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

                                   FORM 10-QSB

                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                  For the Quarterly Period Ended March 31, 2000

                             Commission File Number:

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

    Delaware
    --------
(State of Incorporation)       (I.R.S. Employer Identification No.)

              115 East 23rd Street, New York, New York 10010k 10010
              -----------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (212) 576-2030
                                 --------------
              (Registrant's telephone number, including area code)

Check mark whether the issuer: (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.

           /X/ Yes       / / No

As of March 20 2000, a total of  42,080,846  shares of the  Registrant's  Common
Stock, $.001 par value, were issued and outstanding.


<PAGE>

YOUNETWORK CORPORATION

                                      Index
                                   FORM 10-QSB
                          (A Development Stage Company)

                                                                            Page
                                                                            ----

Part I:  Financial Information

Item 1 - Financial Statements

     Balance Sheets as of December 31, 1999 and
         March 31, 2000 (Unaudited)                                           2

     Statements of Operations for the Three Months Ended
         March 31, 2000 and 1999 (Unaudited) and for the
         Period from Inception (January 14, 1998) to
         March 31, 2000 (Unaudited)                                           3

     Statements of Cash Flows for the Three Months Ended
         March 31, 2000 and 1999 (Unaudited) and for the
         Period from Inception (January 14, 1998) to
         March 31, 2000                                                     4-5

     Notes to Financial Statements                                            6

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

Part II:  Other Information

<PAGE>

                             YOUNETWORK CORPORATION
                          (A Development Stage Company)
                                 Balance Sheets
                      December 31, 1999 and March 31, 2000

<TABLE>
<CAPTION>
                                                              ASSETS
                                                              ------
                                                                                                    December 31,          March 31,
                                                                                                        1999                 2000
                                                                                                    -----------         -----------
                                                                                                                         (Unaudited)
<S>                                                                                                 <C>                 <C>
Current assets:
     Cash and cash equivalents                                                                      $    41,127         $    21,469
     Prepaid expenses                                                                                    59,308              42,650
                                                                                                    -----------         -----------
                  Total current assets                                                                  100,435              64,119
Property and equipment, net                                                                             763,731             700,818
Other assets:
     Software development costs                                                                         508,334             463,471
     Software license                                                                                   165,431             119,213
     Security deposits                                                                                  187,196             187,196
     Loan to stockholder                                                                                 12,201              20,304
     Other assets                                                                                        41,974              46,497
                                                                                                    -----------         -----------
                  Total other assets                                                                    915,136             836,681
                                                                                                    -----------         -----------
                                                                                                    $ 1,779,302         $ 1,601,618
                                                                                                    ===========         ===========

<CAPTION>
                                                 LIABILITIES AND STOCKHOLDERS' EQUITY
                                                 ------------------------------------
<S>                                                                                                 <C>                 <C>
Current liabilities:
     Current portion of capital lease obligation                                                    $   242,627         $   251,955
     Notes payable - stockholders                                                                       200,000             310,000
     Due to related party                                                                               200,000             147,232
     Deferred revenue                                                                                   175,000                  --
     Accounts payable                                                                                   114,381             238,495
     Accrued rebate payable                                                                               4,063                 713
     Other current liabilities                                                                           73,710              95,600
                                                                                                    -----------         -----------
                  Total current liabilities                                                           1,009,781           1,043,995

Capital lease obligations, less current portion                                                         254,439             190,825
Commitments
Stockholders' equity:
     Common stock:
         Class A - par value $.0001 per share:
             Authorized - 1,500,000 shares
             Issued and outstanding - 7,052 shares at December 31,
                1999 and 8,621 shares at March 31, 2000                                                       1                   1
         Class B - par value $.0001 per share:
             Authorized - 1,500,000 shares
             Issued and outstanding - 1,058 shares at December
                31, 1999 and 1,813 shares at March 31, 2000                                                  --                  --
         Class C - par value $.0001 per share:
             Authorized - 247,000,000 shares
             Issued and outstanding - 41,852,352 shares
                at December 31, 1999 and $42,070,052
                at March 31, 2000                                                                         4,185               4,207
     Additional paid-in capital                                                                       2,395,242           2,604,244
     Deficit accumulated during the development stage                                                (1,884,346)         (2,241,654)
                                                                                                    -----------         -----------
                  Total stockholders' equity                                                            515,082             366,798
                                                                                                    -----------         -----------
                                                                                                    $ 1,779,302         $ 1,601,618
                                                                                                    ===========         ===========
</TABLE>


                                       3
<PAGE>

                             YOUNETWORK CORPORATION
                          (A Development Stage Company)
                            Statements of Operations
               For the Three Months Ended March 31, 2000 and 1999
     and for the Period from Inception (January 14, 1998) to March 31, 2000
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                                              For the
                                                                                                            Period From
                                                                                Three Months Ended           Inception
                                                                                    March 31,            (January 14, 1998)
                                                                       ------------------------------        to March 31,
                                                                           2000              1999               2000
                                                                       ------------      ------------      ------------
<S>                                                                    <C>               <C>               <C>
Revenue                                                                $     22,195      $         --      $     71,895

Cost of goods sold                                                           21,170                --            69,748
                                                                       ------------      ------------      ------------

Gross profit                                                                  1,025                --             2,147

Expenses:
     Compensation                                                           160,766            24,854           624,993
     Development costs                                                      139,695                --           477,066
     General and administrative                                             214,126            64,772         1,273,239
                                                                       ------------      ------------      ------------
                  Total expenses                                            514,587            89,626         2,375,298
                                                                       ------------      ------------      ------------

Operating loss                                                             (513,562)          (89,626)       (2,373,151)

Other income (expense):
     Other                                                                  175,000                --           175,000
     Interest expense                                                       (18,987)           (1,063)          (54,979)
     Interest income                                                            241                --            11,476
                                                                       ------------      ------------      ------------
                  Net other income (expense)                                156,254            (1,063)          131,497
                                                                       ------------      ------------      ------------

Net loss                                                               $   (357,308)     $    (90,689)     $ (2,241,654)
                                                                       ============      ============      ============

Net loss per common share, basic and
     diluted                                                           $       (.01)     $         --
                                                                       ============      ============

Weighted average of common shares
     outstanding - basic and diluted                                     42,026,923        34,993,896
                                                                       ============      ============
</TABLE>


                                       4
<PAGE>

                             YOUNETWORK CORPORATION
                          (A Development Stage Company)
                            Statements of Cash Flows
                      For the Three Months Ended March 31,  2000 and 1999
     and for the Period from Inception (January 14, 1998) to March 31, 2000
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                                              For the
                                                                                                            Period From
                                                                                Three Months Ended           Inception
                                                                                    March 31,            (January 14, 1998)
                                                                       ------------------------------        to March 31,
                                                                           2000              1999               2000
                                                                       ------------      ------------      ------------
<S>                                                                     <C>               <C>               <C>
Net cash used in operating activities                                   $  (241,646)      $   (52,648)      $(1,283,260)
                                                                        -----------       -----------       -----------

Cash flows from investing activities:
     Purchase of property and equipment                                     (12,925)             (913)         (279,810)
     Software development costs                                                 (70)         (165,000)         (516,615)
     Loan to stockholder                                                     (8,103)               --           (20,304)
     Purchase of software license                                                --                --          (270,276)
     Payment of security deposits                                                --            (1,200)         (187,196)
                                                                        -----------       -----------       -----------
                  Cash used in investing
                     activities                                             (21,098)         (167,113)       (1,274,201)
                                                                        -----------       -----------       -----------
Cash flows from financing activities:
     Proceeds from issuance of common
         stock                                                              196,700           463,000         2,462,870
     Proceeds from notes payable -
         stockholders                                                       110,000                --           310,000
     Deferred registration costs                                                 --           (62,047)               --
     Payments of capital lease obligations                                  (63,614)           (3,358)         (193,940)
                                                                        -----------       -----------       -----------
                  Net cash provided by financing
                     activities                                             243,086           397,595         2,578,930
                                                                        -----------       -----------       -----------

Net increase (decrease) in cash                                             (19,658)          177,834            21,469

Cash, beginning of period                                                    41,127           178,068                --
                                                                        -----------       -----------       -----------

Cash, end of period                                                     $    21,469       $   355,902       $    21,469
                                                                        ===========       ===========       ===========
</TABLE>


                                       5
<PAGE>

                             YOUNETWORK CORPORATION
                          (A Development Stage Company)
                      Statements of Cash Flows (Concluded)
               For the Three Months Ended March 31, 2000 and 1999
     and for the Period from Inception (January 14, 1998) to March 31, 2000
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                                              For the
                                                                                                            Period From
                                                                                Three Months Ended           Inception
                                                                                    March 31,            (January 14, 1998)
                                                                       ------------------------------        to March 31,
                                                                           2000              1999               2000
                                                                       ------------      ------------      ------------

                                           Supplemental Disclosure of Cash Flow Information
<S>                                                                     <C>                <C>               <C>
Cash paid during the period for:
     Interest                                                           $    9,108         $    1,063        $   31,060
                                                                        ==========         ==========        ==========

                                 Supplemental Schedule of Non-Cash Investing and Financing Activities

Capital lease obligation incurred for the
     acquisition of equipment                                           $       --         $       --        $  627,392
                                                                        ==========         ==========        ==========
Issuance of Class A common stock for
     services                                                           $       --         $       --        $   21,400
                                                                        ==========         ==========        ==========
Issuance of warrants for leasehold
     improvements                                                       $       --         $       --        $   11,000
                                                                        ==========         ==========        ==========
Issuance of Class C common stock for
     servicemark                                                        $   10,000         $       --        $   10,000
                                                                        ==========         ==========        ==========
Issuance of warrants for acquisition
     of software development costs                                      $       --         $       --        $   38,000
                                                                        ==========         ==========        ==========
Issuance of warrants for portion of
     computer equipment lease                                           $      --          $       --        $   54,748
                                                                        ==========         ==========        ==========
</TABLE>

In March 1999,  common stock  purchase  warrants were  exercised and the Company
issued 1,479,452 of Class C common stock for no cash proceeds.

During the period from  inception  (January  14,  1998) to March 31,  2000,  the
Company  issued 8,621 shares of Class A common stock and 1,813 shares of Class B
common stock for no cash proceeds.

During the three months ended March 31, 2000, the Company issued 1,569 shares of
Class A  common  stock  and 755  shares  of  Class B  common  stock  for no cash
proceeds.


                                       6
<PAGE>

                             YOUNETWORK CORPORATION
                          (A Development Stage Company)
                          Notes to Financial Statements

Note 1 - The accompanying unaudited financial statements,  which are for interim
periods,  do not  include  all  disclosures  provided  in the  annual  financial
statements.  These unaudited financial  statements should be read in conjunction
with the financial  statements and the footnotes thereto contained in the Annual
Report on Form  10-KSB for the year  ended  December  31,  1999,  of  YouNetwork
Corporation  (the  "Company"),   as  filed  with  the  Securities  and  Exchange
Commission.  The  December  31,  1999  balance  sheet was derived  from  audited
financial statements, but does not include all disclosures required by generally
accepted accounting principles.

Note 2 - In the opinion of the Company,  the  accompanying  unaudited  financial
statements  contain all  adjustments  (which are of a normal  recurring  nature)
necessary for a fair  presentation of the financial  statements.  The results of
operations  for the  three  months  ended  March  31,  2000 are not  necessarily
indicative of the results to be expected for the full year.

Note 3 - During  1999,  the Company  filed a  registration  statement  under the
Securities Act of 1933 to register  1,000,000 shares each of Class A and Class B
common  stock.  The first  250,000  Class A shares will be offered at no cost to
each  consumer  who  registers  to  become a member  of the  Company's  consumer
network.  The remaining  750,000 Class A shares will be  distributed  to members
based upon referring new members to the consumer network. Class B shares will be
offered to consumer  network members at $1.00 per share,  which may only be paid
with rebates earned by members making purchases on the consumer network.

      Upon the  issuance of Class A shares,  the Company will record a charge to
operations for promotions  costs for the value of the shares issued based on the
most recent private offering.  Upon the issuance of Class B shares,  the Company
will  record a  reduction  in the  liability  for  rebates due to members of the
consumer  network.  A liability  for rebates due to members and a  corresponding
charge to cost of goods sold are recorded  when  members  make  purchases on the
consumer network.

      On  July  13,  1999,  the  aforementioned  registration  statement  became
effective.

      During the three  months ended March 31,  2000,  the Company  issued 1,569
Class A shares and 755 Class B shares.

Note 4 - The Company entered into an agreement in March 1998 with a Company that
provides  long-distance  telephone  service.  During 1998, the Company  received
advances  of  $175,000.  In  March  2000,  the  Company  was  released  from all
obligation  pursuant  to the  agreement  and was not  required  to  perform  its
obligation under the agreement or repay the advance.


                                       7
<PAGE>

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

                Special Note Regarding Forward-Looking Statements

Any statements in this Quarterly  Report on Form 10-QSB about our  expectations,
beliefs, plans, objectives,  assumptions or future events or performance are not
historical facts and are forward-looking statements. These statements are often,
but not always,  made through the use of words or phrases such as "will,"  "will
likely result," "expect," "will continue,"  "anticipate,"  "estimate," "intend,"
"plan,"  "projection,"  "would,"  "should"  and  "outlook."  Accordingly,  these
statements  involve estimates,  assumptions and uncertainties  which could cause
actual  results  to  differ   materially  from  those  expressed  in  them.  Any
forward-looking  statements  are qualified in their entirety by reference to the
factors  discussed  throughout this Report and our Annual Report on Form 10-KSB,
for the year ended  December  31,  1999.  The  following  cautionary  statements
identify  important  factors  that  could  cause our  actual  results  to differ
materially from those projected in the  forward-looking  statements made in this
prospectus.  Among the key factors that have a direct  bearing on our results of
operations are:

      o general  economic and business  conditions;  the existence or absence of
adverse   publicity;   changes  in,  or  failure  to  comply  with,   government
regulations;  changes in marketing and technology;  changes in political, social
and economic conditions;

      o increased competition in the Internet ; Internet capacity; general risks
of the Internet;

      o success of acquisitions and operating  initiatives;  changes in business
strategy or development plans; management of growth;

      o availability, terms and deployment of capital;

      o costs and other effects of legal and administrative proceedings;

      o dependence  on senior  management;  business  abilities  and judgment of
personnel;  availability  of qualified  personnel;  labor and  employee  benefit
costs;

      o development risks; risks relating to the availability of financing; and

      o other factors referenced in this Report and the Form 10-KSB.


                                       8
<PAGE>

Because  the risk  factors  referred  to above  could  cause  actual  results or
outcomes  to differ  materially  from  those  expressed  in any  forward-looking
statements  made  by us,  you  should  not  place  undue  reliance  on any  such
forward-looking  statements.  Further, any forward-looking statement speaks only
as of the date on which it is made and we undertake no  obligation to update any
forward-looking statement or statements to reflect events or circumstances after
the date on  which  such  statement  is made or to  reflect  the  occurrence  of
unanticipated  events.  New  factors  emerge  from  time to time,  and it is not
possible for us to predict which will arise.  In addition,  we cannot assess the
impact of each  factor on our  business  or the extent to which any  factor,  or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.

Overview

      We are a  company  which  launched  a unique  and  novel  online  consumer
network.  By combining  the virtues of  cooperative  marketing  with  incentives
designed to reward a member's  purchasing  influence,  we believe  our  consumer
network  will  develop a sizeable  membership  base,  without  entry  fees,  and
distinguish itself from the emerging wave of direct Internet marketing companies
which are seeking to tap the rapidly developing market for Internet commerce.

      We  currently  offer our members  shares to join our web site in the first
initial  public  offering to register  the issuance of shares to join a web site
with the SEC. We raise no direct proceeds from this offering.  One class A share
is  currently  offered  at no cost to each of the  first  250,000  members.  The
remaining  750,000 class A shares are offered to our members based on net value,
a proprietary  referral tracking technology  developed by us. Our class B shares
are  offered  at the rate of one  share  for each  $1.00  of a  member's  rebate
balance. We will receive an indirect economic benefit from the sale of our class
B shares to the extent that our  obligation to pay rebate dollars to our members
is reduced.

      We derive  our  revenue  from the sale of  competitively  priced  consumer
products  and  services  through  our  website,  YouNetwork.com.  Our  web  site
currently offers twelve different  product  segments,  ranging from house wares,
electronics and toys to music and video,  with more than 1.3 million  individual
product  offerings.  Product  fulfillment  is  achieved  through  manufacturers,
distributors  and other vendors which ship directly to our members.  We maintain
no inventory,  warehouse,  stores or sales facilities.  Due to our low operating
costs, our prices are lower than brick and mortar retailers and competitive with
other Internet marketing sites.

      We were incorporated on January 14, 1998, under the name YouNetwork Corp.,
a New York corporation.  Pursuant to a merger  effective,  February 3, 1999, the
New  York  corporation  merged  into  us,  YouNetwork  Corporation,  a  Delaware
corporation. Our website is located at www.YouNetwork.com.  Nothing contained on
our website should be construed as a part of this filing.


                                       9
<PAGE>

Results of Operations

      From  inception,  operations have been in the early stages of development.
We had nominal amount of revenues for the three and nine months ended  September
30, 1999.

      We  incurred  operating  expenses  of  $514,587  and $89,626 for the three
months ended September 2000 and 1999, respectively.

      The operating  expenses  increased from $89,626 for the three months ended
March 31, 1999 to  $514,587  for the three  months  ended  March 31,  2000.  The
increase in operating  expenses  reflects the higher costs  associated  with the
build-up of the  corporate  infrastructure  of the Company.  These costs consist
primarily of compensation  expense,  system  development costs and other general
and administrative expenses.

      Compensation  expenses  relate  to  establishing  strategic  relationships
through license arrangements and vendor affiliations to market the business.  In
addition, we incurred costs in developing our proprietary tracing system as well
as other general and administrative expenses since inception.

      As of December 31,  1999,  we had net  operating  loss  carryforwards  for
federal  income  tax  purposes  of  approximately  $1,884,000.  There  can be no
assurance   that  we  will  realize  the  benefit  of  the  net  operating  loss
carryforwards.  The federal net operating loss  carryforward  will expire in the
fiscal year 2013.  We have  established  a valuation  allowance  with respect to
these federal and state carryforwards.


                                       10
<PAGE>

                                     PART II
                                OTHER INFORMATION

Item 1: Legal Proceedings

      To the knowledge of the Company there are no legal proceedings  pending or
threatened.

Item 2: Changes in Securities

      Not Applicable

Item 3: Defaults in Senior Securities

      Not Applicable

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

      Not Applicable

Item 6: Exhibits and Reports on Form 8K

      (1) Exhibits:

          27.1  Financial Data Schedule

      (2) Reports on Form 8-K: None


                                       11
<PAGE>

                                   SIGNATURES

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

                                             YOUNETWORK CORPORATION

                                             By: /S/ Don S. Senerath
                                                 -------------------------------
                                                 Don S. Senerath, CEO and
                                                   Principal Financial Officer

Date: May 22, 2000