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


                                    FORM 10-Q
 Quarterly Report pursuant to Section 13 of the Securities Exchange Act of 1934
                  for the quarterly period ended June 30, 1999



                       TELEHUB COMMUNICATIONS CORPORATION
             (Exact Name of Registrant as Specified in its Charter)

     Nevada                        333-61441                  36-413-6730
(Jurisdiction of           (Commission File Number)          (I.R.S. Employer
  incorporation)                                          Identification Number)


                                 CO-REGISTRANTS
                      TeleHub Network Services Corporation
                        TeleHub Technologies Corporation
                           TeleHub Leasing Corporation
          (Exact Name of Co-Registrants as Specified in their Charters)
      Illinois                     333-61441                  36-406-6622
      Nevada                       333-61441                  36-421-3797
      Nevada                       333-61441                  36-335-3108
  (Jurisdiction                   (Commission              (I.R.S. Employer
of incorporation)                 File Number)           Identification Number)

                     John R. Lawson, Chief Financial Officer
                       TeleHub Communications Corporation
                        1375 Tri-State Parkway, Suite 250
                             Gurnee, Illinois 60031
                                 1 (800) TELEHUB
               (Address, including zip code, & telephone number,
                  of Registrants' principal executive offices)



Indicate by check mark whether the Registrants:         Yes   X      No
                                                            ------      ------

   (1)   have  filed  all  reports  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.


On June 30, 1999, the Registrant had 13,055,831  issued and  outstanding  common
shares.



<PAGE>


                       TELEHUB COMMUNICATIONS CORPORATION
                         (Commission File No. 333-61441)



                         TABLE OF CONTENTS FOR FORM 10-Q

                                                                           Page
                                                                           ----
                         PART I - FINANCIAL INFORMATION

Item 1.    Financial Statements............................................. 3
           Consolidated Balance Sheets.......................................3

           Consolidated Statements of Operations.............................4

           Consolidated Statements of Cash Flows.............................5

           Notes to Consolidated Financial Statements........................6

Item 2.    Management's Discussion and Analysis of
           Financial Condition and Results of Operations....................10

                           PART II - OTHER INFORMATION
Item 1.    Legal Proceedings................................................18
Item 2.    Changes in Securities............................................18
Item 3.    Defaults Upon Senior Securities..................................19
Item 4.    Submission of Matters to a Vote of Security Holders..............19
Item 5.    Other Information................................................19
Item 6.    Exhibits and Reports on Form 8-K.................................19

SIGNATURE...................................................................20




<PAGE>



NOTE  CONCERNING  FORWARD-LOOKING  INFORMATION.  Some of the information in this
Report contains  forward-looking  statements that involve  substantial risks and
uncertainties  that constitute  "forward-looking  statements"  under the Private
Securities  Litigation Reform Act of 1995.  Forward-looking words such as "may,"
"will," "expect," "anticipate,"  "believe," "estimate" and "continue" or similar
words identify such  statements.  Investors  should read statements that contain
these  words  carefully  because  they:  (1)  discuss  the  Registrants'  future
expectations;  (2) contain  projections  of the  Registrants'  future results of
operations or of its financial condition;  or (3) state other  "forward-looking"
information.  The Registrants  believe that it is important to communicate  such
future expectations to its investors. However, there may be events in the future
that the Registrants have not accurately predicted or over which the Registrants
have no control.  These events may include the  Registrants'  limited  operating
history and uncertainty as to the Registrants' future profitability; uncertainty
as to the  Registrants'  ability to meet  business  targets  and  budgets and to
develop and implement operational,  sales and marketing and financial systems to
manage rapidly growing  operations;  competition from other  participants in the
highly   competitive   telecommunications   industry;   uncertainty  as  to  the
Registrants'  ability to obtain  financing  on  acceptable  terms to finance its
business  strategy;  uncertainty  as to the  Registrants'  ability to obtain and
protect  intellectual  property rights or to develop  proprietary  products that
will  receive   intellectual   property   protection;   the   possibility   that
technological  developments may adversely affect the commercial viability of the
Registrants'   VASP(TM)   technology  and  the   Registrants'   other  products;
unanticipated  regulatory changes that may change the competitive environment to
the  Registrants'  detriment;  the  Registrants'  efforts to  address  Year 2000
issues.   Cautionary  language  in  this  report  provides  examples  of  risks,
uncertainties  and  events  that may cause the  Registrants'  actual  results to
differ  materially  from  the  expectations  described  in  the  forward-looking
statements  of this Report.  Occurrence  of the events  described in this Report
could have a material  adverse effect on the  Registrants'  business,  operating
results and financial condition.


























                                       2
<PAGE>


                       TELEHUB COMMUNICATIONS CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                (Information as of and relating to the six months
                       ended June 30, 1999, is unaudited)




<TABLE>
<CAPTION>

                                                                   December 31,       June 30,
                                                                       1998             1999
                                                                  -------------    -------------
                                                                                    (UNAUDITED)
                         Assets
Current assets:
<S>                                                               <C>              <C>
  Cash and cash equivalents                                       $  36,727,589    $  13,745,787
  Restricted cash                                                       416,321          289,628
  Accounts receivable, net of allowance for
   doubtful accounts of $1,093,594 and
   $1,764,724 in 1998 and 1999, respectively                          3,114,053        7,889,654
  Due from TeraBridge                                                      --          1,490,258
  Prepayments on leases                                                 905,268          733,111
  Debt issuance costs                                                   874,338          868,767
  Other assets                                                          983,516        1,229,982
                                                                  -------------    -------------
Total current assets                                                 43,021,085       26,247,187

Property and equipment, net                                          21,062,255       19,116,476
Prepayments on leases                                                 1,044,085          615,698
Debt issuance costs                                                   4,874,105        4,409,080
Other assets                                                            408,246          311,341
                                                                  -------------    -------------
          Total assets                                            $  70,409,776    $  50,699,782
                                                                  =============    =============

          Liabilities and Stockholders' (Deficit)
Current liabilities:
  Accounts payable                                                $   5,802,730    $   5,102,322
  Accrued liabilities                                                 4,500,579        7,352,633
  Current portion--capital lease obligations                          2,393,015        2,630,770
  Current portion--long-term debt                                       281,116          305,119
  Deferred gain on sale/leaseback                                        24,477           13,605
                                                                  -------------    -------------
          Total current liabilities                                  13,001,917       15,404,449

Capital lease obligations                                             8,274,635        7,598,566
Other long-term debt                                                 67,885,960       75,451,173
Accrued liabilities                                                   2,893,850        2,362,182
Deferred gain on sale/leaseback                                          29,630            5,720
                                                                  -------------    -------------
          Total liabilities                                          92,085,992      100,822,090
                                                                  -------------    -------------


Stockholders' (deficit):
 Convertible  preferred stock,  $.001 par value;
   100,000,000 shares authorized;
   4,000,000 shares designated as Series A;
   3,500,000    shares  issued  and
   outstanding at December 31, 1998 and
   June 30, 1999; liquidation preference $17,500,000                      3,500            3,500
 Common stock, $.001 par value; 100,000,000 shares authorized;
   12,703,537 and 13,055,831 shares issued and outstanding at
   December 31, 1998 and June 30, 1999, respectively                     12,704           13,056
 Common stock warrants                                               27,246,651       27,246,651
 Additional paid-in capital                                          40,105,733       43,878,943
 Note receivable--stockholder                                          (400,000)      (2,062,170)
 Deferred compensation                                                 (118,422)         (59,211)
 Accumulated deficit                                                (88,526,382)    (119,143,077)
                                                                  -------------    -------------
          Total stockholders' (deficit)                             (21,676,216)     (50,122,308)
                                                                  -------------    -------------
          Total liabilities and stockholders' (deficit)           $  70,409,776    $  50,699,782
                                                                  =============    =============
</TABLE>


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




                                       3
<PAGE>


                       TELEHUB COMMUNICATIONS CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
        (Information as of and relating to the three and six months ended
                      June 30, 1998 and 1999, is unaudited)



<TABLE>
<CAPTION>

                                                       Three Months Ended              Six Months Ended
                                                 ----------------------------    ----------------------------
                                                    June 30,        June 30,        June 30,        June 30,
                                                      1998            1999            1998            1999
                                                 ------------    ------------    ------------    ------------

Revenues:
<S>                                               <C>             <C>            <C>              <C>
  Telecommunications services                     $   152,664     $ 7,240,967     $   159,265     $13,008,598
  Licenses                                               --              --         3,000,000            --
                                                 ------------    ------------    ------------    ------------
                                                      152,664       7,240,967       3,159,265      13,008,598
                                                 ------------    ------------    ------------    ------------

Operating expenses:
  Operations                                        8,646,834      21,487,770      14,572,538      40,648,095
  General and administrative                        1,939,833       1,578,185       3,208,282       4,915,208
  Research and development                          1,933,111       1,577,459       3,668,105       5,672,724
  Sales and marketing                                 697,838       3,058,104         942,518       5,783,646
  Depreciation and amortization                     1,072,162       1,442,415       2,097,518       2,919,077
                                                 ------------    ------------    ------------    ------------
     Total operating expenses                      14,289,778      29,143,933      24,488,961      59,938,750
                                                 ------------    ------------    ------------    ------------
Operating loss                                    (14,137,114)    (21,902,966)    (21,329,696)    (46,930,152)
                                                 ------------    ------------    ------------    ------------

Other income (expense):
  Amortization of debt discount                      (973,525)       (795,024)       (973,525)     (1,590,048)
  Interest expense                                   (997,756)     (3,570,756)     (1,297,236)     (7,071,566)
  Interest income                                      89,947         143,723         187,079         478,992
  Other income                                          9,753          80,017          10,758         133,673
  Net gain on joint venture transaction                  --        24,362,406            --        24,362,406
                                                 ------------    ------------    ------------    ------------
                                                 ($16,008,695)   ($ 1,682,600)   ($23,402,620)   ($30,616,695)
                                                 ============    ============    ============    ============
Basic and diluted loss per share                       ($1.27)         ($0.13)         ($1.85)         ($2.36)
                                                 ============    ============    ============    ============
Weighted average shares outstanding used in
  per share calculations basic and diluted         12,634,450      13,051,562      12,634,450      12,972,552
                                                 ============    ============    ============    ============

</TABLE>


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







                                       4
<PAGE>


                       TELEHUB COMMUNICATIONS CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
            (Information as of and relating to the six months ended
                June 30, 1998 and 1999, is unaudited)



<TABLE>
<CAPTION>

                                                                              Six Months Ended
                                                                           June 30,        June 30,
                                                                             1998            1999
                                                                        ------------    ------------

Cash flows from operations
<S>                                                                     <C>             <C>
  Net Loss                                                              ($23,402,620)   ($30,616,695)
  Adjustments to reconcile net loss to net cash
   used in operating activities
   Gain on joint venture transaction (note 3)                                   --       (24,362,406)
   Depreciation and amortization                                           2,097,518       2,919,077
   Provisions for bad debts                                                    5,043         706,328
   Amortization of debt issuance costs                                          --           434,388
   Amortization of deferred compensation                                     546,096       1,770,553
   Amortization of debt discount                                                --         1,590,048
   Accretion of debt                                                            --         6,133,970
   Items settled through issuance of stock and
   other equity transactions                                               2,517,464            --
   Other non-cash credits                                                   (102,758)         15,978
   Changes in operating assets and liabilities:
   (Increase) decrease in assets:
     Accounts receivable                                                    (145,351)     (5,481,929)
     Due from TeraBridge                                                        --        (1,490,258)
     Prepayments on leases                                                   452,634         436,542
     Other assets                                                           (931,877)       (545,910)
     Increase (decrease) in liabilities:
     Accounts payable                                                      1,385,045         644,893
     Accrued liabilities                                                   2,016,700       3,538,384
     Deferred gain from sale and lease-back                                   54,747         (10,728)
                                                                        ------------    ------------

                  Net cash used in operating activities                  (15,507,359)    (44,317,765)

Cash flows from investing activities:
  Payments for property and equipment                                     (2,774,529)     (4,648,997)
  Proceeds from sale and lease-back of equipment                           1,220,697            --
  Proceeds received on joint venture transaction (note 3)                       --        26,812,136
  Restricted cash                                                          1,031,133         126,693
                                                                        ------------    ------------

                  Net cash provided by (used in) investing activities       (522,699)     22,289,832

Cash flows from financing activities:
  Proceeds from debt issue                                                      --            36,208
  Proceeds from issuance of common stock                                        --           400,050
  Repayment on note receivable - related party                               250,000            --
  Payments on capital lease obligations and loans                         (1,670,501)     (1,390,127)
  Repayment of loan                                                       12,000,000            --
                                                                        ------------    ------------
                  Net cash provided by (used in) financing activities     10,579,499        (953,869)
                                                                        ------------    ------------

Net decrease in cash and cash equivalents                                 (5,450,559)    (22,981,802)
Cash and cash equivalents balance - beginning of period                    9,380,320      36,727,589
                                                                        ------------    ------------
Cash and cash equivalents balance - end of period                       $  3,929,761    $ 13,745,787
                                                                        ============    ============
</TABLE>

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


                                       5
<PAGE>


                       TELEHUB COMMUNICATIONS CORPORATION
                         (Commission File No. 333-61441)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Information as of and relating to the three and six months ended June 30, 1998
                            and 1999, is unaudited)


1.  Basis of Presentation:

         The financial  statements  included  herein are unaudited and have been
prepared in accordance with generally accepted accounting principles for interim
financial  reporting and Securities  Exchange  Commission  ("SEC")  regulations.
Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted  pursuant to such rules and  regulations.  In the
opinion of management,  the financial  statements  reflect all adjustments (of a
normal and recurring nature) which are necessary to present fairly the financial
position,  results of operations and cash flows for the interim  periods.  These
financial statements should be read in conjunction with the annual report on the
Form 10-K of TeleHub Communications  Corporation for the year ended December 31,
1998. The results for the three-month and six-month  periods ended June 30, 1999
are not necessarily  indicative of the results that may be expected for the year
ending December 31, 1999.





2.       Segment information:

         The   Company   had   operated   in   two   business   segments:    (i)
telecommunications   software  products;  and  (ii)  telecommunications  network
services.  On May 19,  1999,  the Company  formed a new venture  with  Newbridge
Networks   Corporation   ("Newbridge").   The  joint  venture  entity  is  named
TeraBridge. At closing, TTC contributed all of its assets and liabilities to the
joint  venture.  The joint venture will be accounted for under the equity method
of accounting.  As a result of the joint venture,  the software products segment
ceased  operations  as of May 19,  1999,  and after that  date,  is no longer an
operating segment of the Company.












                                       6
<PAGE>


                       TELEHUB COMMUNICATIONS CORPORATION
                         (Commission File No. 333-61441)



<TABLE>
<CAPTION>

                                                   Software Products       Network Services        Consolidated
                                                   -----------------       ----------------        ------------
   THREE MONTHS ENDED JUNE 30, 1999
<S>                                                       <C>                    <C>                 <C>
      Revenues                                                   -               $7,240,968          $7,240,968
      Operating loss                                      $3,749,087             18,153,879          21,902,966
      Identifiable assets                                        -               50,699,782          50,699,782
      Depreciation and amortization                          225,912              1,216,503           1,442,415
      Capital expenditures                                   281,161              1,196,476           1,477,637

   THREE MONTHS ENDED JUNE 30, 1998
      Revenues                                                     -               $152,664            $152,664
      Operating loss                                      $4,099,622             10,037,492          14,137,114
      Identifiable assets                                  2,904,267             24,667,185          27,571,452
     Depreciation and amortization                           198,527                873,634           1,072,162
     Capital expenditures                                    306,841              1,290,270           1,597,111


                                                    Software Products       Network Services        Consolidated
                                                   -----------------       ----------------        ------------
   SIX MONTHS ENDED JUNE 30, 1999
      Revenues                                                     -             13,008,598          13,008,598
      Operating loss                                      12,094,935             34,835,217          46,930,152
      Identifiable assets                                          -             50,699,782          50,699,782
      Depreciation and amortization                          572,183              2,346,894           2,919,077
      Capital expenditures                                 1,360,574              4,188,423           5,548,997

   SIX MONTHS ENDED JUNE 30, 1998
      Revenues                                             3,000,000                159,265           3,159,265
      Operating loss                                       4,103,920             17,225,776          21,329,696
      Identifiable assets                                  2,904,267             24,667,185          27,571,452
      Depreciation and amortization                          367,432              1,730,086           2,097,518
      Capital expenditures                                   687,820              2,189,592           2,877,412

</TABLE>

         Identifiable assets are those assets used exclusively in the operations
of each business segment,  or which are allocated when used jointly.  All of the
Software Products revenues were generated from one customer.





                                       7
<PAGE>



                       TELEHUB COMMUNICATIONS CORPORATION
                         (Commission File No. 333-61441)



3.       Joint Venture Agreement:

         On May 19, 1999,  the Company formed a new joint venture with Newbridge
Networks  Corporation  ("Newbridge")  to further  develop the Company's  Virtual
Access Services Platform  ("VASP(TM)")  technology and related products that are
essential to world-wide,  end-to-end,  service-rich  communications  ("Newbridge
Transaction").  Under the terms of the  agreement,  the  Company's  wholly owned
subsidiary,  TeleHub  Technologies  Corporation  ("TTC"),  formed a wholly owned
subsidiary,  ("TeraBridge Technologies Corporation"),  incorporated in the State
of Nevada.  TTC  contributed  all of its assets and  liabilities and the Company
contributed all of it assets relating to its VASP(TM) technology,  including all
intellectual  property rights, to TeraBridge.  The following is a summary of the
assets and liabilities TTC contributed to TeraBridge.


<TABLE>
<CAPTION>

                            Assets                                             Liabilities
    ---------------------------------------------------------------------------------------------------------
<S>                                                 <C>                                           <C>
    Accounts Receivable                             35,198    Accounts Payable                    (1,345,301)
    Allowance for Doubtful Accounts                (35,198)   Accrued Liabilities                 (1,054,529)
    Prepayments on Leases Current                  132,625    Current Portion Capital Lease          (26,734)
    Other Assets                                   323,444    Deferred Gain                          (24,054)
    Fixed Assets                                 6,134,559    Long Term Capital Lease                (56,255)
    Accumulated Depreciation                    (1,574,838)   Long Term Accrued Liabilities         (163,469)
    Prepayments on Leases Long Term                 31,377
    Other Long Term Assets                          72,905
                                                                                               ---------------
                                           ----------------
           Total Assets                          5,120,072        Total Liabilities               (2,670,342)
                                           ================                                    ===============
</TABLE>


         Newbridge  contributed $52 million  directly to TeraBridge.  TeraBridge
immediately  remitted $22 million of this amount to TTC. TTC then  remitted this
$22  million  to the  Company  as a  partial  payment  against  an  intercompany
liability.  Newbridge  also  remitted  $8 million  directly to the  Company.  In
exchange, the Company issued 19% of the common stock of TeraBridge to Newbridge.
Under terms of the  Agreement,  Newbridge  has an option to purchase up to a 50%
ownership interest in TeraBridge for $10 million dollars  ("Newbridge  Option").
The Newbridge  Option expires on May 19, 2000. The net proceeds  received by the
Company was $26.8 million,  which  represents $30 million of payment remitted by
Newbridge  less $3.2  million  of costs  associated  with the  transaction.  The
Company  recorded a total gain on the  transaction  of $24.4  million,  which is
equal to the total amount of cash  received of $26.8 million less the net assets
contributed by TTC to TeraBridge of $2.4 million.


         The  Company  and  Newbridge  each  have  the  right to  appoint  three
individuals to the Board of Directors of  TeraBridge.  A seventh board member is
to  be  appointed  by  mutual  agreement  between  the  Company  and  Newbridge.














                                       8
<PAGE>


                       TELEHUB COMMUNICATIONS CORPORATION
                         (Commission File No. 333-61441)


Accordingly,  TCC is  accounting  for  TeraBridge  under  the  equity  method of
accounting.  The Company has recorded a full valuation  allowance  against their
equity  interest  in the net  assets of  TeraBridge  due to the  uncertainty  of
realization of this investment amount.  Accordingly,  the investment is recorded
at zero on the June 30, 1999 financial statements. Further, the Company's equity
interest  in the net  loss  of  TeraBridge  for the  period  from  May 19,  1999
(commencement  of operations) to June 30, 1999 is not reflected in the statement
of operations  for the quarter ended June 30, 1999.  Recognition of these losses
would reduce the Company's  investment in TeraBridge below zero, and the Company
has no obligation to fund TeraBridge losses or a TeraBridge deficit.

         The Company provides  management and accounting services to TeraBridge.
In  exchange  for these  services  TeraBridge  pays the Company a monthly fee of
$50,000. Additionally,  Newbridge provides management services to TeraBridge for
a monthly fee of $25,000.

         The following is a summary of TeraBridge's  financial statement amounts
as of June  30,  1999 and for the  period  from May 19,  1999  (commencement  of
operations) to June 30, 1999.

         Revenues                   $           0
         Assets                     $  33,736,440
         Liabilities                $   5,016,317
         Stockholders' equity       $  28,720,123
         Operating loss             $   3,869,931
         Net loss                   $   3,729,607






4.   Subsequent Event:

         In its July 1998 offering of 13.875%  Senior  Discount  Notes due 2005,
the Company also issued  125,000  warrants to purchase  16.662 common shares per
warrant (2,082,732 shares if fully exercised). These warrants also provided that
the number of shares  purchasable would increase by 8.678048 shares per warrant,
(1,084,756  additional shares if fully exercised) unless the Company either: (i)
completed its initial public  offering;  (ii)  repurchased  the Notes;  or (iii)
merged into a public company;  before August 1, 1999.  Since the Company did not
take any of those actions, the warrants were automatically adjusted on August 1,
1999. Each warrant now permits its holder to purchase  25.340048  shares,  for a
total of 3,167,488 shares if all 125,000 warrants are fully exercised.









                                        9
<PAGE>


                       TELEHUB COMMUNICATIONS CORPORATION
                         (Commission File No. 333-61441)


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

         The  following  discussion  should  be read  in  conjunction  with  the
Consolidated  Financial  Statements and related notes thereto included elsewhere
in this report.  The results shown herein are not necessarily  indicative of the
results  to  be  expected  in  any  future  periods.  This  discussion  contains
forward-looking statements based on current expectations which involve risks and
uncertainties.   Actual   results  and  timing  of  certain  events  may  differ
significantly from those projected in such  forward-looking  statements due to a
number of factors, including those set forth in this report.

Overview
         After three years of research and  development,  the Company was formed
in January  1996.  The  Company  has  developed  what it  believes  is the first
universal  ATM-based  network with the  potential  to integrate  the delivery of
voice,  data and video on one network.  The Company  launched  commercial  voice
services  on its  network  in  December  1997 and since  then has  entered  into
thirty-nine  contracts,  ranging  from one to three year terms,  to provide long
distance services. As customers transition their traffic onto TeleHub's network,
the Company expects significant growth in revenues.  The Company expects that as
revenues  increase,  the variable  costs  associated  with operating the TeleHub
network  should  decline as a  percentage  of total  revenues,  and  accordingly
margins will improve. The foregoing expectations are forward-looking  statements
that involve risks and uncertainties,  and actual results could vary as a result
of a number of factors including the Company's  operating  results,  the results
and timing of the Company's  launch of new products and services,  governmental,
legislative  or regulatory  changes,  the ability of the Company to meet product
and project demands, the success of the Company's marketing efforts, competition
and acquisitions of complementary businesses, technologies or products.

         To fund its  operations,  the  Company  has raised  gross  proceeds  of
approximately  $42.5 million of equity  capital  through two private  placements
(the "Spring 1997 Offering" and the "Fall 1997  Offering") and in July 1998, the
Company  completed an initial note offering  ("Initial Note Offering")  yielding
$65.9 million in net proceeds after deducting  offering  expenses and repaying a
$11.4  million  bridge  loan.  The  Company  also  received a $1 million  equity
investment from the initial purchaser.

         On May 19, 1999,  the Company  received  $26.8  million of net proceeds
from Newbridge in conjunction with the TeraBridge joint venture transaction.





                                       10
<PAGE>



                       TELEHUB COMMUNICATIONS CORPORATION
                         (Commission File No. 333-61441)


Results of Operations

         The following table sets forth-certain  unaudited financial information
from the Statements of Operations as a percentage of total revenues.




                                           Three Months Ended   Six Months Ended
                                                  June 30           June 30
Statement of Operations Data:                  1998     1999     1998     1999
------------------------------               ------     ----     ----     ----
Revenue                                         100%     100%     100%     100%
Operating expenses other than depreciation
     and amortization                          8658%     382%     709%     439%
Depreciation and amortization                   702%      20%      66%      22%
                                             ------     ----     ----     ----
                 Total operating expenses      9360%     402%     775%     461%
                                             ------     ----     ----     ----

                 Operating loss                9260%     302%     675%     361%
                                             ------     ----     ----     ----
Amortization of debt discount                  (638%)    (11%)    (31%)    (12%)
Interest  expense, net                         (595%)    (48%)    (35%)    (50%)
Other income                                      6%     338%       0%     188%
                                             ------     ----     ----     ----

Net Loss                                     (10487%)    (23%)   (741%)   (235%)
                                             ======     ====     ====     ====



Comparison of Three Months Ended June 30, 1999 and June 30, 1998
         On March 31,  1999,  the Company  signed a  definitive  agreement  with
Newbridge  Networks  Corporation  ("Newbridge") to form a new venture to further
develop the Company's Virtual Access Services Platform  ("VASP(TM)")  technology
and related products that are essential to world-wide, end-to-end,  service-rich
communications ("Newbridge Transaction").  Under the terms of the agreement, the
Company's  wholly owned subsidiary  TeleHub  Technologies  Corporation  ("TTC"),
formed a wholly owned  subsidiary  ("TeraBridge"),  incorporated in the State of
Nevada.  At  closing  (May 19,  1999),  TTC  contributed  all of its  assets and
liabilities  and  the  Company  contributed  all of it  assets  relating  to its
VASP(TM) technology,  including all intellectual property rights, to Terabridge.
The new joint  venture is accounted for under the equity  method,  beginning May
19, 1999. A comparison  of the three and six months ended June 30, 1999 and June
30, 1998 are effected by this transaction.

Revenue
         Revenue increased $7.0 million to $7.2 million from $0.2 million in the
three  months  ended June 30, 1999  compared  to the three ended June 30,  1998,
respectively.  TeleHub Network Services  ("TNS")  generated all of their revenue
from network  operations during the three months ended June 30, 1999. TNS had an
increase of twenty-two  contracts to thirty-nine from seventeen  contracts,  for
the three month period ending June 30, 1999 and 1998, respectively.









                                       11
<PAGE>


                       TELEHUB COMMUNICATIONS CORPORATION
                         (Commission File No. 333-61441)



Operating expenses
         Operating  expenses increased $14.8 million to $29.1 million from $14.3
million for the three months ended June 30, 1999 and 1998, respectively. Network
circuit costs,  consulting fees,  personnel costs and bad debt expense increased
by $10,145,000,  $1,378,000,  $1,000,000 and $528,000 respectively.  Significant
operating  cost  increases  were  necessary to expand the network to efficiently
handle  anticipated   subscriber  traffic,  and  to  manage  the  financial  and
administrative  aspects of the business.  Increased  personnel  costs reflect an
increase in  employees  from 162 as of June 30, 1998 to 197 as of June 30, 1999.
On May 19, 1999 112 employees were  transferred  from the Company to TeraBridge.
Operating expenses are primarily variable and are expected to increase in future
periods as revenue increases. Research and development decreased by $0.3 million
to $1.6  million  from $1.9 million for the three months ended June 30, 1999 and
1998,  respectively.  Research and development costs will decrease in the future
since these costs were primarily  incurred by the TTC Software Products segment,
which ceased operations upon the closing of the Newbridge Transaction.

         Total TNS operating expenses increased  approximately  $15.2 million to
$25.4  million  from $10.2  million for the three months ended June 30, 1999 and
1998,  respectively.  This  increase  related to the network and  infrastructure
expansion,  which will allow for significant revenue growth in the future. Total
TTC operating expenses decreased approximately $0.4 million to $3.7 million from
$4.1 million for the three  months  ended June 30, 1999 and 1998,  respectively.
TTC did not incur expenses after May 19, 1999,  when all assets and  liabilities
were contributed to TeraBridge as part of the Newbridge Transaction.

Amortization of debt discount
         Amortization  of debt discount for the three months ended June 30, 1999
amounted to $795,000 in connection with notes issued by the Company.

Interest income (expense), net
         Net interest  expense for the three months ended June 30, 1999 was $3.4
million as compared to $0.9  million for the three  months  ended June 30, 1998.
Gross interest expense increased  approximately  $2.6 million as a result of the
Initial  Note  Offering.  Interest  income  increased  $54,000  as a  result  of
increased cash and equivalent balances available for short term investments.


Net gain on the joint venture
         In the three months ended June 30, 1999, the Company recorded a gain of
$24.4 million on the Newbridge Transaction.

  Net loss
         The Company reported a net loss of $1.7 million and a net loss of $16.0
million for the three  months  ended June 30, 1999 and 1998,  respectively.  The
Company has not  recorded  any benefit for income  taxes due to the  uncertainty
surrounding  the  realization  of the  favorable  tax  attributes  in future tax
returns. Accordingly, the Company has recorded a valuation allowance against its
total net deferred tax assets.








                                       12
<PAGE>



                       TELEHUB COMMUNICATIONS CORPORATION
                         (Commission File No. 333-61441)


Comparison of Six Months Ended June 30, 1999 and June 30, 1998
Revenue
         Revenue  increased  $9.8 million to $13.0  million from $3.2 million in
the six months  ended June 30,  1999  compared  to the six ended June 30,  1998,
respectively.  TeleHub  Network  Services  ("TNS")  generated  $13.0  million of
revenue from network  operations  during the six months ended June 30, 1999. TTC
recorded no revenue for the six months ended June 30,  1999.  For the six months
ended June 30,  1998,  TTC  accounted  for the majority of the revenue when they
licensed VASP(TM) software to Newbridge for $5.0 million,  $3.0 million of which
was recorded in 1998 while $2 million was recorded in 1997.

Operating expenses
         Operating  expenses increased $35.5 million to $59.9 million from $24.4
million for the six months ended June 30, 1999 and 1998,  respectively.  Network
circuit  costs,  personnel  costs,  consulting  fees,  network  equipment  lease
payments  and  depreciation   expense  increased  by  $19,003,000,   $6,650,000,
$3,662,000,  $1,379,000 and $822,000,  respectively.  Significant operating cost
increases were necessary to expand the network to efficiently handle anticipated
subscriber  traffic,  and to manage the financial and administrative  aspects of
the business.  Increased  personnel  costs reflect an increase in employees from
162 as of June  30,  1998 to 197 as of  June  30,  1999.  On May  19,  1999  112
employees  were  transferred  from the  Company  to  TeraBridge.  All  operating
expenses are primarily  variable and are expected to increase in future  periods
as revenue  increases.  Research  and  development  expenses  increased  by $2.0
million to $5.7 million from $3.7 million for the six months ended June 30, 1999
and 1998,  respectively.  Research and  development  costs will  decrease in the
future since these costs were  primarily  incurred by the TTC Software  Products
segment, which ceased operations upon the closing of the Newbridge Transaction.


         Total TNS operating expenses increased  approximately  $30.5 million to
$47.8  million  from $17.3  million  for the six months  ended June 30, 1999 and
1998,  respectively.  This  increase  related to the network and  infrastructure
expansion,  which will allow for significant revenue growth in the future. Total
TTC operating  expenses  increased  approximately  $5.0 million to $12.1 million
from $7.1 million for the six months ended June 30, 1999 and 1998, respectively.
This increase primarily related to accelerated research and development efforts.
TTC did not incur expenses after May 19, 1999,  when all assets and  liabilities
were contributed to TeraBridge as part of the Newbridge Transaction.







                                       13
<PAGE>


                       TELEHUB COMMUNICATIONS CORPORATION
                         (Commission File No. 333-61441)



Amortization of debt discount
         Amortization  of debt  discount  for the six months ended June 30, 1999
amounted to $1.6 million in connection with notes issued by the Company.

Interest income (expense), net
         Net  interest  expense for the six months  ended June 30, 1999 was $6.6
million as compared  to $1.1  million  for the six months  ended June 30,  1998.
Gross interest expense increased  approximately  $5.8 million as a result of the
Initial Note  Offering.  Interest  income  increased $0.3 million as a result of
increased cash and equivalent balances available for short term investments.

Net gain of the joint venture
         In the six months ended June 30, 1999,  the Company  recorded a gain of
$24.4 million on the Newbridge Transaction.

Net loss
         The Company  reported a net loss of $30.6 million and $23.4 million for
the six months ended June 30, 1999 and 1998,  respectively.  The Company has not
recorded any benefit for income  taxes due to the  uncertainty  surrounding  the
realization of the favorable tax attributes in future tax returns.  Accordingly,
the Company has  recorded a valuation  allowance  against its total net deferred
tax assets.


Liquidity and Capital Resources

         To date the  Company  has  satisfied  its cash  requirements  primarily
through the sale of capital stock,  the Initial Note Offering,  lease  financing
and loans from  affiliates.  The  Company's  principal  uses of cash are to fund
working capital  requirements and capital  expenditures and to service its lease
financing obligations.

         For the six months ended June 30, 1999, net cash used in operations was
$44.3 million  primarily related to net losses,  accounts  receivable growth and
deduction of the gain  recognized  on the Newbridge  transaction,  and offset by
debt accretion and  amortization  of debt discount which requires no cash outlay
and  increases in accounts  payable and accrued  expenses.  Net cash provided by
investing  activities  was $22.3 million for the six months ended June 30, 1999.
This primarily  related to proceeds  received on the Newbridge  Transaction  and
capital  expenditures  for network  equipment,  computer  software  and facility
expansion.  Net cash used in financing  activities  was $1.0 million for the six
months  ended June 30,  1999,  related to  payments  on capital  leases and debt
obligations  offset by proceeds  received  from the  exercise of employee  stock
options.   The  Company   obtained   additional   capital  lease   financing  of
approximately  $1  million  during the six months  ended  June 30,  1999.  Total
payments on capital lease obligations and long-term debt were approximately $1.4
million  during the six months ended June 30, 1999.  The Company is committed to
make payments under various operating leases.














                                       14
<PAGE>


                       TELEHUB COMMUNICATIONS CORPORATION
                         (Commission File No. 333-61441)


         The Company expects to incur additional  operating losses through 1999.
The  Company  believes  that the net  proceeds  from the joint  venture  will be
sufficient  to meet  anticipated  cash  needs for  working  capital  and for the
acquisition of capital  equipment until September 1999.  Based upon  anticipated
sales terms and  projections,  the  Company may be required to raise  additional
funds through a public or private  financing,  strategic  relationships or other
arrangements. There can be no assurance that such additional funding, if needed,
will be available on terms  attractive to the Company,  or at all. The Company's
forecast of the period of time through  which its  financial  resources  will be
adequate to support its operations is a forward-looking  statement that involves
risks and uncertainties, and actual results could vary materially as a result of
a number of factors.



 Year 2000 Readiness

         The term "Year 2000 Issue"  generally  describes  the various  problems
that  might  result  from  improper   processing  of  dates  and  date-sensitive
calculations  involving  dates in the Year 2000 and beyond.  The Year 2000 Issue
results  from  computer  programs  using two digits  rather  than four digits to
define the applicable  year, so that all dates are  interpreted as being between
1900  and  1999.   Computers  and  other  equipment  using  such  programs  will
incorrectly  interpret dates after the year 1999. Such  misinterpretation  might
cause system failures or  miscalculations  and thereby disrupt  operations,  for
example,  temporary inability to process  transactions,  to send invoices, or to
engage in other normal  business  activities.  Year 2000 issues could affect the
Company through the Year 2000  incompatibility  of its own computer  systems and
equipment  as well as that of  third  parties  with  whom the  Company  conducts
business.

     Readiness Task Force
         Since the Company's  formation,  management has been aware of Year 2000
issues and has sought Year 2000 compatibility in the development of VASP(TM) and
the TNS network.  The Company has created a task force to evaluate its Year 2000
readiness  as it may  affect  the  Company's  operations.  The  task  force  has
established a five-step  process in order to achieve Year 2000 readiness.  These
steps  are  (1)   identification,   (2)   assessment,   (3)   remediation,   (4)
implementation and (5) maintenance.


         Identification. The task force is inventorying all technologies used in
the  Company's  business.  These  technologies  include  hardware,  software and
embedded microchips. The task force will review both internal systems (including
VASP(TM),  information  technology  assets,  equipment and other  systems);  and
external systems (i.e.,  third-party  manufactured products used by the Company,
and issues with customers, vendors and suppliers).








                                       15
<PAGE>


                       TELEHUB COMMUNICATIONS CORPORATION
                         (Commission File No. 333-61441)


         The task force has identified eight major areas (involving 71 different
products) in which the Company utilizes third party hardware and software.

         Assessment.  As the inventory discloses different  technologies used by
the Company,  the task force is assessing  the Year 2000  compatibility  of each
inventoried  item.  The task force will verify Year 2000  compatibility  through
testing or from the  manufacturer's  documentation.  To obtain such manufacturer
documentation,  the  task  force is  searching  the  manufacturer's  web site or
soliciting  an  official  Year 2000  compatibility  certificate.  Of  particular
importance in this assessment step is monitoring the Year 2000 readiness efforts
of the Company's critical vendors and customers. The Company has compiled enough
information to evaluate  whether  potential Year 2000 issues with  third-parties
might have a material  adverse effect on  operations.  The conclusion is that it
will not.

         The  task  force  assessed  the Year  2000  compliance  of third  party
hardware and software utilized in VASP(TM).  Such assessment included contacting
the vendor's  representatives and examining technical document for the products.
The task force has determined that, of the 71 different third party products, 43
products (60.6%) are Year 2000 compliant, 17 products (23.9%) are non-compliant,
7 products  (9.9%) do not use  date-sensitive  data,  and 4 products  (5.6%) are
still being assessed. More recent Year 2000 compliant versions are available for
15 of the non-compliant  products,  and compliant versions are under development
for the other two non-compliant  products.  The task force expects to test under
Year 2000 scenarios,  identify the extent of any  non-compliance  and assess the
possible financial consequences by October 1999.

         Remediation. When finding systems that are Year 2000 incompatible,  the
task force will then determine the appropriate  remedial action for that system;
this determination will be performed on a case-by-case  basis.  Remedial actions
could involve  replacement,  upgrading,  software patches, and substitution with
other products.  The Company  anticipates that remedial actions will require use
of the Company's internal resources,  third-party  manufacturers,  suppliers and
vendors and potentially additional third-party  consultants,  as necessary.  The
remediation will then be performed and thoroughly tested. The task force has not
yet encountered any items requiring a major remediation effort.

         Implementation.  After successfully completing remediation and testing,
the Company will implement the Year 2000 ready  technology.  The Company expects
to complete all  implementations  and be fully Year 2000 ready by September  30,
1999.  However,  the Company could encounter a significant  internal or external
Year 2000  issue  which,  if not  remediated  in a timely  manner,  could have a
material  adverse  effect on the  Company's  business,  financial  condition and
results of operations.

         Maintenance.  To maintain Year 2000  compatibility  after completion of
the compliance plan, the task force is drafting Year 2000 business rules.  These
rules  will  cover  both  internally  created   applications  and  purchases  of
technologies. Company employees will be required to ensure the applications they
create  are  Year  2000  compatible,   with  the  assistance  of  the  Company's
information systems department.  All future purchases of hardware,  software and
other technologies will require Year 2000 compatibility certification or similar
documentation.  The Company expects to circulate these rules  internally  during
the third quarter of 1999.










                                       16
<PAGE>


                       TELEHUB COMMUNICATIONS CORPORATION
                         (Commission File No. 333-61441)



Contingency Planning.
         The Company will address  contingency  planning in the third quarter of
1999. The Company  currently  does not foresee  extensive  contingency  planning
efforts. Principal activities will include backing up all data bases and keeping
the information systems department's schedule clear in January of 2000.


Costs.
         The  Company  believes  that total  costs for  becoming  100% Year 2000
compatible will not be  significant,  less than $100,000.  The Company  believes
that adequate resources have been allocated for this purpose and does not expect
to incur significant  expenditures to resolve Year 2000 issues.  However,  there
can be no assurance that the Company will identify all Year 2000 problems in its
systems in advance of their  occurrence  or that the  Company  can  successfully
remedy  any  problems  that  are  discovered.   Failure  to  achieve  Year  2000
compatibility  could disrupt  operation of the network,  or impact the Company's
ability to bill or collect  revenues.  The expenses of the Company's  efforts to
address such  problems,  or the expenses or liabilities to which the Company may
become subject as a result of such problems,  could materially  adversely affect
the Company's business,  prospects,  operating results,  financial condition and
its ability to service and repay indebtedness,  including the Notes. The revenue
stream and financial  stability of existing  customers may be adversely impacted
by Year 2000 issues,  which could cause  fluctuations in the Company's  revenues
and operating profitability.




















                                       17
<PAGE>


                       TELEHUB COMMUNICATIONS CORPORATION
                         (Commission File No. 333-61441)



                           PART II - OTHER INFORMATION

Item 1.       Legal Proceedings
              There are no pending legal proceedings against the Registrants.

Item 2.       Changes in Securities.

       (a)    In its Current Report on SEC Form 8-K dated May 19, 1999 (see Item
              6(b)), Registrant reported the execution of the First Supplemental
              Indenture,  which  amended  the  Indenture  governing  its 13.875%
              Senior Discount Notes due 2005.  Registrants hereby incorporate by
              reference Item 5 of that report,  which  summarized the amendments
              to the Indenture.  Those amendments,  however,  did not reduce the
              principal  amount at  maturity  of the  Notes,  did not reduce the
              interest rate payable on the Notes and did not change the time for
              payment of interest.

       (b)    Not Applicable.

       (c)    Issuance of Unregistered Securities. During the three months ended
              June 30,  1999,  the  Registrant  issued a total of 22,119  common
              shares and options to purchase  821,500  common shares and no debt
              securities.  None of  those  securities  were  sold in  registered
              offerings  and  Registrant  did not  utilize an  underwriter  when
              issuing  those  securities.  The  following  tables  summarize all
              non-registered  sales of securities  during the three months ended
              June 30, 1999:


                               Equity Securities
Date      Title            Amount  Type of Issuance    Consideration  Exemption
----      -----            ------  ----------------    -------------  ---------
4/09/99   Common Shares     3,100  Option Exercise           $15,500   Sec. 4(2)
4/14/99   Common Shares     6,700  Option Exercise           $33,500   Sec. 4(2)
4/16/99   Common Shares     3,836  Option Exercise           $19,180   Sec. 4(2)
4/21/99   Common Shares     5,400  Option Exercise           $54,000   Sec. 4(2)
4/29/99   Common Shares       833  Option Exercise            $4,165   Sec. 4(2)
5/04/99   Common Shares       750  Option Exercise            $3,750   Sec. 4(2)
5/10/99   Common Shares     1,500  Option Exercise            $7,500   Sec. 4(2)


                 Options and Warrants to Purchase Common Shares
                       Shares                         Per Share
Date        Title   Purchasable    Class of Holder  Exercise Price    Exemption
----        -----   -----------    ---------------  --------------    ---------
6/23/99   Options      500,000       Officers           (a)           Sec. 4(2)
6/23/99   Options      274,500       Employees         $14.58         Sec. 4(2)
6/23/99   Options       47,000       Employees          (a)           Sec. 4(2)
(a)  Exercise  price  will be the lower  $14.58  per share or the next per share
     price of the next equity raise.











                                       18
<PAGE>



Item 3.       Defaults Upon Senior Securities.
       (a)    Not Applicable.
       (b)    Not Applicable.

Item 4.       Submission of Matters to a Vote of Security Holders.
              No matters were submitted for a vote of Security Holders.

Item 5.       Other Information
              None.

Item 6.       Exhibits and Reports on Form 8-K.
       (a)    Exhibits.   No exhibits to are to be filed.
       (b)    Reports on Form 8-K.  During the three months ended June 30, 1999,
              Registrants filed the following Current Reports on SEC Form 8-K:

              (1)  May 19, 1999: Reported the following events under Item 5
                   (Other Events):

                   (i)  Consummation  of the  TeraBridge  joint venture  between
                        Registrant and Newbridge Networks Corporation.

                   (ii) Execution of Supplemental Indenture.
                        No financial  statements  were filed with this Current
                        Report on SEC Form 8-K.


















                                       19
<PAGE>


                                    SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrants  have duly  caused  this  report  to be signed on its  behalf by the
undersigned, thereunto duly authorized.

                                          TELEHUB COMMUNICATIONS CORPORATION
                                          TELEHUB NETWORK SERVICES CORPORATION
                                          TELEHUB TECHNOLOGIES CORPORATION
                                          TELEHUB LEASING CORPORATION

August 6, 1999                          By:      /s/ KENNETH A MINIHAN
                                                -------------------------------
                                                Kenneth A. Minihan
                  Acting Chief Executive Officer of Registrants


August 6, 1999                          By:      /s/ JOHN R. LAWSON
                                                -------------------------------
                                                John R. Lawson,
                                                Chief Financial Officer
                                                of Registrants

















                                       20