SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   Form 10-QSB

                QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
  SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED March 31, 1999

Commission file number  0-21151


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

DELAWARE                                                      91-1418002
--------                                                      -----------
(State or other jurisdiction                               (I.R.S. Employer
incorporation or organization)                            Identification No.)


1077 Northern Blvd., Roslyn, NY                                11576
-------------------------------                                -----
(Address of principal executive offices)                     (Zip Code)


                                  516-365-1909
                                  ------------
                           (Issuer's telephone number)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the  registrant  was  required to file such  reports) and (2) has be
subject to such filing requirements for the past 90 days. Yes   X    No 
                                                              -----     -----

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.

     There were 4,275,092 shares of common stock outstanding on April 29, 1999.

Transitional Small Business Disclosure Format
(Check one):

Yes          No    X
    -----        -----


<PAGE>


Item 1.  Financial Statements

                           PROFILE TECHNOLOGIES, INC.

                            Condensed Balance Sheets


--------------------------------------------------------------------------------
                                                      March 31,       June 30,
                                                        1999            1998
--------------------------------------------------------------------------------
                                                    (unaudited)
                                     Assets
                                     ------

Current assets:
  Cash and cash eqivalents                           $ 3,470,882      4,167,951
  Accounts receivable                                     30,934           --
  Prepaid expenses                                        31,802         59,645
                                                     --------------------------

             Total current assets                      3,533,618      4,227,596

Property and equipment, net                              129,914        113,173
Patents, net                                             214,865        204,037
Other assets                                               3,530          3,530
                                                     --------------------------

              Total assets                           $ 3,881,927      4,548,336
                                                     --------------------------

                      Liabilities and Stockholders' Equity
                      ------------------------------------

Current liabilities:
  Accounts payable - stockholders                    $      --           21,737
  Other accounts payable                                  14,800         19,553
  Other accrued liabilities                               42,151        134,322
                                                     --------------------------

              Total current liabilities                   56,951        175,612
                                                     --------------------------

Stockholders' equity:
  Common Stock, $0.01 par value. Authorized
    10,000,000 shares; issued and outstanding
    4,275,092 shares at March 31, 1999 and
    4,262,600 shares at June 30, 1998                      4,275          4,263
  Additional paid-in capital                           7,561,758      7,514,145
  Accumulated deficie                                 (3,741,057)    (3,145,684)
                                                     --------------------------

              Total stockholders' equity               3,824,976      4,372,724
--------------------------------------------------------------------------------

              Total liabilities and
                stockholders' equity                 $ 3,881,927      4,548,336
--------------------------------------------------------------------------------


           See accompanying notes to condensed financial statements.

                                        1


<PAGE>
<TABLE>
<CAPTION>

                                          PROFILE TECHNOLOGIES, INC.

                                       Condensed Statements of Operations
                                                   (unaudited)

----------------------------------------------------------------------------------------------------------------------

                                                         Three months ended                     Nine months ended
                                                               March 31,                             March 31,
                                                     -----------------------------------------------------------------
                                                         1999                1998              1999           1998
----------------------------------------------------------------------------------------------------------------------

<S>                                                  <C>                    <C>              <C>                <C>   
Revenues - services                                  $      --              15,000           178,910            45,000
                                                     -----------------------------------------------------------------    

Cost of services                                            --               4,450            53,085            13,352
                                                     -----------------------------------------------------------------

   Gross profit                                             --              10,550           125,825            31,648
                                                     -----------------------------------------------------------------

Operating expenses:
    Research and development                              82,963            78,913           229,740           230,722
    General and administrative                           229,017           172,672           634,210           490,337
                                                     -----------------------------------------------------------------

                         Total operating expenses        311,980           251,585           863,950           721,059
                                                     -----------------------------------------------------------------

                         Loss from operations           (311,980)         (241,035)         (738,125)         (689,411)
                                                     -----------------------------------------------------------------

Interest income                                           40,879            58,872           142,752           190,486
                                                     -----------------------------------------------------------------

                         Net loss                    $  (271,101)         (182,163)         (595,373)         (498,925)
                                                     -----------------------------------------------------------------

Basic and diluted net loss per share                       (0.06)            (0.04)            (0.14)            (0.12)

Weighted average basic and diluted common
     and common share equivalents outstanding          4,275,092         4,262,600         4,273,205         4,262,600
======================================================================================================================



                              See accompanying notes to condensed financial statements.

                                                       2


<PAGE>

                                           PROFILE TECHNOLOGIES, INC.

                                       Condensed Statements of Cash Flows
                                                  (unaudited)

------------------------------------------------------------------------------------------------------------



                                                                                  Nine months ended
                                                                                      March 31,
                                                                      --------------------------------------

                                                                            1999                    1998
------------------------------------------------------------------------------------------------------------

Cash flows from operating activities:

    Net loss                                                          $  (595,373)                (498,925)
    Adjustments to reconcile net loss to net
     cash used in operating activities:
       Depreciation and amortization                                       74,823                   27,134
       Changes in assets and liabilities:
        Accounts receivable                                               (30,934)                    --   
        Contract work-in-progress                                            --                     20,000
        Accounts receivable/payable - stockholder                         (21,737)                   1,790
        Prepaid expenses                                                   27,843                  (13,807)
        Other assets                                                         --                       (180)
        Other accounts payable                                             (4,753)                   3,010
        Accrued wages                                                        --                    (20,614)
        Other accrued liabilities                                         (92,171)                 (18,514)
                                                                      ------------------------------------

           Net cash used in operating activities                         (642,302)                (500,106)
                                                                      ------------------------------------

Cash flows from investing activities:
   Patents                                                                (44,383)                 (15,000)
   Purchase of property and equipment                                     (58,009)                 (71,836)
                                                                      ------------------------------------

            Net cash used in investing activities                        (102,392)                 (86,836)
                                                                      ------------------------------------

Cash flows from financing activities:
   Proceeds from exercise of common
     stock purchase warrants                                               47,625                     --   
                                                                      ------------------------------------
            Net cash provided by financing activities                      47,625                     --   
                                                                      ------------------------------------

            Decrease in cash and cash equivalents                        (697,069)                (586,942)

Cash and cash equivalents at beginning of period                        4,167,951                4,936,600
                                                                      ------------------------------------

Cash and cash equivalents at end of period                              3,470,882                4,349,658
                                                                      ------------------------------------


                           See accompanying notes to condensed financial statements.


                                                      3
</TABLE>


<PAGE>
                           PROFILE TECHNOLOGIES, INC.

                     Notes to Condensed Financial Statements



1.    Description of Business

Profile  Technologies,  Inc.  (Company)  is in the  business of  developing  and
commercializing potential processes for the nondestructive,  noninvasive testing
of both above  ground and buried  pipelines  for the  effectiveness  of pipeline
cathodic protecting systems and coating integrity. The Company's future revenues
are  currently  dependent  upon the market's  acceptance  of its sole  developed
process.

From 1986  (incorporation)  through June 30, 1998, the Company was considered to
be in the  development  stage  as the  Company  had  not  generated  significant
revenues from its research and development efforts and related service contracts
with respect to the above process,  and  operations,  consisting  principally of
product development and administrative  activities,  had primarily been financed
through the issuance of common stock.

During the nine months ended March 31, 1999,  the Company  commenced work on its
initial commercial  contracts for corrosion  inspection services of pipeline and
has emerged from the  development  stage.  There can be no  assurances  that the
Company will be able to obtain additional commercial contracts in the future.

2.    Basis of Presentation

The unaudited  interim condensed  financial  statements and related notes of the
Company  have  been  prepared  pursuant  to  the  instructions  to  Form  10QSB.
Accordingly,  certain information and footnote  disclosures normally included in
the  financial   statements  prepared  in  accordance  with  generally  accepted
accounting  principles  have been  omitted  pursuant to such  instructions.  The
accompanying  condensed financial statements and related notes should be read in
conjunction with the audited financial  statements and notes thereto included in
the annual report FORM 10KSB for the year ended June 30, 1998.  The  information
furnished reflects, in the opinion of management, all adjustments, consisting of
only normal recurring items,  necessary for fair  presentation of the results of
the interim periods presented. Interim results are not necessarily indicative of
results for a full year. Certain  reclassifications  have been made to the March
31, 1998 information to conform with the March 31, 1999 presentation.

3.   Net Loss Per Share

Basic  earnings  per share is computed by dividing  the net loss by the weighted
average number of common shares outstanding during the period.  Diluted earnings
per share is computed by dividing the net loss by the weighted average number of
common and dilutive common equivalent shares  outstanding  during the period. As
the Company had a net loss  attributable  to common  shareholders in each of the
periods presented, basic and diluted net loss per share are the same.

Excluded from the computation of diluted loss per share for the three months and
nine months  ended March 31, 1998 are  warrants to acquire  1,120,000  shares of
common  stock with a  weighted-average  exercise  price of $3.41  because  their
effect would be antidilutive.  Excluded from the computation of diluted loss per
share for the three months and nine months ended March 31, 1999 are warrants and
options  to acquire  1,237,508  shares of common  stock with a  weighted-average
exercise price of $3.99 because their effect would be antidilutive.

                                       4

<PAGE>


4.    Product Development Costs - New Accounting Pronouncement

Product development costs are charged to operations as incurred.  In March 1998,
the AICPA issued Statement of Position (SOP) No. 98-1,  Accounting for the Costs
of Computer  Software  Developed or Obtained for Internal  Use,  which  requires
capitalization of certain software  development costs for software developed for
internal use.

Costs incurred during the application  development  stage should be capitalized.
The Company adopted SOP No. 98-1 beginning July 1, 1998. The  implementation  of
the provisions of SOP No. 98-1 did not have a significant impact on the Company.

5.    Stock Option Plan and Stock Purchase Warrant

In October, 1998:

     *    the  Board  approved  a Stock  Option  Plan,  subject  to  shareholder
          approval, and reserved for issuance of stock options 500,000 shares of
          common stock;
     *    the  Company  granted a warrant to  purchase  85,000  shares of common
          stock to its President with an exercise price of $7.50 per share.

                                       5


<PAGE>


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

GENERAL

     The Company is in the business of developing and commercializing  potential
processes for the non-destructive, non-invasive testing of both above ground and
buried  pipeline to evaluate the condition  and  integrity of the pipeline.  The
development of its pulse propagation analyzer process and the further refinement
of the technology  associated therewith have progressed to the point where it is
now being utilized  commercially.  The Company has begun to obtain revenues from
its commercial activities but has not yet reached profitability. There can be no
assurance that the Company will obtain  commercial  contracts in the future that
would  produce  operating  revenues  sufficient  to  attain  profitability.  The
Company's process identifies electromagnetic anomalies that may be indicative of
areas of corrosion,  areas that lack cathodic protection and areas that may have
defective  coating  on both  below  ground  and above  ground  pipes.  The pulse
propagation analyzer consists of a computer,  software to enhance collection and
processing  of data,  a precision  multi-channel  pulse  generator  and a signal
analyzer.

     In order for the Company to obtain significant revenues from the use of its
technology,  the Company must establish a sales and marketing  organization that
is effective  and obtains  customers  for its pulse  propagation  analyzer.  The
Company must also be able to supply and train work crews in  sufficient  numbers
to satisfy the requirements of its customers.  From inception  through March 31,
1999,  the Company  incurred  losses of  $3,741,057  and losses are  expected to
continue at least  through the fourth  quarter of the year ending June 30, 1999;
no assurances can be given that losses will not continue thereafter.

RESULTS OF OPERATIONS

Quarter Ended March 31, 1999 Compared to the Quarter Ended March 31, 1998.
--------------------------------------------------------------------------

     The Company had no revenues for the quarter  ended March 31, 1999  compared
to  revenues of $15,000 for the  quarter  ended  March 31,  1998.  The loss from
operations for the quarter ended March 31, 1999 was $311,980  compared to a loss
from  operations of $241,035 for the quarter ended March 31, 1998. The loss from
operations  in the quarter  ended March 31, 1999  increased  by $70,945 over the
comparable  quarter ended March 31, 1998 primarily  because of increased general
and  administrative  expenses of $229,017  compared to $172,672  incurred in the
quarter ended March 31, 1998. The operating loss for the quarter ended March 31,
1999  was  offset   somewhat  by  interest  income  in  the  amount  of  $40,879
representing  interest  earned  from  proceeds  of the  Company's  public  stock
offering which was completed in February of 1997. This resulted in a net loss of
$271,101 for the quarter ended March 31, 1999 compared to a net loss of $182,163
for the  quarter  ended  March  31,  1998.  Research  and  development  expenses
increased  slightly to $82,963 for the quarter  ended March 31, 1999 compared to
$78,913  for the  quarter  ended  March 31,  1998.  General  and  administrative

                                       6

<PAGE>

expenses  increased  by $56,345  for the  quarter  ended March 31, 1999 from the
quarter  ended March 31, 1998  primarily  because of increased  salary  expenses
associated  with  hiring  a new  President  and  additional  personnel,  and  an
associated increase in travel expenses.

Nine Months Ended March 31, 1999 Compared to Nine Months Ended March 31, 1998.
------------------------------------------------------------------------------

     In spite of a lack of revenues  in the third  quarter,  revenues  increased
significantly  to $178,910 for the nine months ended March 31, 1999  compared to
$45,000 for the nine months  ended  March 31,  1998.  Revenues in the nine month
period  ended March 31, 1999 were  derived from both  commercial  contracts  and
demonstration projects whereas revenues for the nine months ended March 31, 1998
were  derived  from  demonstration  projects  and/or  research  and  development
contracts with two large multi-national oil companies.  Total operating expenses
for the nine  months  ended  March 31,  1999  were  $863,950  compared  to total
operating  expenses of $721,059  for the nine months  ended March 31,  1998,  an
increase  of  $142,891  or 20%.  Research  and  development  expenses  decreased
slightly to $229,740 for the nine months ended March 31, 1999 from  $230,722 for
the nine  months  ended  March 31,  1998,  a  decrease  of $982 or less than one
percent. General and administrative expenses increased for the nine months ended
March 31, 1999 to $634,210  compared to $490,337 for the nine months ended March
31, 1998, primarily as a result of increased salary for additional personnel and
travel expenses.

     Management  believes  that both  revenues  and  expenses of the Company are
likely to continue to increase  during the  remainder  of the fiscal year ending
June 30,  1999  compared to the fiscal year ended June 30, 1998 if it is able to
secure additional contracts with customers, of which there is no assurance.  The
revenues  earned  by the  Company  to date  have  often  included  research  and
development  activities  that have been  sponsored by large  multi-national  oil
companies and large  utilities.  These  activities  included  field research and
development at such companies'  facilities and are likely to continue during the
year ending June 30, 1999 and for the  foreseeable  future.  Management  is also
working towards obtaining additional fee for service contracts that are expected
to be the  major  source  of the  Company's  revenues.  If  such  contracts  are
obtained, management expects that its expenditures associated with personnel and
testing  equipment  will begin to rise.  In addition,  as the Company  begins to
actually   provide  fee  for  service  work  on  a  larger   scale,   additional
administrative support activities will increase together with related expenses.

LIQUIDITY AND CAPITAL RESOURCES

     The Company  completed work on its first  commercial  contracts  during the
nine  months  ended  March  31,  1999 and has  emerged  from  development  stage
activities.  Net cash used in operating  activities totaled $642,302 in the nine
months ended March 31, 1999 and the Company  expects that  additional  operating
activities  will  result in cash  outflows  in the near term  while the  Company
pursues additional commercial contracts,  marketing activities, and research and
development.  Cash  outflows from  operations  are expected to continue at least
through  the quarter  ending  June 30,  1999;  no  assurances  can be given that
operational activities will generate positive cash flows thereafter.

                                       7

<PAGE>


     In February of 1997, the Company  completed an initial  public  offering of
its common stock,  selling  1,000,000  shares at a price of $6.00 per share,  as
well as an Underwriter's  overallotment option of 50,000 shares, also at a price
of $6.00 per share.  Net  offering  proceeds of  approximately  $5,172,000  were
realized  by the  Company  from  this  public  offering.  The  Company,  pending
utilization  of the net proceeds in  operations,  has invested  such proceeds in
short-term, high grade, interest-bearing instruments.

     The  Company's  available  cash and  equivalents  as of March 31, 1999 were
$3,470,882. At March 31, 1999, the Company had working capital of $3,476,667 and
no  material  long  term   commitments  or  material   commitments  for  capital
expenditures.

     The Company  believes that its current capital  resources and liquidity are
adequate for at least the next twelve months. Other than equipment purchases for
field crews if the Company is  successful  in  obtaining  additional  commercial
contracts and the expenses associated with the hiring and training of such field
crews, the Company does not have any plans for significant capital  expenditures
above its current level.

RESOURCES

     As of March 31, 1999 the Company did not have any material  commitments for
capital expenditures.  However,  management is currently directing the Company's
activities towards obtaining  additional fee for service  contracts,  which will
necessitate the Company attracting,  hiring,  training and outfitting  qualified
technicians. The Company's intention is to purchase such equipment for its field
crews for the foreseeable future, until such time as the scope of the operations
may require alternate  sources of financing such equipment.  The timing of these
events is dependent  upon the  Company's  ability to obtain  additional  fee for
service contracts,  which is dependent upon the Company's  continuing ability to
demonstrate the  effectiveness of its technology.  The Company believes that its
cash position is  sufficient to satisfy its operating  needs for the next twelve
months.  Management believes it is well on the way to reaching these milestones,
but there can be no assurance  that the Company's  process will gain  widespread
commercial  acceptance  within any particular time frame, or at all. The Company
will incur additional  personnel expenses as it hires and trains field crews and
support personnel related to the successful receipt of commercial contracts.

YEAR 2000 COMPLIANCE

     The Company is aware of the issues  associated with the programming code in
existing  computer systems as the year 2000 approaches.  The "Year 2000" problem
is  concerned  with  whether  computer  systems  will  properly  recognize  date
sensitive  information  when  the year  changes  to  2000.  Systems  that do not
properly  recognize such  information  could generate  erroneous data or cause a
system to fail.  The Year 2000 problem is pervasive and complex since  virtually
every company's  computer  operation will be affected in some way. The Company's
computer  programs  which  process  its  field  data as well  as  operation  and
financing  transactions  were designed and  developed  without  considering  the

                                       8

<PAGE>

impact of the  upcoming  change  in  century.  Nevertheless,  as a result of the
Company's analysis of its computer programs and operations, the Company believes
that "Year 2000" problems will not seriously  impact or have a material  adverse
effect  on the  Company's  expenses,  business,  including  data  gathering  and
interpretation, or its operations.

     It is  possible,  however,  that  "Year  2000"  problems  incurred  by  the
customers  or suppliers  of the Company  could have a negative  impact on future
operations and financial  performance  of the Company,  although the Company has
not been able to  specifically  identify any such problems  among its suppliers.
The Company  believes that it will not be dependent upon any single supplier for
its  equipment  or  machinery  in  the  year  2000,  and  therefore  has  made a
determination  not to contact its primary  suppliers  to  determine  if they are
developing plans to address processing transactions which may impact the Company
in the year 2000.  However,  there can be no assurance  that Year 2000  problems
will not occur with respect to the Company's computer systems.  Furthermore, the
Year 2000 problem may impact  other  entities  with which the Company  transacts
business and the Company  cannot  predict the effect of the Year 2000 problem on
such  entities or the resulting  effect on the Company.  The Company has not yet
developed  a  contingency  plan to operate  in the event that any  non-compliant
customer or supplier systems that materially impact the Company are not remedied
by January 1, 2000 and has not yet determined a time table for developing such a
plan. As a result, if preventative  and/or corrective  actions by the Company or
those  entities  with which the Company  does  business are not made in a timely
manner,  the Year  2000  issue  could  have a  material  adverse  effect  on the
Company's business, financial condition and results of operations.



                           PART II    OTHER INFORMATION


Item 1.   Legal Proceedings.

     The Company is not a party to any pending or threatened legal proceedings.

Item 2.   Changes in Securities.

     None.

Item 3.  Defaults Upon Senior Securities.

     None.

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

     None.

                                       9

<PAGE>


Item 5.  Other Information.

     None.

Item 6.  Exhibits and Reports on Form 8-K

     (a) Exhibits.

         27.1 Financial Data Schedule


     (b) Reports on Form 8-K

         None





                                   SIGNATURES


     In accordance  with the  requirements  of the Exchange Act, the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                          PROFILE TECHNOLOGIES, INC.
                                                  (Registrant)


Date:    May 13, 1999                     /s/ G. L. Scott
                                          --------------------------------------
                                              G. L. SCOTT
                                              Chief Executive Officer


                                         /s/ Henry Gemino
                                         ---------------------------------------
                                             HENRY GEMINO
                                             Chief Financial Officer


                                       10