FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                  Quarterly Report Under Section 13 or 15 (d)
                    of the Securities Exchange Act of 1934

                       For Quarter Ended March 31, 1999

                        Commission File Number 0-13898

                               VERAMARK TECHNOLOGIES, INC.

            (Exact name of registrant as specified in its charter)

          DELAWARE                             16-1192368
(State  or  other  jurisdiction        (IRS Employer Identification
of  Incorporation or Organization)                 Number)



     3750 MONROE AVENUE, PITTSFORD, NY            14534
(Address of principal executive offices)     (Zip Code)

                         (716) 381-6000
(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 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      XX         NO

     Indicate the  number of shares outstanding of each of the issuer's classes
of common stock, as of March 31, 1999.

     Common stock, par value $.10            7,590,909 shares

     This report consists of 15 pages.
<PAGE>



<PAGE>
                                     INDEX



                                                                 PAGE

PART I    FINANCIAL INFORMATION

   Item 1 Financial Statements

          Condensed Balance Sheets -                            3 -  4
          March 31, 1999 and December 31, 1998

          Condensed Statements of Operations -                  5
          Three Months Ended March 31, 1999 and 1998

          Condensed Statements of Cash Flows -                  6
          Three Months Ended March 31, 1999 and 1998

          Notes To Condensed Financial Statements               7 -  8

                                                               
   Item 2 Management's Discussion and Analysis of               9 - 12
          Financial Condition and Results of Operations



PART II   OTHER INFORMATION

   Item 6 Exhibits and Reports on Form 8-K                     13 - 14



<PAGE>
                       PART  I -  FINANCIAL INFORMATION

                          VERAMARK TECHNOLOGIES, INC.

                           CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                          MARCH 31,            DECEMBER 31,
                                                              1999                   1998*
<S>                                         <C>                     <C>
ASSETS
CURRENT ASSETS:                                         (Unaudited)
   Cash and Cash Equivalents                            $ 1,306,506             $   371,209
   Investments                                            4,120,273               4,718,694
   Accounts Receivable, trade (net of
     allowance for doubtful accounts of
     $103,000 and $110,000, respectively)                 2,367,117               2,273,705
   Inventories                                              551,904                 579,968
   Prepaid Expenses                                         179,458                 155,831
                                                        -----------             -----------
        Total Current Assets                              8,525,258               8,099,407

PROPERTY AND EQUIPMENT                                    6,470,055               5,864,469
   Less Accumulated Depreciation                         (4,552,136)             (4,455,539)
                                                        -----------             -----------
        Property and Equipment (Net)                      1,917,919               1,408,930

OTHER ASSETS:
   Software Development Costs
     (Net of accumulated amortization of
     $1,539,290 and  $1,322,254
     respectively)                                        3,570,413               3,393,542
      Pension Assets                                      1,873,721               1,873,721
      Deposits and Other Assets                             411,774                 406,901
                                                        -----------             -----------
   Total Other Assets                                     5,855,908               5,674,164
                                                        -----------             -----------
TOTAL ASSETS                                            $16,299,085             $15,182,501
                                                        ===========             ===========
</TABLE>
See notes to Condensed Financial Statements.

                 *  DERIVED FROM AUDITED FINANCIAL STATEMENTS


<PAGE>

                          VERAMARK TECHNOLOGIES, INC.

                           CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                  March 31,            December 31,
                                                                      1999                   1998*
                                                                (Unaudited)

<S>                                                    <C>                       <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts Payable                                             $   844,254             $   740,576
  Accrued Compensation and Related Taxes                           993,874                 891,186
  Deferred Revenue                                               2,233,838               2,061,475
  Other Accrued Expenses                                           745,705                 838,713
                                                               -----------             -----------  
     Total Current Liabilities                                   4,817,671               4,531,950

  Pension Obligation                                             3,006,313               2,882,847
                                                               -----------             -----------
Total Liabilities                                                7,823,984               7,414,797

STOCKHOLDERS' EQUITY:
  Common Stock, par value $.10, 20,000,000
   shares authorized; issued and outstanding,
   7,653,209 and  7,607,709, respectively                          765,321                 760,771
  Additional Paid-in Capital                                    19,162,349              18,954,579
  Retained Earnings                                            (11,176,854)            (11,734,431)
  Treasury Stock (62,300 and 52,300 shares
   at cost, Respectively)                                         (275,715)               (213,215)
                                                               -----------             -----------
Total Stockholders Equity                                        8,475,101               7,767,704
                                                               -----------             -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                     $16,299,085             $15,182,501
                                                               ===========             ===========

</TABLE>
See notes to Condensed Financial Statements.

                 *  DERIVED FROM AUDITED FINANCIAL STATEMENTS


<PAGE>

                          VERAMARK TECHNOLOGIES, INC.

                      CONDENSED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                      Three Months Ended
                                                           March 31,

                                                          (Unaudited)

                                                   1999                1998

<S>                                     <C>                    <C>
SALES                                          $ 5,043,367           $ 3,604,377
COSTS AND OPERATING EXPENSES:
  Cost of Sales                                    791,979               764,305
  Engineering & Software Development               667,967               630,145
  Selling, General and Administrative            3,070,750             2,145,390
                                               -----------           -----------
     Total Costs and Operating Expenses          4,530,696             3,539,840

INCOME FROM OPERATIONS                             512,671                64,537

INTEREST INCOME                                     64,906                38,535
                                               -----------           -----------
INCOME BEFORE INCOME TAXES                         577,577               103,072

INCOME TAXES                                        20,000                     -
                                               -----------           -----------
NET INCOME                                     $   557,577           $   103,072
                                               ===========           ===========

INCOME PER SHARE
    Basic                                            $ .07                 $ .01
                                                     =====                 =====
    Diluted                                          $ .07                 $ .01
                                                     =====                 =====
</TABLE>


SEE NOTES TO CONDENSED FINANCIAL STATEMENTS.

<PAGE>

                          VERAMARK TECHNOLOGIES, INC.
                      CONDENSED STATEMENTS OF CASH FLOWS

                                             
<TABLE>
<CAPTION>
                                                                  Three Months Ended March 31,
                                                             1999                        1998
                                                                           (Unaudited)

<S>                                                 <C>                          <C>
OPERATING ACTIVITIES:
Net Income                                              $   557,577                  $   103,072
                                                        -----------                  -----------
Adjustments to Reconcile Net Income to Net
Cash Provided (used) by Operating Activities
  Depreciation and Amortization                             333,300                      283,139
  Provision for Losses on Accounts Receivable                 5,000                       12,501
  Provision for Inventory Obsolescence                       47,500                       24,999
  Loss on Disposal of Fixed Assets                            2,399                            -

  Changes in Assets and Liabilities
     Accounts Receivable                                    (98,412)                    (737,968)
     Inventories                                            (19,436)                     220,119
     Prepaid Expenses and Other Current Assets              (23,627)                      (7,833)
     Deposits and Other Assets                               (4,873)                      (7,882)
     Accounts Payable                                       103,678                     (205,399)
     Accrued Compensation Related Taxes                     102,688                       69,482
     Deferred Revenue                                       172,363                      166,613
     Other Current Liabilities                              (93,008)                    (118,683)
                                                        -----------                  -----------
  Net Adjustments                                           527,572                     (300,912)
                                                        -----------                  -----------
  Net Cash Provided (Used) by Operating Activities        1,085,149                     (197,840)
                                                        -----------                  -----------

INVESTING ACTIVITIES:
   Investments                                              598,421                      626,823
   Additions to Property and Equipment                     (627,652)                    (177,098)
   Software Development Costs                              (393,907)                    (230,780)
                                                        -----------                  -----------
Net Cash Flows Provided (Used) by Investing                
Activities:                                                (423,138)                     218,945
                                                        -----------                  -----------

FINANCING ACTIVITIES:
  Increase in Pension Obligation                            123,466                         (450)
  Proceeds from Sales of Stock                                    -                            -
  Exercise of Stock Options and Warrants                    212,320                       12,850
  Treasury Stock Purchases                                  (62,500)                           -
                                                        -----------                  -----------
  Net Cash Flows Provided by Financing Activities           273,286                       12,400
                                                        -----------                  -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS                   935,297                       33,505

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD              371,209                    1,106,944
                                                        -----------                  -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD                $ 1,306,506                  $ 1,140,449
                                                        ===========                  ===========
</TABLE>


<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

(1)  GENERAL

     The  accompanying   unaudited   financial   statements   include   all
adjustments  of  a normal and recurring nature which are, in the opinion of
Registrant's management,  necessary  to  present  fairly  the  Registrant's
financial  position  as of March 31, 1999 and the results of its operations
and cash flows for the three months ended March 31, 1999 and 1998.

     Certain information  and  footnote  disclosures  normally  included in
financial   statements  prepared  in  accordance  with  generally  accepted
accounting  principles   have  been  omitted  pursuant  to  the  rules  and
regulations of the Securities  and  Exchange  Commission.   These condensed
financial  statements  should  be  read  in  conjunction with the financial
statements and related notes contained in the  Annual Report for the fiscal
year ended December 31, 1998.

     The results of operations for the three months  ended  March  31, 1999
are  not  necessarily  indicative  of the results to be expected for a full
year's operation.

     Except for the historical information  contained  herein,  the matters
discussed in this report are forward-looking statements which involve risks
and  uncertainties,  including  but  not  limited to economic, competitive,
governmental and technological factors affecting  the Company's operations,
markets, products, services and prices, and other factors  discussed in the
Company's filings with the Securities and Exchange Commission.

(2)  INVENTORIES

     The composition of inventories at March 31, 1999 and December 31, 1998
was as follows:


                                           MARCH 31,             DECEMBER 31,
                                               1999                     1998
Purchased parts and components            $ 350,302                $ 340,350
Work in process                              99,017                  116,228
Finished goods                              102,585                  123,390
                                          ---------                ---------
                                          $ 551,904                $ 579,968
                                          =========                =========




<PAGE>

(3)  PROPERTY AND EQUIPMENT

     The major classifications of property and equipment at March 31, 1999,
     and December 31, 1998 are:

                                      MARCH 31,                DECEMBER 31,
                                          1999                        1998

Machinery and equipment            $ 1,392,299                 $ 1,377,179
Computer hardware and software       3,195,148                   3,075,398
Furniture and fixtures               1,064,783                   1,064,117
Leasehold improvements                 817,825                     347,775
                                   -----------                 -----------
                                   $ 6,470,055                 $ 5,864,469
                                   ===========                 ===========

 (4) EARNINGS PER SHARE

     Earnings  per share have been calculated under SFAS 128, "Earnings Per
     Share."

<PAGE>


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

RESULTS OF OPERATIONS

     Sales  of  $5,043,367  for  the first quarter  ended  March  31, 1999
increased 40% from the sales of $3,604,377  for  the first quarter of 1998,
establishing a record first quarter sales volume for  the Company.  For the
three  months  ended  March  31,  1999,  the Company earned net  income  of
$557,577, or $.07 per share, compared with  net income of $103,072, or $.01
per  share  for  the same three month period of  1998.   Net  income  as  a
percentage of sales for the three months ended March 31, 1999, was 11.1% of
sales as compared with  2.9%  of  sales  for  the  three months ended March
31, 1998.

     Demand for the Company's core call accounting products and services to
both the domestic and international market remained  strong  throughout the
quarter.   Sales  of  core products increased by 41% for the quarter  ended
March 31, 1999, as compared to the quarter ended March 31, 1998, accounting
for 72% of first quarter 1999 sales.

     Sales of Verabill, the Company's billing and customer care product for
wireline, wireless and other network service providers, accounted for 8% of
the  Company's  sales  for   the   first  quarter  ended  March  31,  1999,
representing a four fold increase over  the  sales  realized  for  the same
three  month  period  of 1998.  Additionally, subsequent to the end of  the
first quarter the Company  announced  the  receipt  of three new orders for
Verabill.  The first from a wireless carrier on the island  of  Bonaire  in
the  Netherlands Antilles, the second for American Samoa Telecom LLP, a new
GSM operator  on  the  island  of  American  Samoa, and a third order for a
Norwegian  carrier  that will provide fixed and  wireless  telephony,  data
communications and internet services.  During the first quarter the Company
also announced that it  has signed an agreement with Kanbay Incorporated of
Rosemont,   Illinois,   under   which   Kanbay   will   provide   worldwide
implementation  support  and   customization  services  for  the  Company's
Verabill product.  With Verabill  systems  now  installed  and operating on
five continents, the Company feels that this agreement greatly enhances its
ability   to  provide  professional  implementation  and  support  services
simultaneously to multiple customers throughout the world.

     Sales  of  TMS,  the  Company's mid to high end telemanagement product
rose 97% for the quarter ended  March 31, 1999 compared to the same quarter
of 1998.  In total, TMS accounted for 6% of total Company sales.

     Sales of INFO/MDR, the Company's  centrex  and virtual private network
offering were down approximately 34% for the first  three  months  of  1999
compared  with the first three months of 1998.  However, the order rate has
been very favorable  and  the  Company  believes  that  sales  of  INFO/MDR
realized during 1999 will exceed the sales recognized during 1998.

     For  the  quarter  ended  March  31,  1999,  31% of Company sales were
generated  from  previously  deferred billings for a variety  of  services,
including training, installation,  custom  rate updates, and implementation
services.  For the quarter ended March 31, 1998,  26% of Company sales were
derived from previously deferred billings. For the  quarter ended March 31,
1999, approximately 10% of sales were from previously deferred billings for
services  which  have  not been, and are not expected to  be,  utilized  by
customers, based on historical experience.

     For the three month ended December 31, 1999 the Company earned a gross
margin on sales of  $4,251,388.   For  the  same three month period of 1998
the Company realized a gross margin on sales  of $2,840,072.  The increased
margins are the result of the significantly higher  sales  volume  combined
with lower direct product costs as a percentage of sales for the comparable
periods.

     Net  engineering expenses, after the effects of the capitalization  of
development costs, increased by 6% from $630,145 for the three months ended
March 31, 1998 to $667,967 for the three months ended March 31, 1999. Gross
engineering and  development  expenses  for  the  three  months ended March
31, 1999 were 23% higher than those costs incurred for the same  quarter of
1998.  The table below summarizes the impact on the Company's operations of
its  engineering  and development efforts for the three months ended  March
31, 1999 and 1998.   The table details engineering and development expenses
on both a gross and net  of  capitalization basis, and adds back charges to
cost of sales resulting from the  amortization  of  previously  capitalized
development costs.

<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED
                                                             MARCH 31,               MARCH 31,
                                                               1999                    1998
<S>                                            <C>                     <C>
Gross Expenditures for Engineering &  Software             $ 1,061,874               $ 860,925
 Development
Less:  Costs Capitalized                                      (393,907)               (230,780)
                                                           -----------               ---------
Net Engineering & Software Development Expense             $   667,967               $ 630,145
                                                           
Plus:  Amounts Amortized and Charged to Cost
 Of Sales                                                      217,036                 209,128
                                                           -----------               ---------
Total Expense Recognized                                   $   885,003               $ 839,273
                                                           ===========               =========
</TABLE>

     Selling,  general  and  administrative  expenses  for the three months
ended March 31, 1999 of $3,070,750 were 43% higher than the  $2,145,390  of
selling,  general  and  administrative expenses incurred for the same three
month  period  of  1998.   The   increased   spending  levels  reflect  the
significant growth in the Company's employment  figures  from 145 employees
at the end of the first quarter of 1998 to 180 employees at March 31, 1999.
As  a  result,  expenses  for  salaries,  benefits,  recruiting, telephone,
training  and  travel  expenses  have  increased accordingly.  The  Company
continues  to  actively  recruit  in  all functional  areas  and  continued
employment growth is expected throughout 1999.

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     The Company's total cash position  (cash  on  hand  plus   short-term
investments)  at March 31, 1999 was $5,426,779.  This compared with a total
cash position of  $5,089,903  at  December 31, 1998 and $2,869,407 at March
31, 1998.

     Accounts receivable increased  4% from the December 31, 1998 figure of
$2,273,705 to $2,367,117 at March 31,  1999.   There  were  no  significant
changes in payment trends among major customers during the first quarter.

     Capital  equipment  spending  for  the first three months of 1999  was
$627,652, of which approximately $470,000 was related to construction costs
and leasehold improvements to an additional  15,000  square  feet leased in
the  same  building  that  houses  the  Company's  current headquarters  in
Pittsford, New York.  The additional space was required  to  meet the needs
of  the  Company's  expanding  employment base and to upgrade its  customer
training facilities.

     Software development expenses  capitalized  and carried on the balance
sheet  at  March 31, 1999 of $3,570,413, or 22% of total  assets,  compared
with capitalized  development costs of $3,393,542, also representing 22% of
assets at December  31,  1998.   Virtually  all  of the current capitalized
costs relate to the Verabill and TMS product lines  and are being amortized
over periods ranging from three to five years.

     Total  assets  at  March  31, 1999 total $16,299,085  representing  an
increase of 7% from the $15,182,501  of  total assets at December 31, 1998,
and an increase of 37% from the total assets of $11,937,012  at  March  31,
1998.

     Accrued  compensation  and  related  taxes  increased from $891,186 at
December 31, 1998 to $993,874 at March 31, 1999 as  a  result  of increased
employment levels.

     Deferred revenues at March 31, 1999 were $2,233,838 versus  $2,061,475
at December 31, 1998. Deferred revenues represent the value of unrecognized
revenues related to a variety of services for which the Company has  billed
customers,  but  not  yet performed the associated service.  These services
typically include training,  installation,  maintenance  and  support,  and
implementation services.

     During the first quarter of 1999 the Company repurchased 10,000 shares
of  its  common  stock  on  the  open  market  for a total consideration of
$62,500.  This continues a policy of repurchasing  Company  stock as market
conditions, cash requirements and profitability allow.

     The Company maintains a private equity line of credit agreement with a
single institutional investor.  Under the equity line, the Company  has the
right  to  sell  to the investor shares of the Company's common stock at  a
price equal to 88% of the average bid price of the stock for the subsequent
ten trading days.  During the term of the agreement the Company may sell up
to $6 million to this  investor,  with  no more than $500,000 in any single
month.   This  agreement  expires  on  August  30,  2000.   There  were  no
transactions under this agreement during the first quarter of 1999.
<PAGE>
     The Company also maintains an agreement  with  a major commercial bank
for  a  secured  demand  line  of  credit  arrangement  in  the  amount  of
$3,000,000.  There have been no borrowings against this agreement.

     In light of its current cash position, profitable operations,  and the
credit  arrangements  referred  to  above, the Company believes that it has
sufficient resources to meet its financial  needs  and  support anticipated
growth over the next twelve months.

<PAGE>


                          PART II - OTHER INFORMATION

ITEM 6:             EXHIBITS AND REPORTS ON FORM 8-K

(1)  Registrant's Condensed Financial Statements for the three months ended
     March 31, 1999 and 1998 are set forth in Part I, Item 1 of this Quarterly
     Report on Form 10-Q.

(2)  Calculation of earnings per share.



<PAGE>

                                               EXHIBIT A: (2)

                          VERAMARK TECHNOLOGIES, INC.

                      CALCULATIONS OF EARNINGS PER SHARE

<TABLE>
<CAPTION>
                                                          Three Months Ended
                                                               March 31,
                                                         1999                 1998
<S>                                    <C>                     <C>
                                                                             
Basic
Net Income                                         $   557,577            $   103,072
                                                   ===========            ===========
Weighted Common Shares Outstanding                   7,590,137              7,550,870
                                                   ===========            ===========
Income Per Common Share                                  $ .07                  $ .01
                                                   ===========            ===========

DILUTED
Net Income                                         $   557,577            $   103,072
                                                   ===========            ===========

Weighted Average Shares Outstanding                  7,590,137              7,550,870

Additional Dilutive Effect of Stock
Options and Warrants after Application
of Treasury Stock Method                               613,381                410,935
                                                   -----------            -----------
Weighted Average Shares Outstanding                  8,203,518              7,961,805
                                                   ===========            ===========

Income per Common Share and Common
Equivalent Share                                         $ .07                  $ .01
                                                   ===========            ===========
</TABLE>


<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.



                          VERAMARK TECHNOLOGIES, INC.

                                  REGISTRANT

Date:     May 11, 1999
          ------------



_____________________________________
David G. Mazzella
President and CEO




Date:     May 11, 1999
          ------------


_____________________________________
Ronald C. Lundy
Treasurer (Chief Accounting Officer)

<PAGE>