U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-QSB


   Quarterly Report Section 13 or 15(d) of the Securities Exchange Act of 1934

                       For the quarter ended June 30, 1999

                          Commission File No. 000-26213

                            ARC COMMUNICATIONS, INC.


                       A New Jersey Corporation 22-3201557

                              788 Shrewsbury Avenue
                         Tinton Falls, New Jersey 07724

                    Issuer's telephone number: (732) 219-1766

     Check  whether  the issuer (1) filed all  reports  required  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 __ No _X_

     Issuer has been subject to the applicable  filing  requirements  since July
27, 1999, the effective date of its Form 10-SB.

     State the number of shares outstanding of each of the registrant's  classes
of common equity as of the latest  practicable  date:  13,750,622  shares of the
registrant's  common stock are issued and  outstanding  as of September  8,1999.
Total number of pages contained in this document is 12.



<PAGE>



ARC COMMUNICATIONS, INC.

INDEX

PART 1.  FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

Condensed Balance Sheets as of June 30, 1999 and December 31, 1998.

Consolidated  Statements of  Operations  for the Three and Six Months Ended June
30, 1998 and 1999.

Consolidated Statements of Cash Flows for the Six Months Ended June 30, 1998 and
1999.

Notes to Consolidated Financial Statements.

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

PART II.  OTHER INFORMATION

Items 1-6.


PART 1 - FINANCIAL INFORMATION

Item 1 - Financial Statements


<PAGE>



                    ARC COMMUNICATIONS, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                     ASSETS

                                                                            Unaudited      Audited
                                                                             June 30,      Dec. 31,
                                                                              1999           1998
                                                                           -----------    -----------
<S>                                                                        <C>            <C>
CURRENT ASSETS
    Cash and cash equivalents                                              $   409,366    $   223,693
    Accounts Receivable - net                                                  733,173        535,838
    Inventory                                                                   23,086         15,765
    Prepaid expenses                                                            11,497         11,222
    Other receivables                                                              -0-          6,000
                                                                           -----------    -----------
          Total Current Assets                                               1,177,122        792,518
                                                                           -----------    -----------

PROPERTY AND EQUIPMENT - NET                                                   375,243        396,196
                                                                           -----------    -----------

OTHER ASSETS
    Goodwill - net                                                              81,736         86,640
    Security deposits                                                            9,410          9,410
    Due from Related Party                                                      22,374         19,908
                                                                           -----------    -----------
          Total Other Assets                                                   113,520        115,958
                                                                           -----------    -----------

TOTAL ASSETS                                                               $ 1,665,885    $ 1,304,672
                                                                           ===========    ===========





                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Line of credit                                                         $   450,115    $   400,115
    Accounts Payable and Accrued Expenses                                      259,176        243,277
                                                                           -----------    -----------
          Total Liabilities                                                    709,291        641,697
                                                                           -----------    -----------



COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
    Preferred stock, $.20 par value, authorized 5,000,000 shares, issued
      and outstanding 720,000 in 1999 and -0- in 1998                          144,000        150,000
    Common stock, $.001 par value, authorized 45,000,000 shares, issued
      and outstanding 13,750,632 in 1999 and 13,553,132 in 1998                 13,751         13,751
    Additional paid-in capital                                               1,352,566      1,352,566
    Retained earnings (accumulated deficit)                                   (553,723)      (855,037)
                                                                           -----------    -----------
          Total Stockholders' Equity                                           956,594        661,280
                                                                           -----------    -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                 $ 1,665,885    $ 1,304,672
                                                                           ===========    ===========
</TABLE>


<PAGE>



                    ARC COMMUNICATIONS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                    UNAUDITED


<TABLE>
<CAPTION>
                             6 Months       6 Months        3 Months       3 Months
                             Ended          Ended           Ended          Ended
                             June 30,       June 30,        June 30,       June 30,
                             1999           1998            1999           1998
                             ------------   ------------    ------------   ------------
<S>                          <C>            <C>             <C>            <C>
NET SALES                    $  1,840,049   $  1,294,652    $    874,105   $    692,809


Cost and Expenses:

Salaries and Other
employee compensation             741,015        766,401         394,393        397,031

Selling, general
 and administrative               797,720        811,374         419,978        399,422
                             ------------   ------------    ------------   ------------

Total Cost and Expenses         1,538,735      1,577,775         814,371        796,153




NET INCOME (LOSS)                 301,314       (283,123)         59,734       (103,344)
                             ------------   ------------    ------------   ------------


BASIC AND DILUTED NET
INCOME (LOSS) PER SHARE      $       0.02   $      (0.02)   $      0.004   $      (0.01)
                             ------------   ------------    ------------   ------------




Weighted Average Number of
Shares Outstanding             13,750,632     13,564,382
</TABLE>


<PAGE>



                    ARC COMMUNICATIONS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                    UNAUDITED

<TABLE>
<CAPTION>
                                                               June 30,     June 30,
                                                                 1999         1998
                                                              ---------    ---------
<S>                                                           <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income (loss)                                         $ 301,314    $(283,123)
                                                              ---------    ---------
    Adjustments to reconcile net income or loss to net cash
      provided by operating activities:
          Depreciation and amortization                          73,640       70,660
          Bad Debt                                               25,999          -0-

    Increase (decrease) in cash from changes in:
      Accounts receivable                                      (223,334)    (137,961)
      Inventory                                                  (7,321)         -0-
      Prepaid expenses                                             (275)        (204)
      Other Receivables                                             -0-       17,576
      Due from related party                                     (2,466)     (51,682)
      Accounts payable and accrued expenses                      15,899      (94,606)
      Deferred revenue                                              -0-       (1,000)
                                                              ---------    ---------

          Total Adjustments                                    (117,858)    (191,059)
                                                              ---------    ---------

          Net Cash Provided (Used) in Operating Activities      183,456     (474,182)
                                                              ---------    ---------


CASH FLOWS FROM INVESTING ACTIVITIES
    Expenditures for property and equipment                     (47,783)     (26,001)

          Net Cash Used in Investing Activities                 (47,783)     (26,001)
                                                              ---------    ---------


CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from notes payable                                  50,000      303,000
                                                              ---------    ---------


          Net Cash Provided by Financing Activities              50,000      303,000
                                                              ---------    ---------


NET INCREASE (DECREASE) IN CASH                                 185,673     (197,183)


CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                  223,693      428,329
                                                              ---------    ---------


CASH AND CASH EQUIVALENTS AT END OF YEAR                      $ 409,366    $ 231,146
                                                              =========    =========


SUPPLEMENTAL DISCLOSURES OF CASH FLOW
    INFORMATION

    Cash paid for interest                                    $  26,119    $   8,655
    Cash paid for income taxes                                      -0-          -0-
</TABLE>



<PAGE>



                    ARC COMMUNICATIONS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                    Unaudited

                                  JUNE 30, 1999


1.   Basis of Presentation

In  the  opinion  of  the  Company,  the  accompanying   consolidated  financial
statements  contain  all  adjustments   (consisting  only  of  normal  recurring
adjustments)  necessary to fairly present the Company's  financial  position and
its  results of  operations  and cash flows as of the dates and for the  periods
indicated.

Certain  information and footnote  disclosures  normally  contained in financial
statements prepared in accordance with generally accepted accounting  principles
have been omitted.  These condensed  consolidated financial statements should be
read in conjunction  with the audited December 31, 1998  consolidated  financial
statements  and related  notes  included  in the  Company's  year end  certified
Financial  Statement.  The  results  of  operations  for the six  months are not
necessarily indicative of the operating results for the full year.

Amounts for the six months ended June 30,1998 have been  reclassified to conform
with the June 30,1999 presentation.

2.   Principles of Consolidations

The consolidated  financial  statements  include the accounts of the Company and
all of its  subsidiaries  in which a  controlling  interest is  maintained.  All
significant  inter- company  accounts and  transactions  have been eliminated in
consolidation.  For those  consolidated  subsidiaries where Company ownership is
less than  100%,  the  outside  stockholders'  interests  are shown as  minority
interests.  Investments  in  affiliates  over which the Company has  significant
influence but not a controlling interest are carried on the equity basis.

3.   Revenue Recognition

The Company recognizes revenue from sales at the date the product is shipped and
as professional services are performed.

<PAGE>



                    ARC COMMUNICATIONS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                    Unaudited

                                  JUNE 30, 1999


Segment Information

                                                  June 30,       June 30,
                                                   1999           1998
                                                -----------    -----------

     Revenues
        Multi-Media                             $ 1,655,594    $ 1,142,882
        Continuing professional education           184,455        151,770
                                                -----------    -----------
          Total Consolidated Revenue            $ 1,840,049    $ 1,294,652
                                                -----------    -----------

     Net Income (Loss)
        Multi-Media                             $   344,918    $   (17,355)
        Continuing professional education           (43,604)      (265,768)
                                                -----------    -----------
           Total Consolidated Net Loss          $   301,314    $  (283,123)
                                                -----------    -----------
     Assets
        Multi-Media                             $ 1,511,660    $ 1,272,570
        Continuing professional education           154,225        124,530
                                                -----------    -----------
          Total Consolidated Net Assets         $ 1,665,885    $ 1,397,100
                                                -----------    -----------



<PAGE>



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

Six Months ended June 30, 1999 and June 30, 1998

     ARC's Net Sales for the six months  ended June 30,  1999 and June 30,  1998
were $1,840,049 and $1,294,652 respectively. An increase of 42.13%. The increase
in sales is due to the increase in ARC Mesa  internet  activities  in continuing
professional educators. ARC also has continued its growth by capitalizing on the
formation  of its sales force in the second  half of 1998.  This sales force has
been able to generate an increase in sales in the area of interactive multimedia
programs, web site development and print collateral.

     Costs and  expenses  for the six month ended June  30,1999 and June 30,1998
were  $1,538,735  and  $1,577,775  respectively a decrease of 2.53% for the same
period ended June  30,1998.  The decrease is primarily due to overhead cuts made
in the Third Quarter of 1998.

     Net income for the six months ended June 30, 1999 was $301,314, compared to
a loss of  $283,123  for the same  period  ended June 30,  1998 an  increase  of
206.4%.  Management  attributes  this  increase in net income to the increase in
sales and decrease in overhead expenses.

Three Months ended June 30, 1999 and June 30, 1998

     ARC's Net Sales for the period  ended June 30,  1999 and June 30, 1998 were
$874,105 and $692,809 respectively. An increase of 26.17%. The increase in sales
is due to the increase in ARCMesa internet activities in continuing professional
educators. ARC also has continued its growth by capitalizing on the formation of
its sales  force in the second  half of 1998.  This sales force has been able to
generate an increase in sales in the area of  interactive  multimedia  programs,
web site development and print collateral.

     Costs and expenses for the three months ended June 30,1999 and June 30,1998
were  $814,371 and $796,153  respectively.  An increase is primarily  due to the
hiring of outside consultants used in the production of sales.

     Net income for the three months ended June 30, 1999 was $59,734 compared to
a loss of $103,344 for the three months ended June 30, 1998. The increase in net
income in 1999 is due to the increase in Sales over the 1998.

LIQUIDITY AND CAPITAL RESOURCES

Six Months ended June 30, 1999 and June 30, 1998

     The Company  maintains a credit  limit of $750,000 as a part of its ongoing
effort to ensure appropriate level of liquidity.  As of June 30,1999 $299,885 of
this line of credit remain  unused and  available  for future use.  Although the
Company  believes that the amount  remaining unused under this line of credit is
sufficient for its short term


<PAGE>



requirements,  the Company  expects that this line of credit may be increased or
other lines of credit established as needed for its long term financing needs.

     The cash flow generated by operations was $183,456 for the six months ended
June 30,1999.  For the same period ended June 30, 1998 operations used $474,182.
The  decrease  in  June  30,1998  was  attributed  to an  increase  in  accounts
receivable  and  a  decrease  in  accounts  payable.  Cash  used  for  investing
activities during the six months ended June 30,1999 and June 30,1998 was $47,783
and $26,001  respectively.  The cash used in investing  activities  was used for
equipment purchased.

     Cash flows generated from financing  activities during the six months ended
June 30,1999 and June 30,1998 was $50,000 and  $303,000  respectively.  The cash
was provided from drawing down on the line of credit.

     For the  six  months  ended  June  30,1999  operating  activities  provided
$183,456.  Investing  activities used $47,783 and financing  activities provided
$50,000 for a cash increase of $185,673 for the period.

     The cash flows used in operating  activities  for the six months ended June
30,1998 was $474,182,  investing  activities used $26,001 and financing provided
cash of $303,000 for a cash decrease in the period of $197,183.


ARC YEAR 2000 COMPLIANCE


     The Year 2000 issue arises as the result of computer  programs  having been
written, and systems having been designed,  using two digits rather than four to
define the  applicable  year.  Consequently,  such software has the potential to
recognize  a date  using "00" as the Year  2000.  This could  result in a system
failure or miscalculations causing disruptions of operations,  including,  among
other things, a temporary inability to process  transactions,  send invoices, or
engage in similar normal business activities.

     The  Company's  current  accounting  and  other  bookkeeping  software  was
purchased  "off-the-shelf"  through retail  vendors and were  represented to the
Company by such manufacturers as being Year 2000 compliant.

     As a user of leading edge technology, Arc has taken steps to ensure that it
is Year 2000 compliant.  Further, the nature of Arc's business requires that its
systems  and  programs  be  evaluated  on an ongoing  basis to ensure  that they
continue to be Year 2000 compliant.

     In addition  to testing  its  programs  internally,  the Company  hired IBS
Interactive ("IBS"), an independent consultant,  to perform a Year 2000 audit on
the  Company's   network.   IBS  determined   that  there  were  no  substantial
deficiencies  in its report dated August 27, 1999.  However,  the IBS report did
identify some non-critical software which


<PAGE>



was  questionable.  Non-critical  software  consists of programs that are either
graphic or spreadsheet in nature.  It has been determined that such questionable
programs will not  necessarily  fail on January 1, 2000, but may apply incorrect
dates (such as 1900) to files saved or created after December 31, 1999.

     Notwithstanding  the fact that  approximately 80% of all of its software is
compliant,  the Company continues to test,  evaluate and update the questionable
programs  and  anticipates  that it will  complete  such  testing and updates by
November 1, 1999.  The Company  has no  contingency  plans in place in the event
that it is unable to  complete  its testing  and  updating  of the  questionable
software by January 1, 2000.  However,  as such  software is  non-critical,  the
Company does not expect to suffer irreparable  economic harm or loss of critical
data.  To date the  Company has spent  approximately  $1,200 to address the Year
2000 problem.

     The Company  believes  that the servers it uses to interact on the internet
are Year 2000 compliant.  Further, the Companies which presently supply products
or services to Arc have informed Arc that they have taken the appropriate  steps
to ready their hardware and software for Year 2000. However,  the Company cannot
guarantee  any other  company's  Year 2000  readiness  and in the event that any
Company  which Arc relies upon for  services or products is not Year 2000 ready,
the Company may suffer irreparable economic harm.


PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings.

None.

Item 2.  Changes in Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4  Submission of Matters to Vote of Security Holders.

None.

Item 5.  Other Information.

None.

Item 6.  Exhibits and Reports on Form 8-K



<PAGE>



None.


SIGNATURES

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

Date: September 9, 1999



ARC COMMUNICATIONS, INC.


BY: /s/ Michael Rubel
    -----------------------------
        Michael Rubel
        Chief Operating Officer