<PAGE>

                    U. S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
         SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended June 30, 1996


Commission File Number: 33-55254-05


                            JUMPIN' JAX CORPORATION
            (Exact name of registrant as specified in its charter)


                  NEVADA                               87-0485319
     (State or other jurisdiction of       (I.R.S. Employer Identification No.)
     incorporation or organization)


         3025 Harbor Lane North, Suite 315, Plymouth, Minnesota    55447
               (Address of principal executive offices)          (Zip Code)


                                (612) 550-1460
             (Registrant's telephone number, including area code)

         Check whether the issuer: (1) has 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. 
[X] Yes   [ ] No

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

           14,637,489 shares of Common Stock as of September 30, 1996


<PAGE>


                                      INDEX


         Part I.     FINANCIAL INFORMATION                                  Page

         Item 1.  Financial Statements:

                    Condensed Consolidated Balance Sheets as of
                    June 30, 1996 and December 31, 1995 (unaudited)

                    Condensed Consolidated Statements of Operations for the
                    three and six months ended June 30, 1996 and 1995
                    (unaudited)

                    Condensed Consolidated Statements of Cash Flows for the
                    three and six months ended June 30, 1996 (unaudited)

                    Notes to Condensed Consolidated Financial
                    Statements (unaudited)

         Item 2.    Management's Discussion and Analysis or Plan
                    of Operations

Part II.  OTHER INFORMATION

         Item 1.  Legal Proceedings
         Item 5.  Other Information
         Item 6.  Exhibits and Reports on Form 8-K

<PAGE>



                                 Part I. FINANCIAL INFORMATION
                                  Item 1. Financial Statements
                            Jumpin' Jax Corporation and Subsidiaries
                             Condensed Consolidated Balance Sheets
                                          (Unaudited)
                        (dollars in thousands except per share amounts)


<TABLE>
<CAPTION>

                                                ASSETS

                                                                 June 30,        December 31,
CURRENT ASSETS:                                                    1996              1995
                                                              ---------------  ------------------
<S>                                                           <C>              <C>
     Cash                                                                $13                   -
     Accounts receivable                                                 188                 253
     Certificate of deposit                                               50                  50
     Inventories                                                         221                 323
     Other current assets                                                100                  76
                                                              ---------------  ------------------
     TOTAL CURRENT ASSETS                                                572                 702

Property and equipment, net                                            2,989               3,136
Other assets                                                             366                  87
                                                              ---------------  ------------------
     TOTAL OTHER ASSETS                                                3,355               3,223

                                                              ===============  ==================
     TOTAL ASSETS                                                     $3,927              $3,925
                                                              ===============  ==================

                      LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
     Bank overdraft                                                        -                  38
     Accounts payable                                                  2,369               1,956
     Bridge Debt                                                         766                   -
     Current portion of long term debt                                 1,298               1,141
     Current portion of notes payable, related parties                    53                  54
     Sales taxes payable                                               2,224               2,137
     Accrued expenses                                                  1,216               1,030
     Deposits on account                                                 339                 479
     Landlord Advances                                                    89                  89
                                                              ---------------  ------------------
     TOTAL CURRENT LIABILITIES                                         8,354               6,924

Long term debt                                                           106                 145
Notes payable, related parties                                             9                  19

Landlord advances                                                        744                 717
Reserve for additional investment in Playpal                               -                 667

                                                              ===============  ==================
     TOTAL LIABILITIES                                                 9,213               8,472
                                                              ===============  ==================
SHAREHOLDERS' EQUITY:
     Common stock, $.001 par value; 50,000,000 shares
       authorized, 14,637,489 and 12,967,395 issued and
       outstanding at June 30, 1996 and December 31, 
       1995 respectively                                                  15                  13
     Additional paid-in capital                                        5,601               4,993
     Common stock issuable                                                 2                   2
     Accumulated Deficit                                             (10,904)             (9,555)
                                                              ---------------  ------------------
     TOTAL SHAREHOLDERS' EQUITY                                       (5,286)             (4,547)

                                                              ===============  ==================
     TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                       $3,927              $3,925
                                                              ===============  ==================
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.


<PAGE>


                                 Jumpin' Jax Corporation and Subsidiaries
                              Condensed Consolidated Statement of Operations
                                                (Unaudited)
                              (dollars in thousands except per share amounts)


<TABLE>
<CAPTION>

                                                           Six months ended           Three months ended
                                                               June 30,                    June 30,
                                                       --------------------------  -------------------------
                                                          1996          1995          1996          1995
                                                       ------------  ------------  ------------  -----------

<S>                                                    <C>           <C>           <C>           <C>
Operating revenues
   Store operating revenues                                    414           413           169          223
   Equipment sales                                           3,066         2,496         1,537        2,144
                                                       ------------  ------------  ------------  -----------

     Total revenues                                          3,480         2,909         1,706        2,367

Store operating and sales costs
   Cost of store operations                                    464           750           219          433
   Cost of equipment sales                                   2,891         2,238         1,445        1,941
                                                       ------------  ------------  ------------  -----------


     Gross margin                                              125           (79)           42           (7)

Selling, general and administrative expense                  1,307         1,520           474        1,114
Interest expense (income)                                      167            56            86           31
                                                       ------------  ------------  ------------  -----------

Net                                                         (1,349)       (1,655)         (518)      (1,152)
loss
                                                       ============  ============  ============  ===========

Loss per share                                              ($0.10)       ($0.19)       ($0.04)      ($0.13)
                                                       ============  ============  ============  ===========

Number of shares used to compute per share amount       14,102,171     8,640,953    14,637,489    8,982,987
                                                       ============  ============  ============  ===========

</TABLE>


See accompanying notes to unaudited condensed consolidated financial statements.



<PAGE>



                                   Jumpin' Jax Corporation and Subsidiaries
                                Condensed Consolidated Statement of Cash Flows
                                                  (Unaudited)
                                            (dollars in thousands)


<TABLE>
<CAPTION>
                                                                          Three months               Six months
                                                                              ended                     ended
                                                                          June 30, 1996             June 30, 1996

<S>                                                                          <C>                    <C>
Cash Flows from operating activities:
   Net income (loss)                                                         $      (518)           $    (1,349)
   Adjustments to reconcile net income to net cash provided by operating
   activities:
      Depreciation                                                                    73                    146
      Amortization of landlord advances                                              (22)                   (44)
      Interest expense on sales tax liability                                         45                     88
      Debt issuance amortization                                                       7                      7
      Changes in operating assets and liabilities:
        Accounts receivable                                                            6                     64
        Inventories                                                                  (14)                   101
        Other current assets                                                          31                     68
        Accounts payable                                                             269                    638

        Accrued expenses and other current liabilities                                86                     47
                                                                          ---------------          -------------
          Net cash provided by (used in) operating activities                        (37)                  (234)
                                                                          ---------------          -------------

Cash flows from investing activities:
   Collection of amount advanced to shareholder
   Advances to affiliates                                                           (503)                  (791)
   Increase in other assets                                                          (64)                  (192)
                                                                          ---------------          -------------
      Net cash provided by (used in) investing activities                           (567)                  (983)
                                                                          ---------------          -------------

Cash flows from financing activities:
   Proceeds from sale of common stock and stock subscription                         100                    610
   Proceeds from bridge debt                                                         652                    734
   Proceeds from landlord advances                                                    70                     70
   Principal payment on debt and notes payable - related parties                     (85)                  (146)
   Increase (decrease) in bank overdraft                                            (120)                   (38)
                                                                          ---------------          -------------
      Net cash provided by financing activities                                      617                  1,230
                                                                          ---------------          -------------

Net increase (decrease) in cash                                                       13                     13
Cash beginning of period                                                               0                      0

Cash end                                                                              13                     13
of period
                                                                          ---------------          -------------
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.


<PAGE>




                   Jumpin' Jax Corporation and Subsidiaries
             Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)


1.       Basis of Presentation

         The financial statements included in this Form 10-QSB have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed, or omitted,
pursuant to such rules and regulations. These financial statements should be
read in conjunction with the financial statements and related notes included in
the Company's Annual Report on Form 10-KSB for the year ended December 31, 1995,

as previously filed with the Securities and Exchange Commission.

         The financial statements presented herein as of June 30, 1996 and for
the three and six months ended June 30, 1996 and 1995 reflect, in the opinion of
management, all adjustments necessary for a fair presentation of financial
position and the results of operations for the periods presented. The results of
operations for the periods presented are not necessarily indicative of operating
results to be expected for the full year.

2.       Organization and Business Acquisitions

         The Company was originally incorporated in April 1988 under the name
Four Star Ranch, Inc. The Company initially was formed without any specific
business plan, other than to seek potential business opportunities for
acquisition, and was essentially inactive until 1994.

         In November 1994, as the first step of the December 1994 acquisition of
the net assets of GymMania Venture Capital Corporation ("GVCC"), a predecessor
business discussed below, the Company issued an aggregate of 6,708,394 shares of
Common Stock to certain investors who held the majority voting common stock
control of GVCC in exchange for $30,772 in stock subscription and a $180,063
note receivable from GVCC and changed its business plan to that of developing
indoor fun centers. In addition, as the first step of the December 1994
acquisition of Gymania Corporation ("Gymania"), another predecessor business
discussed below, the Company entered into a stock purchase agreement with
shareholders of Gymania to issue 450,868 shares of the Company's Common Stock at
$.0074 per share and register such shares. In December 1994, the Company changed
its corporate name to Jumpin' Jax Corporation.


<PAGE>

         On December 30, 1994, the Company acquired substantially all of the
assets of GVCC, a corporation existing under the laws of the Province of
Ontario, Canada for no cash consideration. The transaction was a reverse
acquisition whereby certain shareholders of GVCC became the controlling
shareholders of the Company. The principal asset of GVCC was an advance
receivable of approximately $492,000 from Gymania. GVCC was formed in June 1994
to finance the development of indoor fun centers.

         Also on December 30, 1994, the Company, through its wholly-owned retail
subsidiary, Jumpin' Jax Entertainment, Inc., ("Jumpin' Jax Entertainment")
acquired substantially all of the assets (totaling $512,361) of Gymania in
exchange for assuming substantially all of Gymania's obligations (totaling
$1,012,187), including the advances payable of approximately $492,000 to GVCC.
During 1994, prior to the acquisition of Gymania, the Company advanced $159,288
to Gymania. Gymania was formed in 1991 and had developed and was operating, on a
limited basis, indoor fun centers since its inception.

         The acquisitions of GVCC and Gymania were recorded at the historical
cost of such predecessor businesses, as all such businesses were effectively
under common control through common shareholders and related debt transactions
as described above.


         On March 13, 1995, the Company issued 351,000 shares of Common Stock
valued at $1,033,815 and paid $210,000 of cash at closing, and agreed to pay an
additional $100,000 90 days after closing, in exchange for all of the issued and
outstanding capital stock of Playpal, Inc. of Rockledge, Florida ("Playpal").
Playpal is a manufacturer of modular soft-play equipment for indoor fun centers
and playgrounds. On or about the same time, the Company established Playpal
Sales Corporation, a wholly-owned subsidiary formed to distribute those products
manufactured by Playpal, Inc.. On April 24, 1996, Playpal, Inc. filed for
protection under Chapter 11 of the U.S. Bankruptcy Code. As of September 30,
1996, Playpal, Inc. had ceased all operations, with the case having been
converted to a Chapter 7 liquidation proceeding. Playpal Sales Corporation had
also ceased operations and is insolvent with a liquidation of its assets
eminent.

         The acquisition of Playpal, Inc. was accounted for as a purchase and,
accordingly, the results of Playpal's operations since March 14, 1995 have been
included in the financial statements, notes, and text contained in this report.

         Jumpin' Jax Entertainment subleased space for the operation of its two
centers from a related party, Jumpin' Jax Corporation, a Minnesota Corporation
("JJC"), who leased the space from a mall operator. Due to a lack of working
capital, JJC filed for Chapter 11 bankruptcy protection on July 3, 1996; this
case has been converted into a Chapter 7 liquidation proceeding.

<PAGE>

Jumpin' Jax Entertainment ceased operation of the two centers August 25, 1996,
has vacated the premises and intends to file for bankruptcy protection in the
near future.

The Company, through its minority interests in Children's Choice Learning
Centers, a Nevada corporation ("CCLC"), and JJAX Entertainment, Inc., a
Nevada corporation ("JJAXE"), is exploring opportunities for engaging in
the business of constructing and  operating indoor destination
entertainment and child care centers (the "Entertainment and Child Care
Centers"), in conjunction with strategic partners (primarily in the
casino industry), as a revenue enhancer for such partners.

3.       Other Financial Statement Data:
         Inventories:

         Inventories, which consist principally of food and retail merchandise
for the Company's indoor fun centers and of modular soft-play parts for the
Company's manufacturing subsidiary, are stated at the lower of cost or market,
with cost determined on the first-in, first-out method. Inventories at June 30,
1996 and December 31, 1995 consisted of the following:

                                    June 30,             December 31,
                                      1996                   1995
Food and retail merchandise          $   11                 $  18
Raw material                             97                   127
Work-in-process                         113                   178
                                      -----                   ---
                                      $ 221                 $ 323

                                      =====                 =====
                                
4.       Shareholders' Equity

         During the period from April 1, 1996 through June 30, 1996, the Company
issued 266,667 shares of Common Stock sold through various private placements
for the net proceeds of approximately $100,000.

5.       Industry Segment Information

         The Company's wholly-owned Jumpin' Jax Entertainment, Inc. subsidiary
owned and operated two indoor family fun centers in the Minneapolis-St. Paul
metropolitan area. The Company's wholly-owned Playpal subsidiary custom
designed, manufactured, and assembled at customer sites modular soft-play
equipment for customers worldwide in the fast food and family entertainment
industries. Since the Company's acquisition of Playpal, the Company's
wholly-owned Playpal Sales Corporation subsidiary acted as the U.S. distributor
of Playpal's products.



<PAGE>



6.       Legal Proceedings

         No material legal proceedings exist against the Company, its officers
or directors except as follows:

                  In December 1994, PlayPal was served with a third party
complaint relating to an alleged personal injury claim for unspecified damages
by a patron of a fun center operated by a Playpal customer. Playpal's insurance
carrier has agreed to defend the matter.

                  In 1994, Playpal was served with a complaint alleging personal
injury suffered by a customer of an indoor fun center containing a Playpal
modular soft-play unit. Playpal's insurance carrier at the time of the incident
has refused to defend or pay the claim. Playpal believes that liability, if any,
lies with the center operator as a result of the facts and circumstances.

                  In October 1995, the Company was served with a complaint by a
real estate brokerage firm seeking payment of $29,000 for a commission on the
sublease of the space formerly occupied by Gymania Corporation. The Company
executed a confession of judgment for such amount and agreed to repay the
obligation, with interest, in quarterly installments beginning November 30,
1995. The Company failed to make its final payment on the obligation,
which was due August 31, 1996.

                  In September 1995, Jumpin' Jax Entertainment was served with a
complaint by an advertising agency seeking payment of $44,000 for unpaid
advertising, publication, and printing services. In January 1996, the Company
agreed to repay the obligation over an eleven month period and executed a
confession of judgment for such amount; the Company has made some, but not all

of the payments.

                  In August 1995, the former President of Playpal commenced suit
against Playpal and the Company seeking specific performance, injunctive relief,
and damages for, among other matters, an alleged breach of the stock purchase
agreement between the Company and the former President. In November 1995, the
claim was settled by the Company's agreement to pay him $120,000 in two
installments of $60,000 each prior to February 1996. The first payment of
$60,000 was made in December 1995, however Playpal did not pay the balance.
Summary judgment was granted in March 1996 against Playpal and the Company in
the amount of approximately $65,000.

                  In August 1995, Jumpin' Jax Entertainment was served with a
complaint by a sign construction company which installed signage at the
Company's Maplewood and Burnsville, Minnesota indoor fun centers. In January,
the Company agreed to repay the obligation over an eleven month period and
executed a confession of judgment for such amount; the Company has made some,
but not all of the payments.


<PAGE>

                  In December 1995, Playpal was served with a complaint by a
transportation company seeking payment of $128,000 for unpaid shipping charges.
Plaintiff was awarded summary judgment in the amount of $140,279 in April 1996.

                  In November 1995, a Statement of Claim was issued by a
shareholder of the Company alleging breach of contract by the Company in
connection with a stock purchase agreement. The Statement of Claim was not
provided to the Company until January 1996. The Company does not believe it was
a party to the contract allegedly breached and is vigorously defending against
this claim.

                  In April 1996, a complaint was filed against the Company by
William Auer seeking repayment of a note and interest in the amount of $40,000.
The Company has filed an answer to the complaint.

                  In May 1996, a complaint was filed against the Company by a
supplier of materials to Playpal. The complaint alleged that the Company had
guaranteed the obligations of Playpal to such supplier. The complaint seeks
$101,195 in damages. The Company is currently defending the action.

                  In July 1996, a complaint was filed against the Company by a
supplier of materials to Playpal seeking payment under a guaranty agreement
provided by the Company for the collection of Playpal's obligations to this
supplier. The complaint seeks $48,579. The Company is currently defending the
action.

                  In September 1996, an action was instituted against the
Company and certain of its officers by Riverside Bank and Cynthia Powell (a
former officer of Jumpin Jax Entertainment). The action seeks recovery of
amounts owed to Riverside Bank and guaranteed by Mrs. Powell and her husband
(the former President of Playpal), which guaranty is secured by a mortgage on
the Powell's residence. The amount sought is approximately $74,000.


                  In September 1996, a judgment in the amount of
$78,966.95 was entered against the Company by Allstate Financial
Corporation in connection with an accounts receivable financing engaged
in by the Company in June 1996.

                  The Company has received claims for indemnification pursuant
to certain provisions of a stock purchase agreement, under which the Company
allegedly agreed to indemnify certain individuals for sales tax liabilities in
connection with certain sales tax owed by Playpal. To date, claims totaling
$274,000 have been made. The Company believes that it is not required to provide
such indemnification and intends to defend such action if funds are available
for such purpose.

                  In July 1996, a complaint was filed against Jumpin' Jax
Entertainment by a supplier of equipment to the existing Centers seeking
repayment of a note in the amount of $90,000. Jumpin' Jax Entertainment has
returned the equipment securing this obligation to the supplier but the value of
this equipment is not expected to be adequate to discharge the full amount of
the claim.

                  In June 1996, a notice of eviction was served upon JJC in
connection with its leaseholds for the Centers. The action was stayed under the
provisions of the Chapter 11 bankruptcy proceeding filed by JJC. On August 22,
1996, the bankruptcy court granted the landlord's motion to lift the stay and
the landlord has again begun eviction proceedings. Jumpin' Jax Entertainment
ceased operations in the locations August 25, 1996 and has vacated the 
premises.

<PAGE>

                  In May 1995, Jumpin' Jax Entertainment entered into a ten-year
lease agreement, guaranteed by the Company, for space located in a shopping
center in Green Bay, Wisconsin. Jumpin' Jax Entertainment has informed the
landlord that it will not be occupying the space and, in September 1995, the
landlord instituted an action against the Company for breach of contract. In
January 1996, a motion for summary judgment on the issue of liability was
granted to the landlord. In June 1996, the landlord filed a motion for summary
judgment as to the issue of damages; the Company has retained counsel and
intends to defend against this matter.

                  In January 1996, Jumpin' Jax Entertainment entered into a
ten-year lease agreement for space located in a shopping center in Nashville,
Tennessee. Jumpin' Jax Entertainment does not have the funds required to
construct and equip the facility and has informed the landlord that it will not
be able to begin this process unless working capital funds can be obtained,
which is highly improbable. Therefore, the Company does not intend to continue
with respect to this project although it is liable for amounts under this lease.


<PAGE>
ITEM 2.  Management's Discussion and Analysis of Financial Condition and 
         Results of Operations.

          The following is a discussion and analysis of the Company's unaudited
historical consolidated results of operations for the three and six months ended
June 30, 1996 compared with both the Company's unaudited historical results of
operations for the three and six months ended June 30, 1995 and the pro forma
unaudited results of operations of the Company and Playpal, Inc. (together
referred to as the "Predecessor Business") for the three months ended June 30,
1995 as if the acquisition of Playpal had occurred on January 1, 1995.

         The following table sets forth selected pro forma operating statement
data for the Company and pro forma operating data for the Predecessor Business.

<TABLE>
<CAPTION>
                                                     Six months ended June 30,           Three months ended 
                                                                                               June 30,
                                              ----------------------------------------  --------------------------
                                                                              The
                                                                          Predecessor
                                              The Company   The Company    Business     The Company   The Company
                                              Historical    Historical     Pro Forma    Historical    Historical
                                                 1996          1995          1995          1996          1995
                                              ------------  ------------  ------------  ------------  ------------

<S>                                            <C>          <C>            <C>          <C>           <C>
Operating revenues
   Store operating revenues                           414           413           413           169           223
   Equipment sales                                  3,066         2,496         3,292         1,537         2,144
                                              ------------  ------------  ------------  ------------  ------------

     Total revenues                                 3,480         2,909         3,705         1,706         2,367

Store operating and sales costs
   Cost of store operations                           464           750           750           219           433
   Cost of equipment sales                          2,891         2,238         3,241         1,445         1,941
                                              ------------  ------------  ------------  ------------  ------------

     Gross margin                                     125           (79)         (286)           42            (7)

Selling, general and administrative expense         1,307         1,520         1,723           474         1,114
Interest expense (income)                             167            56           121            86            31
                                              ------------  ------------  ------------  ------------  ------------

     Net loss                                      (1,349)       (1,655)       (2,130)         (518)       (1,152)
                                              ============  ============  ============  ============  ============
</TABLE>

<PAGE>



Comparison of the Company's Unaudited Historical Results of Operations for the
Three and Six Months ended June 30, 1996 and 1995

Playpal

On March 13, 1995, the Company acquired all of the stock of Playpal for an
aggregate cost of $1,588,000. The results of operations for Playpal are included
in the financial statements from March 14 to present.

For the three months ended June 30, 1996, the Company recorded $1,537,000 of
equipment sales, principally of Playpal modular soft-play units; this declined
from $2,144,000 for the same period a year earlier. During the second quarter of
1996, Playpal was forced to file for protection under Chapter 11 of the
Bankruptcy Code due to the substantial debt overhang which existed at the date
of the acquisition and reduced flexibility exhibited on the part of vendors. The
bankruptcy and a lack of debtor-in-possession financing negatively impacted
Playpal's ability to procure materials and deliver product on a timely basis.
This created an unfavorable variance from 1995, when sales were strengthening
due to renewed customer and vendor confidence in Playpal's viability resulting
from its March acquisition by the Company. In an effort to improve the
timeliness of deliveries and minimize the uncertainty in the marketplace caused
by the bankruptcy filing, Playpal increased its installation efforts in 1996,
resulting in cost of equipment sales increasing to 94.0% of gross revenues
versus 90.5% during the same period a year earlier.

         In addition, Playpal incurred $589,000 of selling, general, and
administrative expenses during the second quarter of 1996, $26,000 of
depreciation expense, and $68,000 of interest expense, primarily as a result of
accruals on the $2.1 million sales tax liability. This resulted in a net loss
for Playpal of $590,000. As outlined below, the Company's statement of
operations for the three months ended June 30, 1996, reflects $118,000 of this
loss.

         Because  the  historical  results of the  Company for the first 
quarter of 1995  include  only 18 days of Playpal operations, meaningful
comparisons of the six month period ended June 30, 1995 to the same
period in 1996 do not exist.

         On April 24, 1996, due to a lack of working capital and an inability to
arrange conventional financing, Playpal filed for Chapter 11 protection under
the U.S. Bankruptcy Code. In accordance with GAAP, the Company recorded an
accrual for Playpal's 1996 losses which it had funded subsequent to year end
totaling $667,200 ($472,000 of which were experienced in the three months ended
June 30, 1996). As of September 30, 1996, such Chapter 11 proceeding has been
converted to a liquidation under Chapter 7. No adjustments have been recorded to
reflect the fact that it is likely that a substantial amount of Playpal's
liabilities will be compromised through the bankruptcy proceedings, although
there is no assurance that this will occur.


<PAGE>




Jumpin' Jax Entertainment

         Until August 1996, Jumpin' Jax Entertainment was the owner/operator of
the Company's two family entertainment centers which opened for business in
February 1995. The Company's financial results reflect the full operation of
these two centers during the six months ended June 30, 1996 as compared to 4.5
months of operation of these two locations and 2.5 months of operation of
Gymania's single facility during the six months ended June 30, 1995; second
quarter results for both years reflect only the operation of the two Jumpin' Jax
Entertainment facilities, both for the full quarter. During the three months
ended June 30, 1996, Jumpin' Jax Entertainment had total store revenues of
$169,000 as compared to $223,000 during the same period of 1995. The
year-over-year decline in sales is attributable to reduced marketing of the
centers during 1996 as a result of Jumpin' Jax Entertainment's lack of financial
resources during the period. Although sales declined $54,000 compared to the
prior year, gross margins increased $160,000 from 1995 levels due to lower labor
levels and reduced costs. For the six month period ended June 30, 1996, Jumpin'
Jax Entertainment lost $50,000 from store operations compared with a loss of
$337,000 in 1995. The inability of these locations to generate profits to cover
overhead costs and provide an adequate return, combined with the fact that
Jumpin' Jax Entertainment has been unable to enter into a strategic alliance
which would enable it to attract capital has resulted in this entity becoming
insolvent. In addition, a related party which leased the space from the mall
operator utilized by the two Centers and then subleased the space to Jumpin' Jax
Entertainment filed for Chapter 11 bankruptcy protection in July 1996. This case
has converted to a Chapter 7 liquidation. Jumpin' Jax  Entertainment ceased all
operations of the two centers on August 25, 1996 and intends to file for
bankruptcy protection in the near future.

         In addition to Center operating costs, Jumpin' Jax Entertainment
incurred $104,000 in selling, general and administrative costs during the second
quarter of 1996 ($282,000 for the six months ended June 30, 1996) related to the
development, management, and attempted growth of the operations. Jumpin' Jax
Entertainment also recorded depreciation expense of $47,000 and interest expense
of $9,000 during this period, resulting in a net loss of $210,000. This compares
favorably to the $531,000 loss experienced during the same period of 1995.

         In addition to the operations of Playpal and Jumpin' Jax Entertainment,
the Company employs a small senior management staff to coordinate and manage the
overall affairs of the corporation. This group incurred $190,000 and $381,000 of
costs on the Company's behalf during the three and six months ended June 30,
1996, respectively, consisting primarily of legal and professional fees related
to being a publicly held corporation, salaries and benefits, and various travel
related costs arising from the development and growth of a multi-location
entity. This has increased from $187,000 and $264,000 during the same periods in
1995 due to increased business development costs and increasing legal costs
resulting from litigation related to the Company's lack of working capital.

<PAGE>

Comparison of the Company's Historical Results of Operations for the Three and
Six months ended June 30, 1996 to the Predecessor Businesses' Unaudited Pro
Forma Results of Operations for the Three and Six months ended June 30, 1995


The pro forma results of operations for the three and six months ended June 30,
1995 differ from the Company's historical results of operations due to the
inclusion in the pro forma statements of the results of Playpal, Inc.
for the 2.5 months prior to the March 13, 1995 acquisition by the Company.

During the six months ended June 30, 1996, the Company's revenues declined
$225,000 (6.1%) to $3,480,000 from $3,705,000 during the proforma period a year
earlier. This decrease was due entirely to reduced sales in the Playpal segment
of the Company, primarily as a result of the effects of the April 24 bankruptcy.
Gross margin improved to $125,000 from a loss of $286,000 in the prior year as a
result of improved results in both segments. Decreased overhead costs associated
with the reduction of senior management personnel resulted in a net loss for the
six months ended June 30, 1996 of $1,349,000 as compared to a loss of $2,130,000
a year earlier.

Liquidity and Capital Resources

The Company sustained substantial losses in the fiscal three months
ended June 30, 1996 totaling $518,000. In addition, the Company's
working capital deficit at June 30, 1996 was $7,782,000. The Company
also had a stockholder's deficit of $5,286,000 at June 30, 1996. The
Company currently has no source of revenue, substantial liabilities and
there is substantial doubt as to whether the Company can continue as a
going concern. In August 1996, Playpal discontinued operations as a
debtor-in-possession under Chapter 11 of the federal bankruptcy laws and
has been converted to a full liquidation under Chapter 7 of the federal
bankruptcy laws. Such event will result in the filing of a petition in
the near future by Playpal Sales for liquidation under Chapter 7 of the
bankruptcy laws. In addition, Jumpin' Jax Entertainment has discontinued
operating its two center locations, is unable to raise capital and will
likely file for Chapter 7 under federal bankruptcy laws in the near
future.

During the second quarter of fiscal 1996, the Company raised $100,000 through
private placements of equity and $652,000 through debt financings. The Company
also generated $387,000 net by increasing its working capital deficit primarily
in the Playpal subsidiaries. As of June 30, 1996, the Company had expended all
of these funds and was left with minimal cash reserves.

Of the $752,000 of cash raised in the capital markets, $472,000 was invested by
the Company into the Playpal operations in an effort to restore the business to
profitability and $67,000 was expended towards the potential development of
future Jumpin' Jax Entertainment retail stores. The remainder, along with the
$387,000 generated through an increased working capital deficit, was utilized to
reduce its principal obligations on debt ($85,000), to reduce its bank overdraft
($120,000) and to fund deficit operations. This left the Company with minimal
cash resources as of June 30, 1996.

<PAGE>

Management's current plan is to divest of primarily all of the existing
operations of the Company with the exception of its minority investments
in JJAXE and CCLC. Although these entities are currently seeking
funding, to date they have received no binding commitments for any such

funding, and in the event that working capital is not received within
the near future, it is likely that the Company and these entities will
be required to cease all operations.



<PAGE>

PART II  OTHER INFORMATION
ITEM 1.   Legal Proceedings

                  No material  legal  proceedings  exist against the Company, 
its officers or directors except as follows:

                  In December 1994, PlayPal was served with a third party
complaint in the 24th Judicial District Court, Jefferson Parish, Louisiana,
relating to an alleged personal injury claim for unspecified damages by a patron
of a fun center operated by a Playpal customer. Playpal's insurance carrier has
agreed to defend the matter.

                  In 1994, Playpal was served with a complaint in Suffolk County
(New York) Supreme Court alleging personal injury suffered by a customer of an
indoor fun center containing a Playpal modular soft-play unit. Playpal's
insurance carrier at the time of the incident has refused to defend or pay the
claim. Playpal believes that liability, if any, lies with the center operator as
a result of the facts and circumstances.

                  In October 1995, the Company was served with a complaint in
Hennepin County (Minnesota) District Court by a real estate brokerage firm
seeking payment of $29,000 for a commission on the sublease of the space
formerly occupied by Gymania Corporation. The Company executed a confession of
judgment for such amount and agreed to repay the obligation, with interest, in
quarterly installments beginning November 30, 1995. The Company failed
to make its final payment on the obligation, which was due on August 31,
1996.

                  In September 1995, Jumpin' Jax Entertainment was served with a
complaint in Hennepin County (Minnesota) District Court by an advertising agency
seeking payment of $44,000 for unpaid advertising, publication, and printing
services. In January 1996, the Company agreed to repay the obligation over an
eleven month period and executed a confession of judgment for such amount; the
Company has made some, but not all of the payments.

                  In August 1995, the former President of Playpal commenced suit
against Playpal and the Company in Brevard County (Florida) Circuit Court
seeking specific performance, injunctive relief, and damages for, among other
matters, an alleged breach of the stock purchase agreement between the Company
and the former President. In November 1995, the claim was settled by the
Company's agreement to pay him $120,000 in two installments of $60,000 each
prior to February 1996. The first payment of $60,000 was made in December 1995,
however Playpal did not pay the balance. Summary judgment was granted in March
1996 against Playpal and the Company in the amount of approximately $65,000.

<PAGE>

                  In August 1995, Jumpin' Jax Entertainment was served with a
complaint in Hennepin County (Minnesota) District Court by a sign construction
company which installed signage at the Company's Maplewood and Burnsville,
Minnesota indoor fun centers. In January, the Company agreed to repay the

obligation over an eleven month period and executed a confession of judgment for
such amount; the Company has made some, but not all of the payments.

                  In December 1995, Playpal was served with a complaint in
Brevard County (Florida) Circuit Court by a transportation company seeking
payment of $128,000 for unpaid shipping charges. Plaintiff was awarded summary
judgment in the amount of $140,279 in April 1996.

                  In November 1995, a Statement of Claim was issued in the
Ontario (Canada) Court of Justice by a shareholder of the Company alleging
breach of contract by the Company in connection with a stock purchase agreement.
The Statement of Claim was not provided to the Company until January 1996. The
Company does not believe it was a party to the contract allegedly breached and
is vigorously defending against this claim.

                  In April 1996, a complaint was filed against the Company in
Hennepin County (Minnesota) by William Auer seeking repayment of a note and
interest in the amount of $40,000. The Company has filed an answer to the
complaint.

                  In May 1996, a complaint was filed against the Company in
Hennepin County (Minnesota) District Court by a supplier of materials to
Playpal. The complaint alleged that the Company had guaranteed the obligations
of Playpal to such supplier. The complaint seeks $101,195 in damages. The
Company is currently defending the action.

                  In July 1996, a complaint was filed against the Company in
Orange County (Florida) by a supplier of materials to Playpal seeking payment
under a guaranty agreement provided by the Company for the collection of
Playpal's obligations to this supplier. The complaint seeks $48,579. The Company
is currently defending the action.

                  In September 1996, an action was instituted against the
Company and certain of its officers in Hennepin County, Minnesota, District
Court by Riverside Bank and Cynthia Powell (a former officer of Jumpin Jax
Entertainment). The action seeks recovery of amounts owed to Riverside Bank and
guaranteed by Mrs. Powell and her husband (the former President of Playpal),
which guaranty is secured by a mortgage on the Powell's residence. The amount
sought is approximately $74,000.

                  In September 1996, a judgment in the amount of $78,966.95 was
entered against the Company in Arlington County, Virginia, Circuit Court by
Allstate Financial Corporation in connection with an accounts receivable
financing engaged in by the Company in June 1996.

                  The Company has received claims for indemnification pursuant
to certain provisions of a stock purchase agreement, under which the Company
allegedly agreed to indemnify certain individuals for sales tax liabilities in
connection with certain sales tax owed by Playpal. To date, claims totaling
$274,000 have been made. The Company believes that it is not required to provide
such indemnification and intends to defend such action if funds are available
for such purpose.

                  In July 1996, a complaint was filed against Jumpin' Jax
Entertainment in Hennepin County (Minnesota) District Court by a supplier of
equipment to the existing Centers seeking repayment of a note in the amount of
$90,000. Jumpin' Jax Entertainment has returned the equipment securing this
obligation to the supplier but the value of this equipment is not expected to be
adequate to discharge the full amount of the claim.

<PAGE>

In June 1996, a notice of eviction was served upon JJC in connection
with its leaseholds for the Centers. The action was stayed under the
provisions of the Chapter 11 bankruptcy proceeding filed by JJC. On
August 22, 1996, the bankruptcy court granted the landlord's motion to
lift the stay and the landlord has again begun eviction proceedings.
Jumpin' Jax Entertainment ceased operations in the locations August 25,
1996 and has vacated the  premises.

                  In May 1995, Jumpin' Jax Entertainment entered into a ten-year
lease agreement, guaranteed by the Company, for approximately 15,000 square feet
of space located in a shopping center in Green Bay, Wisconsin. Base rent is
approximately $12,000 per month and began accruing in September 1995. The lease
also requires additional rent of 12% of gross sales in excess of $925,000 plus
3% of gross sales in excess of $1,100,000 per lease year. Jumpin' Jax
Entertainment has informed the landlord that it will not be occupying the space
and, in September 1995, the landlord instituted an action against the Company
for breach of contract. In January 1996, a motion for summary judgment on the
issue of liability was granted to the landlord. In June 1996, the landlord filed
a motion for summary judgment as to the issue of damages; the Company has
retained counsel and intends to defend against this matter.

                  In January 1996, Jumpin' Jax Entertainment entered into a
ten-year lease agreement for approximately 20,000 square feet of space located
in a shopping center in Nashville, Tennessee. Base rent is approximately $13,000
per month for the first five years of the lease and approximately $15,000 per
month for the second five years of the lease and began accruing in July 1996.
The lease also requires additional rent of 6% of gross sales in excess of
$4,013,000 per lease year for the first five years of the lease and in excess of
$4,514,625 for the second five years of the lease. Jumpin' Jax Entertainment
does not have the funds required to construct and equip the facility and has
informed the landlord that it will not be able to begin this process unless
working capital funds can be obtained, which is highly improbable. Therefore,
the Company does not intend to continue with respect to this project although it
is liable for amounts under this lease.


ITEM 5.  Other Information

         From year end through August 20, 1996, the company has raised an
additional $1,312,222, all of which has been expended to fund deficit operations
and service existing obligations. Such amounts include a private placement in
December 1995 and January 1996 (the "Private Placement"), in which the Company
sold a total of 33.5 units for $837,500. Each unit, which was purchasable for
$25,000, contained such number of shares of Common Stock and warrants to
purchase Common Stock as equaled the purchase price of the unit divided by the

lesser of (I) $1.00 or (ii) 67% of the closing high bid price (the "Market
Price") of the Common Stock on the day immediately prior to the effective date
of a registration statement in which the Common Stock and warrants are included.
The warrants were made exercisable at a price of equal to the lesser of $1.00 or
the Market Price, for a period of two years from the effective date. In
addition, the Company was obligated to issue an additional unit for each unit
issued in the Private Placement in the event that the Company failed to register
the Common Stock and warrants by May 31, 1996 and issue an additional unit for
each unit issued in the Private Placement in the event that the Company's Common

<PAGE>

Stock was not listed on NASDAQ by May 31, 1996. The Company did not file a
registration statement in connection with the Private Placement and its Common
Stock was not listed on NASDAQ; accordingly, investors in the Private Placement
are entitled to receive (and were issued) at least 2,512,500 shares of Common
Stock and warrants to purchase an additional 2,512,500 shares of Common Stock.
The placement agent received commissions totaling $83,750 and a non-accountable
expense allowance equal to $25,125. The net proceeds were utilized by the
Company for working capital purposes.

         In May 1996, the Company also engaged in a private placement offering
(the "May Offering") of 12.5 units for $625,000. Each unit, which was
purchasable for $50,000, consisted of (1) a $50,000 principal amount 10%
subordinated promissory note due on the earlier of (a) the closing date of any
public debt or equity offering by the Company (the "Public Offering") or (b) one
year from the initial closing date of the May Offering and (2) the issuance on
the effective date of a registration statement filed with the Securities and
Exchange Commission of (a) 30,000 shares of Common Stock and (b) a total of
300,000 warrants to purchase shares of Common Stock which warrants were to be
identical to any warrants to be issued to the public in connection with any
secondary public offering. In the event that the Company does not complete a
secondary public offering by April 30, 1997, the investor is to be issued, on
April 30, 1997 (a) 210,000 shares of Common Stock; (b) warrants to purchase
1,050,000 shares of Common Stock, exercisable at $.75 per share for a period of
five years from the initial closing; and (c) warrants to purchase 1,050,000
shares of Common Stock, exercisable at a price of $1.00 per share for a period
of five years from the initial closing. The securities contain certain piggyback
registration rights. The Company is currently attempting to renegotiate
the terms & conditions of this obligation.

         All proceeds of the 1996 offerings have been used by the Company for
working capital purposes.

         Management's current plan is to cease primarily all of the operations
of the Company with the exception of managing its investments in JJAXE and CCLC.
Although these entities are currently seeking funding, to date they have
received no binding commitments for any such funding, and in the event that
working capital is not received within the near future, it is likely that the
Company and these entities will be required to cease all operations.

ITEM 6.  Exhibits and Reports on Form 8-K

         8-K filed on May 1, 1996 re: change of independent public accountant.


<PAGE>


                                  SIGNATURES

         Pursuant to the requirements of Section 13 or l5(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                         JUMPIN' JAX CORPORATION


October 4, 1996          By: /s/ Richmond W. A. Chandler
                             -----------------------------
                             Richmond W. A. Chandler
                             Chairman and Chief Executive Officer
                             Principle Financial Officer