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 March 31, 1999



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

      Nevada                       333-61441                  36-413-6730
  (Jurisdiction                   (Commission              (I.R.S. Employer 
of incorporation)                 File Number)           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 March 31, 1999, the Registrant had 13,033,712  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..................7


                           PART II - OTHER INFORMATION
Item 1.    Legal Proceedings...............................................14

Item 2.    Changes in Securities...........................................14

Item 3.    Defaults Upon Senior Securities.................................14

Item 4.    Submission of Matters to a Vote of Security Holders.............15

Item 5.    Other Information...............................................15

Item 6.    Exhibits and Reports on Form 8-K................................15


SIGNATURE..................................................................16




<PAGE>


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



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
                         (Commission File No. 333-61441)

                                                       
                           CONSOLIDATED BALANCE SHEETS
            (Information as of and relating to the three months ended
                     March 31, 1998 and 1999, is unaudited)

                       TELEHUB COMMUNICATIONS CORPORATION

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                           December 31,              March 31,
                                                                1998                   1999
                                                         ---------------         ---------------
                                                                                    (unaudited)
                                     Assets
Current assets:
<S>                                                      <C>                     <C>            
    Cash and cash equivalents                            $    36,727,589         $    10,563,457
    Restricted cash                                              416,321                 314,951                      
    Accounts receivable, net of allowance for                      
       doubtful accounts of $1,093,594 and
       $1,266,623 in 1998 and 1999, respectively               3,114,053               6,286,645                             
    Prepayments on leases                                        905,268                 905,268
    Debt issuance costs                                          874,338                 868,767  
    Other assets                                                 983,516               1,610,024  
                                                         ---------------         ---------------
           Total current assets                               43,021,085              20,549,112  
Property and equipment, net                                   21,062,255              23,656,952
Prepayments on leases                                          1,044,085                 807,469
Debt issuance costs                                            4,874,105               4,626,272
Other assets                                                     408,246                 405,945                    
                                                         ---------------         ---------------
           Total assets                                  $    70,409,776         $    50,045,750
                                                         ===============         ===============

                     Liabilities and Stockholders (Deficit)
Current liabilities:
    Accounts payable                                     $     5,802,730         $     7,522,389  
    Accrued liabilities                                        4,500,579               5,319,065 
    Current portion--capital lease obligations                 2,393,015               2,620,367
    Current portion--long-term debt                              281,116                 292,872                                 
    Deferred gain on sale/leaseback                               24,477                  29,630 
                                                         ---------------         --------------- 
          Total current liabilities                           13,001,917              15,784,323 
Capital lease obligations                                      8,274,635               8,335,353 
Other long-term debt                                          67,885,960              71,636,670 
Accrued liabilities                                            2,893,850               2,877,955 
Deferred gain on sale/leaseback                                   29,630                  18,358
                                                         ---------------         --------------- 
          Total liabilities                                   92,085,992              98,652,659
                                                         ---------------         ---------------    
Stockholders' equity (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 March 31, 1999 
     liquidation preference $17,500,000                            3,500                   3,500                                
  Common stock, $.001 par value;                                                                    
     100,000,000 shares authorized;                                                                 
     12,703,537 and 13,033,712 shares                                                               
     issued and outstanding at                                                                      
     December 31, 1998 and                                                                          
     March 31, 1999 respectively                                  12,704                  13,034                                
Common stock warrants                                         27,246,651              27,246,651 
Additional paid-in capital                                    40,105,733              43,741,370  
Note receivable--stockholder                                    (400,000)             (2,062,170) 
Deferred compensation                                           (118,422)                (88,817)                               
Accumulated deficit                                          (88,526,382)           (117,460,477)                            
                                                         ---------------         ---------------    
         Total stockholders' (deficit)                       (21,676,216)            (48,606,909)                            
                                                         ---------------         --------------- 
         Total liabilities and stockholders' equity      $    70,409,776         $    50,045,750                            
                                                         ===============         ===============                            

</TABLE>

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


                                       3
<PAGE>

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

                      CONSOLIDATED STATEMENTS OF OPERATIONS

            (Information as of and relating to the three months ended
                     March 31, 1998 and 1999, is unaudited)

                       TELEHUB COMMUNICATIONS CORPORATION


                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (Unaudited)


<TABLE>
<CAPTION>

                                                                      Three Months Ended
                                                            ----------------------------------------
                                                                March 31,               March 31,
                                                                  1998                     1999
                                                            ---------------          ---------------

Revenues:
<S>                                                         <C>                      <C>            
   Telecommunications services                              $         6,601          $     5,767,631
   Licenses                                                       3,000,000                      -                
                                                            ---------------          ---------------
                                                                  3,006,601                5,767,631
                                                            ---------------          ---------------

Operating expenses:
   Operations                                                     5,925,704               19,160,325 
   General and administrative                                     1,268,449                3,337,023
   Research and development                                       1,734,994                4,095,265
   Sales and marketing                                              244,680                2,725,542
   Depreciation and amortization                                  1,025,356                1,476,662
                                                            ---------------          ---------------
               Total operating expenses                          10,199,183               30,794,817
                                                            ---------------          ---------------
Operating loss                                                   (7,192,582)             (25,027,186)
                                                            ---------------          ---------------
Other income (expense):
   Amortization of debt discount                                        -                   (795,024) 
   Interest expense                                                (299,480)              (3,500,810)
   Interest income                                                   97,132                  335,269
   Other income                                                       1,005                   53,656
                                                            ---------------          ---------------
               Net loss                                     $    (7,393,925)         $   (28,934,095)
                                                            ===============          =============== 
Basic and diluted loss per share                            $         (0.59)         $         (2.24)
                                                            ===============          =============== 
Weighted average shares outstanding used in                                                         
    per share calculations basic and diluted                     12,634,450               12,892,614
                                                            ===============          =============== 
</TABLE>
                                                           







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


                                       4
<PAGE>

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

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

            (Information as of and relating to the three months ended
               March 31, 1997, 1998 and 1999, and the period from
          January 18, 1996 (inception) to March 31, 1996, is unaudited)

                       TELEHUB COMMUNICATIONS CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                  Three Months Ended
                                                                            ---------------------------------
                                                                              March 31,            March 31,
                                                                                 1998                1999
                                                                            -------------      -------------- 
Cash flows from operations
<S>                                                                         <C>                <C>            
       Net Loss                                                             $  (7,393,925)     $  (28,934,095)
       Adjustments to reconcile net loss to net cash
          used in operating activities
          Depreciation and amortization                                         1,025,356           1,476,662
          Provisions for bad debts                                                    -               173,029
          Amortization of debt issuance costs                                         -               217,196
          Amortization of deferred compensation                                    29,603           1,740,947
          Amortization of debt discount                                               -               795,024
          Accretion of debt                                                           -             3,033,461
          Other  non-cash  credits                                                (96,582)                -
          Changes in operating assets and liabilities:
           (Increase) decrease in assets:
              Accounts Receivable                                                     -            (3,345,621)
              Prepayments on leases                                               229,805             236,616
              Other Assets                                                        (66,253)           (624,207)
           Increase (decrease) in liabilities:
              Accounts Payable                                                  1,244,220           1,719,659
              Accrued liabilities                                                 340,646             802,592
              Deferred gain from sale and lease-back                               60,866              (6,119)
                                                                            -------------      -------------- 
              Net cash used in operating activities                            (4,626,264)        (22,714,856)

Cash flows from investing activities:
       Payments for property and equipment                                     (1,197,327)         (3,171,360)
       Proceeds from sale and lease-back of equipment                           1,000,971                 -
       Restricted cash                                                                -               101,370
                                                                            -------------      -------------- 
              Net cash used in investing activities                              (196,356)         (3,069,990)

Cash flows from financing activities:
       Proceeds from debt issue                                                       -                36,208 
       Proceeds from issuance of common stock                                         -               262,455
       Payments on capital lease obligations and loans                           (528,064)           (677,949)
                                                                            -------------      -------------- 
               Net cash used in financing activities                             (528,064)           (379,286)
                                                                            -------------      -------------- 
Net decrease in cash and cash equivalents                                      (5,350,684)        (26,164,132)
Cash and cash equivalents balance - beginning of period                         9,380,320          36,727,589
                                                                            -------------      -------------- 
Cash and cash equivalents balance - end of period                           $   4,029,636      $   10,563,457
                                                                            =============      ==============
</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 months ended
                     March 31, 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  period  ended  March 31, 1999 are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 1999.


2.       Segment information:

         The Company operates in two business segments:  (i)  telecommunications
software products; and (ii)  telecommunications  network services. The following
table presents revenues and other financial  information by business segment for
the three months ended March 31, 1999 and 1998, respectively.

<TABLE>
<CAPTION>
                                            Software Products   Network Services    Consolidated
                                            -----------------   ----------------    ------------
      THREE MONTHS ENDED MARCH 31, 1999
<S>                                                 <C>               <C>             <C>
      Revenues                                            -           $5,767,630      $5,767,630
      Operating loss                                8,345,848         16,681,338      25,027,186
      Identifiable assets                           7,698,652         42,347,098      50,045,750
      Depreciation and amortization                   346,271          1,130,391       1,476,662
      Capital expenditures                          1,079,413          2,991,947       4,071,360

      THREE MONTHS ENDED MARCH 31, 1998
      Revenues                                     $3,000,000             $6,601      $3,006,601
      Operating loss                                    4,298          7,188,284       7,192,582
      Identifiable assets                           2,502,090         25,592,630      28,094,720
      Depreciation and amortization                   168,905            856,452       1,025,356
      Capital expenditures                            380,979            899,322       1,280,301
</TABLE>

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




                                       6
<PAGE>

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


3.       Joint Venture Agreement:

         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  terms of the  agreement,  the
Company's wholly owned subsidiary TeleHub Technologies Corporation ("TTC"), will
form a wholly  owned  subsidiary  ("NewCo") to be  incorporated  in the State of
Nevada. At closing,  TTC will contribute all of its assets and liabilities,  the
Company will  contribute all of it assets  relating to its VASP(TM)  technology,
including all intellectual property rights, to NewCo.  Newbridge will contribute
$52 million directly into NewCo. NewCo will immediately remit $22 million to TTC
to pay off an  intercompany  liability.  Newbridge  will also  remit $8  million
directly to the Company.  In  exchange,  NewCo and the Company will issue 19% of
the common stock of NewCo to Newbridge. Under terms of the Agreement,  Newbridge
has an option to purchase up to a 50% interest in NewCo for $10 million  dollars
("Newbridge Option"). The Newbridge Option expires in one year.


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 twenty
six contracts,  ranging from one to three year terms, to provide  interstate and
intrastate  long  distance  services  to  switchless  resellers.   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






                                       7
<PAGE>


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


costs  associated  with  operating  the  TeleHub  network  should  decline  as a
percentage   of  total   revenues,   and   accordingly   margins  will  improve.
Additionally,  the Company has signed several memoranda of understanding and has
distributed  several  proposals  to license its VASP(TM)  services.  The Company
expects to license its  technology  to multiple  carriers and OEMs by the end of
1999. The Company expects  significant  growth in revenues from the licensing of
VASP over the next two years.  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  $43.5 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  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.



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,
                                                     ----------------------- 
                                                     March 31,     March 31,  
  Statement of Operations Data:                        1998          1999
  -----------------------------                      ---------     ---------
  Revenue                                                 100%          100%
  Operating expenses other than depreciation
       And amortization                                   305%          508%
  Depreciation and amortization                            34%           26%
                                                     ---------     ---------
                   Total operating expenses               339%          534%
                                                     ---------     ---------
                   Operating loss                         239%          434%
                                                     ---------     ---------
  Amortization of debt discount                             0%           13%
  Interest  expense, net                                    7%           54%
  Other income (expense)                                    0%            1%
                                                     ---------     ---------
  Net loss                                                246%          502%
                                                     =========     =========

                                                                
                                       8
<PAGE>


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



  Comparison of Three Months Ended March 31, 1999 and March 31, 1998
  Revenue
         Revenue increased $2.8 million to $5.8 million from $3.0 million in the
three  months  ended March 31, 1999  compared to the three ended March 31, 1998,
respectively. TeleHub Network Services ("TNS") generated $5.8 million of revenue
from  network  operations  during the three  months  ended March 31,  1999.  TTC
recorded no revenue for the three  months  ended March 31,  1999.  For the three
months ended March 31, 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.

  Operating expenses
         Operating  expenses increased $20.6 million to $30.8 million from $10.2
million  for the  three  months  ended  March 31,  1999 and 1998,  respectively.
Monthly  recurring  network circuit costs,  personnel  costs,  consulting  fees,
network   equipment  lease  payments  and  depreciation   expense  increased  by
$8,858,000,  $5,651,000,  $2,284,000,  $1,334,000  and  $451,000,  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 125 as of March 31, 1998 to 257 as of March 31, 1999.
All operating  expenses are  primarily  variable and are expected to increase in
future periods as revenue increases. Research and development expenses increased
by $2.4  million to $4.1  million  from $1.7  million for the three months ended
March 31,  1999 and 1998,  respectively.  Research  and  development  costs will
increase in future periods to continue the development of the Company's  product
and service offerings.

         Total TNS operating expenses increased  approximately  $15.2 million to
$22.4  million  from $7.2  million for the three months ended March 31, 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 $5.3 million to $8.3 million from
$3.0 million for the three  months ended March 31, 1999 and 1998,  respectively.
This increase related to accelerated research and development efforts.

    Amortization of debt discount
         Amortization of debt discount for the three months ended March 31, 1999
amounted to $795,000 in connection with notes issued to the Company.

  Interest income (expense), net
         Net interest expense for the three months ended March 31, 1999 was $3.2
million as compared to $.2 million for the three  months  ended March 31,  1998.
Gross interest expense increased  approximately  $3.5 million as a result of the
Initial Note  Offering.  Interest  income  increased $ .2 million as a result of
increased cash and equivalent balances available for short term investments.




                                       9
<PAGE>


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



  Net loss
         The Company  reported a net loss of $28.9  million and $7.4 million for
the three  months ended March 31, 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 three months ended March 31, 1999, net cash used in operations was $22.7
million primarily related to net losses and accounts  receivable growth,  offset
by  non-cash  financing  costs and  increases  in  accounts  payable and accrued
expenses.  Net cash used in investing  activities was $3.1 million for the three
months ended March 31, 1999.  This related to capital  expenditures  for network
equipment,  computer  software  and  facility  expansion.  Net cash  provided by
financing  activities was $.4 million for the three months ended March 31, 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 three
months ended March 31, 1999.  Total  payments on capital lease  obligations  and
long-term  debt were  approximately  $.7 million  during the three  months ended
March 31,  1999.  The  Company  is  committed  to make  payments  under  various
operating leases.


         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 the fourth quarter of 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.




                                       10
<PAGE>


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


 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).

         The task force has identified eight major areas (involving 71 different
products)  in which the Company  utilizes  third party  hardware  and  software.
Identification  for the TNS network or its administrative and management systems
has not been completed but targeted for September 1999.

         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 does not yet have
enough   information  to  evaluate  whether  potential  Year  2000  issues  with
third-parties might have a material adverse effect on operations.




                                       11
<PAGE>


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


         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 (22.5%) 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.

     Contingency Planning.
         The Company will address contingency  planning in the second 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.




                                       12
<PAGE>


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


    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.


























                                       13
<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)    Not Applicable.
       (b)    Not Applicable.
       (c)    Issuance of Unregistered Securities. During the three months ended
              March 31, 1999,  the  Registrant  issued a total of 330,175 common
              shares, options and warrants to purchase 732,500 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
              March 31, 1999:

                               Equity Securities
Date         Title          Amount  Type of Issuance   Consideration  Exemption
----         -----          ------  ----------------   -------------  ---------
1/03/99   Common Shares    101,246  Option Exercise         $606,230   Sec. 4(2)
1/05/99   Common Shares     25,000  Option Exercise         $125,000   Sec. 4(2)
1/12/99   Common Shares      1,000  Option Exercise          $10,000   Sec. 4(2)
1/15/99   Common Shares     37,465  Option Exercise         $218,575   Sec. 4(2)
1/15/99   Common Shares     31,319  Option Exercise         $194,095   Sec. 4(2)
3/10/99   Common Shares      2,097  Option Exercise          $10,485   Sec. 4(2)
3/10/99   Common Shares     22,500  Option Exercise         $112,500   Sec. 4(2)
3/31/99   Common Shares    108,654  Option Exercise         $643,270   Sec. 4(2)
3/31/99   Common Shares        894  Option Exercise           $4,470   Sec. 4(2)


                 Options and Warrants to Purchase Common Shares
                        Shares                          Per Share
 Date       Title    Purchasable   Class of Holder    Exercise Price   Exemption
 ----       -----    -----------   ---------------    --------------   ---------
1/01/99    Options       252,500      Employees           $14.58       Sec. 4(2)
1/01/99    Options       180,000      Directors           $14.58       Sec. 4(2)
3/31/99    Warrant       300,000       Employee           $14.58       Sec. 4(2)


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





                                       14
<PAGE>


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


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 March 31, 1999,
              Registrants filed the following Current Reports on SEC Form 8-K:

              (1)  February 2, 1999: Reported the following events  under Item 5
                   (Other Events):

                   (i)   Richard  M.  Harmon's  resignation  as  a  director  of
                         TeleHub Communications  Corporation  ("TeleHub") and as
                         an officer of each Registrant.

                   (ii)  John R.  Lawson's  appointment  as the Chief  Financial
                         Officer,  Treasurer  and  corporate  Secretary for each
                         Registrant.

                   (iii) TeleHub's  completing  the exchange of all  outstanding
                         13.875%  Series A Senior  Discount  Notes  due 2005 for
                         13.875% Series B Senior Discount Notes due 2005.
                   No financial  statements  were filed with this Current Report
                   on SEC Form 8-K.

              (2)  March 31, 1999: Reported the  following events  under  Item 5
                  (Other Events):
                   (i)   The  agreement to enter into  strategic  joint  venture
                         with Newbridge Networks  Corporation for the purpose of
                         developing and marketing the  Registrants'  call server
                         technology.

                   (ii)  Barry C. Lescher's resignation as a director of TeleHub
                         and as an officer for Registrants.

                   No financial  statements  were filed with this Current Report
                   on SEC Form 8-K.








                                       15
<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

May 14, 1999                  By:      /s/ DONALD H. SLEDGE   
                                    ------------------------------------------ 
                                    Donald H. Sledge, Chief Executive Officer 
                                    of Registrants


May 14, 1999                  By:      /s/ JOHN R. LAWSON  
                                    ------------------------------------------
                                    John R. Lawson, Chief Financial Officer
                                    of Registrants


















                                       16