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 March 28, 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 ____ No X

     Number of shares of common stock,  $.001 par value per share,  outstanding:
          As of May 14, 1999:           20,235,047



<PAGE>



                    NEW WORLD COFFEE - MANHATTAN BAGEL, INC.

              INDEX TO FINANCIAL STATEMENTS AND FINANCIAL SCHEDULES

                                 MARCH 28, 1999
<TABLE>
<CAPTION>

                                                                                                       Page
<S>                                                                                                   <C>   


PART I.     FINANCIAL INFORMATION

Item 1.      Financial Statements


     Condensed Consolidated Balance Sheets as of March 28, 1999 and
         December 27, 1998.......................................................................         -3-

     Condensed Consolidated Statements of Operations for the first quarter
         ended March 28, 1999 and March 29, 1998.................................................         -4-

     Condensed Consolidated Statements of Cash Flows for the first quarter
         ended March 28, 1999 and March 29, 1998.................................................         -5-

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

Item 2.      Management's Discussion and Analysis of Financial Condition
             and Results of Operations for the First Quarter Ended
             March 28, 1999                                                                               -7-

PART II:  OTHER INFORMATION......................................................................        -10-

SIGNATURES.......................................................................................        -11-


</TABLE>

<PAGE>



                    NEW WORLD COFFEE - MANHATTAN BAGEL, INC.

                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>



                                                                                     March 28,                December 27,
                                                                                       1999                      1998
                                                                                    ----------
ASSETS                                                                             (Unaudited)
<S>                                                                               <C>                       <C>  


Current assets:
    Cash and cash equivalents...................................                    $4,494,785              $5,269,627
    Franchise and other receivables, net........................                     1,662,340                 964,609
    Current maturities of notes receivables.....................                     1,917,296               2,103,079
    Inventories.................................................                     1,480,019               1,355,730
    Prepaid expenses and other current assets...................                       154,409                 206,073
    Assets held for resale......................................                     1,633,053               1,633,053
                                                                                     ---------               ---------
       Total current assets.....................................                    11,341,902              11,532,171

Property, plant and equipment, net..............................                     6,738,078               6,889,876
Notes and other receivables, net................................                     1,464,117               1,391,929
Trademarks, net.................................................                     9,866,667               9,966,667
Goodwill, net...................................................                     7,047,670               7,097,670
Deposits and other assets.......................................                     1,021,618               1,215,124
                                                                                     ---------               ---------
       Total Assets                                                                $37,480,052             $38,093,437
                                                                                   ===========             ===========

LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities:
    Accounts payable............................................                    $1,992,926              $1,750,647
    Accrued expenses............................................                     5,920,914               7,279,646
    Current portion of long-term debt...........................                     2,545,986               1,633,624
    Current portion of obligations under capital leases.........                       365,054                 398,764
                                                                                       -------                 -------
       Total current liabilities................................                    10,824,880              11,062,681
                                                                                    ----------              ----------

Long-term debt..................................................                    12,593,686              13,530,749
Obligations under capital leases................................                             -                 115,591
Deferred rent...................................................                       269,151                 261,638
Other liabilities...............................................                     4,171,246               4,179,635
Commitments and Contingencies
Stockholders' equity:
    Preferred stock, $.001 par value; 2,000,000
       shares authorized; 0 issued and outstanding..............                             -                       -
    Series B convertible preferred stock, $.001 par value;
       225 Shares Authorized, 43.5 shares outstanding...........                             -                       -
    Common stock, $.001 par value; 50,000,000 shares
       authorized; 20,058,831 and 19,442,644 shares
       issued and outstanding...................................                        20,059                  19,443
    Additional paid-in capital..................................                    34,028,643              33,694,196
    Accumulated deficit.........................................                  (24,427,613)            (24,770,496)
                                                                                  ------------            ------------
       Total stockholders' equity...............................                     9,621,089               8,943,143
                                                                                     ---------               ---------
       Total liabilities and stockholders' equity...............                   $37,480,052             $38,093,437
                                                                                   ===========             ===========
</TABLE>

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


<PAGE>





                    NEW WORLD COFFEE - MANHATTAN BAGEL, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

          FOR THE FIRST QUARTER ENDED MARCH 28, 1999 AND MARCH 29, 1998

                                    UNAUDITED
<TABLE>
<CAPTION>




                                                                                             March 28,          March 28, 
                                                                                               1999               1998
<S>                                                                                         <C>               <C>   

Revenues:
    Manufacturing revenues..............................................................    $6,044,207          $119,082
    Retail sales........................................................................     2,330,002         3,109,045
    Franchise related revenues..........................................................     1,205,628           557,093
                                                                                             ---------           -------
Total Revenues..........................................................................     9,579,837         3,785,220

    Cost of sales.......................................................................     6,892,180         2,623,844
    General and administrative expenses.................................................     1,511,171           695,090
    Depreciation and amortization.......................................................       542,714           369,048
                                                                                               -------           -------
Operating Income........................................................................       633,772            97,238

Other Expenses:
    Interest expense, net...............................................................       290,889            34,894
                                                                                               -------            ------

Net Income..............................................................................      $342,883           $62,344
                                                                                              ========           =======

Basic Net Income Per Common Share.......................................................          $.02              $.01
                                                                                                  ====              ====

Basic Weighted Average Number of Common Shares Outstanding..............................    19,815,173        11,784,401
                                                                                            ==========        ==========

Diluted Net Income Per Common Share.....................................................          $.02              $.01
                                                                                                  ====              ====

Diluted Weighted Average Number of Common Shares Outstanding............................    20,326,886        11,784,401
                                                                                            ==========        ==========
</TABLE>

     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 FIRST QUARTER ENDED MARCH 28, 1999 AND MARCH 29, 1998

                                    UNAUDITED
<TABLE>
<CAPTION>


                                                                                                March 28,         March 29,
                                                                                                  1999                1998
                                                                                               ----------         ---------
<S>                                                                                            <C>                 <C>   

CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income......................................................................            $342,883          $62,344
    Adjustments to reconcile net income to net cash used in operating activities:
        Depreciation and amortization...............................................             542,714          369,048
        Gain on sale of fixed assets................................................           (219,585)        (524,161)
    Increase/(decrease) in cash as a result of changes in  operating  assets and
              liabilities:
        Receivables                                                                            (697,731)          180,027
        Inventories                                                                            (124,289)           40,784
        Prepaid expenses and other current assets...................................              51,664           12,448
        Deposits and other assets...................................................             193,506           30,364
        Accounts payable                                                                         242,279           71,461
        Accrued expenses                                                                     (1,358,732)        (373,666)
        Deferred rent...............................................................               7,514             -
        Other liabilities...........................................................           (157,587)          (1,765)
                                                                                               ---------          -------
                    Net cash used in operating activities...........................         (1,177,364)        (133,116)
                                                                                             -----------        ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Capital expenditures............................................................           (325,070)         (56,634)
    Proceeds from the sale of fixed assets                                                       452,935             -
                                                                                                 -------         --------
                    Net cash provided by/(used in) investing activities.............             127,865         (56,634)
                                                                                                 -------         --------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Issuance of common stock, net of issuance costs                                              335,064             -
    Receipts of notes receivables                                                                171,095             -
    Additions to notes receivables                                                              (57,500)             -
    Repayments of capital leases                                                               (149,301)        (123,489)
    Repayment of notes payable......................................................            (24,701)         (78,750)
                                                                                                --------         --------
                    Net cash provided by/(Used in) financing activities.............             274,657        (202,239)
                                                                                                 -------        ---------
                    Net decrease in cash............................................           (774,842)        (391,989)

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

CASH, End of Period.................................................................           4,494,785          757,024
                                                                                               =========          =======

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Cash paid during the period for:
       Interest.....................................................................             366,352           26,549
    Non-cash investing and financing activities:
       Notes received from sale of fixed assets.....................................                   -        1,250,000


</TABLE>


<PAGE>



                    NEW WORLD COFFEE - MANHATTAN BAGEL, INC.

                   Noted to Consolidated Financial Statements
                                   (Unaudited)

     1. The March 28,  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.

     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;  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.


<PAGE>



                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
          FOR THE FIRST QUARTER ENDED MARCH 28, 1999 AND MARCH 28, 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  18  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. - Debtor in  Possession
("MBC") on November 24, 1998,  resulting in the addition of 6 Company-owned  and
285  franchised  and licensed  Manhattan  Bagel stores.  At March 28, 1999,  the
Company's retail system consisted of 330 stores,  including 25 Company-owned and
305 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.

     Results of Operations

     Quarter Ended March 28, 1999 Compared to Quarter Ended March 29, 1998

     Revenues.  Total  revenues  increased  153.1% to $9,579,837 for the quarter
ended  March  28,  1999  from   $3,785,220  for  the  comparable   1998  period.
Manufacturing  revenues  increased  4975.7%  to  $6,044,207  or  63.1%  of total
revenues  for the quarter  ended  March 28, 1999 from  $119,082 or 3.2% of total
revenues  for  the  comparable  1998  period,  primarily  as  a  result  of  the
acquisition of MBC. Retail sales decreased 25.1% to $2,330,002 or 24.3% of total
revenues for the quarter ended March 28, 1999 from  $3,109,045 or 82.1% of total
revenues for the  comparable  1998 period  primarily  due to the  conversion  of
Company owned stores to franchised stores.  Franchise related revenues increased
116.5% to $1,205,628 or 12.6% of total  revenues for the quarter ended March 28,
1999 from $557,093 or 14.7% 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  increased  to 82.3% for the quarter  ended March 28, 1999 from
81.3% for the comparable 1998 period.  The primary components were lower margins
associated with Manhattan Bagel  manufacturing  revenues and temporary increases
in cost of goods and personnel  costs primarily as a result of the transition in
management responsibility for the Company-owned stores.


<PAGE>



     Depreciation  and  amortization   expenses  as  a  percentage  of  revenues
decreased  to 5.7% for the  quarter  ended  March  28,  1999  from  9.8% 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 15.8% for the quarter ended March 28, 1999 from 18.4% 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, net increased to $290,889,  or 3.0% of revenues,  for the
quarter  ended  March  28,  1999  from  $34,894,  or  1.2% of  revenues  for the
comparable  1998  period.  This  increase is  primarily  due to  interest  costs
relating to the acquisition of MBC.

     Net Income.  Net income  increased to $342,883 for the quarter  ended March
28, 1999 from $62,344 for the comparable 1998 period. This increase is primarily
a result of increased manufacturing gross profit and increased franchise related
revenues of $1,309,878 and $648,535  respectively which were partially offset by
a decrease in retail  gross  profit of  $432,132  and  increases  in general and
administrative, interest and depreciation and amortization expenses of $816,081,
$255,995 and $173,666 respectively.

     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 to franchisees
which should generate additional free cash.

     The Company is  currently  in the  process of  evaluating  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 March 28,  1999 the Company  had a working  capital  surplus of $517,022
compared to a working capital surplus of $469,490 at December 27, 1998.

     The Company had net cash used in operating activities of $1,177,364 for the
first  quarter of 1999  compared  with net cash used in operating  activities of
$133,116 for the first quarter of 1998. The increase in cash used  predominantly
relates to the payment of primarily one time liabilities  incurred in connection
with the acquisition of MBC.

     The Company had net cash  provided by investing  activities of $127,865 for
the first quarter of 1999 compared with net cash used in investing activities of
$56,634 for the first quarter of 1998.


<PAGE>



     The Company had net cash  provided by financing  activities of $274,657 for
the first quarter of 1999 compared with net cash used in financing activities of
$202,239 for the first quarter of 1998.

     The  Company may  refinance  some or all of its  indebtedness  and incur an
increase in the amount of funded debt in 1999, to better leverage its asset base
and reduce borrowing costs. There can be no assurance that such refinancing will
be accomplished, or as to the amount or the cost of such refinancing.

     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.


<PAGE>

                           PART II - OTHER INFORMATION

                    NEW WORLD COFFEE - MANHATTAN BAGEL, INC.

                                 MARCH 28, 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.

     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.

     Item 5. Other Information

     Not applicable

     Item 6. Exhibits and Reports on Form 8-K

     (a) Exhibits. None

     (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.

                                NEW WORLD COFFEE - MANHATTAN BAGEL, INC.


Date:    May 17, 1999      By:  /s/R. Ramin Kamfar
                                -----------------------------------
                                R. Ramin Kamfar
                                Chairman and Chief Executive Officer



Date:    May 17, 1999      By:  /s/Jerold E. Novack
                                -----------------------------------
                                Jerold E. Novack
                                Chief Financial Officer