U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                   FORM 10-QSB

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

      For the quarterly period ended March 31, 1998

[  ]  Transition report under Section 13 or 15 (d) of the Exchange Act

      For the Transition period from __________________ to _____________________

      Commission file number   0-92402

                          ON STAGE ENTERTAINMENT, INC.
        -----------------------------------------------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)

            NEVADA                                                 88-0214292
---------------------------------                            -------------------
  (State or Other Jurisdiction                                 (I.R.S. Employer
of Incorporation or Organization)                            Identification No.)

4625 W. NEVSO DRIVE, LAS VEGAS, NEVADA                              89103
----------------------------------------                          ----------
(Address of Principal Executive Offices)                          (ZIP CODE)

                                 (702) 253-1333
                 ----------------------------------------------
                 Issuer's Telephone Number, Including Area Code

--------------------------------------------------------------------------------
         (Former Name, Former Address and Former Fiscal Year, if Changed
                               Since Last Report)

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS

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

         Class                                      Outstanding at April 1, 1998
-----------------------------                       ----------------------------
Common Stock, $0.01 par value                                  7,190,738


<PAGE>


                  ON STAGE ENTERTAINMENT, INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS
                                                                        PAGE NO.


Part I. Financial Information

       Item 1. Consolidated Financial Statements

                   Balance sheets......................................
                   Statements of operations............................
                   Statements of cash flows............................
                   Notes to financial statements.......................

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


Part II. Other Information

       Item 1. Exhibits and Reports on Form 8-K........................

Signatures.............................................................

Exhibit Index..........................................................


<PAGE>




PART I. FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements

                  On Stage Entertainment, Inc. and Subsidiaries
                           Consolidated Balance Sheets
<TABLE>

                                                                                                        December 31,      March 31,
                                                                                                           1997             1998
                                                                                                       ----------------------------
                                                                                                                        (Unaudited)
<S>                                                                                                     <C>             <C> 
Assets
Current assets
      Cash and cash equivalents ..................................................................     $ 2,323,559      $ 1,195,187
      Accounts receivable, net ...................................................................         455,340          963,995
      Inventory ..................................................................................         118,700          299,771
      Deposits ...................................................................................         342,096          465,385
      Prepaid and other assets ...................................................................         271,338          353,472
      Pre-opening costs, net .....................................................................            --            804,410
    Notes receivable from stockholder ............................................................         136,194          158,568
                                                                                                      ------------     ------------
               Total current assets ..............................................................       3,647,227        4,240,788
                                                                                                      ------------     ------------

Property, equipment and leasehold improvements  (Note 5) .........................................       5,008,835       20,807,049
Less:  Accumulated depreciation and amortization .................................................      (2,553,347)      (2,706,258)
                                                                                                      ------------     ------------
Property, equipment and leasehold improvements, net ..............................................       2,455,488       18,100,791
                                                                                                      ------------     ------------

Cost in excess of net assets acquired, net of accumulated amortization
    of $7,370 and $10,941 ........................................................................         116,415          112,845
Direct acquisition costs .........................................................................         258,133          100,557
Deferred financing costs, net of amortization of  $3,699 (Note 5) ................................            --            746,301
                                                                                                      ------------     ------------
                                                                                                      $  6,477,263     $ 23,301,282
                                                                                                      ============     ============
Liabilities and Stockholder's Equity
Current liabilities
    Accounts payable and accrued expenses ........................................................    $    880,286     $  2,108,065
    Accrued payroll and other liabilities ........................................................         698,499        1,230,492
    Current maturities of long-term debt .........................................................         271,918          603,332
                                                                                                      ------------     ------------
                 Total current liabilities .......................................................       1,850,703        3,941,889
                                                                                                      ------------     ------------

Long-term debt, less current maturities  (Note 5) ................................................         550,332       13,311,891
                                                                                                      ------------     ------------
           Total liabilities and long-term debt ..................................................       2,401,035       17,253,780
                                                                                                      ------------     ------------

Commitments and contingencies (Note 4)

Stockholder's equity
     Preferred stock, par value $1 per share, 1,000,000 shares
         authorized; none issued and outstanding .................................................            --               --
     Common stock, par value $0.01 per share; authorized 25,000,000
          shares; 6,595,500 and 7,190,738 shares issued and outstanding ..........................          65,955           71,907
     Additional paid-in-capital ..................................................................       7,340,013        9,834,061
     Accumulated deficit .........................................................................      (3,329,740)      (3,858,466)
                                                                                                      ------------     ------------
          Total stockholder's equity .............................................................       4,076,228        6,047,502
                                                                                                      ------------     ------------
                                                                                                      $  6,477,263     $ 23,301,282
                                                                                                      ============     ============
</TABLE>
<PAGE>


                  On Stage Entertainment, Inc. and Subsidiaries
                      Consolidated Statements of Operations

                                                         Three months ended
                                                              March 31,
                                                     --------------------------
                                                         1997          1998
                                                     --------------------------
                                                     (Unaudited)    (Unaudited)

Net revenues (Note 5) ............................   $ 2,718,777    $ 6,205,371
Costs of revenues ................................     1,902,888      3,917,328
                                                     -----------    -----------

Gross profit .....................................       815,889      2,288,043
Selling, general & administrative ................     1,069,832      2,282,216
Depreciation and amortization ....................       147,241        188,621
                                                     -----------    -----------

Operating loss ...................................      (401,184)      (182,794)
Interest expense, net ............................       113,869         13,760
Other income .....................................          --          (35,599)
Subsidiary operations for period not owned (Note 5)         --          366,516
                                                     -----------    -----------

Net loss before income taxes .....................      (515,053)      (527,471)
Income taxes .....................................         2,319          1,255
                                                     -----------    -----------
Net loss .........................................   $  (517,372)   $  (528,726)
                                                     ===========    ===========

Loss per share ...................................   $     (0.12)   $     (0.08)
                                                     ===========    ===========
                                                                       
Number of common shares outstanding ..............     4,486,515      6,714,548
                                                     ===========    ===========



<PAGE>


                  On Stage Entertainment, Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows

                Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
                                                                                                          Three months ended
                                                                                                               March 31,
                                                                                                     ------------------------------
                                                                                                        1997               1998
                                                                                                     ------------------------------
                                                                                                     (Unaudited)        (Unaudited)
<S>                                                                                                  <C>                <C>  
Cash flows from operating activities
       Net loss ..............................................................................       $  (517,372)       $  (528,726)
                                                                                                     -------------------------------
       Adjustments  to  reconcile  net  loss  to  net  cash  used  in  operating activities:
         Issuance of common stock to officer .................................................           162,129               --
         Depreciation and amortization .......................................................           147,241            160,180
         Increase (decrease) from changes in operating assets and
                   liabilities
                           Accounts receivable ...............................................           170,599           (508,655)
                           Inventory .........................................................            (6,967)           (60,987)
                           Deposits ..........................................................          (121,970)          (123,289)
                           Offering costs ....................................................          (162,728)              --
                           Pre-opening costs .................................................          (112,457)          (804,410)
                           Prepaid and other assets ..........................................           (23,963)            75,382
                           Accounts payable and accrued expenses .............................            (6,623)           241,735
                           Accrued payroll and other liabilities .............................           (57,144)           531,993
                           Litigation settlement accrual .....................................          (100,000)              --
                                                                                                     -------------------------------
         Total adjustments ...................................................................          (111,883)          (488,051)
                                                                                                     -------------------------------
Net cash used in operating activities ........................................................          (629,255)        (1,016,777)
                                                                                                     -------------------------------

Cash flows from investing activities
              Advances on note receivable from stockholder ...................................          (103,235)           (55,000)
              Payments received on notes receivable from stockholder .........................              --               32,626
              Capital expenditures ...........................................................           (93,517)          (134,363)
              Direct acquisition costs .......................................................              --             (488,298)
              Payment for purchase of Gedco, USA, net of cash received (Note 5) ..............              --          (12,116,556)
                                                                                                     -------------------------------
Net cash used in investing activities ........................................................          (196,752)       (12,761,591)
                                                                                                     -------------------------------

Cash used in financing activities
      Borrowings/repayments under line of credit .............................................              --              250,000
      Proceeds from long-term borrowing (Note 5) .............................................              --           12,500,000
      Repayment on long-term borrowing .......................................................           (25,597)          (100,004)
      Proceeds from bridge notes .............................................................           875,000              --
                                                                                                     -------------------------------
Net cash provided by financing activities ....................................................           849,403         12,649,996
                                                                                                     -------------------------------

Net increase in cash and cash equivalents ....................................................            23,396         (1,128,372)
Cash and cash equivalents at beginning of period .............................................           290,751          2,323,559
                                                                                                     -------------------------------

Cash and cash equivalents at end of period ...................................................       $   314,147        $ 1,195,187
                                                                                                     ===============================

Supplemental  disclosure  of cash flow  information  
    Cash paid during the period for:
        Interest .............................................................................       $    67,072        $    22,923
        Taxes ................................................................................             2,319              1,255
                                                                                                     ===============================
</TABLE>

Supplemental schedule of non-cash investing and financing activities

During the three months ended March 31, 1997 and 1998,  $0 and $442,997 of lease
assets and other obligation,  principally  pre-opening  costs, were capitalized,
respectively.
<PAGE>


                  ON STAGE ENTERTAINMENT, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                 March 31, 1998

(1) Basis of Presentation

The  financial  statements  included  herein  include  the  accounts of On Stage
Entertainment,  Inc. (the "Company") and its  subsidiaries,  Legends in Concert,
Inc., a Nevada corporation;  On Stage Marketing Inc., a Nevada  corporation;  On
Stage Theaters,  Inc., a Nevada  corporation;  Wild Bill's  California,  Inc., a
Nevada corporation;  Fort Liberty,  Inc., a Nevada corporation;  Blazing Pianos,
Inc.,  a  Nevada  corporation;  King  Henry's  Inc.,  a Nevada  corporation  and
Interactive   Events,   Inc.,   a   Georgia   corporation   (collectively,   the
"Subsidiaries").  In the opinion of the Company's  management,  all  adjustments
considered  necessary for fair presentation have been reflected in the financial
statements.  These  adjustments  are of a normal,  recurring  nature.  Operating
results  for the  three  months  ended  March  31,  1998,  are  not  necessarily
indicative of those expected for the full year.  Certain prior year amounts have
been adjusted and reclassified to conform to the 1997 presentation.

The accompanying  unaudited interim consolidated  financial statements have been
prepared in accordance  with the  instructions  to Form 10-QSB and the rules and
regulations  of the  Securities  and  Exchange  Commission.  These  consolidated
financial  statements have been prepared under the presumption that users of the
interim  consolidated  financial  information have either read or have access to
the Company's  audited  financial  statements and footnotes thereto for the year
ended December 31, 1997,  included in Form 10-KSB,  filed on March 31, 1998 with
the Securities and Exchange Commission. Accordingly, footnote disclosures, which
would  substantially  duplicate  the  disclosures  contained  in  the  Company's
December 31, 1997  audited  financial  statements,  have been omitted from these
interim  consolidated  financial  statements.  Certain  information and footnote
disclosures  normally included in consolidated  financial statements prepared in
accordance with generally accepted accounting principles, have been condensed or
omitted  pursuant to such  instructions.  Although the Company believes that the
disclosures are adequate to make the information presented not misleading, it is
suggested that these unaudited interim consolidated financial statements be read
in conjunction with the audited consolidated  financial statements and the notes
thereto for the year ended December 31, 1997, included in Form 10-KSB,  filed on
March 31, 1998.

(2) Subsequent Events

On April 23,  1998 the  Company  formed six (6) new Nevada  subsidiaries.  These
subsidiaries include: On Stage Productions, Inc., On Stage Merchandise, Inc., On
Stage Casino Entertainment, Inc., On Stage Events, Inc., On Stage Theaters North
Myrtle Beach, Inc., and On Stage Theaters Surfside Beach, Inc.

In March 1997, in connection  with the Company's  initial public offering of its
common  stock,  par value  $0.01  per share  ("Common  Stock"),  and  redeemable
warrants to  purchase  Common  Stock (the  "IPO"),  the Company  agreed with its
Underwriter, Whale Securities Co., LP (the "Underwriter"), that it would neither
loan nor  advance  any sums to or on behalf  of John W.  Stuart,  the  Company's
Chairman,  Chief Executive Officer and principal  stockholder,  other than those
sums  advanced to Mr. Stuart from December 31, 1996 through the date of the IPO,
without the Underwriter's prior consent. On October 23, 1997 and subsequently on
November 17, 1997, the Company  received  authorization  from the Underwriter to
advance Mr. Stuart an aggregate of $105,483  (including  principal and interest)
and on March  25,  1998,  the  Company  again  received  authorization  from the
Underwriter  to advance  $150,000 for settlement of certain  litigation  pending
against Mr. Stuart related to his involvement in the Legends in Concert,  Hawaii
show.  As of May 5, 1998,  the Company has advanced  Mr.  Stuart an aggregate of
$205,483 (the  "Advance"),  which  Advance  bears  interest at a rate of 10% per
annum,  matures  one year from the date of the  Advance  and is  evidenced  by a
promissory note.


(3) Loss Per Share

On March 3, 1997, the FASB issued Statement of Financial Accounting Standard No.
128.  Earnings  per share (SFAS 128).  This  pronouncement  provides a different
method of  calculating  earnings per share than is currently  used in accordance
with APB 15, Earnings per Share.  SFAS 128 provides for the calculation of Basic
and Diluted  earnings per share.  Basic  earnings per share includes no dilution
and is computed by  dividing  income  available  to common  shareholders  by the
weighted  average number of common shares  outstanding  for the period.  Diluted
earnings per share  reflects the  potential  dilution of  securities  that could
share in the  earnings  of the entity,  similar to fully  diluted  earnings  per
share.  Except where the provisions of the Securities and Exchange  Commission's
Staff Accounting  Bulletin No. 98 are applicable,  potential dilutive securities
have been excluded in all years  presented in the Statements of Operations  when
the effect of their inclusion would be anti-dilutive.
<PAGE>


For the  three  months  ended  March 31,  1997,  potential  dilutive  securities
representing  617,403 outstanding  options and 212,500 outstanding  warrants are
not included,  since their effect would be  anti-dilutive.  For the three months
ended  March  31,  1998,  potential  dilutive  securities  representing  563,953
outstanding stock options and 2,802,000  outstanding  warrants are not included,
since their effect would be anti-dilutive.

(4) Commitments and Contingencies

The Company is a party to various legal proceedings in which the adverse parties
are seeking  damages from the Company.  While there can be no assurance that any
of the instituted or threatened  lawsuits will be settled or decided in favor of
the Company, the management of the Company does not believe the final resolution
of these  matters  will  have a  material  adverse  effect  upon  the  Company's
financial condition and results of operations.

(5) Business Acquisition

Gedco USA, Inc. Acquisition

On March 13, 1998, the Company  completed its acquisition of certain assets from
Gedco  USA,  Inc.  and its  affiliates  for a  purchase  price  of  $14,000,000,
consisting of  $11,500,000  in cash and 595,238 shares of Common Stock valued at
$2,500,000 (the "Gedco Acqusition").

Included in the Gedco Acquisition were substantially all of the income producing
assets and  associated  real property of Orlando  Entertains  and LA Entertains,
consisting  of King Henry's  Feast,  Blazing  Pianos piano bar, the Fort Liberty
shopping  complex that includes a Wild Bill's Dinner  Theater,  each of which is
located in greater  Orlando,  Florida,  and a second Wild Bill's Dinner Thearter
located in Buena Park,  California.  Gerard  O'Riordan,  President of Gedco USA,
Inc.,  joined the Company as  President  of On Stage  Theaters,  Inc.,  a wholly
subsidiary  of the Company that manages the acquired  dinner  theaters and piano
bar as well as other selected theaters.

The Company funded the cash portion of the purchase price and  transaction  fees
and expenses  with $12.5  million of mortgage  financing  from  Imperial  Credit
Commercial Mortgage Investment Corp. ("ICCMIC"). ICCMIC has committed a total of
$20,000,000,  of which  $7,500,000 is remaining to finance the Company's  future
real estate related acquisitions.  In connection with the loan agreement entered
into  between the  Company and ICCMIC on March 13, 1998 (the "Loan  Agreement"),
the  Company  granted  ICCMIC the right to  provide  the  Company  with up to an
additional $30 million of similar  mortgage  financing.  In connection  with the
financing,  the  Company  issued  ICCMIC  and  Imperial  Capital  Group  LLC (an
affiliate of ICCMIC), an aggregate of 575,000 warrants  immediately  exercisable
into Common Stock at an exercise price of $4.44.  In addition,  concurrent  with
the ICCMIC financing,  Mark Karlan,  the President of ICCMIC, was named a member
of  the  Company's  Board  of  Directors,  filling  a  vacancy  created  by  the
resignation of Kenneth Berg.

The  components  of the  purchase  price and its  allocation  to the  assets and
liabilities are as follows:


Purchase Price:
     Liabilities assumed ........................................    $   986,044
     Issuance of  595,238 restricted shares of common stock .....      2,500,000
                                                                     -----------
                                                                       3,486,044
     Costs of acquisition incurred ..............................      1,645,874
       Cash paid ................................................     11,500,000
                                                                     -----------
                                                                     $16,631,918
                                                                     ===========

         The acquisition was accounted for as a purchase and the assets acquired
were  recorded at a fair market  value.  The  building and  equipment  are being
depreciated over twenty and three years,  respectively,  under the straight-line
method. The allocation of the purchase price was as follows:


Cash .......................................................         $   383,444
Inventory ..................................................             120,084
Prepaid expenses ...........................................             157,516
Land .......................................................          11,275,507
Building ...................................................           3,214,740
Equipment ..................................................             730,627
Deferred financing acquisition expenses ....................             750,000
                                                                     -----------
                                                                     $16,631,918
                                                                     ===========
<PAGE>



         The assets acquired and liabilities  assumed were transferred to either
the Company's  wholly-owned  subsidiary,  On Stage  Theaters,  Inc., or a wholly
owned subsidiary of On Stage Theaters, Inc., concurrent with the acquisition.

         The Company has elected to  consolidate  the  operations  of the assets
acquired in the Gedco Acquisition  retroactively to January 1, 1998.  Therefore,
the  pre-acquisition  gain  of  $366,516  has  been  added  to the  consolidated
statement of operations for the quarter ended March 31, 1998. The effect of this
consolidation of operations prior to acquisition was an increase in net sales of
approximately $3,099,071.


<PAGE>


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

         This document  contains  certain  forward-looking  statements  that are
subject to risks and uncertainties.  Forward-looking  statements include certain
information  relating to its  outstanding  litigation  matters and the  defenses
available  to the  Company,  the  seasonality  of the  Company's  business,  and
liquidity  as well as  information  contained  elsewhere  in this  Report  where
statements  are  preceded  by,  followed  by or  include  the words  "believes,"
"expects,"  "anticipates"  or  similar  expressions.  For such  statements,  the
Company claims the protection of the safe harbor for forward-looking  statements
contained  in  the  Private  Securities  Litigation  Reform  Act  of  1995.  The
forward-looking   statements   in  this   document  are  subject  to  risks  and
uncertainties that could cause the assumptions  underlying such  forward-looking
statements and the actual results to differ  materially  from those expressed in
or implied by the statements.

         The  most  important  factors  that  could  prevent  the  Company  from
achieving its goals and cause the  assumptions  underlying  the  forward-looking
statements and the actual results of the Company to differ materially from those
expressed in or implied by those forward-looking statements include, but are not
limited to, those  identified  in pages 9-17 of Amendment No. 5 to the Company's
Registration Statement on Form SB-2 filed with the Commission on August 13, 1997
(Registration  No.  333-24681),  as well  as the  following:  (i) The  Company's
dependence on its flagship  productions  Legends in Concert,  Wild Bill's Dinner
Extravaganza,  Blazing Pianos,  King Henry's Feast and its principal  production
venues;  (ii) The ability of the Company to successfully  produce and market new
productions and to manage the growth  associated  with the any new  productions;
(iii) Risks associated with the Company's  acquisition  strategy,  including the
Company's  ability to successfully  identify,  complete and integrate  strategic
acquisitions;  (iv) The Company's  ability to obtain  financing on  commercially
reasonable   terms;  (v)  The  Company's  ability  to  service  its  substantial
indebtedness;  (vi) The  competitive  nature of the  leisure  and  entertainment
industry and the ability of the Company to continue to distinguish its services;
(vii) Fluctuations in quarterly operating results and the highly seasonal nature
of the  Company's  business;  (viii) The ability of the Company to reproduce the
performance, likeness and voice of various celebrities without infringing on the
publicity  rights of such celebrities or their estates as well as its ability to
protect its  intellectual  property  rights;  (ix) The ability of the Company to
successfully  manage  the  litigation  pending  against  it and to avoid  future
litigation;  and (x) The results of operations  which depend on numerous factors
including, but not limited to, the commencement and expiration of contracts, the
timing  and amount of new  business  generated  by the  Company,  the  Company's
revenue  mix,  the  timing  and  level  of  additional   selling,   general  and
administrative expense and the general competitive conditions in the leisure and
entertainment industry as well as the overall economy.

Results of Operations

         The following tables sets forth, the results of operations by operating
divisions for the period indicated:
<TABLE>
                                                              For the quarter ended March 31, 1997
                               ----------------------------------------------------------------------------------------------------
                                                                                                Sub-Total
                                  Casino     Corporate                  Production              Operating   Corporate      Total
                               Entertainment   Events     Merchandise    Services    Theaters   Divisions     Office   Consolidated
                               ----------------------------------------------------------------------------------------------------
<S>                             <C>          <C>          <C>           <C>         <C>         <C>         <C>         <C>
Net revenues.................   $1,457,046   $  625,050   $   67,376    $      --   $  569,305  $2,718,777  $      --   $2,718,277
Cost of revenues ............      887,445      420,868       14,462        59,253     520,860   1,902,888         --    1,902,888
                                --------------------------------------------------------------------------------------------------
Gross profit.................      569,601      204,182       52,914       (59,253)     48,445     815,889         --      815,889
                                                                                                                            
Selling, general & 
  administrative.............       53,758      152,287           --           --      137,049     343,094    726,738    1,069,832
Depreciation & amortization .       30,583           --           --           --        5,123      35,706    111,535      147,241
                                --------------------------------------------------------------------------------------------------
Operating income (loss) .....      485,260       51,895       52,914       (59,253)    (93,727)    437,089   (838,273)    (401,184)
Interest expense, net  ......          --          (144)          --            --          --        (144)   114,013           --
                                --------------------------------------------------------------------------------------------------
Net income (loss) before 
   income taxes .............      485,260      52,039       52,914       (59,253)    (93,727)    437,233   (952,286)    (515,053)
Income taxes.................           --       1,723           --            --          --       1,723        596        2,319
                                --------------------------------------------------------------------------------------------------
Net income (loss) ...........   $  485,260  $   50,316   $   52,914    $  (59,253)  $ (93,727) $  435,510 $ (952,882)  $ (517,372)
                                =================================================================================================

<PAGE>

                                                              For the quarter ended March 31, 1997
                               ----------------------------------------------------------------------------------------------------
                                                                                                Sub-Total
                                  Casino     Corporate                  Production              Operating   Corporate      Total
                               Entertainment   Events     Merchandise    Services    Theaters   Divisions     Office   Consolidated
                               ----------------------------------------------------------------------------------------------------

Net revenues................    $1,525,353  $  539,798   $   56,056    $       --   $4,084,164 $6,205,371 $       --   $6,205,371
Cost of revenues ...........       973,607     345,184       12,770        31,549    2,554,218  3,917,328         --    3,917,328
                                --------------------------------------------------------------------------------------------------
Gross profit................       551,746     194,614       43,286       (31,549)   1,529,946  2,288,043         --    2,288,043
Selling, general &    
  administrative ...........        54,306     229,716        4,702        43,104    1,244,838  1,576,666    705,550    2,282,216
Depreciation  &    
  amortization .............        38,402       2,748          560            --       69,863    111,573     77,048      188,621
                                --------------------------------------------------------------------------------------------------
Operating income (loss) ....       459,038     (37,850)      38,024       (74,653)     215,245    599,804   (782,598)    (182,794)
Interest expense, net ......            --         (20)          --            --        6,815      6,795      6,965       13,760 
Other income................            --          --           --            --      (35,599)   (35,599)        --      (35,599)
Subsidiary operations for 
  period not owned .........            --          --           --            --      366,516    366,516         --      366,516
                                --------------------------------------------------------------------------------------------------
Net income (loss) before                
  income taxes .............       459,038     (37,830)      38,024       (74,653)    (122,487)   262,092   (789,563)    (527,471)
Income taxes................            --          --           --            --           --         --      1,255        1,255
                                --------------------------------------------------------------------------------------------------
Net income (losses) ........    $  459,038  $  (37,830)  $   38,024    $  (74,653)  $ (122,487) $ 262,092 $ (790,818)  $ (528,726)
                                =================================================================================================
</TABLE>
The following table sets forth, for the periods indicated, the percentage of the
Company's net revenues represented by operating Divisions income statement data:
<TABLE>
                                                                       Three Months Ended March 31, 1997
                                         -------------------------------------------------------------------------------------------
                                                                                                  Sub-Total
                                            Casino    Corporate              Production           Operating  Corporate     Total
                                         Entertainment  Events   Merchandise  Services  Theaters  Divisions    Office   Consolidated
                                         -------------------------------------------------------------------------------------------
<S>                                      <C>          <C>        <C>         <C>        <C>       <C>        <C>        <C>
Net revenues.........................       100.0%     100.0%      100.0%      100.0%     100.0%     100.0%    100.0%      100.0%
Cost of revenues ....................        60.9       67.3        21.5         0.0       91.5       70.0       0.0        70.0
                                           ---------------------------------------------------------------------------------------
Gross profit ........................        39.1       32.7        78.5         0.0        8.5       30.0       0.0        30.0
Selling, general & administrative ...         3.7       24.4         0.0         0.0       24.1       12.6       0.0        39.4
Depreciation & amortization .........         2.1        0.0         0.0         0.0        0.9        1.3       0.0         5.4
                                           ---------------------------------------------------------------------------------------
Operating income (loss) .............        33.3        8.3        78.5         0.0      (16.5)      16.1       0.0       (14.8)
Interest, net .......................         0.0        0.0         0.0         0.0        0.0        0.0       0.0         4.1
                                           ---------------------------------------------------------------------------------------
Net income (loss) before ............        33.3        0.0        78.5         0.0      (16.5)       0.0       0.0       (18.9)
Income taxes ........................         0.0        0.3         0.0         0.0        0.0        0.1       0.0         0.1
                                           ---------------------------------------------------------------------------------------
Net income (loss) ...................       33.3%        8.3%       78.5%        0.0%     (16.5)%     16.0%      0.0%      (19.0%)
                                           =======================================================================================

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

Net revenues.........................      100.0%      100.0%      100.0%      100.0%      100.0%    100.0%    100.0%      100.0%
Cost of revenues ....................       63.8        63.9        22.8         0.0        62.5      63.1       0.0        63.1
                                           --------------------------------------------------------------------------------------
Gross profit ........................       36.2        36.1        77.2         0.0        37.5      36.9       0.0        36.9
Selling, general & administrative ...        3.6        42.6         8.4         0.0        30.5      25.4       0.0        36.8
Depreciation & amortization .........        2.5         0.5         1.0         0.0         1.7       1.8       0.0         3.0
                                           --------------------------------------------------------------------------------------
Operating income (loss)..............       30.1        (6.5)       68.8         0.0         7.0      11.5       0.0         0.1
Interest, net .......................        0.0         0.0         0.0         0.0         0.2       0.1       0.0         0.2
Other income ........................        0.0         0.0         0.0         0.0        (0.9)     (0.6)      0.0        (0.6)
Subsidiary operations for period 
  not owned .........................        0.0         0.0         0.0         0.0         9.0       6.0       0.0         6.0
                                           --------------------------------------------------------------------------------------
Net income (loss) before income 
  taxes ..............................      30.1        (7.0)       67.8         0.0        (3.0)      4.2       0.0        (8.5)
Income taxes .........................       0.0         0.0         0.0         0.0         0.0       0.0       0.0         0.0
                                           --------------------------------------------------------------------------------------
Net income (loss) ....................      30.1%       (7.0%)      67.8%        0.0        (3.0%)     4.2%      0.0%       (8.5%)
                                           ======================================================================================
</TABLE>
<PAGE>


Net loss for the quarter ended March 31, 1998 was $528,726, as compared to a net
loss of $517,732 for the quarter ended March 31, 1997.

Quarter Ended March 31, 1997 versus Quarter Ended March 31, 1998

Net Revenues.  Revenues  increased by 128.3% to $6,205,000 for the quarter ended
March 31, 1998 compared to $2,718,000  for the quarter ended March 31, 1997. The
Company's revenue is derived from four principal operating divisions:  Theaters,
Corporate Events, Merchandise, and Casino Entertainment.

Theaters revenues were approximately  $4,084,000 for the quarter ended March 31,
1998  compared to $569,000 for the quarter  ended March 31, 1997, an increase of
$3,515,000,  or  617.4%.   Contributing  to  this  increase  were  increases  of
approximately:  (i)  $566,000,  attributable  a full scale  Legends  show at the
Estrel Residence & Congress Hotel in Berlin, Germany, a resident Legends show at
the Christy Lane Theater in Branson,  Missouri,  a resident  variety show at the
Sheraton  Valley  Forge  Hotel  in  King  of  Prussia;   and  (ii)   $3,099,000,
attributable  to the  consolidation  of  operations  of the  Gedco  Acquisition,
retroactively  to January 1, 1998.  These  increases  were  partially  offset by
decreases of approximately: (a) $104,000, attributable to the discontinuation of
the Legends  show on Premier  Cruise Lines due to a sale of the vessels to a new
company;  and (b) $46,000,  attributable to the resident  Legends show in Myrtle
Beach, South Carolina.

Corporate  Events  revenues  were  $540,000 for the quarter ended March 31, 1998
compared to $625,000 for the quarter ended March 31, 1997, a decrease of $85,000
or 13.6%. This decrease was mainly  attributable to a reduction of $209,000,  in
limited  engagements  which included the Legends Celebrity Series at the Empress
Casino in Joliet,  Illinois,  which ran in 1997 but not in 1998. These decreases
were partially  offset by increases in revenues of  approximately  $124,000 from
other corporate events.

Merchandise revenues were approximately  $56,000 for the quarter ended March 31,
1998  compared to $67,000 for the quarter  ended March 31,  1997,  a decrease of
$11,000 or 16.4%.  This decrease was mainly  attributable to a decrease in photo
revenues at the Fireside  Restaurant & Playhouse,  due to the discontinuation by
Fireside of merchandise sales during 1998.

Casino  Entertainment  revenues were  approximately  $1,525,000  for the quarter
ended March 31,  1998  compared to  $1,457,000  for the quarter  ended March 31,
1997,  an increase of  $69,000,  or 4.7%.  Contributing  to this  increase  were
increases of  approximately:  (i) $120,000,  attributable  to the Camouflage Aux
Follies,  at the Taj Mahal Hotel and Casino in Atlantic City, New Jersey,  which
ran in 1998, but not in 1997; (ii) $39,000,  attributable to the Legends show at
the  Bally's  Park  Place in  Atlantic  City,  New  Jersey;  and (iii)  $66,000,
attributable to Fiesta!  Fiesta!,  at the Taj Mahal Hotel and Casino in Atlantic
City,  New Jersey,  which ran in 1998,  but not in 1997.  These  increases  were
partially offset by decreases of approximately:  (a) $64,000,  attributable to a
resident  Legends  show at the  Imperial  Palace in Las Vegas;  and (b) $92,000,
attributable to An Evening at the Improv(R) Spectacular for Trump's Taj Majal in
Atlantic City, Where it ran from March 1997 through July 1997.

Costs of Revenues. Total costs of revenues were $3,917,000 for the quarter ended
March 31, 1998 compared to  $1,903,000  for the quarter ended March 31, 1997, an
increase of $2,014,000,  or 105.9%.  Costs of revenues decreased to 63.1% of net
revenues  for the  quarter  ended March 31,  1998,  as compared to 70.0% for the
quarter  ended March 31, 1997.  This  decrease in cost of sales as percentage of
revenues  was  primarily  attributable  to a change in the mix of the  Company's
revenues due to the inclusion of the Gedco Acquisition revenues which have lower
costs of revenues (49.4%) than: Casino Entertainment  (63.8%);  Corporate Events
(63.9%); or Theaters (103.8%,  exclusive of the Gedco USA, Inc.  consolidation).
The  increase in total costs of revenues was  partially  offset by a decrease in
costs of revenue (22.8%) in the Merchandise Division.
<PAGE>


Selling,  General and Administrative.  Selling, general and administrative costs
were  approximately  $2,282,000 for the quarter ended March 31, 1998 as compared
to $1,070,000  for the quarter ended March 31, 1997, an increase of  $1,212,000,
or 113.3%.  Selling,  general and administrative costs decreased to 36.8% of net
revenues  for the  quarter  ended March 31,  1998,  as compared to 39.4% for the
quarter  ended  March  31,  1997.  The  increase  in total  cost  was  primarily
attributable  to the  inclusion of the Gedco  Acquisition  selling,  general and
administrative  expense,  and  increases  in  automobile  expenses,   insurance,
professional services, rent, advertising,  and promotion and investor relations.
These decreases were partially offset by decreases in salaries and commissions.

Operating Loss. The Company's operating loss was approximately  $183,000 for the
quarter ended March 31, 1998,  compared to an operating loss of $401,000 for the
quarter ended March 31, 1997, an increase of $218,000, or 54%.

Depreciation  and  Amortization.  Depreciation  and amortization for the quarter
ended March 31, 1998 increased by $41,000,  or 28.0%, as compared to the quarter
ended March 31, 1997.  The increase was  primarily  due to capital  additions to
current shows, new shows,  goodwill  amortization and an increase in assets as a
result of the Gedco Acquisition.

Interest  Expense,  Net.  Interest  expense for the quarter ended March 31, 1998
decreased by $100,000,  or 88%, as compared to the quarter ended March 31, 1997.
The decrease was primarily due to a decrease in the average  borrowing level for
the quarter  ended  March 31,  1998 as  compared to the quarter  ended March 31,
1997.

Other Income. Other income for the quarter ended March 31, 1998 was attributable
to a sign-on bonus received from a new supplier.

Income Taxes. The Company is a Nevada corporation with a substantial  portion of
revenue and income  derived in Nevada.  There are no state or local income taxes
in Nevada. The Company accrued no federal income tax for the quarter ended March
31, 1998. Income taxes for the quarters ended March 31, 1997 and 1998, relate to
income taxes due in those states other than Nevada in which the Company conducts
business. At March 31, 1997 and 1998, the Company had federal net operating loss
carryforwards of approximately  $1,174,847 and $3,024,097,  respectively.  Under
Section  382 of the  Internal  Revenue  Code,  certain  significant  changes  in
ownership  that the Company is  currently  undertaking  may  restrict the future
utilization of these tax loss carryforwards.  The net deferred tax assets have a
100% valuation  allowance,  as management  cannot determine if it is more likely
than not that the deferred tax assets will be realized.

Seasonality and Quarterly Results

The Company's  business has been,  and is expected to remain,  highly  seasonal,
with the  majority of its  revenue  being  generated  during the months of April
through October. Part of the Company's business strategy is to increase sales in
tourist markets that experience  their peak seasons from November through March,
so as to offset this seasonality in revenues.  The Gedco Acquisition should also
help to decrease the seasonality of the Company's business since Gedco's revenue
has historically been less seasonal.  The Company is exploring  opportunities to
open shows in markets such as Florida and Arizona,  domestically, and Australia,
South Africa, and Mexico,  abroad,  which the Company believes,  could also help
mitigate the effect of this seasonality.

The  following  table sets forth the  Company's net revenue for each of the last
nine quarters ended March 31, 1998:

                                      Net Revenues ($ in thousands)
                            ----------------------------------------------------
                            March 31,    June 30,   September 30,   December 31,
                            ----------------------------------------------------

Fiscal 1996 ..........       $2,347       $4,266       $4,591         $3,074
Fiscal 1997 ..........       $2,719       $3,979       $5,071         $3,957
Fiscal 1998 ..........       $6,205           --           --             --
<PAGE>


Liquidity and Capital Resources

General

The Company has  historically  met its working  capital  requirements  through a
combination  of cash  flow  from  operations,  equity  and  debt  offerings  and
traditional bank financing. The Company anticipates, based on its proposed plans
and assumptions relating to its operations (including  assumptions regarding the
anticipated  timetable  of its  new  show  openings  and  the  costs  associated
therewith),   that  the  Company's  current  cash,  cash  equivalent   balances,
anticipated  revenue  from  operations  and its  working  capital  line  will be
sufficient to fund its current operations and contemplated  capital requirements
over the next 18  months.  However,  the  Company's  acquisition  strategy  will
require  additional  debt and/or  equity  financing.  In the event the Company's
plans or  assumptions  change,  prove to be  incorrect,  or if  balances  and/or
anticipated revenues otherwise prove to be insufficient,  the Company would need
to revise its expansion  strategy (which revision could include the curtailment,
delay or elimination of certain of its anticipated productions or the funding of
such productions through arrangements with third parties, which would require it
to  relinquish  rights to a  substantial  portion of its  revenues)  and/or seek
additional financing prior to the end of such period.

For the quarter  ended  March 31,  1997,  the  Company  used cash of $629,000 in
operations. As of March 31, 1997, the Company had approximately $314,000 in cash
and cash  equivalents.  For the quarter  ended March 31, 1998,  the Company used
cash of  $1,017,000  in  operations.  As of March  31,  1998,  the  Company  had
approximately  $1,195,000 in cash and cash equivalents.  The operating  deficits
for both quarters were primarily  attributable to business  seasonality,  and an
increase in selling, general and administrative costs.

The net cash used in investing  activities  for the quarter ended March 31, 1997
of $197,000,  was  primarily  attributable  to capital  expenditures  and direct
advances  (which  were  subsequently  written  off at August 13,  1997) on notes
receivable  to Mr.  Stuart.  The net cash used in investing  activities  for the
quarter  ended March 31, 1998 of  $12,762,000,  was  primarily  attributable  to
direct acquisition costs related to the Gedco Acquisition.

Net cash provided by financing  activities  for the quarter ended March 31, 1997
of $849,000, was primarily attributable to a series of debt and bank financings.
Net cash provided by financing  activities  for the quarter ended March 31, 1998
of $12,650,000,  was primarily  attributable to ICCMIC's  funding of $12,500,000
for the Gedco Acquisition.

At March 31, 1997, the Company had a working  capital  deficit of  approximately
$351,000,   which  resulted  primarily  from  business  seasonality,   increased
operating   expenses  and  advances   paid  to  Mr.  Stuart  in  the  amount  of
approximately  $103,000.  At March 31, 1998, the Company had working  capital of
approximately  $298,000,  primarily  attributable  to an  increase  in  pre-paid
tickets and monies received from the Gedco Acquisition.

Working Capital Line

In May 1997, First Security Bank of Nevada ("First  Security")  issued a line of
credit to the Company for up to $250,000.  Borrowings  under such  facility bear
variable interest at 1.5% over the First Security Bank of Idaho's index (10% per
year as of the facility's  inception) and are due on demand.  On March 28, 1998,
First  Security  increased the line of credit from  $250,000 to  $1,000,000  and
extended the expiration  date of the line to March 25, 1999. As of May 13, 1998,
the Company had drawn $715,000 on the line of credit.
<PAGE>


Capital Equipment Financing Commitment

On September 29, 1997,  First  Security  Leasing  Company,  a Utah  corporation,
approved  the Company  for a $500,000  capital  lease line of credit,  which was
subsequently  increased to  $1,000,000  on March 28, 1998.  Advances  under this
capital  lease line incur  interest at a rate of 9.75% per annum.  The financing
commitment  will expire on September 29, 1998. As of April 11, 1998, the Company
had drawn $832,000 on the capital lease line.

Mortgage Financing Commitment

On March 13,  1998,  the Company  entered  into the Loan  Agreement  with ICCMIC
pursuant to which ICCMIC agreed to provide the Company with up to $20,000,000 of
mortgage  financing.  On the same date,  the Company  used  $12,500,000  of said
facility to fund the cash portion of the Gedco  Acquisition and related fees. In
connection with the Loan Agreement,  the Company  provided ICCMIC with the right
to provide the Company with up to an additional  $30,000,000 of mortgage related
financing.  In addition  concurrent with the ICCMIC financing,  Mark Karlan, the
President of ICCMIC,  was named a member of the  Company's  Board of  Directors,
filling a vacancy created by the resignation of Kenneth Berg.


<PAGE>


                           PART II. OTHER INFORMATION


Item 1.  Exhibits & Reports on Form 8-K

         (a) Exhibits

         The following documents are furnished as exhibits and numbered pursuant
         to Item 601 of Regulation S-B.

          4.1  Warrant  Agreement  between Imperial Credit  Commercial  Mortgage
               Investment Corp.,  Imperial Capital Group LLC and the Registrant,
               dated as of March 13,1998.

          10.1 Loan Agreement by and between Imperial Credit Commercial Mortgage
               Investment Corp. and Wild Bill's California,  Inc., King Henry's,
               Inc. and Fort Liberty, inc., dated as of March 13, 1998.

          10.2 Guaranty  Loan  Agreement   between  Imperial  Credit  Commercial
               Mortgage  Investment Corp. and the Registrant,  dated as of March
               13, 1998.

         (b) Reports on Form 8-K

On March 30, 1998,  the Company  filed a report on Form 8-K in which the Company
reported the terms of the Gedco Acquisition.






<PAGE>


                                   SIGNATURES


In accordance with the requirements of the Securities  Exchange Act of 1934, the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

                                       ON STAGE ENTERTAINMENT, INC.








Date: May 14, 1998                               /s/ John W. Stuart
                                                 -------------------------------
                                                 John W Stuart, Chairman
                                                 and Chief Executive Officer









Date: May 14, 1998                                /s/ Kiranjit S. Sidhu
                                                  ------------------------------
                                                  Kiranjit S. Sidhu, Senior Vice
                                                  President Finance and 
                                                  Administration, and Chief 
                                                  Financial Officer

<PAGE>


                                  EXHIBIT INDEX


4.1     Warrant Agreement between Imperial Credit Commercial Mortgage Investment
        Corp., Imperial Capital Group LLC and the Registrant,  dated as of March
        13,1998.

10.1    Loan  Agreement  by and  between  Imperial  Credit  Commercial  Mortgage
        Investment Corp. and Wild Bill's  California,  Inc., King Henry's,  Inc.
        and Fort Liberty, inc., dated as of March 13, 1998.

10.2    Guaranty Loan Agreement  between  Imperial  Credit  Commercial  Mortgage
        Investment Corp. and the Registrant, dated as of March 13, 1998.