SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

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

                For the quarterly period ended September 30, 1998

                                       OR

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

              For the transition period from__________to__________.

                       Commission File Number 33-18834-LA

                             OPAL TECHNOLOGIES, INC.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

           Nevada                                       87-0306464
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

         Suite 4704, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong
         --------------------------------------------------------------
                    (Address of principal executive offices)

                                  852-2541-1999
                           ---------------------------
                           (Issuer's telephone number)

                                       N/A
               ---------------------------------------------------
              (Former name, former address and formal fiscal year,
                         if changed since last report)

     Check whether the issuer (1) has filed all reports  required to be filed by
Section 13 or 15(d) of the Securities  Exchange Act of 1934 during the preceding
twelve (12) months (or such shorter  period that the  Registrant was required to
file such reports) and (2) has been subject to such filing  requirements for the
past ninety (90) days. Yes X   No
                          ----   ----

     As of November  15, 1998,  35,991,964  shares of Common Stock of the issuer
were outstanding.


<PAGE>

                             OPAL TECHNOLOGIES, INC.
                                   FORM 10-QSB

                                      INDEX
                                                                          Page
                                                                         ------
PART I - FINANCIAL INFORMATION

ITEM 1 .  Financial Statements

      Consolidated Balance Sheets as of September 30, 1998 and
      December 31, 1997................................................    3

      Consolidated Statements of Operations-for the three months 
      and nine months ended September 30, 1998 and 1997................    4

      Consolidated Statements of Cash Flows-for the three months 
      and nine months ended September 30, 1998 and 1997................    5

      Notes to Consolidated Financial Statements.......................    6

ITEM 2.  Management's Discussion and Analysis or Plan of Operations....    7

PART II - OTHER INFORMATION............................................    9




                                       2
<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                    OPAL TECHNOLOGIES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

<TABLE>
                                                                                       September 30, 1998         December 31, 1997
                                                                                      -------------------         ------------------
                                                                                            US$'000                    US$'000
                                                                                          (Unaudited)
                                                                                      -------------------         ------------------
<S>                                                                                  <C>                           <C>
ASSETS
Current assets                                                                                      90                    1,453
      Cash and bank deposits                                                                     2,891                    2,590
      Accounts receivable, net                                                                       -                      412
      Due from a shareholder                                                                         -                        2
      Due from a director                                                                            -
      Due from a related company                                                                   240                       26
      Prepayments and other current assets                                                       1,009                      642
      Inventories, net
                                                                                      ----------------             -----------------
            Total current assets                                                                 4,230                    5,125
Property, machinery and equipment, net                                                           9,744                    2,123
Construction-in-progress                                                                         6,570                   11,626
Licensing costs, net                                                                               868                      907
Goodwill, net                                                                                      178                      186
                                                                                      ----------------             -----------------
            Total assets                                                                        21,590                   19,967
                                                                                      ================             =================
LIABILITIES, MINORITY INTERESTS AND SHAREHOLDERS' EQUITY
                                                                                      ================             =================
Current liabilities:
      Short-term borrowings                                                                      1,946                    1,239
      Accounts payable                                                                             797                      625
      Accrued liabilities                                                                           85                      201
      Taxation payable                                                                              38                       38
                                                                                      ----------------             -----------------
            Total current liabilities                                                            2,866                    2,103
Non-current payable                                                                              2,700                    2,877
Loans from PRC joint venture partner                                                               678                      639
Loans from a shareholder                                                                         1,384
                                                                                      ----------------             -----------------
            Total liabilities                                                                    7,628                    5,619
                                                                                      ----------------             -----------------
Minority interests                                                                               2,591                    2,649
                                                                                      ----------------             -----------------
Shareholders' equity:
      Common stock, par value US$0.001:
      -     authorized - 49,000,000 shares as of December 31, 1997 and
            September 30, 1998
      -     outstanding and fully paid - 35,991,964 shares as of December 31,                       36                       36
            1997 and September 30, 1998
      Preferred stock, par value US$0.001:
      -     authorized - 1,000,000 shares as of December 31, 1997 and
            September 30, 1998
      -     outstanding and fully paid - 100,000 shares of December 31, 1997                         -
            and September 30, 1998
      Additional paid in capital                                                                12,213                   12,213
      Accumulated losses                                                                         (855)                    (506)
      Cumulative translation adjustments                                                          (23)                     (44)
                                                                                      ----------------             -----------------
            Total shareholders' equity                                                          11,371                   11,699
                                                                                      ----------------             -----------------
            Total liabilities, minority interest and shareholders' equity                       21,590                   19,967
                                                                                      ================             =================

</TABLE>
            See Notes to Unaudited Consolidated Financial Statements

                                       3
<PAGE>

                    OPAL TECHNOLOGIES, INC. AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
                                                            For the three months ended                 For the nine months ended
                                                                   September 30                               September 30
                                                       ------------------------------------      -----------------------------------
                                                            1998                 1997                 1998                 1997
                                                       --------------      ----------------      --------------      ---------------
                                                          US$'000              US$'000              US$'000               US$'000
                                                       --------------      ----------------      --------------      ---------------
<S>                                                     <C>                 <C>                    <C>                <C>    

Net sales                                                         31                   932                 847                2,870
Cost of goods sold                                               (10)                 (733)               (417)              (1,950)
                                                       --------------      ----------------      --------------      ---------------
      Gross profit                                                21                   199                 430                  920

Selling, general and administrative expenses                    (250)                 (795)               (717)              (1,239)
Interest expenses, net                                           (41)                    3                (120)                   4
                                                       --------------      ----------------      --------------      ---------------
      Loss before income taxes                                  (270)                 (593)               (407)                (315)

Provision for income taxes                                         -                     -                   -                    -
                                                       --------------      ----------------      --------------      ---------------
      Profit / (loss) before minority interests                 (270)                 (593)               (407)                (315)

Minority interest                                                 43                     8                  58                  (33)
                                                       --------------      ----------------      --------------      ---------------
      Net income / (loss)                                       (227)                 (585)               (349)                (348)
                                                       ==============      ================      ==============      ===============
Weighted Average Number of Shares Outstanding             35,991,964            25,231,084          35,991,964            8,929,381
                                                       ==============      ================      ==============      ===============
Loss per common share                                          (0.01)                (0.02)              (0.01)               (0.04)
                                                       ==============      ================      ==============      ===============
</TABLE>


            See Notes to Unaudited Consolidated Financial Statements





                                       4
<PAGE>

                    OPAL TECHNOLOGIES, INC. AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS



<TABLE>
                                                                          For the nine months ended
                                                                                September 30,
                                                                        -----------------------------
                                                                            1998             1997
                                                                        -------------     -----------
                                                                          US$`000           US$`000
                                                                        -------------     -----------
<S>                                                                     <C>               <C>

Cash flow from operating activities
Net income/(losses)                                                           (349)            (348)
Adjustments to reconcile net income /(loss) to net cash provided by /
(used in) operating activities -
         Depreciation of property, machinery & equipment                       120               42
         Amortization of good will                                               8                6
         Amortization of licensing costs                                        40               45
         Minority interest                                                     (58)              33
(Increase)/Decrease in operating assets -
         Accounts receivable, net                                              (301)         (1,891)
         Prepayments, and other current assets                                 (214)           (520)
         Inventories, net                                                      (367)           (188)
Increase /(Decrease) in operating liabilities -
         Accounts payables                                                      172             108
         Accrued liabilities                                                   (116)            205
         Taxation payable                                                         -               -
         Non-current payable                                                   (177)              -
                                                                        ------------     ------------
              Net cash provided by/(used in) operating activities            (1,242)         (2,508)
                                                                        ------------     ------------
Cash flows from investing activities
Acquisition of property, machinery & equipment                               (2,686)         (1,803)
(Advance to) Repayment from a shareholder                                       412               -
(Advance to) Repayment from a director                                            2               1
(Advance to) Repayment from a related company                                     -            (465)
                                                                        ------------     ------------
              Net cash provided by/(used in) investing activities            (2,272)         (2,267)
                                                                        ------------     ------------
Cash flows from financing activities
        Issuance of common shares                                                 -           5,700
        New loans from a shareholder                                          1,384          (1,470)
        New loans from PRC joint venture partner                                 39             828
        Net short-term bank loan                                                592               -
        Other loans                                                             115               -
                                                                        ------------     ------------
              Net cash provided by/(used in) financing activities             2,130           5,058
                                                                        ------------     ------------
Effect of cumulative translation adjustments                                     21             (19)
                                                                        ------------     ------------
Net increase / (decrease) in cash and bank deposits                          (1,363)            264
Cash and bank deposits, as of beginning of period                             1,453              67
                                                                        ------------     ------------
Cash and bank deposits, as of end of period                                      90             331
                                                                        ============     ============

</TABLE>

            See Notes to Unaudited Consolidated Financial Statements


                                       5
<PAGE>

                    OPAL TECHNOLOGIES, INC. AND SUBSIDIARIES
                         NOTES TO UNAUDITED CONSOLIDATED
                              FINANCIAL STATEMENTS



1.   INTERIM PRESENTATION

     The interim financial statements were prepared pursuant to the requirements
     for reporting on Form 10-QSB.  The December 31, 1997 balance sheet data was
     derived  from  audited  financial  statements  but  does  not  include  all
     disclosures  required by  generally  accepted  accounting  principles.  The
     interim   financial   statements  and  notes  thereto  should  be  read  in
     conjunction with the financial statements and notes thereto included in the
     Company's  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 the interim periods presented.

2.   ACQUISITION OF OPERATING BUSINESSES

     The  acquisition of Opal  Agriculture  Development  Limited and Triple Star
     Holding  Limited  by  the  Company  on  June  6,  1997  was  treated  as  a
     recapitalization  of the  acquired  companies  with the  acquired  entities
     considered  the  acquirer  (a  reverse   acquisition).   Accordingly,   the
     historical  consolidated  financial statements of the Company prior to June
     6, 1997 are those of the  combined  financial  statements  of two  acquired
     companies.  The shareholders  equity of the Company as of December 31, 1996
     has been  retroactively  restated to reflect the one for ten reverse  stock
     split,  the  reauthorization  of 50,000,000  shares of  (49,000,000  common
     shares  and  1,000,000  preferred  shares)  and the  issuance  of  Series A
     preferred  stock.  The Series A preferred stock has a vote on all corporate
     matters  equal to thirty  percent  of the total  vote,  is not  subject  to
     redemption and has a liquidation preference of $.001 per share.

3.   MINORITY INTEREST

     The minority interest reflects the 45% interest held by a non-related party
     in Beijing Opal  Agriculture  Biochemistry,  Co. Ltd., a PRC  joint-venture
     engaged  in  the  manufacture   and  production  of  organic   agricultural
     fertilizer.


                                       6
<PAGE>

 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

This release contains forward looking  statements  within the meaning of Section
27A of the  Securities Act of 1933, as amended and Section 21E of the Securities
Exchange Act of 1934,  as amended.  The  Company's  actual  results could differ
materially from those set forth on the forward looking statements as a result of
the risks set forth in a Company's  filings  with the  Securities  and  Exchange
Commission in general economic conditions and changes in the assumptions used in
making such forward looking statements.

Material Changes in Results of Operations

Three  Months  Ended  September  30,  1998  Compared to the Three  Months  Ended
September 30, 1997

Net Sales.  Net sales for the three months ended September 30, 1998 decreased by
US$901,000  or 96.7% to  US$31,000  from  US$932,000  for the three months ended
September 30, 1997. This decrease was primarily due to the  devastating  Yangtze
River floods in China,  which  virtually  wiped out agriculture in the Company's
market and reduced the demand for  fertilizers.  The Company  expects  demand to
increase substantially in the fourth quarter as the waters recede.

Gross  Profit.  Gross  profit for the three  months  ended  September  30,  1998
decreased by  US$178,000  or 89.4% to  US$21,000  from  US$199,000  for the same
period last year. This decrease is  attributable to reduced sales volume.  Gross
profit as a percent of sales was 67.7% for the three months ended  September 30,
1998  compared to 21.4% for the  corresponding  period of the prior  year.  This
increase in gross profit  percentage is  attributable  to the replacement of the
old foliar pilot production line used during the first seven months of 1997 by a
new modern foliar production line in August 1997.

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative  expenses for the three months ended September 30, 1998 decreased
by US$545,000  or 68.6% to  US$250,000  from  US$795,000  for the  corresponding
period of the prior year. This decrease resulted from the decline in sales which
forced a cut back in the Company's level of operations.

Interest  Expense,  Net.  Interest  expense,  net for  the  three  months  ended
September  30, 1998  increased by US$38,000 or 1267% to US$41,000  from US$3,000
for the  corresponding  period of the prior  year.  This  increase  in  interest
expense reflects increased borrowings by the Company.

Net  Loss.  The net loss for the  three  months  ended  September  30,  1998 was
US$227,000  compared with a net loss of US$585,000 for the corresponding  period
of the prior year. The decrease in net loss is attributable to reduced  selling,
general  administrative  expenses  which was  partially  offset by reduced gross
profits.

Nine Months Ended September 30, 1998 Compared to the Nine Months Ended September
30, 1997.

Net Sales.  Net sales for the nine months ended  September 30, 1998 decreased by
US$2,023,000 or 70.5% to US$847,000  from  US$2,870,00 for the nine months ended
September 30, 1997.  This decrease was primarily due to the Yangtze River floods
in China.

Gross  Profits.  Gross  profits for the nine  months  ended  September  30, 1998
decreased  by  US$490,000  or  53%  to  US$430,000   from   US$920,000  for  the
corresponding period of the prior year. This decrease is attributable to reduced
sales  volume.  Gross profit as a percent of sales was 50.8% for the nine months
ended September 30, 1998 compared to 32.1% for the  corresponding  period of the
prior year.  This increase in gross profit is attributable to the replacement of
the old foliar pilot  production line used during the first seven months of 1997
by the new modern foliar production line installed in August 1997.

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative  expenses for the nine months ended  September 30, 1998 decreased
by US$522,000  or 42% to  US$717,000  from  US$1,239,000  for the  corresponding
period of the prior year. This decrease resulted from the decline in sales which
forced a cut back in the Company's level of operations.

Interest Expense, Net. Interest expense, net for the nine months ended September
30,  1998  increased  to  $120,000  from net  interest  income of $4,000 for the
corresponding  period of the prior  year.  This  increase  in  interest  expense
reflects increased borrowings by the Company.

Net  Loss.  The net  loss for the  nine  months  ended  September  30,  1998 was
US$349,000 compared with net loss of US$348,000 for the corresponding  period of
the prior year. The loss for the nine months ended September 30, 1998 was due to
lower sales volume and higher interest  expense,  which was partially  offset by
the reduction in selling, general and administrative expenses, and a much higher
gross profit margin.

                                       7
<PAGE>

 
Changes in Financial Condition, Liquidity and Capital Resources

     For the past  twelve  months,  the  Company  has funded its  operating  and
capital   requirements   with  loans  from  the  parent   company  and  its  PRC
joint-venture  partner and bank loan. As of September 30, 1998,  the Company had
cash of US$90,000 and working capital of  US$1,364,000.  This compares with cash
of US$331,000 and working capital of US$3,560,000 as of September 30, 1997.

     Net cash used in operating  activities  decreased to  US$1,242,000  for the
nine months ended September 30, 1998 from US$2,508,000 for the nine months ended
September  30,  1997.  This  decrease  resulted  from  an  increase  in  account
receivable,  other assets and inventories and a decrease in accrued  liabilities
and non-current payables.

     Net cash used in investing  activities  increased to  US$2,272,000  for the
nine months ended  September 30, 1998 from  US$2,267,000  for the  corresponding
period of the prior year.  While the Company had an increase of  US$883,000  for
the acquisition of property machinery and equipment, it was substantially offset
by the  repayment  of a  shareholder  loan and the  absence of any  advances  to
related company.  This increase is primarily due to additional  expenditures for
the acquisition of machinery and equipment.

     Cash flows from financing activities decreased to US$2,130,000 for the nine
months ended September 30, 1998 for US$5,058,000 for the corresponding period of
the prior year. The decrease is  attributable  to the absence of share sales and
loans from joint  venture  partners  which were  partially  offset by loans from
shareholders, bank loans and other loans.

     The new organic  granular  fertilizer line has been installed and completed
at the Company's Beijing facility.  The Company will complete the testing of the
line in November and will begin trial production in December.  The Company hopes
to begin commercial shipments in January 1999.

     The  annual  production  of the new  organic  granular  fertilizer  line is
approximately  75,000 metric tons which at current prices  represents a sales of
US$18 million and should produce gross profit margins of 30%. 30,000 metric tons
of this production  have been allocated to a Taiwanese  customer and the balance
for the domestic market.

     To  provide  the  working  capital  to  operate  the new  organic  granular
fertilizer  line, the Company will be required to immediately  place  additional
equity,  develop  additional  lending  sources  or  collect  on its  outstanding
receivable.  Without the availability of such sources of funds, the Company will
be  unable  to begin  commercial  production.  While the  Company  is  currently
negotiating  with several  banks in the PRC for  funding,  there is no assurance
that such funding will be forthcoming,  or if forthcoming  will be in sufficient
amount for the Company to execute its business plan.

                                       8
<PAGE>

                                                
                           PART II - OTHER INFORMATION


Item 6. Exhibits and Reports on Form 8-K

          (a)  Exhibits

               27.1 Financial Data Schedule

                                   SIGNATURES

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


                                      OPAL TECHNOLOGIES, INC.


Date: November 19,  1998              By:  /s/ John K. C. Koon
                                           ---------------------------
                                           John K. C. Koon
                                           President and Chief Executive Officer



Dated: November 19, 1998              By:  /s/ Kenneth Poon
                                           ---------------------------
                                           Kenneth Poon
                                           Chief Financial Officer


                                       9