================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  -------------
                                   FORM 10-QSB
                                  -------------
(Mark One)

(X)      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 1998

( )      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   0-22341
                         -------

                              AUGMENT SYSTEMS, INC.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


           DELAWARE                                     04-3089539
--------------------------------                    -------------------
(State or other jurisdiction of                      (I.R.S. Employer
 incorporation or organization)                     Identification No.)

 790 Turnpike Street North Andover, MA                           01845
----------------------------------------                      ----------
(Address of principal executive offices)                      (Zip Code)

                                  978-725-8156
              -----------------------------------------------------
              (Registrant's telephone number, including area code)

Transitional Small Business Disclosure Format:
         Yes                 No  X
             ---                ---
         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 requirement for the past 90 days. YES  X   NO
                                             ---     ---

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
Stock, as of the latest practicable date: As of May 11, 1998,


                  Class                              Outstanding at May 15, 1999
--------------------------------------               ---------------------------
Common Stock, $.01 par value per share                        11,898,952


================================================================================

<PAGE>



                              AUGMENT SYSTEMS, INC.

                                      INDEX


                                                                           PAGES
                                                                           -----
PART I            FINANCIAL INFORMATION

         Item 1          Financial Statements

                         Balance Sheets as of December 31, 1998
                                   and March 31, 1999                          3

                         Results of Operations for the three months
                           ended March 31, 1999 and 1998                       4

                         Statements of Cash Flows for the three months
                           ended March 31, 1999 and 1998                       5

                         Notes to Financial Statements                       6-7

         Item 2          Management's Discussion and Analysis of
                           Financial Condition and Results of Operations    8-10

PART II           OTHER INFORMATION

         Item 1          Legal Proceedings                                    11
         Item 2          Changes in Securities                                11
         Item 3          Defaults Upon Senior Securities                      11
         Item 4          Submission of Matters to a Vote of Security-Holders  11
         Item 5          Other Information                                    11
         Item 6          Exhibits and Reports on Form 8-K                     11

         Signatures                                                           12






<PAGE>



                              AUGMENT SYSTEMS, INC.
                                 Balance Sheets

<TABLE>
<CAPTION>
                                                                                  March 31,             December 31,
                                                                                ------------------------------------
                                                                                    1999                    1998
                                                                                 (unaudited)             (audited)
                                                                                --------------       ---------------
<S>                                                                            <C>                 <C>
                                     ASSETS

Current Assets:
         Cash                                                                   $       24,709       $       187,815
         Accounts receivable, net of allowance
         for doubtful accounts of  $331,628                                                  -
         Inventory, net of allowance of $326,455                                             -
         Prepaid expenses                                                                1,500                27,936
         Assets held for sale                                                           10,000                75,000
                                                                                   -----------              --------

                  Total assets                                                  $       36,209        $      290,751
                                                                                ==============        ==============

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
         Accounts payable                                                       $      222,125         $     377,935
         Accrued expenses                                                              105,655               182,012
         Bridge financing                                                            1,395,701             1,395,701
         Convertible promissory notes                                                    5,339                20,743
         Current portion of capital lease obligations                                  123,301               123,301
                                                                                --------------          ------------

                  Total liabilities                                                  1,852,121             2,099,692

Commitments
Stockholders' Equity (deficit):
         Common stock, $.01 par value; 30,000,000 shares authorized; 11,898,951
         shares issued and outstanding at March 31, 1999, and December 31, 1998,
         respectively                                                                  118,989               118,989
         Additional paid-in capital                                                 21,750,867            21,750,867
         Accumulated deficit                                                       (23,685,768)          (23,678,797)
                                                                                   ----------------------------------
                  Total stockholders' equity (deficit)                              (1,815,912)           (1,808,941)
                                                                                   -------------         ------------
Total liabilities and stockholders' equity                                         $     36,209         $    290,751
                                                                                   =============         ============
</TABLE>



    The accompanying notes are an integral part of the financial statements.


                                       3

<PAGE>



                              AUGMENT SYSTEMS, INC.
                            Statements of Operations

<TABLE>
<CAPTION>
                                                               Three Months Ended
                                                        March 31,                 March 31,
                                                          1999                      1998
                                                       -----------               -----------
                                                       (unaudited)               (unaudited)
<S>                                               <C>                     <C>

NET SALES                                          $        -              $        475,514
COST OF SALES                                               -                        229,399
                                                       -------------             -----------
GROSS MARGIN                                                -                        246,115
OPERATING EXPENSES:
Research and development                                    -                        701,713
         General and administrative                       199,469                    228,933
         Sales and marketing                                -                        723,679
                                                      ------------               ------------
                  Total operating expenses                199,469                  1,654,325
                                                      ------------               ------------
LOSS FROM OPERATIONS                                     (199,469)                (1,408,210)
                                                      ------------               ------------

OTHER INCOME (expense):
         Net income (expense)                             192,498                    (23,943)
                                                       ----------                ------------
                  Total other expense, net                192,498                    (23,943)
                                                       ----------                ------------
NET INCOME (loss)                                   $     (6,971)                $(1,432,153)
                                                    =============                ============

NET LOSS PER COMMON SHARE:
         Basic                                      $      0.0006               $      (0.65)
                                                    =============               =============
         Diluted                                    $      0.0006               $      (0.65)
                                                    =============               =============

</TABLE>



    The accompanying notes are an integral part of the financial statements.


                                       4



<PAGE>



                              AUGMENT SYSTEMS, INC.
                            Statements of Cash Flows

<TABLE>
<CAPTION>

                                                                           Three Months Ended
                                                                    March 31,                 March 31,
                                                                      1999                       1998
                                                                  ------------              ------------
<S>                                                               <C>                       <C>
Cash flows from operating activities:
         Net loss                                                 $  (6,971)                 $(1,432,153)
         Adjustments to reconcile net loss to net cash
             used in operating activities:
                  Loss on disposal of fixed assets                     -                           -
                  Depreciation and amortization                        -                          65,740
         Changes in operating assets and liabilities:
                  Accounts receivable                                  -                        (280,279)
                  Inventories                                          -                         199,075
                  Prepaid expenses                                   91,436                        1,206
                  Accounts payable                                 (155,810)                  (1,054,312)
                  Accrued expenses                                  (91,761)                    (309,495)
                                                                   ---------                    ---------
                       Net cash used for operating activities      (163,106)                  (2,810,218)

Cash flows from investing activities:
         Capital expenditures                                          -                         (14,633)
                                                                   -----------               ------------
                      Net cash provided by  (used for)
                                   investing activities                -                         (14,633)

Cash flows from financing activities:
         Proceeds from issuance of common stock                        -                       4,951,181
         Proceeds from bridge financing                                -                         500,000
         Repayment on bridge financing                                 -                        (200,000)
                                                                   -----------                -----------
                           Net cash provided by financing activities   -                       5,251,181
                                                                   -----------                ----------
                           Net increase (decrease) in cash           (163,106)                 2,426,330
                                                                   -----------                ----------
                           Cash at beginning of period                187,815                     47,224
                                                                   -----------                ----------
                           Cash at end of period                   $   24,709                 $2,473,554
                                                                   -----------                ----------

</TABLE>


    The accompanying notes are an integral part of the financial statements.


                                       5


<PAGE>



                              AUGMENT SYSTEMS, INC.

                           NOTES TO FINANCIAL STATEMENTS

                                 March 31, 1999

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

         Prior to January 15,  1999,  Augment  Systems,  Inc.,  (the  "Company")
designed,  developed and sold fibre  channel  based network file server  systems
designed to increase  data  transfer and file storage on computer  networks.  In
September 1998, the Company  obtained  $1,500,000 in bridge financing of secured
convertible promissory notes and common stock purchase warrants, in anticipation
of private  placement of the Company's  Common Stock. The Company used a portion
of the proceeds of the bridge  financing to repay in full its  indebtedness to a
major lending  institution.  In November  1998,  the Company was informed by the
investment bank that provided the bridge financing, that they would be unable to
secure the additional  funding required to repay the outstanding bridge loan and
provide the Company with the necessary working capital to support implementation
of its  business  plan  and  ongoing  operations.  The  Company  began  to  seek
alternative  financing,  but, was unable to secure the funds or a commitment for
the additional  funding necessary to maintain ongoing  operations and transition
its products  from a  proprietary  platform to standard  hardware and  software.
While the Company  experienced  initial  success  with the  introduction  of its
products to customers,  long-term  viability was dependent in part, on migrating
its technology to standard hardware and software.  However,  without  additional
capital, the Company was unable to complete research and development, maintain a
sales force and requisite administrative support.

         On January 15, 1999, the Board of Directors  elected to discontinue all
ongoing  operations,  layoff all but one of its  employees,  seek buyers for its
technology and inventory and look for a merger  partner.  The Company has ceased
sales, marketing and distribution of its products. On March 31, 1999, two of the
remaining  three  members of the Board of  Directors  resigned  to pursue  other
interests.  As of May 15, 1999, the Company's Chief Financial Officer,  and only
active board member,  was engaged in the  disposition  of assets,  settlement of
outstanding  debts,  sale  of  the  Company's  technology,  and  exploration  of
potential mergers. There are substantial risks that the Company will not be able
to settle its debts or find a suitable  merger  transaction.  The Company may be
compelled to voluntarily  file for bankruptcy or be forced by its creditors into
an involuntarily bankruptcy.

         The  accompanying  unaudited  financial  statements  are  presented  in
accordance  with the  requirements  for Form  10-QSB and do not  include all the
disclosures  required by generally accepted  accounting  principles for complete
financial statements.  Reference should be made to the Company's Form 10-KSB for
the fiscal year ended December 31, 1998 for additional  disclosures  including a
summary of the Company's accounting policies.

         In the opinion of management of the Company,  the financial  statements
include all adjustments, consisting of only normal recurring accruals, necessary
for a fair presentation of the financial  position of Augment Systems,  Inc. The
results of  operations  for the  three-month  period ended March 31, 1999 or any
other  interim  period,  are not  necessarily  indicative  of the  results to be
expected for the full year.


2.   NET LOSS PER SHARE OF COMMON STOCK

         The  Company  follows  Statement  of  Financial   Accounting  Standards
("SFAS")  No.  128,  Earnings  per  Share,  issued by the  Financial  Accounting
Standards Board.



                                       6

<PAGE>

                              AUGMENT SYSTEMS, INC.

                           NOTES TO FINANCIAL STATEMENTS

                                 March 31, 1999



3.       STOCKHOLDERS' EQUITY

         In December 1998, the Board of Directors  authorized the issuance of an
additional  3,592,816  shares of Common  Stock to 66  accredited  investors  who
participated in private  placements of the Company's Common Stock during January
and May 1998.  The issuance of the shares was pursuant to specific  terms of the
private placement relating to missing certain revenue milestones.  As of May 15,
1999, the Company had not issued those shares.

         In December  1998,  the Board of Directors  authorized  the issuance of
warrants to purchase 359,282 shares of Common Stock to the underwriter  involved
in private  placements of the Company's Common Stock during January 1998 and May
1998. The issuance of the warrants was pursuant to specific terms of the private
placement  relating to missing certain revenue  milestones.  As of May 15, 1999,
the Company had not issued those warrants.





                                       7


<PAGE>
                              AUGMENT SYSTEMS, INC.

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

         THREE  MONTHS  ENDED MARCH 31, 1999  COMPARED TO THE THREE MONTHS ENDED
MARCH 30, 1998

INTRODUCTION

         Prior to January 15,  1999,  Augment  Systems,  Inc.,  (the  "Company")
designed,  developed and sold fibre  channel  based network file server  systems
designed to increase  data  transfer and file storage on computer  networks.  In
September 1998, the Company  obtained  $1,500,000 in bridge financing of secured
convertible promissory notes and common stock purchase warrants, in anticipation
of a private placement of the Company's Common Stock. The Company used a portion
of the proceeds of the bridge  financing to repay in full its  indebtedness to a
major lending  institution.  In November  1998,  the Company was informed by the
investment bank that provided the bridge financing, that they would be unable to
secure the additional  funding required to repay the outstanding bridge loan and
provide the Company with the necessary working capital to support implementation
of its  business  plan  and  ongoing  operations.  The  Company  began  to  seek
alternative  financing,  but, was unable to secure the funds or a commitment for
the additional  funding necessary to maintain ongoing  operations and transition
its products  from a  proprietary  platform to standard  hardware and  software.
While the Company  experienced  initial  success  with the  introduction  of its
products to customers,  long-term  viability was dependent in part, on migrating
its technology to standard hardware and software.  However,  without  additional
capital, the Company was unable to complete research and development, maintain a
sales force and requisite administrative support.

         On January 15, 1999, the Board of Directors  elected to discontinue all
ongoing  operations,  layoff all but one of its  employees,  seek buyers for its
technology and inventory and look for a merger  partner.  The Company has ceased
sales, marketing and distribution of its products. On March 31, 1999, two of the
remaining  three  members of the Board of  Directors  resigned  to pursue  other
interests. As of April 15, 1999, the Company's Chief Financial Officer, and only
active board member,  was engaged in the  disposition  of assets,  settlement of
outstanding  debts,  sale  of  the  Company's  technology,  and  exploration  of
potential mergers. There are substantial risks that the Company will not be able
to settle its debts or find a suitable  merger  transaction.  The Company may be
compelled to voluntarily  file for bankruptcy or be forced by its creditors into
an involuntarily bankruptcy.

         Prior to January 15, 1999, Augment Systems,  Inc.  designed,  developed
and sold fibre  channel-based  network file server systems  designed to increase
data  transfer and file storage on computer  networks.  The  Company's  products
addressed the increasing  demand for the rapid transfer and efficient storage of
very large image and text files within computer networks.  The Company's initial
target  market was the  electronic  printing and  publishing  industry  which is
rapidly  converting to digital  technology,  but suffered from critical workflow
bottlenecks  due to the very large file sizes of color  images  which  cannot be
efficiently  transported  over  conventional  networks.  The Company  sold fibre
channel-based  network  file  server  systems  which  included  (i)  one or more
end-to-end high speed fibre channel arbitrated loop ("FC-AL") interfaces; (ii) a
file server, the AFX 410, that performs a central file management function, high
speed  large  capacity  storage,  and  high  speed  interconnects  to the  FC-AL
interfaces;  and (iii) PCI cards and software for each client  workstation to be
connected to the file server.

RESULTS OF OPERATIONS

During the three month  period  ended March 31, 1999 the Company  recognized  no
revenues as compared to $475,514  revenues  recognized  during the three  months
ended March 31, 1998. The Company does not  anticipate  shipping any product for
the foreseeable  future and is  concentrating  its efforts on the disposition of
assets,  settlement of outstanding debts, sale of the Company's technology,  and
exploration of potential mergers.

                                       8
<PAGE>


The Company  recognized a net loss of  approximately  $7,000 for the three-month
period  ending  March  31,  1999 as  compared  to a loss of  $1,432,153  for the
three-month  period ended March 31, 1998.  The  recognition of net income is the
result of settling debts with creditors below the amount  recognized at the time
of indebtedness.

Research and development  costs for the three-month  period ended March 31, 1999
were $0 as compared to the three-month  period ended March 31, 1998 of $701,713.
The Company is currently not conducting any research and development  activities
and does not anticipate any such efforts in the foreseeable future.

General and administrative costs for the three-month period ended March 31, 1999
were $164,469 as compared to $228,933 for the three-month period ended March 31,
1998.  The  decrease is a result of a reduction  of  headcount  during the first
quarter of 1999.  The Company  currently  has one employee  and expects  further
reductions in spending, as the first quarter results include severance pay.

Selling and marketing costs for the three-month period ended March 31, 1999 were
$0 as compared to $723,679 for the three-month  period ended March 31, 1998. The
Company is currently not conducting any sales and marketing  activities and does
not anticipate any such efforts in the foreseeable future.

The Company  currently has 1 full-time  employee  engaged in the  disposition of
assets,  settlement of outstanding debts, sale of the Company's technology,  and
exploration of potential mergers.

YEAR 2000

         Certain  computer  programs and  microprocessors  use two digits rather
than  four to  define  the  applicable  year.  Any  computer  program  that  has
date-sensitive  software and  microprocessors may recognize a date using "00" as
the year 1900 rather than 2000. This phenomenon  could cause a disruption of the
Company's  operations,  including,  among other things, a temporary inability to
send  invoices,  or engage in similar  normal  business  activities.  Management
believes the Company is  substantially  year 2000  compliant with respect to its
administration, and general operations. Prior to purchasing any new equipment or
software,  it is Company policy to ensure that the  specifications  include year
2000  compliance.  However,  there can be no guarantee that the systems of other
companies on which the Company's  system will rely will be converted on a timely
basis or that a failure to convert by another  company,  or a conversion that is
incompatible with the Company's systems, would not have a material impact on the
Company.  Based on its current  assessment,  management  believes that year 2000
compliance will not have a material  adverse impact on the future  operations of
the Company.  In addition,  the Company believes that its products are year 2000
compliant and does not anticipate any claims relating thereto.

LIQUIDITY AND CAPITAL RESOURCES

         The Company has funded its  operations  since October 1995  principally
from  a  combination  of  debt  and  equity  financings  totaling  approximately
$22,975,000.  Prior to May 1997, the Company issued convertible promissory notes
in the  aggregate  principal  amount of  approximately  $864,000.  Approximately
$802,000 of the  principal  balance of these  notes plus  accrued  interest  was
converted into shares of Common Stock in November 1996 at a conversion  price of
$4.00 per share.  In December 1996 and February  1997,  the Company raised gross
proceeds of  $3,585,000 in a private  placement of  promissory  notes and common
stock purchase  warrants.  The  promissory  notes,  bearing  interest at 12% per
annum,  were  repaid  from the  proceeds  of its  initial  public  offering.  In
addition,  from September 1995 through August 1996, the Company issued 1,653,623
shares of its Common Stock for approximately $3,372,000 in gross proceeds.

         On May 16, 1997, the Company  completed its initial public  offering of
1,800,000 shares of its Common Stock at a price of $5.50 per share and 2,070,000
Redeemable Common Stock Purchase  Warrants at $.15 per warrant.  Each Redeemable
Common  Stock  Purchase  Warrant  entitles  the holder to purchase  one share of
Common Stock for $6.60 during the four-year period  commencing May 12, 1998. The
net  proceeds  from the  Company's  initial  public  offering,  after  deducting
underwriting  discounts and  commissions and estimated  expenses  payable by the
Company, were approximately $8,220,000.

         In October  1997,  the  Company  obtained  a  $750,000  loan from Fleet
National  Bank.  The loan  was  secured  by all of the  Company's  assets,  bore
interest at Fleet National Bank's prime rate plus 2% and was originally  payable
by December 31, 1997 or upon completion of a financing resulting in net proceeds
to the Company of at least  $5,000,000.  Pursuant to the terms of the loan,  the
Company issued detachable warrants to purchase 100,000 shares of Common Stock at
an exercise price of $1.00 per share  exercisable over five years. This loan was
extended  through and until July 31, 1998. On July 31, 1998,  the Company made a
payment in the amount of $300,000 to Fleet  National Bank and the final $450,000
balance was retired on August 31, 1998.


                                       9

<PAGE>

         During December 1997 and January 1998, the Company  secured  $1,000,000
in bridge financing from  institutional and private investors in anticipation of
the private  placement  of the  Company's  Common  Stock.  The bridge  financing
promissory  notes  accrued  interest at 8% per annum with interest and principal
payable  at  maturity  on the  initial  closing  of the  private  placement.  In
addition,  the Company issued to bridge investors five year warrants to purchase
up to 750,000 shares in the aggregate of the Company's Common Stock at $1.00 per
share. In February 1998, the Company repaid $200,000 of these  promissory  notes
plus interest and the holders of $800,000 of these  promissory  notes  converted
their notes into shares of the  Company's  Common  Stock at $1.00 per share.  In
January 1998, the Company closed on an initial amount of $6,180,000 of a private
placement  initiated in December  1997. In early May 1998, the Company closed on
an additional $575,000 and terminated the offering started in December 1997. The
aforementioned  funds  were used to repay  outstanding  accounts  payable  debts
incurred  during 1997 of  approximately  $1.400,000,  repay bridge  financing of
approximately $200,000 and bank debt of approximately $300,000, support research
and  development  expenses  of  approximately  $2,000,000,  sales and  marketing
expenses of approximately  $1,700,000,  and $675,000 in administrative and other
expenses.


         In September 1998, the Company obtained  $1,500,000 in bridge financing
of secured convertible  promissory notes and common stock purchase warrants. The
Company used a portion of the proceeds of the bridge  financing to repay in full
its  indebtedness to Fleet National Bank. The convertible  promissory notes were
due and payable  upon the earlier of the closing of a financing  of a minimum of
$4,000,000 or in September  1999. In November  1998, the Company was informed by
the  investment  bank,  that provided the bridge  financing,  that they would be
unable to secure the additional funding required to repay the outstanding bridge
loan and provide the Company with the necessary  working  capital to support its
business  plan and ongoing  operations.  The Company  began to seek  alternative
financing,  but , was unable to secure the funds necessary. On January 15, 1999,
the Board of Directors  decided to shut down operations,  lay-off all but one of
its employees,  liquidate assets,  seek buyers for the Company's  technology and
look for merger partners.

         In  addition,  the  Company may also need to raise  capital  from other
financings.  There can be no assurances  that the Company will be able to obtain
such additional  financings on terms acceptable to the Company or in a timeframe
required by the Company,  if at all. In such event,  the Company may be required
to  materially  alter its plans.  Any such  additional  financing  may result in
significant dilution to existing stockholders or the issuance of securities with
rights  superior to those of the  existing  shareholders.  In the event that the
Company is unable to raise or borrow additional funds, the Company may be forced
into bankruptcy.

         In  addition,  the Company is seeking to be acquired by another  entity
with growth potential. If any such entity is located, there can be no assurances
that the Company will be able to obtain such a merger on terms acceptable to the
Company and within an acceptable  timeframe required by the Company,  if at all.
Any such transaction may result in significant dilution to existing stockholders
or the  issuance of  securities  with rights  superior to those of the  existing
stockholders.  In the event  that the  Company  is unable to  consummate  such a
transaction, the Company may be forced to file for bankruptcy.

         These factors raise  substantial  doubt about the Company's  ability to
continue as a going  concern.  The Company is dependent on its ability to settle
all debts with  creditors,  attract  purchasers of the Company's  technology and
attract potential merger partners,  which will undoubtedly result in substantial
dilution to existing  shareholders.  Although the Company has effectively ceased
operations,  there  are  numerous  secured  and  unsecured  creditors  who could
commence litigation against the Company.

         The  Company  is  authorized  to issue up to  50,000,000  shares of its
Common Stock and up to  2,000,000  shares of  Preferred  Stock.  As of April 15,
1999,  there were  11,898,952  shares of the  Company's  Common Stock issued and
outstanding  and no  Preferred  Stock  issued and  outstanding.  The  Company is
obligated  to issue  additional  3,592,816  shares  of Common  Stock to  certain
investors who  participated in private  placements of the Company's Common Stock
during January 1998 and May 1998. The shares had been authorized for issuance by
the Board of Directors during 1998.

The Company does not have any material  commitments for capital  expenditures at
this time.

FORWARD LOOKING STATEMENTS

This report  contains  forward-looking  statements  that  describe the Company's
business prospects.  These statements involve risks and uncertainties including,
but not limited to, rapid technology changes,  regulatory uncertainty,  level of
demand for the Company's  products and services,  product  acceptance,  industry
wide competitive  factors,  timing of completion of major equipment projects and
political, economic or other conditions.  Furthermore, market trends are subject
to changes that could adversely affect future results.

                                       10
<PAGE>


                           PART II. OTHER INFORMATION



Item 1.           Legal Proceedings
                  -----------------
                  None

Item 2.           Changes in Securities
                  ---------------------
                  None

Item 3.           Defaults Upon Senior Securities
                  -------------------------------
                  None

Item 4.           Submission of Matters to a Vote of Security Holders
                  ---------------------------------------------------
                  None

Item 5.           Other Information
                  -----------------
                  None

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


                  (a) There were no Form 8-Ks filed  during  the  quarter  ended
March 31, 1999.




                                       11

<PAGE>


                                   SIGNATURES

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


                              AUGMENT SYSTEMS, INC.



Date: May 15, 1999             By: /s/      Duane A. Mayo
                                 -----------------------------------------------
                                 Duane A. Mayo
                                 Chief Financial Officer, Treasurer and Director
                                 (Principal Financial & Accounting Officer)






                                       12