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                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended March 31, 1999

                                       OR

             [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
               For the transition period from ________ to ________


                           Commission File No. 0-15260

                                Biorelease Corp.
        (Exact name of small business issuer as specified in its charter)

            Delaware                                      88-0218411
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)


      340 Granite St., Suite 200                     Manchester, NH    03102
(Address of principal Executive offices)                            (Zip Code)


                                 (603) 641-8443
                 Issuer's telephone number, including area code

         Former name,  former  address and formal  fiscal year, if changed since
last report.

         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 _____

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the last  practicable  date.  There was 9,736,659
shares of common stock, par value $.01 per share, as of May 11, 1999.

  ----------------------------------------------------------------------------

         Transitional Small Business Disclosure Format (Check One)
Yes ____  No __X__  




                                    1 of 10
<PAGE>




                                BIORELEASE CORP.


                                      INDEX

PART I. FINANCIAL INFORMATION                                              Page
                                                                          Number
                                                                          ------
Item 1.  Financial Statements

                                                         
Consolidated  balance sheets as of March 31, 1999 (unaudited) and June
30, 1998                                                                     3

Consolidated  Statements of  Operations  for the three months and nine
months ended March 31, 1999 (unaudited) and 1998 (unaudited), and from
October 20, 1989 (inception) to March 31, 1999 (unaudited)                   4

 Consolidated  Statements  of Cash  Flows  for the nine  months
 ended March 31, 1999  (unaudited)  and 1998  (unaudited),  and
 from   October  20,  1989   (inception)   to  March  31,  1999
 (unaudited)                                                                 5

 Notes to Unaudited Financial Statements                                     7

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operation                                            8

PART II. OTHER INFORMATION

         Item 1.  Legal Proceedings                                         10
         Item 2.  Changes in Securities                                     10
         Item 3.  Defaults Upon Senior Securities                           10
         Item 4.  Submission of Matters to a Vote of Security Holders       10
         Item 5.  Other Information                                         10
         Item 6.  Exhibits and Reports on Form 8-K.                         10



                                    2 of 10
<PAGE>


PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statement
                                BIORELEASE CORP.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                           CONSOLIDATED BALANCE SHEETS
                        March 31, 1999 and June 30, 1998
                                    --------
<TABLE>

<CAPTION>

                                                                             March 31,                  June 30,
         ASSETS                                                                 1999                      1998
         ------                                                              ---------                  --------
                                                                            (Unaudited)

<S>                                                                         <C>                        <C>       
Cash                                                                        $        828               $    1,320
Accounts receivable                                                                2,370                    8,455
Inventories                                                                       16,903                   18,434
Other receivables                                                                      -                      745
Prepaid expenses and other current assets                                              -                        -
                                                                             -----------               ----------
         Total current assets                                               $     20,101               $   28,954

 Equipment and leasehold improvements, net                                         4,154                   10,971
 Intangible assets, net                                                           12,571                   20,449
 Other noncurrent assets                                                             300                      300
                                                                             -----------               ----------
         Total assets                                                        $    37,126               $   60,674
                                                                             ===========               ==========

         LIABILITIES AND STOCKHOLDERS' EQUITY
 Notes payable                                                               $    27,500               $   27,500
 Accounts payable                                                                121,770                  113,515
 Accrued expenses                                                                 97,540                   93,954
 Notes payable - stockholders, current                                            46,100                   46,100
 Income taxes payable                                                              1,549                    1,549
 Other current liabilities                                                             -                        -
                                                                             -----------              ----------
         Total current liabilities                                               294,459                  282,618

 Notes payable - stockholder, long term                                           14,955                   14,955
 Notes payable - other, long term                                                 16,000                   16,000
 Other liabilities                                                                87,734                   87,734
                                                                             -----------               ----------
         Total liabilities                                                       413,148                  401,307
                                                                             -----------               ----------

Stockholders' equity:
     Common stock of $.01 par value,
     50,000,000  shares   authorized,   10,286,659  and  
          10,286,659  issued  and 9,736,659  and  9,736,659  
          outstanding  at March 31, 1999 and June 30, 1998                      102,867                   102,867

         Additional paid-in capital                                           9,140,088                 9,140,088
         Stock warrants outstanding                                                   -                         -
         Development stage accumulated deficit                              ( 9,563,477)               (9,528,088)
      Stock subscription receivable                                         (    50,000)               (   50,000)
                                                                            ------------               -----------
                                                                            (   370,522)               (  335,133)
        Less: Treasury stock                                                      5,500                     5,500
                                                                            -----------                ----------
        Total stockholders' equity (deficit)                                (   376,022)               (  340,633)
                                                                            ------------               -----------
Total liabilities and stockholders'
   equity (deficiency)                                                      $    37,126                $   60,674
                                                                            ===========                ==========
</TABLE>


                   The accompanying notes are an integral part
                   of the consolidated financial statements.



                                    3 of 10
<PAGE>

<TABLE>
<CAPTION>

                                BIORELEASE CORP.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
   For the Three Months and Nine Months Ended March 31, 1999 and 1998, and the
               Cumulative Period from Inception to March 31, 1999
                                   -----------

                                          Three Months Ended                         Nine Months Ended 
                                               March 31,                               March 31,                      Inception
                                     ----------------------------             ----------------------------        (October 20, 1989)
                                                                                                                          To   
                                         1999              1998                   1999              1998            March 31, 1999
                                         ----              ----                   ----              ----          ------------------
                                     (Unaudited)       (Unaudited)            (Unaudited)       (Unaudited)
                                                  
<S>                                  <C>               <C>                  <C>                  <C>                  <C>
Revenues                             $    5,350        $  13,558            $    6,956           $  53,558            $  566,177
Cost of Goods Sold                    (   1,354)               -            (    1,531)                  -            (   26,868)
                                      ----------        --------            ----------            --------            ---------- 
   Gross Profit                           3,996           13,558                 5,425              53,558               539,309
Operating expenses:
 Cell culture operations                      -               -                     -                    -            (  601,116)
 Research and development                     -               -                     -                    -            (2,558,041)
 Purchased technologies                       -               -                     -                    -            (  690,000)
 General and administrative           (  11,260)      (  26,929)           (   35,284)             (53,955)           (4,302,799)
 Other                                        -               -                     -                    -                     -   
                                     -----------        -------            ----------            ---------            -----------
(Loss)/Gain from operations           (   7,264)      (  13,371)           (   29,859)             (   397)          ( 7,612,647)
                                     -----------       ---------           -----------           ---------            -----------
Other costs:
 Interest, net                        (   1,728)      (   9,725)           (    5,182)             (12,949)               66,823
 Lease commitment cost                        -               -                     -                    -            (  315,000)
 Litigation costs                             -               -                     -                    -            (   99,242)
 Other income (costs)                         -               -                     -                    -            (   23,034)
 Gain (Loss) on sale of assets                -               -            (      500)                   -                62,116
 Offering costs                               -               -                     -                    -            (  336,446)
 Option compensation                          -               -                     -                    -            (  219,375)
 Income on settlements                        -               -                   154                    -               293,761
 Realized loss for decline
  in value of investment                      -               -                     -                    -           ( 1,500,000)
                                     ----------       ---------           -----------             --------           ----------- 
     Total other costs               (    1,728)      (   9,725)          (     5,528)            ( 12,949)          ( 2,070,397)
                                     -----------      ----------          ------------            --------           ----------- 
Income (loss) before  provision for
 (benefit  from) income taxes and  
 cumulativeeffect of change in 
 accounting principle                 (   8,992)      (  23,096)           (   35,387)            ( 13,346)           (9,683,044)
                                                                                  
Provision for income taxes                    -               -                     -                  -              (  343,873)
                                     ----------       ---------           -----------             --------            ---------- 
Income (loss) before cumulative 
 effect ofaccounting principle        (   8,992)      (  23,096)           (   35,387)            ( 13,346)          (10,026,917)
Cumulative effect of change in
 accounting principle                         -               -                     -                    -               463,440
                                     ----------       ---------           -----------             --------            ----------
Net income (loss)                    $(   8,992)      $( 23,096)          $(   35,387)           $( 13,346)         $( 9,563,477)
                                     ===========      ==========          ============           =========           ===========

Weighted average shares               9,736,659        9,669,992            9,736,659            9,444,992             7,634,139
Basic and fully diluted (loss)
  per share                          $      .00       $      .00           $      .00                $ .00                $(1.25)

</TABLE>

                     The accompanying notes are an integral
                 part of the consolidated financial statements.




                                    4 of 10
<PAGE>


                                BIORELEASE CORP.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                For the Nine Months Ended March 31, 1999 and 1998
            and the Cumulative Period from Inception to March 31,1999
                                   (Unaudited)
                                 ---------------
<TABLE>
<CAPTION>

                                                                                    Inception
                                                    Nine Months Ended           (October 20, 1989)
                                                      March 31,                    to March 31,
                                           1999                    1998               1999     
                                      --------------          --------------     --------------
Cash flows from operating activities:
<S>                                   <C>                   <C>                  <C>           
Net (Loss)/Gain                       $(    35,387)         $ (    13,346)       $ ($9,563,477)
  Adjustments to reconcile
  net loss to net cash used in
  development activities:
    Depreciation and
      amortization                          14,193                 22,500              270,125
    Cumulative effect of change
      in accounting principle                    -                      -         (    463,440)
    (Gain) loss on sale of
      assets                                   500                      -         (     38,204)
    Recognized loss on
     investment                                  -                      -            1,500,000
    Loss on extinguishment
      of debt                                    -                      -               42,000
    Common stock issued in exchange
      for purchased technology                   -                      -              605,000
    Common stock issued
      in exchange for
      services rendered                          -                 20,500               52,300
    Common stock options issued
      in exchange of services
      rendered                                   -                  6,750              128,453
  Amortization of unearned
    compensation                                 -                      -              140,625
  Repricing of Class A warrants                  -                      -               78,750
  (Increase) decrease in current assets:
    Cash - escrow                                -                      -                    -
    Accounts receivable                      6,085                  8,099         (      2,370)
    Other receivables                          745                      -                    -
    Inventories                              1,531                      -         (     16,903)
    Prepaid expenses and
      other current assets                      -                       -                  360
    Deferred tax asset                          -                       -              463,440
    Other non-current assets                    -                       -         (        300)
  Increase (decrease) in 
   current liabilities:
    Accounts payable                         8,255           (     17,295)             192,721
    Deferred revenue                             -           (     20,000)                   -
    Accrued expenses                         3,586           (      6,298)             105,008
    Other current liabilities                    -                      -                1,549
    Other liabilities                            -                  1,500               87,734
                                       -----------           ------------          -----------
      Net cash provided (used)
        In operating activities        (       492)                 2,410          ( 6,416,629)
                                       -----------            -----------          -----------

Cash flows from investing activities:
  Purchase of government backed
    securities                                  -                      -          (  1,000,000)
  Proceeds from collateralized
    mortgage obligations                        -                      -             1,000,000
  Purchase of fixed assets                      -                      -          (    333,187)
  Proceeds from sale of assets                  -                      -               189,742
  Purchase of intangible
    assets                                      -                      -          (    105,205)
                                       ----------             ----------             ----------
      Net cash used in
        investing activities                    -                      -          (    248,650)
                                       ----------           ------------          -------------
</TABLE>

                     The accompanying notes are an integral
                 part of the consolidated financial statements.




                                    5 of 10
<PAGE>


                                BIORELEASE CORP.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                         CONSOLIDATED STATEMENT OF CASH
             FLOWS For the Nine Months Ended March 31, 1999 and 1998
           and the Cumulative Period from Inception to March 31, 1999
                                    --------

<TABLE>
<CAPTION>

                                                                                    Inception
                                                Nine Months Ended               (October 20, 1989)
                                                     March 31,                      to March 31,
                                             1999                 1998                 1999
                                         (Unaudited)          (Unaudited)           Unaudited)
                                         -----------          -----------        -----------------
<S>                                      <C>                  <C>                <C>
Cash flows from financing activities:

  Advances from
    stockholders                                  -                    -              594,385
  Payments of advances
    from stockholders                             -                    -        (     159,975)
  Loans payable                                   -                    -                    -
  Notes payable (paid)                            -         (     12,475)             104,555
  Issuance of common stock, net                   -                    -            2,105,966
  Purchase of investments in
   issuance of common stock                       -                    -         (     10,000)
  Notes receivable                                -                    -                    -
  Recapitalization                                -                    -            4,031,176
                                         ----------          -----------            ---------

      Net cash provided
      by investing
      activities                                  -         (     12,475)           6,666,107
                                        -----------         -------------         -----------

Net increase (decrease)
  in cash                                (      492)         (    10,065)                 828
Cash at beginning
  of period                                   1,320               15,278                    -
                                         -----------         ------------       -------------

Cash at end of period                   $       828         $      5,213        $         828
                                        ===========         ============        =============




Supplemental disclosure of non-cash transactions:

Cash paid for interest                            -                    -                7,752

Marketable securities acquired
  through issuance of common
  stock           -                               -                    -                    -

Issuance of common stock
  for subscription receivable                     -                    -               50,000

Liabilities repaid through
  issuance of common stock                        -                    -              616,214

Non-marketable security acquired
  through the issuance of
  common stock                                   -                    -             1,500,000

</TABLE>

                     The accompanying notes are an integral
                 part of the consolidated financial statements.

<PAGE>




                                BIORELEASE CORP.
                          (A DEVELOPMENT STAGE COMPANY)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                FOR THE NINE MONTHS ENDED MARCH 31, 1999 AND 1998
               AND CUMULATIVE FROM INCEPTION (OCTOBER 20, 1989) TO
                                  MARCH 31,1999

1.      Basis of presentation

        The accompanying  unaudited  consolidated financial statements have been
        prepared in accordance with generally accepted accounting principles for
        interim  financial  information and with the instructions to Form 10-QSB
        and Rule 310 of Regulation S-B. Accordingly,  they do not include all of
        the information and footnotes required by generally accepted  accounting
        principles for complete consolidated  financial statements and should be
        read in conjunction with the Company's  audited  consolidated  financial
        statements  at and for the  fiscal  year  ended  June 30,  1998.  In the
        opinion  of  management,  all  adjustments  (consisting  only of  normal
        recurring  accruals)  considered  necessary for a fair presentation have
        been  included.  Operating  results for the nine months  ended March 31,
        1999 are not necessarily  indicative of the results that may be expected
        for the year ended June 30, 1999.

                                    7 of 10

<PAGE>


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

Results of Operations


Three Months Ended March 31, 1999 and 1998

        For the three months ended March 31, 1999 the  Company,  including  it's
subsidiary,  Biorelease  Technologies,  Inc.,  (the  Subsidiary) had revenues of
$5,350,  cost of good sold of $1,354,  general  and  administrative  expenses of
$11,260,  interest expense of $1,728 and no income taxes resulting in a net loss
of $8,992 as  compared  to the three  months  ended  March 31, 1998 in which the
Company, including its subsidiary, had revenues of $13,558, cost of good sold of
$0, general and administrative  expenses of $26,929,  interest expense of $9,725
and no income taxes resulting in a net loss of $23,096. The loss for the current
quarter, as compared to the loss in the same period last year, was attributed to
reduced general and administrative expenses and reduced interest expense.

Nine Months Ended March 31, 1999 and 1998

        For the nine months  ended March 31,  1999,  the Company had revenues of
$6,956,  cost of goods sold of $1,531,  general and  administrative  expenses of
$35,284,  interest expense of $5,182,  loss on sale of asset of $500,  income on
settlements  of $154 and no income  taxes  resulting in a let loss of $35,387 as
compared  to the nine  months  ended  March 31,  1998  wherein  the  Company had
revenues of $53,558, no cost of goods sold, general and administrative  expenses
of $53,955, interest expense of $12,949, no gain on sale of assets, no income on
settlement and no income taxes resulting in a net loss of $13,346.  The increase
in the net loss for the nine months resulted primarily from the  discontinuation
of grant research revenues net of reduced costs.

Inception (October 20, 1989) to March 31, 1999

        From October 20, 1989, the date of the  Subsidiary's  initial  activity,
through March 31, 1999,  the Company had revenues of $566,177 cost of goods sold
of $26,868,  cell  culture  expenses of  $601,116,  research  and  developmental
expenses of  $2,558,041,  purchased  technology  costs of $690,000,  general and
administrative expenses of $4,302,799,  interest income, net of interest expense
of $66,823,  lease  commitment  cost of $315,000,  litigation  costs of $99,242,
other costs of  $23,034,  gain on sale of assets of  $62,116,  offering  cost of
$336,446,  Option Compensation of $219,375,  income recognized on settlements of
$293,761, realized loss for decline in value of investment of $1,500,000, income
tax  expense  of  $343,873  and a  cumulative  effect of  change  in  accounting
principle  of  $463,440,  thereby  resulting  in  an  accumulated  net  loss  of
$9,563,477.

                                    8 of 10

<PAGE>


Liquidity and Capital Resources

        From inception  until the date on which the subsidiary was combined with
the Company (the Reorganization), the Subsidiary's primary sources of funds were
the  proceeds  from  private  offerings  of its  Common  Stock  and Stock in the
Subsidiary. Since the Reorganization, the primary source of capital has been the
Company's funds and revenues. The Company continues to seek a company to combine
with to increase its  liquidity  and asset levels  and/or to  contribute  to the
development of the Company's technologies.

Dividend Policy

        The Company has not  declared or paid any  dividends on its common stock
since its inception and does not anticipate  the  declaration or payment of cash
dividends in the foreseeable future. The Company intends to retain earnings,  if
any, to finance the development  and expansion of its business.  Future dividend
policy will be subject to the  discretion  of the Board of Directors and will be
contingent  upon future  earnings,  if any, the Company's  financial  condition,
capital requirements, general business conditions, and other factors. Therefore,
there can be no assurance that dividends of any kind will ever be paid.

Effect of Inflation

        Management  believes that inflation has not had a material effect on its
operations for the periods presented.


                                    9 of 10

<PAGE>


                                     PART II

                                OTHER INFORMATION

Item 1. Legal Proceedings.

        None

Item 2. Changes in Securities.

        None

Item 3. Defaults Upon Senior Securities.

        None

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

        None

Item 5. Other Information.

        None

Item 6. Exhibits and Reports of Form 8-K.

        None


         SIGNATURE

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended,  the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

         BIORELEASE CORP.



May 12, 1999      By:  /s/ Richard F. Schubert    
                       ---------------------------------    
                       Richard F. Schubert, Chairman and
                       Principal Financial Officer


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