<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549



                                    FORM 10-Q



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



For the quarter ended March 31, 1999               Commission File No.   0-19944
------------------------------------               -----------------------------



                                  M-WAVE, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)



           DELAWARE                                            36-3809819
--------------------------------------------------------------------------------
(State or other jurisdiction of                             (I.R.S.  Employer
incorporation or organization)                              identification No.)


216 Evergreen Street, Bensenville, Illinois                        60106 
--------------------------------------------------------------------------------
(Address of principal executive offices)                         (Zip Code)



Registrant's telephone number including area code:              (630) 860-9542
                                                                --------------



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 and 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      
    -----      -----


The registrant has 2,267,842 shares of common stock outstanding at May 4, 1999.


                                       1

<PAGE>   2
                         PART I - FINANCIAL INFORMATION
                          ITEM 1: FINANCIAL STATEMENTS
                                        
                                 M-WAVE, INC.
                                        
                          CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                                    (UNAUDITED)
                                                                                  DECEMBER 31,       MARCH 31,  
                                                                                      1998             1999 
                                                                                  -----------       -----------      
<S>                                                                               <C>               <C> 
                                             ASSETS                                                        
CURRENT ASSETS:
    Cash and cash equivalents...............................................      $ 3,712,537       $ 4,915,729      
    Accounts receivable, net of allowance for doubtful accounts,
     1998- $10,000: 1999 $10,000............................................        1,772,637         1,367,312      
    Inventories.............................................................        1,583,421           513,851      
    Refundable income taxes.................................................                0            73,962      
    Deferred income taxes...................................................          395,987           308,819      
    Prepaid expenses and other..............................................           99,656           133,734      
                                                                                  -----------       -----------      
        Total current assets................................................        7,564,238         7,313,407      
PROPERTY, PLANT AND EQUIPMENT:                                                                                       
    Land, buildings and improvements........................................        2,360,152         4,987,979      
    Machinery and equipment.................................................        7,355,774         7,500,202      
                                                                                  -----------       -----------      
        Total property, plant and equipment.................................        9,715,926        12,488,181      
    Less accumulated depreciation...........................................       (4,750,872)       (5,096,929)   
                                                                                  -----------       -----------        
        Property, plant and equipment-net...................................        4,965,054         7,391,252      
NOTE RECEIVABLE.............................................................                0         1,066,504      
ASSETS TO BE DISPOSED OF, NET...............................................        3,233,405                 0      
OTHER ASSETS................................................................            5,677               655
                                                                                  -----------       -----------      
TOTAL.......................................................................      $15,768,374       $15,771,818      
                                                                                  ===========       ===========
                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
    Accounts payable........................................................      $ 1,306,348       $ 1,472,894      
    Accrued expenses........................................................          607,628           535,718      
    Current portion of long-term debt.......................................          307,605           307,605      
                                                                                  -----------       -----------      
        Total current liabilities...........................................        2,221,581         2,316,217      
                                                                                                                     
DEFERRED INCOME TAXES.......................................................          388,808           388,808      
LONG-TERM DEBT..............................................................        1,990,337         1,889,405      
STOCKHOLDERS' EQUITY:                                                                                                
    Preferred stock, $.01 par value; authorized, 1,000,000
      shares; no shares issued..............................................                0                 0      
    Common stock, $.01 par value; authorized, 10,000,000 shares                                                      
      3,069,806 shares issued and 2,267,842 shares outstanding                                                       
      at December 31, 1998, 3,069,806 shares issued and 2,267,842
      shares outstanding at March 31, 1999..................................           30,698            30,698      
    Additional paid-in capital..............................................        8,348,832         8,348,832      
    Retained earnings ......................................................        4,464,226         4,473,966      
    Treasury stock:  801,964 shares, at cost................................       (1,676,108)       (1,676,108)     
                                                                                  -----------       -----------      
        Total stockholders' equity .........................................       11,167,648        11,177,388      
                                                                                  -----------       -----------      
TOTAL.......................................................................      $15,768,374       $15,771,818      
                                                                                  ===========       ===========
</TABLE>

                See notes to consolidated financial statements.

                                       2
<PAGE>   3
                                  M~WAVE, Inc.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                                     Three months ended March 31,
                                                                     ----------------------------
                                                                        1998              1999
                                                                     ----------        ----------
<S>                                                                  <C>               <C>
Net sales.........................................................   $2,716,093        $3,682,818
Cost of goods sold................................................    2,389,494         2,906,236
                                                                     ----------        ----------
  Gross profit....................................................      326,599           776,582

Operating expenses:
  General and administrative......................................      425,539           437,159
  Selling and marketing...........................................      160,655           175,284
                                                                     ----------        ----------
    Total operating expenses......................................      586,194           612,443
                                                                     ----------        ----------
  Operating income (loss).........................................     (259,595)          164,139

Other income (expense):
  Interest income.................................................       41,565            32,280
  Interest expense................................................      (57,441)          (46,391)
  Rental income...................................................            0             8,000
  Loss on disposal of assets......................................      (21,400)         (135,084)
                                                                     ----------        ----------
    Total other income (expense)                                        (37,276)         (141,195)
                                                                     ----------        ----------
    Income (loss)  before income  taxes...........................     (296,871)           22,944

Provision (credit) for income taxes...............................     (121,806)           13,204
                                                                     ----------        ----------
Net income (loss).................................................    ($175,065)           $9,740
                                                                     ==========        ==========
Net income (loss) per share basic and diluted                            ($0.06)            $0.00

Weighted average shares                                               3,049,806         2,267,842
</TABLE>


                See notes to consolidated financial statements.


                                       3
<PAGE>   4
                                  M~WAVE, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)



<TABLE>
<CAPTION>
                                                                              Three months ended March 31,
                                                                                1998               1999
                                                                             ----------          ----------
<S>                                                                          <C>                 <C>
OPERATING ACTIVITIES:
  Net income (loss)........................................................   ($175,065)         $    9,740
  Adjustments to reconcile net loss to net cash flows
    from operating activities:
      Loss on disposal of property, plant and equipment....................  $   21,400          $  135,084
      Depreciation and amortization........................................  $  243,425          $  249,460
      Deferred income taxes................................................     $96,139          $   87,168
    Changes in assets and liabilities:
      Accounts receivable-trade............................................  $  115,423           ($209,705)
      Inventories..........................................................   ($329,861)         $  296,091
      Income taxes.........................................................   ($217,946)           ($73,962)
      Prepaid expenses and other assets....................................    ($51,419)           ($47,623)
      Accounts payable.....................................................  $  194,685          $  155,349
      Accrued expenses.....................................................   ($455,293)           ($31,495)
                                                                             ----------          ----------
         Net cash flows from operating activities..........................   ($558,512)         $  570,107
                                                                             ----------          ----------
INVESTING ACTIVITIES:
  Purchase of property, plant and equipment................................    ($65,544)          ($163,921)
  Proceeds from sale of property, plant and equipment......................  $  115,000          $    4,619
  Proceeds from sale of PC Dynamics property, plant and equipment .........  $        0          $  581,965
  Proceeds from sale of PC Dynamics net working capital and other .........  $        0          $  311,354
                                                                             ----------          ----------
         Net cash flows from investing activities..........................  $   49,456          $  734,017

FINANCING ACTIVITIES:
  Payments on long term debt...............................................    ($75,827)          ($100,932)
                                                                             ----------          ----------
         Net cash flows from financing activities..........................    ($75,827)          ($100,932)
                                                                             ----------          ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.......................   ($584,883)         $1,203,192

CASH AND CASH EQUIVALENTS - Beginning of period............................  $3,534,315          $3,712,537
                                                                             ----------          ----------
CASH AND CASH EQUIVALENTS - End of period..................................  $2,949,432          $4,915,729
                                                                             ==========          ==========
Supplemental Disclosures of Cash Flow Information:

    Cash paid during the period for interest...............................  $   57,441          $   46,391
</TABLE>



                See notes to consolidated financial statements.
<PAGE>   5

                                    M-WAVE, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)

         1.       BASIS OF PRESENTATION

                  The accompanying unaudited consolidated financial statements
             have been prepared in accordance with generally accepted accounting
             principles for interim financial information and with the
             instructions to Form 10-Q. Accordingly, they do not include all of
             the information and footnotes required by generally accepted
             accounting principles for complete financial statements. In the
             opinion of management, all adjustments necessary for a fair
             presentation have been included. For further information, refer to
             the consolidated financial statements contained in the Annual
             Report on Form 10-K for the year ended December 31, 1998 filed
             March 30, 1999.

         2.       BUSINESS

                  M-Wave, through its wholly-owned subsidiaries, Poly Circuits
             Inc. and PC Dynamics Corporation (collectively, the "Company"),
             manufactures printed circuit boards using Teflon-based laminates to
             customers' specifications. In addition, the Company produces
             customer specified bonded assemblies consisting of a printed
             circuit board bonded in some manner to a metal carrier or pallet.
             One bonding technique used by the Company is Flexlink(TM), a
             patented process granted to the Company in 1993. The Company
             developed an enhanced version of Flexlink(TM) in 1996.

                  On March 25, 1999, PC Dynamics Corporation, sold substantially
             all of its machinery and equipment, inventory and accounts
             receivable and assigned all of its outstanding contracts and orders
             to Performance Interconnect Corporation, a Texas Corporation.(PIC)
             The purchase price paid by PIC consisted of:

                  (i)     $893,319 in cash;

                  (ii)    a promissory note in the principal amount of
                          $773,479, which is payable in nine (9) equal
                          monthly installments commencing on July 1, 1999;
                          and  

                  (iii)   a promissory note in the principal amount of
                          $293,025, which is payable in monthly
                          installments of $50,000 commencing on May 1, 1999
                          until paid.

                  PC Dynamics and PIC also entered into a royalty agreement
             which provides for PIC to pay PC Dynamics a royalty equal to 8.5%
             of the net invoice value of certain microwave frequency components
             and circuit boards sold by PIC for eighteen months following the
             closing. PIC shall not be required to pay PC Dynamics in excess of
             $500,000 in aggregate royalty payments.


                                       5

<PAGE>   6


                  In  addition,  PC Dynamics has leased its facility in Texas to
             PIC for $17,000 per month for three years. PIC has the right under
             the lease to purchase the facility from PC Dynamics for $2,000,000
             at anytime during the term of the lease. If PIC exercises its right
             to purchase the facility, the remaining balance due on the royalty
             agreement is payable in monthly installments of $25,000 until a
             minimum of $500,000 is paid.

         3. INVENTORIES

                  Substantially all the Company's inventories consist of work in
             process.

         4. DEBT

                  The Company has a mortgage loan of $2,197,010 for the facility
             at PC Dynamics Corporation in Frisco, Texas. Interest on this
             mortgage loan is at 1/2 % over prime rate. The loan is payable in
             monthly installments of principal and interest and is due in
             October 2001.

                  The Company has a $2,000,000 line of credit available based on
             80% of eligible accounts receivable to fund the working capital
             needs of the Company. Interest is at the prime rate (7.75% at March
             31, 1999) plus 1/2%. The agreement expires May 31, 1999 and is
             renewable annually at the mutual consent of the Company and the
             lender. No balance was outstanding under the line at March 31,
             1999.

         5. LITIGATION

                  The Company is a party to various actions and proceedings
             related to its normal business operations. The Company believes
             that the outcome of these proceedings will not have a material
             adverse effect on the financial position or results of operations
             of the Company.




                                       6

<PAGE>   7


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

         RESULTS FOR THE QUARTER ENDED MARCH 31, 1999 COMPARED TO THE QUARTER 
         ENDED MARCH 31, 1998

         NET SALES

                  Net sales were $3,683,000 for the first quarter ended March
         31, 1999 a increase of $967,000 or 36% above the first quarter of 1998.
         The increase was a result of a final shipment of a matured product line
         of $1,300,000 to Motorola. Net sales of all other products sold to
         Motorola decreased by $154,000. Net sales to Rockwell decreased by
         $56,000. Net sales to Spectrian decreased by $430,000. Spectrian
         reduced their requirements in the first quarter of 1999. Net sales to
         Lucent increased by $62,000. Net sales in general were reduced due to
         low customer requirements.

                  The Company's three largest customers accounted for 55% of the
         Company's net sales for the first quarter ended March 31, 1999 compared
         to 54% in the first quarter of 1998.

         GROSS PROFIT AND COST OF GOODS SOLD

                  Gross profit increased by $450,000 to $777,000 in the first
         quarter of 1999 from $327,000 in 1998. The increase in gross profit was
         a result of an increase in net sales of 36%. Gross margin increased to
         approximately 21% in 1999 from approximately 12% in 1998. Scrap was
         down approximately 22% due to increased controls and process
         improvements.

                  During the fourth quarter of 1997, the Company decided to
         reposition the PC Dynamics subsidiary located in Frisco, Texas.
         Management decided the PC Dynamics subsidiary did not have a future
         place in the Company's strategic plans. On March 25, 1999, PC Dynamics
         sold substantially all of its machinery and equipment, inventory and
         accounts receivable and assigned all of its outstanding contracts and
         orders to Performance Interconnect Corporation, a Texas Corporation.
         The Company also leased its Texas facility to Performance Interconnect
         Corporation.

                   The building and equipment of PC Dynamics Corporation are
         recorded in the December 31, 1998 balance sheet as building and
         equipment to be disposed of at market value less an estimate of selling
         costs. The market value was determined based on appraisals. The
         building value of PC Dynamics Corporation is recorded in the March 31,
         1999 balance sheet as land, buildings and improvements.



                                       7
<PAGE>   8


         OPERATING EXPENSES

                  General and administrative expenses were $437,000 or 11.9% of
         net sales in the first quarter of 1999 compared to $426,000 or 15.7% of
         net sales in the first quarter of 1998. General and administrative
         expenses consist primarily of salaries and benefits, professional
         services, depreciation of office equipment, computer systems and
         occupancy expenses. The first quarter of 1999 included approximately
         $44,000 of expenses relating to the sale of substantially all the
         assets of PC Dynamics Corporation.

                  Selling and marketing expenses were $175,000 or 4.8% of net
         sales in the first quarter of 1999 compared to $161,000 or 5.9% of net
         sales in the first quarter of 1998. Selling and marketing expenses
         include the cost of salaries, advertising and promoting the Company's
         products, and commissions paid to independent sales organizations.
         Sales commission expense increased $19,000 as a result of higher sales.

         OPERATING INCOME

                  Operating Income was $164,000 in the first quarter of 1999
         compared to an operating loss of $260,000 in the first quarter of 1998,
         an increase in the operating income of $424,000. The change in
         operating income reflects primarily the changes in net sales, gross
         profit and cost of goods sold and operating expenses as discussed
         above. The change in operating income can be summarized as follows:

         Increase in net sales                         $   116,000
         Increase in gross margin                          334,000
         Increase in operating expenses                    (26,000)
                                                       ------------

         Increase in operating income                  $   424,000

                  On March 31, 1999, the Company had 49 employees compared to 91
         on March 31, 1998.

         INTEREST INCOME

                  Interest income from short-term investments was $32,000 in the
         first quarter of 1999 compared to $35,000 in 1998. Royalty income was
         $6,700 in the first quarter of 1998.

         INTEREST EXPENSE

                  Interest expense, primarily related to the Company's mortgage
         obligation on its P C Dynamics facility, was $46,000 in the first
         quarter of 1999 compared to $57,000 in 1998.

         GAIN (LOSS) ON DISPOSAL OF FIXED ASSETS

                  The Company recorded a loss of $135,000 on the disposal of
         fixed assets in the first quarter of 1999 compared to a loss of



                                       8

<PAGE>   9


         $21,000 in 1998. The loss in the first quarter of 1999 was primarily
         related to sale of substantially all the machinery and equipment of PC
         Dynamics Corporation to Performance Interconnect Corporation.


         INCOME TAXES

                  The Company had an effective tax credit rate of 57.5% in 
         the first quarter of 1999 compared to 41.0% in 1998.

         LIQUIDITY AND CAPITAL RESOURCES

                  Net cash provided/(used) was $570,000 for the first three
         months of 1999 compared to ($559,000) for the first three months of
         1998. Inventories decreased $296,000. Accounts payable was up $155,000.

                  Capital expenditures were $164,000 for the first three months
         of 1999, Capital expenditures were $66,000 in the first three months of
         1998.

                  The Company collected $893,000 relating to the sale of
         substantially all of the machinery and equipment, inventory and
         accounts receivable of PC Dynamics Corporation to Performance
         Interconnect Corporation.

                  The Company has a mortgage loan of $2,197,010 on the P C
         Dynamics facility. Interest on this mortgage loan is at 1/2 % over
         prime rate. The loan is payable in monthly installments of principal
         and interest and is due in October 2001.

                  The Company has a line of credit from American National Bank
         and Trust Company of Chicago which provides for a maximum borrowings of
         $2,000,000 based on 80% of eligible accounts receivables through May
         1999 at an interest rate of prime plus 0.5%. No balance was outstanding
         under the line at March 31, 1999.

                  As of March 31, 1999, the Company has $2,197,000 of debt and
         $4,916,000 of cash and cash equivalents. Management believes that funds
         generated from operations, coupled with the Company's cash balance and
         its capacity for debt will be sufficient to fund current business
         operations.

         INFLATION

                  Management believes inflation has not had a material effect on
         the Company's operation or on its financial position.

         YEAR 2000 COMPLIANCE

                  Many computer and other software and hardware systems
         currently are not, or will or may not be, able to read, calculate or
         output correctly using dates after 1999 and such systems will



                                       9

<PAGE>   10


         require significant modifications in order to be Year 2000 compliant.
         This issue may have a material adverse affect on the Company's
         business, financial condition and results of operations because its
         computer and other systems are integral parts of the Company's
         distribution activities as well as its accounting and other information
         systems and because the Company will have to divert financial resources
         and personnel to address this issue.

                  The Company has reviewed its computer and other hardware and
         software systems and has recently begun upgrading those systems that it
         has identified as not being year 2000 compliant. The existing systems
         will be upgraded either through modification or replacement. The
         Company currently anticipates that it will complete testing of these
         upgrades by the end of fiscal 1999.

                  Although the Company is not aware of any material operational
         impediments associated with upgrading its computer and other hardware
         and software systems to be year 2000 compliant, the Company cannot make
         any assurances that the upgrade or the Company's computer systems will
         be completed on schedule, or that the upgraded systems will be free of
         defects. If any such risks materialize, the Company could experience
         material adverse consequences to its business, financial condition and
         results of operations.

                  Year 2000 compliance may also adversely affect the Company's
         business financial conditions and results of operations indirectly by
         causing complications to, or otherwise affecting, the operations of any
         one or more of its suppliers and customers. The Company is contacting
         its significant suppliers and customers in an attempt to identify any
         potential year 2000 compliance issues with them. The Company is
         currently unable to anticipate the magnitude of the operational or
         financial impact of year 2000 compliance issues with its suppliers or
         customers.

                  The Company expects to incur approximately $100,000 through
         fiscal 1999 to resolve and test the Company's year 2000 compliance
         issues. All expenses incurred in connection with year 2000 compliance
         will be expensed as incurred, other than acquisitions of new software
         or hardware, which will be capitalized.

         FOREIGN CURRENCY TRANSACTIONS

                  All of the Company's foreign transactions are negotiated,
         invoiced and paid in United States dollars.

         ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS

                  As a supplier to microwave manufacturers, the Company is
         dependent upon the success of its customers in developing and
         successfully marketing end-user microwave systems. The Company is
         currently working on several development programs for its customers.
         The development of commercial applications for



                                       10
<PAGE>   11


         microwave systems and the timing and size of production schedules for
         these programs is uncertain and beyond the control of the Company.
         There can be no assurance that these development programs will have a
         favorable impact on the Company's operating results. Although
         management believes some of these products and programs may ultimately
         develop into successful commercial applications, such developments
         could result in periodic fluctuations in the Company's operating
         results. As a result of these considerations, the Company has
         historically found it difficult to project operating results.

                  The Company expects that a small number of customers will
         continue to account for a substantial majority of its sales and that
         the relative dollar amount and mix of products sold to any of these
         customers can change significantly from year to year. There can be no
         assurance that the Company's major customers will continue to purchase
         products from the Company at current levels, or that the mix of
         products purchased will be in the same ratio. The loss of one or more
         of the Company's major customers or a change in the mix of product
         sales could have a material adverse effect on the Company.

                  In addition, future results may be impacted by a number of
         other factors, including the Company's dependence on suppliers and
         subcontractors for components; the Company's ability to respond to
         technical advances; successful award of contracts under bid; design and
         production delays; cancellation or reduction of contract orders; the
         Company's effective utilization of existing and new manufacturing
         resources; and pricing pressures by key customers.

                  The Company's future success is highly dependent upon its
         ability to manufacture products that incorporate new technology and are
         priced competitively. The market for the Company's products is
         characterized by rapid technology advances and industry-wide
         competition. This competitive environment has resulted in downward
         pressure on gross margins. In addition, the Company's business has
         evolved towards the production of relatively smaller quantities of more
         complex products, the Company expects that it will at times encounter
         difficulty in maintaining its yield standards. There can be no
         assurance that the Company will be able to develop technologically
         advanced products or that future pricing actions by the Company and its
         competitors will not have a material adverse effect on the Company's
         results of operations.




                                       11

<PAGE>   12


                           PART II - OTHER INFORMATION

         ITEM 1:  LEGAL PROCEEDINGS

                  None


         ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits


                  27       Financial Data




         The Company filed a report on Form 8-K dated March 25, 1999 announcing
         that PC Dynamics Corporation, a wholly owned subsidiary of the Company,
         sold substantially all of its machinery and equipment, inventory and
         accounts receivable and assigned all of its outstanding contracts and
         orders to Performance Interconnect Corporation, a Texas Corporation.











                                       12

<PAGE>   13



                                    SIGNATURE

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

                                                    M-WAVE, INC.

         Date: May 4, 1999             /s/ PAUL H. SCHMITT        
                                       ------------------------------
                                           Paul H. Schmitt

                                           Chief Financial Officer














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<PAGE>   14




                                  EXHIBIT INDEX

         EXHIBIT
           NO                              DESCRIPTION
         -------         --------------------------------------------------
           27            Financial Data















                                       14