UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, DC 20549-1004


                                   Form 10-QSB

                                   (Mark One)
     [X]  Quarterly  report  pursuant  to Section 13 or 15(d) of the  Securities
          Exchange Act of 1934


                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999

                                       or


     [ ]  Transition  report pursuant to Section 13 or 15(d) of the Securities
          Exchange Act of 1934

        For the transition period from _______________ to _______________

                         Commission File Number 0-26455

                        ADVANCED BUSINESS SCIENCES, INC.
        (Exact name of small business issuer as specified in its charter)

                               DELAWARE 87-0347787
      (State or other jurisdiction of (I.R.S. Employer Identification No.)
                         incorporation or organization)

                              3345 No.107th STREET
                              OMAHA, NEBRASKA 68134
                                 (402) 498-2734
               (Address, including zip code, and telephone number,
                      including area code, of registrant's
                           principal executive office)


         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 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 issuer's  shares  outstanding  as of September 30, 1999,  was
12,946,624.

     Transitional Small Business Disclosure Form (Check One): YES [ ] NO [X]





<PAGE>



PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                        ADVANCED BUSINESS SCIENCES, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                     CONDENSED CONSOLIDATED BALANCE SHEETS
             September 30, 1999 and December 31, 1998 (in thousands)
<TABLE>
<CAPTION>


                                                                                     (unaudited)
                                                                                  September, 30          December 31
                                ASSETS                                                     1999                 1998
                                                                                  ---------------- --------------------
<S>                                                                                  <C>            <C>

Current Assets
     Cash and Cash Equivalents ....................................................   $       428   $   377,592
     Receivables
       Trade Accounts .............................................................        53,736        13,995
       Employees ..................................................................        15,411        26,309
       Stock Subscription Receivable ..............................................           -0-       599,452
     Inventory ....................................................................       706,215       535,055
     Prepaid Expenses .............................................................        53,440        16,212
                                                                                           ------        ------

         Total Current Assets .....................................................       829,230     1,568,615
                                                                                          -------     ---------

Property and Equipment
     Furniture and Equipment ......................................................       625,916       571,779
     Leasehold Improvements .......................................................        16,326        16,326
     Leased Equipment .............................................................       237,084       194,236
     Intellectual Property ........................................................       169,000       169,000
                                                                                          -------       -------

         Total Cost ...............................................................     1,048,326       951,341
         Less Accumulated Depreciation and Amortization ...........................       590,387       346,277
                                                                                          -------       -------

         Net Book Value ...........................................................       457,939       605,064
                                                                                          -------       -------

Other Assets
     Rent and Utility Deposits ....................................................         3,473         4,073
     Patents ......................................................................        13,631        13,631
     Advance to Comguard ..........................................................        86,634        66,992
     Investment in Comguard .......................................................           -0-         2,191
                                                                                          -------       -------

         Total Other Assets .......................................................       103,738        86,887
                                                                                          -------       -------

         Total Assets .............................................................   $ 1,390,907   $ 2,260,566
                                                                                      ===========   ===========

                                   LIABILITIES
Current Liabilities
     Cash in Bank Overdraft .......................................................   $    82,976   $   206,230
     Accounts Payable .............................................................       340,492       392,016
     Payroll Taxes Accrued and Withheld ...........................................        55,294       220,440
     Accrued Interest .............................................................        49,871        19,795
     Accrued Wages ................................................................        41,922        45,600
     Note Payable Short Term Debt .................................................     4,476,806     2,034,768
     Current Portion of Long-Term Debt ............................................        20,039        25,978
                                                                                          -------       -------

         Total Current Liabilities ................................................     5,067,400     2,944,827
                                                                                        ---------     ---------

Long-Term Liabilities
     Long-Term Debt, Less Current Portion .........................................       103,914       123,675
                                                                                          -------       -------

          Total Liabilities .......................................................     5,171,314     3,068,502
                                                                                        ---------     ---------

Commitments and Contingency
Stockholders' Equity (Deficit)
     Common Stock 50,000,000 Shares Authorized at $.001
       Par Value; 11,196,016 and 12,633,494 Shares Issued
       and Outstanding Respectively Retroactively Restated ........................        11,197        12,634
     Paid-in Capital ..............................................................     8,866,897     8,306,546
     Deficit Accumulated During the Development Stage .............................  ( 12,660,794)  ( 9,127,116)
                                                                                      ------------   -----------

         Total Stockholders' Equity (Deficit) .....................................  (  3,780,407)  (   807,936)
                                                                                      ------------   -----------

         Total Liabilities and Stockholders' Equity (Deficit) .....................   $ 1,390,907   $ 2,260,566
                                                                                      ===========   ===========

</TABLE>


     See accompanying notes to the consolidated financial statements.
<PAGE>



                        ADVANCED BUSINESS SCIENCES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                         For the three and nine months
                ended September 30, 1999 and 1998 (in thousands)

<TABLE>
<CAPTION>


                                                           THREE MONTHS ENDED          NINE MONTHS ENDED
                                                       --------------------------------------------------
                                                              September 30,              September 30,
                                                       --------------------------------------------------
                                                       1999           1998            1999           1998
                                                       --------------------------------------------------

<S>                                            <C>             <C>            <C>             <C>

Revenues ...................................   $     33,952    $    14,187    $    124,909    $    30,307
Cost of Sales ..............................         19,825         32,038          84,384         85,234
                                                    -----------------------------------------------------

     Gross Profit (Loss) ...................         14,127        -17,851          40,525        -54,927
                                                    -----------------------------------------------------

Expenses

     Research and Development ..............        492,219         56,499         876,208        162,975
     Sales and Marketing ...................        118,382        133,971         326,735        287,549
     General and Administrative ............        967,523        524,114       2,151,040      1,306,444
                                                    -----------------------------------------------------
        Total Expenses .....................      1,578,124        714,584       3,353,983      1,756,968
                                                    -----------------------------------------------------

        Loss from Operations ...............     (1,563,997)      (732,435)     (3,313,458)    (1,811,895)

Other Income and Expense

     Loss on Sales of Property and Equipment         (2,578)             -          (2,578)            -
     Interest Expense ......................        (90,784)       (14,854)       (217,642)       (44,859)
     Asset Abandonment                                    -              -               -              -
                                                    -----------------------------------------------------
        Total Other Income and Expense .....        (93,362)       (14,854)       (220,220)       (44,859)
                                                    -----------------------------------------------------

        Net Loss Before Income Taxes .......     (1,657,359)      (747,289)     (3,533,678)    (1,856,754)

Provision for Income Taxes                                -              -               -              -
                                                    -----------------------------------------------------

        Net Loss ...........................   ($ 1,657,359)   ($  747,289)   ($ 3,533,678)   ($1,856,754)
                                               ===========================================================

Net Loss Per Share - Basic and Diluted .....   ($      0.15)   ($     0.10)   ($      0.31)   ($     0.25)
                                               ===========================================================

Weighted Average Shares Outstanding
As Retroactively Restated ..................     11,320,281      7,487,009      11,320,281      7,487,009
                                               ===========================================================

</TABLE>



         See accompanying notes to the consolidated financial statements.




<PAGE>



                        ADVANCED BUSINESS SCIENCES, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           For the nine months ended
             September 30, 1999 and 1998 (unaudited) (in thousands)

<TABLE>
<CAPTION>


                                                                                NINE MONTHS ENDED SEPTEMBER 30,
                                                                                        1999           1998
                                                                                -------------------------------
<S>                                                                             <C>              <C>

Cash Flows from Operating Activities
    Net Loss ...................................................................   ($3,533,678)   ($1,856,754)
    Cash Used in Operating Activities ..........................................       730,132        115,619
    Changes in Operating Assets and Liabilities ................................      (408,549)      (604,640)
                                                                                -------------------------------
        Net Cash Flows Used in Operating Activities ............................    (3,212,095)    (2,345,775)

Cash Flows from Investing Activities
    Purchase of Leased Equipment ...............................................       (42,848)      (180,367)
    Purchase of Property and Equipment .........................................       (56,715)      (113,968)
    (Increase) Decrease in Rent and Utility Deposits ...........................           600          7,876
    Funds Advanced to Comguard .................................................       (19,642)             0
                                                                                -------------------------------
        Net Cash Used in Investing Activities ..................................      (118,605)      (286,459)

Cash Flows from Financing Activities
    Increase (Decrease) in Notes Payable Banks .................................     2,442,038      1,346,547
    Repayment of Long-Term Debt ................................................       (25,700)      (133,948)
    Proceeds from Issuance of Common Stock .....................................        61,000      1,413,789
    Increase (Decrease) in Banks Overdraft .....................................      (123,254)         5,546
    Decrease in Notes Receivable Stockholders ..................................       599,452              0
                                                                                -------------------------------
        Net Cash Provided by Financing Activities ..............................     2,953,536      2,631,934

Increase (Decrease) in Cash and Cash Equivalents ...............................      (377,164)          (300)
                                                                                -------------------------------

Cash and Cash Equivalents, Beginning of Period .................................       377,592            300
                                                                                -------------------------------

Cash and Cash Equivalents, End of Period .......................................   $       428    $         0
                                                                                ===============================
Disclosure from Operating Activities
Interest .......................................................................   $   217,642    $    44,859
Taxes ..........................................................................             0              0

</TABLE>



         See accompanying notes to the consolidated financial statements.


<PAGE>



                ADVANCED BUSINESS SCIENCES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                 (in thousands, except share and per share data)

1.       GENERAL

The condensed  consolidated  balance sheet of Advanced Business  Sciences,  Inc.
("ABS" or the  "Company")  at  December  31,  1998 has been taken  from  audited
consolidated  financial  statements  at that date and  condensed.  The condensed
consolidated  financial statements for the three and nine months ended September
30,  1999 and for the  three  and  nine  months  ended  September  30,  1998 are
unaudited and reflect all normal and recurring  accruals and  adjustments  which
are, in the opinion of  management,  necessary  for a fair  presentation  of the
financial  position,  operating  results and cash flows for the interim  periods
presented  in  this  quarterly  report.  The  condensed  consolidated  financial
statements  should  be read  in  conjunction  with  the  consolidated  financial
statements and notes thereto, together with management's discussion and analysis
of financial  condition  and results of  operations,  contained in the Company's
Annual Report on Form 10-SB for the year ended December 31, 1998. The results of
operations  and cash flows for the nine months ended  September 30, 1999 are not
necessarily indicative of the results for the entire fiscal year ending December
31, 1999. Where appropriate,  items within the condensed  consolidated financial
statements have been reclassified from the previous periods' presentation.

2.       ORGANIZATION AND CONSOLIDATION

The Company is a development  stage  company.  The Company  develops,  produces,
markets and supports a broad product line of solutions  relating to the wireless
electronic  tracking,  monitoring and reporting of individuals  and things.  ABS
products are designed to enhance productivity, reduce costs, and improve overall
response using on-line access to information  previously maintained on a variety
of  media.  Today,  the  Company  primarily  markets  to  the  criminal  justice
application for house arrest and continuous electronic monitoring.  ABS provides
individual monitoring within eleven (11) states: Arizona,  Minnesota,  Iowa, New
Jersey, Ohio, Texas, Wisconsin, Colorado, South Carolina, New York, and Kansas.

The Company was incorporated under the laws of the State of Colorado on June 13,
1983 under the name "Sage Institute International,  Inc." A Delaware corporation
under the name "Sage Analytics International, Inc." was incorporated on July 17,
1986;  and, on September 2, 1986, the Company was  reincorporated  as a Delaware
corporation  by merging  the  Colorado  corporation  with and into the  Delaware
corporation.

On December 17, 1997, the shareholders of Advanced  Business  Sciences,  Inc., a
Nebraska  corporation,  concluded a share  exchange with the Company (the "Share
Exchange") whereupon the Nebraska corporation became the wholly-owned subsidiary
of the  Company  and  control  of the  Company  was  transferred  to the  former
shareholders  of the Nebraska  corporation.  See "Security  Ownership of Certain
Beneficial Owners and Management," "Directors, Executive Officers, Promoters and
Control  Persons," and "Recent Sales of  Unregistered  Securities."  The Company
changed its name to Advanced Business Sciences, Inc. on December 18, 1997.

On September  28, 1998,  the Company  concluded a share  exchange  with Comguard
Leasing and Financial,  Inc., an Illinois corporation ("Comguard Leasing"),  and
its shareholders (the "Comguard  Acquisition").  Comguard  Leasing,  through its
subsidiary,   Comguard,   Inc.,   provides  house  arrest  monitoring   services
principally  to  the  State  of  Illinois.  When  the  Company  came  under  new
management,  it was determined that Comguard Leasing was not consistent with the
Company's  long-term  strategic  goals.  The  Company's   management   therefore
determined that the Company should divest its holdings in Comguard Leasing. With
the  agreement  of the former  shareholders  of Comguard  Leasing,  the Comguard
Acquisition was rescinded effective June 1, 1999.




<PAGE>



3.       PRORPERTY AND EQUIPMENT AND DEPRECIATION EXPENSES

The following is a summary of property and equipment and  depreciation  expenses
at September 30, 1999 and December 31, 1998:

                                    September 30, 1999         December 31, 1998
      Furniture & Equipment                  $ 625,916                  $571,779
      Leasehold Improvements                    16,326                    16,326
      Intellectual Property                    169,000                   169,000
      Leased Equipment                         237,084                   194,236
                                             ---------                ----------
         Total Cost                          1,048,326                   951,341
                                            ---------                 ----------
         Less Accumulated Depreciation         590,387                   346,277
                                            ----------                ----------
         Net Book Value                      $457,939                  $605,064
                                            ==========                 =========

Depreciation and Amortization Expenses        $254,226                  $172,221


In 1998,  the  Company  reduced  the size of its office and  warehouse  space in
Omaha,  Nebraska.  Leasehold  improvements and equipment that could not be moved
were written off.


4.       COMMITMENTS AND CONTINGENCIES

The Company's  subsidiary,  ABS Nebraska, is a defendant in an action pending in
Montana Eighteenth Judicial District Court,  Gallatin County,  captioned Applied
Technologies, Inc. v. Advanced Business Sciences, Inc., et al., No. 98-285. This
action was initially filed on September 11, 1998. The Amended  Complaint alleges
that ABS Nebraska is in breach of contract  under which the  Plaintiff,  Applied
Technologies,  Inc., was to produce  prototype and production  parolee  tracking
devices. The Amended Complaint alleges that the Company is in breach of contract
for failure to make payments thereunder.  The plaintiff prays for an unspecified
amount of  compensatory  and  consequential  damages.  The plaintiff  also seeks
attorney's  fees and such  other  relief,  as the court may deem  equitable  and
proper. ABS Nebraska has denied the allegations,  has raised certain affirmative
defenses and has brought a counterclaim  alleging,  among other things, that the
Plaintiff failed to deliver in a timely manner all documents schematic drawings,
mechanical drawings,  computer disks of designs, vendors lists with part numbers
and art work. On December 3, 1999,  the parties  entered into a stipulation  for
settlement.  Under the terms of this settlement, the defendant agreed to pay the
sum of $25,000 payable in two equal  installments  due on December 10, 1999, and
May 10, 2000, respectively. When the defendant makes such payment, the plaintiff
will  cause the action to be  dismissed  with  prejudice  and will  release  the
defendant of all claims.

On February 1, 1998,  the Company  issued  1,250,000  units  having an aggregate
purchase price of $2,500,000. A unit consisted on one Common Share and a warrant
to purchase one Common Share at an exercise  price of (1) $3.00 per share during
the first  year,  (2) $4.00 per share  during the second  year and (3) $5.00 per
share  during the third year.  The  warrants  expire  February 1, 2001.  All but
sixteen  investors in this offering  were  accredited  investors.  The Company's
management  believes that this  transaction  was in substantial  compliance with
Rule 506 under the Securities  Act;  however,  the Company may have a contingent
liability for an undetermined amount.

The Company  entered into an Agreement  with a business  executive to act as its
President and Chief  Executive  Officer on February 1, 1999.  Under terms of the
Agreement the executive  will act as President,  Chief  Executive  Officer and a
voting Director of the Company.  The Contract  commenced on February 1, 1999 and
continues  through the third  anniversary of that date.  Thereafter the contract
may be renewed  annually  and continue on the same terms and  conditions  for an
indefinite term until termination in accordance with the terms of the Agreement.
The  executive  shall be  compensated  for his  services at the rate of $150,000
annually to be paid in accordance with the Company normal payroll practices. The
executive  shall be eligible for an annual  bonus in  accordance  with  criteria
established  by the Board each year.  As discussed  in note #19,  the  executive
received 1,000,000 shares of common stock as a hiring incentive.



5.       SUBSEQUENT EVENTS

The Company  announced  that James E. Stark has been  promoted to President  and
Chief Financial  Officer of the Company.  Mr. Stark joined ABS September 1, 1999
as the Corporate Controller and also serves as the Secretary of the Company. Mr.
Stark will report directly to the Chairman of the Board of Directors of ABS. Mr.
Stark's  promotion is the result of the  resignation  of Benjamin J. Lamb as the
Company's President, CEO and a member of the Board of Directors.


6.       CORRECTION OF ERRORS

The Company has made changes to the financial statements at December 31, 1998 as
follows;

Non Cash Expenses paid by Issuance of Shares of Common Stock.
<TABLE>
<CAPTION>


                                                                          Corrected                Original
                                                                          Statement                Statement
                                                                          ----------------------------------
<S>                                                                       <C>                     <C>

Consultation Fees - Comguard Acquisition Issued 242,500
Shares at $0.10 Per Share Corrected to $0.44 Per Share ...........        $  106,700               $ 24,250
Issued 457,750 Shares for Employee Bonuses at $0.10
Per Share Corrected $0.30 Per Share ..............................           137,325                 45,775
Issued 1,000,000 Shares for Guarantor Fees at $0.10 Per
Share Corrected to $0.25 Per Share ...............................           250,000                100,000
Accrued Wages for Employee Bonuses to be Paid In Stock in
1999 Accrued at $0.10 Per Share Corrected to $0.30 Per Share .....            45,600                 15,200
                                                                          ----------------------------------
                                                                          $  539,625               $185,225
                                                                          ==================================

Net Increase to Operating Expenses ...............................                               $  354,400
Net Loss Year Ended December 31, 1998 as Originally Reported .....                                3,446,012
                                                                                                  ---------
Net Loss Year Ended December 31, 1998 as Corrected ...............                               $3,800,412
                                                                                                 ==========
</TABLE>

The increase in prior per share of the stock issued was adjusted as follows:

                                                                 Discount
                                              Date        Price   Factor   Cost
                                              ---------------------------------
Comguard Acquisition Fees ................   8/24/98   $   2.75$   2.31  $ 0.44
Employee Bonuses .........................    4/9/98       1.88    1.58     0.3
Loan Guarantor ...........................    4/1/98       1.56    1.31    0.25

The  discount  factor is a result of an  independent  valuation  of the  stock's
financial and equity risk at 50% and the lack of marketability at 34%.


7.       GOING CONCERN

The accompanying financial statements of Advanced Business Sciences,  Inc., have
been prepared on a going-concern basis, which contemplates profitable operations
and the satisfaction of liabilities in the normal course of business.  There are
uncertainties  that raise  substantial doubt about the ability of the Company to
continue as a going  concern.  As shown in the  statements  of  operations,  the
Company has not yet achieved profitable operations.  As of September 30, 1999, e
Company has insufficient  working capital.  These items raise  substantial doubt
about the ability of the Company to continue as a going concern.
<PAGE>

Management presently believes that the Company is in the final development stage
of its electronic  tracking and monitoring  devices and the delivery of services
relating to these devices.  Although there has been substantial  progress in the
development of this technology,  the Company does not have any significant sales
and there can be no assurance that the Company will have any significant sales.

Management plans to continue financing  development of the Company's  technology
through the plan described herein.

The Company's  continuation  as a going concern is dependent upon its ability to
satisfactorily  meet its debt obligations,  meet its product  development goals,
secure new financing and generate  sufficient  cash flows from  operations.  The
financial  statements  do not include  any  adjustments  that might  result from
outcome of these uncertainties.


7.       FINANCIAL STATEMENTS SINCE INCEPTION

Below are ABS's condensed  consolidated statement of operations and statement of
cash flows from inception through September 30, 1999.

Statement of Operations

                                                Inception to
                                             September 30, 1999
                                             ------------------

Revenues ...................................   $    249,402
Cost of Sales ..............................        231,915
                                               ------------
     Gross Profit (Loss) ...................         17,487
                                               ------------

Expenses
     Research and Development ..............      2,260,493
     Sales and Marketing ...................      1,305,143
     General and Administrative ............      8,617,643
                                               ------------
        Total Expenses .....................     12,183,279
                                               ------------
        Loss from Operations ...............    (12,165,792)
                                               ------------
Other Income and Expense
     Interest Income .......................         14,744
     Other Income ..........................         84,528
     Loss on Sales of Property and Equipment        (11,914)
     Interest Expense ......................       (686,163)
     Asset Abandonment
                                                    (94,300)
                                               ------------
        Total Other Income and Expense .....       (693,105)
                                               ------------
        Net Loss Before Income Taxes .......    (12,858,897)

Extraordinary Item
    Gain from Extinguishment of Debt .......        569,901
Provision for Income Taxes .................              -
                                               ------------
        Net Loss ...........................   ($12,288,996)
                                               ============

<PAGE>

Statement of Cash Flows


Cash Flows from Operating Activities
    Net Loss .......................................   ($12,288,996)
    Cash Used in Operating Activities ..............      1,078,893
    Changes in Operating Assets and Liabilities ....       (470,950)
                                                        -----------
        Net Cash Flows Used in Operating Activities     (11,681,053)

Cash Flows from Investing Activities
    Proceeds from Sales of Property and Equipment ..         31,160
    Purchase of Leased Equipment ...................       (237,084)
    Purchase of Property and Equipment .............       (612,206)
    (Increase) Decrease in Rent and Utility Deposits         (3,473)
    (Increase) in Patents ..........................        (15,145)
    Purchase of Intellectual Property ..............       (169,000)
    Funds Advanced to Comguard .....................        (86,634)
                                                        -----------
        Net Cash Used in Investing Activities ......     (1,092,382)

Cash Flows from Financing Activities
    Increase (Decrease) in Notes Payable Banks .....      4,476,806
    Proceeds from Long-term Debt ...................      4,144,081
    Repayment of long-term Debt ....................              0
    Proceeds from Issuance of Common Stock .........      4,070,000
    Increase (Decrease) in Banks Overdraft .........         82,976
    Decrease in Notes Receivable Stockholders ......              0
                                                        -----------
        Net Cash Provided by Financing Activities ..     12,773,863
                                                        -----------
Increase (Decrease) in Cash and Cash Equivalents ...            428
                                                        -----------
Cash and Cash Equivalents, Beginning of Period .....              0
                                                        -----------
Cash and Cash Equivalents, End of Period ...........   $        428
                                                        ===========

Disclosure from Operating Activities
Interest ...........................................   $    652,749
Taxes ..............................................              0



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

ABS is a  developmental  stage  company.  As  such,  the  financial  results  of
operations  reflect  the  primary  activities  of the  Company  directed  toward
development and testing of its GPS products, principally for offender monitoring
in the criminal justice  marketplace.  The following table sets forth the number
of tracking units monitored or leased for the period indicated. Prior to January
1, 1999,  the Company  monitored  and leased were the same as they appear in the
table below.  Since January 1, 1999, the Company  monitored and leased 135 units
in the third quarter of 1999. The remainder of 276 units in the third quarter of
1999 were monitored units only.

               Year         3rd Quarter        Year-to-date
         -------------------------------------------------------
               1998              49                100
               1999             411               1,720

The following table sets forth certain consolidated statements of operations (in
thousands) information as a percentage of revenues during the periods indicated:


<PAGE>

<TABLE>
<CAPTION>




                                                                  THREE MONTHS ENDED
                                                                     September 30,
                                               -------------------------------------------------
                                                             1999                   1998
                                               -------------------------------------------------
<S>                                            <C>            <C>         <C>         <C>

Revenues ...................................   $    33,952        100.0%  $  14,187       100.0%
Cost of Sales ..............................        19,825         58.4%     32,038       225.8%
                                               -------------------------------------------------
     Gross Profit (Loss) ...................        14,127         41.6%    -17,851      -125.8%
                                               -------------------------------------------------
Expenses
     Research and Development ..............       492,219       1449.7%     56,499       398.2%
     Sales and Marketing ...................       118,382        348.7%    133,971       944.3%
     General and Administrative ............       967,523       2849.7%    524,114      3694.3%
                                               -------------------------------------------------
        Total Expenses .....................     1,578,124       4648.1%    714,584      5036.9%
                                               -------------------------------------------------
        Loss from Operations ...............    (1,563,997)     -4606.5%   (732,435)    -5162.7%
Other Income and Expense
     Loss on Sales of Property and Equipment        (2,578)        -7.6%         --         0.0%
     Interest Expense ......................       (90,784)      -267.4%    (14,854)     -104.7%
     Asset Abandonment .....................            --          0.0%         --         0.0%
                                               -------------------------------------------------
        Total Other Income and Expense .....       (93,362)      -275.0%    (14,854)     -104.7%
                                               -------------------------------------------------
        Net Loss Before Income Taxes .......    (1,657,359)     -4881.5%   (747,289)    -5267.4%
Provision for Income Taxes                             --            --          --          --
                                               -------------------------------------------------
        Net Loss ...........................   ($1,657,359)     -4881.5%  ($747,289)    -5267.4%
                                               =================================================
</TABLE>
<TABLE>
<CAPTION>



                                                                 NINE MONTHS ENDED
                                               -------------------------------------------------
                                                                   September 30,
                                               -------------------------------------------------
                                                     1999                      1998
                                               -------------------------------------------------
<S>                                            <C>           <C>        <C>            <C>


Revenues ...................................   $   124,909       100.0% $    30,307        100.0%
Cost of Sales ..............................        84,384        67.6%      85,234        281.2%
                                               -------------------------------------------------
     Gross Profit (Loss) ...................        40,525        32.4%     -54,927       -181.2%
                                               -------------------------------------------------

Expenses
     Research and Development ..............       876,208       701.5%     162,975        537.7%
     Sales and Marketing ...................       326,735       261.6%     287,549        948.8%
     General and Administrative ............     2,151,040      1722.1%   1,306,444       4310.7%
                                               -------------------------------------------------
        Total Expenses .....................     3,353,983      2685.1%   1,756,968       5797.2%
                                               -------------------------------------------------
        Loss from Operations ...............    (3,313,458)    -2652.7%  (1,811,895)     -5978.5%

Other Income and Expense
     Loss on Sales of Property and Equipment        (2,578)       -2.1%         --           0.0%
     Interest Expense ......................      (217,642)     -174.2%       (44,859)    -148.0%
     Asset Abandonment .....................          --           0.0%         --           0.0%
                                               -------------------------------------------------
        Total Other Income and Expense .....      (220,220)     -176.3%       (44,859)    -148.0%
                                               -------------------------------------------------
        Net Loss Before Income Taxes .......    (3,533,678)    -2829.0%    (1,856,754)   -6126.5%
Provision for Income Taxes                            --          --            --            --
                                               -------------------------------------------------
        Net Loss ...........................   ($3,533,678)    -2829.0%   ($1,856,754)   -6126.5%
                                               ==================================================

</TABLE>

<PAGE>




Discussions of certain matters  contained in this Quarterly  Report on Form 10-Q
may constitute  forward-looking  statements  under Section 27A of the Securities
Act  of  1933,  as  amended  (the  "Securities  Act"),  and  Section  21E of the
Securities  Exchange  Act of 1934,  as  amended,  (the  "Exchange  Act").  These
statements may involve risks and uncertainties. These forward-looking statements
relate to, among other things,  the Company's ability to secure  financing,  the
results of the Company's product development  efforts,  future sales levels, the
Company's  future  financial   condition,   liquidity  and  business   prospects
generally, perceived opportunities in the marketplace for the Company's products
and its products under  development  and the Company's  other business plans for
the future.  The actual outcomes of these matters may differ  significantly from
the outcomes expressed or implied in these forward-looking  statements and other
risks detailed in "ITEM 1.  Description  of Business  contained in the Company's
Form 10-SB filed with the SEC February 9, 2000.

The following  discussion is intended to provide a better  understanding  of the
significant  changes in trends relating to the Company's financial condition and
results of operations.  Management's  Discussion and Analysis  should be read in
conjunction with the accompanying  Consolidated  Financial  Statements and Notes
thereto.

Revenues


The  Company  derives  revenue  from sale of  products,  billable  services  for
monitoring,  software license fees,  equipment and software leasing, and charges
for  maintenance  and repair of  equipment.  For the three and nine months ended
September 30, 1999,  Revenues  increased 139.3% to $33,952 for the third quarter
of 1999 and 312.1% to 124,909 during the first nine months of 1999,  compared to
$14,187 and $30,307 respectively during the same periods in 1998. The reason for
the  increases in both  comparable  periods are more units being  monitored  and
leased in the three  months  ended  September  30,  1999 (411 units) and for the
first nine months of 1999 (1,720  units) as compared to the same periods in 1998
(49 and 100 units respectively).

Cost of Sales

Cost of Sales  represents  the direct costs  associated  with the  generation of
revenue, and includes cost of goods for products which are sold, direct costs of
distribution  of software  and  equipment,  maintenance  expenses  on  equipment
repaired  under  service  agreements,  and the  direct  variable  communications
expenses  associated with the monitoring  services provided by the Company.  For
the three and nine months  ended  September  30, 1999,  Cost of Sales  decreased
38.1% to $19,825 for the third quarter of 1999 and 1.0% to $84,384 for the first
nine months of 1999, compared to $32,038 and 85,234 respectively during the same
periods  in 1998.  The  primary  reason  for the lower cost of sales in the 1999
periods was increased utilization of the Company assets in service.

Gross Profit

For the three months and nine months ended September 30, 1999,  Gross Profit for
the  Company  increased  $31,978 to $14,127  and  increased  $95,452 to $40,525,
compared to a Gross Profit of $(17,851) and $(54,927) for the comparable periods
of 1998. The reasons for this increase were higher revenues and  proportionately
lower Cost of Sales in the 1999 periods, as discussed above.

Research and Development

Research  and  Development  expenses are the direct  costs  associated  with the
Company's  development of its  proprietary  products.  Expenses in this category
include the cost of outside contracted engineering and design, staffing expenses
for the Company's own engineers and software developers, and the actual costs of
components,  prototypes,  and testing equipment and services used in the product
development  functions.  For the Research and development  expenses increased to
$492,219 and $876,208  for the three and nine months ended  September  30, 1999,
respectively,  from  $56,499  and  $162,975  for the same  periods in 1998.  The
primary  reason  for this  increase  was that the  Company  began the design and
development work of its Series 2000 product in the third quarter of 1999.

<PAGE>


Sales and Marketing

Sales and Marketing  expenses  represent  the costs of the  Company's  sales and
marketing  staff,  travel  and  related  expenses  associated  with sales to the
Company's  customers and  prospects,  the costs of  advertising in magazines and
periodicals,  attendance at trade shows, and production of marketing and related
collateral material. Sales and Marketing expenses increased decreased $15,589 or
(11.6%) in the third  quarter of 1999 to  $118,382  when  compared  to the third
quarter of 1998. The decrease is the result of less  advertising  and trade show
expenses  incurred  in the  third  quarter  of 1999 when  compared  to the third
quarter of 1998. For the first nine months of 1999, Sales and Marketing expenses
increased $39,186 to $326,735,  compared to $287,549 in the comparable period of
1998. The primary  reason for this increase was that the Company  experienced an
increase in sales and marketing staff over the comparable period in 1998.

General and Administrative

General and  Administrative  expenses are all the indirect and overhead expenses
associated  with the  operations  of the  Company,  outside  of  those  expenses
described above. These expenses include executive, administrative and accounting
staff payroll, taxes and benefits,  rent on property, all travel not included in
the Sales and Marketing  expense,  fixed telephone  expenses,  office leases and
supplies,  and  recruiting  and  training  expense.  For the three  months ended
September 30, 1999,  General and  administrative  expense increased  $443,409 to
$967,523, from $524,114 in the comparable period of 1998. The primary reason for
the increase was an increase in administrative and executive staff. For the nine
months ended September 30, 1999, General and Administrative expense increased by
$844,596 to $2,151,040,  from  $1,306,444 in the comparable  period of 1998. The
primary reason for this increase was an increase in administrative and executive
staff.

Profit (loss) from Operations

For the three months ended September 30, 1999,  Loss from  Operations  increased
$831,562 to  $(1,563,997),  compared to $(732,435)  for the same period in 1998.
The reason for this  increase  was higher  expenses in the period,  as explained
above,  offset by slightly  higher  gross  profits.  For the nine  months  ended
September 30, 1999, Loss from Operations  increased  $1,501,563 to $(3,313,458),
compared to  $(1,811,895)  for the same period in 1998.  The reason for the nine
month  increase is the same as for the three month period  increase as indicated
above.

Loss on Sale of Property and Equipment

For the three months ended  September 30, 1999,  the Company  incurred a loss on
the sale of certain  computer  equipment of $2,578 as compared to no expense for
the same  comparable  period in 1998. For the first nine months of 1999 the loss
on sale of Property  and  equipment  is the same as for the three  months  ended
September 30, 1999.

Interest Expense

For the three  months  ended  September  30, 1999,  Interest  expense  increased
$75,930 to $90,784,  compared to Interest  expense of $14,854 in the  comparable
period of 1998.  This interest  expense  increase was due to larger  outstanding
balances in Company  borrowings  in 1999 over 1998.  For the nine  months  ended
September 30, 1999, Interest expense increased $172,783 to $217,642, compared to
Interest  expense of $44,859 in the  comparable  period of 1998.  This  interest
expense increase was due to larger outstanding balances in Company borrowings in
1999 over 1998.

Net Loss

For the three months  ended  September  30, 1999,  the Company had a Net Loss of
$1,657,359  or $.15 per share,  compared  to a Net Loss of  $747,289 or $.10 per
share, in the comparable  period of 1998, for the reasons  described  above. For
the  nine  months  ended  September  30,  1999,  the  Company  had a Net Loss of
$3,533,678  or $(.31) per share,  compared to a Net Loss of $1,856,754 or $(.25)
per share, in the comparable period of 1998, for the reasons described above.

<PAGE>


Liquidity and Capital Resources

For the nine months ended  September 30, 1999, the Company used  $(3,212,095) of
cash in operating activities and another $(118,605) in investing activities.  It
generated  $2,953,536 in cash from financing  activities.  The total of all cash
flow  activities  resulted  in a  decrease  in the  balance  of  cash  and  cash
equivalents  for the nine month  period of  $(377,164).  For the same  period of
1998, the Company used $(2,345,775) of cash in operating  activities and another
$(286,459)  in  investing  activities.  It  generated  $2,631,934  in cash  from
financing  activities.  The  total of all cash  flow  activities  resulted  in a
decrease in the balance of cash and cash equivalents of $300.

As of September 30, 1999, the Company had the following borrowing  facilities in
place:

The Company has borrowed the principal sum of $1,000,000  from U.S. Bank N.A. of
Omaha,  Nebraska.  The loan was due in a single  payment  on  August  15,  1999,
together  with accrued  interest.  The interest rate is a variable rate based on
the U.S. Bank National  Association  Reference  Rate (the "Index Rate") plus two
(2) percent.  As of December 15, 1999, the Index Rate was eight and  one-quarter
(8.25)  percent.  This loan is secured by a security  interest in the  Company's
tangible and intangible  assets.  The Company received an extension of this note
until March 1, 2000.

The Company has  borrowed  the  principal  sum of  $999,767.13  from  Commercial
Savings Bank of Carroll, Iowa. The loan is due on October 5, 1999, together with
accrued  interest.  The interest rate is eight percent (8%) per annum. This loan
is secured by a security  interest  in the  Company's  tangible  and  intangible
assets. The Company renewed this note until April 5, 2000.

The Company  has  borrowed  the  principal  sum of  $499,021  from each of James
Pietig,  a director of the Company,  and Mary  Collison,  a  stockholder  of the
Company.

 The Company has borrowed the principal sum of $850,000 from United Bank of Iowa
of Carroll,  Iowa.  The loan had an original  maturity date of December 30, 1999
and has been  extended  until April 15,  2000.  The  interest  rate is eight and
one-quarter (8.25)% per annum.

     The Company has  borrowed  the  principal  sum of $245,000  from  Templeton
Savings Bank of  Templeton,  Iowa.  The loan is due June 14, 2000 and carries an
interest rate of nine- (9)% per annum.

The Company is a development stage business and has not yet achieved  profitable
operations.  The Company lacks sufficient operating capital, and intends to fund
its ongoing  development  and  operations  through a  combination  of additional
equity capital and further borrowings. As of September 30, 1999, the Company did
not have commitments for either debt or share purchases to meet its planned 1999
operating capital requirements.

Impact of Year 2000 Issues

The Year 2000 issue is related to computer software  utilizing two digits rather
than four to define the  appropriate  year.  As a result,  any of the  Company's
computer  programs or any of the  Company's  suppliers or vendors that have date
sensitive  software may incur system failures or generate incorrect data if "00"
is recognized as 1900 rather than 2000.

The Company has been addressing Year 2000 issues throughout fiscal year 1998 and
has modified or is in the process of modifying any products or services that are
affected by Year 2000 issues.  The Company has a formal  comprehensive Year 2000
readiness  plan in place and under the  oversight of executive  management  and,
ultimately, the Company's board of directors.


The  Company's  greatest  risk for a material  disruption  in services lies in a
potential   disruption  of   telecommunication   services  due  to  an  external
telecommunication  service  provider's failure to be Year 2000 compliant and the
resulting  impact  upon the  Company's  monitoring  services.  The  Company  has
contacted and obtained  assurances  from its  telecommunications  providers that
their  networks are Year 2000  compliant.  In  addition,  the Company has backup
telecommunication  provider  connectivity  if for any reason the primary carrier
has a disruption in service.
<PAGE>


Databases,  operating systems and system hardware have been reviewed and updated
as necessary  for Year 2000  readiness.  A review of the model 1702 GPS tracking
unit  date  format  revealed  that  the  4-digit  year  is  being  used  for all
calculations and Year 2000 issues should affect the model 1702. Year 2000 issues
were known when the GPS control  software was  developed and code was written to
comply with these issues.

Reviews of models' 100,  101 and 102  firmware of our house arrest  product show
that they are not affected by Year 2000 issues due to the way the information is
processed.  The internal hardware  components have been reviewed and will not be
affected by Year 2000 issues. Review is currently being done on the house arrest
control software that reports violations.

In addition to the review of the system, a Year 2000 testing laboratory was also
established.  In this laboratory,  a monitoring environment was established that
mirrored  the  current  operating  environment.  As  part  of our  testing,  all
monitoring  computers  and  monitoring  units were set to December  31, 1999 and
allowed to run for three (3) days. Preliminary results show continued unaffected
processing of monitoring information.

The Company believes that, based upon changes and modifications already made and
those that are currently  planned for  implementation  in fiscal year 1999,  the
impact of Year 2000  issues  will not be  material.  However,  to the extent the
Company  or third  parties on which it relies do not  timely  achieve  Year 2000
readiness, the Company's results of operations may be adversely affected.


PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

     For a  description  of  pending  litigation,  see NOTE 4.  COMMITMENTS  AND
CONTINGENCIES above.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(A)  EXHIBITS
     27.01  Financial Data Schedule

(B) REPORTS ON FORM 8-K
     The  registrant  filed no  reports on Form 8-K  during  the  quarter  ended
     September 30, 1999.

Items 2, 3, 4 and 5 are not applicable and have been omitted.


<PAGE>



                                    SIGNATURE

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

                                 ADVANCED BUSINESS SCIENCES, INC.


Date:    February 25, 2000       By:   /S/ James E. Stark
                                       James E. Stark
                                       President and Chief Financial Officer