<PAGE>
 
                     U.S. SECURITIES & EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  Form 10-QSB

                 QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended March 31, 1999
                         Commission File Number 0-22351

                                FirstQuote Inc.
                                ---------------
       (Exact name of small business issuer as specified in its charter)

                DELAWARE                             98-0162893
                --------                             ----------
      (State or other jurisdiction of            (I.R.S. Employer
       incorporation or organization)           Identification No.)

    12, Ave des Morgines, 1213 Petit-Lancy 1, Geneva, Switzerland       N/A
    -------------------------------------------------------------       ---
             (Address of principal executive offices)                (Zip Code)

                                +41-22-879-0879
                                ---------------
                          (Issuer's telephone number)



                       (previously Virtual Telecom, Inc.)
                       ----------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                    report)

Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
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  [_]

As of May 10, 1999 the Registrant had 6,018,309 shares of its common stock, par
value $0.001, issued and outstanding.

Transitional Small Business Disclosure Format:    Yes  [_]  No  [X]
<PAGE>
 
Part I - Financial Information 

Item 1.  Financial Statements

                                FIRSTQUOTE INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                   March 31,      December 31,
                                                     1999             1998    
                                                  ----------      ------------
                                                  (Unaudited)       (Audited) 
<S>                                               <C>             <C>         
ASSETS                                                                        
                                                                              
CURRENT ASSETS                                                                
  Cash and cash equivalents                       $4,955,635      $  229,450  
  Trade accounts receivable, net                     220,558         191,229  
  Prepaid expenses and other receivables              99,659          62,108  
                                                  ----------      ----------  
    Total current assets                           5,275,852         482,787  
                                                  ----------      ----------  
NON-CURRENT ASSETS                                                            
  Property and equipment, net                      1,003,570       1,130,563  
  Other assets                                       437,500          28,487  
                                                  ----------      ----------  
    Total non-current assets                       1,441,070       1,159,050  
                                                  ----------      ----------  

                                                  ----------      ----------  
    Total Assets                                  $6,716,922      $1,641,837  
                                                  ==========      ==========  
</TABLE>

The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements

                                       2
<PAGE>
 
                                FIRSTQUOTE INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
 
LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                                               <C>            <C>
CURRENT LIABILITIES
  Trade accounts payable                                          $   680,286    $   658,700
  Accrued liabilities                                                 150,407        102,274
  Current portion of capital lease obligations                        148,522        146,481
  Advances/convertible loans from stockholders/related parties                     1,000,000
  Deferred income                                                     158,049        170,808
                                                                  -----------    -----------
    Total current liabilities                                       1,137,264      2,078,263
                                                                  -----------    -----------
LONG TERM CAPITAL LEASE OBLIGATIONS
  Capital lease obligation, net of current portion                    130,696        166,621
                                                                  -----------    -----------
STOCKHOLDERS' EQUITY
  Preferred Stock, $0.001 par value, 
    10,000,000 shares authorized; 
      Class A: 18,500 and 68,500 shares issued and outstanding             19             69
      Class B: 1,923,716 shares issued and outstanding                  1,924          1,924
      Class C: 3,783,784 shares issued and outstanding                  3,784
  Common Stock, $0.001 par value,                                       6,018          5,781
    20,000,000 shares authorized; 6,018,309 and 5,781,309 shares
    issued and outstanding                                       
  Additional paid-in capital                                       13,564,345      6,381,315
  Cumulative translation adjustment                                   291,719       (148,610)
  Accumulated deficit                                              (8,418,847)    (6,843,526
                                                                  -----------    -----------
    Total stockholders' equity/(deficit)                            5,448,962       (603,047)
                                                                  -----------    -----------
                                                                  -----------    -----------
    Total Liabilities and Shareholders' Equity                    $ 6,716,922    $ 1,641,837
                                                                  ===========    ===========
</TABLE>
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements

                                       3
<PAGE>
 
                                FIRSTQUOTE INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                For the Three Months Ended
                                                                       March 31,
                                                                --------------------------
                                                                   1999           1998
                                                                -----------    ----------
                                                                (Unaudited)     (Audited)
<S>                                                             <C>            <C> 
INCOME                                                          $   260,404    $   95,533
EXPENSES
  Selling & Market Development Expenses                             362,212       285,267
  General & Administrative Expenses                                 999,908       573,248
                                                                -----------    ----------
                                                                  1,362,120       858,516
                                                                -----------    ----------
OPERATING RESULT                                                 (1,101,716)     (762,983)

OTHER INCOME AND EXPENSES
  Interest Expense                                                   24,425          (676)
  Foreign Exchange Loss, net                                       (498,030)     (169,074)
                                                                -----------    ---------- 
                                                                  (473,6055)     (169,751)
                                                                -----------    ----------
NET LOSS                                                         (1,575,321)     (932,734)
                                                                ===========    ==========
Basic and diluted weighted average number of common shares        5,899,809     5,527,291
                                                                ===========    ==========
Basic and diluted net loss per common share                     $     (0.27)   $    (0.17)
                                                                ===========    ==========
</TABLE>
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements

                                       4
<PAGE>
 
                                FIRSTQUOTE INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
<TABLE>
<CAPTION>

                                                                                For the Three Months Ended
                                                                                         March 31,
                                                                                --------------------------
                                                                                    1999           1998
                                                                                 (Unaudited)     (Audited)
<S>                                                                              <C>            <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Loss                                                                       $(1,575,321)   $ (932,734)
  Adjustments to reconcile net loss to net cash used in operating activities: 
    Exchange loss                                                                    498,030       169,074
    Depreciation and amortization                                                    143,371       117,651
    Provision for doubtful debtors                                                    21,022         2,302
    Interest accrued on loans payable                                                      -         5,417
    Stock and stock options issued as compensation cost                               31,250             -
Increase / decrease resulting from changes in:
    Trade accounts receivable                                                        (50,351)      (10,276)
    Prepaid expenses and other receivables                                           (37,551)       (6,802)
    Trade accounts payable                                                            21,588      (105,397)
    Accrued liabilities and provisions                                                48,133       (52,784)
    Deferred income                                                                  (12,759)       10,990
                                                                                 -----------    ----------
    Net cash used-in operating activities                                           (912,587)     (802,559)

CASH USED IN INVESTING ACTIVITIES:
  Purchase of equipment                                                              (16,378)      (52,630)
  Other non-current asset expenditures                                              (190,263)       (2,831)
                                                                                 -----------    ----------
    Net cash used-in investing activities                                           (206,642)      (55,461)

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
  Issuance of stock                                                                7,007,000             -
  Commission on issuance of stock                                                    (70,000)            -
  Collection of stock subscriptions receivable                                             -     2,000,000
  Reimbursements of advances from stockholders and related parties                (1,000,000)      (96,089)
  Payment of capital lease obligations                                               (33,885)     (219,684)
                                                                                 -----------    ----------
    Net cash provided by financing activities                                      5,903,115     1,684,227

Effect of Exchange Rate Changes on Cash and cash equivalents                         (57,701)      (39,747)

NET INCREASE IN CASH AND CASH EQUIVALENTS                                          4,726,185       786,460

CASH AND CASH EQUIVALENTS AT BEGINNING                                               229,450       569,264
                                                                                 -----------    ----------
CASH AND CASH EQUIVALENTS AT END                                                 $ 4,955,635    $1,355,724   
                                                                                 -----------    ----------
</TABLE>
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements

                                       5
<PAGE>
 
                                FIRSTQUOTE INC.
                  NOTES TO THE CONDENSED FINANCIAL STATEMENTS
                                  (Unaudited)


NOTE 1 - CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without
audit. 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 March 31, 1999, and for all periods
presented have been made.

Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these unaudited condensed
consolidated financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's December 31, 1998 audited
financial statements. The results of operations for the three months ended March
31, 1999 are not necessarily indicative of the operating results for the full
year.

NOTE 2 - CONVERTIBLE LOANS FROM STOCKHOLDERS

As at December 31, 1998 the Company owed $1,000,000 in respect of a loan
convertible into preferred stock of the Company upon the conclusion of
additional equity financing, or redeemable, at the option of the lender. In
January 1999, the loan was converted into 540,541 shares of Series C Preferred
Stock (see Note 3.)

NOTE 3 - ISSUANCE OF COMMON AND PREFERRED STOCK

During the three months ended March 31, 1999, 50,000 shares of Series A
Preferred stock were converted into 100,000 common shares.

During the three months ended March 31, 1999, the Company issued 2,000 shares of
its common stock upon the exercise of 2,000 warrants previously issued with the
Series A Preferred stock. The warrants are exercisable at $3.50.

During the three months ended March 31, 1999, the Company issued 135,000 shares
in settlement of half of the amount due to a financial software solution
provider.

In January 1999, the Company sold 3,783,784 shares of its Series C Preferred
Stock for a total consideration of $7,000,000, including the conversion of the
$1,000,000 loan from stockholder (see Note 2.)

                                       6
<PAGE>
 
Item 2.  Management's Discussion and Analysis or Plan of Operation

Background

The Company is engaged in the business of developing and providing various real-
time market data and financial information services as well as online dealing
capabilities via a range of client interfaces based on Internet technologies.
Its services are marketed under the brand name "FirstQuote". Its services are
available via its own wide-area Internet network by dial-up or dedicated access,
as well as from any other Internet access point. The Company also provides
related supporting network services to users of its financial information
services

Unless the context otherwise requires, all references to the Company include its
wholly owned subsidiary, Virtual Telecom SA, a Swiss corporation and FirstQuote
Ltd. a UK company.

Regarding the Company's plan of operations for the 1999 fiscal year, it has
targeted strategic alliances in key European financial centers from which to
leverage its growth. It plans to market its financial market information,
analytical tools and online order entry/matching systems both under its own
product names and as co-branded implementations with institutional clients.

Currency Exchange Rates: Although the Company reports its results in US dollars,
virtually all of its revenues and expenses are denominated in other currencies,
primarily Swiss francs, Euros and Pounds sterling. Consequently, the Company's
net results are directly affected by any changes in the exchange rate between
the US dollar on the one hand, and the Swiss franc, Euros or Pounds sterling on
the other. Transactions of the Company and its subsidiaries are recorded based
on the functional currency of each particular company. The Company's main
operating subsidiary maintains a Swiss franc functional currency and has a US
dollar denominated current account with its parent company. This results in
foreign exchange differences being recorded based on variations in the USD/CHF
rate of exchange.

Assets and liabilities of the Company and its subsidiaries are translated at the
exchange rate in effect at each year-end. Income statement accounts are
translated at the average rate of exchange prevailing during the year.
Translation adjustments arising from differences in exchange rates from period
to period are included in the cumulative translation adjustment account in
stockholders' equity.

Results of Operations

Revenue of $260,404 was reported for the three months ended March 31, 1999 which
amounts to an increase of 173% over that of $95,533 for the corresponding prior
year quarter. Revenues in the first quarter of 1999 were 52% above those of the
fourth quarter of 1998. Revenue is comprised of financial market data services
and related network connectivity services, including web services. While market
data services related revenues accounted for 41% of total revenue for the prior
year, the relative importance of this source of revenue is increasing as the
Company's FirstQuote user base expands. Financial market data services accounted
for 56% of revenue for the first quarter of 1999.

Selling & Market Development expenses for the three months ended March 31, 1999
year were $362,212 or 27% above the amount of $285,267 for the corresponding
prior year quarter.

General and administrative expenses were $999,908 for the three months ended
March 31, 1999, an increase of 74% from $573,248 in the corresponding prior year
quarter. Staff costs represent the major component of this expense and have
increased 128% from $204,382 to $466,937. Operating expenses have increased 35%
from $190,753 to $258,238, and depreciation charges have increased by 22% from
$117,651 to $143,371.

The net loss for the three months ended March 31, 1999 was $1,575,321, which is
69% above the loss for the corresponding prior year quarter of $932,734.

The foreign exchange gains arise essentially from the revaluation of amounts due
by Virtual Telecom SA to Virtual Telecom Inc., which have been denominated in US
dollars.

                                       7
<PAGE>
 
Liquidity and Financial Condition

As of March 31, 1999, the Company had working capital of $4,138,586 and
stockholders' equity of $5,448,961.

In January 1999 the Company secured equity financing through the sale of
3,783,784 shares of Series C Preferred Stock for $7,000,000, including the
conversion of $1,000,000 due from a related party.

The Company has continued to generate negative cashflows since its cost base
exceeds its revenues from operating activities. The net cash burn rate during
the first quarter of 1999 was approximately $300,000 per month, which was lower
than the fourth quarter of 1998 due to increases in revenue.

Based on the current levels and trends of revenue and operating expenses, the
Company believes that it has sufficient capital to continue its activities for
the next twelve months. However, the plan of operations for the 1999 fiscal year
will require increases in the amounts of operating and capital expenditure above
those incurred to date. While revenues are similarly projected to increase
during the year, it is not certain that these revenues and the above-mentioned
financing will be sufficient to cover these expenditures until the time that a
breakeven situation may be achieved. At this time there are no firm commitments
or agreements on the part of any party to provide any additional debt or equity
capital to the Company and there can be no assurance that the Company will be
able to obtain additional capital. The Company's inability to increase revenue
or obtain additional debt or equity capital on a timely basis will, in all
likelihood, materially adversely affect its future planned growth of operations
and revenues.

Euro Conversion

On January 1, 1999, eleven of the fifteen member countries of the European Union
("EU") establish fixed conversion rates between their existing sovereign
currencies and the Euro, and adopted the Euro as their common legal currency.
Switzerland is not a member of the EU and the Company currently denominates most
of its transactions in Swiss francs, the unit of currency of Switzerland.
Furthermore, subscribers to the Company's services are typically invoiced in the
currency of their resident jurisdiction. The Company has successfully adapted
its information systems and practices to accommodate the Euro in those EU member
countries in which it offers its services. Moreover, the content within the
financial information distributed by the Company (notably security quotations)
has successfully begun to be denominated in Euro, commencing on January 1, 1999.

Euro conversion is expected to generally increase cross-border price
transparency among the participating countries and result in a more competitive
European market. The Company is uncertain as to the effect, if any, that Euro
conversion will have on its ability to sell its products and services in the
European market. Euro conversion could potentially impact pricing strategies and
demand for the Company's services in the European market, lead to increased
competition within the European market for the specific types of services sold
by the Company, or impact the Company's relationships with vendors and
licensors. As a result of competitive pressures, the Company could also
potentially be required to denominate future transactions in the Euro and incur
currency risk and conversion costs as a result.

There can be no assurance that Euro conversion will not have a material, adverse
effect on the Company's business, financial condition and results of operation.

Year 2000 Compliance

The Year 2000 problem results from the use by computers of two digits rather
than four digits to define the applicable year. The use of only two digits was
common during the period when computer resources were much more expensive than
today. As a result, when such computer systems must process dates both before
and after January 1, 2000, the two-digit year identification may create
processing errors and system failures. These effects may be apparent in both
information processing systems as well as mechanical operations controlled by
computers (embedded microprocessors). The effects of this issue are further
compounded by the interdependence of computer systems between suppliers and
customers.

                                       8
<PAGE>
 
The Company utilizes computer software applications and operating systems in
distributing its financial information service, operating its network
infrastructure and various administrative and billing functions. In addition,
the Company's financial information service is reliant upon the receipt of
financial data from external vendors such as Standard & Poor's Comstock, and the
processing of that information using software licensed to the Company by third
parties such as Townsend Analytics. To the extent the Company's computer
software applications, or those of its information vendors and software
licensers, are unable to operate accurately after January 1, 2000, some degree
of modification, or even possibly replacement of such applications, may be
necessary.

In the event that the Company's systems or the systems of its third party
information vendors and licensers are not materially Year 2000 compliant, the
Company could experience a disruption in the provision of its financial
information and network access services.

The Company has appointed a Year 2000 Committee to assess the scope of the
Company's risks in this regard and adopt appropriate measures to bring its
applications into compliance. To date the costs associated with this project
have amounted to approximately $25,000, all of which are internal expenses.

The committee has completed the process of identifying the core processes,
internal equipment as well as external services and software licenses that may
not be Year 2000 compliant. The cost of replacing internal IT equipment and
applications known to be not Year 2000 compliant is approximately $20,000.
Internal non-IT systems employed are not critical and have been determined not
to pose significant risks.

Where external risks have been identified, the Company has sent confirmation
letters to information vendors and software licensors to ascertain their
progress in identifying and addressing problems that their own computer systems
may face in correctly processing date information related to the Year 2000. The
Company is in the process of reviewing the responses received from these parties
in order to assess further steps to be taken.

In addition, and independent from Year 2000 issues but having the effect of
reducing risks related thereto, the Company has diversified the equipment and
data suppliers that it uses and has identified alternative suppliers where
needed, should failures occur.

The most likely worst case scenario for the Company would involve the loss of
data feeds from external sources. If such were to occur the Company would have
to switch to alternate data suppliers which may result in certain disruptions to
its service and potential revenue losses as a result.

The future costs estimated to be required to resolve Year 2000 issues amount to
$20,000 of internal resources relating to a number of planned projects. The
further findings of this committee will be disclosed in due course.

No assurance can be given that any of the Company's or third party systems is or
will be Year 2000 compliant. Neither can assurance be given that the eventual
costs required to address remaining unresolved Year 2000 issues or that the
impact of the Company's failure to achieve substantial Year 2000 compliance will
not have a material adverse effect on the Company's business, financial
condition or results of operations.

Safe Harbor

This report contains various forward-looking statements that are based on the
Company's beliefs as well as assumptions made by and information currently
available to the Company. When used in this report, the words "believe,"
"expect," "anticipate," "estimate" and similar expressions are intended to
identify forward-looking statements. Such statements are subject to certain
risks, uncertainties and assumptions referred to herein, and in the Company's
1998 Annual Report on Form 10-KSB, including, without limitation, the Company's
recent commencement of commercial and marketing operations and the risks and
uncertainties concerning the market acceptance of its services and products;
technological changes; increased competition; and general economic conditions.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those anticipated, estimated, or projected. The Company cautions potential
investors not to place undue reliance on any such forward-looking statements,
all of which speak only as of the date made.

                                       9
<PAGE>
 
PART II - Other Information

Item 1.  Legal Proceedings.

         Inapplicable.

Item 2.  Changes in Securities and Use of Proceeds

         In January 1999, the Company issued 3,783,784 shares of Series C
         Preferred Stock to five parties for the total consideration of
         $7,000,000. The issuance took place pursuant to Section 4(2) of the
         Securities Act of 1933. In connection with the sale of 756,757 shares
         of Series C Preferred Stock to one of the parties, the Company paid a
         finders' fee to a nonaffiliated party consisting of $70,000 and a
         warrant to purchase 37,838 common shares of the Company at an exercise
         price of $1.85 per share.

         In March 1999, the Company issued 135,000 shares of common stock to
         Townsend Analytics, Ltd. in consideration of certain distribution
         rights granted to the Company. The issuance took place pursuant to
         Section 4(2) of the Securities Act of 1933. There were no underwriters
         involved in the issuance.

Item 3.  Defaults Upon Senior Securities

         Inapplicable.

Item 4.  Submission of Matters to a Vote of Security Holders.

         Inapplicable.

Item 5.  Other Information

         Inapplicable.

Item 6.  Exhibits and Reports on From 8-K.

         (a)  Exhibits
 
              27.1 Financial Data Schedule

         (b)  Reports of Form 8-K

              Inapplicable.

SIGNATURES

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

                                          FIRSTQUOTE INC.
                                          ---------------
                                           (Registrant)

Dated: May 15, 1999           By      /s/ Neil Gibbons       
                                      ----------------       
                                      Neil Gibbons           
                                      Chief Executive Officer
                                                             
                                      /s/ Mark Benn          
                                      -------------          
                                      Mark Benn              
                                      Chief Financial Officer 

                                       10