Form 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549

-----------------------------------------------------------------------------


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


               For the thirteen week period ended May 1, 1999

                                       OR

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

For the transition period from             to


                         Commission File Number 0-19536

                              THE RIGHT START, INC.
             (Exact name of registrant as specified in its charter)


     California                                       95-3971414
     ----------                                       ----------
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organiztion)                         Identification No.)


       5388 Sterling Center Drive, Unit C, Westlake Village, CA 91361
             (Address of principal executive offices) (Zip Code)

                               (818) 707-7100
            (Registrant's telephone number, including area code)


-----------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report.)

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_______

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

Common Stock Outstanding as of June 7, 1999 - 5,059,203 shares


<PAGE>





                              THE RIGHT START, INC.

                               INDEX TO FORM 10-Q
                          FOR THE THIRTEEN WEEK PERIOD
                                ENDED MAY 1, 1999




                         PART I - FINANCIAL INFORMATION

Item 1.     Financial Statements (unaudited)

            Balance Sheet                                        3
            Statement of Operations                              4
            Statement of Cash Flows                              5
            Notes to Financial Statements                        6


Item 2.     Management's Discussion and Analysis of Financial
            Condition and Results of Operations                  9




                           PART II - OTHER INFORMATION


Item 6.     Exhibits and Reports on Form 8-K                    13

SIGNATURES                                                      14




















                                       2
<PAGE>

<TABLE>
                              THE RIGHT START, INC.
                                  BALANCE SHEET
                                   (unaudited)


                                                   May 1,         January 30,
                                                    1999             1999
                                               --------------   --------------
<S>                                            <C>              <C>
ASSETS
Current assets:
    Cash                                       $     254,000    $     626,000
    Accounts and other  receivables                  641,000          585,000
    Merchandise inventories                        6,040,000        5,797,000
    Prepaid catalog costs                            350,000          363,000
    Other current assets                           1,262,000          929,000
                                               --------------   --------------

       Total current assets                        8,547,000        8,300,000


Property, plant and equipment, net                 8,304,000        7,884,000
Deferred income taxes                              1,400,000        1,400,000
Other noncurrent assets                              111,000           87,000
                                               --------------   --------------

                                               $  18,362,000    $  17,671,000
                                               ==============   ==============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
    Accounts payable and accrued expenses      $   4,281,000    $   3,349,000
    Accrued salaries and bonuses                     396,000          433,000
    Advance payments on orders                        51,000           40,000
    Revolving line of credit                          94,000
    Term note payable                              2,500,000        2,750,000
                                               --------------   --------------

       Total current liabilities                   7,322,000        6,572,000

Deferred rent                                      1,440,000        1,449,000

Mandatorily redeemable preferred stock Series A,
    $3,000,000 redemption value                    1,859,000        1,789,000

Shareholders' equity:
    Convertible preferred stock Series B           2,813,000        2,813,000
    Convertible preferred stock Series C           3,850,000        3,850,000

    Common stock (25,000,000 shares authorized
       at no par value; 5,051,820 issued
       and outstanding)                           22,337,000       22,337,000
    Additional paid-in capital                     3,437,000        3,571,000
    Accumulated deficit                          (24,696,000)     (24,710,000)
                                               --------------   --------------

                                               $  18,362,000    $  17,671,000
                                               ==============   ==============

                 See accompanying notes to financial statements

</TABLE>

                                       3
<PAGE>

<TABLE>
                          THE RIGHT START, INC.
                         STATEMENT OF OPERATIONS
                               (unaudited)



                                                   Thirteen weeks ended
                                                ---------------------------

                                                  May 1, 1999   May 2, 1998
                                                -------------  ------------
<S>                                             <C>            <C>
   Net sales:
      Retail                                    $  9,035,000   $ 7,329,000
      Catalog                                      1,686,000     1,712,000
                                                -------------  ------------
                                                  10,721,000     9,041,000

   Costs and expenses:
      Cost of goods sold                           5,115,000     4,585,000
      Operating expense                            4,181,000     4,213,000
      General and administrative expense             909,000       922,000
      Pre-opening costs                               62,000        31,000
      Depreciation and amortization expense          349,000       348,000
      Other income                                                (152,000)
                                                -------------  ------------

                                                  10,616,000     9,947,000
                                                -------------  ------------

   Operating income (loss)                           105,000      (906,000)
   Interest expense                                   85,000       316,000
                                                -------------  ------------

   Income (loss) before income taxes
     and extraordinary item                           20,000    (1,222,000)
   Income tax provision                                9,000        12,000
                                                -------------  ------------

   Income (loss) before extraordinary item            11,000    (1,234,000)
   Extraordinary gain                                               27,000
                                                -------------  ------------

   Net income (loss)                            $     11,000   $(1,207,000)
                                                =============  ============

Basic and diluted loss per share:
   Loss before extraordinary item               $      (0.01)  $     (0.24)
   Extraordinary item
                                                =============  ============
   Net loss                                     $      (0.01)  $     (0.24)
                                                =============  ============

Weighted average number of common shares
     outstanding                                   5,051,820     5,051,820
                                                =============  ============

                 See accompanying notes to financial statements

</TABLE>

                                       4
<PAGE>

<TABLE>
                              THE RIGHT START, INC.
                             STATEMENT OF CASH FLOWS
                                   (unaudited)

                                                          Thirteen weeks ended
                                                    ---------------------------------

                                                     May 1, 1999        May 2, 1998
                                                    -------------    ----------------
<S>                                                 <C>               <C>
Cash flows from operating activities:
  Net income (loss)                                 $     11,000      $   (1,207,000)
  Adjustments to reconcile net income (loss)
   to net cash provided by (used in) operating
   activities:
     Depreciation and amortization                       349,000             348,000
     Amortization of discount on senior
      subordinated notes                                                      24,000
     Extraordinary gain                                                      (27,000)
     Change in assets and liabilities
      affecting operations                               193,000            (395,000)
                                                    -------------     ----------------

       Net cash provided by (used in)
        operating activities                             553,000          (1,257,000)
                                                    -------------    ----------------

Cash flows from investing activities:
     Additions to property, plant and equipment         (769,000)           (256,000)
                                                    -------------    ----------------

           Net cash used in investing activities        (769,000)           (256,000)
                                                    -------------    ----------------

Cash flows from financing activities:
     Net proceeds from (payments on) revolving
      line of credit                                      94,000          (2,014,000)
     Payments on term note payable                      (250,000)
     Proceeds from sale of senior subordinated
      notes, net                                                           3,606,000
                                                    -------------    ----------------

           Net cash provided by (used in)
            financing activities                        (156,000)          1,592,000
                                                    -------------    ----------------


Net increase (decrease) in cash                         (372,000)             79,000
Cash at beginning of period                              626,000             240,000
                                                    -------------    ----------------

Cash at end of period                               $    254,000     $       319,000
                                                    =============    ================

                 See accompanying notes to financial statements

</TABLE>


                                       5
<PAGE>

                              THE RIGHT START, INC.
                        NOTES TO THE FINANCIAL STATEMENTS


NOTE 1:  Description of Business and Significant Accounting Policies

      The Right  Start,  Inc.  (the  Company) is a specialty  merchant  offering
unique,  high-quality  juvenile  products  for infants and young  children.  The
Company  markets its  products  through its retail  stores and through The Right
Start Catalog.

      There  have  been  no  changes  in the  Company's  significant  accounting
policies as set forth in the Company's  financial  statements for the year ended
January 30, 1999. These unaudited financial statements as of May 1, 1999 and for
the  thirteen  week period  then ended have been  prepared  in  accordance  with
generally  accepted  accounting  principles for interim  financial  information.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of management,  all adjustments  (consisting of normal  recurring
adjustments)  considered  necessary for a fair  presentation have been included.
Certain  reclassifications  have been made to  conform  prior  year  amounts  to
current year presentation.

      Operating  results for the thirteen  week period ended May 1, 1999 are not
necessarily  indicative  of the results that may be expected for the year ending
January 29, 2000.


NOTE 2:  Per Share Data

      On December 15, 1998,  the Company's  shareholders  approved a one-for-two
reverse split of the Company's common stock,  which had previously been approved
by the Company's  Board of Directors.  The reverse split was effective  December
15, 1998.  All  references  in the  financial  statements  to shares and related
prices, weighted average number of shares, per share amounts and stock plan data
have been adjusted to reflect the reverse split.

      Basic per share data is computed by dividing  income  available  to common
shareholders  by the  weighted  average  number  of common  shares  outstanding.
Diluted  per share data is  computed  by  dividing  income  available  to common
shareholders  plus income  associated  with dilutive  securities by the weighted
average  number of shares  outstanding  plus any  potential  dilution that could
occur if securities or other  contracts to issue common stock were  exercised or
converted into common stock in each year.

<TABLE>
                                                       Thirteen weeks ended
                                                       --------------------
                                                 May 1, 1999         May 2, 1998
                                                 -----------         -----------
<S>                                              <C>                 <C>
Income (loss) before extraordinary item          $    11,000         $(1,207,000)
Preferred stock accretion                            (70,000)
                                                 -----------         -----------
Basic and diluted loss before extraordinary
  item applicable to common shareholders         $   (59,000)        $(1,207,000)
                                                 ===========         ===========
</TABLE>

      Securities that could potentially dilute basic EPS in the future that were
not included in the  computation of diluted EPS because to do so would have been
antidilutive for the periods presented  include options  outstanding to purchase
701,161  and  652,011  shares  of common  stock at May 1, 1999 and May 2,  1998,
respectively,  Series B preferred  stock  convertible  into 1,000,000  shares of
common stock and Series C preferred stock  convertible  into 1,925,000 shares of
common stock at May 1, 1999.


NOTE 3:  Recapitalization and Extraordinary Gain

      In order to enhance  the  Company's  liquidity  and  improve  its  capital
structure, effective April 13, 1998 the Company completed a private placement of
non-interest  bearing senior subordinated notes in an aggregate principal amount
of  $3,850,000,  together with  detachable  warrants to purchase an aggregate of
1,925,000 shares

                                       6
<PAGE>

Note 3.  Recapitalization and Extraordinary Gain (continued)

of common stock exercisable at $2.00 per share (the "New  Securities").  The New
Securities  were sold for an aggregate  purchase  price of  $3,850,000  and were
purchased principally by affiliates of the Company.

      In connection  with the sale of the New  Securities,  the Company  entered
into an agreement  (the  "Agreement")  with all of the holders of the  Company's
existing  subordinated  debt and warrant  securities  representing  an aggregate
principal amount of $6,000,000.  Pursuant to the Agreement,  each holder (of new
and old securities)  agreed to exchange all of its subordinated  debt securities
together  with any warrants  issued in  connection  therewith,  for newly issued
preferred  stock.  The issuance of the shares of preferred  stock was subject to
the  approval of the  Company's  shareholders,  which  approval  was received on
December 15, 1998.

      Ten shares of newly  issued  preferred  stock were  issued for each $1,000
principal amount of subordinated debt securities exchanged.  The total number of
shares  issued  were  30,000,  30,000 and 38,500 for Series A, B and C Preferred
Stock, respectively.

      Holders of  $3,000,000  principal  amount of  existing  subordinated  debt
securities  elected  to  receive  Series A  Preferred  Stock  which has no fixed
dividend rights, is not convertible into common stock, is mandatorily redeemable
by the Company in May 2002 and does not accrue  dividends  unless the Company is
unable to redeem the Series A Preferred Stock at the required  redemption  date,
at which point  dividends  would begin to accumulate and accrue at a rate of $15
per share per annum.

      Holders of  $3,000,000  principal  amount of  existing  subordinated  debt
securities elected to receive Series B convertible  preferred stock which has no
fixed dividend rights and is convertible  into common stock at a price per share
of $3.00.

      Holders of the $3,850,000  principal  amount of New Securities  elected to
receive Series C convertible  preferred stock which has no fixed dividend rights
and is convertible into common stock at a price per share of $2.00.

      As the $3,850,000 of New Securities  were issued in  contemplation  of the
exchange into convertible preferred stock, the accounting for the New Securities
is analogous to convertible  debt.  The New Securities  were to be exchanged for
Series C preferred stock which were convertible into common stock at a price per
share of  $2.00.  As of the date of issue of the New  Securities,  the stock was
trading at $4.00 per share. Since the conversion feature was in the money at the
date of  issue of the  debt,  the  portion  of the  debt  proceeds  equal to the
beneficial  conversion feature of $3,850,000 was allocated to additional paid-in
capital.  The resulting  debt  discount of $3,850,000  was amortized to interest
expense  over  the  period  from  the  April  issuance  date to the date the New
Securities  were  first  convertible.  The date the New  Securities  were  first
convertible  was the exchange date when the New  Securities  were  exchanged for
convertible  preferred  stock. No value was assigned to the warrants because the
requirement  to exchange the  warrants,  together  with the debt,  for preferred
stock resulted in an assessment that the warrants had no independent value apart
from the exchange transaction.

      The  exchanges of the  subordinated  debt and warrant  securities  for the
preferred  stock were recorded at the date of issuance of the  preferred  stock.
The fair value of each preferred  stock series was determined as of the issuance
date of the  stock.  The  difference  between  the fair  value  of the  Series A
preferred  stock  granted of $1,769,000  and the carrying  amount of the related
subordinated debt security's balance exchanged of $3,000,000 was recognized as a
gain on the extinguishment of debt, net of transaction  expenses,  in the amount
of $1,231,000.  The difference  between the fair value of the Series B preferred
stock granted of $2,812,000 and the carrying amount of the related  subordinated
debt  security's  balance plus accrued  interest  exchanged  of  $2,828,000  was
recognized as a gain on the extinguishment of debt, net of transaction expenses,
in the amount of $16,000  with $8,000 of the gain on the  exchange of notes held
by principal  shareholders  recorded as a credit to additional  paid-in capital.
There was no gain or loss recognized on the conversion of New Securities.

      In connection with the above restructuring,  effective April 13, 1998, the
holders  of  the  Company's   $3,000,000   subordinated   notes  and  $3,000,000
subordinated  convertible  debentures agreed to waive their right to receive any
and all interest  payments accrued and owing on or after February 28, 1998. This
modification of terms was accounted for prospectively,  from the effective date,
under Statement of Financial Accounting Standards No. 15, "Accounting of Debtors
and Creditors for Troubled Debt Restructurings," as follows.

                                       7
<PAGE>


NOTE 3:  Recapitalization and Extraordinary Gain (continued)

      The carrying amount of the subordinated notes as of April 14, 1998 was not
changed as the carrying  amount of the debt did not exceed the total future cash
payments  of $3,000,000 specified  by the new terms.  Interest  expense  was
computed using the interest method to apply a constant  effective  interest rate
to the payable balance between the modification  date of April 13, 1998, and the
original maturity date of the payable in May 2000.

      The  total  future  cash  payments  specified  by  the  new  terms  of the
convertible  debentures of  $3,000,000  is less than the carrying  amount of the
liability to the debenture holders of $3,027,000, therefore, the carrying amount
was reduced to an amount  equal to the total future cash  payments  specified by
the new terms and the Company  recognized an extraordinary gain on restructuring
of  payables  equal to the  amount of the  reduction  as of April 13,  1998.  No
interest  expense  was  recognized  on the  payable  for any period  between the
modification  date of April 13, 1998 and the date the debentures  were exchanged
for preferred stock.

      Proceeds from the  Company's  private  placement of New  Securities in the
amount  of  $3,850,000  were  used to pay off the  Company's  revolving  line of
credit.  Further,  the Company's  lender  amended the existing loan agreement to
provide more favorable  terms which are consistent with  management's  financial
and operating  plans.  These plans  include the closure of certain  unprofitable
mall stores and opening of other store locations.



NOTE 4:  Supplemental Disclosure of Cash Flow Information

      Interest  paid  amounted to $103,000 and  $201,000 for the thirteen  weeks
ended May 1, 1999 and May 2, 1998, respectively.  Cash paid for income taxes was
$11,000  and $5,000 for the  thirteen  weeks  ended May 1, 1999 and May 2, 1998,
respectively.

      Changes in assets and liabilities which increased  (decreased) cash are as
follows:

<TABLE>
                                                       Thirteen weeks ended
                                                       --------------------
                                                   May 1, 1999      May 2, 1998
                                                   -----------      -----------
<S>                                                <C>              <C>
Accounts and other receivables                     $   (56,000)     $    (8,000)
Merchandise inventories                               (243,000)      (1,099,000)
Prepaid catalog costs                                   13,000         (222,000)
Other current assets                                  (333,000)         127,000
Other noncurrent assets                                (24,000)         (34,000)
Accounts payable and accrued expenses                  871,000          857,000
Accrued salaries and bonuses                           (37,000)         (10,000)
Advance payments on orders                              11,000           15,000
Deferred rent                                           (9,000)         (21,000)
                                                   -----------      -----------

                                                   $   193,000      $  (395,000)
                                                   ===========      ===========
</TABLE>



NOTE 5:  New Accounting Prounouncements

      In April  1998,  the  American  Institute  of  Public  Accountants  issued
Statement of Position 98-5 "Reporting on the Costs of Start-up Activities" ("SOP
98-5").  This  statement  requires  that the costs of  start-up  activities  and
organization costs be expensed as incurred.  The statement was effective for the
Company  beginning on January 31, 1999 and there was no effect on net income for
the period ended May 1, 1999 resulting from the adoption of SOP 98-5.  Effective
October 1, 1997,  the Company  began  expensing all store  pre-opening  costs as
incurred.


NOTE 6:  Subsequent Event

     In  December  1998,  the  Company   granted   275,000  options  which  vest
immediately  upon the  attainment  of a closing  stock price,  as defined in the
grant agreements, of $6.50 for thirty consecutive trading days. On May 21, 1999,
the  Company  attained a closing  stock  price of $6.50 for  thirty  consecutive
trading days and as a result the 275,000 options  outstanding became immediately
vested  resulting  in a  non-cash  compensation  charge  of $1.7  million  to be
recorded in the Company's second quarter operating results.


                                       8
<PAGE>

                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
               FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

Results of Operations

     Statements  in  this  Form  10-Q  that  are  not  purely   historical   are
forward-looking   statements  within  the  meaning  of  the  Private  Securities
Litigation Reform Act of 1995. These forward-looking  statements with respect to
the  financial  condition and results of the  operations of the Company  involve
risks and uncertainties which are detailed further in the filings of the Company
with the Securities and Exchange Commission,  including, but not limited to, the
Company's Registration Statement on Form S-3 (File No. 333-08157) and its Annual
Report on Form 10-K/A for the year ended January 30, 1999.


Thirteen weeks ended May 1, 1999 compared with May 2,  1998

      Net sales for the  thirteen  weeks  ended May 1, 1999  increased  18.6% to
$10.7 million from $9.0 million for the same period last year.  Retail net sales
increased  $1.7  million or 23.3%,  reflecting  the impact of  same-store  sales
increases of 26% and the opening of nine new street location  stores,  offset by
the impact of seven store closures.  Catalog net sales remained  relatively flat
at $1.7 million.

     Cost of goods sold  increased  $.5 million or 11.6%,  resulting  in a gross
margin of 52.3% as  compared  to 49.3%  last  year.  The  improvement  in margin
resulted from changes in product mix to include significantly more developmental
toys and books, which have higher gross margins, and from lower markdowns due to
higher inventory turns.

     Operating  expense  remained  flat at $4.2 million in the first  quarter of
1999 and 1998 in spite of the 18.6%  increase in net sales.  Improved  operating
efficiencies  were  experienced  in both retail and  catalog.  Retail  operating
expenses  decreased as a percentage of sales to 39% in the first quarter of 1999
from 48% for the same period  last year.  This  decrease  resulted from  reduced
payroll and  reduced  occupancy  costs  associated  with the  increase in street
locations and decrease in mall stores.  Catalog operating costs decreased to 39%
of catalog  sales in the first quarter of 1999 from 42% for the same period last
year. The catalog  results  continue the favorable trend in managing the catalog
at a more profitable  level with reduced catalog  production and other operating
costs.

       General and administrative  expense decreased 1.4% to $909,000 during the
first  quarter of 1999 from  $922,000  during  the same  period  last year.  The
components of this expense did not change significantly between the two periods.

     Included  in other  income in the first  quarter of 1998 is the net gain of
$152,000  associated with the closing of two stores.  The gain resulted from the
collection of key money from an assignee and the write-off of deferred rent, net
of closing expenses.

      Interest  expense  decreased to $85,000 from $316,000 in the first quarter
of the prior year.  The decrease  resulted from a decrease in total  outstanding
borrowings,  including the  extinguishment  of subordinated debt associated with
the Company's 1998 recapitalization.

      The Company has a deferred tax asset of $9.2 million, which is reserved by
a valuation  allowance  of $7.8  million,  for a net  deferred tax asset of $1.4
million. Management expects that the Company will generate $4 million of taxable
income  within  the next 15 years to utilize  the net  deferred  tax asset.  The
taxable  income will be generated  through a combination  of improved  operating
results  and tax  planning  strategies.  Rather than lose the tax  benefit,  the
Company could implement  certain tax planning  strategies  including the sale of
the Company's catalog operations,  since such operations  generally operate on a
profitable  basis.  Alternatively,  the  Company  could  also  sell its  catalog
operation's  mailing lists in order to generate  income to enable the Company to
realize  its  NOL  carryforwards.  Based  on the  above  operating  improvements
combined  with tax  planning  strategies  in  place,  management  believes  that
adequate  taxable  income will be  generated  over the next 15 years in which to
utilize the NOL carryforwards.

                                       9
<PAGE>


     In  December  1998,  the  Company   granted   275,000  options  which  vest
immediately  upon the  attainment  of a closing  stock price,  as defined in the
grant agreements, of $6.50 for thirty consecutive trading days. On May 21, 1999,
the  Company  attained a closing  stock  price of $6.50 for  thirty  consecutive
trading days and as a result the 275,000 options  outstanding became immediately
vested  resulting  in a  non-cash  compensation  charge  of $1.7  million  to be
recorded in the Company's second quarter operating results.


Liquidity and Capital Resources

      During the first quarter of Fiscal 1999,  the Company's  primary source of
liquidity was from  operations,  which generated $.6 million.  In addition,  the
Company had  borrowings  of $.1  million  under its $13  million  senior  credit
facility (the "Credit Facility").  The Credit Facility consists of a $10,000,000
revolving  line of credit  for  working  capital  (the  "Revolving  Line") and a
$3,000,000 capital expenditure  facility (the "Capex Line").  Availability under
the Revolving Line is subject to a defined  borrowing  base.  During the quarter
ended May 1, 1999,  $250,000 was paid down on the Capex Line. As of May 1, 1999,
borrowings of $2,500,000 and $.1 million were  outstanding  under the Capex Line
and the Revolving Line,  respectively.  Approximately $3.2 million was available
under the Revolving  Line. The Credit  Facility  terminates on November 19, 1999
and on such date all  borrowings  thereunder  are  immediately  due and payable.
Borrowings  under the Credit  Facility are secured by  substantially  all of the
Company's  assets.  The Company plans to replace the Credit Facility by November
1999, and believes that it could extend the Credit Facility to May 2000.


                                       10
<PAGE>

     The Credit  Facility,  as  amended,  requires  the  Company at all times to
maintain net worth (defined to include equity, subordinated debt and mandatorily
redeemable  preferred  stock) of at least $8 million.  The Credit  Facility also
limits  the  Company's  earnings  before  interest,   taxes,   depreciation  and
amortization  (EBITDA) to a loss amount of $500,000 for the twelve  months ended
April 30, 1999.  Minimum  EBITDA of zero is required for the twelve months ended
July 31, 1999 and $400,000  for the twelve  months  ended  October 31, 1999.  In
addition,  capital  expenditures  are limited to $1,750,000 in fiscal 1999.  The
Company believes that it will maintain compliance with these requirements.

     The  Company is in the  process  of  developing  an  internet  site,  which
development will require a capital  commitment of up to $1,000,000.  The Company
has formed a  subsidiary,  Rightstart.com  Inc.,  for purposes of operating  and
maintaining  the  internet  site.  Proceeds  from the planned sale of a minority
interest  in  Rightstart.com  will  fund  the  site's  ongoing  maintenance  and
operations.

     The Company's ability to fund its operations,  open new stores and maintain
compliance  with the Credit  Facility  is  dependent  on its ability to generate
sufficient cash flow from operations and secure  financing  beyond November 1999
as described  above.  Historically,  the Company has  incurred  losses and could
again incur  losses in the near term.  Depending  on the success of its business
strategy,  the Company may continue to incur losses beyond such periods.  Losses
could  negatively  affect  working  capital and the  extension  of credit by the
Company's suppliers and impact the Company's operations.


Impact of Inflation

      The impact of inflation on results of operations has not been  significant
during the Company's last three fiscal years.


Seasonality

      The  Company's  business  is not as  significantly  impacted  by  seasonal
fluctuations,   when  compared  to  many  other  specialty  retail  and  catalog
operations. The Right Start's products are for the most part need-driven and the
customer  is often  the end  user of the  product.  However,  the  Company  does
experience increased sales during the Christmas holiday season.


Other Matters

Year 2000

      The year 2000  problem is the result of computer  programs  being  written
using two digits  (rather than four) to define the  applicable  year. Any of the
Company's programs that have time-sensitive  software may recognize a date using
"00" as the  year  1900  rather  than  the  year  2000  which  could  result  in
miscalculations or system failures.

      The Company is  currently  working to identify  and resolve all  potential
issues relating to the year 2000 on the processing of date-sensitive information
by the Company's computerized information system. For purposes of addressing the
issues and planning the appropriate resolutions,  the Company has segregated its
internal systems and individually assessed their state of readiness as follows:

                     Phase of Planning ("x" indicates phase is complete)
                     ---------------------------------------------------
System            Awareness  Assessment  Renovation  Validation  Implementation
------            ---------  ----------  ----------  ----------  --------------
Credit Card Processing   x        x           x           x             x
Inventory Maintenance    x        x           x           x
Accounting and Reporting x        x           x           x             x
Point of Sale
  Transactions           x        x
Non-computerized         x        x
systems (none are
material to the
Company's
operations)


                                       11
<PAGE>


      In addition to resolving  any year 2000 issues on the  Company's  internal
systems, the Company is working with its third party vendors in implementing the
appropriate solutions.  The Company estimates that the maximum,  worst-case cost
of addressing  its year 2000 issues is  approximately  $125,000 for hardware and
software.

     The Company is currently  working with its  software  vendor for  inventory
maintenance  systems to complete the  installation  of the  upgraded,  year 2000
compliant  version of these systems.  The Company is working with its vendor for
its point of sale ("POS")  system to complete the program  changes  required for
this  system  to be year  2000  compliant.  If, in a  worst-case  scenario,  the
necessary  upgrades  could not be completed in a timely  manner,  the  Company's
contingency  plans provide for the purchase and  installation of replacement POS
software. No other systems are material to the Company's operations.

New Accounting Pronouncements

      In April  1998,  the  American  Institute  of  Public  Accountants  issued
Statement of Position 98-5 "Reporting on the Costs of Start-up Activities" ("SOP
98-5").  This  statement  requires  that the costs of  start-up  activities  and
organization costs be expensed as incurred.  The statement was effective for the
Company  beginning on January 31, 1999 and there was no effect on net income for
the period ended May 1, 1999 resulting from the adoption of SOP 98-5.  Effective
October 1, 1997,  the Company  began  expensing all store  pre-opening  costs as
incurred.


Quantitative and Qualitative Disclosures about Market Risk

     In the ordinary  course of  operations,  the Company  faces no  significant
market risk. Its purchase of imported products subjects the Company to a minimum
amount of foreign  currency risk.  Foreign  curency risk is that risk associated
with recurring  transactions with foreign companies,  such as purchases of goods
from foreign vendors.  If the strength of foreign currencies  increases compared
to the U.S. dollar, the price of imported products could increase.  However, the
Company has no  commitments  for future  purchases  with  foreign  vendors  and,
additionally, the Company has the ability to source products domestically in the
event of import price increases.

     See  "Management's  Discussion  and  Analysis of  Financial  condition  and
Results of Operations -- Liquidity and Capital Resources" above for a discussion
of debt  obligations  of the Company,  the interest rates of which are linked to
the prime  rate.  The  Company has not  entered  into any  derivative  financial
instruments  to manage  interest  rate risk,  currency  risk or for  speculative
purposes and is currently not evaluating the future use of such instruments.

                                       12
<PAGE>


                                     PART II


Item  6.  Exhibits and Reports on Form 8-K

The  Company  filed no Reports  on Form 8-K  during the first  quarter of fiscal
1999.


The following exhibits of The Right Start, Inc. are included herein.


Exhibit
Number
------

27    Financial Data Schedule





                                       13
<PAGE>



                                   SIGNATURES

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


                               THE RIGHT START, INC.



Date:  June 14, 1999                            /s/ JERRY WELCH
       -------------                            ---------------
                                                Jerry Welch
                                                Chief Executive Officer


Date:  June 14, 1999                            /s/ GINA M. ENGELHARD
       -------------                            ---------------------
                                                Gina M. Engelhard
                                                Chief Financial Officer




                                       14