U.S. Securities and Exchange Commission
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2000

                         Commission file number 0-29750

                          IENTERTAINMENT NETWORK, INC.
        (Exact name of small business issuer as specified in its charter)

                            North Carolina 56-2092059
        (State of incorporation) (I.R.S. Employer Identification Number)

                         215 Southport Drive, Suite 1000
                        Morrisville, North Carolina 27560
                     (Address of principal executive office)

                                 (919) 461-0722
                           (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 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 |   |

As of May 10, 2000 (the most recent practicable date), there were 15,048,430
shares of the issuer's Common Stock, $.10 par value per share, outstanding.

Transitional Small Business Disclosure Format (check one)

Yes |   |                    No | X |

<PAGE>

                          IENTERTAINMENT NETWORK, Inc.

                          Form 10-QSB Quarterly Report

                                      INDEX




PART I        FINANCIAL INFORMATION                                PAGE
Item 1        Financial Statements                                    3

Item 2        Management's Discussion and Analysis of
              Financial Condition and Results of Operations          11

PART II       OTHER INFORMATION                                      15

Item 1        Legal Proceedings                                      15

Item 2        Changes in Securities and Use of Proceeds              15

Item 3        Defaults Upon Senior Securities                        16

Item 4        Submission of Matters to a Vote of Security Holders    16

Item 5        Other Information                                      16

Item 6        Exhibits and Reports on Form 8-K                       16

SIGNATURES                                                           16

                                        2

<PAGE>

PART I.               FINANCIAL INFORMATION

ITEM 1.               FINANCIAL STATEMENTS



                          IENTERTAINMENT NETWORK, Inc.

                           Consolidated Balance Sheets
                        (IN THOUSANDS, EXCEPT SHARE DATA)



                                                     MARCH 31       DECEMBER 31
                                                      2000             1999
                                                   (UNAUDITED)       (AUDITED)
                                                 ------------------------------
ASSETS
Current assets:
   Cash and cash equivalents                        $ 1,921          $ 3,092
   Trade receivables, net of allowances of
   $ 34  and $ 241, respectively                        907              421
   Software development costs, net                       92               92
   Prepaid expenses and other                           180              138
                                                 ------------------------------
Total current assets                                  3,100            3,743

Property and equipment, net                             800              714

Noncurrent assets:
   Royalties receivable                                  -                80
   Goodwill, net                                      2,929            3,329
   Other                                                 -                10
                                                 ------------------------------
Total noncurrent assets                               2,929            3,419
                                                 ------------------------------

Total assets                                         $6,829           $7,876
                                                 ==============================

<PAGE>

                          IENTERTAINMENT NETWORK, Inc.

                     Consolidated Balance Sheets (continued)
                        (IN THOUSANDS, EXCEPT SHARE DATA)



                                                       March 31      DECEMBER 31
                                                         2000           1999
                                                      (UNAUDITED)     (AUDITED)
                                                     ---------------------------
LIABILITIES, REDEEMABLE PREFERRED STOCK AND
STOCKHOLDERS' EQUITY

Current liabilities:

   Accounts payable and accrued expenses              $    1,559     $    2,258
   Royalties and commissions payable                          73            120
   Current portion of capital lease obligations               68             55
                                                      -------------------------
Total current liabilities                                  1,700          2,433

Capital lease obligations, less current portion               48             29

Series D Redeemable Convertible Preferred Stock,
 $.10 par value; liquidation and stated value of
 $1,000 per share, plus accumulated accretion;
 4,911 shares authorized, issued and outstanding
 at December 31, 1999 (Note 4)                                 -          4,951

Stockholders' equity:
Series D Convertible Preferred Stock plus
 accumulated accretion, $.10 par value;
 liquidation and stated value of $1,000 per share,
 4,911 shares authorized, issued and outstanding
 at March 31, 2000 (Note 4)                                5,025              -
Common stock, $.10 par value; 50,000,000 shares
 authorized; 15,046,680 and 14,722,203 shares
 issued and outstanding at March 31, 2000 and
 December 31, 1999, respectively                           1,505          1,472

Additional paid-in capital                                37,278         36,672
Accumulated deficit                                      (38,649)       (37,565)
Accumulated other comprehensive loss                        ( 78)          (116)
                                                      -------------------------
Total stockholders' equity                                 5,081            463
                                                      -------------------------
Total liabilities, redeemable preferred stock and
 stockholders' equity                                 $    6,829     $    7,876
                                                      =========================

SEE ACCOMPANYING NOTES.

<PAGE>

                          IENTERTAINMENT NETWORK, Inc.

                      Consolidated Statements of Operations
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
                                   (Unaudited)



                                                      THREE MONTHS ENDED
                                                            March 31
                                                      2000           1999
                                                 ----------------------------
NET REVENUES:

   CD-ROM PRODUCT SALES                          $         10     $       561
   PAY FOR PLAY                                           423             467
   ROYALTIES AND LICENSES                                  61               7
   ADVERTISING AND CONTRACT REVENUE                     1,061              74
                                                 ----------------------------
TOTAL NET REVENUES                                      1,555           1,109
COST OF REVENUES:
   COST OF PRODUCTS AND SERVICES                           18             416
   ROYALTIES AND AMORTIZED SOFTWARE COSTS                 253              89
                                                 ----------------------------
TOTAL COST OF REVENUES                                    271             505
                                                 ----------------------------
GROSS  PROFIT                                           1,284             604

OPERATING EXPENSES:
   SALES AND MARKETING                                    743           1,469
   PRODUCT DEVELOPMENT                                    575           1,845
   GENERAL AND ADMINISTRATIVE                             616             852
   GOODWILL AMORTIZATION                                  400             191
                                                 ----------------------------
TOTAL OPERATING EXPENSES                                2,334           4,357
                                                 ----------------------------
OPERATING LOSS                                         (1,050)         (3,753)

OTHER (INCOME) EXPENSE:
   NET INTEREST EXPENSE - THIRD PARTIES                     5           2,345
   INTEREST EXPENSE - RELATED PARTIES                       -              18
   OTHER                                                  (51)            (53)
                                                 ----------------------------
TOTAL OTHER (INCOME) EXPENSE                              (46)          2,310
                                                 ----------------------------
LOSS BEFORE INCOME TAXES                               (1,004)         (6,063)
INCOME TAX EXPENSE                                          6              35
                                                 ----------------------------
NET LOSS                                               (1,010)         (6,098)

ACCRETION OF SERIES D PREFERRED STOCK                     (74)              -
                                                 ----------------------------
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS        $     (1,084)   $     (6,098)
                                                 ============================
BASIC AND DILUTED LOSS PER SHARE:
 NET LOSS PER SHARE                              $      (0.07)   $      (0.59)
                                                 ============================
WEIGHTED AVERAGE SHARES USED IN COMPUTING BASIC
    AND DILUTED LOSS PER SHARE                     14,936,800      10,316,300
                                                 ============================

SEE ACCOMPANYING NOTES.
<PAGE>
                          IENTERTAINMENT NETWORK, Inc.

                      Consolidated Statements of Cash Flows
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                   THREE MONTHS ENDED MARCH 31
                                                                                       2000                1999
                                                                                ----------------------------------
OPERATING ACTIVITIES

<S>                                                                               <C>                <C>
Net loss                                                                          $    ( 1,010)      $    (6,098)
Adjustments to reconcile net loss to net cash used in operating
   activities:
     Issuance of warrants                                                                    -                 76
     Depreciation and amortization                                                         473                317
     Issuance of common stock for services                                                  35                  -

     Non-cash compensation expense                                                          10                  -
     Amortization of capitalized software development costs                                  -                212
     Noncash interest expense                                                                -              2,194
     Write-off of capitalized software development costs                                     -                393
     Changes in operating assets and liabilities:
       Trade and royalties receivable                                                     (406)               767
       Inventories                                                                           -                 58
       Prepaid expenses and other                                                           17              (272)
       Accounts payable and accrued expenses                                              (337)              (650)
       Royalties and commissions payable                                                   (47)              (280)
       Accrued interest payable to related parties                                           -                 28
                                                                                ----------------------------------
Net cash used in operating activities                                                   (1,265)            (3,255)

INVESTING ACTIVITIES
Acquisition of MPG-Net                                                                       -                 18
Purchase of property and equipment                                                        (112)               (36)
Increase in notes receivable                                                                 -               (200)
Software development costs                                                                   -                (37)
                                                                                ----------------------------------
Net cash used in investing activities                                                     (112)              (255)

FINANCING ACTIVITIES
Proceeds from issuance of common and preferred stock                                       233                207
Stock registration costs                                                                   (50)                 -
Net repayments on lines-of-credit                                                            -                (25)
Payments on capital lease obligations                                                      (15)                (6)
Proceeds from issuance of convertible debentures                                             -              3,660
                                                                                ----------------------------------
Net cash provided by financing activities                                                  168              3,836
Effect of currency exchange rate changes on cash and cash equivalents                       38                (14)
                                                                                ----------------------------------
Net (decrease) increase in cash and cash equivalents                                    (1,171)               312
Cash and cash equivalents at beginning of period                                         3,092              2,943
                                                                                ----------------------------------
Cash and cash equivalents at end of period                                          $    1,921         $    3,255
                                                                                ----------------------------------

NONCASH INVESTING AND FINANCING ACTIVITIES

Issuance of common stock in connection with development agreement                   $       49         $        -
                                                                                ==================================
Issuance of common stock in connection with acquisition of MPG-Net                  $        -         $    3,891
                                                                                ==================================
Issuance of common stock in settlement of contractual liabilities                   $      300         $      288
                                                                                ----------------------------------
Issuance of common stock in connection with employee severance                      $       62         $        -
                                                                                ----------------------------------
Fixed assets acquired under capital lease                                           $       47         $        -
                                                                                ==================================
Contingently issuable warrants provided to holder of convertible debenture          $        -         $    1,067
                                                                                ----------------------------------
Issuance of warrants to broker in connection with convertible debentures            $        -         $      390
                                                                                ==================================
</TABLE>

SEE ACCOMPANYING NOTES.


<PAGE>

                          IENTERTAINMENT NETWORK, Inc.

                   Notes to Consolidated Financial Statements

        (INFORMATION AS OF March 31, 2000 AND FOR THE THREE MONTHS ENDED
                      March 31, 2000 AND 1999 IS UNAUDITED)



1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

iEntertainment Network, Inc. (f/k/a Interactive Magic, Inc.) (or the "Company")
is a developer and publisher of Internet games and an operator of online game
services. The Company develops and publishes proprietary online multi-player
games and has built an Internet distribution infrastructure which offers online
gamers a variety of free, subscription and pay-per-play games and services,
including simulation, parlor, strategy, role playing and action games. Effective
December 30, 1999, the Company changed its name from Interactive Magic, Inc. to
iEntertainment Network, Inc.


BASIS OF PRESENTATION

The condensed consolidated financial statements include the accounts of
iEntertainment Network, Inc. (the "Company"), a North Carolina corporation, and
its wholly owned subsidiaries, iMagicOnline Corporation, iEntertainment Network
Ltd. and iEntertainment Network GmbH. All significant intercompany accounts and
transactions have been eliminated.

While the financial information furnished is unaudited, the condensed
consolidated financial statements included in this report reflect all
adjustments (consisting only of normal recurring adjustments) which the Company
considers necessary for the fair presentation of the results of operations for
the interim periods covered and of the financial condition of the Company at the
date of the interim balance sheet. The results for interim periods are not
necessarily indicative of the results for the entire year. The condensed
consolidated financial statements should be read in conjunction with the
iEntertainment Network, Inc. consolidated financial statements and the notes
thereto, included in the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1999.


REVENUE RECOGNITION

Revenue from pay for play online sales is recognized at the time the game is
played and is based upon actual usage by the customer on an hourly basis. The
Company records advertising revenues in the period the advertising impressions
are delivered to customers. The Company records advertising revenues net of
related administrative fees as reported by its outside advertising vendor. The
Company's advertising contracts do not guarantee a minimum number of impressions
to be delivered.

<PAGE>

                          IENTERTAINMENT NETWORK, Inc.

             Notes to Consolidated Financial Statements (continued)



1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

REVENUE RECOGNITION (CONTINUED)

In December 1999, the Securities and Exchange Commission released Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements", which provides guidance on the recognition, presentation, and
disclosure of revenue in financial statements. SAB No. 101 provides guidance on
a variety of revenue recognition issues, including gross versus net income
statement presentation. The Company's 1999 quarterly reporting on Form 10-QSB
reported advertising revenues gross with related fees reported as selling and
marketing expenses. Based on the criteria of SAB No. 101, the Company has
retroactively reclassified its 1999 quarterly reporting to present its
advertising revenues net of these sales and marketing expenses. The total amount
reclassified for the three months ended March 31, 1999 was $53,000.

Revenue from CD-ROM product sales was recognized at the time of product
shipment. Revenue from royalties and licenses is recognized when earned under
the terms of the relevant agreements with original equipment manufacturers
("OEMs"), international distributors and other third parties. With respect to
license agreements that provide customers the right to multiple copies in
exchange for guaranteed amounts, net revenue is recognized upon delivery of the
product master or the first copy provided collectibility is probable. Per copy
royalties on sales that exceed the guarantee are recognized as earned. The
Company accepts product returns and provides price protection on certain unsold
merchandise. Revenue is recorded net of an allowance for estimated future
returns, markdowns, price protection and warranty costs. Such reserves are based
upon management's evaluation of historical experience, current industry trends
and estimated costs.

In October 1997, the Accounting Standards Executive Committee "(AcSEC)" issued
Statement of Position "(SOP)" 97-2, "Software Revenue Recognition" as amended in
March 1998 by SOP 98-4 and October 1998 by SOP 98-9. These SOPs provide guidance
on applying generally accepted accounting principles in recognizing revenue on
software transactions. The Company adopted SOP 97-2 for software transactions
entered into beginning January 1, 1998. Based on the current requirements of the
SOPs, application of these statements did not have a material impact on the
Company's revenue recognition policies. However, AcSEC is currently reviewing
further modifications to the SOP with the objective of providing more
definitive, detailed implementation guidelines. This guidance could lead to
unanticipated changes in the Company's operations and revenue recognition
practices.

Revenue from certain software development contracts with fixed price components
is recognized on the percentage of completion basis in accordance with the
American Institute of Certified Public Accountants' SOP 81-1, "Accounting for
Performance of Construction-Type and Certain Production-Type Contracts." In
accordance with SOP 81-1, the Company recognizes percentage of completion
revenue based upon the ratio of accumulated incurred costs to the total
estimated costs to complete each contract.

<PAGE>

                          IENTERTAINMENT NETWORK, Inc.

             Notes to Consolidated Financial Statements (continued)



1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

COMPREHENSIVE LOSS

The following chart details the Company's comprehensive loss for the periods
presented:

                                            THREE MONTHS ENDED MARCH 31
                                                2000          1999
                                             ----------    ----------
  Net Loss                                    $(1,010)      $(6,098)
  Other comprehensive income(loss) - foreign
  currency translation adjustment                  38           (14)
                                             ----------    ----------
  Comprehensive loss                            $(972)     $ (6,112)
                                             ==========    ==========

2. DISPOSITION OF ASSETS

In connection with the disposition of its CD-ROM assets, the Company decided to
terminate certain CD-ROM distribution agreements and began negotiations to
mutually release each partner from any obligation under the terms of these
agreements. In the second quarter of 1999, the Company estimated a liability of
$850,000 for potential settlements upon termination of these agreements. The
balance of this liability at March 31, 2000 and December 31, 1999 was $195,000
and $692,000 respectively and is reflected as accounts payable and accrued
expenses in the consolidated balance sheet. In the first quarter of 2000, the
Company settled with its two largest distributors by paying $250,000 in cash and
issuing common stock valued at $300,000.

3. BUSINESS COMBINATION

On February 12, 1999 the Company completed the acquisition of MPG-Net, Inc.
("MPG-Net") by exchanging 600,000 shares of its common stock valued at
approximately $3.1 million for all of the outstanding common stock of MPG-Net
and issuing 150,000 shares of its common stock valued at approximately $800,000
in full settlement of certain debt obligations of MPG-Net. MPG-Net was primarily
in the business of developing, publishing and distributing interactive, real
time 3-D entertainment for multi-user online/Internet play, as well as creating
entertainment platforms on the Internet such as online game channels, game hubs
and websites. The acquisition was accounted for as a purchase in accordance with
Accounting Principles Board Opinion ("APB") No. 16, "Business Combinations" and,
accordingly, the operating results of MPG-Net have been included in the
Company's consolidated financial statements from the date of acquisition. The
excess of the aggregate purchase price over the fair market value of the net
assets acquired of approximately $4.3 million is being amortized on a
straight-line basis over 3 years.

<PAGE>

                          IENTERTAINMENT NETWORK, Inc.

             Notes to Consolidated Financial Statements (continued)


4. STOCKHOLDERS' EQUITY AND REDEEMABLE CONVERTIBLE PREFERRED STOCK

As of December 31, 1999 the Company had 4,911 shares of Series D redeemable
convertible preferred stock outstanding. These shares were redeemable at the
option of the holder until a registration statement, registering the underlying
common stock necessary to effect a conversion of the Series D preferred stock,
became effective. A registration statement was filed and became effective in
March 2000 which removed the redemption feature that was outside the control of
the Company. Accordingly the Company classified the Series D preferred stock as
permanent equity during the first quarter of 2000.

The Series D preferred stock holders are entitled to a 6% annual return on the
stated value of the preferred stock, upon liquidation, conversion, and
redemption within control of the Company. Accordingly, the Company has recorded
this return as accretion to the stated value of the preferred stock an a charge
to accumulated deficit. For the three months ended March 30, 2000, the recorded
accretion was $74,000 and accumulated accretion was $114,000.

5. STOCK OPTIONS, STOCK PLANS AND WARRANTS


The following table summarizes the activity under the Company's Stock Option
Plans for the three months ended March 31, 2000:

                                   OPTIONS       WEIGHTED-AVERAGE EXERCISE PRICE
                                 OUTSTANDING               PER SHARE
                              ------------------------------------------------
Balances at December 31, 1999     3,755,794                  1.95
   Options granted                  273,206                  2.98
   Options exercised               (247,057)                 1.54
   Options canceled                 (84,637)                 3.86
                              ------------------------------------------------
Balances at March 31, 2000        3,697,306                 $2.01
                              ================================================

At March 31, 2000 the Company had 2,147,491 options exercisable at exercise
prices ranging from $1.00 - $6.00 per share.


At March 31, 2000 and December 31, 1999, the Company had 1,185,903 warrants
outstanding, all of which were exercisable at prices ranging from $1.00 to $9.60
per share.

<PAGE>

                          IENTERTAINMENT NETWORK, Inc.


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

RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE
MONTHS ENDED MARCH 31, 1999

OVERVIEW

During 1999, the Company implemented its revised business strategy focusing
future efforts solely on the Internet. As part of its plan, on June 30, 1999 the
Company received $2,500,000 from Ubi Soft Entertainment S.A. for the sale of the
rights the Company had for the development of certain CD-ROM games. The sale of
the development rights marked the Company's exit from the CD-ROM business. The
Company retained the online rights for these games. During the fourth quarter of
1999, management of the Company began the process of closing its European
operations which historically had supported its CD-ROM business. The three month
financial statement comparisons are therefore heavily impacted by the
disposition of the CD-ROM business.

NET REVENUES

Net revenues increased by 40% to $ 1.6 million for the three months ended March
31, 2000 from $1.1 million for the three months ended March 31, 1999.

The following table summarizes the changes in the components of revenue from
1999 to 2000:

                                                   Three Months ended March 31
                                                             ($000)
                                                 ------------------------------

Revenue for the period in 1999                              $ 1,109

Increase / (Decrease) in CD-ROM revenue                        (551)
Increase / (Decrease) in Pay for Play Revenue                  ( 44)
Increase / (Decrease) in Royalty & Licensing                     54
Increase / (Decrease) in Advertising                            987
                                                            -------
Revenue for the period in 2000                              $ 1,555

The Company expects that, under its Internet only strategy, future revenues will
be derived primarily from advertising supported games and its pay for play
premium games.


COST OF REVENUES

Cost of revenues consists of costs of products sold (including cost of Internet
access) and royalties and amortization of software development costs. Cost of
revenues in the first quarter of 2000 decreased to $0.3 million from $.5 million
in the same period of 1999. The decrease was due to the Company's exit from the
CD-ROM business.

<PAGE>

                          IENTERTAINMENT NETWORK, Inc.

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

OPERATING EXPENSES

Operating expenses decreased $2.0 million or 46% from the first quarter of 1999
to the same period in 2000. The following is a summary of major variances:

                                                  Three Months ended March 31
                                                             ($000)
                                                  -----------------------------

Operating Expenses for the period in 1999                   $   4,357

Increase/ (Decrease) in Sales and Marketing                      (726)
Increase/ (Decrease) in Product Development                    (1,270)
Increase/ (Decrease) in General and Administrative               (236)
Increase/ (Decrease) in Goodwill Amortization                     209
                                                  -----------------------------
Operating Expenses for the period in 2000                   $   2,334

SALES AND MARKETING

Sales and marketing expenses declined significantly from the prior quarter due
to the exit from the CD-ROM business which resulted in a substantial reduction
in advertising expense and personnel costs.

PRODUCT DEVELOPMENT

Product development expenses, especially staffing expenses, decreased in the
quarter primarily due to the exit from the CD-ROM business. The first quarter of
1999 included a one-time charge for the write-off of unamortized development
costs associated with the exit from the CD-ROM business of $.6 million.

GENERAL AND ADMINISTRATIVE

General and administrative expenses decreased in the quarter primarily due to
the consolidation of our Florida and Texas operations to North Carolina and the
accompanying reduction in employee expenses.

GOODWILL AMORTIZATION

Goodwill from the MPG-Net acquisition, acquired in mid first quarter 1999, is
being amortized to expense over 36 months.

OTHER EXPENSE

Other income decreased $2.3 million in the 2000 quarter as compared to 1999. The
higher expense levels in the first quarter of 1999 were due to the interest
expense relating to the recognition of the beneficial conversion feature of the
$4,000,000 convertible debenture, and related warrants, which were issued in the
first quarter of 1999; as well as the interest expense on these debentures.

<PAGE>

                          IENTERTAINMENT NETWORK, Inc.

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

INCOME TAX EXPENSE
The Company recorded $6,000 in income tax expense for the first quarter of 2000
compared to $35,000 for the same period in 1999. The entire tax expense in each
period is attributable to earnings in Europe.

LIQUIDITY AND CAPITAL RESOURCES

The Company's capital requirements have been and will continue to be
significant, and, to date, its cash requirements have exceeded its cash flow
from operations. The Company historically has satisfied cash requirements
through cash generated from operations, borrowings, the private sale of equity
securities, and its initial public offering.

As of March 31, 2000, the Company had cash and cash equivalents of $1.9 million.
The following is a condensed table of cash and cash equivalents on hand and
major cash flow items:

                                                                         ($000)
                                                                         ------

Cash and cash equivalents on hand, December 31, 1999                    $ 3,092

Net loss                                                                 (1,010)
Add: non-cash charges and expenses                                          518
Changes in working capital                                                 (773)
                                                                        -------
              Net Cash Used in Operations                                (1,265)

Net investing and financing activities                                       56
Effect of exchange rates on cash and cash equivalents                        38
                                                                        -------
Net change in cash and cash equivalents                                  (1,171)
                                                                        -------
Cash and cash equivalents on hand, March 31, 2000                       $ 1,921
                                                                        =======
 The Company used $2.0 million less net cash in operating activities during the
first three months of 2000 compared with the same period in 1999. This decrease
was primarily due to exiting the CD-ROM business and increasing the focus on a
pure Internet strategy during 2000, resulting in reduced cash operating
requirements.

The Company's success is dependent upon its ability to generate sufficient cash
flow to meet its obligations on a timely basis, to obtain additional financing
or refinancing as may be required, and ultimately to attain profitability.
Management expects the disposition of its CD-ROM operations will reduce its
operating losses and expects to be able to attract additional capital, if
needed, for its online operations. However, there can be no assurance that
management's plans will be executed as anticipated.

<PAGE>

                          IENTERTAINMENT NETWORK, Inc.

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

LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)

The Company believes that it has sufficient cash resources to fund the Company's
operations through at least the next twelve months. The Company does not have
any current arrangements or commitments for any future financing. The Company
may not be able to obtain sufficient additional financing to satisfy its cash
requirements. The Company may be required to obtain financing on terms that are
not favorable to it and its shareholders.

If the Company is unable to obtain additional financing when needed, it may be
required to delay or scale back product development and marketing programs in
order to meet its short-term cash requirements, which could have a material
adverse effect on its business, financial condition and results of operations.

The Company's forecast for the period of time through which its financial
resources will be adequate to support its operations is a forward-looking
statement that involves risks and uncertainties, and actual results could vary.
The factors described in the preceding paragraphs will impact the Company's
future capital requirements and the adequacy of its available funds.


YEAR 2000 ISSUE

Prior to January 1, 2000, the Company conducted a review of its products and
operating systems to identify those products and systems which could be affected
by the potential Year 2000 problem. The Company's products are of a nature that
they are not date dependent or subject to failure because of Year 2000 issues.
As a result, the Company believes that all of its products and operating systems
were assessed, and if necessary, remedied to be Year 2000 compliant.

The Company has developed a contingency plan to deal with certain critical Year
2000 situations should they arise. Under the Company's Year 2000 contingency
plan, the Company has and will continue to inventory and collect documentation
on all of its computers, computer related equipment, and equipment with embedded
processors. In addition, the Company will continue to monitor and test systems
as necessary.

The Company has also communicated with significant vendors, suppliers and
critical business partners to determine the extent to which the Company might be
vulnerable in the event those parties failed to properly remediate their own
Year 2000 issues. Based on those communications, the Company believes that its
significant vendors, suppliers and critical business partners are Year 2000
compliant.

 The Company believes that it is currently Year 2000 compliant. All of the
Company's products and operating systems have continued to function beyond
January 1, 2000 without any business interruption. As the Year 2000 progresses,
however, the Company may experience problems associated with the Year 2000

<PAGE>

                           IENTERTAINMENT NETWORK, Inc.

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

YEAR 2000 ISSUE (CONTINUED)
that have not yet been discovered. There can be no assurances that the Company's
internal systems and products or those of third parties on which the Company
relies will not suffer disruptions relating to Year 2000 issues. The failure to
achieve Year 2000 compliance or to have appropriate contingency plans in place
to deal with any noncompliance could result in significant disruption of the
Company's operations and could have a material adverse effect on the Company's
financial condition and results of operations.

Based on the assessments described above, the Company estimates that it expended
less than $25,000 to achieve Year 2000 compliance.

EURO CONVERSION

On January 1, 1999, the European Community began denominating significant
financial transactions in a new monetary unit, the Euro. The Euro is intended to
replace the traditional currencies of the individual EU member countries. During
the fourth quarter of 1999 the Company decided to close its European operations
and therefore is not converting internal financial systems to the Euro as a
functional currency during this closure period.


PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

From January 1, 2000 through March 31, 2000 the Company issued warrants to
purchase 52,500 shares to members of the Board of Directors in recompense for
services at exercise prices ranging from market value to 79% of the market value
on the date of issuance; (2) granted options to purchase 178,500 shares to 16
employees priced at market value on the date of issuance; (3) issued 42,206
shares of Common Stock to contractors for services priced at the average market
price over a range of days specified under contract; (4) issued 77,420 shares of
Common Stock, priced at market value on the date of contract execution, to a
vendor in satisfaction of outstanding liabilities.

All the foregoing transactions were exempt from registration under Section 5 of
the Securities Act of 1933, as amended, by reason of Section 4(2) of the Act and
Regulation D of the Securities and Exchange Commission.

<PAGE>

                           IENTERTAINMENT NETWORK, Inc

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.


ITEM 5. OTHER INFORMATION

RISK FACTORS

In connection with the "Safe Harbor" provisions of the Private Securities
Litigation Reform Act of 1995, readers of this document are advised that this
document contains both statements of historical facts and forward-looking
statements. Our forward-looking statements include statements related to capital
needs and ability to raise capital. Words such as "anticipates," "expects,"
"intends," "plans," "believes," "seeks," "estimates" and similar expressions are
intended to identify forward-looking statements. Our forward-looking statements
are subject to certain risks and uncertainties that could cause actual results
to differ materially from those indicated by the forward-looking statements.

Our forward-looking statements are based on current expectations, estimates and
projections about our industry, management's beliefs, and certain assumptions
made by management. These statements are not guarantees of future performance
and actual actions or results may differ materially. These statements are
subject to certain risks, uncertainties and assumptions that are difficult to
predict. We undertake no obligation to update publicly any forward-looking
statements as a result of new information, future events or otherwise, unless
required by law.

You should carefully consider the risks described in the Company's 10-KSB,
together with all of the other information included in this Form 10-QSB, before
making an investment decision. The risks and uncertainties described are not the
only ones we face. If any of these risks actually occur, it is likely that our
business, financial conditions or operating results would be harmed. In such
case, the trading price of our common stock could decline, and you could lose
all or part of your investment.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(A)      EXHIBITS

         27.01    Financial Data Schedule

(B)   REPORTS ON FORM 8-K

Since the filing of the Company's 1999 Annual Form 10-KSB, the Company filed
current reports on Form 8-K in conjunction with the following events:

         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.


 IENTERTAINMENT NETWORK, INC.

                             By: /s/ Michael C. Pearce
                             -------------------------
                             Michael C. Pearce
                             Chief Executive Officer

                             By: /s/ Robert L. Hart
                             -------------------------
                             Robert L. Hart
                             Chief Financial Officer