SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 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                January 31, 1998
                                                          

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


            For the transition period from              to


                         Commission file number 0-13284

                               V BAND CORPORATION
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


           New York                                           13-2990015
-------------------------------                           -------------------
(State or other jurisdiction of                            (IRS Employer
incorporation or organization)                            Identification No.)


                   565 Taxter Road, Elmsford, New York 10523
              ----------------------------------------------------
              (Address and zip code of principal executive office)


                                 (914) 789-5000
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (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 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 [   ]

The number of shares of Common Stock  outstanding,  as of January 31, 1998,  was
5,412,591 shares.
<PAGE>
                               V BAND CORPORATION
                           FORM 10-Q QUARTERLY REPORT
                   FOR THE THREE MONTHS ENDED JANUARY 31, 1998




                                TABLE OF CONTENTS


                          PART I. Financial Information

Item 1.        Financial Statements

               Consolidated  balance sheets at January 31, 1998  (unaudited) and
                    October 31, 1997
                   
               Consolidated  statements of operations for the three months ended
                    January 31, 1998 and 1997 (unaudited)

               Consolidated  statements of cash flows for the three months ended
                    January 31, 1998 and 1997 (unaudited)

               Notes to consolidated financial statements (unaudited)

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



SIGNATURES
<PAGE>
<TABLE>
<CAPTION>
                          V BAND CORPORATION AND SUBSIDIARIES
                              CONSOLIDATED BALANCE SHEETS
                         JANUARY 31, 1998 AND OCTOBER 31, 1997
                             (in 000's, except share data)

                                                               January 31,    October 31,
                                                                  1998           1997
                                                                --------      --------
          ASSETS                                              (unaudited)
<S>                                                             <C>           <C>
Current Assets:
Cash and cash equivalents .................................     $    332      $    336
Accounts receivable, less allowance for doubtful
     accounts of $498 in 1998 and 1997 ....................        4,239         8,079
Inventories, net ..........................................        5,707         4,733
Prepaid expenses and other current assets .................          441           458
                                                                --------      --------
                         Total current assets .............       10,719        13,606
                                                                --------      --------

Fixed Assets:
Furniture, fixtures, equipment and leasehold improvements .        9,527         9,539
Less: Accumulated depreciation and amortization ...........       (8,867)       (8,786)
                                                                --------      --------
                         Total fixed assets ...............          660           753
                                                                --------      --------

Other Assets ..............................................          185           193
                                                                --------      --------

     TOTAL ASSETS .........................................     $ 11,564      $ 14,552
                                                                ========      ========

     LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
Short-term debt ...........................................     $  1,339      $  2,943
Accounts payable ..........................................        2,612         2,557
Accrued wages .............................................          951           894
Customer deposits .........................................        1,114           959
Other accrued expenses ....................................        1,716         1,102
                                                                --------      --------
                         Total  current liabilities .......        7,732         8,455
                                                                --------      --------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                          V BAND CORPORATION AND SUBSIDIARIES
                              CONSOLIDATED BALANCE SHEETS
                         JANUARY 31, 1998 AND OCTOBER 31, 1997
                             (in 000's, except share data)

                                                               January 31,    October 31,
                                                                  1998           1997
                                                                --------      --------
                                                              (unaudited)
<S>                                                             <C>           <C>
Shareholders' Equity:
Common stock, $.01 par value; authorized 20,000,000 shares;
     issued 7,131,913 .....................................           71            71
Capital in excess of par value ............................       19,922        19,872
Accumulated deficit .......................................       (4,592)       (2,270)
Cumulative translation adjustment .........................          199           192
                                                                --------      --------
                                                                  15,600        17,865
Less - Treasury stock, at cost; 1,719,322 shares...........      (11,768)      (11,768)
                                                                --------      -------- 
                              Total shareholders' equity...        3,832         6,097
                                                                --------      --------

          TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY            $ 11,564      $ 14,552
                                                                ========      ========

</TABLE>
                 See notes to consolidated financial statements
<PAGE>
<TABLE>
<CAPTION>
                          V BAND CORPORATION AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF OPERATIONS
            FOR THE THREE MONTHS ENDED JANUARY 31, 1998 AND 1997 (unaudited)
                           (in 000's, except per share data)
                                  



                                                          1998           1997
                                                        --------        -------
<S>                                                     <C>            <C> 
Sales
       Equipment .................................       $ 3,228        $ 6,106
       Service ...................................         1,496          1,396
                                                        --------        -------
            Total sales ..........................         4,724          7,502
                                                         -------        -------

Cost of Sales
       Equipment .................................         2,423          3,769
       Service ...................................           986            946
                                                         -------        -------
            Total cost of sales ..................         3,409          4,715

            Gross profit .........................         1,315          2,787
                                                         -------        -------

Operating Expenses
       Selling, general and administrative .......         2,964          2,160
       Research and development ..................           602            795
                                                         -------        -------
            Total operating expenses .............         3,566          2,955
                                                         -------        -------

            Operating income (loss) ..............        (2,251)          (168)

Interest (Expense) Income ........................           (50)             3
Other Expense ....................................           (21)            (9)
                                                         -------        -------
            Net loss .............................       $(2,322)       $  (174)
                                                         =======        =======

Net loss per share ...............................       $  (.43)       $  (.03)
                                                         =======        =======

Weighted average number of shares of common
    stock and common stock equivalents ...........         5,413          5,328
                                                         =======        =======

</TABLE>
                 See notes to consolidated financial statements

<PAGE>
<TABLE>
<CAPTION>
                       V BAND CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
        FOR THE THREE MONTHS ENDED JANUARY 31, 1998 AND 1997 (unaudited)
                        (in 000's, except per share data)





                                                                      1998         1997
                                                                    -------      -------
<S>                                                                 <C>          <C>
Cash Flows from operating activities:
Net loss ......................................................     $(2,322)     $  (174)
Adjustments to reconcile net loss to net
   cash provided by (used in) operating activities:
    Depreciation ..............................................         126          137
    Amortization of other assets ..............................           8          106
    Provision for doubtful accounts ...........................           3            3
    Waiver of Chairman's salary ...............................          50
    Changes in assets and liabilities:
        Accounts receivable ...................................       3,837          253
        Inventories ...........................................        (974)        (536)
        Prepaid expenses and other current assets .............          17          261
        Other assets ..........................................                       52
        Accounts payable and other current liabilities ........         881       (1,548)
        Foreign currency translation adjustment ...............           7          (40)
                                                                    -------      -------
            Net cash provided by (used in) operating activities       1,633       (1,486)
                                                                    -------      -------
Cash Flows from Investing Activities:
Capital expenditures ..........................................         (33)         (12)
                                                                    -------      -------
            Net cash used in investing activities .............         (33)         (12)
                                                                    -------      -------
Cash Flows from Financing Activities:
Proceeds from short-term debt .................................       5,800          200
Payments of short-tem debt ....................................      (7,404)
Proceeds from issuance of common stock ........................                        7
                                                                    -------      -------
            Net cash (used in) provided by financing activities      (1,604)         207
                                                                    -------      -------

Net decrease in cash and cash equivalents......................          (4)      (1,291)
Cash and cash equivalents, at beginning of period..............         336        2,258
                                                                    -------      -------
Cash and cash equivalents, at end of period....................     $   332      $   967
                                                                    =======      =======
Supplementary Disclosures:
Income taxes paid .............................................     $     4      $   156
                                                                    =======      =======
Interest paid .................................................     $    52      $   162
                                                                    =======      =======

</TABLE>
                 See notes to consolidated financial statements
<PAGE>
                       V BAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (in 000's)

Note A -- Basis of Presentation

The accompanying  consolidated  financial  statements  include the accounts of V
Band  Corporation  and  its  wholly-owned  subsidiaries  (the  "Company").   All
significant intercompany balances and transactions have been eliminated. Certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance with generally accepted  accounting  principles have been
condensed or omitted.  These consolidated financial statements should be read in
conjunction with the Company's audited financial  statements for the fiscal year
ended October 31, 1997 as set forth in the Company's annual report on Form 10-K.
In the  opinion of  management,  all  adjustments  (which  include  only  normal
recurring  adjustments)  necessary  to present  fairly the  financial  position,
results  of  operations  and cash  flows at  January  31,  1998 and all  periods
presented have been made.

Note B -- Significant accounting policies

Revenue  recognition  -  Equipment  revenue,  for new system  installations  and
modifications  to existing systems at customer  locations,  is recognized as the
product is shipped.  For long-term  contracts,  equipment  revenue is recognized
under the  percentage of completion  method.  Service  revenue,  which  includes
maintenance  contract  revenue and repairs,  is recognized  when the service has
been completed.

Note C -- Inventories

Inventories are summarized as follows:
<TABLE>
<CAPTION>
                                            January 31,   October 31,
                                              1998            1997
                                            -------         -------
<S>                                         <C>             <C>
               Finished goods .........     $ 3,601         $ 3,374
               Parts and components ...       4,650           3,935
                                            -------         -------
                                              8,251           7,309
               Less: Inventory reserves      (2,544)         (2,576)
                                            -------         -------
                                            $ 5,707         $ 4,733
                                            -------         -------

</TABLE>

Note D -- Short-term debt

In May 1997, the Company  entered into a Credit  Agreement with National Bank of
Canada, (the "Credit Agreement"). The Credit Agreement provides a revolving loan
and letter of credit  facility of up to $4 million with  interest  rates (at the
Company's  option) of prime plus 1/4  percent or LIBOR plus 2 1/4  percent.  The
Company's  obligations  under the  Credit  Agreement  are  secured by a security
interest  in  all  of  the  assets  of  V  Band  Corporation  and  its  domestic
subsidiaries.  The prime rate was 8.5% at January 31,  1998.  As a result of the
<PAGE>
Company's  results of  operations  for 1997,  the Company  failed to satisfy the
financial  covenants  set forth in the Credit  Facility.  On  February  9, 1998,
National Bank of Canada waived the Company's  failure to satisfy those covenants
at October 31, 1997 and has amended them for fiscal year 1998. In addition,  the
interest rate on the  outstanding  borrowings  has been modified to prime plus 2
percent effective February 1, 1998.

Note E  -- Restructuring plan

On  January  31,  1998,  the  Company  established  a plan  to  restructure  its
operations.  The  restructuring  plan,  involves  consolidation of the Company's
office space in New York and London,  the  restructuring of its operations,  the
establishment  of a centralized  customer service center and the reassignment of
various marketing and administrative  personnel to field sales support functions
to open new sales and  distribution  channels.  As a result  of this  plan,  the
Company  has  reduced  its  headcount  from its  October  31,  1997 level of 186
employees to 170 employees at January 31, 1998. Therefore,  the Company recorded
a $1,023  charge  during the quarter  ended  January  31,  1998  relating to the
restructuring plan.

Note F - Related party transaction

In the first quarter of 1998, the Chairman of the Company  waived  substantially
all of his  compensation  accrued to him during the  quarter.  The  Company  has
recorded such amount as compensation expense and a capital contribution.
<PAGE> 
Item 2. Management's  Discussion and Analysis of Financial Condition and 
        Results of Operations
                        (in 000's except per share data)

Results of Operations

Sales for the first  quarter of 1998,  ended  January 31,  1998,  of $4,724 were
$2,778,  or 37%,  lower than the $7,502  reported in the first  quarter of 1997.
Equipment  sales of $3,228 in the first quarter of 1998 decreased by $2,878,  or
47%, from the equipment sales of $6,106 in the first quarter of 1997.  Sales for
the Company's  core product  decreased 6% from $3,542 in 1997 to $3,328 in 1998.
The remaining  decrease in equipment  sales was primarily due to the decrease in
sales of $2,564 for the Company's eXchange phone for which the Company had three
large  non-recurring  contracts during the first quarter of 1997. Sales from the
Company's service business  increased to $1,496, or 7%, for the first quarter of
1998 from $1,396 for the first quarter of 1997.  This increase was primarily due
to a  $203,  or 18%,  increase  in the  Company's  maintenance  sales  due to an
increase of customers serviced by the Company offset by a $104, or 38%, decrease
in the Company's repair business primarily due to lower amount of repairs of the
Company's older ViaX product line.

Gross  profit  margin for the first  quarter of 1998 was 28% compared to 37% for
the first quarter of 1997.  The gross profit margin for the equipment  sales was
25% in the first  quarter of 1998  compared  to 38% for the same period in 1997.
The  decrease  in the gross  profit  margin for  equipment  sales was  primarily
attributable  to the lower sales  achieved in the first quarter not  effectively
absorbing  the fixed  manufacturing  costs  coupled  with  higher  manufacturing
variances  which were  attributable to lower  production  volumes and additional
spare equipment  required for several larger contracts.  The gross profit margin
for service  sales was 34% for the first  quarter of 1998 as compared to 32% for
the same  period in 1997.  The  increase  was  attributable  to the  increase in
maintenance sales for the first quarter.

Operating expenses for the first quarter of 1998 were $3,566 or $611 higher than
the $2,955  reported for the first  quarter of 1997.  The increase was primarily
attributable to a $1,023 charge related to the Company's plan to restructure its
operations.  The plan  includes  consolidation  of office  space in New York and
London and the  centralization  of  administrative  functions  of the  Company's
United States service  operation into its New York operation.  In addition,  the
Company has reassigned several marketing and administrative staff to field sales
support functions as a further effort to enhance  revenues.  As a result of this
plan, the Company  reduced the number of its employees from the October 31, 1997
level of 186 to 170 at  January  31,  1998.  Excluding  this  charge,  operating
expenses  decreased by $412.  This  decrease  was  partially  attributable  to a
decrease  in  research  and  development  expenses  as  1997  expenses  included
development  of the  second  generation  of the  Company's  eXchange  phone.  In
addition,  operating  expenses for the Company's Licom  subsidiary  decreased by
$232,  which was attributable to the downsizing and relocation of its operations
into the Company's corporate facility.

The net loss reported in the first quarter ended January 31, 1998 was $2,322, or
$.43 per share, compared to a net loss of $174, or $.03 per share, for the first
quarter of 1997. The loss was primarily attributable to the $1,023 non-recurring
charge related to a restructuring plan coupled with the aforementioned  decrease
in sales for the first quarter of 1998. The average shares  outstanding  for the
quarter  ended  January 31, 1998  increased  to 5,413  versus 5,328 for the same
period in 1997.
<PAGE>
Financial Condition

The  Company's  aggregate of cash and cash  equivalents  was $332 at January 31,
1998,  a decrease  of $4 from the October  31,  1997  balance of $336.  Accounts
receivable  decreased $3,837  primarily due to liquidation of various  retainage
balances  on large  customer  contracts  as well as a decrease  in sales for the
first  quarter of 1998 as compared to fourth  quarter of 1997.  Short-term  debt
decreased  $1,604  as a  result  of  the  liquidation  of  accounts  receivable.
Inventory  increased $974 as a result of the  aforementioned  lower sales in the
first quarter of 1998.  Accrued  expenses  increased  $614  primarily due to the
Company's restructuring accrual of a $1,023.

The  Company's  loss for 1997 and the first  quarter  of 1998 had a  substantial
impact on its working capital and liquidity. On May 28, 1997 the Company entered
into a Credit  Agreement (the "Credit  Agreement") with National Bank of Canada,
New York Branch (the "Bank").  The Credit Agreement provided a $4 million credit
facility  to the  Company  secured  by  substantially  all of the  assets of the
Company and its domestic  subsidiaries.  As a result of the Company's results of
operations for 1997,  the Company failed to satisfy the financial  covenants set
forth in the  Credit  Facility.  The Bank has waived  the  Company's  failure to
satisfy  the  financial  covenants  set forth in the  Credit  Agreement  and has
amended those  covenants  for fiscal year 1998.  The  Company's  operations  are
dependant upon the continued availability of funding under the Credit Agreement.
The continued  availability of funding under the Credit  Agreement is dependent,
in turn, upon the Company's ability to satisfy the amended  financial  covenants
set forth in the Credit Agreement which require an improvement in the results of
the  Company's  operations  for the  remainder of 1998. 

In the first quarter of 1998, the Chairman of the Company  waived  substantially
all of his  compensation  accrued to him during the  quarter.  The  Company  has
recorded such amount as compensation expense and a capital contribution.
<PAGE>

                               V BAND CORPORATION


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.



                                                 V BAND CORPORATION
                                                     (Registrant)



Date: March 16, 1998
                                              /s/ Thomas E. Feil
                                              ------------------
                                              Thomas E. Feil
                                              Chairman & Chief Executive Officer
                                              (Duly Authorized Officer)



Date: March 16, 1998
                                              /s/ Mark R. Hahn
                                              ---------------- 
                                              Mark R. Hahn
                                              Chief Financial Officer
                                              (Principal Accounting Officer)