<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB
(Mark One)

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

                FOR THE QUARTERLY PERIOD ENDED March 31, 2006

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

       For the transition period from ________________ to _______________

                                     0-29873
                            (Commission file number)

                                   UWINK, INC.
        (Exact name of small business issuer as specified in its charter)

                    UTAH                                 87-0412110
        (State or other jurisdiction                    (IRS Employer
      of incorporation or organization)              Identification No.)

                  12536 BEATRICE, LOS ANGELES, CALIFORNIA 90066
                    (Address of principal executive offices)

                            (310) 827-6900 (Issuer's
                                telephone number)

                                       N/A
             (Former name, former address and former fiscal year, if
                           changed since last report)

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

The number of shares of common stock outstanding as of May 10, 2006 was
18,140,300.

Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]







<PAGE>


                                   UWINK, INC.
                                      INDEX

                                                                            Page
                                                                          Number
                                                                          ------

PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements

           Consolidated Balance Sheet as of March 31, 2006 (unaudited)       2

           Consolidated Statements of Operations for the three
           months ended March 31, 2006 and 2005 (unaudited)                  3

           Consolidated Statements of Cash Flows for the three months
           ended March 31, 2006 and 2005 (unaudited)                         4

           Notes to Consolidated Financial Statements (unaudited)            5

Item 2.    Management's Discussion and Analysis or Plan of Operations       19

Item 3.    Controls and Procedures                                          27

PART II.   OTHER INFORMATION

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds      28

Item 6.    Exhibits                                                         29

SIGNATURES                                                                  29


                                        1






<PAGE>

PART I.    FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

<TABLE>
<S>     <C>
                                 UWINK, INC. AND SUBSIDIARY
                                 CONSOLIDATED BALANCE SHEET
                                         (UNAUDITED)


                                                                                 March 31,
                                                                                   2006
                                                                               ------------
                                           ASSETS

CURRENT ASSETS
     Cash and cash equivalents                                                 $  1,065,201
     Account receivable, net of allowance for doubtful accounts of $62,873            9,354
     Inventory, net of obsolescence reserve of $195,339                             224,167
     Advance to supplier                                                             66,398
     Prepaid expenses and other current assets                                       57,794
                                                                               ------------
TOTAL CURRENT ASSETS                                                              1,422,913
                                                                               ------------

PROPERTY AND EQUIPMENT, net of accumulated
      depreciation of $289,125                                                       21,417

CAPITALIZED SOFTWARE DEVELOPMENT COSTS, net of
     accumulated amortization of $910,773                                                --
                                                                               ------------
                                                                               $  1,444,330
                                                                               ============


                            LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable                                                          $    833,093
     Accrued expenses                                                               184,249
     Accrued payroll and related benefits                                           170,148
     Due to related parties                                                         323,000
     Advances from Customers                                                         24,980
     Note Payable                                                                   111,844
                                                                               ------------
TOTAL CURRENT LIABILITIES                                                         1,647,314
                                                                               ------------

     Convertible note payable, net of discount of $14,167                            85,833

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT
     Common stock, $0.001 par value; 50,000,000 shares
        authorized; 18,140,300 shares issued and outstanding                         18,146
     Additional paid-in capital                                                  24,791,621
     Accumulated deficit                                                        (25,178,436)
     Shares to be issued                                                             79,852
                                                                               ------------
TOTAL STOCKHOLDERS' DEFICIT                                                        (288,817)
                                                                               ------------
                                                                               $  1,444,330
                                                                               ============

                    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
                        UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                        2






<PAGE>

                              UWINK, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (UNAUDITED)


                                                         THREE MONTH PERIODS ENDED
                                                       ------------------------------
                                                        MARCH 31,        *MARCH 31,
                                                          2006              2005
                                                       ------------      ------------

NET SALES                                              $     50,347      $    243,221

COST OF SALES                                                34,168           186,124
                                                       ------------      ------------
GROSS PROFIT                                                 16,179            57,097
                                                       ------------      ------------

OPERATING EXPENSES
      Selling, general and administrative expenses          285,292         1,145,781
                                                       ------------      ------------

LOSS FROM OPERATIONS                                       (269,113)       (1,088,684)

OTHER INCOME (EXPENSE)
      Other income                                               --               267
      Debt discount expense                                 (22,500)          (56,251)
      Nominal stock option expense                         (110,034)           43,305
      Gain on settlement of debt                                676             9,727
      Interest expense                                       (7,924)          (70,400)
                                                       ------------      ------------
TOTAL OTHER EXPENSES                                       (139,782)          (73,352)
                                                       ------------      ------------

LOSS BEFORE PROVISION FOR INCOME TAXES                     (408,895)       (1,162,036)

PROVISION FOR INCOME TAXES                                       --                --
                                                       ------------      ------------

NET LOSS                                                   (408,895)       (1,162,036)
                                                       ------------      ------------
NET LOSS ATTRIBUTED TO COMMON STOCKHOLDERS             $   (408,895)     $ (1,162,036)
                                                       ============      ============

NET LOSS PER COMMON SHARE - BASIC & DILUTED            $      (0.02)     $      (0.10)
                                                       ============      ============

WEIGHTED AVERAGE COMMON SHARES
      OUTSTANDING - BASIC                                24,832,670        11,035,872
                                                       ============      ============

                 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
                     UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

* The independent accountants have not reviewed the unaudited consolidated financial
  statements for the three months ended March 31, 2005.

                                          3






<PAGE>

                                    UWINK, INC. AND SUBSIDIARY
                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                                           (UNAUDITED)


                                                                       THREE MONTH PERIODS ENDED
                                                                     ----------------------------
                                                                       MARCH 31,       *MARCH 31,
                                                                         2006             2005
                                                                     -----------      -----------

CASH FLOW FROM OPERATING ACTIVITIES:
   Net loss                                                             (408,895)     $(1,162,036)
   Adjustment to reconcile net loss to net cash
     Provided by (used in) operating activities:
       Amortization of debt discount on convertible note payable          24,000           56,251
       Nominal Stock Option Expense                                      110,034               --
       Depreciation and amortization expense                               2,663           35,905
       Bad debt allowance                                                (13,120)         128,596
       Issuance of common stock for services                                  --          624,434
       Shares to be issued for expense incurred                           11,708               --
       Inventory obsolescence reserve                                    (22,116)              --
   Changes in operating assets and liabilities:
     Accounts receivable                                                   3,766          417,179
     Inventory                                                            53,294               --
     Deposits - inventory                                                     --           33,023
     Deposits - Gameworks                                                     --          615,000
     Deposits                                                              5,000           22,500
     Prepaid expenses and other current assets                           (21,251)          34,977
     Accounts payable                                                    (69,397)          87,974
     Accrued expenses                                                    (10,897)         (25,290)
     Accrued payroll and related benefits                                 80,551          (58,776)
     Advances from Customers                                                  --          (25,000)
                                                                     -----------      -----------
Net cash provided by (used in) operating activities                     (254,660)         784,737
                                                                     -----------      -----------

CASH FLOW FROM INVESTING ACTIVITIES:
   Payment for property and equipment                                     (5,000)              --
                                                                     -----------      -----------

CASH FLOW FROM FINANCING ACTIVITIES:
   Payment of note payable                                              (120,000)              --
   Proceeds from (payments of) advances from related parties,              3,000         (764,156)
   Proceeds from issuance of common stock                              1,500,000           75,000
   Payment of offering costs                                             (81,898)               0
                                                                     -----------      -----------
Net cash provided by (used in) financing activities                    1,301,102         (689,156)
                                                                     -----------      -----------

NET INCREASE IN CASH AND
   CASH EQUIVALENTS                                                    1,041,442           95,581

CASH AND CASH EQUIVALENTS, Beginning of period                            23,759           58,307
                                                                     -----------      -----------

CASH AND CASH EQUIVALENTS, End of period                               1,065,201      $   153,888
                                                                     ===========      ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

   Interest paid                                                           1,778      $    70,400
                                                                     ===========      ===========
   Income taxes paid                                                          --      $        --
                                                                     ===========      ===========

SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES

   Conversion of debt into 305,555 shares of common stock                     --      $   192,500
                                                                     ===========      ===========
   Issuance of common stock for accrued salaries                              --      $    13,750
                                                                     ===========      ===========
   Issuance of common stock for services                                      --      $   624,434
                                                                     ===========      ===========
   Deferred compensation paid in capital stock                                --      $   178,242
                                                                     ===========      ===========

                       THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
                           UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

* The independent accountants have not reviewed the unaudited consolidated financial
  statements for the three months ended March 31, 2005.


                                                4
</TABLE>






<PAGE>

NOTE 1 - BASIS OF PRESENTATION AND GOING CONCERN

The unaudited consolidated financial statements have been prepared by uWink,
Inc. (the "Company"), pursuant to the rules and regulations of the Securities
and Exchange Commission. The information furnished herein reflects all
adjustments (consisting of normal recurring accruals and adjustments) which are,
in the opinion of management, necessary to fairly present the operating results
for the respective periods. Certain information and footnote disclosures
normally present in annual consolidated financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been omitted pursuant to such rules and regulations. These
consolidated financial statements should be read in conjunction with the audited
consolidated financial statements and footnotes for the year ended December 31,
2005 included in the Company's Annual Report on Form 10-KSB. The results of the
three months ended March 31, 2006 are not necessarily indicative of the results
to be expected for the full year ending December 31, 2006.

The accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America, which
contemplate continuation of the Company as a going concern. The Company has
incurred a net loss of $408,895 for the three months ended March 31, 2006, and
as of March 31, 2006, the Company had an accumulated deficit of $25,178,436.
These conditions raise substantial doubt as to the Company's ability to continue
as a going concern. These unaudited consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
These unaudited consolidated financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts, or
amounts and classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.

We expect to need to raise additional amounts of capital through the
sale of our equity or debt securities within the next 3 to 6 months because, as
discussed below, after funding the build out of our prototype restaurant, we do
not expect to have sufficient funds remaining to fund our corporate overhead and
expenses and we do not expect the cash flow from our first restaurant location
to be sufficient to cover our corporate overhead and expenses. As of the date of
this report, we have no commitments for the sale of our securities nor can we
assure you that such funds will be available on commercially reasonable terms,
if at all. Should we be unable to raise the required funds, our ability to
finance our operations and growth will be materially adversely affected.


                                        5






<PAGE>

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of
uWink, Inc. and its subsidiary, uWink California, Inc. The accompanying
consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America. All
inter-company accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Fair Value of Financial Instruments

Statement of financial accounting standard No. 107, Disclosures about fair value
of financial instruments, requires that the Company disclose estimated fair
values of financial instruments. The carrying amounts reported in the statements
of financial position for current assets and current liabilities qualifying as
financial instruments are a reasonable estimate of fair value. For certain of
the Company's financial instruments, including cash and cash equivalents,
accounts receivable, accounts payable, accrued expenses and unearned revenue,
the carrying amounts approximate fair value due to their short maturities. The
amounts shown for convertible debentures and notes payable also approximate fair
value because current interest rates and terms offered to the Company for
similar debt are substantially the same.

Cash and Cash Equivalents

Cash and cash equivalents include cash in hand and cash in time deposits,
certificates of deposit and all highly liquid debt instruments with original
maturities of three months or less.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to concentrations of
credit risk include accounts receivables. Exposure to losses on receivables is
principally dependent on each customer's financial condition. The Company
monitors its exposure for credit losses and maintains allowances for anticipated
losses, as required.

Research and Development

Research and development costs are charged to expense as incurred until
technological feasibility has been established. These costs consist primarily of
salaries and direct payroll related costs.


                                        6






<PAGE>

Software Development Costs

Software development costs related to computer games and network and terminal
operating systems developed by the Company are capitalized in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 86, "Accounting for the
Cost of Computer Software to be Sold, Leased, or Otherwise Marketed."
Capitalization of software development costs begins upon the establishment of
technological feasibility and is discontinued when the product is available for
sale. When the software is a component part of a product, capitalization begins
with the product reaches technological feasibility. The establishment of
technological feasibility and the ongoing assessment for recoverability of
capitalized software development costs require considerable judgment by
management with respect to the completion of all planning, designing, coding and
testing activities necessary to establish that the product can be produced to
meet its design specifications and certain external factors including, but not
limited to, anticipated future gross revenues, estimated economic life, and
changes in software and hardware technologies. Capitalized software development
costs are comprised primarily of salaries and direct payroll related costs and
the purchase of existing software to be used in the Company's products.

Amortization of capitalized software development costs is provided on a
product-by-product basis on the straight-line method over the estimated economic
life of the products (not to exceed three years). Management periodically
compares estimated net realizable value by product with the amount of software
development costs capitalized for that product to ensure the amount capitalized
is not in excess of the amount to be recovered through revenues. Any such excess
of capitalized software development costs to expected net realizable value is
expensed at that time.

Revenue Recognition

The Company recognizes revenue related to software licenses in compliance with
the American Institute of Certified Public Accountants ("AICPA") Statement of
Position No. 97-2, "Software Revenue Recognition." Revenue is recognized when
the Company delivers its touch screen pay-for-play game terminals to its
customer and the Company believes that persuasive evidence of an arrangement
exits and the fees are fixed or determinable. Included with the purchase of the
touch screen terminals are licenses to use the games loaded on the terminals.
The Company delivers the requested terminals for a fixed price either under
agreements with customers or pursuant to purchase orders received from
customers.

The Company does not have any contractual obligations to provide post sale
support of its products. The Company does provide such support on a case by case
basis and the costs of providing such support are expensed as incurred.

Impairment of Long-Lived Assets

Effective January 1, 2002, the Company adopted Statement of Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets" ("SFAS 144"), which addresses financial accounting and reporting for the
impairment or disposal of long-lived assets and supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," and the accounting and reporting provisions of APB Opinion No.


                                       7






<PAGE>

30, "Reporting the Results of Operations for a Disposal of a Segment of a
Business." The Company periodically evaluates the carrying value of long-lived
assets to be held and used in accordance with SFAS 144. SFAS 144 requires
impairment losses to be recorded on long-lived assets used in operations when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets' carrying amounts. In
that event, a loss is recognized based on the amount by which the carrying
amount exceeds the fair market value of the long-lived assets. Loss on
long-lived assets to be disposed of is determined in a similar manner, except
that fair market values are reduced for the cost of disposal.

Advances from Customers

The Company records advances from customers as a liability and recognizes these
amounts as revenue over the period of the related agreement. As of March 31,
2006, advances from customers relating to licensing fees amounted to $24,980.

Returns

The Company does not offer customers a contractual right to return products sold
by the Company. The Company does accept product returns from time to time on a
case by case basis.

Advertising and Marketing Costs

The Company expenses costs of advertising and marketing as incurred.

Income Taxes

The Company utilizes SFAS No. 109, "Accounting for Income Taxes," which requires
the recognition of deferred tax assets and liabilities for the expected future
tax consequences of events that have been included in the financial statements
or tax returns. Under this method, deferred income taxes are recognized for the
tax consequences in future years of differences between the tax bases of assets
and liabilities and their financial reporting amounts at each period end based
on enacted tax laws and statutory tax rates applicable to the periods in which
the differences are expected to affect taxable income. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount
expected to be realized.


NOTE 2 - LOSS PER SHARE

The Company reports loss per share in accordance with SFAS No. 128, "Earnings
per Share." Basic loss per share is computed by dividing loss available to
common shareholders by the weighted average number of common shares available.
Diluted loss per share is computed similar to basic loss per share except that
the denominator is increased to include the number of additional common shares
that would have been outstanding if the potential common shares had been issued
and if the additional common shares were dilutive. The following potential
common shares have been excluded from the computation of diluted net loss per
share for the three months ended March 31, 2006 and 2005 because the effect
would have been anti-dilutive:


                                       8






<PAGE>

<TABLE>
                                                                           2006           2005
                                                                        ----------     ----------
<S>                                                                      <C>            <C>
              Shares to be issued upon conversion
               of convertible note                                              --        225,003
              Stock options issued to employees                          2,264,732      1,197,510
              Stock options issued to consultants and others                    --         28,515
              Warrants issued to consultants and finders                   335,398        213,682
              Warrants issued for financing                              5,049,939      1,507,923
                                                                        ----------     ----------
                                                                         7,650,069      3,172,633
                                                                        ==========     ==========
</TABLE>


NOTE 3 - ACCOUNTS RECEIVABLE

During the three months ended March 31, 2006, gross receivables previously
reserved for were written down by $13,120 and a corresponding reduction was made
to the allowance for doubtful accounts.

Accounts Receivable at March 31, 2006                                $   72,227
Less:  allowance for doubtful accounts                                  (62,873)
                                                                     ----------
                                                                     $    9,354
                                                                     ==========
NOTE 4 - INVENTORY

Inventory has been reviewed for obsolescence and stated at lower of cost or
market as of March 31, 2006, determined on a first in first out basis.

Inventory at March 31, 2006                                          $  419,506
Less: obsolescence reserve                                             (195,339)
                                                                     ----------
                                                                     $  224,167
                                                                     ==========


NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment at March 31, 2006, consists of the following:

                  Computer equipment and related software             $ 169,285
                  Office furniture and equipment                         17,926
                  Leasehold improvements                                 84,849
                  Machinery and equipment                                33,482
                  Construction In Progress                                5,000
                                                                      ----------
                                                                        310,542
                  Less accumulated depreciation and amortization       (289,125)
                                                                      ----------
                                                                      $  21,417
                                                                      ==========


                                       9






<PAGE>

NOTE 6 - CONCENTRATION OF CASH

The Company considers all liquid investments with an original maturity of three
months or less to be cash equivalents. As of March 31, 2006, the Company had
cash and cash equivalent balances totaling $902,199 in financial institutions,
which were in excess of federally insured amounts.

NOTE 7 - DUE TO RELATED PARTIES

Due to related parties consists of amounts advanced to the Company by certain
related parties, specifically its employees and their family members and
directors of the Company.

Due to related parties outstanding at March 31, 2006 consisted of the
following:

Convertible Note payable to Mr. Bradley Rotter, a member of the Company's board
of directors. This Convertible Note is due April 10, 2006, accrues interest at
10%, and is convertible, at the option of Mr. Rotter, into the same securities
issued by the Company in (and on the same terms and conditions pari passu with
the investors in) any offering of its securities that results in gross proceeds
to the Company of at least $3,000,000. Upon conversion, Mr. Rotter will receive
as a conversion bonus additional securities equal to 20% of the aggregate
principal value plus accrued interest converted. The Convertible Note is
mandatorily repayable immediately following the consummation of any offering of
securities that results in gross proceeds to the Company of at least $3,000,000.
Upon such repayment, or upon repayment at maturity, Mr. Rotter will receive
warrants to purchase 200,000 shares of common stock of the Company at an
exercise price of $0.59. A portion of the value of this note was recorded as a
preferential conversion feature and recorded as discount of $40,000 to be
amortized over the term of the note, 6 months. The discount of $40,000 is fully
amortized as of March 31, 2006. (See Note 15 for extension of note).

<TABLE>
<S>                                                                                     <C>
Principal Amount                                                                        $ 200,000

Loan payable to the brother-in-law of the President and CEO issued on August 10,
2005, 6% interest, unsecured, due upon demand                                              39,000

Loan payable to the wife of the President and CEO issued on various dates in
2004 and 2005, 8% interest, unsecured, due upon demand                                     23,500

Loan payable to the Company's Vice President of Operations issued on various
dates in 2004 and 2005, 8% interest unsecured, due upon demand                             60,500
                                                                                        ---------
Total                                                                                   $ 323,000
                                                                                        =========
</TABLE>

                                       10






<PAGE>

NOTE 8 - NOTES PAYABLE

Notes payable outstanding at March 31, 2006 consisted of the following:

<TABLE>
<S>                                                                                     <C>
Loan payable to the Company's former Vice President of Marketing issued on
various dates in 2004 and 2005, 12% interest secured by inventory and
receivables of the Company, due February 15, 2007. The loan payable to the
Company's Vice President of Marketing was reclassified from Due to Related
Parties to Notes Payable on the December 31, 2005 balance sheet following the
termination of the holder's employment with the Company. Accrued interest of
$76,198 outstanding on this note as of March 31, 2006 is included under
accrued expenses on the balance sheet as of March 31, 2006.                             $ 111,844
                                                                                        =========

On March 16, 2006, we repaid a $120,000 convertible note together with $7,000 of
accrued interest.


NOTE 9 - LONG TERM CONVERTIBLE NOTES PAYABLE

Long term convertible notes payable outstanding at March 31, 2006 consisted of
the following:

Convertible Note issued on September 8, 2005. The note is due September 8, 2007,
accrues interest at 10%, and is mandatorily convertible into the same securities
issued by the Company in (and on the same terms and conditions pari passu with
the investors in) any offering of its securities that results in gross proceeds
to the Company of at least $3,000,000. Upon conversion, the holder will receive
as a conversion bonus additional securities equal to 20% of the aggregate
principal value plus accrued interest converted. A portion of the value of this
note was recorded as a preferential conversion feature and recorded as discount
of $20,000 to be amortized over the term of the note, 2 years. $5,833 of this
discount is amortized as of March 31, 2006.

Principal Amount                                                                        $ 100,000
Less Discount                                                                             (14,167)
                                                                                        ---------
                                                                                        $  85,833
                                                                                        =========
</TABLE>


NOTE 10 - EQUITY

Preferred Stock of uWink

The Company has authorized 5,000,000 shares of Preferred Stock. The Board of
Directors is authorized to establish, from the authorized shares of Preferred
Stock, one or more classes or series of shares, to designate each such class and
series, and to fix the rights and preferences of each such class and series.
Without limiting the authority of the Board of Directors granted hereby, each
such class or series of Preferred Stock shall have such voting powers (full or
limited or no voting powers), such preferences and relative, participating,
optional or other special rights, and such qualifications, limitations or
restrictions as shall be stated and expressed in the resolution or resolutions
providing for the issue of such class or series of Preferred Stock as may be
adopted from time to time by the Board of Directors prior to the issuance of any
shares thereof. Fully-paid stock of the Company shall not be liable to any
further call or assessment.


                                       11






<PAGE>

Common Stock

During the three-month period ended March 31, 2006, the Company:

Issued 500,012 shares of common stock valued at $150,003 to 4 investors on
conversion of $125,003 principal amount of convertible notes plus $25,000 of
accrued interest. These shares were part of shares to be issued as of December
31, 2005.

Sold 5,000,000 shares of common stock to 22 investors for gross proceeds of
$1,500,000. The investors in the transaction also received immediately
exercisable, three-year warrants to purchase an aggregate of 2,500,000 shares of
common stock priced at $0.345 per share. Merriman Curhan Ford & Co. acted as
sole placement agent for this transaction. We paid to Merriman Curhan Ford & Co,
as placement agent, a commission of $75,000 (equal to 5% of the aggregate
offering price) plus $5,000 in expenses. Merriman also received an additional
450,000 immediately exercisable, three-year warrants to purchase common stock at
$0.345 per share as part of this fee arrangement. The fair value of the warrants
of $590,524 was calculated using the Black Scholes option pricing model using
the following assumptions: risk free rate of return of 7.5%, volatility of 109%,
expected life of 3 years and dividend yield of 0%. The fair value of the
warrants and the placement agent's commission and expenses were accounted for as
cost of raising equity with a corresponding amount debited to additional paid-in
capital.

Issued 115,000 shares of common stock, valued at $65,550 based on the closing
price of the common stock on the date of the agreement, to Ms. Alissa Bushnell,
daughter of our CEO Nolan Bushnell, in payment for public relations services
provided to the Company during 2005. These shares were part of shares to be
issued as of December 31, 2005.

Issued 50,000 shares of common stock valued at $21,000, based on the closing
price of the common stock on the date of the agreement, to the holder of a
$120,000 convertible note in consideration for the holder extending the maturity
date of the note from November 2005 to March 2006. These shares were part of
shares to be issued as of December 31, 2005.

NOTE 11 - STOCK BASED COMPENSATION

The Company adopted SFAS No. 123-R effective January 1, 2006 using the modified
prospective method. Under this transition method, stock compensation expense
recognized in the first quarter of 2006 includes compensation expense for all
stock-based compensation awards vested during the three-month period ended March
31, 2006, based on the grant-date fair value estimated in accordance with the
provisions of SFAS No. 123-R. There were 2,264,732 stock-based compensation
awards outstanding as of March 31, 2006. During the quarter ended March 31,
2006, the Company granted 400,000 stock options vested over a period of three
years.


                                       12






<PAGE>

Prior to January 1, 2006, the Company measured stock compensation expense using
the intrinsic value method of accounting in accordance with Accounting
Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations (APB No. 25). Thus, expense was
generally not recognized for the Company's employee stock option and purchase
plans.

IMPACT OF ADOPTION OF SFAS NO. 123-R IN Q1 2006
Stock compensation expense measured in accordance with SFAS No. 123-R totaled
approximately $110,034, or $0.0 per basic and diluted share in the first quarter
of 2006. The adoption of SFAS No. 123-R resulted in increased expense of
approximately $107,747 as compared to the stock compensation expense that would
have been recorded pursuant to APB No. 25. In the first quarter of 2005, the
Company recorded $45,333 as the stock based compensation expense.

                                                                        2005
                                                                   ------------
             Net loss as reported                                  $(1,162,036)
             Compensation recognized under APB 25                       45,333
             Compensation recognized under SFAS 123                    (77,137)
                                                                   ------------
             Pro forma                                             $(1,193,840)
                                                                   ============

             Basic and diluted loss per common share as reported   $     (0.10)
             Pro forma                                             $     (0.10)


METHODS OF ESTIMATING FAIR VALUE
Under both SFAS No. 123-R and under the fair value method of accounting under
SFAS No. 123 (i.e., SFAS No. 123 Pro Forma), the fair value of restricted stock
is determined based on the number of shares granted and the quoted price of the
company's common stock on the date of grant. The fair value of stock options is
determined using the Black-Scholes model.

SIGNIFICANT ASSUMPTIONS USED TO ESTIMATE FAIR VALUE
The weighted-average assumptions used in estimating the fair value of stock
options granted during the period, along with the weighted-average grant date
fair values, were as follows.

                        Expected volatility                95%
                        Expected life in years             10 years
                        Risk free interest rate            6.75%
                        Dividend yield                     0%


                                       13






<PAGE>

Under SFAS No 123-R, the Company's expected volatility assumption is based on
the historical volatility of the Company's stock. The expected life assumption
is primarily based on historical exercise patterns and employee post-vesting
termination behavior. The risk-free interest rate for the expected term of the
option is based on the U.S. Treasury yield curve in effect at the time of grant.

Stock compensation expense recognized in the first quarter of 2006 is based on
awards expected to vest, and there were no estimated forfeitures. SFAS No. 123-R
requires forfeitures to be estimated at the time of grant and revised in
subsequent periods, if necessary, if actual forfeitures differ from those
estimates.

The Company assumed the uWink.com, Inc. 2000 Employee Stock Option Plan pursuant
to its acquisition of uWink California. The 2000 Plan provides for the issuance
of up to 681,218 (after giving effect to a 3.15611 reverse stock split in
connection with the acquisition of uWink California) incentive and non-qualified
stock options to employees, officers, directors and consultants of the Company.
Options granted under the 2000 Plan vest as determined by the Board of
Directors, provided that any unexercised options will automatically terminate on
the tenth anniversary of the date of grant.

In 2004, the Company's Board of Directors approved the uWink, Inc. 2004 Stock
Incentive Plan (the "2004 Plan"). The 2004 Plan provides for the issuance of up
to 1,200,000 incentive stock options, non-qualified stock options, restricted
stock awards and performance stock awards to employees, officers, directors, and
consultants of the Company. Awards granted under the 2004 Plan vest as
determined by the Board of Directors, provided that no option or restricted
stock award granted under the 2004 Plan may be exercisable prior to six months
from its date of grant and no option granted under the 2004 Plan may be
exercisable after 10 years from its date of grant.

In 2005, the Company's Board of Directors approved the uWink, Inc. 2005 Stock
Incentive Plan (the "2005 Plan"). The 2005 Plan provides for the issuance of up
to 2,000,000 incentive stock options, non-qualified stock options, restricted
stock awards and performance stock awards to employees, officers, directors, and
consultants of the Company. Awards granted under the 2005 Plan vest as
determined by the Board of Directors, provided that no option or restricted
stock award granted under the 2005 Plan may be exercisable prior to six months
from its date of grant and no option granted under the 2005 Plan may be
exercisable after 10 years from its date of grant.

The following table summarizes the options outstanding as of March 31, 2006.

                                                                     Weighted
                                                   Stock             Average
                                                  Option             Exercise
                                                   Plan               Price
                                                ----------         ------------
Balance December 31, 2005                        2,400,411          $  0.88
Granted                                            400,000          $  0.30
Exercised                                               --               --
Canceled                                           535,679          $  0.92
Balance March 31, 2006                           2,264,732          $  0.76
Exercisable March 31, 2006                         548,941          $  1.32

The weighted-average assumptions used in estimating the fair value of stock
options granted during the period, along with the weighted-average grant date
fair values, were as follows.

                       Expected volatility                95%
                       Expected life in years             10 years
                       Risk free interest rate            6.75%
                       Dividend yield                     0%

The weighted average remaining contractual life of options outstanding issued
under the plans is 8.5 year at March 31, 2006. The exercise prices for the
options outstanding under the plans at March 31, 2006 ranged from $0.30 to
$3.16.

The Company recognized expense of $110,034 and $45,333 for the three month
periods ended March 31, 2006 and 2005.


                                       14






<PAGE>

Stock Warrants

The Company has issued warrants to consultants and finders for services rendered
and to investors in connection with raising capital.

The following table summarizes the warrants outstanding as of March 31, 2006.

                                                                   Weighted-
                                                                   Average
                                                                   Exercise
                                                     Warrants       Price
                                                     ---------     -------
Balance, December 31, 2005                           2,435,337     $  3.09
Granted                                              2,950,000     $  0.35
Exercised                                                   --          --
Cancelled                                                   --          --
Balance March 31, 2006                               5,385,337     $  0.63
Exercisable March 31, 2006                           5,385,337     $  0.63

During the three month period ended March 31, 2006, the Company issued 2,950,000
immediately exercisable warrants at an exercise price of $0.345 to 22 investors
and a placement agent.

The fair value of the warrants of $590,524 was calculated using the Black
Scholes option pricing model using the following assumptions: risk free rate of
return of 7.5%, volatility of 109%, expected life of 3 years and dividend yield
of 0%. The fair value of the warrants and the placement agent's commission and
expenses were accounted for as cost of raising equity with a corresponding
amount debited to additional paid-in capital.


NOTE 12 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2005, the EITF reached consensus on Issue No. 05-6, Determining the
Amortization Period for Leasehold Improvements ("EITF 05-6"). EITF 05-6 provides
guidance on determining the amortization period for leasehold improvements
acquired in a business combination or acquired subsequent to lease inception.
The guidance in EITF 05-6 will be applied prospectively and is effective for
periods beginning after June 29, 2005. EITF 05-6 is not expected to have a
material effect on the Company's consolidated financial position or results of
operations.

In February 2006, FASB issued SFAS No. 155, "Accounting for Certain Hybrid
Financial Instruments". SFAS No. 155 amends SFAS No 133, "Accounting for
Derivative Instruments and Hedging Activities", and SFAF No. 140, "Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities". SFAS No. 155, permits fair value remeasurement for any hybrid
financial instrument that contains an embedded derivative that otherwise would
require bifurcation, clarifies which interest-only strips and principal-only
strips are not subject to the requirements of SFAS No. 133, establishes a
requirement to evaluate interest in securitized financial assets to identify
interests that are freestanding derivatives or that are hybrid financial
instruments that contain an embedded derivative requiring bifurcation, clarifies
that concentrations of credit risk in the form of subordination are not embedded
derivatives, and amends SFAS No. 140 to eliminate the prohibition on the
qualifying special-purpose entity from holding a derivative financial instrument
that pertains to a beneficial interest other than another derivative financial
instrument. This statement is effective for all financial instruments acquired
or issued after the beginning of the Company's first fiscal year that begins
after September 15, 2006.


                                       15






<PAGE>

In March 2006, FASB issued SFAS 156 "Accounting for Servicing of Financial
Assets" this Statement amends FASB Statement No. 140, ACCOUNTING FOR TRANSFERS
AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENTS OF LIABILITIES, with
respect to the accounting for separately recognized servicing assets and
servicing liabilities. This Statement:

    1.   Requires an entity to recognize a servicing asset or servicing
         liability each time it undertakes an obligation to service a financial
         asset by entering into a servicing contract.

    2.   Requires all separately recognized servicing assets and servicing
         liabilities to be initially measured at fair value, if practicable.

    3.   Permits an entity to choose "Amortization method" or "Fair value
         measurement method" for each class of separately recognized servicing
         assets and servicing liabilities.

    4.   At its initial adoption, permits a one-time reclassification of
         available-for-sale securities to trading securities by entities with
         recognized servicing rights, without calling into question the
         treatment of other available-for-sale securities under Statement 115,
         provided that the available-for-sale securities are identified in some
         manner as offsetting the entity's exposure to changes in fair value of
         servicing assets or servicing liabilities that a servicer elects to
         subsequently measure at fair value.

    5.   Requires separate presentation of servicing assets and servicing
         liabilities subsequently measured at fair value in the statement of
         financial position and additional disclosures for all separately
         recognized servicing assets and servicing liabilities.

This Statement is effective as of the beginning of the Company's first fiscal
year that begins after September 15, 2006. Management believes that this
statement will not have a significant impact on the financial statements.


NOTE 14 - COMMITMENTS AND CONTINGENCIES

Other Litigation

In the ordinary course of business, the Company is generally subject to claims,
complaints, and legal actions. As of March 31, 2006, management
believes that the Company is not a party to any action which would have a
material impact on its financial condition, operations, or cash flows.


                                       16






<PAGE>

Leases

The Company's offices are located in Los Angeles, California and consist of
8,500 square feet of office and warehouse space leased at the rate of $10,200
per month. The term of this lease, which commenced May 1, 2005, is three years.
The Company is currently attempting to sublease all or part of the space, and
relocate to approximately 2,500 square feet. The Company incurred rent expense
of $30,615 and $29,903 for the three month periods ended March 31, 2006 and
2005, respectively.

Effective as of April 10, 2006, we secured an approximately 10 year lease on the
planned location for our first uWink Bistro in Woodland Hills, California,
located at 6100 Topanga Canyon Boulevard, Woodland Hills, California 91367. The
underlying lease agreement between Nolan Bushnell, our CEO, in his personal
capacity, and Promenade LP, the landlord, is as of February 3, 2006. Effective
as of April 10, 2006, the Company, Mr. Bushnell and Promenade L.P. entered into
an assignment agreement pursuant to which Mr. Bushnell assigned his rights under
the lease to the Company (but without relieving Mr. Bushnell of his liability
for the performance of the lease). In connection with this assignment, we agreed
with Mr. Bushnell that, should we fail to perform under the lease and Mr.
Bushnell become obligated under the lease as a result, Mr. Bushnell will have
the right to operate the leased premises in order to satisfy his obligations
under the lease.

This location consists of 5,340 square feet. The minimum annual rent payments
under the lease are $176,220 from rental commencement through January 31, 2009;
$181,507 from February 1, 2009 to January 31, 2010; $186,952 from February 1,
2010 to January 31, 2011; $192,560 from February 1, 2011 to January 31, 2012;
$198,337 from February 1, 2012 to January 31, 2013; $204,287 from February 1,
2013 to January 31, 2014; $210,416 from February 1, 2014 to January 31, 2015;
and $216,728 from February 1, 2015 to January 31, 2016.

If our gross sales from this location exceed certain annual thresholds, we are
obligated to pay additional percentage rent over and above the minimum annual
rent described above. Our percentage rent obligation is equal to 5% of gross
sales in excess of the following thresholds:

         Rental commencement to January 31, 2009: $3,524,400;
         February 1, 2009 to January 31, 2010: $3,630,132;
         February 1, 2010 to January 31, 2011: $3,739,036;
         February 1, 2011 to January 31, 2012: $3,851,207;
         February 1, 2012 to January 31, 2013: $3,966,743;
         February 1, 2013 to January 31, 2014: $4,085,745;
         February 1, 2014 to January 31, 2015: $4,208,318; and
         February 1, 2015 to January 31, 2016: $4,334,567.

Our obligation to pay rent under this lease commences on the earlier of the date
we open for business and October 5, 2006.


                                       17






<PAGE>

NOTE 15 - SUBSEQUENT EVENTS

On April 19, 2006, we entered into a letter agreement (the "Letter Agreement")
with Mr. Bradley Rotter, a member of our board of directors, in respect of the
$200,000 Convertible Promissory Note, dated October 10, 2005 and due April 10,
2006, payable to Mr. Rotter (the "2005 Note"). Pursuant to the Letter Agreement,
effective April 19, 2006, we:

         1.       Repaid $100,000 of the principal amount of, together with
                  $10,356 of accrued interest on, the 2005 Note;

         2.       Issued immediately exercisable, 3 year warrants to Mr. Rotter
                  to purchase 100,000 shares of common stock at an exercise
                  price of $0.345 per share; and

         3.       Issued a new convertible note (the "2006 Note") payable to Mr.
                  Rotter, in respect of the unpaid balance of $100,000 on the
                  2005 Note. This note is due October 19, 2006, accrues interest
                  at 10%, and is convertible, at the option of Mr. Rotter, into
                  the same securities issued by the Company in (and on the same
                  terms and conditions pari passu with the investors in) any
                  offering of its securities that results in gross proceeds to
                  the Company of at least $3,000,000. Upon conversion, Mr.
                  Rotter will receive as a conversion bonus additional
                  securities equal to 20% of the aggregate principal value plus
                  accrued interest converted. The 2006 Note is mandatorily
                  repayable immediately following the consummation of any
                  offering of securities that results in gross proceeds to the
                  Company of at least $3,000,000. Upon such repayment, or upon
                  repayment at maturity, Mr. Rotter will receive warrants to
                  purchase 100,000 shares of common stock of the Company at an
                  exercise price of $0.345.


                                       18






<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

GENERAL

The following discussion and analysis should be read in conjunction with our
consolidated financial statements and related footnotes for the year ended
December 31, 2005 included in our Annual Report on Form 10-KSB. The discussion
of results, causes and trends should not be construed to imply any conclusion
that such results or trends will necessarily continue in the future.

OVERVIEW

uWink, Inc. ("uWink", "we", "us", or the "Company") is a digital entertainment
company, based in Los Angeles, California, that designs and develops interactive
entertainment software and platforms for restaurants, bars, and mobile devices.

Over several years of operation, we have invested substantial time and capital
in the construction of a uniform development platform. We have used this
platform to develop over 70 short-form video games (the "uWink Game Library")
and interactive entertainment and vending products. We believe our software and
hardware components can be used in multiple products, thereby reducing the cost
of development, the time to market, and the integration of existing software
into additional hardware applications.

For the past two years we have derived our revenue from the sale of our SNAP!
countertop game platforms (and its predecessor platforms) and the Bear Shop (aka
Boxter Bear, hereinafter "Bear Shop") entertainment vending platform, products
the entertainment vending platform dispenses, such as plush bears and related
clothing, and software licensing fees.

SNAP!, our countertop video game terminal, enables customers to play over 70
short form video games from the uWink Game Library.

Our entertainment vending platform, Bear Shop, offers animated point of purchase
vending. The Bear Shop product allows customers to pick outfits and accessories
for a plush/stuffed bear using an interactive touch screen resulting in
thousands of combinations. The foundation of the Bear Shop product is an
interactive entertainment-vending platform that we believe can be leveraged to
create various vending solutions.

We have made a strategic decision to reposition the Company as an entertainment
restaurant company. As a result, we are winding down our SNAP! and Bear Shop
manufacturing and sales operations and we have decided not to enter the 2006
marketing cycle of tradeshows and advertising for SNAP! and Bear Shop. This
decision also allowed us to reduce staff and liquidate inventory and
product-related receivables. We believe that the restaurant project is the most
cost effective way to monetize our investment in technology. We are currently
seeking to license our SNAP! and Bear Shop intellectual property to 3rd party
manufacturers in exchange for licensing fees.


                                       19






<PAGE>

Going forward, our strategy is to leverage our network and entertainment
software assets, including the uWink Game Library, to develop an interactive
entertainment restaurant concept, the uWink Bistro. uWink Bistro is designed to
allow customers to order food, drinks, and games/media via touch screens at the
table. This concept integrates food and our interactive entertainment software
to provide what we believe to be a new entertainment dining experience. We are
currently planning on opening our first uWink Bistro in the Los Angeles,
California area in the summer of 2006. We have not yet generated any revenue
from the uWink Bistro.

Prominent features of the uWink Bistro concept are expected to include:

         AT-THE-TABLE TOUCH SCREEN ORDERING. We plan to offer our guests the
         ability to order food and drinks via touch screens at the table, rather
         than from a waitperson. We are planning that orders from the table will
         go straight to the kitchen and that, as the food is ready, it will be
         delivered by runners from the kitchen to the table.

         AT-THE-TABLE ENTERTAINMENT. We expect to provide our guests with
         at-the-table entertainment, including games from the uWink Game
         Library, video, cartoons, and film trailers, via touch screen
         terminals.

         DISTINCTIVE CASUAL DINING EXPERIENCE AND VALUE PROPOSITION. We are
         aiming our concept to compete in the "casual dining" segment of the
         restaurant market. We believe our concept will combine some of the best
         elements of the casual dining market, including freshly prepared food
         with generous portions at attractive price points and quick turnaround
         times, with innovative at-the-table ordering and entertainment to
         create a new experience for casual dining patrons. We are targeting our
         average check to be $10 to $15 per guest, excluding alcoholic
         beverages; at this price point we believe that we will provide an
         attractive and entertaining value proposition for casual diners.

Led by Nolan Bushnell, our Chairman and Chief Executive officer and the founder
of both Atari and Chuck E. Cheese, and our Director of Restaurant Operations (on
a consulting basis), John Kaufman, former Vice President of Operations at
California Pizza Kitchen, we believe we have assembled a management team with
the vision and experience to successfully execute on the uWink Bistro concept.


                                       20






<PAGE>

We plan to open our first restaurant in Woodland Hills, California (Los Angeles
area) at the Westfield Promenade Shopping Center in the summer of 2006. This
location is approximately 5300 square feet and has seating for approximately 160
guests, excluding patio seats. We have secured an approximately 10 year lease on
this location.

On March 3, 2006, we raised gross proceeds of $1,500,000 via the private
placement of 5,000,000 shares of common stock to 22 investors. The investors in
the transaction also received immediately exercisable, three-year warrants to
purchase an aggregate of 2,500,000 shares of common stock priced at $0.345 per
share. Merriman Curhan Ford & Co. acted as sole placement agent for this
transaction. We paid to Merriman Curhan Ford & Co, as placement agent, a
commission of $75,000 (equal to 5% of the aggregate offering price) plus $5,000
in expenses. Merriman also received an additional 450,000 immediately
exercisable, three-year warrants to purchase common stock at $0.345 per share as
part of this fee arrangement.

We plan to use the net proceeds from this private placement to fund the capital
expenditures, and provide the operating capital, required to open our first
uWink Bistro.

We currently expect that we will be required to spend approximately
$500,000 to $700,000 over the next 3 months to build out and equip the Woodland
Hills location. To staff the restaurant we expect to hire, in the next 2 to 3
months, an executive chef, 3 managers and 35-50 full-time and part-time
non-managerial restaurant staff.

We expect to need to raise additional amounts of capital through the
sale of our equity or debt securities within the next 3 to 6 months because,
after funding the build out of the restaurant, we do not expect to have
sufficient funds remaining to fund our corporate overhead and expenses and we do
not expect the cash flow from the Woodland Hills location to be sufficient to
cover our corporate overhead and expenses. As of the date of this report, we
have no commitments for the sale of our securities nor can we assure you that
such funds will be available on commercially reasonable terms, if at all. Should
we be unable to raise the required funds, our ability to finance our operations
and growth will be materially adversely affected.

Our near term strategy is to prove our concept at the Woodland Hills location
within the next 6 to 9 months and then raise additional capital necessary to
fund our operations and to open 2 to 3 additional company-owned and/or managed
restaurants within the next 12 to 18 months. We are currently in discussions
with a number of potential joint venture partners that would provide the capital
and real estate for additional restaurants that would be managed, but not owned,
by the Company.

Our longer term growth strategy is to open additional company-owned restaurants
in new markets and to franchise our concept, focusing on multiple-unit area
development agreements with experienced operators. We are targeting a mix of
one-third company-owned restaurants and two-thirds franchised restaurants. We
will also seek to generate additional revenue through the sale of media
equipment to franchisees.


                                       21






<PAGE>

BASIS OF PRESENTATION

The accompanying consolidated financial statements, included elsewhere in this
Quarterly Report on Form 10-QSB, have been prepared in conformity with
accounting principles generally accepted in the United States of America, which
contemplate continuation as a going concern. We have incurred a net loss of
$408,895 for the three months ended March 31, 2006, and as of March 31, 2006, we
had an accumulated deficit of $25,178,436. These conditions raise substantial
doubt as to our ability to continue as a going concern. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty. The consolidated financial statements do not
include any adjustments relating to the recoverability and classification of
recorded asset amounts, or amounts and classification of liabilities that might
be necessary should we be unable to continue as a going concern.

RESULTS OF OPERATIONS

Three months ended March 31, 2006 compared with the three months ended March 31,
2005.

Net sales for the three months ended March 31, 2006 decreased by $192,874 (79%)
from $243,221 for the three months ended March 31, 2005 to $50,347 for the three
months ended March 31, 2006. The decrease in revenue is largely attributable to
our decision to wind down our SNAP! and Bear Shop manufacturing and sales
operations and reposition the Company as an entertainment restaurant company.

Cost of sales for the three months ended March 31, 2006 decreased by $151,956
(82%) from $186,124 for the three months ended March 31, 2005 to $34,168 for the
three months ended March 31, 2006. The decrease in cost of sales is attributable
to lower SNAP! and Bear Shop sales volume resulting from our decision to wind
down our SNAP! and Bear Shop operations.

Our gross profit percentage was 32% for the three months ended March 31, 2006
compared to 23% for the three months ended March 31, 2005. The increase in the
gross profit percentage is primarily attributable to the disproportionate effect
of the sale of one Bear Shop machine and one SNAP! machine at full price, in
light of our low level of revenue in the first quarter of 2006, and reversing
the reserve against those items sold at the normal selling price.

Selling, general and administrative expenses for the three months ended March
31, 2006 decreased by $860,489 (75%) from $1,145,781 for the three months ended
March 31, 2005 to $285,292 for the three months ended March 31, 2006.
The decrease is attributable generally to lower levels of operations resulting
from our decision to wind down our SNAP! and Bear Shop operations and an
approximately $500,000 reduction in financial consulting expense from $508,000
in the first quarter of 2005 to $16,000 in the first quarter of 2006. In the
first quarter of 2005 we issued approximately $450,000 worth of shares of our
common stock in exchange for investor relations services. In addition, legal
expenses fell by approximately $77,000 from $77,279 in the first quarter of 2005
to $380 in the first quarter of 2006. The higher level of legal fees in the
first quarter of 2005 relates to legal fees in connection with our pursuit of
the assets of Sega Gameworks out of bankruptcy.


                                       22






<PAGE>

As a result, our loss from operations for the three months ended March 31, 2006
was reduced by $819,571 (75%) to $269,113, from a loss of $1,088,684 for the
three months ended March 31, 2005.

Total other expense for the three months ended March 31, 2006 increased by
$66,430 (91%) from $73,352 for the three months ended March 31, 2005 to $139,782
for the three months ended March 31, 2006. This increase was primarily
attributable to higher nominal stock option expense resulting from the expensing
of options granted to employees based on the fair market value of the options
offset by lower debt discount amortization and an approximately $62,000
reduction in interest expense from $70,400 for the first quarter of 2005 to
$7,924 for the first quarter of 2006. The reduction in interest expense is
attributable to lower levels of debt in 2006 resulting from the conversion and
repayment of convertible notes in late 2005 and early 2006 and the repayment in
2005 of amounts borrowed to fund our pursuit of the assets of Sega Gameworks out
of bankruptcy.

As a result, our net loss for the three months ended March 31, 2006 was reduced
by $753,141 (65%) to $408,895, from a net loss of $1,162,036 for the three
months ended March 31, 2005.


LIQUIDITY AND CASH RESOURCES

As of March 31, 2006, our cash position was $1,065,201 and we had negative
working capital of $224,401. Working capital represents our current assets minus
our current liabilities and is related to our ability to pay short term debt as
it becomes due.

On March 3, 2006, we raised gross proceeds of $1,500,000 via the private
placement of 5,000,000 shares of common stock to 22 investors. The investors in
the transaction also received immediately exercisable, three-year warrants to
purchase an aggregate of 2,500,000 shares of common stock priced at $0.345 per
share. Merriman Curhan Ford & Co. acted as sole placement agent for this
transaction. We paid to Merriman Curhan Ford & Co, as placement agent, a
commission of $75,000 (equal to 5% of the aggregate offering price) plus $5,000
in expenses. Merriman also received an additional 450,000 immediately
exercisable, three-year warrants to purchase common stock at $0.345 per share as
part of this fee arrangement. We plan to use the net proceeds from this private
placement to fund the capital expenditures, and provide the operating capital,
required to open our first uWink Bistro.

On March 16, 2006, we repaid a $120,000 convertible note together with $7,000 of
accrued interest.

We expect to need to raise additional amounts of capital through the
sale of our equity or debt securities within the next 3 to 6 months because,
after funding the build out of the restaurant, we do not expect to have
sufficient funds remaining to fund our corporate overhead and expenses and we do
not expect the cash flow from the Woodland Hills location to be sufficient to
cover our corporate overhead and expenses. As of the date of this report, we
have no commitments for the sale of our securities nor can we assure you that
such funds will be available on commercially reasonable terms, if at all. Should
we be unable to raise the required funds, our ability to finance our operations
and growth will be materially adversely affected.


                                       23






<PAGE>

CASH POSITION AND USES OF CASH

Our cash and cash equivalents position as of March 31, 2006 was $1,065,201.

During the three months ended March 31, 2006, net cash used in operations was
$254,660, as compared to providing cash of $784,737 for the three months ended
March 31, 2005. The decrease is primarily attributable to a $624,434 reduction
in the issuance of common stock to pay for services in the first quarter of 2006
as compared to the first quarter of 2005; a $413,413 reduction in cash provided
by accounts receivable in the first quarter of 2006 as compared to the first
quarter of 2005; and the collection in the first quarter of 2005 of a $615,000
deposit in connection with our pursuit of the assets of Sega Gameworks out of
bankruptcy.

During the three months ended March 31, 2006, we used $5,000 in our investing
activities. During the three months ended March 31, 2005, we used no cash in
investing activities.

During the three months ended March 31, 2006, our financing activities provided
cash in the amount of $1,301,102 as compared to using cash of $689,156 for the
three months ended March 31, 2005. The increase is primarily due to a $1,425,000
increase in proceeds from the issuance of common stock in the first quarter of
2006 as compared to the first quarter of 2005, and lower levels of debt
repayment in the first quarter of 2006 as compared to the first quarter of 2005.
In the first quarter of 2005 we repaid $615,000 borrowed in 2004 relating to our
pursuit of the assets of Sega Gameworks out of bankruptcy.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

ESTIMATES - Our discussion and analysis of our consolidated financial condition
and results of operations are based upon our consolidated financials statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of these consolidated
financial statements requires us to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses, and related
disclosures of contingent assets and liabilities. On an ongoing basis, we
evaluate our estimates, including those related to allowance for doubtful
accounts, inventory reserves, impairment of long-lived assets and intangibles,
and value of our stock and options/warrants issued for services. We base our
estimates on historical experience and on various other assumptions that we
believe to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying value of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions; however, we believe
that our estimates, including those for the above-described items, are
reasonable.


                                       24






<PAGE>

Software Development Costs

Software development costs related to computer games and network and terminal
operating systems developed by the Company are capitalized in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 86, "Accounting for the
Cost of Computer Software to be Sold, Leased, or Otherwise Marketed."
Capitalization of software development costs begins upon the establishment of
technological feasibility and is discontinued when the product is available for
sale. When the software is a component part of a product, capitalization begins
when the product reaches technological feasibility. The establishment of
technological feasibility and the ongoing assessment for recoverability of
capitalized software development costs require considerable judgment by
management with respect to the completion of all planning, designing, coding and
testing activities necessary to establish that the product can be produced to
meet its design specifications and certain external factors including, but not
limited to, anticipated future gross revenues, estimated economic life, and
changes in software and hardware technologies. Capitalized software development
costs are comprised primarily of salaries and direct payroll related costs and
the purchase of existing software to be used in the Company's products.

Amortization of capitalized software development costs is provided on a
product-by-product basis on the straight-line method over the estimated economic
life of the products (not to exceed three years). Management periodically
compares estimated net realizable value by product with the amount of software
development costs capitalized for that product to ensure the amount capitalized
is not in excess of the amount to be recovered through revenues. Any such excess
of capitalized software development costs to expected net realizable value is
expensed at that time.

Revenue Recognition

The Company recognizes revenue related to software licenses in compliance with
the American Institute of Certified Public Accountants ("AICPA") Statement of
Position No. 97-2, "Software Revenue Recognition." Revenue is recognized when
the Company delivers its touch screen pay-for-play game terminals to its
customer and the Company believes that persuasive evidence of an arrangement
exits and the fees are fixed or determinable. Included with the purchase of the
touch screen terminals are licenses to use the games loaded on the terminals.
The Company delivers the requested terminals for a fixed price either under
agreements with customers or pursuant to purchase orders received from
customers.

The Company does not have any contractual obligations to provide post sale
support of its products. The Company does provide such support on a case by case
basis and the costs of providing such support are expensed as incurred.


                                       25






<PAGE>

FORWARD-LOOKING STATEMENTS

In this report we make a number of statements, referred to as "FORWARD-LOOKING
STATEMENTS", which are intended to convey our expectations or predictions
regarding the occurrence of possible future events or the existence of trends
and factors that may impact our future plans and operating results. These
forward-looking statements are derived, in part, from various assumptions and
analyses we have made in the context of our current business plan and
information currently available to us and in light of our experience and
perceptions of historical trends, current conditions and expected future
developments and other factors we believe to be appropriate in the
circumstances. You can generally identify forward-looking statements through
words and phrases such as "SEEK", "ANTICIPATE", "BELIEVE", "ESTIMATE", "EXPECT",
"INTEND", "PLAN", "BUDGET", "PROJECT", "MAY BE", "MAY CONTINUE", "MAY LIKELY
RESULT", and similar expressions. When reading any forward looking statement you
should remain mindful that all forward-looking statements are inherently
uncertain as they are based on current expectations and assumptions concerning
future events or future performance of our company, and that actual results or
developments may vary substantially from those expected as expressed in or
implied by that statement for a number of reasons or factors, including those
relating to:

         o        whether or not markets for our products and services develop
                  and, if they do develop, the pace at which they develop;

         o        our ability to attract the qualified personnel to implement
                  our growth strategies;

         o        the accuracy of our estimates and projections;

         o        our ability to fund our short-term and long-term financing
                  needs;

         o        changes in our business plan and corporate strategies; and

         o        other risks and uncertainties discussed in greater detail
                  under "Risk Factors" in our Annual Report on Form 10-KSB for
                  the year ended December 31, 2005.

Each forward-looking statement should be read in context with, and with an
understanding of, the various other disclosures concerning our company and our
business made elsewhere in this report as well as other pubic reports filed with
the United States Securities and Exchange Commission (the "SEC"). You should not
place undue reliance on any forward-looking statement as a prediction of actual
results or developments. We are not obligated to update or revise any
forward-looking statement contained in this report to reflect new events or
circumstances unless and to the extent required by applicable law.


                                       26






<PAGE>

ITEM 3.    CONTROLS AND PROCEDURES

Under the supervision and with the participation of its senior management,
including the Chief Executive Officer, the Company conducted an evaluation of
the effectiveness of the design and operation of its disclosure controls and
procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act,
as of the end of the period covered by this report (the "Evaluation Date").
Based on this evaluation, the Company's CEO concluded as of the Evaluation Date
that certain of the Company's disclosure controls and procedures were not
effective, as evidenced by the following failures:

Failure to timely file the financial statements and proforma financial
information in connection with our acquisition of our wholly owned subsidiary
uWink California. This filing was due on February 19, 2004 and was not made
until May 18, 2004.

Failure to file a report on Form 8-K regarding our sale, on May 15, 2005, of
533,458 shares of common stock for cash to 6 investors for $293,402.

Failure to file a report on Form 8-K regarding the appointment of Bradley Rotter
to our Board of Directors effective November 11, 2005.

As set forth in our Annual Report on Form 10-KSB for the fiscal year ended
December 31, 2005 and our Current Report on Form 8-K filed on May 2, 2006,
during a re-audit of our 2004 financial results we discovered a number of
accounting errors that required the restatement of our financial statements for
the fiscal year ended December 31, 2004.

Changes in Internal Control Over Financial Reporting

The Company intends to address the ineffective controls and procedures, and to
take appropriate action to correct the deficiencies identified. The Board of
Directors is performing oversight of the implementation of enhancements and
improvements to its internal controls.

Limitations on Controls

Management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will prevent or detect all error and
fraud. Any control system, no matter how well designed and operated, is based
upon certain assumptions and can provide only reasonable, not absolute,
assurance that its objectives will be met. Further, no evaluation of controls
can provide absolute assurance that misstatements due to error or fraud will not
occur or that all control issues and instances of fraud, if any, within the
Company have been detected.


                                       27






<PAGE>

PART II.   OTHER INFORMATION


ITEM 2.  CHANGES IN SECURITIES AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
         SECURITIES

During the three months ended March 31, 2006, we sold or issued unregistered
shares of our equity securities in the following transactions:

On January 10, 2006, we issued 500,012 shares of common stock valued at $150,003
to 4 investors on conversion of $125,003 principal amount of convertible notes
plus $25,000 of accrued interest. These issuances were made pursuant to the
exemption from registration provided by SEC Rule 506 promulgated under
Regulation D of the Securities Act of 1933.

On March 3, 2006, we sold 5,000,000 shares of common stock to 22 investors for
gross proceeds of $1,500,000. The investors in the transaction also received
immediately exercisable, three-year warrants to purchase an aggregate of
2,500,000 shares of common stock priced at $0.345 per share. Merriman Curhan
Ford & Co. acted as sole placement agent for this transaction. We paid to
Merriman Curhan Ford & Co, as placement agent, a commission of $75,000 (equal to
5% of the aggregate offering price) plus $5,000 in expenses. Merriman also
received an additional 450,000 immediately exercisable, three-year warrants to
purchase common stock at $0.345 per share as part of this fee arrangement. The
fair value of the warrants of $590,524 was calculated using the Black Scholes
option pricing model using the following assumptions: risk free rate of return
of 7.5%, volatility of 109%, expected life of 3 years and dividend yield of 0%.
The fair value of the warrants and the placement agent's commission and expenses
were accounted for as cost of raising equity with a corresponding amount debited
to additional paid-in capital. These issuances were made pursuant to the
exemption from registration provided by SEC Rule 506 promulgated under
Regulation D of the Securities Act of 1933.

On March 31, 2006, we issued 115,000 shares of common stock, valued at $65,550
based on the closing price of the common stock on the date of the agreement, to
Ms. Alissa Bushnell, daughter of our CEO Nolan Bushnell, in payment for public
relations services provided to the Company during 2005. This issuance was made
pursuant to the exemption from registration provided by Section 4(2) of the
Securities Act of 1933.

On March 31, 2006, we issued 50,000 shares of common stock valued at $21,000,
based on the closing price of the common stock on the date of the agreement, to
the holder of a $120,000 convertible note in consideration for the holder
extending the maturity date of the note from November 2005 to March 2006. This
issuance was made pursuant to the exemption from registration provided by SEC
Rule 506 promulgated under Regulation D of the Securities Act of 1933.


                                       28






<PAGE>

ITEM 6.  EXHIBITS

(a) Exhibits

      REGULATION
      S-B NUMBER                           EXHIBIT


         4.1      Form of uWink, Inc. Warrant, dated March 3, 2006 (incorporated
                  by reference to the Company's Current Report on Form 8-K filed
                  on March 9, 2006).

         10.1     Securities Purchase Agreement dated March 3, 2006 between
                  uWink, Inc. and Investors (incorporated by reference to the
                  Company's Current Report on Form 8-K filed on March 9, 2006).

         31.1     Rule 13a-14(a) Certification of Chief Executive Officer.

         31.2     Rule 13a-14(a) Certification of Chief Financial Officer and
                  Chief Accounting Officer.

         32.1     Certification of Chief Executive Officer pursuant to 18 U.S.C.
                  Section 1350, as Adopted Pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

         32.2     Certification of Chief Financial Officer and Chief Accounting
                  Officer pursuant to 18 U.S.C. Section 1350, as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


                                   SIGNATURES

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

                                                   UWINK, INC.


May 15, 2006                                       By: /s/ NOLAN K. BUSHNELL
                                                       ------------------------
                                                       Nolan K. Bushnell
                                                       Chief Executive Officer


                                                   By: /s/ PETER F. WILKNISS
                                                       ------------------------
                                                       Peter F. Wilkniss
                                                       Chief Financial Officer
                                                       Chief Accounting Officer


                                       29