ........................                --                   --                150,000
  Repayment of promissory note ......................................                --                   --               (300,000)
  Repayment of bridge loans .........................................                --                   --             (1,050,000)
  Repayment of convertible debt .....................................                --                   --               (100,000)
  Proceeds from initial public offering .............................                --                   --              8,772,815
                                                                              -----------          -----------          -----------
Net cash provided from financing activities .........................                --                (21,920)         $ 9,572,815
                                                                              -----------          -----------          -----------
Net increase (decrease) in cash and cash equivalents ................          (1,366,238)          (4,721,172)           1,771,966
Cash and cash equivalents, beginning of period ......................           3,138,204            4,268,963                 --
                                                                              -----------          -----------          -----------
Cash and cash equivalents, end of period ............................         $ 1,771,966          $ 3,796,791          $ 1,771,966
                                                                              ===========          ===========          ===========
Supplemental disclosure of cash flow information:
  Cash paid for interest ............................................                --                   --            $    66,665
  Cash paid for taxes ...............................................                --                   --                   --
Non-cash investing and financing activities:
Issuance of common stock ............................................                --                   --            $     5,800
Purchase of license from affiliate ..................................                --                   --            $ 4,000,000

                                   The accompanying notes are an integral part of these financial statements

</TABLE>

                                                                 5


<PAGE>


                      INTERNATIONAL DISPENSING CORPORATION
                          (A Development Stage Company)

                        NOTES TO THE FINANCIAL STATEMENTS
            (Information as of and for the period ended June 30, 1998
                                  is unaudited)


1.    THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

      The balance  sheet as of June 30, 1998 and statements  of  operations  and
statements  of cash flows for the six months  then ended have been  prepared  by
International  Dispensing Corporation (the "Company") without audit. The results
should be read in conjunction  with the audited  financial  statements and notes
thereto  included  in the  Company's  Annual  Report on Form 10-KSB for the year
ended  December 31, 1997.  Results of operations for the six month period is not
necessarily  indicative  of the  operating  results  for the full year.  Interim
statements are prepared on a basis consistent with year end statements.

      In the opinion of management,  the unaudited interim financial  statements
furnished  herein include all adjustments  necessary for a fair  presentation of
the results of operations of the Company.  All such  adjustments are of a normal
recurring nature.

2.    BUSINESS DEVELOPMENTS

      On December 23, 1997, the Company  entered into an agreement with Well Men
Industrial  Company Limited,  a Hong Kong registered  corporation  ("Well Men"),
pursuant to which Well Men granted to the Company an  exclusive  right to market
and sell in China  certain  Well Men  products.  Well Men also  assigned  to the
Company for the purpose of commercializing  such Well Men products,  all of Well
Men's patents and patent  applications  relating to such Well Men products.  The
agreement  is for an  initial  term of ten  years.  The  Company  has  opened  a
representative  office in China to promote  the sales of these  products  and to
establish the name of the Company. Operations commenced in March, 1998.


                                        6

<PAGE>



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



      The Company was  incorporated  in Delaware in October  1995 under the name
ReSeal Food  Dispensing  Systems,  Inc.  and  changed its name to  International
Dispensing  Corporation on September 12, 1996. The Company was formed  primarily
for the  purpose  of  commercializing  and  marketing  certain  proprietary  and
patented delivery and dispensing technologies (the "Technologies") licensed from
ReSeal International  Corporation ("RIC"), which Technologies consist of barrier
oriented,  closed delivery and dispensing  systems (the "Systems")  composed of:
(i)   self-adjusting   reservoir   bodies,   (ii)  patented,   barrier  capable,
unidirectional  flow  valves (the "Valve  Assemblies"),  and (iii) as  required,
mechanisms to activate and facilitate the product  delivery and flow  functions.
When  utilized in  dispensing  flowable  food and beverage  products  like milk,
juice,  wine,  etc., the Systems are designed to maintain the sterility,  purity
and freshness of such products  throughout its use life, with the possibility of
eliminating or reducing the need for adding preservatives to the product to keep
it fresh  and/or  refrigeration  throughout  its use  life.  The  self-adjusting
reservoir  body of a System is designed to shrink in proportion to the amount of
the product being dispensed through the Valve Assembly. The Valve Assemblies are
designed to dispense a product without  letting either air or contaminants  flow
back into the internal  reservoir in which the  remaining  product is held.  The
Company  believes that by maintaining  the purity of the product that remains in
the  container,  the  Systems  will  provide  higher  levels  of  freshness  for
significantly  longer periods of time and, if preservatives are eliminated,  the
level of purity, of a wide array of packaged flowable products.

      The  Company  is  primarily  focusing  its  marketing  activities  on  the
application of the licensed  technologies in the Field of Use (as defined below)
as set forth in that certain Amended and Restated License Agreement, between the
Company and RIC, which  encompasses the food and beverage  industries as broadly
defined.  "Field Of Use" means the use of the  Technology to make,  use,  lease,
sell or distribute (a) any food or beverage dispensers or containers that embody
the Technology or the  manufacture,  use,  lease,  sale or distribution of which
uses  the  Technology  (collectively, the  "Product")  intended  for  use  in an
industrial  or  commercial  place  of  business  in the  preparation  of food or
beverage at such place of business,  (b) any food or beverage  Product  intended
for  use  in an  industrial  or  commercial  place  of  business  by a  customer
purchasing  food or beverage at such place of business for consumption on or off
the  premises of such place of  business,  or (c) any food or  beverage  Product
intended  to be  sold to or by food or  beverage  wholesale  price  discounters,
retailers  and similar  establishments  that sell food or beverage to consumers.
Within such  categories,  the  applications of the licensed  technologies can be
divided into a number of  potential  markets,  including  but not limited to the
following: (i) beverages, which include milk/cream,  coffee, tea (hot and cold),
hot  chocolate,  juices,  sweeteners,  baby formula,  baby food (in puree form),
wines and water;  (ii) foods,  which include soups,  liquid eggs, liquid butter,
sauces,  yogurt,  melted cheese  (nacho),  baby foods and hot toppings in liquid
form; and (iii) condiments, which include ketchup,


                                        7

<PAGE>


barbecue sauce, mayonnaise, salad dressing, oils and mustard.

      The prototype  tooling for  production of prototype  Valve  Assemblies has
been completed.  Upon production of initial  prototype  Valve  Assemblies,  such
Valve  Assemblies  will be  subjected  to  independent  laboratory  testing.  In
addition,  the Company will supply specific  prototype  Systems to customers for
consumer testing.

      On November 10, 1997, the Company entered into a Joint Systems Development
Agreement with Packaging Systems,  L.L.C., the parent company of Rapak, Inc. The
resulting  products of this  strategic  alliance  will be  BaginBox  with unique
Valve/Pump  Technology food and beverage  delivery systems that will be marketed
to the food and beverage industries throughout the United States.

      On December 23, 1997, the Company  entered into an agreement with Well Men
Industrial  Company Limited,  a Hong Kong registered  corporation  ("Well Men"),
pursuant to which Well Men granted to the Company an  exclusive  right to market
and sell in China  certain  Well Men  products.  Well Men also  assigned  to the
Company for the purpose of commercializing  such Well Men products,  all of Well
Men's patents and patent  applications  relating to such Well Men products.  The
agreement  is for an  initial  term of ten  years.  The  Company  has  opened  a
representative  office in China to promote  the sales of these  products  and to
establish the name of the Company. Operations commenced in March, 1998.


                              RESULT OF OPERATIONS


Six Months Ended June 30, 1998 Compared to Six Months Ended June 30, 1997
-------------------------------------------------------------------------

      Revenue - For the six months ended June 30, 1998, the Company had revenues
of $332,750  versus no revenues for the  comparable  1997  period.  All of these
revenues  were derived from the sale of Well Men products in China.  The sale of
Well Men products in China  commenced in March of 1998. The Company  anticipates
continuing revenues from the sale of Well Men products over the next six months.

      Gross  Margin - For the six months  ended June 30,  1998,  the Company had
gross margins of $145,655  versus no gross margins for the six months ended June
30, 1997. All of these gross margins  derived from the sale of Well Men products
in China.  The  Company  anticipates  that the  43.77%  gross  margin on revenue
derived from the sale of Well Men products will be maintained  over the next six
months.

      Operating  Expenses - For the six months ended June 30, 1998,  the Company
had operating expenses of $649,964 versus operating expenses of $438,975 for the
six month period ended June 30, 1997.  This increase of $210,989,  or 48.1% over
the  comparable  period last year is due primarily to the Company's  accelerated
investment in research and development of its core technology,  and its start-up
costs associated with the Well Men Agreement.


                                        8

<PAGE>


      Net Loss - For the six months ended June 30,  1998,  the Company had a net
loss of $442,280 versus a net loss of $339,988 for the six months ended June 30,
1997. This increase in net loss of $102,292, or 30.1% over the comparable period
last year is due primarily to the Company's  accelerated  investment in research
and  development of its core  technology,  and its start-up cost associated with
the Well Men Agreement.


Three Months Ended June 30, 1998 Compared To Three Months Ended June 30, 1997
-----------------------------------------------------------------------------

      Revenue - For the three  months  ended  June 30,  1998,  the  Company  had
revenues of $275,294 versus no revenues for the comparable  1997 period.  All of
these  revenues  were derived  from the sale of Well Men products in China.  The
sale of Well Men products  commenced in March of 1988,  when $57,456 in revenues
were generated.  The Company  anticipates  continuing  revenues from the sale of
Well Men products over the next six months.

      Gross Margin - For the three  months ended June 30, 1988,  the Company had
gross  margins of $125,783  versus no gross  margins for the three  months ended
June 30, 1997. All of these gross margins were derived from the sale of Well Men
products in China.

      Operating Expenses - For the three months ended June 30, 1998, the Company
had operating expenses of $346,868 versus operating expenses of $258,758 for the
three month period ended June 30, 1997. This increase of $88,110,  or 34.1% over
the  comparable  period last year is primarily due to the Company's  accelerated
investment in research and development of its core technology.

      Net Loss - For the three months ended June 30, 1998, the Company had a net
loss of $194,110  versus a net loss of $208,878  for the three months ended June
30,  1997.  This  decrease in net loss of $14,768,  or 7.1% over the  comparable
period last year, even with accelerated  investments in research and technology,
is due to the  revenues  and  gross  margins  generated  by the sale of Well Men
products in China.

      The Company has reported a net loss from  operations of $ 3,139,850  since
inception.

                               FINANCIAL CONDITION

      As  reflected in the  financial  statements,  the Company has  experienced
continuing net losses and negative cash flows from  operations  through June 30,
1998. The Company's  continuing  existence is dependent on its ability to attain
profitable  operations.  As of June 30, 1998,  the Company had liquid  assets of
$1,771,966.

      In a private  placement  concluded in February 1996, the Company  obtained
aggregate  capital  of  $2,250,000  through  the  issuance  by  the  Company  of
convertible notes, options and the sale of Common Stock.

      In October 1996, the Company sold, in an initial public offering,  833,334
Units, each Unit


                                        9

<PAGE>


consisting  of two shares of Common  Stock and two  redeemable  Class A purchase
warrants for $12.00 per Unit.  Each warrant  entitles the holder to purchase one
share of the  Company's  Common  Stock for  $7.00  during  the four year  period
commencing  October 3, 1997.  The warrants are redeemable by the Company at $.05
per warrant any time after  October 3, 1997 if certain  conditions  are met. The
net  proceeds,  which  the  Company  received  from the  offering,  amounted  to
approximately $8.8 million.

      The Company  believes that it has adequate funds  available to conduct and
continue its business and does not foresee needing to raise  additional funds in
the next 12 months.




PART II - OTHER INFORMATION

Item 1.       Legal Proceedings.
                       None

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.
                       None

Item 6.       Exhibits and Reports on Form 8-K.
                       (a) Exhibit 27.  Financial Data Schedule
                       (b) No Current Reports on Form 8-K have been filed for
                           the quarter for which this report is being filed.


                                        10

<PAGE>


                                   SIGNATURES

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


                                      INTERNATIONAL DISPENSING
                                      CORPORATION



Date: July 24, 1998                   /s/ Jon D. Silverman
                                      --------------------
                                      Jon D. Silverman
                                      Chairman of the Board, Chief Executive
                                        Officer and President
                                      (Principal Executive Officer)



Date: July 24, 1998                   /s/ Jeffrey D. Lewenthal
                                      ------------------------
                                      Jeffrey D. Lewenthal
                                      Chief Financial Officer and Treasurer
                                      (Principal Accounting and Financial
                                      Officer)


                                       11