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

                                   FORM 10-QSB


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

                For the quarterly period ended September 26, 1999

                                       OR

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

                         Commission File Number 0-27148

                    New World Coffee - Manhattan Bagel, Inc.
           (Name of small business issuer as specified in its charter)

         Delaware                                                  13-3690261
(State or other jurisdiction                                (I.R.S. Employer
of Incorporation or organization)                           Identification No.)

                             246 Industrial Way West
                               Eatontown, NJ 07724
          (Address of principal executive offices, including zip code)

                                 (732) 544-0155
                           (Issuer's telephone number)

Check 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 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 ___

   Transitional small business disclosure format (check one): Yes  __X__No

    Number of shares of common stock, $.001 par value per share, outstanding:
                                             As of November 10, 1999: 11,033,039

<PAGE>



                    NEW WORLD COFFEE - MANHATTAN BAGEL, INC.

              INDEX TO FINANCIAL STATEMENTS AND FINANCIAL SCHEDULES

                               SEPTEMBER 26, 1999

                                                                        Page

PART I.     FINANCIAL INFORMATION

Item 1.      Financial Statements

     Consolidated Balance Sheets as of September 26, 1999 and
         December 27, 1998.....................................         -3-

     Consolidated Income Statements  for the third quarter
         and year to date period ended September 26, 1999 and
         September 27, 1998....................................         -4-

     Consolidated Statements of Cash Flows for the
         year to date period ended September 26, 1999
         and September 27, 1998................................         -5-

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

Item 2.      Management's Discussion and Analysis of
             Financial Condition and Results of Operations for
             the Third Quarter Ended September 26, 1999........         -7-

Item 3.      Management's Discussion and Analysis of
             Financial Condition and Results of Operations
             for the Year to Date Period Ended
             September 26, 1999................................         -8-

PART II:  OTHER INFORMATION....................................        -12-

SIGNATURES.....................................................        -13-



<PAGE>



                    NEW WORLD COFFEE - MANHATTAN BAGEL, INC.

                           CONSOLIDATED BALANCE SHEETS


                                      September 26,              December 27,
                                          1999                        1998
                                    ----------------           ---------------
                                      (Unaudited)

ASSETS

Current assets:
    Cash and
    cash equivalents...............       $3,197,774                 $5,269,627
    Franchise and
    other receivables, net.........        2,225,466                    964,609
    Current maturities of
    notes receivables..............        2,154,164                  2,103,079
    Inventories....................        1,817,362                  1,355,730
    Prepaid expenses and
    other current assets...........          224,348                    206,073
    Assets held for resale.........        1,697,138                  1,633,053
                                           ---------                  ---------
       Total current assets........       11,316,252                 11,532,171

Property, plant and
equipment, net.....................        7,139,523                  6,889,876
Notes and other
receivables, net...................        1,313,928                  1,391,929
Trademarks, net....................       21,960,416                  9,966,667
Goodwill, net......................          944,336                  7,097,670
Deposits and other assets..........        1,316,753                  1,215,124
                                           ---------                  ---------
       Total assets                      $43,991,208                $38,093,437
                                         ===========                ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Accounts payable...............       $2,085,014                 $1,750,647
    Accrued expenses...............        3,840,264                  7,279,646
    Current portion of
    long-term debt.................        1,162,486                  1,633,624
    Current portion of obligations
    under capital lease............          437,666                    398,764
                                             -------                    -------
       Total current liabilities...        7,525,430                 11,062,681

Long-term debt.....................          321,791                    115,591
Deferred rent......................          284,179                    261,638
Other liabilities..................        6,390,611                  4,179,635
Commitments and Contingencies
Stockholders' equity:
    Preferred stock,  $.001 par value;
      2,000,000  shares  authorized;
      0 shares issued and
    outstanding....................                -                          -
    Series B convertible preferred stock,
      $.001 par value; 225 Shares authorized,
      27.5 shares issued
    and outstanding................                -                          -
    Common stock, $.001 par value;
      50,000,000 shares authorized;
      10,550,498 and 9,721,322 shares
      issued and outstanding......            10,550                     9,721
    Additional paid-in capital....        34,382,682                33,703,918
    Accumulated deficit...........      (23,023,422)              (24,770,496)
                                        ------------              ------------
       Total stockholders' equity.        11,369,810                 8,943,143
                                          ----------                 ---------
       Total liabilities and
       stockholders' equity.......       $43,991,208               $38,093,437
                                         ===========               ===========


         The accompany notes are an integral part of these consolidated
         balance sheets.







                    NEW WORLD COFFEE - MANHATTAN BAGEL, INC.

                         CONSOLIDATED INCOME STATEMENTS

      FOR THE THIRD QUARTER ENDED SEPTEMBER 26, 1999 AND SEPTEMBER 27, 1998

    AND YEAR TO DATE PERIODS ENDED SEPTEMBER 26, 1999 AND SEPTEMBER 27, 1998

                                    UNAUDITED



                                    Third Quarter              Year To Date
                                       Ended                      Ended
                               September   September      September   September
                                26, 1999    27, 1998       26, 1999    27, 1998
                              ----------  ----------     ----------   ---------
Revenues:

    Manufacturing
    revenues..............    $6,241,681     $91,008    $18,438,142    $322,492
    Retail sales..........     2,119,763   3,066,159      6,849,190   9,216,799
    Franchise related
    revenues..............     1,841,205     885,942      4,283,294   2,304,232
                              ----------   ---------    -----------   ---------
Total Revenues............    10,202,649   4,043,109     29,570,626  11,843,523

    Cost of sales.........     7,001,447   2,767,282     20,800,635   8,235,017
    General and
    administrative
    expenses..............     1,589,771     805,442      4,577,389   2,228,545
    Depreciation
    and amortization......       565,905     321,701      1,640,573   1,006,085
                              ----------   ---------      ---------   ---------
Operating Income..........     1,045,526     148,684      2,552,029     373,876

    Interest expense, net.       431,212      66,660      1,044,978     157,906
                              ----------   ---------      ---------   ---------

Income before
Extraordinary Item........       614,314      82,024      1,507,051     215,970

Extraordinary Item:
     Net Gain from Early
        Extinguishment
        Of Debt                  240,023           -        240,023           -
                              ----------   ---------      ---------   ---------

Net Income                      $854,337     $82,024      1,747,074    $215,970
                              ==========   =========      =========   =========

Basic Net Income
Per Common Share..........          $.08        $.01           $.17        $.03
                                    ====        ====           ====        ====

Basic Weighted Average
  Number of Common Shares
  Outstanding.............    10,367,680   7,331,196     10,075,071   6,436,010
                              ==========   =========     ==========   =========

Diluted Net Income
Per Common Share..........          $.08        $.01           $.17        $.03
                                    ====        ====           ====        ====

Diluted Weighted Average
Number of Common and
Common Equivalent Shares
    Outstanding...........     10,607,680  7,331,196     10,295,071   6,436,010
                               ==========  =========     ==========   =========
  The accompanying notes are an integral part of these consolidated statements.


<PAGE>



                    NEW WORLD COFFEE - MANHATTAN BAGEL, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

  FOR THE YEAR TO DATE PERIODS ENDED SEPTEMBER 26, 1999 AND SEPTEMBER 27, 1998

                                    UNAUDITED


                                              September 26,       September 27,
                                                   1999                1998

CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income...........................        $1,747,074            $215,970
    Adjustments to reconcile net income
    to net cash used in operating activities:
        Depreciation and amortization....         1,640,573           1,006,085
        Gain on sale of fixed assets.....         (299,726)         (1,798,312)
        Extraordinary gain for early
        extinquishment of debt...........         (240,023)                   -
    Increase/(decrease) in cash as
    a result of changes in  operating
    assets and liabilities:
        Receivables......................       (1,260,857)             677,776
        Inventories......................         (482,342)              53,478
        Prepaid expenses and
        other current assets.............          (18,275)           (131,107)
        Receipts on notes receivable                497,866                   -
        Advances under notes receivable           (470,250)
        Deposits and other assets........         (101,629)           (230,451)
        Accounts payable.................           334,367            (18,133)
        Accrued expenses.................         (995,977)           (610,016)
        Deferred rent....................            22,542           (190,662)
        Other liabilities................         (259,362)                   -
                                                -----------         -----------
               Net cash provided by/
               (used in) operating
               activities................           113,981         (1,025,372)
                                                -----------         -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Capital expenditures.................         (692,919)           (324,686)
    Proceeds from the sale
    of fixed assets .....................           696,195                   -
    Net cash paid for acquisition........       (2,311,453)
    Additions to assets
    held for resale......................          (64,085)
    Capitalized Leases...................                 -            (15,332)
                                               ------------         -----------
         Net cash provided by/(used in)
         investing activities............       (2,372,262)           (340,018)


CASH FLOWS FROM FINANCING ACTIVITIES:
    Issuance of common stock,
    net of issuance costs.................          679,564           2,761,079
    Proceeds from
    long term borrowings..................       14,837,998                   -
    Payment of liabilities in
    connection with acquired assets.......      (2,828,037)                   -
    Repayments of capital leases..........        (502,622)           (358,004)
    Early retirement of debt..............      (4,650,000)                   -
    Repayment of notes payable............      (7,350,475)         (1,170,000)

         Net cash provided by/
         (used in) financing activities...          186,428           1,233,075
                                                -----------         -----------
         Net increase(decrease)
         in cash..........................      (2,071,853)           (132,315)

CASH, Beginning of Period.................        5,269,627           1,149,013


CASH, End of Period.......................       $3,197,774          $1,016,698
                                                ===========          ==========

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




                                              September 26,       September 27,
                                                  1999                 1998
                                              -------------       -------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION:
  Cash paid during the period for:
    Interest..............................        1,035,352              79,105
    Non-cash investing and
    financing activities:
      Equipment purchased under
      capital leases......................          747,724              16,054
      Issuance of Common Stock as
      repayment of promissory note........                -           1,100,000
      Notes received from sale of
      fixed assets........................                -           2,733,500

DETAILS OF ACQUISITION
    Assets acquired                               6,311,453
    Notes issued                                (1,500,000)
    Estimated accruals at time
    of acquisition                              (2,500,000)
                                                -----------

      Cash paid for acquisition                   2,311,453
































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

<PAGE>


                    NEW WORLD COFFEE - MANHATTAN BAGEL, INC.
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

1.   The  September  26,  1999  consolidated  balance  sheet  presented  herein
     was  derived  from the  audited  December  27, 1998 consolidated financial
     statements of the Company.

2.   These  consolidated  financial  statements have been prepared in accordance
     with  generally  accepted  accounting   principles  for  interim  financial
     information  and with the  instructions  to Form 10-QSB.  The  consolidated
     financial  statements  should  be  read in  conjunction  with  the  audited
     consolidated  financial  statements  of the  Company  for  the  year  ended
     December 27, 1998 for a description of the significant accounting policies,
     which have continued without change, and other note information.

3.   All  adjustments  (recurring  in  nature)  which  are,  in the  opinion  of
     management, necessary for a fair presentation of the results of the interim
     periods  have been  included.  The results of the  interim  periods are not
     necessarily   indicative  of  the  results  for  the  full  year.   Certain
     reclassifications  have been made to the prior interim financial statements
     to conform to the current interim presentation.

4.   On August 31, 1999, the Company  completed a new financing  agreement  with
     a bank. The agreement  provides for a $ 12,000,000 term note  payable.
     The note is payable as to interest only for the first year of the Note
     Agreement  with  quarterly  principal installments due thereafter.  The
     Note is due in full on December 21, 2003. The Company also obtained a
     $3,000,000 Line of Credit from the bank. At September 26, 1999, $ 1,500,000
     was available  under the Line of Credit.  Interest on the Note Payable and
     Line of Credit is calculated at variable  rates,  which are in part,
     dependent on the maintenance of certain  financial  ratios by the Company.
     Proceeds from the above  borrowings  were used to extinguish  existing debt
     and to acquire the  Chesapeake  Bagel Bakery franchise asset ("CBB").  The
     Company incurred  approximately $ 230,000 in costs  associated with the
     refinancing  which are being amortized over the life of the loan.

5.   The Company repaid the BET Associates,  Inc. note payable of $5,000,000 and
     the Manhattan Bagel Unsecured  Creditors'  Trust note payable of $5,500,000
     as a part of the  refinancing  discussed  above.  The note was repaid at an
     $850,000  discount  from  its  face  value.  The  discount,  and the  costs
     associated  with obtaining such discount,  is included as an  extraordinary
     item, Gain from the  Extinguishment of Debt for the quarter ended September
     26, 1999.

6.   On August 31, 1999, the Company  acquired CBB. The purchase price consisted
     of $ 2,311,000 paid at the closing plus  estimated  liabilities at the time
     of acquisition totaling $ 2,500,000 and a note payable to the seller in the
     amount of $  1,500,000.  The note payable to the seller is due in principal
     installments as follows:

                              Date Payable        Amount
                              ------------        ------
                              March 1, 2003       $ 262,500
                              August 31, 2003     $ 412,500
                              August 31, 2004     $ 825,000

     Interest at 10% per annum is due in quarterly  installments  commencing  on
     October  1,  1999.  The note is subject  to  downward  revision  based upon
     certain purchase price adjustments.



<PAGE>


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain  statements  in this Form  10-QSB  under  "Management's  Discussion  and
Analysis  of  Financial   Condition  and  Results  of   Operations"   constitute
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation  Reform  Act of 1996 with  respect  to the  financial  condition  and
business of the Company.  The words "estimate",  "plan",  "intend",  "believes",
"expect",  and similar  expressions  are  intended  to identify  forward-looking
statements. Such forward-looking statements involve and are subject to known and
unknown  risks,  uncertainties,  and other  factors which could cause the actual
results, performance, and achievements of the Company to be materially different
from any future results,  performance (financial or operating),  or achievements
expressed or implied by such forward-looking  statements.  Such factors include,
among others, the following:  competition;  success of operating and franchising
initiatives; development schedules; advertising and promotional efforts; adverse
publicity;  acceptance of new product offerings;  availability of new locations,
and  terms of sites for store  development;  changes  in  business  strategy  or
development   plans;  the  ability  to  integrate   acquisitions   successfully;
availability  and terms of capital;  food,  labor,  and employee  benefit costs;
changes  in  government  regulations;  regional  weather  conditions;  and other
factors  referenced in this Form 10-QSB , in the  Company's  Form 10-KSB for its
1998  fiscal  year,  and in the  Company's  most  recent  S-3  filing  which are
incorporated by reference herein.


<PAGE>



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
                          OF OPERATIONS FOR THE THIRD
             QUARTER ENDED SEPTEMBER 26, 1999 AND SEPTEMBER 27, 1998

General

     New World Coffee - Manhattan Bagel, Inc., a Delaware Corporation  organized
in 1992, is one of the largest  franchisors of coffee bars and bagel bakeries in
the United States.  It operates and franchises  coffee bars,  bagel bakeries and
integrated  coffee  bar/bagel   bakeries  in  28  states  in  the  Northeastern,
Southeastern  and  Southwestern  United  States,  the District of Columbia,  and
internationally.  The first  Company-owned New World Coffee store opened in 1993
and the first  franchised  New World Coffee  store  opened in 1997.  The Company
acquired  the stock of Manhattan  Bagel  Company,  Inc.  ("MBC") on November 24,
1998,  resulting  in the  addition of 6  Company-owned  and 285  franchised  and
licensed Manhattan Bagel stores. The Company acquired Chesapeake Bagel Bakery on
August 31,  1999,  resulting  in the  addition  of 88  franchised  and  licensed
Chesapeake  Bagel Bakery  stores.  At September 26, 1999,  the Company's  retail
system consisted of 390 stores,  including 19  Company-owned  and 371 franchised
and licensed stores.

     The Company is  vertically  integrated  with bagel  dough and cream  cheese
manufacturing plants in Eatontown, NJ and Los Angeles, CA, and a coffee roasting
plant in Branford,  CT. The Company's products are sold to franchised,  licensed
and Company-owned stores as well as to wholesale supermarket and non-traditional
outlets.

     The  Company  has  incurred  losses  in each  fiscal  year  from  inception
primarily  due  to  the  cost  of  retail  store  expansion  and  developing  an
infrastructure to support future growth.  The Company's  strategic plan does not
include the development of additional Company owned stores.

Results of Operations

Quarter Ended September 26, 1999 Compared to Quarter Ended September 27, 1998

     Revenues.  Total revenues  increased  152.4% to $10,202,649 for the quarter
ended  September  26,  1999 from  $4,043,109  for the  comparable  1998  period.
Manufacturing  revenues  increased  6,758.4%  to  $6,241,681  or  61.2% of total
revenues for the quarter ended  September 26, 1999 from $91,008 or 2.3% of total
revenues  for  the  comparable  1998  period,  primarily  as  a  result  of  the
acquisition of MBC. Retail sales decreased 30.9% to $2,119,763 or 20.8% of total
revenues for the quarter ended  September  26, 1999 from  $3,066,159 or 75.8% of
total revenues for the comparable 1998 period primarily due to the conversion of
Company owned stores to franchised stores.  Franchise related revenues increased
107.8% to $1,841,205 or 18.0% of total revenues for the quarter ended  September
26,  1999 from  $885,942  or 21.9% of total  revenues  for the  comparable  1998
period, primarily as a result of the acquisition of MBC.

     Costs and Expenses. Cost of sales as a percentage of manufacturing revenues
and retail sales  decreased to 83.7% for the quarter  ended  September  26, 1999
from 87.7% for the comparable 1998 period. The primary component of the decrease
was the  substantial  shift toward  manufacturing  revenues  and higher  margins
associated  with such revenues as compared to the  operating  margins of Company
owned stores.

     Depreciation and amortization expense as a percentage of revenues decreased
to 5.5% for the quarter ended  September  26, 1999 from 8.0% for the  comparable
1998 period primarily due to an increase in the Company's revenue base, the sale
of Company owned stores to  franchisees  and the Company's  previous  compliance
with FASB 121.

     General and  administrative  expenses as a percentage of revenues decreased
to 15.6% for the quarter ended  September 26, 1999 from 19.9% for the comparable
1998 period,  primarily  as a result of the  Company's  revenue  growth which is
enabling it to better leverage its management infrastructure.

     Interest  expense  increased  to  $431,212,  or 4.2% of  revenues,  for the
quarter  ended  September  26, 1999 from  $66,660,  or 1.6% of revenues  for the
comparable  1998  period.  This  increase is  primarily  due to  interest  costs
relating to the acquisition of MBC.

     Gain from the Early Extinguishment of Debt, net, increased to $240,023 with
no such gain for the comparable  1998 period.  This gain  represents an $850,000
discount earned for the prepayment of the Manhattan  Bagel Unsecured  Creditors'
Trust Note which was partially  offset by the costs  associated  with  obtaining
such discount.

     Net  Income.  Net  income  increased  to  $854,337  for the  quarter  ended
September 26, 1999 from $82,024 for the comparable 1998 period. This increase is
primarily  a result  of  increased  manufacturing  and  retail  gross  profit of
$970,112,  increased  franchise related revenues of $955,263 and the net gain on
the  extinguishment of debt of $240,023 which were partially offset by increases
in general and administrative expenses of $784,329, interest expense of $364,552
and depreciation and amortization expense of $244,204.


            ITEM 3. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS FOR THE YEAR TO DATE
             PERIOD ENDED SEPTEMBER 26, 1999 AND SEPTEMBER 27, 1998


Results of Operations

Year To Date Period Ended September 26, 1999 Compared to Year To Date Period
Ended September 27, 1998

     Revenues.  Total revenues  increased  149.7% to $29,570,626 for the year to
date period ended  September 26, 1999 from  $11,843,523  for the comparable 1998
period.  Manufacturing  revenues  increased  5,617.4% to $18,438,142 or 62.4% of
total  revenues  for the year to date  period  ended  September  26,  1999  from
$322,492 or 2.7% of total revenues for the comparable 1998 period,  primarily as
a result of the  acquisition of MBC.  Retail sales decreased 25.7% to $6,849,190
or 23.2% of total revenues for the year to date period ended  September 26, 1999
from  $9,216,799  or 77.8% of total  revenues  for the  comparable  1998  period
primarily due to the  conversion  of Company owned stores to franchised  stores.
Franchise  related  revenues  increased  85.9% to  $4,283,294  or 14.5% of total
revenues for the year to date period ended September 26, 1999 from $2,304,232 or
19.5% of total revenues for the comparable 1998 period, primarily as a result of
the acquisition of MBC.

     Costs and Expenses. Cost of sales as a percentage of manufacturing revenues
and retail sales  decreased to 82.3% for the year to date period ended September
26, 1999 from 86.3% for the comparable 1998 period. The primary component of the
decrease  was the  substantial  shift toward  manufacturing  revenues and higher
margins  associated  with such revenues as compared to the operating  margins of
Company owned stores.

     Depreciation and amortization expense as a percentage of revenues decreased
to 5.5% for the year to date period ended  September  26, 1999 from 8.5% for the
comparable  1998 period  primarily due to an increase in the  Company's  revenue
base, the sale of Company-owned stores to franchisees and the Company's previous
compliance with FASB 121.

     General and  administrative  expenses as a percentage of revenues decreased
to 15.5% for the year to date period ended September 26, 1999 from 18.8% for the
comparable  1998 period,  primarily as a result of the Company's  revenue growth
which is enabling it to better leverage its management infrastructure.

     Interest expense increased to $1,044,978 or 3.5% of revenues,  for the year
to date period ended  September 26, 1999 from $157,906,  or 1.3% of revenues for
the  comparable  1998 period.  This increase is primarily due to interest  costs
relating to the acquisition of MBC.

     Gain from the Early  Extinguishment of Debt, net, increased to $240,023
with no such gain for the  comparable  1998  period.  This gain  represents  an
$850,000 discount earned for the prepayment of the Manhattan  Bagel Unsecured
Creditors' Trust Note which was partially  offset by the costs  associated  with
obtaining such discount.

     Net Income.  Net income increased to $1,747,074 for the year to date period
ended  September 26, 1999 from  $215,970 for the  comparable  1998 period.  This
increase  is  primarily a result of  increased  manufacturing  and retail  gross
profit of $3,182,423, increased franchise related revenues of $1,979,062 and the
net gain from the extinguishment of debt of $240,023 which were partially offset
by  increases in general and  administrative  expenses of  $2,348,844,  interest
expense of $887,072 and depreciation and amortization expense of $634,488.

Liquidity and Capital Resources

      The Company plans to satisfy its capital requirements in 1999 through cash
flow from operations and through the sale of Company owned stores,  which should
generate additional free cash. The Company successfully  concluded a refinancing
of its debt that extends the terms of principal repayment.

      The Company is currently in the process of completing the  modification of
its information technology infrastructure for Year 2000 compliance.  The Company
does  not   expect   that  the  cost  to  modify  its   information   technology
infrastructure  to be Year 2000  compliant  will be  material  to its  financial
condition or results of operations. The Company does not anticipate any material
disruption in its  operations as a result of any failure by the Company to be in
compliance.

      At September 26, 1999 the Company had a working capital surplus of
$3,790,822  compared to a working capital surplus of $ 469,490 at December 27,
1998.

      The Company had net cash provided by operating  activities of $113,981 for
the  first  nine  months  of 1999  compared  with  net  cash  used in  operating
activities of $1,025,372  for the first nine months of 1998. The decrease in net
cash used in operating activities primarily reflects the increased net income of
the Company.

     The Company had net cash used in investing activities of $2,372,262 for the
first nine months of 1999 compared with net cash used in investing activities of
$340,018 for the first nine months of 1998.  The increase in cash used  reflects
the effect of the Company's acquisition of CBB.

     The Company had net cash provided by financing  activities of $ 186,428 for
the first nine  months of 1999  compared  with net cash  provided  by  financing
activities of $1,233,075 for the first nine months of 1998. The decrease in cash
provided  reflects the  completion of the  Company's  debt  refinancing,  net of
liabilities paid in connection with the acquisition of MBC.

Seasonality and General Economic Trends

     The  Company  anticipates  that its  business  will be  affected by general
economic  trends that  affect  retailers  in general.  While the Company has not
operated  during a period  of high  inflation,  it  believes  based on  industry
experience  that it would generally be able to pass on increased costs resulting
from inflation to its customers. The Company's business may be affected by other
factors,  including  increases in the  commodity  prices of green coffee  and/or
flour,  acquisitions by the Company of existing stores,  existing and additional
competition,  marketing programs, weather, and variations in the number of store
openings.  The Company has few employees at the minimum wage level and therefore
believes  that an increase in the minimum  wage would have little  impact on its
operations and financial condition.

Revaluation of Trademarks

      In the second quarter the Company  commissioned  an independent  valuation
firm to  determine  the  value of the  intellectual  property  purchased  in the
Manhattan  Bagel Company,  Inc.  acquisition.  In accordance  with the resultant
valuation,  the Company increased the book value of the trademarks  purchased by
$6 million, with an offsetting reduction in goodwill.

Subsequent Event

     On September 29, 1999, the Company signed a letter of intent to acquire New
York Bagel  Enterprises,  Inc.,  under which the Company would add 15 franchised
locations  and 26 Company  owned  locations  to its  system.  The closing of the
transaction is subject to the Company's completion of operational due diligence,
negotiation of a definitive agreement, necessary shareholder and bank approvals,
and standard closing conditions.  There can be no assurance that such conditions
shall be met and that the acquisition will close.



<PAGE>



                           PART II - OTHER INFORMATION

                    NEW WORLD COFFEE - MANHATTAN BAGEL, INC.

                               SEPTEMBER 26, 1999

Item 1.   Legal Proceedings

     Not applicable

Item 2.   Changes in Securities

     During the first quarter of 1999, 15 shares of Series B Convertible
Preferred  Stock were  exchanged for 126,665 shares of Common Stock

     During the third quarter of 1999, 15 shares of Series B Convertible
Preferred  Stock were  exchanged for 133,118 shares of Common Stock

     During the third  quarter of 1999,  the Company  completed a reverse  stock
split whereby  holders were entitled to one share of the Company's  Common Stock
for each two shares owned.

Item 3. Defaults upon Senior Securities

     Not applicable

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

     On  March  24,  1999 a  special  meeting  of  shareholders  was  held.  The
shareholders voted to approve the name change of the Company to New World Coffee
- Manhattan Bagel,  Inc.  Additionally the shareholders  approved an increase in
the number of authorized shares of common stock to 50,000,000 shares.

Item 5.  Other Information

     Not applicable

Item 6.  Exhibits and Reports on Form 8-K

     (a)  Exhibits.  None

(b)      Reports on Form 8-K.
         On June  14,  1999 the  Company  filed an 8-K  report  relating  to the
         adoption  of a  Shareholder  Rights  Plan  and the  entering  into of a
         Shareholder Rights Agreement.

         On September 7, 1999,  the Company filed an 8-K relating to the reverse
         stock split, acquisition of Chesapeake Bagel Bakery and the refinancing
         of the Company's debt.



<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.

                    NEW WORLD COFFEE - MANHATTAN BAGEL, INC.


Date:   November 15, 1999                By:/s/ Ramin Kamfar
                                            ------------------------------------
                                            R. Ramin Kamfar
                                            Chairman and Chief Executive Officer



Date:   November 15, 1999                By:/s/ Jerold E. Novack
                                            ------------------------------------
                                            Jerold E. Novack
                                            Chief Financial Officer