QUARTERLY REPORT FOR SMALL BUSINESS ISSUERS
                 SUBJECT TO THE 1934 ACT REPORTING REQUIREMENTS

                                   FORM 10-QSB

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

     [x] QUARTERLY  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT
OF 1934

     For the quarterly period ended March 31, 1999

                                       OR

     [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT
OF 1934

     Commission File Number: 001-14005

                            FRISBY TECHNOLOGIES, INC.
             (Exact Name of Registrant as Specified in its Charter)

      Delaware                                    62-1411534
(State or other Jurisdiction of                 (I.R.S. Employer
 Incorporation or Organization)                  Identification Number)

                               77 East Main Street
                                   Suite 2000
                            Bay Shore, New York 11706
              (Address of Principal Executive Offices and Zip Code)
                                 (516) 969-8570
              (Registrant's telephone number, including area code)



     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                     Yes       X               No  ________

     Number of shares  outstanding of the issuer's Common Stock, par value $.001
per share, as of April 30, 1999: 5,708,113 shares.



<PAGE>


                            FRISBY TECHNOLOGIES, INC.


                                      INDEX

<TABLE>                                                              
<CAPTION>
                                                                                          Page
<S>                                                                                       <C>   


Part I            Financial Information

Item 1.           Financial Statements

                  Balance Sheets - March 31, 1999 (unaudited) and
                  December 31, 1998                                                           3

                  Statements  of Operations - Three Month Period Ended March 31,
                  1999 (unaudited) and March 31, 1998
                  (unaudited)                                                                 4

                  Statement of Stockholders' Equity - Three Month Period
                  Ended March 31, 1999 (unaudited)                                            5

                  Statements  of Cash Flows - Three Month Period Ended March 31,
                  1999 (unaudited) and March 31, 1998 (unaudited) 6

                  Notes to Financial Statements - March 31, 1999 (unaudited)                  7

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

Part II           Other Information                                                          12

                  Signatures                                                                 14


</TABLE>

<PAGE>


                         PART I - FINANCIAL INFORMATION
                          Item 1. Financial Statements

                            Frisby Technologies, Inc.
                                 Balance Sheets

<TABLE>
<CAPTION>

                                                                                  March 31, 1999       December 31, 1998
                                                                                  --------------       -----------------
                                                                                   (unaudited)
<S>                                                                                <C>                 <C> 

Assets
Current assets:
Cash and cash equivalents                                                       $     4,308,617        $     6,516,138
Marketable securities                                                                 1,548,359              1,555,683
Accounts receivable - billed                                                            982,755              1,045,975
Accounts receivable - unbilled                                                           89,535                 58,159
Inventory                                                                               661,295                671,569
Prepaid and other current assets                                                        369,535                595,998
                                                                           ---------------------    -------------------
Total current assets                                                                  7,960,096             10,443,522
Property and equipment, net                                                             505,299                277,494
Intangible assets, less accumulated amortization                                      2,037,403              2,000,700
Other assets                                                                            291,994                391,516
                                                                           ---------------------    -------------------
Total assets                                                                  $      10,794,792       $     13,113,232
                                                                           =====================    ===================

Liabilities and stockholders' equity Current liabilities:
Accounts payable                                                                $       648,685        $       868,649
Accrued expenses and other current liabilities                                          141,774                385,533
Payable to Triangle Research and Development Corporation                                    -                  400,000
License fees payable                                                                    146,076                189,726
Deferred license revenues                                                                68,751                 85,000
                                                                           ---------------------    -------------------
Total current liabilities                                                             1,005,286              1,928,908
Accrued license agreement costs                                                         120,250                120,250
Deferred license revenues                                                                66,250                 46,250
Other liability                                                                       1,300,000              1,300,000
                                                                           ---------------------    -------------------
Total liabilities                                                                     2,491,786              3,395,408
Commitments
Stockholders' equity:
Preferred Stock, 1,000,000 shares authorized; 587,500 shares issued and
outstanding:                                                                          2,479,000              2,479,000
Common Stock, $.001 par value; 10,000,000 shares authorized;
    5,120,613 shares issued and outstanding                                               5,121                  5,121
Additional paid-in capital                                                           12,199,828             12,199,828
Accumulated other comprehensive income                                                   13,675                 21,000
Accumulated deficit                                                                 (6,394,618)            (4,987,125)
                                                                           ---------------------    -------------------
Total stockholders' equity                                                            8,303,006              9,717,824
                                                                           ---------------------    -------------------
Total liabilities and stockholders' equity                                       $   10,794,792        $    13,113,232
                                                                           =====================    ===================

</TABLE>

     See accompanying notes.


<PAGE>


                            Frisby Technologies, Inc.
                            Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                    Three month period ended
                                                                                           March 31,
                                                                       -----------------------------------------------
                                                                              1999                       1998
                                                                       -------------------        --------------------
<S>                                                                    <C>                         <C>   

Revenues:
Product sales                                                            $        830,420            $        271,375
Research and development projects                                                 101,375                      49,271
Licenses and royalties                                                             95,031                      26,618
                                                                       -------------------        --------------------
Total revenues                                                                  1,026,826                     347,264
                                                                       -------------------        --------------------

Cost of sales:
Product sales                                                                     657,200                     221,813
Research and development projects                                                  81,935                      34,776
Licenses and  royalties                                                           106,457                       1,765
                                                                       -------------------        --------------------
Total cost of sales                                                               845,592                     258,354
                                                                       -------------------        --------------------
Gross profit                                                                      181,234                      88,910
Selling and marketing expense                                                     748,000                     220,148
General and administrative expense                                                915,956                     400,993
                                                                       -------------------        --------------------
Loss from operations                                                          (1,482,722)                   (532,231)
Interest income                                                                    75,229                       2,884
                                                                       -------------------        --------------------
Loss before income taxes                                                      (1,407,493)                   (529,347)
Income tax provision                                                                 -                          -
Net loss                                                                 $    (1,407,493)            $      (529,347)  
                                                                       ===================        ====================
Net loss per common share - basic and diluted                            $          (.27)            $          (.16)
                                                                       ===================        ====================

</TABLE>

     See accompanying notes.


<PAGE>


                            Frisby Technologies, Inc.
                   Statement of Stockholder's Equity (Deficit)
                                   (Unaudited)

<TABLE>
<CAPTION>



                                                                        Accumu-
                                                                        lated
                                                                        Other
                                                            Additional  Compre-  Accumu-
                     Preferred Stock       Common Stock     Paid-In     hensive  lated
                    Shares   Amount      Shares    Amount   Capital     Income   Deficit        Total

<S>                 <C>      <C>          <C>      <C>      <C>         <C>      <C>           <C>

Balance at
December 31, 1998   587,500  $2,479,000 5,120,613   $5,121  $12,199,828 $21,000  $(4,987,125)  $9,717,824

Net Loss              ---       ---        ---       ---        ---       ---     (1,407,493)  (1,407,493)

Unrealized gains
on marketable
securities            ---       ---        ---       ---        ---    (  7,325)      ---      (    7,325)
                                                                                                ----------

Comprehensive
(loss)                ---       ---        ---       ---        ---       ---         ---      (1,414,818)

Balance at         --------  ----------  ---------  ------  ----------- -------  -----------   ----------
March 31, 1999      587,500  $2,479,000  5,120,613  $5,121  $12,199,828 $13,675  $(6,394,618)  $8,303,006
                   ========  ==========  =========  ======  =========== =======  ===========   ==========

</TABLE>



     See accompanying notes.




<PAGE>


                            Frisby Technologies, Inc.
                            Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                        Three month period ended
                                                                                               March 31,
                                                                           -------------------------------------------
<S>                                                                         <C>                          <C> 

                                                                                      1999                      1998
                                                                                      ----                      ----
Operating activities
Net loss                                                                      $   (1,407,493)         $     (529,347)
Adjustments to reconcile net loss to net cash used in operating
    activities:
Depreciation and amortization                                                          37,471                   3,345
Non cash consulting expense                                                            70,000                      --
Amortization of intangibles                                                            51,300                      --
Changes in assets and liabilities, prior to effect of acquisition:
Accounts receivable                                                                    37,448                (14,541)
Inventory                                                                              38,797                (42,502)
Other current assets                                                                  156,463                (18,074)
Other non-current assets                                                               99,522                      --
Accrued license agreement costs                                                         --                         --
Accounts payable                                                                    (238,243)               (143,952)
Accrued expenses and other current liabilities                                      (243,759)                  58,634
Licenses fees payable                                                                (43,650)               (100,961)
Other liabilities                                                                       3,751                (12,500)
                                                                           -------------------     -------------------
Net cash used in operating activities                                             (1,438,393)               (799,898)
                                                                           -------------------     -------------------

Investing activities
Purchases of property and equipment                                                 (265,276)                      --
Purchase of intangible assets                                                       (400,000)                      --      
Purchase of business, net of cash acquired                                          (103,852)                      --
                                                                           -------------------     -------------------
Net cash used in investing activities                                               (769,128)                      --
                                                                           -------------------     -------------------

Financing activities
Net proceeds from private placement                                               --                        2,479,000
Payment of transaction costs                                                      --                        (227,264)
                                                                           -------------------     -------------------
Net cash provided by financing activities                                         --                        2,251,736
                                                                           -------------------     -------------------

Net (decrease) increase in cash and cash equivalents                              (2,207,521)               1,451,838
Cash and cash equivalents - beginning of period                                     6,516,138                 375,222
                                                                           -------------------     -------------------
Cash and cash equivalents -end of period                                       $    4,308,617          $    1,827,060
                                                                           ===================     ===================

</TABLE>


     See accompanying notes


<PAGE>


                            Frisby Technologies, Inc.
                          Notes to Financial Statements
                           March 31, 1999 (Unaudited)

     1. Basis of Presentation

     The  accompanying  unaudited  financial  statements  have been  prepared in
conformity  with  generally  accepted  accounting  principles  and  reflect  all
adjustments  consisting of normal recurring adjustments which, in the opinion of
management, are necessary for a fair presentation of the results for the periods
shown. The results of operations for such periods are not necessarily indicative
of the results  expected for the full fiscal year or for any future period.  The
preparation  of financial  statements  in  conformity  with  generally  accepted
accounting principles 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 revenue and expenses during the reporting period. Actual
results could differ from those estimates and assumptions.

     The accompanying  financial  statements  should be read in conjunction with
the audited financial  statements of Frisby  Technologies,  Inc. (the "Company")
for the year ended  December  31, 1998 and the notes  thereto  contained  in the
Company's  Annual Report on Form 10-KSB,  filed with the Securities and Exchange
Commission on March 31, 1999, as amended.

     2. Summary of Significant Accounting Policies

     Net Loss Per Share

     Net loss per share for the  three-month  periods  ended  March 31, 1999 and
1998 are based on the  weighted  average  number of  common  shares  outstanding
during the period in  accordance  with the  Statement  of  Financial  Accounting
Standard ("SFAS") No. 128 "Earnings Per Share."

     Shares  used in the  computation  of net loss per share for the three month
periods  ended  March  31,  1999  and  1998  were   5,120,613   and   3,280,613,
respectively,  representing the  weighted-average  common shares outstanding for
the period.  The number of shares used in the  calculation of net loss per share
on a basic and diluted basis is the same.

     3. Shareholders' Equity

     On April 6, 1999, the Company  received  notice from the shareholder of the
Convertible  Preferred  Stock of its  decision to convert the 587,500  shares of
Convertible Preferred Stock shares into Common Stock. This transaction increases
the number of outstanding common stock to 5,708,113.



<PAGE>


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


     Results of  Operations  for the three  month  period  ended  March 31, 1999
compared with the three month period ended March 31, 1998

     Revenues.  The Company  generates  revenue from three primary sources:  (i)
sales of its Thermasorb(R)  additives and ComforTemp(R) foam products for use in
its strategic  partners'  products;  (ii) revenue from research and  development
contracts  related to the United States  government and private  companies;  and
(iii)  license  fees  and  royalties  from  the  use  of the  Thermasorb(R)  and
ComforTemp(R)  trademarks by strategic partners in end-use products,  as well as
other fees earned in connection  with its agreements  with  strategic  partners.
Total  revenues  for the three month  period  ended March 31, 1999  increased by
$680,000 to $1,027,000  from $347,000 for the three month period ended March 31,
1998.

     Product  sales.  Product  sales for the three month  period ended March 31,
1999  increased by $559,000 to $830,000 from $271,000 for the three month period
ended March 31, 1998. The increase was primarily the result of product shipments
to  additional  licensees  since the first  quarter  of 1998.  The  Company  had
twenty-two  licensees  at March 31, 1999 as compared to the eight  licensees  at
March 31, 1998.

     Research and development  projects.  Revenues from research and development
projects for the three month period ended March 31, 1999 increased by $52,000 to
$101,000  from $49,000 for the three month  period  ended March 31,  1998.  This
increase reflects the completion of a funded United States  government  research
and  development  contract  that  began  in the  second  half  of  1998  and the
completion of funded contracts with undisclosed  private companies for potential
applications incorporating the Company's thermal management products.

     Licenses and  royalties.  Revenues  from license fees and royalties for the
three month  period  ended March 31, 1999  increased  by $68,000 to $95,000 from
$27,000 for the three month period ended March 31, 1998. This increase  reflects
the recognition of fees received from strategic  partners for license agreements
entered  into after the first  quarter  1998.  License  fees are  recognized  as
revenue  ratably  over  the life of the  license  agreement.  Additionally,  the
increase is due to royalty income received from a third party as a result of the
assignment of a license agreement from Triangle Research Development Corporation
("TRDC") to the Company in September 1998.

     Cost of Sales.  The  Company's  cost of sales  consists  of: (i) direct and
indirect  costs  incurred in  connection  with  product  sales;  (ii) direct and
indirect costs incurred in connection with revenue from research and development
contracts  relating to the United States government and private sector programs;
(iii)  royalty  payments  required  to be made to the  inventor  of the  thermal
management  technology or another party  licensed by the inventor;  and (iv) the
amortization  expense  associated with the September 1998  transaction  with the
inventor to lower the royalty  rates.  Costs of sales for the three month period
ended March 31, 1999 increased by $588,000 to $846,000  compared to $258,000 for
the three month period ended March 31, 1998.

<PAGE>

     Cost of sales --  Products.  The cost of sales  related to products for the
three month period ended March 31, 1999  increased by $435,000 to $657,000  from
$222,000 for the three month period ended March 31, 1998. This increase reflects
the higher volume of product sales and the  corresponding  costs related to such
product  sales in the three month period ended March 31, 1999 as compared to the
corresponding period in the prior year.

     Cost of sales  --  Research  and  development  projects.  The cost of sales
related to research  and  development  projects for the three month period ended
March 31, 1999  increased by $47,000 to $82,000 from $35,000 for the three month
period  ended March 31, 1998.  This  increase  reflects the higher  research and
development  revenues in the three month period ended March 31, 1999 as compared
to the corresponding period in the prior year.

     Cost of Sales --  Licenses  and  royalties.  The cost of sales  related  to
licenses and royalties for the three month period ended March 31, 1999 increased
by $104,000 to $106,000  from $2,000 for the three month  period ended March 31,
1998 primarily due to amortization  of intangible and royalties  expense related
to the September 1998 transaction with TRDC.

     Selling and marketing expense.  Selling and marketing expense for the three
month  period  ended March 31,  1999  increased  by  $528,000  to $748,000  from
$220,000  for the three month period  ended March 31,  1998.  This  increase was
primarily the result of the Company  increasing  its  marketing and  advertising
activity  in order to build  brand name  recognition  of its  Thermasorb(R)  and
ComforTemp(R)  products and trademarks.  These activities included the hiring of
additional  sales personnel,  advertising  placements in many national trade and
consumer  publications  and tradeshow  participation.  Additionally,  consulting
expense of $70,000 was  recorded  relating to  warrants  and options  granted to
consultants in 1998.

     General and administrative expense.  General and administrative expense for
the three month  period  ended March 31, 1999  increased by $515,000 to $916,000
from  $401,000 for the three month  period  ended March 31,  1998.  The increase
reflects the increase in personnel  and  personnel-related  expenses,  including
travel, and recruiting costs of new employees.  Additionally,  fees and expenses
paid to consultants have also increased over the comparable period for the prior
year.  These  increases  are in  connection  with the expansion of the Company's
operations and commercialization of its thermal management products.


<PAGE>


     Net interest income/expense. Net interest income for the three month period
ended March 31, 1999  increased  by $72,000 to $75,000 from $3,000 for the three
month period ended March 31, 1998.

     Net loss.  As a result of the  foregoing,  the net loss for the three month
period ended March 31, 1999 increased to $1,407,000  from $530,000 for the three
month period ended March 31, 1998.

     Liquidity and capital resources. From its inception through March 31, 1999,
the Company has incurred  cumulative  losses of  approximately  $6,395,000.  The
Company has financed its  operations  to date through  research and  development
contracts  relating to United States  government  programs,  bank borrowings and
issuance of common stock and convertible preferred stock.

     At March 31, 1999, the Company had working capital of $6,955,000, including
cash and  marketable  securities of  $5,057,000  accounts  receivable  billed of
$983,000 and inventory of $661,000,  offset by accounts  payable of $649,000 and
license fees payable of $146,000.

     Cash used by operating activities was $1,438,000 and $800,000 respectively,
for the three month period ended March 31, 1999 and 1998.  The principal  factor
contributing to the cash used in operating activities for the three month period
ended  March  31,  1999 and  1998  was the net  loss for each of the  respective
periods.  Cash used in  investing  activities  was  $769,000 for the three month
period ended March 31, 1999.  The principal  investing  activity for this period
was an installment  payment to TRDC for the agreement  signed in September 1998,
the purchase of the assets of Steele Incorporated, and the purchase of equipment
for the  development  facility in North  Carolina.  Cash  provided by  financing
activities  was  $2,252,000 for the three month period ended March 31, 1998. The
principal financing activity for the three month period ended March 31, 1998 was
the  receipt  of the  net  proceeds  of  $2,479,000  from  the  exercise  of the
Convertible Preferred Stock Option by one holder of record.

     The  Company  is  relocating  its  North  Carolina  operations  to a  newly
constructed  facility located in Winston Salem, North Carolina during the second
half of fiscal 1999. The cash  requirement  with respect to that relocation will
be  expended  in the third and forth  quarters  of 1999 and total  1999  capital
expenditures are not expected to exceed $1,000,000.

     The Company has a $1,000,000 line of credit with a bank. The line of credit
bears  interest  at the lower of the  bank's  prime  rate or a two point  spread
versus the London Interbank Overnight Rate ("LIBOR") and will expire on June 30,
1999.  The full amount of the line is currently  available.  It is the Company's
intent to renew or replace the line of credit in order to  accommodate  possible
future funding requirements.

<PAGE>

     The  Company  has  incurred  cumulative  losses  since its  inception  and,
therefore,  has not been subject to significant  federal  income taxes.  Through
March 31, 1999,  the Company has generated net operating loss  carryforwards  of
approximately  $6,000,000,  which may be  available to reduce  future  available
taxable income and future tax liabilities.  These  carryforwards  expire in year
2018. The Tax Reform Act of 1986 provides for an annual limitation on the use of
net operating loss  carryforwards  (following  certain  ownership  changes) that
could significantly limit the Company's ability to utilize these  carryforwards.
Upon the completion of the Company's  initial public  offering  ("IPO"),  or the
subsequent exercise of options or warrants in connection with other future sales
of equity, the Company's ability to utilize the aforementioned carryforwards may
be  limited.  Additionally,  because  the United  States tax laws limit the time
during  which these  carryforwards  may be applied  against  future  taxes,  the
Company may not be able to take full  advantage of these  attributes for federal
tax purposes.

     Based on the Company's  current  operating plan, the Company  believes that
its available cash, cash flow from operations and available line of credit, will
be  sufficient  to satisfy  its  operational  and capital  requirements  through
December 1999. Such belief is based upon certain  assumptions,  and there can be
no assurance that such assumptions are correct.  In the event that the Company's
plans change,  or its available  cash,  cash flow from  operations and available
line of credit are insufficient to fund operations due to unanticipated  delays,
problems,  expenses  or  otherwise,  the  Company  would  be  required  to  seek
additional  financing  sooner  than  anticipated.   Further,  depending  on  the
Company's  progress in marketing  its product  line,  gaining  acceptance of its
thermal  management  technology  and its other  products and services  among the
business community or the  identification of strategic  acquisition or licensing
opportunities,  the  Company  may  determine  that  it  is  advisable  to  raise
additional capital sooner than was anticipated.

     Inflation

     The  impact  of  general  inflation  on the  Company's  business  has  been
insignificant  to date and the  Company  believes  that it will  continue  to be
insignificant for the foreseeable future.

     Year 2000

     The Year 2000 Issue is the result of computer  programs being written using
two digits rather than four to define the applicable  year. Any of the Company's
computer programs that have  date-sensitive  software may recognize a date using
"00" as the year 1900 rather than the year 2000.  This could  result in a system
failure or miscalculations causing disruptions of operations,  including,  among
other things, a temporary inability to process  transactions,  send invoices, or
engage in similar normal business activities.

<PAGE>

     Based  on  recent  assessments,  the  Company  determined  that it will not
require  significant  modifications  of its  hardware  or software so that those
systems  will  properly  utilize  dates beyond  December  31, 1999.  The Company
presently believes that with  modifications of its existing  software,  the Year
2000 Issue can be mitigated.

     The  Company's  plan to resolve the Year 2000 Issue  involves the following
four phases: assessment,  remediation,  testing, and implementation. As of April
30, 1999, the Company has fully completed its assessment of all internal systems
that could be significantly  affected by the Year 2000. The completed assessment
indicated that most of the Company's significant  information technology systems
will not be significantly  affected,  particularly the general ledger,  billing,
and inventory systems.  The Company does not believe that the Year 2000 presents
a material exposure as it relates to the Company's  products.  In addition,  the
Company has begun to gather information about the Year 2000 compliance status of
its external  agents and continues to monitor  their  compliance.  To date,  the
Company  is not aware of any  external  agent  with a Year 2000 issue that would
materially  impact the Company's  results of operations,  liquidity,  or capital
resources.  The Company has requested  from its bank an assessment of the extent
of the  bank's  Year  2000  compliance.  In the  event the bank is not Year 2000
compliant in a timely manner, the Company is prepared to change banks.  However,
the  Company  has no means of ensuring  that  external  agents will be Year 2000
ready.  The inability of external  agents to complete their Year 2000 resolution
process in a timely fashion could  materially and adversely  impact the Company.
The effect of non-compliance by external agents is not determinable.

     The Company  will utilize its  external  software  and service  provider to
reprogram,  test and  implement the software for the Year 2000  modification  as
needed,  the cost of which is not expected to be  significant.  The Company will
evaluate the status of  completion of Year 2000  modifications  in June 1999 and
will undertake all remaining  necessary  steps to seek to ensure its systems are
Year 2000 compliant. In the event the Company is unable to resolve its Year 2000
modifications in a timely fashion, the business of the Company may be materially
and adversely impacted.

     In the  event the  Company's  computer  systems  are  materially  adversely
affected by the Year 2000 issue, the Company's  business and operations could be
materially adversely affected by disruptions in the operations of other entities
with which the Company  interacts.  However,  the Company believes that the most
likely worst case scenario is that there will be some  localized  disruptions of
systems that will affect individual processes,  facilities or service technology
providers  for a  short  time  rather  than  systematic  or  long-term  problems
affecting  its  business  operations  as a whole.  In such event the Company has
contingency plans for certain critical  applications and is working on plans for
others.   These   contingency  plans  involve,   among  other  actions,   manual
workarounds, increasing inventories, and adjusting staffing strategies.

     Forward-Looking Statements

     Certain  information  contained  in this  Quarterly  Report on Form 10-QSB,
including,  without  limitation,  information  appearing  under  Part I, Item 2,
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations," are  forward-looking  statements (within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities  Exchange Act of
1934).  Factors set forth in the Company's Prospectus filed April 1, 1998, or in
the Company's other Securities and Exchange Commission filings, could affect the
Company's  actual results and could cause the Company's actual results to differ
materially from those expressed in any forward-looking statements made by, or on
behalf of, the Company in this Quarterly Report on Form 10-QSB.

     Those statements are subject to numerous risks and uncertainties that could
cause actual  results,  performance and  achievements to differ  materially from
those  described  or implied in the  forward-looking  statements,  and  reported
results  should not be considered an  indication  of future  performance.  Those
potential risks and uncertainties  include without limitation the uncertainty of
the economic  environment  for the remainder of this year,  the need for further
development  of  certain  Frisby   Technologies'   products  and  markets,   the
development  of  alternative  technologies  by third  parties,  Year 2000 issues
affecting the Company and its customers and  suppliers,  and the  uncertainty of
market acceptance and demand for the Company's products in the future.

<PAGE>

                            PART II-OTHER INFORMATION

     Item 1. Legal Proceedings

     None.

     Item 2. Changes in Securities

     On April 6, 1999, the Company  received  notice from the shareholder of the
Convertible  Preferred  Stock of its  decision to convert the 587,500  shares of
Convertible Preferred Stock shares into Common Stock. This transaction increases
the number of outstanding common stock to 5,708,113.


     Item 3. Defaults Upon Senior Securities

     None.

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

     None

     Item 5. Other Information

     None.

     Item 6. Exhibits and Reports on Form 8-K

     (a) Exhibits

     27.1 Financial Data Schedule

     (b) Reports on Form 8-K

     None.




<PAGE>


                                   Signatures


     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.

         Dated:  May 17, 1999

                                          FRISBY TECHNOLOGIES, INC.



                                      By: /s/Gregory S. Frisby
                                          -------------------------------
                                          Gregory S. Frisby
                                          President and Chief Executive Officer



                                      By: /s/Stephen P. Villa
                                          -------------------------------
                                          Stephen P. Villa
                                          Chief Financial Officer