SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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


(X)   Quarterly report for the quarterly period ended March 31, 1999

                                       OR

( )   Transition  Report  Pursuant To  Section 13  Or  15(d) of  The  Securities
      Exchange Act of 1934

Commission file number   1-3952

                               SIBONEY CORPORATION
             (Exact name of registrant as specified in its charter)

             Maryland                                       73-0629975
 (State or other jurisdiction of                      (I.R.S. Employer I.D. No.)
 incorporation or organization)

34 S. Brentwood Blvd., Ste 211, P.O. Box 16184, St. Louis, MO 63105

                    (Address of principal executive offices)
                                   (Zip Code)

                                  314-725-6141
              (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 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  [ ]

         Title of class of                             Number of Shares
           common stock                      outstanding as of this Report Date

Common stock, par value                                  16,518,344
$.10 per share

                                        1

<PAGE>


                                      INDEX


PART I   FINANCIAL INFORMATION

Item 1.  Financial Statements

         Condensed Consolidated Balance Sheet, March 31,
         1999 and December 31, 1998                                          3

         Condensed Consolidated Statement of Operations,
         Three Months Ended March 31, 1999 and March 31, 1998                4

         Condensed Consolidated Statement of Cash Flows, Three
         Months Ended March 31, 1999 and March 31, 1998                      5

         Notes to Condensed Consolidated Financial                           6
         Statements

Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations                       7


PART II  OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K                                   11

Signatures                                                                  11

Exhibit Index                                                               12



                                        2

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

                      SIBONEY CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET

                                     Assets

                                                                    DECEMBER 31,
                                                 March 31,          1998 (SEE
                                                    1999            NOTE BELOW)
Current Assets
 Cash and cash equivalents                     $   110,082        $    134,387
 Investment                                          8,500               8,500
 Accounts and notes receivable                     545,348             274,204
 Inventories (Note 2)                              218,819             187,545
 Prepaid expenses and deposits                     144,563              77,774
                                               -----------        ------------
  Total Current Assets                           1,027,312             682,410

Property, Plant and Equipment (Net of
accumulated depreciation of $581,462 at
March 31, 1999 and $569,649 at December
31, 1998)                                          190,953             198,820
                                               -----------        ------------
                                               $ 1,218,265        $    881,230
                                               ===========        ============


                      Liabilities and Stockholders' Equity

Current Liabilities
 Current Portion Long Term Debt                $    13,155         $    11,828
 Note payable (Note 3)                             126,097                  --
 Accounts payable                                  154,126              85,508
 Accrued expenses                                  221,582             148,579
                                                   -------         -----------
  Total Current Liabilities                        514,960             245,915
  
Long Term Debt                                      23,955              28,437
                                              ------------         -----------
    Total Liabilities                              538,915             274,352
    

Stockholders' Equity
 Common stock:
   Authorized 20,000,000 shares at $0.10
    par value; issued and outstanding
    16,518,344 shares                           1,651,835            1,651,835
 Unrealized holding gain on investment              8,500                8,500
 Additional paid-in capital                           300                  300
 Retained earnings (deficit)                     (981,285)          (1,053,757)
                                              ------------         ------------
    Total Stockholders' Equity                    679,350              606,878
                                              ------------         -----------
                                              $ 1,218,265          $   881,230
                                              ============         ===========

NOTE:     The balance sheet at December 31, 1998 has been taken from the audited
          financial statements at that date and condensed.

     See accompanying notes to condensed consolidated financial statements.


                                        3

<PAGE>

                      SIBONEY CORPORATION AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS




                                                        THREE MONTHS ENDED
                                                              MARCH 31,
                                              ----------------------------------
                                                   1999                   1998
                                                   ----                   ----

Revenues                                      $  842,854            $   521,682
Cost of Product Sales                            149,117                 75,655
Selling, General and
Administrative Expenses                          615,327                529,153
                                              -----------            -----------

Income (Loss) from Operations                     78,410                (83,126)
                                              -----------            -----------
Other Income (Expense)
 Interest Income (Expense)                        (1,649)                  (398)
 Miscellaneous                                    (4,289)                (1,278)
                                              -----------            -----------
Total Other Income (Expense)                      (5,938)                (1,676)
                                              -----------            -----------

Net Income (Loss)                             $   72,472            $   (84,802)
                                              ==========            ============
Weighted Average Shares Outstanding
                                              16,518,344             16,432,844
                                              ===========           ============
Basic and Diluted Income (Loss) per
Common Share                                  $     .004            $     (.005)
                                              ===========           ============


     See accompanying notes to condensed consolidated financial statements.


                                        4

<PAGE>

                      SIBONEY CORPORATION AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998



                                                         1999            1998
                                                         ----            ----
Cash Flows from Operations
  Net income (loss) from continuing operations           72,472       $( 84,802)
  Adjustments to reconcile net income (loss) from
    continuing operations to net cash provided by
    continuing operations:
      Depreciation                                       11,813          14,407
      Change in assets and liabilities:
        Increase in accounts and notes                  271,144)       (138,509)
       receivable 
     Increase in inventory                              (31,274)         (6,881)
         Decrease in prepaid expenses
           and deposits                                 (66,789)        (30,113)
         Decrease in accounts payable
           and accrued expenses                         141,621          87,738
                                                      ----------      ----------
Net Cash Used in Operations                            (143,301)       (158,160)
                                                      ----------      ---------

Cash Flows from Investing Activities
 Payments for equipment                                  (3,946)        (21,022)
                                                      ----------      ----------

Cash Flows from Financing Activities
 Borrowing under line-of-credit agreement               115,000          44,000
 Payment on long-term debt                               (3,155)         (4,922)
 Net advances from note payable                          11,097              --
                                                      ----------      ----------
Net Cash Provided by Financing Activities               122,942          39,078
                                                      ----------      ----------

Net Decrease in Cash and Cash Equivalents               (24,305)       (140,104)
    

Cash and Cash Equivalents - Beginning of Period         134,387         289,752
                                                      ----------       ---------

Cash and Cash Equivalents - End of Period             $ 110,082       $ 149,648
                                                      ==========      ==========


Supplemental Disclosure of Cash Flow Information
 Interest Paid                                        $   2,064       $   1,900
                                                      ----------      ----------
 Non cash investing activities for the 3 months
 ended March 31, 1999 included a capital lease for
 equipment of $53,350



     See accompanying notes to condensed consolidated financial statements.


                                        5

<PAGE>

                      SIBONEY CORPORATION AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                             MARCH 31, 1999 AND 1998


1.   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     The  condensed  consolidated  balance  sheet  as of  March  31,  1999,  the
     condensed  consolidated statement of operations for the three-month periods
     ended March 31, 1999 and 1998 and the condensed  consolidated  statement of
     cash flows for the three-month periods then ended have been prepared by the
     Company,  without  audit.  In the opinion of  management,  all  adjustments
     (which include only recurring  adjustments) necessary to present fairly the
     financial  position and results of operations at March 31, 1999 and for all
     periods have been made.

     Certain information and footnote disclosures normally included in financial
     statements  prepared  in  accordance  with  generally  accepted  accounting
     principles  have been condensed or omitted.  These  condensed  consolidated
     financial  statements  should  be read in  conjunction  with the  financial
     statements and notes thereto included in the Registrant's  Annual Report on
     Form 10-K for the year ended  December 31, 1998.  The results of operations
     for the period ended March 31, 1999 are not  necessarily  indicative of the
     operating results for the full year.


2.   INVENTORIES

     Inventories consist of the following:


                                     MARCH 31, 1999          DECEMBER 31, 1998
                                     --------------          -----------------
     Raw materials                     $ 106,702                 $ 128,727
     Finished goods                      112,117                    58,818
                                        --------                  --------
                                       $ 218,819                 $ 187,545
                                       =========                  ========

3.   NOTE PAYABLE

     The  Company  has a revolving  line of credit  agreement  with a bank which
     provides  funds  based on 75% of  eligible  receivables,  as defined by the
     agreement,  with a maximum  of  $500,000.  The  outstanding  debt is due on
     demand,  and if no demand is made,  then on August 1, 1999.  The agreement,
     secured by accounts receivable,  equipment and inventory,  requires monthly
     interest  payments on the  outstanding  balance at 0.75% above the lender's
     prime rate. As of March 31, 1999 there was $115,000  outstanding  under the
     line of credit  agreement.  As of December 31, 1998 no loan was outstanding
     under the agreement.

                                        6

<PAGE>

                      SIBONEY CORPORATION AND SUBSIDIARIES

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

The Company is engaged,  through its Siboney  Learning  Group Division and Gamco
Industries,  Inc. ("Gamco"),  a wholly-owned  subsidiary,  in the publishing and
distribution  of educational  software.  The Company has served the  educational
market  for more  than 35 years.  The  Company's  main  business  is  publishing
proprietary educational software in math, reading and language arts for students
and teachers in grades  kindergarten  through grade 12. This software  motivates
students to master key skills  which are stressed on  standardized  tests and in
textbooks.  Siboney Learning  Group/Gamco sells through a network of independent
distributors  throughout  the United  States as well as through its own catalogs
and sales force. Popular Gamco software titles include Money Challenge, Discover
Time,  the Touchdown  Math series,  Undersea  Reading for Meaning and new titles
including Reading Concepts,  Paragraph Power and Reading for Critical  Thinking.
The Company publishes over 200 titles for Macintosh,  Windows,  DOS and Apple II
operating systems.

The Company also has certain natural  resources  interests,  including coal, oil
and gas, through several subsidiaries.

OVERVIEW OF THE COMPANY

Since its inception in 1995, the Siboney  Learning Group Division has focused on
two  priorities:   1)  increasing  distribution  channels  to  schools  for  its
instructional  software  titles and 2) accelerating  product  development of new
proprietary  titles and new  versions  of  existing  proprietary  titles for new
computer platforms.

In addition to selling its GAMCO  software to K-12  schools  through the leading
national software catalog dealers, other school software dealers and through its
own direct  catalogs,  the Company has set up two new channels to reach  schools
more effectively and  aggressively.  Orchard  Teacher's  Choice Software,  which
offers a comprehensive  curricular solution with universal  management,  is sold
through a network of 30 dealers with  protected or exclusive  territories  whose
sales  representatives  call on schools.  These dealers sell the more  expensive
Orchard  packaged  product to schools  and to school  districts  looking  for an
integrated learning system.

The  Company has also built an Inside  Sales force of six sales  representatives
who focus on selling  software titles to the Company's  12,000 school  customers
and 40,000 additional prospects.

The Company has drastically accelerated its product development through internal
development  and  through  licensing  transactions.  During  1998,  the  Company
released 29 products for  Windows,  25 titles for  Macintosh  and 34 new CD-ROMs
titles that can be used on Macintosh  and Windows  computers.  In addition,  the
Company signed two new licensing  agreements  with outside  developers that will
allow the Company to offer new and tested  product  offerings in two  curricular

                                        7

<PAGE>

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

areas  which are  growing  in  importance.  In March 1998 the  Company  signed a
licensing  agreement  with ELS,  Inc. to enhance  and publish its Memory  Master
series of software titles that teach phonics,  sight words and spelling to young
learners.  In May 1998,  the Company  signed a licensing  agreement  with NECTAR
Foundation to revise and distribute its highly  successful  series of innovative
math  titles  that  reflect the  National  Council of  Teachers of  Mathematics'
Standards.  These two new series were released in the first quarter of 1999. The
Company continues to explore other licensing opportunities during 1999.

The Company's  revenue  growth and success in 1998 and the first quarter of 1999
can be directly  attributed  to its  increased  distribution  to schools and its
stream of new titles  and new  versions  which are  meeting  schools'  needs for
quality content on new computer  platforms.  During 1999, the Company expects to
release approximately 60 new and improved titles.

RESULTS OF OPERATION

The following is  management's  discussion  and analysis of certain  significant
factors  which have  affected the  Company's  financial  position and  operating
results during the periods covered by the  accompanying  condensed  consolidated
financial statements.

THREE MONTHS ENDED MARCH 31, 1999 vs. MARCH 31, 1998

Total revenues increased 61.6% during the three month period ended March 31,1999
compared  to the same  period in 1998,  reflecting  higher  sales of the Siboney
Learning Group/Gamco division.  Ninety percent of Siboney Learning Group's sales
were  generated by products  released over the past 21 months.  Sales of Orchard
Teachers  Choice  Software  increased  209% while sales of Gamco's  Mac/Win CD's
increased 288%.

Cost of product  sales  increased  during the quarter  compared to the  previous
year's quarter due to higher  revenues and the effect of higher  royalties paid.
As a percentage of revenue, cost of product sales increased to 17.7% compared to
14.5% in the  prior  year,  primarily  due to  royalties  paid on sales of newly
licensed software titles.  The Company expects the cost of sales as a percentage
of revenue to remain higher  compared to 1998 as a result of the increased sales
of products on which the Company owes royalty payments.

Selling,  general and administrative expenses increased during the quarter ended
March 31, 1999  compared to the same  quarter in 1998,  primarily  due to higher
advertising  costs,  marketing  expenses,  salary and  commission  expenses  and
general office expenses.

The  Company's  net income  for the first  quarter  of 1999,  primarily  for the
reasons above,  was $72,472,  compared to a loss of $84,802 in the first quarter
of 1998.

                                        8

<PAGE>



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


LIQUIDITY AND CAPITAL RESOURCES

Sales at Siboney Learning Group/Gamco  increased during February and March 1999,
compared with November and December 1998,  consistent with our experience in the
previous  year.  As a result,  cash  decreased  at March 31,  1999,  compared to
December 31, 1998,  in order to pay the increased  level of expenses  (including
increased prepaid expenses, primarily due to the cost of catalog mailings during
February 1999)  associated with higher sales and fund the resultant higher level
of accounts receivable at March 31, 1999.

Note payable also increased at March 31, 1999 compared to December 31, 1998 as a
result of the  Company  drawing  down on its  line-of-credit  to meet  increased
working capital  requirements  associated with higher sales and related expenses
during the fist quarter.

Accounts  payable  increased at March 31, 1999,  primarily due to the expense of
printing  and  mailing  catalogs  and  the  Company's  Annual  Report.  This  is
consistent with the Company's experience in previous years.

Accrued  expenses  increased at March 31, 1999,  as a result of royalties due on
higher sales of licensed software titles.

The net worth of the Company at March 31, 1999 was $679,350 compared to $606,878
at December 31, 1998, as a result of the retention of earnings  during the three
month period.

YEAR 2000 ISSUE

The Year 2000 ("Y2K")  issue is the result of computer  programs  being  written
using two digits,  rather than four, to define the applicable year. As a result,
when moving from the year 1999 to 2000, without  adjustment,  such programs will
assume the year 1900 rather than 2000, with various  potential  adverse effects.
Consequently,  most computer  programs must be adjusted to assure that they will
go forward and not backward.

The Company utilizes computer  technologies  throughout its business to carry on
its day to day operations.  Computer  technologies include hardware and software
used by the  Company  both in  developing  its  products  and in  operating  its
business. The Company has recently converted its operating and accounting system
to software which has been warranted to be Y2K compliant.

The Company is initiating  communications  and  developing a monitoring  program
with all of its  significant  suppliers to determine Y2K  compliance.  While the
Company is not  presently  aware of any  significant  exposure,  there can be no
assurance  that the systems of third parties on which the Company relies will be
converted  in a timely  manner,  or that  failure to convert by another  company
would not have a material adverse effect on the Company.


                                        9

<PAGE>


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

Management anticipates that the most reasonably likely worst-case scenario would
involve a temporary interruption of certain operations.

The cost of  determining  the Company's  exposure to risks  associated  with Y2K
compliance  and correction is estimated to be less than $1,000 and is not deemed
material to its results of operations for the fiscal year.

Educational software produced by the Company is used in conjunction with popular
operating  systems,  namely Macintosh,  DOS and the Windows series.  The Company
produces  single  title  programs  and  multiple  title  programs.  Single title
programs  which are operated in DOS have no dates in their  management  systems.
Single  title  programs  which the Company  produces  for  Macintosh  or Windows
operating systems record student performance by raw score percentage followed by
date  entered,  which is  automatically  provided  by the  underlying  operating
system.  Dates used by the company's  single title programs are displayed in two
digit (i.e.,  07-10-99)  configuration.  Storage of this  information is by most
recent entry and is only displayed and retrieved on a "last information entered,
first  displayed"  basis.  It is not sorted on a date basis and therefore is not
subject to the Y2K problem.  Multiple  title  programs  use a management  system
which displays dates in a four digit (i.e.,  07-10-1999)  configuration and thus
are not subject to Y2K issues.


                                       10

<PAGE>


                           PART II - OTHER INFORMATION

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K


      a)   Exhibits: See Exhibit Index on page 12.

      b)   Reports  on Form  8-K:  No  reports  on Form  8-K  were  filed by the
           Registrant during the quarter ended March 31, 1999.


                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) 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.


                                              SIBONEY CORPORATION



Date: May 12, 1999                            By:  /s/ Timothy J. Tegeler
                                                  ------------------------------
                                                  Timothy J. Tegeler
                                                  President, Chief Executive
                                                  Officer and Chief Financial
                                                  Officer



                                       11

<PAGE>

                                  EXHIBIT INDEX



    Exhibit Number         Description                               Page
    --------------         -----------                               ----

           27(a)           Financial Data Schedule
                           (Filed in EDGAR version only)               13