FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549


              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                        For Quarter Ended March 31, 1999

                                       OR

              [ ] TRANSITION REPORT PURSUANT O SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                For the Transition Period from _______ to _______

                         Commission file number 33-20432

                       MAGNITUDE INFORMATION SYSTEMS, INC.
                       -----------------------------------
             (Exact Name of Registrant as Specified in its Charter)

                     Delaware                            75-2228828
                     --------                            ----------
            (State or other Jurisdiction of            (IRS Employer
             Incorporation or Organization)          Identification No.)

                  50 Tannery Road, Branchburg, New Jersey 08876
               --------------------------------------------------
               (Address of Principal Executive Office) (Zip Code)

                                 (908) 534-6400
                                 --------------
               (Registrant's telephone number including area code)


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.

                               Yes x        No _____

The  number  of  shares  of  Registrant's  Common  Stock,   $0.0001  par  value,
outstanding as of March 31, 1998, was 8,346,991 shares.

<PAGE>

              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES

                                      INDEX
                                      -----

                                                                          Page
                                                                         Number
                                                                         ------

PART 1 - FINANCIAL INFORMATION

Item 1 Financial Statements (unaudited)

         Consolidated Balance Sheet
         - March 31, 1999                                                      3

         Consolidated Statements of Operations
         - Three months ended March 31, 1999 and 1998                          4

         Consolidated Statements of Cash Flows
         - Three months ended March 31, 1999 and 1998                          5

         Notes to Consolidated Financial Statements                       6 - 12


Item 2  Management's  Discussion and Analysis of Financial 
         Condition and Results of Operations                             13 - 14


PART II  -  OTHER INFORMATION                                                 15


SIGNATURES                                                                    16


FINANCIAL DATA SCHEDULE                                                       17


                                       2
<PAGE>

PART I - Item 1

              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)
                                                                  March 31, 1999
                                                                  --------------
ASSETS
     Current Assets
     Cash .............................................             $       823 
     Accounts receivable, net of allowance for                   
     doubtful accounts of 106,589 .....................                  80,963
     Inventories ......................................                  26,789
     Prepaid expenses .................................                 546,683
                                                                    -----------
        Total Current Assets ..........................                 655,258
     Property, plant and equipment ....................                 138,874
     Acquired software assets .........................               1,302,882
     Other assets .....................................                  65,561
                                                                    -----------
TOTAL ASSETS ..........................................               2,162,575
                                                                    ===========
LIABILITIES AND STOCKHOLDERS' EQUITY                             
LIABILITIES                                                      
     Accounts payable and accrued expenses ............               1,103,545
     Dividends payable ................................                   9,000
     Prepayments received .............................                      --
     Loans and notes payable ..........................                 857,500
     Current maturities long-term debt ................                  64,503
     Current maturities lease obligations .............                  15,826
                                                                    -----------
        Total Current Liabilities .....................               2,050,374
     Long-term debt, less current portion .............               1,276,060
     Lease obligations, less current portion ..........                  29,839
                                                                    -----------
TOTAL LIABILITIES .....................................               3,356,273
                                                                 
STOCKHOLDERS' EQUITY                                             
     Preferred Stock Ser.A, $0.01 par value, 3,000,000           
     shares authorized, 0 and 100,000 shares issued and                        
     outstanding ......................................                      --
     Cumulative Preferred Stock, $0.001 par value,               
     10 shares issued and outstanding .................                       0
     Common Stock, $0.0001 par value, 30,000,000 shares          
     authorized, 8,346,991 issued and outstanding .....                     835
     Contributed capital ..............................                  81,000
     Additional paid-in capital .......................               8,218,195
     Accumulated deficit ..............................              (9,493,728)
                                                                    -----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) ..................              (1,193,698)
TOTAL LIABILITIES AND EQUITY ..........................             $ 2,162,575
                                                                    ===========

                 See notes to consolidated financial statements


                                       3
<PAGE>

              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                                          Three Months Ended
                                                               March 31,
                                                         1999             1998
                                                   -------------    ----------

Revenues .....................................     $    44,507      $ 1,012,418
     Cost of Goods Sold ......................          42,876          491,737
                                                   ------------     -----------

Gross Profit .................................           1,631          520,681

     Selling expenses ........................         165,471          299,197
     General & administrative expenses .......         421,975          448,503
                                                   -----------      -----------

Operating Income (Loss) ......................        (585,815)        (227,019)

     Miscellaneous income ....................          63,675                0
     Interest expense (net) ..................         (51,837)         (80,717)
     Miscellaneous expenses ..................         (13,685)               0
                                                   -----------      -----------
Non-Operating Income (Expense) ...............          (1,847)         (80,717)
                                                   -----------      -----------


Net Loss .....................................     $  (587,662)     $  (307,736)
                                                   ===========      ===========

Loss per Common Share ........................     $     (0.08)     $     (0.09)
                                                   ===========      ===========
Weighted Average Number of
     Common Shares Outstanding ...............       7,295,093        3,361,736

                 See notes to consolidated financial statements


                                       4
<PAGE>

              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                    Three Months Ended March 31,
                                                        1999            1998
                                                   ------------    -------------
Cash Flows from Operating Activities
     Net income (loss) .........................   $  (587,662)    $  (307,736)
     Adjustments to net income (loss)
        Depreciation and Amortization ..........        45,794          50,889
     Decreases (increases) in Assets
        Accounts receivable ....................        83,029        (420,431)

        Inventories ............................             0          39,860
        Prepaid advertising ....................             0        (375,000)
        Prepaid expenses .......................      (161,075)        (28,753)
        Other assets ...........................          (450)              0
     Increases (decreases) in Liabilities
        Accounts payable and accrued expenses ..      (570,198)          5,605
                                                    ----------      ----------
Net Cash Provided (Used) by Operating Activities    (1,190,562)     (1,035,566)

Cash Flows from Investing Activities
     Rolina acquisition ........................             0        (763,890)
     Capital expenditures ......................             0         (72,484)
                                                    ----------      ----------
Net Cash Provided (Used) by Investing Activities             0        (836,374)

Cash Flows from Financing Activities
     Proceeds from notes payable ...............             0         225,000
     Conversion of equity subscriptions ........             0        (175,000)
     Repayment of notes ........................      (184,177)        (20,000)
     Repayment of long-term debt ...............       (19,500)        (58,250)
     Issuance of common stock ..................     1,385,659       1,900,890
                                                    ----------      ----------
Net Cash Provided (Used) by Financing Activities     1,181,982       1,872,640
Net Increase (Decrease) in Cash ................        (8,580)            700
Cash at Beginning of Period ....................         9,403           4,546
                                                    ----------      ----------
Cash at End of Period ..........................   $       823     $     5,246
                                                   ===========     ===========

                 See notes to consolidated financial statements


                                       5
<PAGE>

              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999

BACKGROUND

Magnitude   Information  Systems,   Inc.  (the  "Company"  or  "Magnitude")  was
incorporated  as a  Delaware  corporation  on  April  19,  1988  under  the name
Fortunistics  Inc. On March 4, 1993, the Company  changed its name to Whitestone
Industries,  Inc. On July 14,  1997,  the Company  changed its name to Proformix
Systems,  Inc.,  and on  November  18,  1998,  the  Company  changed its name to
Magnitude Information Systems, Inc.

On June 24, 1997,  the Company,  Royal Capital,  Inc.,  and  Proformix,  Inc., a
Delaware corporation and manufacturer of ergonomic keyboarding systems,  entered
into an Acquisition Agreement. Proformix, Inc. in November 1998 changed its name
to Magnitude, Inc. and is hereafter referred to as Magnitude,  Inc.. Pursuant to
the Acquisition  Agreement,  Magnitude Inc. shareholders were offered 1 share of
the Company's  common stock for every 3.4676 shares of  Magnitude,  Inc.  common
stock,  and 1 share of  preferred  stock  for every 1 share of  Magnitude,  Inc.
preferred stock. At the time of this submission, holders of approximately 98% of
Magnitude,  Inc.  common  stock  have  tendered  their  shares in  exchange  for
Whitestone common shares. The remaining 2% of Magnitude,  Inc. stockholders hold
a  minority  interest  which is  valued  at $0.  For  accounting  purposes,  the
acquisition has been treated as an acquisition of Whitestone by Magnitude,  Inc.
and a  recapitalization  of  Magnitude,  Inc..  As a  result,  the  Company  and
Magnitude,  Inc. remain as two separate legal entities whereby  Magnitude,  Inc.
operates as a subsidiary of Magnitude Information Systems,  Inc.. The operations
of the newly combined entity are currently comprised solely of the operations of
Magnitude, Inc.

On February 2, 1998,  the Company  entered into an Agreement  and Plan of Merger
with Rolina  Corporation,  a privately held New Jersey software developing firm,
and on April 30, 1998,  into an Asset Purchase  Agreement  with Vanity  Software
Publishing  Co., a Canadian  developer  of  specialized  software,  whereby  the
Company, in return for payments in form of cash and equity,  acquired the rights
to certain  software  products and related assets,  with such software  products
subsequently forming the basis for the further development,  during the year, of
the Company's proprietary Proformix EMS Software System.

On November 18, 1998,  the Company and its wholly  owned  subsidiary  Magnitude,
Inc.  entered into an Asset Purchase  Agreement and several  related  agreements
with  1320236  Ontario  Inc.  ("OS"),  a  publicly  traded  Canadian   designer,
manufacturer  and  distributor  of office  furniture  based in Holland  Landing,
Ontario,  Canada,  pursuant  to which OS  acquired  Magnitude,  Inc.'s  hardware
product line comprised of the Company's ergonomic keyboard platform products and
accessories,  and all related  inventory and production  tooling and warehousing
assets,  and all  intellectual  property  rights  including the Proformix  name,
against  a cash  consideration  and an  ongoing  contingent  stream  of  royalty
payments on OS' sales of the  Proformix  hardware  products.  The  Company  will
continue to market its  proprietary  software  under the  Proformix  label.  The
Agreement  with OS  also  provided  for the  retirement  of the  Company's  then
existing  bank debt,  out of the proceeds of the  transaction.  Further  details
regarding this transaction may be obtained from the Company's  related filing of
February 9, 1999, on Form 8-K, incorporated herein by reference.

Until  November  18,  1998,  when the Company  sold its  hardware  product  line
comprised  of  Magnitude,   Inc.'s  ergonomic  keyboard  platform  products  and
accessories, its business was primarily centered around the design, development,
manufacture,  and marketing of research-based  ergonomic  accessory products for
the computerized workplace. In parallel, and beginning with the February 1998


                                       6
<PAGE>

              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999

acquisition  by the  Company  of  Rolina  Corporation,  which had  developed  an
ergonomic  software product that was being marketed under the name "ErgoSentry",
and the subsequent acquisition in May 1998 of substantially all of the assets of
Vanity Software Publishing Corporation,  which also included a certain ergonomic
software package known as "ErgoBreak", the Company engaged in the development of
a unique suite of software  packages  designed to increase  productivity  in the
computer   related  work   environment   which  include  the  before   mentioned
"ErgoSentry" and "ErgoBreak" products. These efforts resulted, in November 1998,
in the  release  to the market of the  proprietary  "Proformix  EMS"  (Ergonomic
Management System) software system.  With the sale of the hardware product line,
the Company's business is now focused exclusively on the further development and
marketing of these software  products.  As such,  the Company  currently must be
considered an enterprise in transition, because it has not yet realized material
revenues from licensing its software.

Magnitude Inc.'s wholly owned subsidiary,  Corporate Ergonomic  Solutions,  Inc.
(Ergonomics)  was  incorporated  in the State of New Jersey during October 1992.
Ergonomics,  which commenced  operations in September 1997, was formed primarily
to  market  hardware  products.   Its  operations  during  1998  have  not  been
significant.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Principles of Consolidation
        The consolidated  financial statements include the accounts of Magnitude
        Information  Systems,  Inc. and its  subsidiaries,  Magnitude,  Inc. and
        Corporate  Ergonomic  Solutions,   Inc.  All  significant   intercompany
        balances and transactions have been eliminated.

     Inventories
        Inventory  consists of  finished  goods which are stated at the lower of
        cost (determined by the first-in, first out method) or market.

     Depreciation and Amortization
        Property,  plant and  equipment  are recorded at cost.  Depreciation  on
        equipment, furniture and fixtures and leasehold improvements is computed
        on the  straight  line method over the  estimated  useful  lives of such
        assets  between  5-10  years.  Maintenance  and  repairs  are charged to
        operations as incurred.  Software assets acquired pursuant to the Rolina
        and Vanity  agreements are amortized on the straight line method over 10
        years.

     Securities Issued for Services
        The Company  accounts for stock options issued for services by reference
        to the fair  market  value of the  Company's  stock on the date of stock
        issuance or option grant.  Compensation expense is recorded for the fair
        market  value of the stock  issued,  or in the case of options,  for the
        difference  between the stock's  fair market  value on the date of grant
        and the option exercise price.

        Effective  January 1, 1996, the Company  adopted  Statement of Financial
        Accounting   Standard  (SFAS)  No.  123,   "Accounting  for  Stock-based
        Compensation".  The statement generally suggests,  but does not require,
        employee stock-based compensation transactions be accounted for based on
        the fair value of the  consideration  received  or the fair value of the
        equity instruments issued, whichever is more reliably measurable.


                                       7
<PAGE>

              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

     Income Taxes
        The  Company  provides  for income  taxes  based on enacted  tax law and
        statutory  tax rates at which items of income and  expenses are expected
        to be  settled in the  Company's  income tax  return.  Certain  items of
        revenue and  expense are  reported  for Federal  income tax  purposes in
        different  periods  than  for  financial  reporting  purposes,   thereby
        resulting in deferred  income taxes.  Deferred taxes are also recognized
        for operating losses that are available to offset future taxable income.
        Valuation  allowances are established  when necessary to reduce deferred
        tax  assets to the amount  expected  to be  realized.  The  Company  has
        incurred net operating losses for  financial-reporting and tax-reporting
        purposes.  Accordingly,  the  benefit  for income  taxes has been offset
        entirely by a valuation allowance against the related deferred tax asset
        for the periods ended March 31, 1999.

     Net Loss Per Share
        Net loss per share,  in  accordance  with the  provisions  of  Financial
        Accounting  Standards Board No. 128, "Earnings Per Share" is computed by
        dividing  net loss by the  weighted  average  number of shares of Common
        Stock outstanding  during the period.  Common Stock equivalents have not
        been   included  in  this   computation   since  the  effect   would  be
        anti-dilutive.

     Revenue Recognition
        Revenue  from  hardware  product  sales  is  recognized  at the  time of
        shipment  provided that the resulting  receivable is deemed  probable of
        collection.  Revenue from  software  sales is  recognized at the time of
        licensing  provided that the resulting  receivable is deemed probable of
        collection.

     Use of Estimates
        The  preparation  of financial  statements in conformity  with generally
        accepted   principles   requires   management  to  make   estimates  and
        assumptions  that affect the reported  amounts of assets and liabilities
        and disclosure of contingent  assets and  liabilities at the date of the
        financial  statements and the reported  amounts of revenues and expenses
        during the  reporting  period.  Actual  results  could differ from those
        estimates.

PREPAID EXPENSES
        Prepaid  expenses  include a  position  of  $375,000  resulting  from an
        agreement  in February  1998 with BNN  Business  News  Network  Inc.,  a
        nationwide  media  advertising  and radio network  company , whereby the
        Company  purchased  advertising  time  on the  Business  News  Network's
        broadcasts  ,  usable  over a period  of  three  years  and  aggregating
        $900,000 in retail value, against issuance of 150,000 new and restricted
        common shares.  The services purchased were capitalized at the then fair
        market value of the stock issued, for a total of $375,000. The resulting
        asset will be amortized as utilized, over the time frame of the next two
        years. As per the date of this report, no portion of this asset has been
        utilized.  The  Company  is  currently  analyzing  the  utility  of this
        advertising  credit  in  light  of  current  business   strategies.   If
        management  deems that it may not be able to  economically  utilize  the
        entire  amount  during  the time  allotted,  it may  elect to  effect an
        accelerated amortization or write-down of this asset position.


                                       8
<PAGE>

              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999

PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment consist of the following at March 31, 1999:

               Equipment                                            $    195,903
               Furniture and fixtures                                     66,093
               Leasehold improvements                                     45,770
                                                                    ------------
                                                                         307,766
               Less accumulated depreciation                             168,892
                                                                    ------------
                                      Total                         $    138,874
                                                                    ============

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following at March 31,
1999:

               Accounts payable                                      $   601,735

               Accrued interest                                          280,054

               Accrued commissions                                        71,768

               Accrued professional fees                                  55,709

               Miscellaneous accruals                                     94,279
                                                                    ------------
                                      Total                          $ 1,103,545
                                                                    ============

LOANS PAYABLE

Magnitude,  Inc. and the Company had borrowings under short term loan agreements
with the following terms and conditions at March 31, 1999:


        Pursuant to three  promissory  notes signed  throughout 1995    $ 90,000
        and 1996, an investor  advanced  Magnitude,  Inc. a total of 
        $90,000 payable upon demand with interest at 12% per annum.  
                                                                     
        On  December  4,  1996,  Magnitude,   Inc.  repurchased  the      75,000
        equivalent of 144,192 shares of its common stock and retired 
        same against  issuance of a promissory  note maturing twelve 
        months thereafter  accruing interest at 5% per annum and due 
        December 4, 1998. This note is overdue at March 31, 1999 and 
        no demand for payment has been made through April 7, 1999    
                                                                        
        Pursuant  to the  Rolina  Corporation  Agreement  & Plan  of     100,000
        Merger dated  February 2, 1998 the Company was to deliver to 
        Steven D.  Rudnik  $100,000  eight  months  from the closing 
        date.  Such amount is overdue and as a result Mr. Rudnik has  
        a lien on certain  software  products.  In February  1999, a  
        director and  shareholder  of the Company  provided a demand      42,500
        loan to the  Company  which  is  carried  as a  non-interest    --------
        bearing cash advance.                                         
                                                                      
            Total                                                       $307,500
                                                                        ========


                                 9
<PAGE>

              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999

NOTES PAYABLE

     Private Placement Offering
        During  February  through June 1995, an underwriter  acting as placement
        agent,  on behalf of  Magnitude,  Inc.  placed,  in a private  placement
        offering,  an aggregate 16 units,  each  consisting  of a $100,000,  12%
        promissory note and 10,000 shares of Magnitude, Inc.'s common stock. The
        promissory  notes were  originally  due on the earlier of 12 months from
        their  issuance or the  completion  of a public or private  financing of
        either  debt  or  equity   securities  of  Magnitude,   Inc.,  and  were
        subsequently  extended  for an  additional  6 months,  and further by an
        additional  9  months.  In May  1997 a  restructuring  agreement  caused
        $1,075,000  of these notes to be extended  and modified to, among other,
        mature by April 30, 2000.  Two such notes,  however,  totaling  $200,000
        were extended and modified to, among other, mature on dates ranging from
        January  1, 1999  through  April  30,  2000.  The total  amount of notes
        outstanding  at March 31,  1999 was  $1,475,000,  of which  $550,000  is
        current.

LONG-TERM DEBT

     Long-term debt as of March 31, 1999 is comprised of the following:

        Note to the  board  chairman,  principal  due  May 31,  2000    $351,060
        accruing  interest at a rate of 10% per annum.  This note is            
        secured  by all of  Magnitude  Inc.'s  assets  and  property.     
        Discounted  present value of a non-interest  bearing $70,000      33,529
        settlement with a former  investor of Magnitude,  Inc. to be            
        paid in 24 equal monthly  payments  commencing July 1, 1997.      
        The imputed  interest  rate used to discount  the note is 8%            
        per  annum.             
        Discounted  present  value  of  a  non-interest bearing           30,974
        $176,000   settlement   with  former   counsel  of        
        Magnitude, Inc. to be paid in 24 monthly payments commencing    
        September  1,  1997.  The  imputed  interest  rate  used  to    
        discount the note is 8% per annum.                              --------
               Total                                                     415,563
                   Less current maturities                                64,503
                                                                        --------
                   Long-term debt, net of current maturities            $351,060
                                                                        ========


                                 10
<PAGE>

        MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           MARCH 31, 1999

INCOME TAXES

        At December 31, 1998,  The Company had net operating loss carry forwards
        approximating  $8,900,000  which expire  between the years 2008 and 2013
        and are subject to certain annual limitations.

The Company's  total deferred tax asset and valuation  allowance at December 31,
1998 are as follows:
            Total deferred tax asset                                  $3,560,000
            Less valuation allowance                                   3,560,000
            Net deferred tax asset                                    $       --
                                                                      ==========

COMMITMENTS AND CONTINGENCIES

   Lease Agreement
     Magnitude,  Inc.  leases its  administrative  offices  pursuant  to a lease
     agreement dated December 9, 1998.  Such lease  commences  December 16, 1998
     and expires on December  31, 2001 and requires  monthly  payments of $3,700
     from December 16, 1998 to October 31, 1999 and $3,250 from November 1, 1999
     to December 31,1999.

   Licensing Agreement
     Pursuant to an August 29,  1997  letter of intent,  the Company may acquire
     Cornell Ergonomics ("Cornell"),  a software developer of a unique ergonomic
     assessment  tool.  This agreement was  subsequently  revised on December 1,
     1997  through a Software  Distribution  and Option  Agreement  whereby  the
     Company obtained a two-year exclusive license to distribute and sub-license
     a certain software product and obtained the exclusive right,  under certain
     circumstances,  to  purchase  either  the  assets of  Cornell or all of the
     issued and outstanding capital stock of Cornell.

   Put Option
     Pursuant to the February 2, 1998,  Agreement and Plan of Merger with Rolina
     Corporation (see  "Background")  the Company had issued 155,556 shares (the
     "Shares") of its common stock to the  principal of Rolina  Corporation  who
     currently  serves as the Company's  President and Chief Executive  Officer,
     and a Put Option for such Shares.  This Put Option  requires the Company to
     repurchase  up to  155,556 of the Shares at a price of $2.41 per share upon
     notice of such option exercise in accordance with the provisions  contained
     therein,  such notice  eligible  to be given at any time after  February 1,
     2000, and before 5:00 p.m. on the 90th day thereafter.

RELATED PARTY TRANSACTIONS

     In November 1998, the Company  entered into a consulting  agreement with an
     individual who subsequently, in January 1999, joined the Company's board of
     directors,  and pursuant to which the Company  issued  1,000,000  shares of
     common stock. Such shares were registered on Form S-8 on December 22, 1998.
     During  the  first  quarter  of  1999,  this  individual  pursuant  to  the
     consulting agreement obtained the release of approximately  $436,000 of the
     Company's liabilities.

     Between  December  30, 1998,  and March 31, 1999, a director and  principal
     shareholder  extended  working  capital loans  aggregating  $395,560 to the
     Company,  of which a portion of $351,060 was covered by a  promissory  note
     bearing  interest  at the  rate of 10% p.a.  During  the  same  time,  this
     director and shareholder  exercised  options to purchase  450,000 shares of
     the  common  stock of the  Company  and was  issued an  additional  565,000
     shares,  against a combination  of cash payments and  cancellation  of debt
     owed by the Company, in the aggregate amount of $507,500.


                                       11
<PAGE>

              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999


RELATED PARTY TRANSACTIONS,  continued

     On April 1, 1999, the Company's board of directors  authorized the issuance
     of up to 600,000 shares of the Company's common stock to certain  directors
     and  officers  of the  Company and  registration  of same on Form S-8,  for
     services as employees  or  consultants  during 1999,  and in lieu of salary
     from May 1, 1999, to the end of the year, or other remuneration.


CHANGES IN KEY PERSONNEL

     In January 1999,  Steven D. Rudnik was  appointed  President and CEO of the
     Company,  taking over the position  previously  occupied by Jerry Swon, who
     continues  to serve as a director  of the  Company.  At the same time,  Mr.
     Rudnik was named a director of the Company.


                                       12
<PAGE>

Item 2.

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

New Software Business and Results of Operations:

Effective  with the sale of the  hardware  business in  November  1998 to Office
Specialty  (see  "Background"  in  Notes to  Financial  Statements)  no  further
revenues were being  generated  from this product line,  aside from royalties on
third party revenues from the sales of such hardware  products which amounted to
$63,675 for the quarter and which are included in non-operating  income.  In the
aftermath of the Office  Specialty  transaction,  the Company's  revenue base is
being supplied solely by the licensing of the Company's proprietary software. As
such,  the Company  currently  must be considered  an enterprise in  transition,
because it has not yet realized  material  revenues from licensing its software.
The software  business  accounted for less than 3% of total revenues during 1998
or $72,486. A comparison of revenues to last year's fiscal quarters therefore is
not  meaningful.  Comparisons  of  operating  expenses  likewise  are of limited
usefulness, and will therefore only be made where appropriate.

The Company is currently  introducing  to the market its new  Proformix  EMS(TM)
suite of software products. This unique product is the first integrated suite of
software  tools that provides a complete  compliance  system for  evaluation and
management of ergonomic  risk factors for the computer  workplace.  The software
also  provides  an  effective  productivity  measuring  tool  that  can  make  a
verifiable  difference in any company's  bottom line. The Company's  proprietary
software  products  are  designed  to  help  businesses  deal  with  potentially
preventable  repetitive stress injuries,  by real-time monitoring of keyboarding
activities,  pro-active dialog with at-risk employees,  and strategic  profiling
and management of computer use throughout an organization.

The sales  cycle for larger  projects  involving  software  related  products is
relatively  long,  and the new  products  therefore  are not  expected  to yield
significant new revenues  before later in this fiscal year.  Revenues during the
quarter ended March 31, 1999,  totaled $44,507 and were supplied  primarily from
what the  Company  classifies  as "pilot  projects".  Typically,  in view of the
new-ness  of product and market,  a client  initially  purchases a license for a
"pilot version" of the software,  functionally complete but limited to a smaller
number of users.  After undergoing a process of  familiarization  and evaluation
the  client is  expected  to upgrade to the  intended  ultimate  number of users
which,  by  definition,  should  encompass  all  personnel  exposed to the above
described  risks.  Many tests and evaluations by third parties have confirmed to
the Company's satisfaction that its product is mature, stable, and effective. It
is with a high degree of confidence, therefore, that the Company expects many of
the  ongoing  trial  installations  to lead to  larger  enterprise  orders  and,
thereby, to the targeted revenue stream.

Software  assets  underlying  the  Company's  products are being  amortized on a
straight  line  over 10 years,  resulting  in a level  charge  of  approximately
$12,000 per month to  cost-of-goods-sold.  Selling expenses amounted to $165,471
and general and  administrative  expenses totaled $421,975 for the quarter.  The
relatively large amount of G&A expenses is attributable to the fact that most of
the Company's  operating expenses currently have fixed or quasi-fixed  character
covering the cost of maintaining an operational  infrastructure required for the
business.  While the software  business to a significant  degree is less capital
intensive than the Company's previously dominant hardware business,  its overall
cost structure is less sensitive to changes in volume.  This burdens the Company
with a certain level of fairly  constant  expenses  during the period when it is
only  beginning to realize cash flow from revenues.  However,  after passing the
break-even  point the Company will be the beneficiary of significant  cash flows
from any further revenue increases.  The operating results for the quarter ended
March  31,  1999,  was a loss of  $585,815.  The net  loss for the  quarter  was
$587,662 or $0.08 per share.


                                       13
<PAGE>

Liquidity and Capital Resources

The  Company's  cash needs to finance both the loss from  operations  during the
quarter, and a reduction in current liabilities of approximately  $570,000 since
the beginning of the year, were satisfied  primarily through placement of common
equity in private transactions (see section "Related Party Transactions").  Such
financing  transactions  resulted in a noticeable  relative  improvement  in the
working  capital  deficit,  which  decreased  from  approximately  $2,200,000 at
December 31,  1998,  to  $1,400,000  at March 31,  1999.  The deficit,  however,
continues to impose serious  constraints on the Company's  liquidity,  which are
aggravated by the continuing  negative cash flow from  operations.  To alleviate
these  constraints,  management has since the end of the quarter  negotiated the
placement of an aggregate  $500,000 in convertible  debt with private  investors
which,  at  the  time  of  this  submission  has  resulted  in  the  receipt  of
approximately  the same amount in cash.  Management  anticipates  a further need
during  the  upcoming  quarters  to  augment  working  capital  through  outside
financing.  Management's  efforts  in  this  direction  center  around  securing
additional  funding from a variety of sources including debt instruments,  and a
liquidation of unused NOL's  expected to generate  approximately  $500,000,  the
latter subject to finalization of pertinent current New Jersey tax legislation.


                                       14
<PAGE>

PART II - OTHER INFORMATION

Item 1 LEGAL PROCEEDINGS

In response to this item,  reference  is made to the  Company's  reports on Form
10-KSB for the year ended December 31, 1998, as previously submitted.


Item 2 CHANGES IN SECURITIES

During the first  quarter of 1999 and through May 12, 1999,  the Company  issued
the following unregistered securities:

     (i) 565,000 shares of Common Stock to a director and principal  shareholder
in exchange against cancellation of promissory notes and interest thereon in the
aggregate value of $282,500 (see "Related Party Transactions");

     (ii)  77,778  shares  of Common  Stock to the  former  principal  of Rolina
Corporation (see "Background") and current President of the Company, pursuant to
a Non-Dilution  clause in the February 2, 1998 Agreement and Plan of Merger with
Rolina Corporation;

     (iii) 54,100 shares of Common Stock to three  Magnitude,  Inc.  consultants
and providers of services to the Company.

Item 3 DEFAULTS ON SENIOR SECURITIES - None

Item 4 SUBMISSION OF MATTERS TO A VOTE OF
       SECURITIES' HOLDERS - None

Item 5 OTHER INFORMATION - None

Item 6 EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibit 27 - Financial Data Schedule - is attached hereto.

     (b)  Reports  on Form 8-K: - A report was filed on  January  27,  1999,  to
announce the consummation of an Asset Purchase  Agreement and related agreements
with 1320236  Ontario Inc.  d/b/a Office  Specialty,  and is included  herein by
reference.


                                       15
<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.

                                 MAGNITUDE INFORMATION SYSTEMS, INC.




Date: May 13, 1999          By: _____________________________________
                                Steven D. Rudnik
                                President and Chief Executive Officer


                                       16
<PAGE>

              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES

                                   EXHIBIT 27
THIS SCHEDULE  CONTAINS SUMMARY FINANCIAL  INFORMATION  EXTRACTED FROM THE MARCH
31, 1999  FINANCIAL  STATEMENTS  OF  MAGNITUDE  INFORMATION  SYSTEMS,  INC.  AND
SUBSIDIARIES  AND IS QUALIFIED  IN ITS  ENTIRETY BY REFERENCE TO SUCH  FINANCIAL
STATEMENTS.

<TABLE>
<CAPTION>
Item Number                Item Description                                 March 31, 1999
-----------                ----------------                                 --------------
<S>                  <C>                                                  <C>   
  5-02(1)            Cash and cash items                                        823.00

  5-02(2)            Marketable securities                                           -

  5-02(3)(a)(1)      Notes and accounts receivable - trade                  187,552.00

  5-02(4)            Allowances for doubtful accounts                       106,589.00

  5-02(6)            Inventory                                               26,789.00

  5-02(9)            Total current assets                                   655,258.00

  5-02(13)           Property, plant and equipment                          307,766.00

  5-02(14)           Accumulated depreciation                               168,892.00

  5-02(18)           Total assets                                         2,162,575.00

  5-02(21)           Total current liabilities                            2,050,374.00

  5-02(22)           Bonds, mortgages and similar debt                    1,305,899.00

  5-02(28)           Preferred stock - mandatory redemption                          -

  5-02(29)           Preferred stock - no mandatory redemption                       -

  5-02(30)           Common stock                                               835.00

  5-02(31)           Other stockholders' equity (deficit)               (1,194,533.00)

  5-02(32)           Total liabilities and stockholders' equity           2,162,575.00

  5-03(b)1(a)        Net sales of tangible products                          44,507.00

  5-03(b)1           Total revenues                                          44,507.00

  5-03(b)2(a)        Cost of tangible goods sold                             42,876.00

  5-03(b)2           Total costs and expenses applicable 
                       to sales and revenues                                165,471.00

  5-03(b)3           Other costs and expenses                               421,975.00

  5-03(b)5           Provision for doubtful accounts and notes                1,887.00

  5-03(b)(8)         Interest and amortization of debt discount              51,837.00

  5-03(b)(10)        Income/loss before taxes and other items             (587,662.00)

  5-03(b)(11)        Income tax expense                                              -

  5-03(b)(14)        Income/loss continuing operations                    (587,662.00)

  5-03(b)(15)        Discontinued operations                                         -

  5-03(b)(17)        Extraordinary items                                             -

  5-03(b)(18)        Cumulative effect - changes in 
                       accounting principles                                         -

  5-03(b)(19)        Net income or loss                                   (587,662.00)

  5-03(b)(20)        Earnings per share - primary                               (0.08)

  5-03(b)(20)        Earnings per share - fully diluted                         (0.08)
</TABLE>


                                       17