FORM 10-QSB
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549



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

               For Qtr. Ended: June 30, 1998 File No.: 2-72849-NY

                               IMN FINANCIAL CORP.
             (Exact name of registrant as specified in its charter)




            DELAWARE                                         11-2558192
  (State or other jurisdiction                            (I.R.S. Employer
of incorporation or organization)                        Identification No.)





                  520 BROADHOLLOW ROAD MELVILLE NEW YORK 11746
                    (Address of principal executive offices)



                                 (516) 844-9805
              (Registrant's telephone number, including area code)



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 registrant's classes of
stock as of August 15, 1998:

Common stock, $.001 par value - 24,764,201 shares outstanding.




<PAGE>



                      IMN FINANCIAL CORP. AND SUBSIDIARIES
                      ------------------------------------
                                   FORM 10-QSB
                                   -----------








                                      INDEX

PART I - FINANCIAL INFORMATION

       Item I - FINANCIAL STATEMENTS (Unaudited)

Condensed Consolidated Balance Sheets -
                   June  30, 1998 and June 30, 1997                         3-4


Condensed Consolidated Statement of Income -
                   Six Months Ended June  30, 1998 and June 30, 1997          5



Condensed Consolidated Statement of Income -
                     Three Months Ended June  30, 1998 and June 30, 1997      6

               Condensed Consolidated Statement of Cash Flows -
                   Three Months Ended June  30, 1998 and June 30, 1997      7-8


               Condensed Consolidated Statement of Retained Earnings          9


Notes to Financial Statements                                             10-11

Item II - MANAGEMENT'S DISCUSSION AND ANALYSIS                            12-13


PART II - OTHER INFORMATION                                                  14


SIGNATURES                                                                   15

EXHIBIT 27 - FINANCIAL DATA SCHEDULE                                         16






                                        2

<PAGE>



                      IMN FINANCIAL CORP. AND SUBSIDIARIES
                      ------------------------------------

                                  FORM 10 - QSB
                                  -------------



                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      -------------------------------------


                                     ASSETS
                                     ------



<TABLE>
<CAPTION>




                                                    6/30/98             6/30/97
                                                   Unaudited           Unaudited
                                                  -----------        -----------

ASSETS
<S>                                                <C>               <C>        
    Cash                                           $ 2,905,908       $   232,333
    Mortgage inventory                              59,839,563        16,253,149
    Points and fees receivable                       4,396,093           368,100
    Stock subscription receivable                            0         6,600,000
    Other current receivables                          754,310           144,967
    Investments                                      7,356,558         5,660,293
    Prepaid expenses                                 4,727,117         1,798,493
    Property and equipment - net                     1,583,210           489,795
    Notes and mortgages receivable                   4,219,964         2,296,229
    Intangible assets - net                          4,377,447           694,649
    Other assets                                        85,167            69,994
                                                   -----------       -----------

TOTAL ASSETS                                       $90,245,337       $34,608,002
                                                   ===========       ===========
</TABLE>





                                        3

<PAGE>



                      IMN FINANCIAL CORP. AND SUBSIDIARIES
                      ------------------------------------
                                  FORM 10 - QSB
                                  -------------


                      CONDENSED CONSOLIDATED BALANCE SHEET
                      ------------------------------------


                       LIABILITIES & STOCKHOLDERS' EQUITY
                       ----------------------------------




<TABLE>
<CAPTION>

                                                     6/30/98         6/30/97
                                                    Unaudited       Unaudited
                                                  ------------    ------------

 LIABILITIES
<S>                                               <C>             <C>         
    Accounts payable and accrued expenses         $  4,794,209    $  1,902,274
    Warehouse lines of credit                       59,258,693      15,880,615
    Borrowers escrow funds                             272,393         364,621
    Capital lease obligations                          191,054         146,470
    Notes payable                                      585,586               0
    Due to related party                             7,098,595       2,196,436
    Deferred income                                  1,175,540         280,809
    Deferred income taxes                              415,019               0
    Other liabilities                                        0           5,374
                                                  ------------    ------------
          Total Liabilities                         73,791,089      20,776,599


STOCKHOLDERS' EQUITY
    Preferred stock - authorized 5,000,000 shares
     $.001 par value per share, the number of
     shares outstanding at June 30, 1998 and
     June 30, 1997 - 4,250 and -0-, respectively          4               0
    Common stock - authorized 45,000,000 shares,
     $.001 par value per share, the number of
     shares outstanding at June 30, 1998 and
     June 30, 1997 - 31,764,201 and
     23,686,700, respectively                           31,858           2,369
    Paid-in capital                                 20,548,166      13,639,304
    Stock subscription receivable                   (3,766,666)              0
    Unrealized Gain on Available-for-Sale
          Securities                                   253,129               0
    Retained earnings                                 (612,243)        189,730
                                                  ------------    ------------
          TOTAL STOCKHOLDERS' EQUITY                16,454,248      13,831,403
                                                  ------------    ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $ 90,245,337    $ 34,608,002
                                                  ============    ============
</TABLE>





                                        4

<PAGE>



                      IMN FINANCIAL CORP. AND SUBSIDIARIES
                      ------------------------------------

                                  FORM 10 - QSB
                                  -------------

                   CONDENSED CONSOLIDATED STATEMENT OF INCOME
                   ------------------------------------------
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                     Six Months      Six Months
                                                        Ended           Ended
                                                       6/30/98         6/30/97
                                                    ------------     ----------

OPERATING INCOME
<S>                                                 <C>             <C>         
    Points, Fees and Premium Income                 $ 11,352,545    $  2,296,774
    Interest Income                                    1,593,150         150,138
                                                    ------------    ------------

         Total Operating Income                       12,945,695       2,446,912
                                                    ------------    ------------

OPERATING EXPENSES
    General and Administrative Expenses                9,932,347       2,013,874
    Interest Expense                                   2,210,085         171,480
    Depreciation                                         135,904          25,316
    Amortization of Acquisition Goodwill                  84,006               0
    Other Amortization                                    51,247          29,219
                                                    ------------    ------------

         Total Operating Expenses                     12,413,589       2,239,889
                                                    ------------    ------------

Income from Operations                                   532,106         207,023

Income (loss) from Subsidiary                            (77,038)              0
                                                    ------------    ------------

Income before Provision for Income Taxes                 455,068         207,023

Provision for Income Taxes                                50,523               0
                                                    ------------    ------------

Net Income                                          $    404,545    $    207,023
                                                    ============    ============

Weighted Average Number of Shares Outstanding         31,764,157       5,503,629
                                                    ============    ============

Basic Earnings per share                            $     0.0127    $     0.0376
                                                    ============    ============

Diluted Earnings per share                          $     0.0127    $     0.0376
                                                    ============    ============
</TABLE>






                                        5

<PAGE>



                      IMN FINANCIAL CORP. AND SUBSIDIARIES
                      ------------------------------------

                                  FORM 10 - QSB
                                  -------------

                   CONDENSED CONSOLIDATED STATEMENT OF INCOME
                   ------------------------------------------
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                    Three Months    Three Months
                                                        Ended          Ended
                                                       6/30/98        6/30/97
                                                    ------------    -----------

OPERATING INCOME
<S>                                                 <C>              <C>        
    Points, Fees and Premium Income                 $ 6,062,085      $ 2,296,774
    Interest Income                                     957,292          150,138
                                                    -----------      -----------

         Total Operating Income                       7,019,377        2,446,912
                                                    -----------      -----------

OPERATING EXPENSES
    General and Administrative Expenses               5,156,486        2,012,374
    Interest Expense                                  1,318,295          171,480
    Depreciation                                         70,889           25,316
    Amortization of Acquisition Goodwill                 42,003                0
    Other Amortization                                   26,598           29,219
                                                    -----------      -----------

         Total Operating Expenses                     6,614,271        2,238,389
                                                    -----------      -----------

Income from Operations                                  405,106          208,523

Income (loss) from Subsidiary                          (107,715)               0
                                                    -----------      -----------

Income before Provision for Income Taxes                297,391          208,523

Provision for Income Taxes                               41,560                0
                                                    -----------      -----------

Net Income                                          $   255,831      $   208,523
                                                    ===========      ===========
</TABLE>















                                        6

<PAGE>



                      IMN FINANCIAL CORP. AND SUBSIDIARIES
                      ------------------------------------

                                  FORM 10 - QSB
                                  -------------

                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                 ----------------------------------------------
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                    Six Months          Six Months
                                                      Ended                Ended
                                                     6/30/98              6/30/97
                                                    ----------          -----------

CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                   <C>              <C>          
    Net Income                                        $     404,545    $     207,023
    Adjustments to reconcile net income to net cash
         provided by operating activities:
         Amortization                                       135,253           29,219
         Depreciation                                       135,904           25,316
         Loss from subsidiary                                77,038                0
    Changes in assets and liabilities                    (4,503,949)      (5,424,085)
                                                      -------------    -------------

Net cash (used in)  operating activities                 (3,751,209)      (5,162,527)
                                                      -------------    -------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of property and equipment                     (294,128)         (31,515)
    Purchase of intangible assets                            (3,315)        (209,153)
    Mortgages originated - net                         (288,222,964)     (35,195,259)
    Mortgages sold                                      272,536,020       37,743,126
                                                      -------------    -------------

Net cash provided by (used in) investing activities     (15,984,387)       2,307,199
                                                      -------------    -------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Sale of preferred stock                               2,554,970                0
    Notes receivable advanced                            (1,954,639)               0
    Advances from related parties                         2,020,997          492,533
    Proceeds from warehouse line of credit              269,810,659       34,843,306
    Repayments of warehouse line of credit             (254,204,466)     (32,366,825)
    Collection of stock subscriptions                     2,374,934                0
    Collection of notes receivable                           11,311            1,886
                                                      -------------    -------------

Net cash provided by financing activities                20,613,766        2,970,900
                                                      -------------    -------------

Net increase (decrease) in cash and equivalents             878,170          115,572

Cash Balance at Beginning of Period                       2,027,738          116,761
                                                      -------------    -------------

Cash Balance at End of Period                         $   2,905,908    $     232,333
                                                      =============    =============
</TABLE>



                                        7

<PAGE>




                      IMN FINANCIAL CORP. AND SUBSIDIARIES
                      ------------------------------------

                                  FORM 10 - QSB
                                  -------------

                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                 ----------------------------------------------
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                 Six Months      Six Months
                                                   Ended           Ended
                                                  6/30/98         6/30/97
                                                 ----------      ----------

SUPPLEMENTAL DISCLOSURES:
<S>                                             <C>              <C>       
    Interest expense                            $2,210,085       $  171,480
                                                ===========      ==========

    Income taxes                                $   69,559       $        0
                                                ===========      ==========



SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:



Decrease in Market Value of Available-for-Sale 
          Securities                            $  102,165       $        0
                                                ===========      ==========

Assets distributed to reduce debt               $4,339,089       $        0
                                                ===========      ==========

Stock issued in conjunction with acquisitions   $  300,000       $        0
                                                ===========      ==========

Notes payable issued in conjunction with 
          acquisitions                          $  394,710       $        0
                                                ===========      ==========


</TABLE>

















                                        8

<PAGE>



                      IMN FINANCIAL CORP. AND SUBSIDIARIES
                      ------------------------------------

                                  FORM 10 - QSB
                                  -------------

              CONDENSED CONSOLIDATED STATEMENT OF RETAINED EARNINGS
              -----------------------------------------------------
                                   (Unaudited)





RETAINED EARNINGS - JANUARY 1, 1998                                 $(1,016,788)

Net Income                                                              404,545
                                                                    -----------

RETAINED EARNINGS - JUNE 30, 1998                                   $  (612,243)
                                                                    ===========































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<PAGE>



                      IMN FINANCIAL CORP. AND SUBSIDIARIES
                      ------------------------------------

                                  FORM 10 - QSB
                                  -------------

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                   (Unaudited)


NOTE 1 - BASIS OF PRESENTATION

         The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information as set forth in Article 10 of Regulation S-B. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included.


NOTE 2 - EARNINGS PER SHARE

         Earnings per share have been computed on the basis of the total
weighted average number of shares outstanding at June 30, 1998 and 1997.


                                                        JUNE 30,       JUNE 30,
                                                          1998           1997
                                                      -----------   -----------

Number of shares outstanding - Start Up Period         31,764,107   5,503,629

Increases of shares                                            94           0
                                                      -----------   -----------

Number of shares outstanding - End of period           31,764,201   5,503,629
                                                      ===========   ===========

Weighted Average Number of Shares
Outstanding                                            31,764,150   5,503,629
                                                      ===========   ===========


NOTE 3 - PRINCIPLES OF CONSOLIDATION

         The consolidated financial statements of the Company include the
accounts of IMN Financial Corp. and its wholly owned subsidiaries, Island
Mortgage Network, Inc., Citizens Mortgage Service Company, First Equities
Service Corp. and First Equities Commercial Corp. All significant intercompany
balances and transactions have been eliminated in consolidation.


NOTE 4 - SALE OF SUBSIDIARIES

         The Company sold Green Shield Mortgage Corp., 1st Potomac Mortgage
Corporation and American National Mortgage Corporation (former subsidiaries)
during the first quarter of 1998. Preceding the sales, the Company removed
certain assets pertaining to the business operations, which will be continued by
the Company's subsidiary, Island Mortgage Network, Inc. These subsidiaries were
sold for book value, resulting in no gain or loss to the Company.




                                       10

<PAGE>




                      IMN FINANCIAL CORP. AND SUBSIDIARIES
                      ------------------------------------

                                  FORM 10 - QSB
                                  -------------

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                   (Unaudited)


NOTE 5 - PREFERRED STOCK

         On February 20, and March 31, 1998, respectively, the Company entered
into two Securities Purchase Agreements. Under the terms of the agreements, the
buyers would receive 8% Convertible Preferred Stock and warrants to purchase
additional shares. The gross proceeds to the Company were $3,000,000. The
agreement provided for the issuance of preferred shares and warrants. The shares
are convertible at 75% of the average closing bid prices of the Company's common
stock as quoted by Bloomberg, LP for the five-day trading period (the "Average
Price") ending on the day prior to the date of the conversion (the "Conversion
Price"). The Conversion Price may not be greater than 120% of the Average Price
on the closing date (the "Maximum Price"). The warrants expire on March 31, 2003
and are exercisable at $2.00 per share. The Company issued additional warrants
to the convertible preferred stockholders' which expire on July 15, 2003 and
exercisable at $2.00 per share.


NOTE 6 - SUBSEQUENT EVENTS

         In July 1998, the Company retired 7,000,000 shares of treasury stock
previously issued in conjunction with loan negotiations which were concluded
without consequence.















                                       11

<PAGE>



                      IMN FINANCIAL CORP. AND SUBSIDIARIES
                      ------------------------------------

                                  FORM 10 - QSB
                                  -------------

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


         The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial position and
operating results during the periods included in the accompanying condensed
consolidated financial statements.

RESULTS OF OPERATIONS - SIX MONTH PERIOD ENDED JUNE 30, 1998 VS. JUNE 30, 1997

         Total revenues for the six months ended June 30, increased to
$12,945,695 as compared to $2,446,912 for the same period in 1997, an increase
of 429%. The Company attributes the increase to the various acquisitions since
August 1, 1997.

         Total general and administrative expenses for the six months ended June
30, increased to $9,967,787 as compared to $2,013,874 for the same period in
1997, an increase of 395%. The Company attributes the increase to the increase
of sales volume mentioned above. This increase is 34% less than the increase in
sales due to ongoing acquisitions related cost reductions.

         Total interest expense for the six months ended June 30, increased to
$2,210,085 as compared to $171,480 for the same period in 1997, an increase of
1188%. The Company attributes the increase to the increase of sales volume
mentioned above.

         Total net income for the six months ended June 30, increased to
$404,545 as compared to $207,023 for the same period in 1997, an increase of
95%. The Company attributes the increase to the increase of sales volume
mentioned above.

RESULTS OF OPERATIONS - THREE MONTH PERIOD ENDED JUNE 30, 1998 VS. JUNE 30, 1997

         Total revenues for the three months ended June 30, increased to
$7,019,377 as compared to $2,446,912 for the same period in 1997, an increase of
187%. The Company attributes the increase to the various acquisitions since
August 1, 1997.

         Total general and administrative expenses for the three months ended
June 30, increased to $5,191,926 as compared to $2,012,374 for the same period
in 1997, an increase of 158%. The Company attributes the increase to the
increase of sales volume mentioned above. This increase is 29% less than the
increase in sales due to ongoing acquisitions related cost reductions.

         Total interest expense for the three months ended June 30, increased to
$1,318,295 as compared to $171,480 for the same period in 1997, an increase of
669%. The Company attributes the increase to the increase of sales volume
mentioned above.








                                       12

<PAGE>



                      IMN FINANCIAL CORP. AND SUBSIDIARIES
                      ------------------------------------

                                  FORM 10 - QSB
                                  -------------

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


RESULTS OF OPERATIONS - THREE MONTH PERIOD ENDED JUNE 30, 1998 VS. 
JUNE 30, 1997 (CONT'D)

         Total net income for the three months ended June 30, increased to
$255,831 as compared to $208,523 for the same period in 1997, an increase of
23%. The Company attributes the increase to the increase of sales volume
mentioned above.


LIQUIDITY AND CAPITAL RESOURCES

         The Company believes that current operations will provide adequate cash
flow to meet current obligations. The Company has $4,396,093 in points and fees
receivable and investments of $7,356,558 as its present capital resources.
Management believes that these resources provide adequate working capital for
the Company.












                                       13

<PAGE>



                           PART II - OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         The exhibits filed as part of this report are listed below.



                                                          DESCRIPTION
A) EXHIBITS
             27       Financial Data Schedule


B) REPORTS
              *       Form 8-K dated May 5, 1997

              *       Form 8-K-A dated August 1,1997

              *       Form 8-K dated September 16, 1997

              *       Form 10QSB - For the Quarter Ended March 31, 1997

              *       Form 10QSB - For the Quarter Ended June 30, 1997

              *       Form 10QSB - For the Quarter Ended September 30, 1997

                      Form 10QT - For the Transition Period October 1, 1996 to
              *               December 31, 1996

              *       Form 10KSB - For the Year Ended December 31, 1997

              *       Form 10QSB - For the Quarter Ended March 31, 1998









        *    Incorporated by reference.






                                       14

<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.


             IMN FINANCIAL CORP. AND SUBSIDIARIES.



Dated: August 15, 1998
                                       EDWARD CAPUANO - President, Principal
                                       Executive Officer and Principal Financial
                                       Officer















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