SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For The Quarter Ended March 31, 2000              Commission File Number 0-25025
                      --------------                                     -------


                          SEDONA WORLDWIDE INCORPORATED
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            ARIZONA                                      86-0718104
-------------------------------             ------------------------------------
(State or other jurisdiction of             (IRS Employer Identification Number)
 incorporation or organization)

                 3840 North 16th Street, Phoenix, Arizona 85016
                 ----------------------------------------------
                    (Address of principal executive offices)

         Registrant's telephone number, including area code 602-263-9600


              ----------------------------------------------------
              Former name, former address, and former fiscal year,
                          if changed since last report.

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

                                 Yes [X] No [ ]

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
stock, as of the latest practicable date.

            Class                                  Outstanding at March 31, 2000
-------------------------------                    -----------------------------
Common Stock, without par value                            4,200,000 shares
<PAGE>
                                     PART I

ITEM I. FINANCIAL STATEMENTS

                          SEDONA WORLDWIDE INCORPORATED
                                  BALANCE SHEET

                                                    December 31,     March 31,
                                                        1999           2000
                                                    -----------     -----------
                                                                    (Unaudited)
                                     ASSETS

  Cash and cash equivalents                         $     9,564     $    29,977
  Accounts receivable                                    12,988          33,077
  Inventories                                           157,546         144,268
  Prepaid expenses and other current assets              30,077          29,151
                                                    -----------     -----------
    Total current assets                                210,175         236,473
  Property and equipment, net                            44,077          34,452
                                                    -----------     -----------
    TOTAL ASSETS                                    $   254,252     $   270,925
                                                    ===========     ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES & STOCKHOLDERS' EQUITY:

  Accounts payable                                  $     4,523     $    19,227
  Accrued expenses                                       24,309          17,946
                                                    -----------     -----------
    Total current liabilities                            28,832          37,173
                                                    -----------     -----------
  Common stock, no par value; 50,000,000
    shares authorized; 4,200,000 shares
    issued and outstanding                            1,000,000       1,000,000
  Contributed capital                                 2,545,730       2,545,730
  Deficit                                            (3,320,310)     (3,311,978)
                                                    -----------     -----------
    Total stockholders' equity                          225,420         233,752
                                                    -----------     -----------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $   254,252     $   270,925
                                                    ===========     ===========

                 See notes to consolidated financial statements

                                        2
<PAGE>
                          SEDONA WORLDWIDE INCORPORATED
                             STATEMENT OF OPERATIONS
                                   (UNAUDITED)

                                                   Three months ended March 31,
                                                   ----------------------------
                                                       1999            2000
                                                   -----------      -----------
Net Sales:
  Customers                                        $    34,750      $   113,077
  Affiliates                                            69,182               --
                                                   -----------      -----------
    Total net sales                                    103,932          113,077
                                                   -----------      -----------
Cost of sales:                                          65,349           49,621
                                                   -----------      -----------
  Gross profit                                          38,583           63,456
Selling, general & administrative expense:              80,129           55,124
                                                   -----------      -----------
Income (loss) from operations                          (41,546)           8,332
Interest expense                                           547               --
                                                   -----------      -----------
  Net Income (Loss)                                    (42,093)           8,332
                                                   ===========      ===========

Weighted average shares of common
  stock outstanding                                  4,200,000        4,200,000

  Basic income (loss) per share                    $     (0.01)     $      0.00
                                                   ===========      ===========

  Diluted income (loss) per share                  $     (0.01)     $      0.00
                                                   ===========      ===========

                 See notes to consolidated financial statements

                                       3
<PAGE>
                          SEDONA WORLDWIDE INCORPORATED
                             STATEMENT OF CASH FLOWS
                                   (UNAUDITED)

                                                    Three months ended March 31,
                                                    ----------------------------
                                                        1999           2000
                                                      --------       --------
Cash flows from OPERATING activities:
  Net income (loss)                                   $(42,093)      $  8,332
  Depreciation and amortization                          9,872          9,625
  (Increase) decrease in accounts receivable               364        (20,089)
  Decrease in inventory                                 33,300         13,278
  Decrease (increase) in prepaid and other              (8,851)           926
  Increase (decrease) in accounts payable               (6,653)        14,704
  Decrease in accrued expense                           (3,448)        (6,363)
                                                      --------       --------
Net cash generated by (used in)
  operating activities                                 (17,509)        20,413
                                                      --------       --------
Cash flows from INVESTING activities:
  Purchase of property and equipment                      (856)            --
                                                      --------       --------
Cash flows from FINANCING activities:
  Principal payments on debt and leases                 (7,013)            --
  Advances from parent                                 (28,120)            --
                                                      --------       --------
Net cash provided by (used in)
  financing activities                                 (35,133)            --
                                                      --------       --------

INCREASE (decrease) in cash                            (53,498)        20,413

Cash at beginning of period                             68,406          9,564
                                                      --------       --------

Cash at end of period                                 $ 14,908       $ 29,977
                                                      ========       ========

                 See notes to consolidated financial statements

                                       4
<PAGE>
                          SEDONA WORLDWIDE INCORPORATED

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1. BUSINESS DESCRIPTION AND BASIS OF PRESENTATION

     Sedona  Worldwide  Incorporated,  an  Arizona  corporation  ("SWI"  or  the
"Company"),  was  incorporated  in 1992  under  the  name  Red  Rock  Collection
Incorporated.  In  1997,  the  Company  changed  its  name to  Sedona  Worldwide
Incorporated.  The  Company  was a  majority-owned  subsidiary  of  ILX  Resorts
Incorporated,  an Arizona  corporation ("ILX") until December 31, 1999, when ILX
effected a distribution of all of the shares of the Company's Common Stock which
ILX held to the ILX  shareholders  of record as of December 21,  1999,  on a pro
rata basis (the  "Spin-Off").  As a result of the Spin-Off,  ILX's  shareholders
became owners of, in the  aggregate,  80% of the Company's  outstanding  capital
stock.  ILX  registered  the Company's  Common Stock  pursuant to a Registration
Statement on Form 10-SB on a voluntary  basis,  in order to effect the Spin-Off,
without the need to register the  distribution of the Company's  Common Stock to
ILX's shareholders under the Securities Act of 1933, as amended (the "Securities
Act"). In January 2000, ILX distributed an Information Statement, which contains
substantially  the same kind of  information  as is  typically  found in a Proxy
Statement,  to ILX  shareholders.  The Information  Statement  disclosed certain
material  information  about the  Company  and the shares of Common  Stock to be
distributed to ILX shareholders in the Spin-Off.

     The Company is principally engaged in the development,  testing, marketing,
and distribution of its own proprietary "Sedona Spa" branded lines of face, hair
and  body  care  products  and  apparels  containing  ingredients  or  materials
indigenous to, and embodying the appeal of, the Southwestern  region of the U.S.
and of Sedona, Arizona in particular. In addition, the Company has established a
marketing  alliance with Robert  Shields,  founder of Robert Shields  Design,  a
jewelry and art design  company  based in Sedona,  Arizona,  whereby the Company
will be able to offer a line of  Southwestern-style  jewelry and artwork similar
to Mr.  Shield's  existing  line of  products.  In  addition,  the  Company  has
developed a line of apparel under the brand name "Red Rock Gear." No significant
sales of apparel or jewelry have occurred to date.

     The  accompanying  unaudited  consolidated  financial  statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information  and the  instructions  to Form  10-QSB and Rule 10-01 of
Registration  S-X.  Accordingly,  they do not include all of the information and
notes  required  by  generally  accepted  accounting   principles  for  complete
financial  statements.  In  the  opinion  of  management,  all  adjustments  and
reclassifications  considered  necessary for a fair and comparable  presentation
have been included and are of a normal recurring  nature.  Operating results for
the three-month  period ended March 31, 2000 are not  necessarily  indicative of
the results  that may be expected for the year ending  December  31,  2000.  The
accompanying  financial  statements  should  be read  in  conjunction  with  the
Company's most recent audited financial statements.

INVENTORIES

     Inventories  are  recorded at the lower of cost  (first-in,  first-out)  or
market.

PROPERTY AND EQUIPMENT

     Property and equipment are stated at cost.  Depreciation  is computed using
the  straight-line  method over the estimated useful lives of the assets,  which
range from three to five years.  Property and equipment under capitalized leases
are stated at the lesser of fair value or the  present  value of future  minimum
lease payments at the date placed in service, and amortized on the straight-line
method over the term of the lease.

INCOME TAXES

     Income taxes are  accounted  for using  Statement  of Financial  Accounting
Standards  ("SFAS") No. 109,  "Accounting For Income Taxes." Under SFAS No. 109,
deferred tax assets and liabilities are recognized for the estimated  future tax
effects  attributable to differences  between the financial  statement  carrying
amounts of existing assets and liabilities and their  respective tax basis.

                                       5
<PAGE>
                          SEDONA WORLDWIDE INCORPORATED

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

REVENUE RECOGNITION

     The Company  recognizes  sales of products  when the  products are shipped.
Revenue  from  consigned  goods is  recognized  when sold and is not  considered
significant to the operations of the Company.

ACCOUNTING MATTERS

     In February 1997, the Financial  Accounting Standards Board issued SFAS No.
129, "Disclosure of Information about Capital Structure" ("SFAS 129"), which was
effective for financial  statements  for periods  ending after December 15, 1997
and establishes  standards for disclosing  information about an entity's capital
structure.  SFAS  129  was  adopted  by the  Company  in  1997.  There  were  no
significant effects on the Company's disclosures about its capital structure, as
that term is defined in SFAS 129,  in the three  months  ended March 31, 1999 or
2000.

     In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income" ("SFAS 130"), which was effective for financial
statements  for  periods  beginning  after  December  15,  1997 and  establishes
standards for reporting and display of  comprehensive  income and its components
(revenues,  expenses,  gains  and  losses)  in a  full  set  of  general-purpose
financial statements.  The Company adopted SFAS 130 in 1998. There were no items
of other comprehensive income, as that term is defined in SFAS 130, in the three
months ended March 31, 1999 or 2000.

     In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosure  about  Segments of an Enterprise  and Related  Information"  ("SFAS
131"), which is effective for fiscal years beginning after December 15, 1997 and
establishes  standards  for the way  that  public  business  enterprises  report
information about operating segments in annual financial statements and requires
that those enterprises  report selected  information about operating segments in
interim financial reports issued to shareholders.  It also establishes standards
for related disclosures about products and services, geographic areas, and major
customers.  The  Company  has a single  segment in the  personal  care  products
industry.  Revenue  from the  Company's  only major  customer is reported on the
Statement  of  Operations  under  Affiliates  in 1999 and in  Customers  in 2000
following the Spin-Off.

     In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting  for Derivative  Instruments and Hedging  Activities"  ("SFAS 133"),
which  requires  that an entity  recognize all  derivatives  as either assets or
liabilities  in the balance sheet and measure those  instruments  at fair value.
The standard also provides  specific  guidance for  accounting  for  derivatives
designated  as hedging  instruments.  In June  1999,  the  Financial  Accounting
Standards Board issued SFAS No. 137, "Accounting for Derivative  Instruments and
Hedging Activities - Deferral of the Effective Date of Statement No. 133" ("SFAS
No.  137"),  which  delayed the  effective  date of SFAS No. 133 for the company
until 2001. The Company is currently  evaluating  what impact this standard will
have on its financial statements.

NOTE 2. BUSINESS CONDITION

     As shown in the accompanying financial statements, the Company achieved net
income of $8,332  during the three months ended March 31, 2000. As of that date,
the Company's  current assets  exceeded its current  liabilities by $199,300 and
its  total  assets  exceeded  its  total  liabilities  by  $233,752  due  to ILX
contributing in excess of $2,545,000 of intercompany debt to capital at December
31, 1999.  However,  the Company  incurred net losses of $376,629,  $317,084 and
$192,340 in 1997, 1998 and 1999, respectively, and has an accumulated deficit of
$3,311,978 at March 31, 2000.  Those  factors  create an  uncertainty  about the
Company's  ability to continue as a going concern.  The financial  statements do
not include any adjustments  that might be necessary if the Company is unable to
continue as a going concern.

                                       6
<PAGE>
                          SEDONA WORLDWIDE INCORPORATED

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

     The Company's continuation as a going concern is dependent upon its ability
to generate  sufficient  cash flow to meet its obligations on a timely basis, to
obtain  financing  as may be  required,  and  ultimately  to  attain  profitable
operations.  At the time of the Spin-Off,  the Company was indebted to ILX in an
amount in excess of $2,545,000,  which ILX contributed to capital in conjunction
with the Spin-Off.  The Company has incurred net losses since its inception.  In
order  to  achieve  profitability  it  will be  necessary  for  the  Company  to
substantially increase its revenue. While there are presently some opportunities
in progress that may generate  sufficient  additional sales to generate profits,
there can be no assurance  that such  revenues  will be  generated  from current
sources.  The Company may pursue debt or equity financing that will enable it to
invest in marketing and distribution  geared toward generating greater revenues.
However, there can be no assurance that such financing will be available or that
the  marketing  and  distribution  efforts  will  be  successful  in  generating
sufficient  sales to  achieve  profitability.  ILX has  agreed to  provide up to
$200,000 of additional  financing  following  completion of the Spin-Off through
November 30, 2000. All amounts  borrowed by the Company will bear interest equal
to the prime rate plus 3% per annum, and is payable  monthly.  The entire unpaid
principal will be due on December 31, 2000. At March 31, 2000, there had been no
funds advanced under this agreement.

                                       7
<PAGE>
ITEM II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

     THE FOLLOWING  DISCUSSION OF THE COMPANY'S  FINANCIAL CONDITION AND RESULTS
OF OPERATIONS  INCLUDES CERTAIN  FORWARD-LOOKING  STATEMENTS.  WHEN USED IN THIS
FORM 10-QSB,  THE WORDS "ESTIMATE,"  "PROJECTION,"  "INTEND,"  "ANTICIPATES" AND
SIMILAR TERMS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS THAT RELATE TO
THE COMPANY'S  FUTURE  PERFORMANCE.  SUCH  STATEMENTS ARE SUBJECT TO SUBSTANTIAL
UNCERTAINTY.   READERS  ARE  CAUTIONED  NOT  TO  PLACE  UNDUE  RELIANCE  ON  THE
FORWARD-LOOKING STATEMENTS SET FORTH BELOW. THE COMPANY UNDERTAKES NO OBLIGATION
TO PUBLICLY  UPDATE OR REVISE ANY OF THE  FORWARD-LOOKING  STATEMENTS  CONTAINED
HEREIN.

OVERVIEW

     Sedona Worldwide  Incorporated was formed in 1992 to develop,  test, market
and distribute its own proprietary  "Sedona Spa" branded lines of face, hair and
body care products and apparels containing  ingredients or materials  indigenous
to, and  embodying the appeal of, the  Southwestern  region of the United States
and of Sedona, Arizona in particular. To date, the Company has generated revenue
primarily  through the sale of its face, hair and body care products to ILX. ILX
distributes  the  Company's  products  as in-room  amenities  at its resorts and
hotels,  as  premiums  (incentives)  to its  customers  for  attending  vacation
ownership  sales  presentations,  and for retail sales at its resort gift shops,
and at the Sedona Spa at Los Abrigados  Resort & Spa. The Company also generates
revenue from direct mail sales to consumers (many of whom were introduced to the
products as in-room amenities or premiums) and from limited retail  distribution
in specialty shops.

RESULTS OF OPERATIONS

     The  following  table  sets forth  certain  operating  information  for the
Company:

                                                    Three Months Ended March 31,
                                                    ----------------------------
                                                         1999          2000
                                                        -----          -----
Net sales:
Sales to ILX (1)                                         66.6%          55.2%
Sales to customers other than ILX                        33.4%          32.9%
Sales previously deferred (2)                             0.0%          11.9%
                                                        -----          -----
Total sales                                             100.0%         100.0%
                                                        =====          =====
As a percentage of net sales:
Cost of sales                                            62.9%          43.9%
Contribution margin                                      37.1%          56.1%
Sales, general and administrative expense                77.1%          48.7%
Net income (loss)                                       (40.5)%          7.4%

----------
(1)  Sales  made to ILX are made at lower  prices  (generally  cost plus a small
     mark up) than sales made to customers other than ILX.
(2)  Sales  previously  deferred  refers to a  one-time  recognition  of revenue
     related to unredeemed product certificates.

COMPARISON  OF THE THREE  MONTHS  ENDED MARCH 31, 1999 TO THE THREE MONTHS ENDED
MARCH 31, 2000

     Net sales  increased  8.8% or $9,145 in the quarter ended March 31, 2000 to
$113,077  from  $103,932  for the same period in 1999.  The increase is due to a
one-time  realization  of  previously  deferred  revenue  related to  unredeemed
product certificates.  The Company's major customer,  ILX, accounted for $62,419
or 55.2% of total net sales for the quarter  ended March 31, 2000 as compared to
$69,182 or 66.6% of total net sales for the same period in the prior year.  Cost
of sales as a  percentage  of sales for the three months ended March 31, 2000 of
43.9%  is  lower  than  the same  period  in 1999 of  62.9%  because  of a lower
percentage  of sales to ILX  resorts,  which  have a lower  profit  margin,  the
one-time  recognition of previously deferred revenue, as well as reduced product
costs as a result of discounts achieved through higher volume purchasing.

     Sales,  general and  administrative  expenses decreased 31.2% or $25,005 in
the first quarter of 2000 to $55,124, due to decreased overhead expenses related
to the Spin-Off.

                                       8
<PAGE>
ITEM II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

     Interest expense  decreased to $0 for the three months ended March 31, 2000
from $547 in the same  period in 1999,  reflecting  the  fulfillment  of capital
lease obligations.

     There is no income tax benefit  recorded  in 1999 or 2000.  The Company has
recorded a  valuation  allowance  equal to its  deferred  tax asset at March 31,
2000. Under SFAS No. 109, deferred tax assets and liabilities are recognized for
the estimated future tax effects attributable to differences between the amounts
of the Company's existing assets and liabilities and their respective tax basis.
Because  the  Company  has not  yet  generated  taxable  income,  and  therefore
sufficient  evidence  does not exist that  differences  in financial and taxable
income and net operating  loss  carryforwards  will be utilized to reduce future
income taxes, no income tax benefit has been recorded for the three-month period
ended March 31, 2000.

LIQUIDITY AND CAPITAL RESOURCES

SOURCES OF CASH

     The Company  generates cash primarily from the sale of its own  proprietary
"Sedona Spa"  branded  lines of face,  hair and body care  products and apparels
containing  ingredients or materials indigenous to, and embodying the appeal of,
the  Southwestern  region  of the  United  States  and  of  Sedona,  Arizona  in
particular.  During the  three-month  period ended March 31, 1999,  cash used in
operations was $17,509. During the three-month period ended March 31, 2000, cash
generated by operations  was equal to $20,413.  Historically  the Company's cash
flows from product sales have not been  sufficient to fund its  operations,  and
shortfalls  have been funded by ILX.  ILX  advanced  the Company  $28,120 in the
three months ended March 31,  1999;  no funds were  advanced in the three months
ended  March 31,  2000.  ILX has  funded the  Company's  cash  shortfalls  since
inception.  At the time of the  Spin-Off,  the Company was indebted to ILX in an
amount in excess of $2,545,000,  which ILX contributed to capital in conjunction
with the  Spin-Off.  ILX has  agreed to  provide up to  $200,000  of  additional
financing  following  completion of the Spin-Off  through November 30, 2000. All
amounts  borrowed by the Company will bear interest equal to the prime rate plus
3% per annum, with interest payable monthly. The entire unpaid principal will be
due on December 31, 2000. Without such a commitment, or other sources of working
capital  financing  which at present do not exist,  the  Company's  current cash
flows  will be  insufficient  to  meet  its  liquidity,  operating  and  capital
requirements.  The Company currently has no credit facility with a bank or other
financial  institution.  The Company will attempt to obtain a credit facility to
address its cash flow needs;  however,  there can be no assurance  that any such
financing  will be  available  if  needed,  or,  if  available  will be on terms
acceptable to the Company.

     The Company anticipates that its expenses will increase in the future as it
attempts to expand its business by acquiring new products and  increasing  sales
and marketing efforts and other  operations.  The Company expects to continue to
incur losses until such time, if ever, as it is able to sell a sufficient volume
of products at prices that  provide  adequate  gross  profit to cover  operating
costs.  The Company's  working  capital  requirements  will depend upon numerous
factors,  including payment cycles for its shipped products, credit arrangements
with suppliers,  the scale-up of its sales and marketing resources,  acquisition
of new products and the terms upon which such products are acquired, competitive
factors, and marketing activities.  There can be no assurance when, if ever, the
Company will be able to generate  sufficient  revenues  from its  operations  to
offset its expenses or to secure additional capital commitments.  If the Company
is unable  to  generate  more  cash  flows  than it does  currently,  it will be
insolvent and may have to discontinue its business operations.

     The  Company has  historically  filed its income tax returns as a member of
the ILX  consolidated  income tax return.  There is no formal income tax sharing
agreement  to  allocate  income  taxes  among  the  members  of the  group  and,
historically,  the Company has not  recorded an income tax benefit for losses it
has incurred that were utilized or may be utilized by ILX.

     As part of the consolidated financial statements of its former parent, ILX,
the Company  recorded a valuation  allowance  equal to its deferred tax asset at
December  31,  1998.  At December 31,  1999,  as a result of the  Spin-Off,  the
Company recorded no deferred tax asset nor a corresponding  valuation  allowance
because all tax benefits  created by the  Company's  net  operating  losses were

                                       9
<PAGE>
ITEM II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

retained by ILX. This treatment  results in no income tax benefit being recorded
at either March 31, 1999 or at March 31, 2000.

USES OF CASH

     Investing  activities  typically  reflect  a net use of cash for  equipment
purchases. Net cash used in investing activities in the three months ended March
31, 1999 was $857.  There were no purchases of property and equipment during the
quarter ended March 31, 2000.

CREDIT FACILITIES AND CAPITAL

     The Company has never accessed commercial financing and to date, all of its
working  capital  needs  have  been  financed  by ILX.  However,  following  the
Spin-Off,  ILX does not intend to fund the  Company's  future  cash  shortfalls,
except as  follows:  In October  1999,  ILX agreed to provide up to  $200,000 of
working capital  financing to the Company through November 30, 2000. All amounts
borrowed by the Company under this  agreement  will bear  interest  equal to the
prime rate plus 3% per annum,  with  interest  payable  monthly,  and the entire
unpaid principal amount due on December 31, 2000. As a result,  the Company will
need to secure  alternative  financing  sources if it  continues to operate at a
loss or,  even if  profitable,  it  pursues a growth  strategy.  There can be no
assurance  that such  resources will be available to the Company when needed and
on favorable terms. In addition,  any commercial financing obtained is likely to
impose certain  financial and other  restrictive  covenants upon the Company and
result in increased interest expense.  Although the Company anticipates the need
for additional  financing,  it does not presently have any plans to engage in an
equity or debt financing transaction.

SEASONALITY

     Presently the Company's revenues are only minimally seasonal, with slightly
increased  sales during the second and third  quarters and December,  reflecting
seasonality in resort guests of its major customer,  ILX. If the Company is able
to expand its customer  base and  marketing  and  distribution  methods,  it may
experience  different  seasonality  dynamics that may cause operating results to
fluctuate.

CONCENTRATION

     The  substantial  majority  of the  Company's  revenues  to date  have been
generated from ILX.  There are no long-term  commitments to purchase by ILX and,
in the event ILX  ceased to be a  customer  of the  Company,  revenues  would be
significantly  impacted.  If ILX remains a customer,  revenues  are  expected to
increase as ILX adds more resorts  (which utilize  in-room  amenities) and sales
offices  (which  offer  premiums to touring  guests),  although  there can be no
assurances in this regard.

INFLATION

     Inflation  and  changing  prices  have  not had a  material  impact  on the
Company's revenues, income or loss from operations or net income or loss for the
three months ended March 31, 1999 or 2000.

                                       10
<PAGE>
                                     PART II

ITEM I. LEGAL PROCEEDINGS

     The  Company  is not  currently  the  subject  of any  pending  or,  to its
knowledge, threatened legal claims.

ITEM II. CHANGES IN SECURITIES AND USE OF PROCEEDS

     None

ITEM III. DEFAULTS UPON SENIOR SECURITIES

     None

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

     None

ITEM V. OTHER INFORMATION

     None

ITEM VI. EXHIBITS AND REPORTS ON FORM 8-K

     (i)  Exhibits

          Exhibit No.       Description
          -----------       -----------
              27            Financial Data Schedule (filed herewith)

     (ii) Reports on Form 8-K

          None

                                       11
<PAGE>
                                   SIGNATURES

     Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
amended,  the Registrant has duly caused its quarterly report on Form 10-Q to be
signed on its behalf by the undersigned thereunto duly authorized.


                          SEDONA WORLDWIDE INCORPORATED
                                  (Registrant)


                           /s/ Patrick J. McGroder III
                        ---------------------------------
                             Patrick J. McGroder III
                              Chairman of the Board


                               /s/ Mia A. Martori
                        ---------------------------------
                                 Mia A. Martori
                        Director, President and Treasurer


                             /s/ Margaret M. Eardley
                        ---------------------------------
                               Margaret M. Eardley
                           Chief Financial Officer of
                            ILX Resorts Incorporated
                           (acting principal financial
                             and accounting officer)


Date:  As of May 11, 2000

                                       12