<PAGE>
 
                    U.S. Securities and Exchange Commission
                             Washington, D.C. 20549
                                        
                                   Form 10-Q
                                        
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE             
    SECURITIES EXCHANGE ACT OF 1934

       For the quarterly period ended            October 31, 1998
                                      ------------------------------------------
 
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
            SECURITIES EXCHANGE ACT OF 1934
For the transition period from .................... to ......................

                        Commission file number: 0-24454
                                                -------
                                        
                     Wave Technologies International, Inc.
       -----------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                 Missouri                         43-1481443
       -----------------------------------------------------------------
       (State or other jurisdiction    (IRS Employer Identification No.)
             of incorporation)                           

         10845 Olive Boulevard, Suite 250, Saint Louis, Missouri 63141
       -----------------------------------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (314) 995-5767
       -----------------------------------------------------------------
              (Registrant's telephone number including area code)

                                      N/A
       -----------------------------------------------------------------
  (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
                                       -----      -----

               APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
                                        
     Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
                                   Yes   X     No
                                       -----      -----

                     APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: The issuer had 4,158,311
shares of common stock, par value $.50, outstanding as of December 4, 1998.

                       --------------------------------
<PAGE>
 
                     WAVE TECHNOLOGIES INTERNATIONAL, INC.


                               Table of Contents
                       Form 10-Q for the Quarterly Period
                             Ended October 31, 1998

<TABLE>
<CAPTION>
 
 
PART I        FINANCIAL INFORMATION                                         Page
------        ---------------------                                         ----
<S>           <C>                                                           <C>
Item 1.       Financial Statements (Unaudited)
 
              Consolidated Balance Sheets at October 31, 1998, and            3
              April 30, 1998
 
              Consolidated Statements of Operations for the                   4
              three and six months ended October 31, 1998 and 1997
 
              Consolidated Statements of Cash Flows for the                   5
              six months ended October 31, 1998 and 1997
 
              Notes to Consolidated Financial Statements                      6
 
Item 2.       Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                       7
 
Item 3.       Quantitative and Qualitative Disclosures about Market Risk     10
 
PART II       OTHER INFORMATION
-------       -----------------
 
Item 4.       Submission of Matters to a Vote of Security Holders            10
 
Item 6.       Exhibits and Reports on Form 8-K                               10
 
SIGNATURES                                                                   11
</TABLE>
<PAGE>
 
                     WAVE TECHNOLOGIES INTERNATIONAL, INC.
                          CONSOLIDATED BALANCE SHEETS
                       (Dollars in thousands, unaudited)

<TABLE>
<CAPTION>

                                                                  30-Apr           31-Oct
                                                                   1998             1998
                                                                  -------          -------
                      ASSETS
----------------------------------------------------
<S>                                                              <C>               <C>
Current assets:
    Cash and cash equivalents                                     $ 1,498          $   831
    Accounts receivable (less allowance of $397 and
        $398, respectively)                                         7,262            9,716
    Inventory                                                         905              959
    Prepaid expenses                                                  680              926
                                                                  -------          -------
            Total current assets                                   10,345           12,432

Property, plant & equipment - net                                   3,366            3,050
Prepaid direct mail cost                                              408            1,040
Deferred courseware                                                 2,124            2,283
Other assets                                                        2,053            2,179
                                                                  -------          -------
    Total assets                                                  $18,296          $20,984
                                                                  =======          =======
        LIABILITIES AND SHAREHOLDERS' EQUITY
----------------------------------------------------

Current liabilities:
    Accounts payable                                              $ 2,480          $ 3,131
    Accrued expenses                                                2,347            1,900
    Deferred revenue                                                3,947            5,106
    Bank line-of-credit                                                -             1,500
    Current portion of long-term debt and capital lease 
    obligations:
         Related party                                                163               37
         Other                                                         56               57
                                                                  -------          -------
            Total current liabilities                               8,993           11,731

Long-term debt:
  Related party                                                        -                -
  Other                                                                41                9

Accrued rent liability                                                347              294

Common shareholders' equity:
  Common stock, $.50 par value, authorized 20,000,000 shares;
    issued, 3,933,459 and 4,158,311 shares; outstanding, 
    3,933,459 and 4,158,311 shares                                  2,079            2,079
  Less treasury stock, at cost (7,357 shares)                         (15)             (15)
  Additional paid-in capital                                        8,083            8,083
  Accumulated deficit                                              (1,355)          (1,334)
  Cumulative translation adjustment                                   123              137
                                                                  -------          -------
            Total common shareholders' equity                       8,915            8,950
                                                                  -------          -------
    Total liabilities and shareholders' equity                    $18,296          $20,984
                                                                  =======          =======
</TABLE>



                                     - 3 -
<PAGE>
 

                     WAVE TECHNOLOGIES INTERNATIONAL, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
              (Dollars in thousands, except per share, unaudited)

<TABLE>
<CAPTION>


                                                      Three Months Ended         Six Months Ended
                                                          October 31                October 31
                                                      -------------------        -----------------
                                                       1997         1998          1997       1998
                                                      ------       ------        ------    -------
<S>                                                   <C>          <C>           <C>       <C>
  Revenues:

     Publishing                                       $5,005       $5,225       $ 8,444    $ 9,358
     Instructor-led training                           2,959        4,365         6,006      7,165
     Custom solutions                                  1,424          321         2,802      1,254
                                                      ------       ------        ------    -------

             Total revenues                            9,388        9,911        17,252     17,777
                                                      ------       ------       -------    -------



  Cost and expenses:

     Cost of services, products and development        4,439        5,256         9,094      9,561
     Sales and marketing                               2,114        2,676         4,271      5,169
     General and administrative                        1,575        1,535         3,302      2,991
                                                      ------       ------       -------    -------

             Total costs and expenses                  8,128        9,467        16,667     17,721
                                                      ------       ------       -------    -------

  Income from operations                               1,260          444           585         56

  Other income (expenses) - net                          (36)         (28)          (50)       (21)
                                                      ------       ------       -------    -------

  Income before tax                                    1,224          416           535         35

  Less provision for income taxes                        428          168           189         14
                                                      ------       ------       -------    -------

  Net income                                          $  796       $  248       $   346    $    21
                                                      ======       ======       =======    =======

  Basic net income per common share                   $ 0.20       $ 0.06       $  0.09    $  0.01
                                                      ======       ======       =======    =======

  Basic weighted average common shares                 3,968        4,158         3,957      4,158
                                                      ======       ======       =======    =======

  Diluted net income per common share                 $ 0.20       $ 0.06       $  0.09    $  0.01
                                                      ======       ======       =======    =======

  Diluted weighted average common shares               4,069        4,163         4,035      4,166
                                                      ======       ======       =======    =======
</TABLE>

                                      -4-
<PAGE>
 
<TABLE>
<CAPTION>
                                        WAVE TECHNOLOGIES INTERNATIONAL, INC.
                                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                              SIX MONTHS ENDED OCTOBER 31
                                          (Dollars in thousands, unaudited)

                                                                               1997          1998      
                                                                            ----------    -----------  
CASH FLOWS FROM OPERATING ACTIVITIES:                                                                  
<S>                                                                         <C>           <C>
                                                                                                       
    Net income                                                              $      346    $       21   
    Adjustments to reconcile net income to net cash                                                    
    used in operating activities:                                                                      
       Depreciation and amortization                                             1,195         1,096   
       Barter activity                                                            (178)            -   
       Other                                                                        49            14   
       Net changes in other assets and liabilities, net of acquisitions:                                      
          Accounts receivable                                                      360        (2,454)  
          Inventory                                                               (204)          (54)  
          Other current assets                                                    (424)         (246)  
          Prepaid direct mail                                                     (191)         (632)  
          Deferred courseware                                                     (515)         (159)  
          Other assets                                                             159          (373)  
          Accounts payable                                                        (380)          651   
          Accrued expenses                                                          65          (447)  
          Deferred revenue                                                        (524)        1,106   
                                                                            ----------    ----------
             Net cash from (used) in operating activities                         (242)       (1,477)  
                                                                            ----------    ----------
                                                                                                       
CASH FLOWS FROM INVESTING ACTIVITIES:                                                                  
                                                                                                       
    Capital expenditures                                                        (1,130)         (532)   
                                                                            ----------    ----------
             Net cash used in investing activities                              (1,130)         (532)   
                                                                            ----------    ----------
                                                                                                       
CASH FLOWS FROM FINANCING ACTIVITIES:                                                                  
                                                                                                       
    Proceeds from issuance of common stock - net                                   154             -   
    Proceeds from borrowings under line of credit - net                          1,195         1,500   
    Repayments of notes payable                                                   (122)         (127)  
    Payments of capital lease obligations                                          (37)          (31)   
                                                                            ----------    ----------
             Net cash provided by financing activities                           1,190         1,342   
                                                                            ----------    ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                              (182)         (667)  
                                                                                                       
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                     948         1,498   
                                                                            ----------    ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                    $      766    $      831   
                                                                            ==========    ==========
</TABLE>



                                     - 5 -
<PAGE>
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE I. - GENERAL

The financial information herein is unaudited.  However, in the opinion of
management, such information reflects all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation of the results of
operation for the period being reported.  Additionally, it should be noted that
the accompanying condensed consolidated financial statements do not purport to
contain complete disclosures in conformity with generally accepted accounting
principles.

The results of operations for the six months ended October 31, 1998, are not
necessarily indicative of the results of operations for the full year.

These condensed consolidated financial statements should be read in conjunction
with the Company's consolidated financial statements for the year ended April
30, 1998, and the notes thereto.

The Company has reclassified certain 1998 fiscal year accounts to conform to
current year presentation.

NOTE II. - DEBT

On January 5, 1997, the Company issued a three-year term note to a bank in the
amount of $600,000, bearing interest at 9.25% per year, secured by certain of
Wave's equipment.  The Company's operating line of credit is with the same bank,
in the amount of  $2,500,000, and was renewed on September 1, 1998.  It bears
interest at the bank's prime rate and is secured by the Company's accounts
receivable, inventory and equipment.  The Chairman of the Board of the bank is a
member of the Board of Directors of the Company.

NOTE III. - EARNINGS PER SHARE

In the quarter ended January 31, 1998, the Company adopted Statement of
Financial Accounting Standards No. 128 "Earnings Per Share (FAS 128).  In
accordance with FAS 128, basic earnings per share are computed by dividing net
income by the weighted average number of common shares outstanding during the
period.  Diluted earnings per share are computed similar to basic except the
denominator is increased to include the number of additional common shares that
would have been outstanding if dilutive potential common shares had been issued.

NOTE IV. - REPORTING COMPREHENSIVE INCOME

Effective May 1, 1998, Wave adopted Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income" ("FAS 130").  FAS 130 establishes
standards for reporting and display of comprehensive income and its components
in financial statement.  Comprehensive income includes all non-shareowner
changes in equity and for Wave consists of net income and foreign currency
translation adjustments.  Total comprehensive income for the three and six
months ended October 31, 1997 and 1998 was:

<TABLE>
<CAPTION>
                                Three Months Ended           Six Months Ended
                                    October 31,                October 31,
                                ------------------           ----------------
                                1997          1998           1997        1998
                                  (in thousands)              (in thousands)
<S>                             <C>           <C>            <C>          <C>
Net income                      $796          $248           $346         $21
Other comprehensive gain          18            45             49          14
                                ----          ----           ----         ---

Total comprehensive income      $814          $293           $395         $35
</TABLE>

NOTE V. - DISCLOSURE ABOUT SEGMENTS

Effective May 1, 1998, Wave adopted Statement of Financial Accounting Standards
No. 131, "Disclosures about Segments of an Enterprise and Related Information"
("FAS 131").  FAS 131 establishes standards for defining operating segments and
reporting information about operating segments in financial statements.  It also
establishes standards for related disclosure about products, geographic areas
and major customers.  FAS 131 is not required to be applied to interim financial
statements in the year of adoption, but will be applied to Wave's annual
financial statements for the fiscal year ending April 30, 1999.

                                      -6-
<PAGE>
 
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation.

                                    Overview

     The Company designs, develops and delivers technical training programs
addressing the Internet, data communications, networking, and client/server
computing technologies.  Wave delivers these products and services through
instructor-led courses, informational seminars and published products and the
Internet.  The Company markets its courses and published products to management
information professionals, systems integrators, value-added resellers and others
with systems management responsibilities.

     The Company delivers its instructor-led training through eleven Company-
owned facilities in the United States and two centers in the United Kingdom. The
Company increasingly markets and sells training solutions utilizing a mix of
multi-media published materials and live training. Wave has developed both
domestic and international distribution channels for its products.

                Three Months Ended October 31, 1998 Compared To
                      Three Months Ended October 31, 1997

     Total revenues increased $523,000, or 6%, in the quarter ended October 31,
1998, to $9,911,000 from $9,388,000 in the same quarter in fiscal 1998, and
increased $2,045,000, or 26%, over total revenues for the first fiscal 1999
quarter.  The increase in revenues included a $676,000 increase in international
revenues.  International revenues accounted for approximately 24% of Wave's
total revenues in the quarter ended October 31, 1998, compared to 18% of total
revenues in the same quarter in fiscal 1998, and 30% in the first quarter of
fiscal 1999.  Revenues for the quarter ended October 31, 1997, included
$1,000,000 in non-recurring license fees from distribution and licensing
agreements with IBM.

     Publishing revenues increased $220,000, or 4%, from $5,005,000 to
$5,225,000, and remained stable as a percentage of total revenues, at 53%,
compared to the second quarter in fiscal 1998. Domestic publishing revenues
during the second quarter of fiscal 1998 included the non-recurring IBM license
fees which were replaced with $400,000 of other domestic licensing fees and
sales of published products bundled with live training.  In addition,
international publishing revenues increased $544,000, largely from sales of
"Camp Wave boot camp" programs and sales to international distributors.

     Instructor-led training ("ILT") revenues increased 48% to $4,365,000 from
$2,958,000 in the same quarter in fiscal 1998, and increased as a percentage of
total revenues, to 44% from 32%.  The increase related to classroom and Internet
components of the Camp Wave boot camp programs and sales for courses acquired as
part of the QA acquisition.  Microsoft courses accounted for 57% of ILT revenues
for the quarter ended October 31, 1998 compared to 66% for the second quarter of
fiscal 1998.  International ILT revenues increased $94,000, or 11% compared to
the same quarter in fiscal 1998.  The rapid growth in domestic ILT revenues was
not reflected in international ILT sales, due to delays in deploying the Camp
Wave boot camps in the Company's London centers.

     The Company recognized $1,435,000 in revenues for the Camp Wave boot camps,
$590,000 in revenues for Club Wave sales and $676,000 for corporate Club Wave
sales in the quarter ended October 31, 1998.  Deferred revenue for Camp Wave was
$2,274,000, and for Club Wave and corporate Club Wave was $1,965,000 as of the
end of the quarter.  Total deferred revenue was $5,106,000 as of that date.
This compares to total deferred revenue at April 30, 1998 of $3,947,000, and to
total deferred revenue at July 31, 1998, the end of the first fiscal quarter, of
$4,396,000.  Deferred revenue reflects completed sales by the Company, where the
Company has recognized the cost of selling and order execution, so that Wave
carries limited ongoing operating expenses to fulfill these additional sales and
recognize the related revenue.

     Custom solutions revenues decreased dramatically, by $1,104,000 or 77% from
the same period in fiscal 1998, and represented 3% of total revenues, compared
to 15% in the second quarter of fiscal 1998.  In early summer of 1998, the
Company determined not to continue its participation in the GTE University
program.  While this 


                                      -7-
<PAGE>
 
program made a significant contribution to Wave's custom solutions revenues,
margins from GTE University sales were well below those for the rest of the
Company. Wave determined that the resources to support the GTE program, as well
as certain other custom solutions services, including the TSW program and
WaveSource, could be more effectively deployed in other areas.

     Cost of services, products and development increased $817,000, or 18%, in
the quarter ended October 31, 1998, to $5,256,000, and increased as a percentage
of total revenues to 53% from 47% in the same quarter in fiscal 1998.  The
Company experienced significant increases in material costs, of $408,000, or
59%, including approximately $200,000 for testing-related materials for the Camp
Wave boot camps.  The remaining material cost increase and an increase in
shipping and freight expenses, of $87,000, supported the significant increase in
published product sales (net of the non-recurring IBM license fees in the second
quarter of fiscal 1998).  Outside contractor expenses also increased by $182,000
for outside trainers to meet the demand for the Camp Wave boot camps.  Rent
expense increased $104,000, or 26%, largely for scheduled increases in rents for
the domestic training centers, as well as for larger training space at a few of
the domestic centers.  Wave also incurred $100,000 for outside facilities 
rental, in connection with its arrangement with Caliber Learning Network to use
Caliber's training facilities to deliver instructor-led training programs.  The
Company incurred $94,000 for license amortization expenses related to materials
licensed as part of the QA acquisition, and for materials licensed from an
outside source, rather than being developed internally.  Expenses related to 
NAEC fees and search fees for trainers also increased $48,000.  These increases
were partially offset by a $217,000, or 40%, decrease in expenses related to
delivery of customs solutions services, as a result of the termination of the
GTE University business.  In addition, the Company reported a $67,000 decrease 
in payroll related expenses, and a $38,000 decrease in employee travel expenses.

     Sales and marketing expenses for the quarter ended October 31, 1998,
increased $562,000, or 27%, to $2,676,000, from the same quarter in fiscal 1998,
and increased as a percentage of total revenues, to 27% compared to 23%.  The
increase as a percentage of revenues reflects the fact that a significant
portion of Wave's recent sales are included in deferred revenue. The largest
single variance in sales and marketing expenses was a $243,000, or 52%, increase
in direct mail expenses, for the Company's renewed direct mail program begun
several months earlier.  As part of that program, print and other advertising
expenses also increased $142,000, or 69%, including a $100,000 increased for
international marketing.  Payroll-related expenses increased $75,000, or 6%, and
employee travel-related expenses increased $92,000, or 124%, largely related to
the reorganization of the Company's field sales force.

     General and administrative expenses decreased $40,000, or 3%, to $1,535,000
for the second quarter of fiscal 1998, and decreased as a percentage of total
revenues to 15% from 17% in the same quarter in fiscal 1998.  Increases in
payroll and travel-related expenses of $32,300 and $26,000, respectively, and a
$51,000 increase in consulting fees related to employee search and testing were
offset by a $120,000, or 31%, decrease in depreciation expense, and by decreases
in telephone and miscellaneous expenses.

     Quarterly income before taxes was $416,000, compared to $1,224,000 for the
second quarter of fiscal 1998.  Wave expensed $168,000 for income taxes for the
quarter, compared to $428,000 in the same period in fiscal 1998.  The Company's
net income of $248,000, or $.06 per share, for the second quarter of fiscal
1998, compared to net income of $796,000, or $.20 per share, in the quarter
ended October 31, 1997, and to a net loss of $227,000, or $.05 per share, for
the first quarter of fiscal 1998.

                   Six Months Ended October 31, 1998 Compared
                      To Six Months Ended October 31, 1997

     Total revenues increased $525,000, or 3%, in the six months ended October
31, 1998, to $17,777,000 from $17,252,000 in the same period in fiscal 1998.
Publishing revenues increased $915,000 or 11%, to $9,358,000 from $8,444,000,
and increased as a percentage of total revenues, to 53% from 49% in the first
six months of fiscal 1998.  Instructor-led training revenues increased
$1,160,000, or 19%, to $7,165,000, and increased as a percentage of total
revenues to 40% from 35%.  Custom solutions revenues decreased dramatically, by
$1,550,000, or 55%, to $1,254,000 for the first six months of fiscal 1999, and
decreased as a percentage of total revenues to 7%, compared 


                                      -8-
<PAGE>
 
to 16% in the fiscal 1998 period, as the result of Wave's reallocation of its
custom solutions resources described above.

     International sales increased 33% from the first six months of fiscal 1998,
to $4,726,000, and increased as a percentage of total revenues, to 27% from 20%.
International publishing revenues for the six-month period were $2,996,000, or
32% of total publishing revenues, compared to $1,808,000, or 21%, in the same
period in the prior fiscal year.  International ILT revenues were $1,691,000, or
24%, of total ILT revenues, for the first six months of fiscal 1999, compared to
$1,743,000, or 29%, of total ILT revenues for the same period in the prior year,
as the growth in international ILT revenues did not entirely compensate for the
decrease in the first quarter of fiscal 1999.

     Cost of services, products and development increased $467,000 or 5%, in the
six months ended October 31, 1998, to $9,561,000, and increased slightly as a
percentage of total revenues, to 54% in the current period, compared to 53% in
the fiscal 1998 period.  Domestic cost of services, products and development
increased slightly by $221,000, or 3%.  Wave significantly reduced domestic
expenses in several areas with a focussed effort on cost controls.  The Company
decreased domestic payroll expenses by $494,000 or 15%, decreased employee
travel-related expense by $152,000, and decreased miscellaneous expenses by
$83,000, or 32%.  Depreciation expense decreased $72,000, or 30%, as the Company
leased new computer equipment rather than purchasing the items, and domestic
royalty expenses declined $56,000, to $1,000, as sales of products incorporating
certain licensed materials declined.  Expenses related to provision of custom
solutions services also decreased by $500,000, as the result of the elimination
of certain custom solutions programs.  These cost savings were offset by a
$317,000 increase in costs related to the use of outside contractors to deliver
instructor-led training for courses acquired as part of the QA acquisition, and
a 31%, or $296,000, increase in material costs, related to sales of the Camp
Wave boot camp products. Capitalization of Company-wide current period
development costs decreased $229,000, as a result of the decrease in payroll
costs.  In addition, amortization of previously capitalized development costs
increased $156,000 compared to the same period of the prior year.  Domestic rent
expense increased $167,000, or 24%, as a result of higher lease rates and
expanded domestic classroom space in some domestic training centers.  Wave also
incurred additional outside facilities rental expenses of $100,000 for its
program with Caliber Learning Network.  The Company incurred an additional
$141,000 of license amortization expenses for QA materials and items licensed
from other third parties.  International material costs increased $104,000, or
27%, to support increased published product sales.  International royalty fees
increased $115,000, from $14,000 to $129,000 for increased sales of royalty-
based products. Real estate rental expenses for international properties
increased $52,000, or 98%, for Wave's second London training center.  These
increases were partially offset by a $156,000 decrease in total international
employment-related expenses.

     Sales and marketing expenses for the six months ended October 31, 1998,
increased $898,000, or 21%, to $5,169,000, and increased as a percentage of
total revenues, to 29% from 25%.  Domestic sales and marketing payroll-related
expense increased $330,000, or 19%, and international payroll expense increased
$202,000, or 29%, compared to the first six months of fiscal 1998.  Direct mail
expenses increased $123,000, or 12%, from the fiscal 1998 six-month period, but
remained stable as a percentage of revenues at 6%.  Printing and advertising
costs also increased, by $126,000, or 23%, as the Company continued its
Internet-based and industry publication advertising.  Total international sales
and marketing expenses increased by $369,000, or 37%, while domestic sales and
marketing expenses increased $529,000, or 16%.

     General and administrative expenses decreased $311,000, or 9%, to
$2,991,000 for the first six months of fiscal 1999, and decreased as a
percentage of total revenues to 17% from 19% in the same period in fiscal 1998.
Domestic general and administrative payroll decreased by $126,000, or 16%, and
was partially offset by a $21,000 increase in international payroll expense.
Telephone expenses decreased $50,000, as the result of Company cost controls.  A
$223,000, or 28%, decrease in depreciation expense related to the full
depreciation of computer equipment purchased in prior fiscal years was partially
offset by increases in personnel-related consulting fees of $40,000 and in
investor relations expenses of $47,000.

                                      -9-
<PAGE>
 
     Pre-tax income was $35,000 for the six months ended October 31, 1998,
compared to  $535,000 for the same period in fiscal 1998.  Net income for the
current six-month period was $21,000, compared to net income of $346,000 for the
same period in the previous fiscal year.  Net income per share was $0.01 for the
six months ended October 31, 1998 compared to net income per share of $0.09 for
the same period in fiscal 1998.

                        Liquidity and Capital Resources

     The Company's net cash balance at October 31, 1998, was $831,000, compared
to $1,498,000 at April 30, 1998. Total accounts receivable increased $2,454,000,
or 34% at October 31, 1998. Accounts payable also increased, by $651,000, from
$2,480,000 at April 30, 1998 to $3,131,000 at October 31, 1998, but were
partially offset by a $447,000 decrease in accrued expenses, due to the payment
of accrued income and alternative minimum taxes.

     As Wave continued its renewed direct mail program, prepaid direct mail
increased by $632,000, or 155% at October 31, 1998, compared to April 30, 1998.
The Company anticipates that this will continue to grow over the next quarter as
Wave continues its increased spending in this area.  While prepaid advertising
appears as an asset on the balance sheet, that amount will be expensed over the
following six months.  Similarly, deferred revenue is booked as a liability, but
the $5,106,000 in deferred revenue at October 31, 1998, will be recognized as
revenues over the next twelve months.  This amount represents a $1,159,000
increase in deferred revenue from the 1998 fiscal year end and a $710,000
increase from July 31, 1998, as the result of Wave's intensified direct mail
campaign begun during the last fiscal quarter.

     Wave had drawn $1,500,000 on its line of credit at quarter end, compared to
no balance at the end of fiscal 1998. The Company had overnight borrowing
balances on the line continuously during the second quarter of fiscal 1999,
compared to 15 times during the first quarter in fiscal 1999.

     Wave intends to seek a $1,000,000 increase in its credit line. Although the
Company believes that cash generated from operations, together with existing
cash balances, and its available credit line, should be sufficient to satisfy
the Company's cash requirements for the remainder of the current quarter, the
increased line would provide additional flexibility to finance future revenue
growth.

Year 2000

     The Company is performing an analysis of its systems and continuing to work
with its software vendors to determine the impact of Year 2000 issues on its
operations.  Based upon preliminary discussions with its vendors, management
believes that Year 2000-compliant upgrades are available for all of its programs
at minimal costs, aggregating approximately $160,000 for materials, installation
and testing, including $140,000 of estimated internal labor costs.  Although the
Company's vendors have indicated that Year 2000-compliant upgrades are
available, in the event that such upgrades are not compatible with existing
hardware or software, or are not fully compliant, Wave believes that it can
complete all internal functions manually, including order entry, class
registration and scheduling, accounting and financial reporting.  This would
involve additional employee time and effort, and might delay completion of
certain internal reports, and would be estimated to cost $25,000.  If broad
interruption of telephone, banking, air travel or similar services or utilities
were to occur, however, this would have a material adverse effect on the
Company's operations, as it would interfere with customers' abilities to place
and pay for orders, and the Company's ability to ship publishing materials to
its customers, and to fulfill customers' training requirements.  The most
likely risk for Wave as the result of Year 2000 issues is the potential delay by
companies in sending their technology employees to training programs.  This
could result in a significant decline in revenues for the last calendar quarter
of 1999 and the first calendar quarter of 2000, as information technology
professionals stay "on call" to deal with their employers' potential Year 2000
problems.

                                     -10-
<PAGE>
 
Forward-Looking Statements

     Certain forward-looking statements are included in this Form 10-Q. They use
such words as "may," "will," "expect," "anticipate," "believe," "plan," and
other similar terminology. These statements reflect management's current
expectations and involve a number of risks and uncertainties. Actual results
could differ materially due to changes in the market acceptance of Wave's
integrated program, market delays related to anticipated or new releases of
Windows 2000 (formally called NT5), the continued effectiveness of direct mail
initiatives, global and local business and economic conditions, legislation and
governmental regulations, competition, the Company's ability to effectively
maintain and update its product portfolio, shifts in technology, political or
economic instability in local markets, weather-related issues significantly
affecting attendance at training centers, and currency and exchange rates. In
addition, as Wave has focussed its core business and Camp Wave boot camps on
training for Microsoft's MCSE, the Company's dependence on continued demand for
the MCSE certification has increased significantly.

Item 3. Quantitative and Qualitative Disclosure about Market Risk.

     Not Applicable

                          PART II - OTHER INFORMATION

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

     At the Company's annual meeting of shareholders held on September 9, 1998,
the following matters were voted upon:

          1.  Election of Robert E. Lefton to serve as a director of the Company
          until the annual meeting of shareholders in 2001 and until his
          successor is qualified. The vote was as follows:

          3,235,527 shares in favor
          96,321 shares withheld authority

          2.  The appointment of Deloitte & Touche, L.L.P. as independent 
          auditors for the Company for the fiscal year ending April 30, 1999 was
          approved by the following vote:

          3,247,998 shares in favor
          81,200 shares against
          2,650 shares abstained or broker non-votes.

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

(a)       Exhibits:

27        Financial Data Schedule

(b) Reports on Form 8-K - The registrant did not file any reports on Form 8-K
    during the fiscal quarter ended October 31, 1998.

                                   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.

                              Wave Technologies International, Inc.



Dated: December 10, 1998
                            By:   /s/ J. Michael Bowles
                                ------------------------------------------------
                                J. Michael Bowles, Chief Financial Officer
                                (Principal Accounting and Financial Officer and
                                Duly Authorized Officer)

                                     -11-