SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                  For the Quarterly Period Ended March 31, 2000

                                       OR

          ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                             SECURITIES ACT OF 1934

                        For the transition period from to

                        Commission file number 000-23740
                                    ---------

                              INNOTRAC CORPORATION
              -----------------------------------------------------
             (Exact name of registrant as specified in its charter)


              Georgia                                       58-1592285
        --------------------------------------------------------------------
        (State or other jurisdiction of                  (I.R.S. Employer
        incorporation or organization)                  Identification Number)


         6655 Sugarloaf Parkway Duluth, Georgia                        30097
         --------------------------------------------------------------------
         (Address of principal executive offices)                  (Zip Code)

        Registrant's telephone number, including area code:    (678) 584-4000
                                                           --------------------


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes /X/ No  / /

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

                                              Outstanding at April 30, 2000
                                              -----------------------------
Common Stock at $.10 par value                      11,214,995 Shares
<PAGE>

                                      INDEX
<TABLE>
<CAPTION>

                                                                                                     Page
                                                                                                     ----
<S>                                                                                               <C>
Part I. Financial Information                                                                          3

         Item 1.  Financial Statements                                                                 3

                  Consolidated  Balance Sheets (Unaudited) At March 31, 2000 and
                  December 31, 1999                                                                    3

                  Consolidated  Statements of Operations  (Unaudited)
                  for the Three Months Ended March 31, 2000 and 1999                                   3

                  Consolidated  Statements  of Cash  Flows  (Unaudited)  for the
                  Three Months Ended March 31, 2000 and 1999                                           5

                  Condensed Notes to Consolidated Financial Statements March 31,
                  2000 and 1999                                                                        6

         Item 2.  Management's Discussion  and  Analysis  of Financial Condition
                  and Results of Operations                                                       7 - 10

         Item 3.  Quantitative and Qualitative Disclosures About Market Risk                          10

Part II. Other Information                                                                            11

          Item 6. Exhibits and Reports On Form 8-K                                                    11

Signatures                                                                                            12
</TABLE>

                                       2
<PAGE>


PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                                             INNOTRAC CORPORATION
                                          CONSOLIDATED BALANCE SHEETS
                                                (in thousands)
<TABLE>
<CAPTION>

                                      ASSETS                               March 31, 2000   December 31, 1999
                                      ------                               --------------   -----------------
                                                                           (Unaudited)
<S>                                                                          <C>               <C>
Current assets:
     Cash and cash equivalents ....................................          $    237          $    894
     Accounts receivable, net .....................................            61,619            52,431
     Inventories ..................................................            31,412            39,503
     Deferred tax assets ..........................................             1,210               583
     Prepaid expenses and other current assets ....................             2,592             1,399
                                                                             --------          --------
               Total current assets ...............................            97,070            94,810
                                                                             --------          --------

Property and equipment:
     Rental equipment .............................................             4,367             4,986
     Computer, machinery and transportation equipment .............            11,009             8,711
     Furniture, fixtures and leasehold improvements ...............             3,296             2,830
                                                                             --------          --------
                                                                               18,672            16,527
     Less accumulated depreciation and amortization ...............            (7,820)           (7,605)
                                                                             --------          --------
                                                                               10,852             8,922
                                                                             --------          --------

Other assets, net .................................................               209               486
                                                                             --------          --------
                                                                             $108,131          $104,218
                                                                             ========          ========


                              LIABILITIES AND  SHAREHOLDERS' EQUITY
                              -------------------------------------

Current liabilities:
     Current portion of long-term debt ............................          $      8          $      8
     Line of credit ...............................................            13,635             7,008
     Accounts payable .............................................             7,000            10,530
     Accrued expenses .............................................             9,187             7,384
                                                                             --------          --------
               Total current liabilities ..........................            29,830            24,930
                                                                             --------          --------

Total noncurrent liabilities ......................................               212                75
                                                                             --------          --------
               Total liabilities ..................................            30,042            25,005
                                                                             --------          --------


Shareholders' equity:
     Common stock .................................................             1,121             1,121
     Additional paid-in capital ...................................            59,701            59,701
     Retained earnings ............................................            17,267            18,391
                                                                             --------          --------
              Total shareholders' equity ..........................            78,089            79,213
                                                                             --------          --------
              Total liabilities and shareholders' equity ..........          $108,131          $104,218
                                                                             ========          ========
</TABLE>

The  accompanying  condensed  notes are an integral  part of these  consolidated
statements.

                                                   3
<PAGE>


Financial Statements-Continued

                                     INNOTRAC CORPORATION
                            CONSOLIDATED STATEMENTS OF OPERATIONS

                          Three Months Ended March 31, 2000 and 1999
                                         (Unaudited)
                           (In thousands except per share amount)

<TABLE>
<CAPTION>
                                                                Three Months Ended March 31,
                                                                   2000             1999
                                                                ---------         ----------
<S>                                                             <C>                <C>
Revenues, net ........................................          $ 47,850           $ 67,320
Cost of revenues .....................................            44,670             58,717
                                                                --------           --------
               Gross margin ..........................             3,180              8,603
                                                                --------           --------

Operating expenses:
       Selling, general and administrative expenses ..             4,172              2,440
       Depreciation and amortization .................               622                379
                                                                --------           --------
                Total operating expenses .............             4,794              2,819
                                                                --------           --------
Operating (loss) income ..............................            (1,614)             5,784
                                                                --------           --------

Other expense (income), net:

       Interest expense ..............................               227                373
       Other .........................................                18                (20)
                                                                --------           --------
                Total other expenses, net ............               245                353
                                                                --------           --------

(Loss) income before income taxes ....................            (1,859)             5,431
Income tax benefit (provision) .......................               735             (2,145)
                                                                --------           --------
                Net (loss) income ....................          $ (1,124)          $  3,286
                                                                ========           ========

Earnings per share:
Net (loss) income per common and common equivalent share:

       Basic                                                    $  (0.10)          $   0.37
                                                                ========           ========

       Diluted                                                  $  (0.10)          $   0.36
                                                                ========           ========

Weighted average common and common equivalent shares:

       Basic                                                      11,215              9,000
                                                                ========           ========

       Diluted                                                    11,215              9,127
                                                                ========           ========
</TABLE>

The  accompanying  condensed  notes are an integral  part of these  consolidated
statements.

                                             4
<PAGE>




Financial Statements-Continued
<TABLE>
<CAPTION>
                                                      INNOTRAC CORPORATION
                                              CONSOLIDATED STATEMENT OF CASH FLOWS

                                                          (Unaudited)
                                                         (in thousands)

                                                                                                  Three Months Ended March 31,
                                                                                                     2000               1999
                                                                                                   --------           --------
<S>                                                                                                <C>                <C>
Cash flows from operating activities:
     Net (loss) income ..................................................................          $ (1,124)          $  3,286
     Adjustments to reconcile net (loss) income to net cash used in operating activities:
         Depreciation and amortization ..................................................               622                379
         Depreciation-rental equipment ..................................................               173                536
         Loss on disposal of rental equipment ...........................................                45                220
         Deferred income taxes ..........................................................              (148)                 3
         Increase in accounts receivable ................................................            (9,188)           (28,659)
         Decrease (increase) in inventories .............................................             8,091             (5,453)
         Increase in prepaid expenses and other assets ..................................            (1,275)              (443)
         (Decrease) increase in accounts payable ........................................            (3,530)            13,878
         Increase (decrease) in accrued expenses and other ..............................             1,816             (1,855)
                                                                                                   --------           --------
              Net cash used in operating activities .....................................            (4,518)           (18,108)
                                                                                                   --------           --------

Cash flows from investing activities:
     Purchases of property and equipment ................................................            (2,764)              (880)
                                                                                                   --------           --------
              Net cash used in investing activities .....................................            (2,764)              (880)
                                                                                                   --------           --------

Cash flows from financing activities:
     Net borrowings under line of credit ................................................             6,627             15,883
     Repayment of long-term debt ........................................................                (2)                 0
                                                                                                   --------           --------
              Net cash provided by financing activities .................................             6,625             15,883
                                                                                                   --------           --------

Net decrease in cash and cash equivalents ...............................................              (657)            (3,105)
Cash and cash equivalents, beginning of period ..........................................               894              3,379
                                                                                                   --------           --------
Cash and cash equivalents, end of period ................................................          $    237           $    274
                                                                                                   ========           ========

Supplemental cash flow disclosures:
     Cash paid for interest .............................................................          $    207           $    325
                                                                                                   ========           ========
     Cash paid for income taxes, net of refunds received ................................          $     77           $  2,486
                                                                                                   ========           ========
</TABLE>


The  accompanying  condensed  notes are an integral  part of these  consolidated
statements.

                                                               5
<PAGE>
Financial Statements-Continued

                              INNOTRAC CORPORATION
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             MARCH 31, 2000 AND 1999

1.       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
         Article 10 of Regulation S-X of the Securities and Exchange Commission.
         The accompanying  unaudited  consolidated financial statements reflect,
         in the opinion of management,  all  adjustments  necessary to achieve a
         fair statement of financial  position and the results of its operations
         for the interim periods presented. All such adjustments are of a normal
         and recurring  nature.  The results of operations  for the three months
         ended March 31, 2000 are not  necessarily  indicative of the results to
         be expected for the year ending December 31, 2000. It is suggested that
         these condensed  financial  statements be read in conjunction  with the
         consolidated  financial  statements  and notes thereto  included in the
         Company's 10-K filing and annual report.

2.       Basic  earnings  per share is computed by dividing pro forma net income
         by the weighted  average number of common shares  outstanding.  Diluted
         earnings per share  includes the effect of the Company's  stock options
         (using the treasury stock method) for 1999. For 2000,  such effects are
         excluded as their effect is antidilutive. The following table shows the
         computation of the number of shares outstanding (in thousands):

                                             Three Months Ended March 31,

                                                  2000               1999
                                            -----------       -----------
                     Basic Shares                11,215             9,000
                     Stock Options                   --               127
                                            -----------       -----------
                     Diluted Shares              11,215             9,127
                                            ===========       ===========


                                       6
<PAGE>

ITEM 2 -

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion may contain certain forward-looking statements that are
beyond the control of the Company.  Actual  results may differ  materially  from
those  expressed  or implied by such  forward-looking  statements.  Factors that
could  cause  actual  results to differ  include,  but are not  limited  to, the
reliance on a small  number of major  clients;  risks  associated  with  buying,
warehousing and renting products to customers; risks associated with the term of
our  contracts;  risks  of  entering  new  lines  of  businesses,   particularly
e-commerce; reliance on the telecommunications industry; ability to continue and
manage  growth;  the  impact  of the trend  toward  outsourcing;  dependence  on
qualified managers and labor force;  risks associated with changing  technology;
risks  associated  with  competition;  risks  associated  with  fluctuations  in
operating and quarterly  results;  compliance  with government  regulation;  and
other factors  discussed in more detail under "Business" in the Company's annual
report on Form 10-K for the year ended December 31, 1999.

Overview
--------

Innotrac   provides   customized,   technology-based   marketing   support   and
distribution  services to large  corporations  that outsource  these  functions.
Since 1994, we have focused on the  telecommunications  industry  because of its
high growth characteristics and increasing marketing needs. We provide marketing
support services and  distribution of Caller ID units,  Caller ID telephones and
other telecommunications products to BellSouth, Pacific Bell, Southwestern Bell,
Ameritech Services, Inc., Bell Atlantic and US West and their customers. Pacific
Bell, Southwestern Bell and Ameritech Services, Inc. are all subsidiaries of SBC
Communications.  During the fourth  quarter  ended  December 31, 1999,  we began
distributing  Digital  Subscriber Line Modems (DSL) for  BellSouth.net and other
internet service providers (ISPs).

In  1991,  we  initiated  a  fulfillment  program  to  sell or  rent  Caller  ID
stand-alone devices to BellSouth customers. Customers paid us for these products
by check or credit  card.  In 1993,  we began  billing the charges on  BellSouth
customers'  telephone  bills  in  interest-free  installments.  As  part of that
program, we acquired Caller ID and other telecommunications equipment from third
party manufacturers,  while assuming  collections risk on customer payments.  In
November 1998, we entered into a new contract with  BellSouth  pursuant to which
we continue to provide Caller ID hardware and other equipment,  including corded
and cordless telephones with built-in Caller ID, to BellSouth customers.  We now
bill BellSouth, rather than BellSouth customers, for these products.

Upon receipt of an order, we ship the product,  track inventory levels and sales
and  marketing  data and  maintain  call center  operations  to handle  customer
service and technical  support.  From time to time,  rather than acquiring units
and selling or leasing them to BellSouth  customers,  we distribute,  for a fee,
Caller ID hardware that  BellSouth or other clients have  purchased from various
third-party manufacturers.

Under  our  programs  with SBC  Communications  and the ISPs,  like our  current
contract  with  BellSouth,  we bill the  respective  telecommunications  clients
directly for the telecommunications  units that are sold to their end users. The
clients are then responsible for billing and collecting from their customers. As
a result of this change in our payment  model,  unit prices and our gross margin
are lower than  historical  levels (see "Results of  Operations"  "Revenues" and
"Gross Margin" below).  We generally  experience lower bad debt expenses,  which
are  included  in  selling,   general  and  administrative   expenses,   because
telecommunications clients, rather than their end user customers, pay us for the
equipment.  These lower expenses offset the decline in gross margin.  The change
in our payment model has had little effect on our operating margin to date.

We have experienced  significant growth in revenues in recent years. This growth
stems primarily from growth in Caller ID market penetration and our consultative
selling with respect to product-based  marketing support services.  According to
industry sources,  market penetration of Caller ID services in the United States
as of  December  31,  1999 was  approximately  36.4%  and is  expected  to reach
approximately  75% by 2007. We believe that the combined  Caller ID  penetration
for our  clients  is  approximately  the same as the  industry  average.  If our
clients'  penetration  fails  to  increase,  our  revenues  could  be  adversely
affected. We believe opportunities  continue to exist in the market areas served
by Pacific Bell, a subsidiary of SBC  Communications,  where market  penetration
for Caller ID lags behind the national average because regulatory issues delayed



                                       7
<PAGE>

the release of Caller ID. Caller ID equipment sales may eventually  level off as
the  Caller  ID  market  matures.   We  believe  that  by   distributing   other
telecommunications  products such as DSL modems for existing customers,  growing
our  telecommunications  company client base and expanding customer distribution
channels through e-commerce, we will be able to offset any eventual maturity and
lower  penetration  levels  in our  Caller  ID  business.  However, there  is no
guarantee  that the gross  margins  associated  with the  expansion  into  these
markets will be at historical levels.

The following table sets forth the percentage of total net revenues derived from
services  provided to each of the following clients for the years ended December
31, 1999, 1998 and 1997 and the three months ended March 31, 2000 and 1999.

                                                            Three Months Ended
                            Year Ended December 31,             March 31,
                        -----------------------------      -------------------
                        1999         1998        1997      2000       1999
                        -----------------------------      -------------------
Pacific Bell ....        31%          25%         8%        25%        29%
Southwestern Bell        20           11         --         25         30
BellSouth .......        34 <F1>      59         16         85         35


         Total ..        90%          95%        93%        82%        94%
                       =====        =====       =====      =====      =====
[FN]
<F1> Includes all marketing support services related to Caller ID equipment.
</FN>


BellSouth  revenue dollars increased 8% and 10% for the years ended December 31,
1999 and 1998,  respectively,  although  as a  percentage  of net  revenues  our
BellSouth  telecommunications  business declined.  In connection with previously
disclosed  internal  issues  at  BellSouth,  revenues  from  sales of  Caller ID
equipment  for  BellSouth  declined 68% in the first quarter of 2000 below first
quarter 1999  equipment  sales.  The Company  believes that  internal  issues at
BellSouth  will continue to result in a decrease in sales of Caller ID equipment
that the Company undertakes for BellSouth.  Revenues from Pacific Bell decreased
38% for the first quarter of 2000 compared to 1999 equipment sales. Southwestern
Bell  Caller ID  equipment  sales  slowed by 43% for the first  quarter  of 2000
compared to first quarter 1999 equipment sales. The decrease in Pacific Bell and
Southwestern  Bell  revenues was caused by delays by these  clients of Caller ID
promotional  programs.  The  Company  cannot  estimate  the  impact  of any such
decrease  in  promotional  programs on its net  revenues.  Declines in Caller ID
revenues were  partially  offset by sales of DSL modems on behalf of a number of
clients, including BellSouth.

Revenues  are  recognized  on the  accrual  basis as  services  are  provided to
customers or as units are shipped (including  installment  sales).  Revenues are
reduced for estimated  product  returns and  allowances,  which are based on our
historical experience.

The  largest  component  of our  expenses  is our  cost of  revenues  which  are
primarily variable in nature and which includes the following:

         o        the product costs of telecommunications equipment;

         o        depreciation on Caller ID rental equipment;

         o        the costs of labor associated with marketing  support services
                  for a particular client;

         o        telecommunications   services  costs  (including  call  center
                  support);

         o        information technology support;

         o        materials and freight charges; and

         o        directly allocable facilities costs.


A second component of our expenses includes selling, general and administrative,
or SG&A,  expenses.  This  expense item is  comprised  of (1)  financial,  human
resources,  administrative  and  marketing  functions  that are not allocable to
specific client services and (2) bad debt expense. Bad debt expense represents a
provision for installments and rentals that will be deemed  uncollectible  based
on  Innotrac's  historical  experience,  as well  as  billing  adjustments  from
telecommunications providers. SG&A expenses tend to be fixed in nature, with the
exception of bad debt expense, which is related to revenues.

                                       8
<PAGE>

Results of Operations
---------------------

The following table sets forth unaudited summary operating data,  expressed as a
percentage  of  revenues,  for the three  months  ended March 31, 2000 and 1999,
respectively.  The data  has  been  prepared  on the  same  basis as the  annual
financial statements.  In the opinion of the Company's  management,  it reflects
all adjustments,  consisting only of normal and recurring adjustments, necessary
for a fair presentation of the information for the periods presented.  Operating
results for any period are not necessarily  indicative of results for any future
period.

The financial  information  provided below has been rounded in order to simplify
its  presentation.  However,  the  percentages  below are  calculated  using the
detailed information contained in the consolidated financial statements.

                                                          Three Months
                                                       Ended March 31,
                                                      --------------------
                                                       2000          1999
                                                      ------         -----
Revenues, net ..............................          100.0%         100.0
Cost of revenues ...........................           93.4           87.2
                                                      -----          -----
Gross margin ...............................            6.6           12.8
Selling, general and administrative expenses            8.7            3.6
Operating income ...........................           (3.4)           8.6
Interest expense ...........................            0.5            0.6
Income before income taxes .................           (3.9)%          8.1%

THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH 31, 1999

Revenues.  The Company's net revenues  decreased  28.9% to $47.8 million for the
--------
three months ended March 31, 2000 from $67.3  million for the three months ended
March 31, 1999.  Revenues decreased  primarily due to a 46.2% decrease in Caller
ID units sold and fulfilled to 1.2 million units, plus a decrease in average per
unit  prices of  Caller  ID units  offset  by a  115,000  unit  increase  in our
e-commerce  business,  which included sales of 36,000 DSL modems.  The Company's
reserve for returns and allowances  decreased slightly in terms of dollars,  but
remained  the same as a  percentage  of  revenues.  The reserve was $1.5 million
(3.2% of net  revenues)  for the three months  ended March 31, 2000  compared to
$2.1 million (3.2% of net revenues) for the three months ended March 31, 1999.

Cost of  Revenues.  The  Company's  cost of  revenues  decreased  23.9% to $44.7
-----------------
million for the three months ended March 31, 2000  compared to $58.7 million for
the three months ended March 31, 1999. Cost of revenues decreased  primarily due
to a 34.1% decrease in cost of equipment  associated  with the decrease in units
sold by the  Company.  This  decrease was offset by  approximately  $1.0 million
incurred in conjunction with our e-commerce business.

Gross Margin.  For the three months ended March 31, 2000,  the  Company's  gross
-----------
margin decreased 62.8% to $3.2 million as compared to $8.6 million for the three
months ended March 31, 1999.  The decrease in gross margin was due  primarily to
the decrease in revenue.  Gross margins decreased to 6.6% of revenues from 12.8%
of revenues,  respectively.  Decrease in gross margin,  attributed  primarily to
other direct  costs,  remained at  historical  levels  while sales  decreased by
28.9%.  Other  direct  costs are  relatively  fixed in nature  and are slower to
decrease than cost of goods sold.  We are  currently  looking at areas to reduce
these other fixed costs.

Selling, General and Administrative Expenses. SG&A expenses for the three months
--------------------------------------------
ended  March  31,  2000  increased  71.0% to $4.2  million  or 8.7% of  revenues
compared to $2.4  million or 3.6% of revenues  for the three  months ended March
31, 1999. The Company's bad debt expense was $727,000 (1.5% of net revenues) for
the three  months  ended March 31,  2000 as  compared  to $417,000  (0.6% of net
revenues) for the three months ended March 31, 1999.  The remaining  increase of
approximately  $1.7 million is due to resources  dedicated to the development of
our e-commerce business.

Income Taxes. The  Company's  effective  tax  rate  for  the  three months ended
------------
March 31, 2000 and 1999 was 39.5%, respectively.


                                       9
<PAGE>

Liquidity and Capital Resources
-------------------------------

The Company funds its operations and capital expenditures primarily through cash
flow from  operations  and borrowings  under a credit  facility with a bank and,
from time to time,  offerings of equity and debt.  The Company had cash and cash
equivalents of approximately $237,000 at March 31, 2000. The Company maintains a
$40.0  million  revolving  line of credit  with a bank,  maturing  in June 2002.
Borrowings under the line of credit bear interest at the Company's option at the
bank's prime rate,  as adjusted from time to time, or LIBOR plus up to 225 basis
points.  At March 31, 2000,  the interest  rate on the line of credit was 7.16%,
and the weighted average interest rate for the three months ended March 31, 2000
was 7.02%. At March 31, 2000,  $13.6 million was  outstanding  under the line of
credit.

During the three months ended March 31, 2000 and 1999,  the Company used cash at
$4.5  million and $18.1  million,  respectively,  in operating  activities.  The
decrease in use of cash flow from operating  activities in 2000 was due to lower
working  capital  requirements  resulting from decreases in accounts  receivable
(principally receivables from Pacific Bell, Southwestern Bell and BellSouth) due
to the  decreased  sales volume and similar  decreases in  inventory,  offset by
decreased payables during the first three months of 2000 as compared to the same
period in 1999.

During  the three  months  ended  March  31,  2000,  net cash used in  investing
activities was $2.8 million as compared  to $880,000 in 1999.  This increase was
primarily  due  to an  increase  in  technology  purchases  for  our  e-commerce
applications offset by a reduction in the number of purchases of Caller ID units
for rent.

During the three months ended March 31, 2000, the net cash provided by financing
activities  was  $6.6  million  compared  to  $15.9  million  used in  financing
activities  in the same  period in 1999.  This  decrease  was  primarily  due to
decreased borrowings on our line of credit.

The Company estimates that its cash and financing needs through 2000 will be met
by cash flows from  operations  and its line of credit  facility.  However,  any
increase in the  Company's  growth rate,  shortfalls  in  anticipated  revenues,
increases in  anticipated  expenses,  or significant  acquisitions  could have a
material adverse effect on the Company's liquidity and capital resources. Any of
these  might  require  the Company to raise  additional  capital  from public or
private equity or debt sources in order to finance operating losses, anticipated
growth and contemplated capital  expenditures.  If such sources of financing are
insufficient or  unavailable,  the Company will be required to modify its growth
and operating  plans in  accordance  with the extent of available  funding.  The
Company  may need to raise  additional  funds  in  order  to take  advantage  of
unanticipated  opportunities.  These opportunities could include acquisitions of
complementary  businesses  or the  development  of new  products,  or  otherwise
respond to unanticipated  competitive pressures.  There can be no assurance that
the Company  will be able to raise any such capital on terms  acceptable  to the
Company or at all.

Recent Accounting Pronouncements
--------------------------------

The FASB has issued Statement No. 133, Accounting for Derivative Instruments and
Hedging  Activities,  which  must be adopted by June 30,  2000.  This  statement
establishes  accounting  and reporting  standards for  derivative  instruments -
including certain derivative  instruments  embedded in other contracts - and for
hedging  activities.  Adoption  of  this  statement  is not  expected  to have a
material impact on the Company's financial statements.

ITEM 3- QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We believe our  exposure to market risks are immaterial.  We hold no market risk
sensitive  instruments for trading  purposes.  At present,  we do not employ any
derivative  financial  instruments,  other  financial  instruments or derivative
commodity  instruments to hedge any market risks and we do not currently plan to
employ them in the future.  To the extent  that we have  borrowings  outstanding
under our credit  facility,  we have market risks relating to the amounts of our
borrowings  because  interest rates under the credit facility are variable.  Our
exposure is immaterial due to the short-term nature of these borrowings.


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<PAGE>



PART II - OTHER INFORMATION



ITEM 6 -  EXHIBITS AND REPORTS ON FORM 8-K



        (a)    Exhibits

               Exhibit
               Number     Description
               -------    -----------

                 27       Financial Data Schedule (for SEC use only)

        (b)    Reports on Form 8-K - There were no Form 8-K filings.

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<PAGE>


                                   SIGNATURES

Pursuant  to the  requirements  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.

                                                  INNOTRAC CORPORATION
                                                    (Registrant)



Date:  May 11, 2000                       By:  /s/ Scott D. Dorfman
                                                   Scott D. Dorfman
                                                   President and Chief Executive
                                                    Officer and Chairman of the
                                                    Board


Date:  May 11, 2000                       By: /s/ David L. Gamsey
                                                  David L. Gamsey
                                                  Senior Vice President and
                                                   Chief Financial Officer
                                                  (on behalf of the Registrant
                                                  and as Chief Accounting
                                                  Officer)



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