U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

        (MARK ONE)

          [ X ]    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES
                   EXCHANGE ACT OF 1934

                      For the quarter ended March 31, 1998

          [   ]    TRANSITION REPORT UNDER SECTION 13 OR A5(d) OF THE SECURITIES
                   EXCHANGE ACT OF 1934  (no fee required)


                         Commission file number 0-23544
                                                -------

                                EROX CORPORATION
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

           California                                 94-3107202
---------------------------------------           --------------------
  (State or other jurisdiction of                  (I.R.S. employee
   incorporation or organization)                  Identification No.)


4034 Clipper Court, Fremont, California                   94538
---------------------------------------           --------------------
(Address of principal executive offices)                (Zip code)


                    Issuer's telephone number: (510) 226-6874
                                               --------------

         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
[ ]

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the latest practicable date. 10,289,488 shares of Common
Stock as of May 5, 1998.

                                                                 Total Pages: 21
<PAGE>
                                EROX CORPORATION
<TABLE>

                                                        INDEX
<CAPTION>
                                                                                                                Page
                                                                                                                ----
<S>                                                                                                               <C>
PART I
FINANCIAL INFORMATION

         Item 1. Financial Statements

                  Condensed Balance Sheets (Unaudited) as of March 31, 1998
                  and December 31, 1997...........................................................................2

                  Statements of Operations (Unaudited) for the Three Months Ended
                  March 31, 1998 and 1997.........................................................................3

                  Condensed Statements of Cash Flows (Unaudited) for the Three Months
                  Ended March 31, 1998 and 1997...................................................................4

                  Notes to Condensed Financial Statements (Unaudited).............................................5

         Item 2. Management's Discussion and Analysis

                  Management's Discussion and Analysis of Financial Condition and Results of Operations...........6

PART II
OTHER INFORMATION

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

SIGNATURES........................................................................................................9
</TABLE>

<PAGE>

                                     PART I
                              FINANCIAL INFORMATION


Item 1.  Financial Statements



<PAGE>

                                EROX Corporation

<TABLE>
                                 Balance Sheets
<CAPTION>
                                                         March 31,     December 31,
                                                           1998            1997
                                                       ------------    ------------
<S>                                                    <C>             <C>         
Assets

Current assets:
  Cash and cash equivalents                            $     33,930    $    248,617
  Accounts receivable, net of allowances of $499,606      2,670,450       3,084,784
   and $822,813 in 1998 and 1997, respectively
  Inventory                                               3,215,413       3,421,298
  Other current assets                                      146,276         128,817
                                                       ------------    ------------
Total current assets                                      6,066,069       6,883,516

Property and equipment, net                                  84,366          99,491
                                                       ------------    ------------

                                                       $  6,150,435    $  6,983,007
                                                       ============    ============

Liabilities and shareholders' equity



  Loan payable, bank                                   $    614,462    $    548,000
  Accounts payable                                          393,631         800,648
  Other accrued expenses                                  1,486,122       1,205,069
                                                       ------------    ------------
Total current liabilities                                 2,494,215       2,553,717

Commitments                                                    --              --

Shareholders' equity:
  Convertible  preferred  stock,  issuable in
    series,  no par value,  10,000,000 shares
    authorized, 1,433,333 shares issued and
    outstanding at March 31, 1998
    and December 31, 1997, respectively                   2,145,535       2,145,535

  Common stock, no par value,  40,000,000 shares
    authorized,  10,289,488 shares
    issued and outstanding at March
    31, 1998 and December 31, 1997, respectively         17,667,024      17,667,024
  Accumulated deficit                                   (16,156,339)    (15,383,269)
                                                       ------------    ------------
Total shareholders' equity                                3,656,220       4,429,290
                                                       ------------    ------------
                                                       $  6,150,435    $  6,983,007
                                                       ============    ============

<FN>
See accompanying notes.
</FN>
</TABLE>

<PAGE>

                                EROX Corporation

                            Statements of Operations

                                                      Quarter ended March 31,
                                                      -----------------------

                                                   ------------    ------------
                                                       1998            1997
                                                   ------------    ------------

Net sales                                          $  3,363,161    $  5,096,289
Cost of goods sold                                    1,044,199         907,686
                                                   ------------    ------------

Gross profit                                          2,318,962       4,188,603

Expenses:
   Research and development                              82,132          91,770
   Selling, general and administrative                2,999,595       3,907,279
                                                   ------------    ------------

Total expenses                                        3,081,727       3,999,049
                                                   ------------    ------------

Income (loss) from operations                          (762,765)        189,554

Interest income                                              56          11,980
Interest (expense)                                      (10,955)         (2,543)
Other (expense)                                             594           1,474
                                                   ------------    ------------

Income (loss) before income taxes                      (773,070)        200,466

Income taxes                                               --            10,783
                                                   ------------    ------------

Net income (loss)                                  $   (773,070)   $    189,683
                                                   ============    ============

Net income (loss) per common share-basic           $       (.08)   $        .02
                                                   ============    ============

Net income (loss) per common share-
  assuming dilution                                $       (.08)   $        .02
                                                   ============    ============

Weighted average shares used in
  calculation of earnings per share                  10,289,488      10,221,260
                                                   ============    ============

Weighted average shares and equivalents,
  if dilutive, used in calculation of net income
  (loss) per common share                            10,289,488      10,577,397
                                                   ============    ============

See accompanying notes. 
<PAGE>

                                EROX Corporation

                            Statements of Cash Flows


                                                      Quarter ended March 31,
                                                      -----------------------

                                                         1998          1997
                                                     -----------    -----------
Cash flows from operating activities
Net income (loss)                                    $  (773,070)   $   189,682

Adjustments  to  reconcile  net  income  (loss)
  to net cash  used in  operating  activities:
  Depreciation and amortization                           15,125         15,296

  Changes in operating assets and liabilities:
    Accounts receivable                                  414,334     (1,677,813)
    Inventory                                            205,885     (1,602,757)
    Other current assets                                 (17,459)      (385,062)
 Accounts payable and accrued liabilities               (125,964)       862,406
                                                     -----------    -----------
Net cash used in operating activities                   (281,149)    (2,598,247)

Cash flows from investing activities
Purchase of property and equipment                          --          (87,254)
                                                     -----------    -----------
Net cash provided by (used in) investing activities         --          (87,254)

Cash flows from financing activities
Proceeds from bank borrowings                             66,462        442,378
Proceeds from issuance of common stock                      --          184,039
                                                     -----------    -----------
Net cash provided by financing activities                 66,462        626,417

Net increase/(decrease) in cash and cash equivalents    (214,687)    (2,059,084)
Cash and cash equivalents at beginning of the year       248,617      2,059,084
                                                     -----------    -----------
Cash and cash equivalents at end of the year         $    33,930    $      --
                                                     ===========    ===========


See accompanying notes.


<PAGE>

                                EROX Corporation

                     Notes to Condensed Financial Statements
                                   (unaudited)

                                 March 31, 1998

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

         The accompanying  unaudited  condensed  financial  statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Rule 10-01 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been included.  Operating  results for the three months ended March 31, 1998 are
not necessarily  indicative of the results that may be expected for the calendar
year ending December 31, 1998. For further  information,  refer to the financial
statements and footnotes thereto included in the Company's annual report on Form
10-KSB for the year ended December 31, 1997.

Inventory

         Inventories  are  stated  at the  lower of cost  (first  in - first out
method) or market.  The inventory at March 31, 1998  consists of finished  goods
inventory  valued at $1,512,065 work in process of $210,754 and raw materials of
$1,492,594.  At December 31, 1997, these balances were $1,665,393,  $151,143 and
$1,604,762, respectively.

Net (Loss) Income Per Share

         In 1997, the Financial  Accounting  Standards Board issued Statement of
Financial Accounting Standards No. 128 (SFAS 128), Earnings per Share. Statement
128 replaced the  previously  reported  primary and fully  diluted  earnings per
share with basic and diluted  earnings per share.  Unlike  primary  earnings per
share,  basic  earnings  per share  excludes  any  dilutive  effects of options,
warrants and convertible  securities.  Diluted  earnings per share is similar to
the previously  reported fully diluted earnings per share. All per share amounts
for all periods have been presented, and where necessary, restated to conform to
Statement 128 requirements.

         Basic   net   (loss)   income   per   share  is   computed   using  the
weighted-average  number of common  shares  outstanding.  Diluted net income per
share is  computed  using  the  weighted-average  number of  common  shares  and
dilutive common equivalent shares outstanding during the period. Dilutive common
share  equivalents  consist of employee  stock options using the treasury  stock
method  and  dilutive  convertible  securities  using the  if-converted  method.
Diluted loss per share is computed using the  weighted-average  number of common
shares outstanding during the period. Common stock equivalents are excluded from
the diluted  loss per share  computation  as their effect in  antidilutive.  The
following  table sets forth the  computation for basic and diluted (loss) income
per share:

                                                   March 31, 1998  March 31 1997
                                                    ------------    ------------
Numerator:
Net (loss) income from operations                   $   (773,070)   $    189,683
Denominator:
Denominator for basic earnings per share-data         10,289,488      10,221,260
Effect of dilutive securities:
  Employee stock options                                    --           356,137
                                                    ------------    ------------
Denominator for diluted earnings per share-data       10,289,488      10,577,397

Basic net (loss) income per share                   $      (0.08)   $       0.02
                                                    ------------    ------------
Diluted net (loss) income per share                 $      (0.08)   $       0.02
                                                    ------------    ------------
<PAGE>

Item 2. Management's Discussion and Analysis

         This report contains  forward-looking  statements within the meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities  Exchange  Act  of  1934,  as  amended.  Except  for  the  historical
information contained in this discussion and analysis of financial condition and
results  of  operations,  the  matters  discussed  herein  are  forward  looking
statements.  These forward looking statements include but are not limited to the
Company's  plans for sales  growth and  expansion  into new  channels  of trade,
expectations  of gross  margin,  expenses,  new  product  introduction,  and the
Company's   liquidity  and  capital  needs.  These  matters  involve  risks  and
uncertainties  that could cause  actual  results to differ  materially  from the
statements made. In addition to the risks and  uncertainties  described in "Risk
Factors",  below,  these risks and  uncertainties  may include  consumer trends,
business cycles,  scientific  developments,  changes in governmental  policy and
regulation,  currency  fluctuations,  economic  trends in the United  States and
inflation. These and other factors may cause actual results to differ materially
from those anticipated in forward-looking statements.  Readers are cautioned not
to place undue reliance on these forward-looking statements, which speak only as
of the date hereof.

Risk Factors

         The  Company's  future  results  may be affected to a greater or lesser
degree by the following factors among others:

         Competition:  The prestige  fragrance  market is volatile and extremely
competitive.  Consumer preferences and demands can shift dramatically reflecting
changes in fashion and current fads. There are numerous  fragrance products that
are better known than the products marketed by the Company.  There are also many
companies which have  substantially  greater  resources than EROX and which have
the ability to invest heavily in new product  development and introduction.  The
Company can expect that its competitors will attempt to compete with the Company
through the introduction of new products and promotion of existing products.

         In  addition,  the  product  life cycle of  fragrances  is  shortening.
Traditional  fragrance  companies now introduce a new fragrance every one to two
years  compared  to every four to five years as in the past.  This  increase  in
competing  fragrances  makes  it  difficult  for any one  fragrance  to hold the
consumer's  attention on a long-term  basis.  Although the Company  believes the
inclusion  of  human  pheromones  as  a  component  clearly  differentiates  its
products,  other fragrances are competing for space with the Company's  products
at both the store level and in print and media advertising.

         Marketing: The failure to establish and maintain the necessary sales or
distribution  channels  could have a material  adverse  effect on the  Company's
business.  Although  the Company  believes  its  marketing  strategy is the most
cost-effective  way to introduce  its products,  there can be no assurance  that
broader-scale  retail launches will be successful.  The Company cannot guarantee
that retail outlets or catalogs will continue to carry the EROX products. If the
current  strategy is  unsuccessful,  marketing of the Company's  products  would
require a new  strategy and may require a  significantly  more  expensive  sales
effort for which the Company may not have sufficient funds.

         Retail environment: Continued consolidation in the retail trade has led
to the emergence of four major retail players who control the major share of the
market.  Federated  Department Stores, The May Company,  Dayton  Hudson/Marshall
Fields and Dillard  Department  Stores now comprise the majority of US upper end
department  stores.  This  consolidation  could  lead to price  and  promotional
pressure and increased credit risk for the Company.

         The retail  environment  in better  department  stores is  increasingly
challenging.  Retailers  have  aggressively  cut  inventories  across the board.
Promotional  support in the form of co-op advertising  dollars is being cut back
and  retailers  are  feeling  pressure to become  more  promotional  in order to
compete with price conscious chains appealing to bargain hunters. Fragrances and
cosmetics  are  increasingly  being sold in  secondary  markets such as discount
perfumeries,  drug  chains  and  lower  priced  department  stores.  It  is  not
anticipated  that the  department  store class of trade in the U.S.  will become
more profitable in the near future.

         Seasonality:  Sales in the fragrance  industry are generally  seasonal,
with generally  higher sales in the second half of the calendar year as a result
of increased  demand for fragrance  products in  anticipation  of and during the
Christmas  holiday season.  The  anticipated  seasonality of the Company's sales
could cause a significant variation in its quarterly operating results.
<PAGE>

         Patent protection:  There can be no assurance that any patent or patent
application  owned  or  controlled  by the  Company  will  continue  to  provide
commercially  significant  protection of the Company's technology or ensure that
the  Company  may not be  determined  to infringe  valid  patents of others.  No
assurance can be given that others will not independently  develop substantially
equivalent  proprietary  information  or otherwise  gain access to the Company's
trade  secrets or that the Company  can  meaningfully  protect  its  technology,
proprietary information or trade secrets.

         Attraction and retention of key employees: The success of the Company's
future operations  depends in large part on the Company's ability to recruit and
retain key employees and  consultants  with research,  product  development  and
marketing  experience,  as well as other  professionals  who are in considerable
demand.  There  can be no  assurance  that the  Company  will be  successful  in
retaining or recruiting such key personnel.

         Dependence  on third  parties for  manufacturing:  The Company does not
have  facilities to manufacture its products and relies on Pherin to manufacture
its  pheromones and third parties to supply  components  and to blend,  fill and
package its fragrance  products.  The Company  believes that such  manufacturing
services are the most effective  method of producing its products.  The majority
of the fragrance industry uses contract fillers,  and the Company has no current
plans to set up its own filling  facilities.  However, as with any business that
is not  vertically  integrated,  if the  Company  is  unable to obtain or retain
fragrance  suppliers,  component  manufacturers or third party  manufacturing on
acceptable  terms,  it may not be able to obtain  commercial  quantities  of its
products, which would adversely affect results.

Results of Operations

Three  Months  ended March 31, 1998 as compared to the Three  Months ended March
31, 1997

         Net sales for the first quarter of 1998 were $3,363,161  representing a
decrease of 34% from sales of $5,096,289 for the prior year's quarter.  Sales in
the first quarter of 1997  included the launch of inner  REALM(R) into the major
department  store chains in the U.S. The Company  attributes the 34% decrease in
net sales  entirely to inner REALM.  Initial  launch  quantities  shipped in the
first  quarter of 1997 were not  duplicated  by reorders in the first quarter of
1998. The Company's first fragrance  offerings:  Realm Women(R) and Realm Men(R)
have shown level reorder quantities  between the two quarters.  During the first
quarter of 1998,  the  Company  expanded  sales to  distributors  for  secondary
markets.  Also in 1998,  international  shipments  increased with expansion into
selected  European  markets  for both retail and direct  marketing.  The Company
plans to aggressively pursue these outlets as they offer a cost-effective method
of distribution.

         Net  sales  for the  quarters  ended  March  31,  1998 and 1997 were as
follows:

--------------------------------------------------------------------------------
Markets                                       1998                       1997
--------------------------------------------------------------------------------

  U.S. Markets                  $        2,952,227        $         4,752,101
  International Markets                    410,934                    344,188
                                   ----------------          -----------------

  Net Sales                     $        3,363,161        $         5,096,289

         Gross  margin for the  quarter  ended March 31,  1998  declined  13% to
$2,318,962  from  $4,188,603 in the prior year  primarily due to the decrease in
full price launch  shipments of inner REALM.  The Company created inner REALM to
be a product  with a higher gross margin than Realm Women and Realm Men, and the
decrease  in the  quantity  of inner  REALM  items sold  resulted  in the margin
shortfall.  Also  contributing to the margin shortfall was the increase in sales
to secondary and  international  classes of trade.  The Company sells into these
markets  through  distributors.   While  the  net  selling  price  is  lower  to
distributors  than  the  wholesale  price  to  department  stores,  the  Company
anticipates  seeing long term  benefits as there are no ongoing  advertising  or
field support chargebacks to lower overall operating results.

         Research and  Development  expenses for the first  quarters of 1998 and
1997 were $82,132 and $91,770,  respectively.  These costs  principally  reflect
payments and costs under the Company's contract with Pherin Corporation.
<PAGE>

         Operating  expenses  decreased  $907,684  to  $2,999,595  in the  first
quarter of 1998 from $3,907,279 in the first quarter of 1997.  While $781,105 of
this decrease was attributable to lower  advertising and marketing costs,  costs
in all operational  areas were decreased.  Headcount in the sales area decreased
due to attrition,  and the Company used this  opportunity to change its focus to
emphasizing  selling-through  at the retail level from  selling-into  Department
stores. The Company replaced regional managers primarily  responsible for making
headquarters  calls with additional field selling staff responsible for in-store
activities  geared toward selling directly to the retail  consumer.  The Company
anticipates  this change in selling strategy will increase retail turns and lead
to higher  volume sales to its  department  store  customers.  Distribution  and
general and  administrative  costs decreased as well as selling and marketing in
the first quarter of 1998. MIS  consulting  costs were lower in the 1998 quarter
due to completion of the Company's installation of automated warehousing and EDI
systems. Additionally,  temporary workers employed during the first quarter 1997
launch of inner REALM were not required during 1998.

         The Company  incurred  $10,899 in net interest expense during the first
quarter of 1998 compared to $9,437 net interest income in 1997. During the first
quarter of 1998, the Company was in a net borrowing  position as compared to the
same period in 1997 when the Company was earning interest on cash balances.

LIQUIDITY

         At March 31,  1998,  the  Company  had  borrowed  $614,462  against its
$3,000,000 line of credit.  Working  capital was $3,571,854.  At March 31, 1997,
the Company had net  borrowings of $942,378 and working  capital of  $5,559,853.
For the  first  quarter  of 1998,  net cash  used in  operating  activities  was
$281,149  compared to  $2,598,247  for the prior  year's  quarter.  Assuming the
Company's  activities  proceed  substantially as planned,  the Company's line of
credit and  anticipated  revenues  from product sales should be adequate to meet
its  working  capital  needs  over  the  next  twelve  months.  Working  capital
requirements  will  primarily  be for  the  supply  of  inventory  and  accounts
receivable financing.

         Additional  working  capital  may  be  required  should  the  Company's
continued  expansion  fail to generate  anticipated  consumer  response  levels.
Furthermore,  additional  working  capital  may be  required  should the Company
experience a greater than planned success with its product and retail expansion.
Funds would be needed for inventory  build,  accounts  receivable  financing and
staffing purposes. If the Company fails to achieve significant revenues from its
1998  marketing  efforts,  or if  retail  expansion  proves  to be more  capital
intensive than planned, the Company may require additional funding.

         On April 1, 1998, the Company signed a renegotiated loan agreement with
Mid-Peninsula  Bank  of Palo  Alto,  California  (the  "Bank")  providing  for a
continued line of credit. The Company may borrow up to $3,000,000 at an interest
rate equal to the Bank's prime rate plus .75% with borrowings  secured primarily
by the Company's trade receivables and inventory.  The agreement,  which expires
in April, 1999,  contains certain  debt-to-equity and working capital covenants.
There are no charges for any unused portions of the line.

<PAGE>

                                     PART II
                                OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

         (a) Exhibit 10.14 Business Loan Agreement dated April 1, 1998     E- 11
             Exhibit 27.01-Financial Data Schedule                         E- 19

         (b) The  Company  did not file any reports on Form 8-K during the three
             months ended March 31, 1998.


<PAGE>

                                   SIGNATURES


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


                                     EROX CORPORATION
                                     Registrant




Date:  May 15, 1998                  /s/ William P. Horgan
                                     ------------------------------------------
                                              William P. Horgan
                                     Chairman and Chief Executive Officer




Date:  May 15, 1998                  /s/ Maxine C. Harmatta
                                     ------------------------------------------
                                              Maxine C. Harmatta
                                     Vice President, Finance and Administration