<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                        ---------------------------------

                                   FORM 10-QSB

[X] Quarterly Report under Section 13 or 15d of the Securities Exchange Act of
    1934 for the quarterly period ended: June 30, 1999

[ ] Transition report pursuant to Section 13 or 15d of the Securities Exchange
    Act of 1934 For the Transition period from _____________ to ______________

                         Commission file number: 1-12966


                                   INSCI CORP
             (Exact name of registrant as specified in its charter)

               Delaware                                   06-1302773
-------------------------------------      -------------------------------------
       (State of incorporation)                         (IRS employer
                                                    identification number)

                          Two Westborough Business Park
                              Westborough, MA 01581
                    (Address of principal executive offices)

         Issuer's telephone number, including area code: (508) 870-4000

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

Yes   X     No
     ---       ----

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

Title of Each Class                             Outstanding June 30, 1999
-------------------                             -------------------------
Common stock, par value $.01                          8,785,664

Transitional Small Business Disclosure Format (check one)
Yes       No  X
    ---      ---
<PAGE>

                                      INSCI

                                      INDEX

PART I            FINANCIAL INFORMATION

Item 1.           Financial Statements

            Balance Sheet as of  June 30, 1999                          3

            Statements of Operations for the Three Months Ended
            June 30, 1999 and 1998                                      4

            Statements of Cash Flows for the Three Months
            Ended June 30, 1999 and 1998                                5

            Notes to Financial Statements                               6

Item 2.     Management's Discussion and Analysis or Plan of Operation   7


PART II     OTHER INFORMATION

Item 1.     Legal Proceedings                                          11

Item 2.     Change in Securities                                       11

Item 3.     Defaults Upon Senior Securities                            11

Item 4.     Submission of Matters to a Vote of Security Holders        11

Item 5.     Other Information                                          11

Item 6.     Exhibits and Reports on Form 8-K                           12

            Signature                                                  12

<PAGE>

PART I     FINANCIAL INFORMATION:

                                   INSCI Corp
                                  BALANCE SHEET
                                 (in thousands)
                                   (unaudited)

                                                                        JUNE 30,
                                                                         1999
ASSETS                                                                 --------
Current assets:
      Cash and cash equivalents                                        $    797
      Accounts receivable, net                                            3,239
      Inventory                                                              83
      Prepaid expenses and other current assets                             279
                                                                       --------
        Total current assets                                              4,398
Property & equipment, net                                                   749
Capitalized software development costs,
      net of accumulated amortization of $652                               961
Purchased software, net of accumulated amortization of $795               1,743
Other assets                                                                296
                                                                       --------
Total assets                                                           $  8,147
                                                                       ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
      Accounts payable                                                      926
      Accrued expenses:
        Compensation                                                        374
        Vacation                                                            276
        Commissions                                                          84
        Other                                                               650
      Deferred maintenance revenue                                        1,200
                                                                       --------
        Total current liabilities                                         3,510
                                                                       --------

Stockholders' equity :
  Common stock                                                               88
  Preferred stock                                                            16
  Additional paid-in capital                                             27,784
  Accumulated deficit                                                   (23,251)
                                                                       --------
        Total stockholders' equity                                        4,637
                                                                       --------
Total liabilities and stockholders' equity                             $  8,147
                                                                       ========

                             See accompanying notes
<PAGE>

                                   INSCI CORP
                            STATEMENTS OF OPERATIONS
                    (in thousands, except per share amounts)
                                   (unaudited)

                                                          THREE MONTHS ENDED
                                                               JUNE 30,
                                                          1999           1998
                                                         ------         ------
Revenue
     Product                                             $  910         $1,765
     Services                                             1,510          1,448
                                                         ------         ------
        Total revenue                                     2,420          3,213
                                                         ------         ------
Cost of revenue
     Product                                                353            354
     Services                                               717            756
                                                         ------         ------
        Total cost of revenue                             1,070          1,110
                                                         ------         ------
Gross margin                                              1,350          2,103
                                                         ------         ------
Expenses
     Sales and marketing                                    850          1,053
     Product development                                    633            471
     General and administrative                             641            385
                                                         ------         ------
        Total expenses                                    2,124          1,909
                                                         ------         ------

Income (loss) from operations                              (774)           194
                                                         ------         ------
Other income (expense)
     Interest income                                         11             25
     Interest expense                                      --             --
     Other                                                   (4)          --
                                                         ------         ------
        Total other income (expense)                          7             25
                                                         ------         ------
Net income (loss)                                          (767)           219
                                                         ======         ======

Preferred stock dividends                                  (159)          (163)
                                                         ------         ------
Net income (loss) applicable
     to common shares                                    $ (926)        $   56
                                                         ======         ======

Net income (loss) per common share                       $(0.11)        $ 0.01
                                                         ======         ======
Weighted average common
     shares outstanding                                   8,055          6,768
                                                         ======         ======

                             See accompanying notes
<PAGE>

                                   INSCI CORP
                            STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)

                                                             THREE MONTHS ENDED
                                                                   JUNE 30,
                                                              1999        1998
                                                             -------    -------
Cash flows from operating activities:
  Net income (loss)                                          $  (767)   $   219
  Reconciliation of net income (loss) to net cash
  used in operating activities:
    Depreciation and amortization                                112         93
    Amortization of deferred software costs                      283        197
    Stock options granted for services                            23         30
    Changes in assets and liabilities:
      Accounts receivable                                       (251)        38
      Prepaid expenses and other current assets                 (144)      (131)
      Accounts payable                                          (220)      (190)
      Accrued and other liabilities                              (40)      (333)
      Deferred maintenance revenue                               (52)        75
      Other assets                                               (10)       (80)
                                                             -------    -------
Net cash used in operating activities                         (1,066)       (82)
                                                             -------    -------
Cash flows from investing activities:
    Additions to capitalized software development costs         (161)      (137)
    Additions to purchased software costs                       (235)      (198)
    Capital expenditures                                        (182)       (89)
                                                             -------    -------
Net cash used in investing activities                           (578)      (424)
                                                             -------    -------
Cash flows from financing activities:
    Proceeds from issuance of common stock                       574          2
                                                             -------    -------
Net cash provided by financing activities                        574          2
                                                             -------    -------

Net change in cash and cash equivalents                       (1,070)      (504)
Cash and cash equivalents at beginning of period               1,867      2,596
                                                             -------    -------
Cash and cash equivalents at end of period                   $   797    $ 2,092
                                                             =======    =======

                             See accompanying notes
<PAGE>

                                   INSCI CORP

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

BASIS OF PRESENTATION

      The financial statements included in this report have been prepared by
INSCI (the "Company" or "INSCI"), without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission (the "Commission").
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. However,
we believe that the disclosures contained herein are adequate to make the
information presented not misleading. The financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's annual report on Form 10-KSB, filed on June 28, 1999, for the fiscal
year ended March 31, 1999, and with the Company's definitive proxy statement for
its 1999 Annual Meeting of Stockholders filed with the Commission on July 29,
1999.

      In the opinion of the management of the Company, the accompanying
unaudited financial statements reflect all adjustments (of a normal and
recurring nature) which are necessary to present fairly the financial position
of the Company as of June 30, 1999 and the results of operations and cash flows
for the three months ended June 30, 1999 and June 30, 1998.

      The accompanying financial statements include the operations of the
Company and its wholly owned subsidiary; INSCI (UK) Limited, a product
development center located in the United Kingdom. During fiscal 1998, the
Company's Board of Directors approved the closing of the Company's Philippine
subsidiary. Neither subsidiary is financially significant to the consolidated
results of the Company. All intercompany transactions and balances have been
eliminated in the preparation of the financial statements.

      The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

INCOME (LOSS) PER SHARE

      Basic net income (loss) per common share is computed by dividing net
income (loss) applicable to common shares by the weighted average number of
common shares outstanding during the period. For the three months ended June 30,
1999 and 1998, diluted net income (loss) per share is the same as basic net
income (loss) per share since the inclusion of stock options, warrants and
convertible securities would be antidilutive.

CONTINGENCIES

      None

CREDIT FACILITY

      On July 16, 1999, the Company executed an Agreement ("Agreement") with
Silicon Valley Bank ("SVB") to renew its bank line of credit. The terms of this
Agreement provide for a $1,500,000 working capital credit facility for a term of
one year. The terms further provide for working capital advances up to seventy
five percent of the Company's eligible domestic accounts receivable under ninety
days from invoice date. Collateral for the line, which is secured by a lien, is
comprised of all Company assets. The rate of interest to be paid to SVB is prime
plus one percent. In order to borrow against the line, the Company is required
to meet certain covenants which include minimum tangible net worth of $750,000
for the quarters ending June 30 and September 30, 1999, $1,100,000 for the
quarter ending December 31, 1999 and $1,500,000 for the quarter ending March 31,
2000, and a quick ratio, excluding deferred maintenance revenue, of 1:50 to 1.
The Company, at its option, may terminate the credit facility with SVB without
penalty. To date, the Company has not borrowed against any portion of this
credit facility.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

COMPARISON OF RESULTS OF OPERATIONS

      The following table sets forth, for the periods indicated, the percentage
relationship that certain items of the Company's results of operations bear to
total revenue:

                                                    Three months ended
                                                         June 30,
                                                     1999        1998
                                                     ----        ----
        Revenue                                         %           %
             Product                                   38          55
             Services                                  62          45
                                                     ----        ----
               Total revenue                          100         100
        Cost of revenue
             Product                                   15          11
             Services                                  29          24
                                                     ----        ----
               Total cost of revenue                   44          35
                                                     ----        ----
        Gross margin                                   56          65
        Expenses
             Sales and marketing                       37          33
             Product development                       25          14
             General and administrative                26          12
                                                     ----        ----
               Total expenses                          88          59
                                                     ----        ----
        Income (loss) from operations                 (32)          6

        Other income (expense)                          0           1
                                                     ----        ----
        Net income (loss)                             (32)          7
                                                     ====        ====

THREE MONTHS ENDED JUNE 30, 1999 AS COMPARED TO THE THREE MONTHS ENDED JUNE 30,
1998:

REVENUE

       INSCI develops, sells, installs and supports electronic document
repository software with integrated internet, imaging, workflow,
print-on-demand, electronic distribution and archive (COLD) software for the
enterprise level (high volume production) market. INSCI's software products
enable customers to improve their services through electronic access to
documents (e.g. invoices, statements, reports, etc.); provide financial savings
through elimination of paper and microfiche; and provide the foundation for the
digital document "back office" for electronic commerce applications. Sales to
end users generally include software, systems integration and consulting
services, installation, and training. Post-installation maintenance and customer
support is available under the terms of a separate contract at an additional
charge. INSCI sells its products through a combination of a direct sales force
and indirectly through value added resellers ("VARs"), distributors and
strategic sales alliances with companies including Unisys Corporation, Xerox
Corporation and Moore Corporation. Revenue is net of discounts and allowances
given to third party VARs and distributors.

      Total revenue for the quarter ended June 30, 1999 ( the "current quarter")
was $2,420,000 and decreased by $793,000, or 25%, compared to revenue of
$3,213,000 for the quarter ended June 30, 1998. Product revenue decreased by
$855,000 for the current quarter and was partially offset by an increase in
services revenue of $62,000.

      Product revenue was $910,000 in the current quarter compared to $1,765,000
for the same quarter last year. The decrease in product revenue reflects several
factors. As we have increased our focus to selling a greater portion of our
products through sales partners, which include Unisys Corporation, Xerox
Corporation and Moore Corporation, sales cycles have lengthened. We believe,
however, that future sales growth through these partners will provide greater
opportunities than through increases in our direct sales force. Another factor
affecting current quarter revenues was the resignation of a key sales executive
in March, 1999. We have been transitioning to a new sales management team and
believe that the impact of this transition is largely behind us. We also believe
there was some impact on this quarter's revenues due to customers and prospects
delaying decisions as they focused on their own internal Y2K issues. As a
result, we have experienced delays in several large orders. We expect to close
on many of these orders over the next several months.

      Services revenue was $1,510,000 in the current quarter compared to
$1,448,000 for the same quarter last year. Services revenues, which grew
modestly in the current quarter, are related to the growth in product revenues.
Accordingly, services revenues would have been higher had product revenue grown
in the current quarter.

      For the quarter ended June 30, 1999 the Company received in excess of ten
percent of its total revenues from Unisys , a strategic sales partner of the
Company. A decline in revenues from this sales partner in future quarters could
materially effect the revenues and operating results of the Company.

      INSCI has historically had volatility in quarter to quarter revenue growth
while at the same time posting year to year growth increases. Looking forward,
we believe that we have the products, sales partners and customer base to
provide a strong foundation for continued annual revenue growth.

GROSS MARGIN AND COST OF REVENUE

      Gross margin for the quarter ended June 30, 1999 was $1,350,000 and
decreased 36% compared to gross margin of $2,103,000 for the same quarter last
year. Gross margin as a percent of revenues was 56% for the current quarter
compared to 65% for the same quarter last year. The decrease in gross margin is
primarily the result of decreased product revenue for the current quarter.

      Cost of product revenue as a percentage of product revenue was 38% in the
current quarter as compared to 20% for the same quarter last year. Cost of
services revenue was 47% in the current quarter as compared to 52% for the same
quarter last year. The increase in cost of product revenue as a percent of
revenues in the current quarter reflects the relatively fixed nature of
amortization costs of capitalized software, with less revenue to cover these
costs. To the degree that the Company's product revenues grow in future periods,
cost of revenue as a percent of revenue is expected to decrease as increased
revenues are available to absorb amortization costs. The improvement in cost of
service revenue as a percent of service revenues reflects increased operating
efficiencies of the service organization.

SALES AND MARKETING

      Sales and marketing expenses for the quarter ended June 30, 1999 were
$850,000 and decreased by 19%, compared to $1,053,000 for the same quarter last
year. The expense decrease reflects lower sales commissions associated with
lower revenues for the current quarter combined with cost reductions in several
marketing programs.

PRODUCT DEVELOPMENT

      The Company's product development program has been directed toward
creating a suite of complementary products to meet customer and marketplace
requirements for a more complete electronic document management solution. This
development program includes continued development of NT and Web based products
combined with enhancement of existing Unix based products. During fiscal 1999,
the Company released significant enhancements to its Windows NT suite of
products, which combine an electronic digital document repository with internet
access and integrated imaging and workflow. This software can archive and
retrieve high volumes of documents operating on the NT platform.

       The additions to INSCI's product offerings, along with enhancements to
existing products, have been funded by the Company's gross expenditures for
software products. Gross product development expenses for the quarter ended June
30, 1999 were $1,029,000 before capitalization of software expenses of $396,000,
for net product development expenses of $633,000. Gross development expenses for
the quarter ended June 30, 1998 were $806,000, before capitalization of software
expenses of $335,000, for net product development expenses of $471,000. The
increase of gross expenditures for the current quarter reflects acceleration of
enhancements of the Company's newer line of NT and Web based products to meet
the continuing increase in enterprise performance requirements in our market.

GENERAL AND ADMINISTRATIVE

      General and administrative expenses were $641,000 for the quarter ended
June 30, 1999 and increased by $256,000 compared to expenses of $385,000 for the
same quarter last year. This increase reflects expenses associated with the
addition of a President to the Company's executive organization, the addition of
a formal management information services department to support our technological
infrastructure and the addition of an investor relations program.

INTEREST INCOME, NET

      Net interest income for the quarter ended June 30, 1999 was $11,000
compared to $25,000 for the same quarter last year. The decrease reflects lower
cash balances in the current quarter with correspondingly lower interest income.

NET INCOME (LOSS)

      Net loss for the quarter ended June 30, 1999 was $767,000 compared to a
net income of $219,000 for the quarter ended June 30, 1998. The loss for the
current quarter reflects decreases in revenues combined with increased
expenditures for product development and general and administrative expenses.

YEAR 2000 COMPUTER SOFTWARE CONVERSION

      Many computer systems will experience problems handling dates beyond the
year 1999. Therefore, some computer hardware and software will need to be
modified prior to the year 2000 in order to remain functional. The Company has
assessed both internal readiness of its computer systems and the compliance of
its computer software sold to customers for its ability to process the year
2000. The Company believes that it is materially ready to process year 2000
requirements and that the remaining minor changes scheduled to be completed over
the next four months will be successfully implemented as part of the Company's
normal maintenance update of internal systems. The majority of the costs
associated with implementing the Company's year 2000 compliance program have
already been recognized and have not been material in terms of the Company's
financial operating results. Costs associated with implementing the final
portions of the Company's program over the next four months are not expected to
be material. The Company believes there is little risk associated with year 2000
issues relative to its internal operations or computer software sold. There can
be no assurance, however, that there will not be a delay in, or increased costs
associated with the implementation of such changes. The Company's inability to
implement such changes could have an adverse effect on future results of
operations.

FORWARD LOOKING COMMENTS

      We believe that opportunities to increase future revenues are best served
by supporting sales growth through our strategic sales partner channels due to
the existing customer relationships that these partners have and the relatively
large number of sales personnel that they can direct to selling our products, as
compared to much lower sales coverage of our internal direct sales force. We
have also continued to increase our expenditures for product development with
the objective of continuing to provide leading products to the markets that we
serve. The increase in revenues for fiscal 1999 compared to fiscal 1998 reflects
the positive impact on revenues of the Company's new products and increased
revenues through indirect channels. We are not able to predict, however, when
and to what degree future revenue increases from our NT based products or
increased use of sales channels may occur. In addition, the long sales cycle
associated with our products and market combined with the large dollar value of
many customer orders, which may or may not be received in a given quarter, can
result in quarter-to-quarter revenue volatility.

LIQUIDITY AND CAPITAL RESOURCES

      As of June 30, 1999 we had $797,000 of cash and working capital of
$888,000 in comparison to $2,092,000 of cash and working capital of $2,153,000
as of June 30, 1998. The present cash reserves of the Company are believed to be
sufficient to meet the foreseeable needs of the Company. The Company has
available a $1.5 million working capital bank line which it has not utilized.
Accounts receivable were $3,239,000 with weighted days outstanding of 65 as of
June 30, 1999 compared to receivables of $2,866,000 with weighted days
outstanding of 56, as of June 30, 1998. Our receivable days outstanding vary
between 55 and 65 days and the current quarter's higher days are based on
customer mix and are not indicative of any trend in increasing receivable days.

      The Company's cash flows are summarized below for the periods indicated:
(in thousands)

                                                     THREE MONTHS ENDED JUNE 30,
                                                        1999            1998
                                                       -------          -----
Cash provided by (used in)
        Operating activities                           $(1,066)         $ (82)
        Investing activities                              (578)          (424)
        Financing activities
                                                           574              2
                                                       -------          -----
           Increase (decrease) in cash and cash
             equivalents                               $(1,070)         $(504)
                                                       =======          =====

Cash and cash equivalents at end of period             $   797         $2,092

      Cash use increased by $566,000 for the three months ended June 30, 1999
compared to the same period last year. We used cash of $1,066,000 in operating
activities for the three months ended June 30, 1999, primarily from our net
loss. Net cash used in investing activities was $578,000 for the current period
from additions to capitalized and purchased software combined with capital
expenditures. Cash provided by financing activities totaled $574,000 and
reflects funds received from the exercise of Company stock options.

      On July 16, 1999, the Company executed an Agreement ("Agreement") with
Silicon Valley Bank ("SVB") to renew its bank line of credit. The terms of this
Agreement provide for a $1,500,000 working capital credit facility for a term of
one year. The terms further provide for working capital advances up to seventy
five percent of the Company's eligible domestic accounts receivable under ninety
days from invoice date. Collateral for the line, which is secured by a lien, is
comprised of all Company assets. The rate of interest to be paid to SVB is prime
plus one percent. In order to borrow against the line, the Company is required
to meet certain covenants which include minimum tangible net worth of $750,000
for the quarters ending June 30 and September 30, 1999, $1,100,000 for the
quarter ending December 31, 1999 and $1,500,000 for the quarter ending March 31,
2000, and a quick ratio, excluding deferred maintenance revenue, of 1:50 to 1.
The Company, at its option, may terminate the credit facility with SVB without
penalty. To date, the Company has not borrowed against any portion of this
credit facility.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT:

      With the exception of historical information, the matters discussed in
this report are "forward looking statements" as the term is defined in Section
21E of the Securities Exchange Act of 1934. While the Company believes that its
strategic plan is on target and the business outlook remains strong, several
important factors, many of which are beyond the control of the Company, have
been identified which could cause results to differ materially from historical,
planned, implied or predicted results of the Company. While the Company has
achieved an operating income in some past quarters, INSCI historically has been
unable to generate sales volumes necessary to achieve profitability on a
sustained basis. INSCI has experienced, and may in the future experience,
significant quarter to quarter fluctuations in revenues and the results of
operations. Such fluctuations may result in volatility in the market price of
the Company's Common Stock.

       Quarterly revenues and results of operations may fluctuate as the result
of a variety of factors, including the lengthy sales cycle for the Company's
products, the proportion of revenues attributable to software license fees
versus services, the amount of revenue generated by alliances with other
companies selling INSCI's products, demand for the Company's products, the size
and timing of individual license transactions, the introduction of new products
and product enhancements by the Company or its competitors, changes in customer
budgets, competitive conditions in the industry and general economic conditions.
Additionally, the sale of the Company's products generally involves a
significant commitment of capital by its customers and may be delayed due to
time consuming authorization procedures within an organization. Other factors
affecting the Company's operating results include INSCI's ability to design and
introduce on a timely basis new products which compete effectively on the basis
of price and performance and which address customer requirements, product
obsolescence, technological changes, competition and competitive pressures on
price, the ability to hire and retain qualified personnel and general economic
conditions affecting the investment by potential customers in peripheral
computer devices. There is no assurance that the Company can maintain or
increase its sales volume going forward or that it will be able to achieve a
profit in the marketing of its products.

PART II  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         To the best of the Company's knowledge, there are no material legal
proceedings pending against the Company or any of its property, nor was any such
proceeding terminated during the quarter ended June 30, 1999.

ITEM 2.  CHANGE IN SECURITIES

         This item is not applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         This item is not applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         This item is not applicable.

ITEM 5.  OTHER INFORMATION

      On July 16, 1999, the Company executed an Agreement ("Agreement") with
Silicon Valley Bank ("SVB") to renew its bank line of credit. The terms of this
Agreement provide for a $1,500,000 working capital credit facility for a term of
one year. The terms further provide for working capital advances up to seventy
five percent of the Company's eligible domestic accounts receivable under ninety
days from invoice date. Collateral for the line, which is secured by a lien, is
comprised of all Company assets. The rate of interest to be paid to SVB is prime
plus one percent. In order to borrow against the line, the Company is required
to meet certain covenants which include minimum tangible net worth of $750,000
for the quarters ending June 30 and September 30, 1999, $1,100,000 for the
quarter ending December 31, 1999 and $1,500,000 for the quarter ending March 31,
2000, and a quick ratio, excluding deferred maintenance revenue, of 1:50 to 1.
The Company, at its option, may terminate the credit facility with SVB without
penalty. To date, the Company has not borrowed against any portion of this
credit facility.

      On July 27, 1999, the Company filed Post Effective Amendment No. 1 to the
Registration Statement. The Company included in the Post Effective Amendment
9,458,835 shares of Common Stock (the "shares") comprised of 2,279,166 shares
underlying outstanding warrants; 2,950,336 shares underlying previously granted
stock options; up to 229,333 shares issuable upon conversion of outstanding 8%
Convertible Redeemable Preferred Stock (the "Preferred Shares") and 4,000,000
shares reserved by the Company for acquisitions. All shares included in the Post
Effective Amendment were previously included in the Form S-1 Registration
Statement. Upon exercise of any of the warrants or stock options, the Company
will receive the exercise/conversion price, and intends to use proceeds received
for working capital and general corporate purposes.

<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(A)   EXHIBITS.

      Exhibit 27, Financial Data Schedule

(B)   REPORTS ON FORM 8-K.

      A report on Form 8-K, dated April 27, 1999 was filed by the Company on
      April 29, 1999 regarding filing a Form S-8 for 3,000,000 shares of common
      stock underlying 3,000,000 stock options authorized under our 1997 Equity
      Incentive Plan.



                                    SIGNATURE

   Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                           INSCI CORP


Date:  August 5, 1999                By:   /S/ ROGER C. KUHN
                                           ------------------------------------
                                           Roger C. Kuhn
                                           Vice President and Chief Financial
                                           Officer