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, 1999
                                                          ---------------- 

 [   ]   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.)


                   3 Westchester Plaza, 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, 1999,  was
5,428,621 shares.
<PAGE>
                               V BAND CORPORATION
                           FORM 10-Q QUARTERLY REPORT
                   FOR THE THREE MONTHS ENDED JANUARY 31,1999




                                TABLE OF CONTENTS

                                       
                          PART I. Financial Information

Item 1.        Financial Statements

               Consolidated  balance sheets at January 31, 1999  (unaudited) and
                    October 31, 1998
                   
               Consolidated  statements of operations for the three months ended
                    January 31, 1999 and 1998 (unaudited)

               Consolidated  statements of cash flows for the three months ended
                    January 31, 1999 and 1998 (unaudited)

               Notes to consolidated financial statements (unaudited)

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

Item 3.        Quantitative and Qualitative Disclosures About Market Risk



                           PART II. Other Information

Item 6.        Exhibits and Reports on Form 8-K  


SIGNATURES      


<PAGE>
<TABLE>
<CAPTION>
                           V BAND CORPORATION AND SUBSIDIARIES
                               CONSOLIDATED BALANCE SHEETS
                          JANUARY 31, 1999 AND OCTOBER 31, 1998
                              (in 000's, except share data)

                                                              January 31,    October 31,
                                                                 1999           1998
                                                                --------      -------- 
         ASSETS                                               (unaudited)
<S>                                                             <C>           <C>     
Current Assets:
Cash ......................................................     $    630      $    915
Accounts receivable, less allowance for doubtful
    accounts of $292 in 1999 and $289 in 1998 .............        2,867         2,813
Inventories, net ..........................................        3,701         4,241
Prepaid expenses and other current assets .................          344           313
                                                                --------      --------
                       Total current assets ...............        7,542         8,282
                                                                --------      --------
Fixed Assets:
Furniture, fixtures, equipment and leasehold improvements .        7,831         7,811
Less: Accumulated depreciation and amortization ...........       (7,516)       (7,444)
                                                                --------      --------
                       Total fixed assets .................          315           367
                                                                --------      --------

Other Assets ..............................................          149           158
                                                                --------      --------

    TOTAL ASSETS ..........................................     $  8,006      $  8,807
                                                                ========      ========
    LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
Short-term debt ...........................................     $  1,305      $  1,425
Accounts payable ..........................................        2,245         2,434
Accrued wages .............................................          910           842
Customer deposits .........................................        1,480         1,389
Other accrued expenses ....................................          674           797
                                                                --------      --------
                       Total  current liabilities .........        6,614         6,887
                                                                --------      --------
Commitments and Contingencies (see notes)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                           V BAND CORPORATION AND SUBSIDIARIES
                               CONSOLIDATED BALANCE SHEETS
                          JANUARY 31, 1999 AND OCTOBER 31, 1998
                              (in 000's, except share data)
                                      (continued)

                                                              January 31,    October 31,
                                                                 1999           1998
                                                                --------      -------- 
                                                               (unaudited)
<S>                                                             <C>           <C>     
Shareholders' Equity:
Common stock, $.01 par value; authorized 20,000,000 shares;
    issued 7,147,943 shares ...............................           71            71
Capital in excess of par value ............................       20,016        20,016
Deficit ...................................................       (7,207)       (6,639)
Cumulative translation adjustment .........................          281           240
                                                                --------      --------
                                                                  13,160        13,688
Less Treasury stock, ata cost; 1,719,322 shares............      (11,768)      (11,768) 
                                                                --------      --------
                       Total shareholders' equity .........        1,392         1,920
                                                                --------      --------

    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ............     $  8,006      $  8,807
                                                                ========      ========
</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, 1999
                     AND 1998 (unaudited) (in 000's, except
                                 per share data)



                                                           1999          1998
                                                         -------        -------
<S>                                                      <C>            <C>    
Sales
      Equipment ..................................       $ 2,093        $ 3,228
      Service ....................................         1,683          1,496
                                                         -------        -------
           Total sales ...........................         3,776          4,724
                                                         -------        -------

Cost of Sales
      Equipment ..................................         1,639          2,423
      Service ....................................         1,066            986
                                                         -------        -------
           Total cost of sales ...................         2,705          3,409
                                                         -------        -------

           Gross profit ..........................         1,071          1,315
                                                         -------        -------

Operating Expenses
      Selling, general and administrative ........         1,425          2,964
      Research and development ...................           189            602
                                                         -------        -------
           Total operating expenses ..............         1,614          3,566
                                                         -------        -------

           Operating loss ........................          (543)        (2,251)

Interest Expense .................................           (35)           (50)
Other Income (Expense) ...........................            10            (21)
                                                         -------        -------
           Net loss ..............................       $  (568)       $(2,322)
                                                         =======        =======

Net loss per basic and diluted common share ......       $  (.10)       $  (.43)
                                                         =======        =======

Weighted average number of basic and diluted
    shares outstanding ...........................         5,429          5,413
                                                         =======        =======
</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, 1999 AND 1998 (unaudited)
                                          (in 000's)

                                                                          1999        1998
                                                                       --------     -------- 
<S>                                                                    <C>          <C>     
Cash Flows from Operating Activities
    Net loss .....................................................     $  (568)     $(2,322)
    Adjustments to reconcile net loss to net
       cash provided by (used in) operating activities:
       Depreciation ..............................................          73          126
       Amortization of other assets ..............................           9            8
       Provision for doubtful accounts ...........................           3            3
       Waiver of Chief Executive Officer's compensation ..........        --             50
       Changes in assets and liabilities:
           Accounts receivable ...................................         (57)       3,837
           Inventories ...........................................         540         (974)
           Prepaid expenses and other current assets .............         (31)          17
           Other assets ..........................................          --           --
           Accounts payable and other current liabilities ........        (153)         881
           Foreign currency translation adjustment ...............          41            7
                                                                       -------      -------
               Net cash (used in) provided by operating activities        (144)       1,633
                                                                       -------      -------

Cash Flows from Investing Activities
    Capital expenditures .........................................         (21)         (33)
                                                                       -------      -------
               Net cash used in investing activities .............         (21)         (33)
                                                                       -------      -------

Cash Flows from Financing Activities
    Proceeds from short-term debt ................................       3,075        5,800
    Payments of short-tem debt ...................................      (3,195)      (7,404)
                                                                       -------      -------
               Net cash used in financing activities .............        (120)      (1,604)
                                                                       -------      -------

Net decrease in cash .............................................        (285)          (4)
Cash at beginning of period ......................................         915          336
                                                                       -------      -------
Cash at end of period ............................................     $   630      $   332
                                                                       =======      =======

Supplementary Disclosures
    Income taxes paid ............................................     $  --        $     4
                                                                       =======      =======
    Interest paid ................................................     $    35      $    52
                                                                       =======      =======
</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, 1998 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,  1999 and all  periods
presented have been made.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will  continue as a going  concern.  The  Company's  ability to
continue as a going concern is uncertain based on the matters  discussed  below.
The consolidated financial statements do not include any adjustments relating to
the  recoverability  and  classification of assets or the amounts of liabilities
that might be  necessary  should the  Company be unable to  continue  as a going
concern.  The Company's  continuation  as a going concern is dependent  upon the
Company's ability to return to profitability and to maintain compliance with its
amended bank covenants.

The Company has incurred  recurring losses from  operations.  As a result of the
Company's results of operations, the bank amended the financial covenants of the
Credit Agreement (see Note D). The amended financial  covenants  require,  among
other things,  an improvement in the Company's  results of operations during the
second fiscal  quarter of 1999 and a return to  profitability  commencing in the
third quarter of 1999. The Company's operations are dependent 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 and upon the ability of the Company to generate sufficient revenue and
results  from  operations  to support  such  funding.  The Company is  presently
seeking  additional  sales  orders  in  order  to  improve  the  results  of its
operations.  There is no assurance  that the Company will be able to improve the
results of its operations to satisfy the amended financial covenants.

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.
<PAGE>
Note C -- Inventories

Inventories are summarized as follows:

                                                  January 31,       October 31,
                                                     1999               1998

Finished goods ...........................         $ 3,166            $ 3,812
Parts and components .....................           3,044              3,339
                                                   -------            -------
                                                     6,210              7,151
Less: Inventory reserves .................          (2,509)            (2,910)
                                                   -------            -------
                                                   $ 3,701            $ 4,241
                                                   =======            =======


Note D  -- Short-term debt

In May 1997, the Company  entered into a Credit  Agreement with National Bank of
Canada, (the "Credit Agreement") which expires in May 2000. The Credit Agreement
provided a revolving loan and letter of credit facility of up to $4 million. 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. Under the terms of the Credit Agreement, the Company is restricted
from paying  dividends  if an event of default has  occurred  and is  continuing
thereunder.  Due to the 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 amended the covenants for fiscal
year 1998. In addition,  the interest  rate on the  outstanding  borrowings  was
modified  to prime  plus 2 percent  effective  February  1,  1998.  The  amended
financial  covenants were not satisfied for the  three-month  period ended April
30, 1998. On June 4, 1998,  National Bank of Canada waived the Company's failure
to satisfy  those  covenants at April 30, 1998 and amended the covenants for the
remainder  of fiscal year 1998.  The  Company  satisfied  the amended  financial
covenants for the three-month  periods ended July 31, 1998, October 31, 1998 and
January 31, 1999, but was in violation of a non-financial covenant as of October
31, 1998.  The prime rate was 7.75% at January 31,  1999.  On February 18, 1999,
National Bank of Canada waived the non-financial  covenant default,  amended the
financial  covenants  for  all  periods  through  expiration,  and  reduced  the
revolving loan and credit facility to $2 million.
<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 1999,  ended  January 31,  1999,  of $3,776 were
$948,  or 20%,  lower than the  $4,724  reported  in the first  quarter of 1998.
Equipment  sales of $2,093 in the first quarter of 1999 decreased by $1,135,  or
35%,  from the  equipment  sales of $3,228 in the first  quarter  of 1998.  This
decrease was primarily due to decreased demand for the Company's products. Sales
from the Company's  service business  increased to $1,683, or 13%, for the first
quarter of 1999 from $1,496 for the first  quarter of 1998.  This  increase  was
primarily due to new maintenance  contracts entered into after the expiration of
warranty periods for  installations of the Company's  eXchange phone in previous
fiscal years and an increase in other customers serviced by the Company.

Gross profit  margin was 28% for the first  quarter of 1999 and 1998.  The gross
profit  margin  for the  equipment  sales was 22% in the first  quarter  of 1999
compared  to 25% for the  same  period  in 1998.  This  decrease  was  primarily
attributable  to price  discounting  required  in  competitive  bidding  for new
installations as well as additions to existing customer installations. The gross
profit  margin  for  service  sales  was 37% for the  first  quarter  of 1999 as
compared to 34% for the same period in 1998.  The increase was  attributable  to
the increase in maintenance sales for the first quarter.

Operating  expenses  for the first  quarter of 1999 were $1,614 or $1,952  lower
than the  $3,566  reported  for the first  quarter  of 1998.  The  decrease  was
primarily attributable to the first quarter 1998 charge of $1,023 related to the
Company's   restructuring   of  its  operations,   reductions  in  research  and
development expenditures, and decreases in other operating expenses.

The net loss  reported in the first  quarter ended January 31, 1999 was $568, or
$.10 per share,  compared  to a net loss of $2,322,  or $.43 per share,  for the
first quarter of 1998. The loss was primarily attributable to the aforementioned
decrease in  equipment  sales and gross profit  margin for the first  quarter of
1999.  The average  shares  outstanding  for the quarter  ended January 31, 1998
increased to 5,429 versus 5,413 for the same period in 1997.

Financial Condition

The  Company's  cash was $630 at January 31,  1999,  a decrease of $285 from the
October 31, 1998 balance of $915.  Short-term debt decreased $120 as a result of
payments  made  during the  quarter.  Inventory  decreased  $540 as the  Company
substantially  reduced new  purchases and also  rescheduled  deliveries of goods
previously ordered from its subcontractors and suppliers.

The  Company's  losses for 1997,  1998 and the first  quarter of 1999 have 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 provides a $2
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, the Bank amended the financial covenants of the
Credit  Agreement.  The Company's  operations  are dependent  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.  The amended  financial  covenants  require,  among other things,  an
improvement  in the  Company's  results of  operations  during the second fiscal
quarter of 1999 and a return to  profitability  in the third  fiscal  quarter of
1999.  There is no  assurance  that the  Company  will be able to satisfy  these
requirements.
<PAGE>
Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Although  the  Company  currently  invoices  its  customers  in US dollars or UK
pounds,  exchange rates for these and other local  currencies in countries where
the  Company  may  operate in the future may  fluctuate  in  relation  to the US
dollar.  Such fluctuations may have an adverse effect on the Company's  earnings
or assets when local  currencies are exchanged for US dollars.  Any weakening of
the value of such local  currency  against the US dollar  could  result in lower
revenues  and earnings for the  Company.  To date,  gains and losses  related to
foreign currency  transactions  and foreign  currency  translation have not been
material for the Company.  Included in the Company's  consolidated balance sheet
at October 31, 1998 are net assets of the Company's United Kingdom subsidiary of
$816,000. There has been no material change in this information during the first
fiscal quarter of 1999.


Item 6.  Exhibits and Reports on Form 8-K

         (a)       Exhibits                   
                  10.18  Agreement  dated  November 15, 1998 between the Company
                         and Thomas Hughes.
                  10.19 Agreement dated December 1, 1998 between the Company and
                        Nicholas Nestora.
                  10.20 Agreement dated December 1, 1998 between the Company and
                         Marc Teichman.



<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 17, 1999
                                             /s/ Thomas E. Feil
                                             ------------------
                                             Thomas E. Feil
                                             Chairman & Chief Executive Officer
                                             (Duly Authorized Officer)



Date:  March 17, 1999
                                             /s/ Robert O. Riiska
                                             --------------------
                                             Robert O. Riiska
                                             Chief Financial Officer
                                             (Principal Accounting Officer)