<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, 2004

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

      For the transition period from ________________ to _______________

                                    000-29873
                            (Commission file number)

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

               UTAH                                   86-0412110
   (State or other jurisdiction                      (IRS Employer
 of incorporation or organization)                Identification No.)

              5443 BEETHOVEN STREET, 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 [] No [X]

The  number  of  shares  of  common  stock  outstanding  as of May 14,  2004 was
9,256,008.

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


<PAGE>

                                   UWINK, INC.
                                      INDEX

<TABLE>
<CAPTION>
                                                                               Page
                                                                              NUMBER
                                                                              ------
<S>                                                                              <C>
PART I.        FINANCIAL INFORMATION                                             2

Item 1.        Financial Statements                                              2

               Consolidated Balance Sheet as of March 31, 2004 (unaudited)       2

               Consolidated Statements of Operations for the
               three months ended March 31, 2004 and 2003 (unaudited)            3

               Consolidated Statements of Cash Flows for the
               three months ended March 31, 2004 and 2003 (unaudited)            4

               Notes to Consolidated Financial Statements (unaudited)            5

Item 2.        Management's Discussion and Analysis or Plan of Operations        9

Item 3.        Controls and Procedures                                          13

PART II.       OTHER INFORMATION                                                14


Item 2.        Change in Securities and Small Business Issuer
               Purchases of Equity Securities                                   14

Item 4.        Submission of Matters to a Vote of Security Holders              14


Item 6.        Exhibits and Reports on Form 8-K                                 14

SIGNATURES                                                                      15
</TABLE>

<PAGE>

PART I.        FINANCIAL INFORMATION

ITEM 1.        FINANCIAL STATEMENTS


                 UWINK, INC. AND SUBSIDIARY
                 CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                                           MARCH
                                                                                          31, 2004
                                                                                 ---------------------------
                                                                                        (unaudited)
          ASSETS

CURRENT ASSETS
<S>                                                                              <C>
       Cash and cash equivalents                                                 $                1,140,412
       Account receivable, net of allowance for doubtful accounts of $0                             290,790
       Inventory, net of obsolescence reserve of $50,000                                            304,897
       Prepaid expenses and other current assets                                                     62,714

                                                                                 ---------------------------
TOTAL CURRENT ASSETS                                                                              1,798,813

PROPERTY AND EQUIPMENT, net of accumulated
       depreciation of $352,672                                                                     165,761
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, net of
       accumulated amortization of $751,650                                                          28,972
                                                                                 ---------------------------
TOTAL ASSETS                                                                     $                1,993,546
                                                                                 ===========================


                          LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
       Accounts payable                                                          $                  427,287
       Accrued expenses                                                                             197,145
       Accrued payroll and related benefits                                                          62,495
       Unearned revenue                                                                             155,556
       Due to related parties                                                                        57,412
       Convertible note payable, net of discount of $15,027                                         109,973
       Bridge loans payable                                                                         150,000
                                                                                 ---------------------------
TOTAL CURRENT LIABILITIES                                                                         1,159,868
                                                                                 ---------------------------


COMMITMENT AND CONTINGENCIES                                                                              -

STOCKHOLDERS' EQUITY
       Common stock, $0.001 par value; 50,000,000 shares
           authorized; 9,212,158 shares issued and outstanding                                        9,212
       Additional paid-in capital                                                                18,293,291
       Accumulated deficit                                                                      (17,468,825)
                                                                                 ---------------------------
TOTAL STOCKHOLDERS' EQUITY                                                                          833,678
                                                                                 ---------------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                       $                1,993,546
                                                                                 ===========================
</TABLE>

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

                                       2
<PAGE>

                           UWINK, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                                             THREE MONTHS ENDED
                                                             ---------------------------------------------------
                                                                     MARCH                       MARCH
                                                                    31, 2004                   31, 2003
                                                             -----------------------    ------------------------
                                                                     (unaudited)                (unaudited)
<S>                                                          <C>                        <C>
NET SALES                                                    $              335,727     $                49,193

COST OF SALES                                                               225,177                       3,721

                                                             -----------------------    ------------------------
GROSS PROFIT                                                                110,550                      45,472
                                                             -----------------------    ------------------------

OPERATING EXPENSES
       Selling, general and administrative expenses                         776,381                     201,871
       Research and development                                             134,954                      23,651
                                                             -----------------------    ------------------------
TOTAL OPERATING EXPENSES                                                    911,335                     225,522
                                                             -----------------------    ------------------------

LOSS FROM OPERATIONS                                                       (800,785)                   (180,050)
                                                             -----------------------    ------------------------

OTHER INCOME (EXPENSE)
       Other income                                                             129                       4,345
       Gain on settlement of debt                                           142,673                           -
       Amortization of debt discounts                                       (31,079)                          -
       Interest expense                                                      (8,452)                    (35,706)
                                                             -----------------------    ------------------------
TOTAL OTHER INCOME (EXPENSE)                                                103,271                     (31,361)
                                                             -----------------------    ------------------------

LOSS BEFORE PROVISION FOR INCOME TAXES                                     (697,514)                   (211,411)

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

NET LOSS                                                                   (697,514)                   (211,411)

AMORTIZATION OF PREFERRED STOCK DISCOUNTS                                         -                     (34,116)
                                                             -----------------------    ------------------------
NET LOSS ATTRIBUTED TO COMMON STOCKHOLDERS                   $             (697,514)    $              (245,527)
                                                             =======================    ========================

NET LOSS PER COMMON SHARE - BASIC AND DILUTED                $                (0.08)    $                  (0.08)
                                                             =======================    ========================

WEIGHTED AVERAGE COMMON SHARES
       OUTSTANDING - BASIC AND DILUTED                                    8,904,197                   2,929,823
                                                             =======================    ========================
</TABLE>


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

                                       3
<PAGE>
                           UWINK, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                            THREE MONTHS ENDED
                                                                             --------------------------------------------------
                                                                                     MARCH                      MARCH
                                                                                    31, 2004                   31, 2003
                                                                             -----------------------    -----------------------
                                                                                   (unaudited)                  (unaudited)
<S>                                                                          <C>                        <C>
CASH FLOW FROM OPERATING ACTIVITIES:
    Net loss                                                                 $             (697,514)    $             (211,411)
    Adjustment to reconcile net loss to net cash
       used in operating activities:
          Amortization of debt discount on bridge loans/convertible
            note payable                                                                     31,079                          -
          Amortization of options issued below market price                                  48,333                     48,333
          Depreciation and amortization expense                                              41,630                     30,507
    Changes in operating assets and liabilities:
       Accounts receivable                                                                 (158,633)                    38,046
       Inventory                                                                           (125,761)                    (1,685)
       Prepaid expenses and other current assets                                            (21,184)                      (172)
       Accounts payable                                                                    (369,520)                  (265,261)
       Accrued expenses                                                                     128,530                    219,657
       Accrued payroll and related benefits                                                 (81,483)                  (337,862)
       Unearned revenue                                                                      (4,166)                    19,444
                                                                             -----------------------    -----------------------
Net cash used in operating activities                                                    (1,208,689)                  (460,404)
                                                                             -----------------------    -----------------------
CASH FLOW FROM INVESTING ACTIVITIES:
    Payment for property and equipment                                                      (55,254)                         -
                                                                             -----------------------    -----------------------
Net cash used in investing activities                                                       (55,254)                         -
                                                                             -----------------------    -----------------------
CASH FLOW FROM FINANCING ACTIVITIES:
    Change in cash overdraft                                                                      -                      3,956
    Proceeds (repayments) from advances from related parties                                                           (25,000)
    Proceeds from issuance of common stock                                                1,439,050                    500,000
    Payment of offering costs                                                              (190,865)                   (25,000)
                                                                             -----------------------    -----------------------
Net cash provided by financing activities                                                 1,248,185                    453,956
                                                                             -----------------------    -----------------------

NET INCREASE (DECREASE) IN CASH AND
    CASH EQUIVALENTS                                                                        (15,758)                    (6,448)

CASH AND CASH EQUIVALENTS, Beginning of period                                            1,156,170                      6,448
                                                                             -----------------------    -----------------------

CASH AND CASH EQUIVALENTS, End of period                                     $            1,140,412     $                     -
                                                                             =======================    =======================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

    Interest paid                                                            $                    -     $                     -
                                                                             =======================    =======================
    Income taxes paid                                                        $                    -     $                     -
                                                                             =======================    =======================
</TABLE>

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

                                       4
<PAGE>
                           UWINK, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

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,
2003 included in the Company's Annual Report on Form 10-KSB.  The results of the
three months ended March 31, 2004 are not necessarily  indicative of the results
to be expected for the full year ending December 31, 2004.

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 $697,514 for the three months ended March 31, 2004 and as
of March 31, 2004, the Company had an accumulated deficit of $17,468,825.  These
conditions raise  substantial doubt as to the Company's ability to continue as a
going concern.  These financial  statements do not include any adjustments  that
might result from the outcome of this uncertainty. These 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.
Management's intentions are as follows:

In the first quarter of 2004,  the Company  raised  $1,439,050 in gross proceeds
from the sale of 719,525 shares of the Company's common stock. In addition,  the
Company  converted  $108,710  of  accrued  salaries  into  48,584  shares of the
Company's common stock.

The  Company  will  need  additional  working  capital  to  fund  its  expanding
operations  over the next 12 months.  The Company  believes that it will need at
least an additional $2 million of working  capital to fund the projected  demand
for its Snap!  and Design'R Bear products and, if necessary,  to finance  future
losses from  operations  as it endeavors to build revenue and reach a profitable
level of operations.  The Company plans to obtain the additional working capital
through the private placement sale of its equity securities.  However, as of the
date of this report, there are no commitments for the sale of its securities nor
can there be any  assurance  that such funds will be available  on  commercially
reasonable  terms, if at all. Should the Company be unable to raise the required
funds, its ability to finance its continued growth will be materially  adversely
affected.

STOCK OPTIONS

The Company has adopted only the disclosure provisions of Statement of Financial
Accounting   Standards   ("SFAS")   No.   123,   "Accounting   for   Stock-Based
Compensation." It applies Accounting Principles Bulletin ("APB") Opinion No. 25,
"Accounting  for Stock  Issued to  Employees,"  and related  interpretations  in
accounting for its Stock Option Plan and does not recognize compensation expense
for its Stock Option Plan other than for restricted  stock and options issued to
outside  third  parties.  If the Company had elected to  recognize  compensation
expense  based upon the fair value at the grant date for awards  under the Stock
Option Plan  consistent  with the  methodology  prescribed  by SFAS No. 123, the
Company's  net loss and loss per share would be reduced to the pro forma amounts
indicated below for the three months ended March 31, 2004 and 2003:

                                       5
<PAGE>
                           UWINK, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                                 2004              2003
                                              ----------        -----------
Net loss
  As reported                                 $ (697,514)       $  (211,411)
  Compensation recognized under APB 25            48,333             48,333
  Compensation recognized under SFAS 123         (70,388)           (85,487)
                                              ----------        -----------
                  Pro forma                   $ (719,569)       $  (248,565)
                                              ==========        ===========

Basic and diluted loss per common share
  As reported                                 $    (0.08)       $     (0.08)
  Pro forma                                   $    (0.08)       $     (0.10)


This option  valuation  model requires input of highly  subjective  assumptions.
Because the Company's employee stock options have characteristics  significantly
different from those of traded  options,  and because  changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion,  the  existing  model does not  necessarily  provide a reliable  single
measure of fair value of its employee stock options.

For purposes of computing  the pro forma  disclosures  required by SFAS No. 123,
the fair  value for these  options  was  estimated  at the date of grant in 2002
using a Black-Scholes  option pricing model with the following  weighted-average
assumptions:  risk-free interest rate of 3.5%; dividend yields of 0%; volatility
factors of the expected market price of the Company's  common stock of 223%; and
a weighted average expected life of the option of 10 years, respectively.  There
were no options granted in 2003 or in the first quarter of 2004.

                                       6
<PAGE>
                           UWINK, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 2 - LOSS PER SHARE

The Company  reports  earnings (loss) per share in accordance with SFAS No. 128,
"Earnings  per Share." Basic  earnings  (loss) per share is computed by dividing
income (loss) available to common shareholders by the weighted average number of
common shares  available.  Diluted earnings (loss) per share is computed similar
to basic earnings  (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.  Diluted  earnings (loss) per share has not been presented
since the effect of the assumed  conversion  of options and warrants to purchase
common shares would have an anti-dilutive effect. The following potential common
shares have been excluded from the computation of diluted net loss per share for
the three  months  ended March 31, 2004 and 2003  because the effect  would have
been anti-dilutive:

<TABLE>
<CAPTION>

                                                                                  2004               2003
                                                                               -----------         ----------
<S>                                                                                <C>                <C>
                  Shares to be issued upon conversion of preferred stock                 -          1,610,018
                  Shares to be issued upon conversion of bridge loans/
                     Convertible notes                                             174,265            517,515
                  Stock options issued to employees                                613,413            613,413
                  Warrants issued to consultants and finders                       259,473            137,036
                  Warrants issued for financing                                    655,168            504,653
                                                                               -----------         ----------
                                                                                 1,702,319          3,382,635
                                                                               ===========         ==========

NOTE 3 - INVENTORY

Inventory at March 31, 2004, consist of the following:


                        Raw materials                                          $   176,438
                        Work in process                                             21,200
                        Finished goods                                             157,259
                                                                               -----------
                                                                                   354,897
                        Less allowance for obsolete inventory                      (50,000)
                                                                               -----------
                                                                               $   304,897
                                                                               ===========

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment at March 31, 2004, consist of the following:

                        Computer equipment                                     $   219,713
                        Office furniture and equipment                              17,926
                        Leasehold improvements                                      84,849
                        Machinery and equipment                                    195,945
                                                                               -----------
                                                                                   518,433
                        Less accumulated depreciation and amortization            (352,672)
                                                                               -----------

                                                                               $   165,761
                                                                               ===========
</TABLE>

                                       7
<PAGE>
                           UWINK, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 5 - EQUITY

During the three months ended March 31, 2004, the Company:

      o     sold 719,525  shares of common  stock for cash in private  placement
            offerings  for  gross  proceeds  of  $1,439,050.  The  Company  paid
            $190,865 in offering costs to the placement agent. In addition,  the
            Company issued to the placement  agent a warrant to purchase  71,952
            shares of the Company's  common stock at an exercise  price of $2.00
            per share; and

      o     issued   48,584   shares  of  common   stock  in  exchange  for  the
            cancellation of accrued payroll of $108,710.

NOTE 6 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December 2003, the  Securities and Exchange  Commission  ("SEC") issued Staff
Accounting  Bulletin ("SAB") No. 104, "Revenue  Recognition." SAB 104 supersedes
SAB 101,  "Revenue  Recognition  in  Financial  Statements."  SAB 104's  primary
purpose  is to  rescind  accounting  guidance  contained  in SAB 101  related to
multiple element revenue arrangements, superseded as a result of the issuance of
EITF 00-21,  "Accounting for Revenue  Arrangements with Multiple  Deliverables."
Additionally,  SAB 104  rescinds  the SEC's  Revenue  Recognition  in  Financial
Statements  Frequently  Asked  Questions and Answers ("the FAQ") issued with SAB
101 that had been  codified  in SEC  Topic  13,  Revenue  Recognition.  Selected
portions of the FAQ have been  incorporated  into SAB 104.  While the wording of
SAB  104 has  changed  to  reflect  the  issuance  of EITF  00-21,  the  revenue
recognition  principles of SAB 101 remain  largely  unchanged by the issuance of
SAB 104,  which was  effective  upon  issuance.  The adoption of SAB 104 did not
impact the consolidated financial statements.

NOTE 7 - SUBSEQUENT EVENTS

In April 2004,  the Company  issued  43,850 shares of its common stock to Falcon
Capital for selling  shares of common stock in the Company's  private  placement
offering.

                                       8
<PAGE>

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

GENERAL

The following discussion and analysis should be read in conjunction with the our
consolidated  financial  statements  and  related  footnotes  for the year ended
December 31, 2003 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

We design, develop and market entertainment software for touch screen video game
terminals,  amusement vending machines,  and lottery and gaming kiosks.  For our
video game terminals and amusement vending machines, we develop the software and
hardware prototypes  internally,  and we rely on contract manufacturers overseas
to build the units  delivered to our  customers.  We derive our revenue from the
sale of our game terminals,  licensing fees on software sales,  and a variety of
network services.

We were  incorporated  under the laws of the State of Utah on October 14,  1982.
Prior  to the  reverse  acquisition  described  below,  our  corporate  name was
Prologue.  We had not  generated  significant  revenues  and were  considered  a
development  stage  company as  defined in  Statement  of  Financial  Accounting
Standards No. 7. We were seeking business  opportunities  or potential  business
acquisitions.   Pursuant  to  a  Securities   Purchase  Agreement  and  Plan  of
Reorganization dated November 21, 2003 among Prologue, uWink, California Inc., a
Delaware  corporation  ("uWink  California") and its stockholders,  Prologue has
acquired  98.8% of the  issued  and  outstanding  shares  of uWink  California's
capital  stock.  We expect to acquire  the  remaining  uWink  California  shares
outstanding in subsequent closings.  Prologue issued one (1) share of its common
stock for every 3.15611  shares of uWink  California  capital  stock.  Since the
stockholders of uWink California  acquired  approximately  84% of the issued and
outstanding  shares of Prologue  and the uWink  California  management  team and
board of  directors  became  the  management  team and  board  of  directors  of
Prologue,  according to FASB Statement No. 141 - "Business  Combinations,"  this
acquisition has been treated as a recapitalization for accounting purposes, in a
manner  similar  to  reverse  acquisition  accounting.  In  accounting  for this
transaction:

      o     uWink California is deemed to be the purchaser and surviving company
            for accounting purposes. Accordingly, its net assets are included in
            the balance sheet at their historical book values and the results of
            operations  of  uWink   California   have  been  presented  for  the
            comparative prior period;

      o     Control of the net assets and  business  of  Prologue  was  acquired
            effective  December 4, 2003. This transaction has been accounted for
            as a purchase  of the assets and  liabilities  of  Prologue by uWink
            California.  The historical cost of the net liabilities  assumed was
            $750.

As a result of the transaction described above we changed our name from Prologue
to uWink, Inc.

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
$697,514 for the three months ended March 31, 2004 and as of March 31 ,2004,  we
had an accumulated  deficit of $17,468,825.  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

                                       9
<PAGE>

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

Net sales for the three months ended March 31, 2004 increased by $286,534 (582%)
from $49,193 for the three months ended March 31, 2003 to $335,727 for the three
months  ended March 31,  2004.  We derive our revenue  from the sale of our game
terminals,  licensing fees and network services. The increase in revenue was due
to a significant  ramp up of our sales and marketing  efforts and our ability to
make sales of our SNAPTM  product in several  markets.  In the fourth quarter of
2003, we began selling our common stock for cash in private placement offerings,
which  allowed us to complete the  development  of SNAPTM,  purchase  inventory,
establish sales  channels,  hire  additional  personnel,  and enhance our market
presence internationally.

Cost of sales for the three  months  ended March 31, 2004  increased by $221,456
(5,952%)  from $3,721 for the three  months ended March 31, 2003 to $225,177 for
the three months  ended March 31, 2004.  The increase in cost of sales is due to
the  commencement  of our sale of SNAPTM  product  into  several  markets in the
fourth quarter of 2003. As a hardware product with embedded software,  SNAPTM is
constructed with a variety of hardware components, each of which incur a cost on
a per-unit basis.  As a result,  as we increase the number of SNAPTM units sold,
we correspondingly increase our cost of sales.

Our gross profit  percentage was 92.4% for the three months ended March 31, 2003
compared to 32.9% for the three months ended March 31, 2004. The decrease in the
gross  profit  percentage  was due to the  commencement  of our  sale of  SNAPTM
product  into  several  markets  in the fourth  quarter  of 2003.  As a hardware
product with  embedded  software,  the cost of sales  associated  with SNAPTM is
significantly  higher  than the sale of  software  alone,  which was the primary
source of sales for the three months ended March 31, 2003

Selling,  general and  administrative  expenses for the three months ended March
31, 2004  increased by $574,510  (285%) from $201,871 for the three months ended
March 31, 2003 to  $776,381  for the three  months  ended  March 31,  2004.  The
increase was due to our general ramp up of  corporate  operations  once we began
selling our common stock for cash in private  placement  offerings in the fourth
quarter  of 2003.  For the  three  months  ended  March 31,  2004 we also  hired
additional sales, operational, and finance personnel,  completed and distributed
collateral  marketing  materials,  incurred  greater  audit and  legal  expenses
resulting  from public  reporting  requirements,  and  incurred  greater  travel
expense in order to secure the terms of our Chinese  manufacturing  relationship
and increase our sales and marketing presence internationally.

Research  and  development  expense  for the three  months  ended March 31, 2004
increased  by $111,303  (471%) from $23,651 for the three months ended March 31,
2003 to $134,954 for the three months ended March 31, 2004. The increase was due
to the  development  of both new hardware and software  products.  A substantial
portion of this expense was associated with the development of our Design'R Bear
prototype,  which we began showcasing in various Southern  California  locations
during the first quarter of 2004.

Gain on the  settlement  of debt for the  three  months  ended  March  31,  2004
increased  by $142,673  (100.0%)  from $nil for the three months ended March 31,
2003 to $142,673 for the three months  ended March 31,  2004.  In 2004,  we were
able to settle certain  obligation with old vendors for amount less than we were
originally charged for the product or services.

                                       10
<PAGE>

Amortization  of debt  discounts  for the three  months  ended  March  31,  2004
increased  by  $31,079  from $0 for the three  months  ended  March 31,  2003 to
$31,079 for the three months ended March 31, 2004. In the second quarter of 2003
we issued a  convertible  note payable in the amount of $125,000  that  included
detachable warrants to purchase shares of our common stock and also a conversion
feature.  The debt discounts of $124,998 are being amortized to expense over the
twelve month term of the note.

Interest  expense for the three months ended March 31, 2004 decreased by $27,254
(76.3%) from $35,706 for the three months ended March 31, 2003 to $8,452 for the
three  months ended March 31, 2004.  The  decrease is due to the  conversion  of
bridge loans and related party debt to equity during 2003.

LIQUIDITY AND CASH RESOURCES

During  the third and  fourth  quarters  of 2003 we raised  $3,227,756  in gross
proceeds from the sale of 1,613,884 shares of our common stock. During the first
quarter of 2004, we raised an additional  $1,439,050 in gross  proceeds from the
sale of 719,525 shares of our common stock. We have used the net proceeds (after
commissions  and  professional  costs  related to the merger) of the offering to
restructure and improve our balance sheet,  pay off certain accounts payable and
accrued  liabilities,  purchase game terminal inventory and for working capital.
As of March 31, 2004 our cash position was  $1,140,412  and our working  capital
was  $638,945.  During the first  quarter  of 2004,  we have also  converted  an
additional  $108,710 of accrued payroll and related  benefits into 48,584 shares
of common stock.

We will need additional  working  capital to fund our expanding  operations over
the next 12  months.  We  believe  that we will need at least an  additional  $2
million  of  working  capital to fund the  projected  demand  for our Snap!  and
Design'R  Bear  products  and,  if  necessary,  to finance  future  losses  from
operations  as we endeavor  to build  revenue  and reach a  profitable  level of
operations. We plan to obtain the additional working capital through the private
placement sale of our equity securities. However, as of the date of this report,
we have no  commitments  for the  sale of our  securities  nor can  there be any
assurance 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 continued growth will be materially adversely affected.


CASH POSITION AND USES OF CASH

Our cash and cash equivalents position as of March 31, 2004 was $1,140,412.

During the three months ended March 31, 2004, we used  $1,208,689 in cash in our
operating  activities,  as compared to $460,404 for the three months ended March
31,  2003.  The  significant  change  in the  use of  cash  from  our  operating
activities  is due to the  infusion  of cash from the sale of our  common  stock
which allowed us to keep our payables current and increase our inventory.

During  the three  months  ended  March 31,  2004,  we used  $55,254  in cash in
investing  activities,  as compared to $0 for the three  months  ended March 31,
2003.

During the three months ended March 31, 2004, our financing  activities provided
cash in the amount of  $1,248,185,  as compared to $453,956 for the three months
ended March 31, 2003. The significant  increase is due to the sale of our common
stock in private  placement  offerings in the first quarter of 2004.  During the
three months ended March 31, 2003 we received  gross  proceeds of $500,000  from
the sale of our common stock to a private investor.

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<PAGE>

CRITICAL ACCOUNTING POLICIES AND 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 intangible, 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.

Revenue  Recognition  - We  recognize  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 we deliver our touchscreen  pay-for-play  game terminals to our
customer  and we believe that collect  ability is  probable.  Included  with the
purchase of the  touchscreen  terminals  are licenses to use the games loaded on
the  terminals.  We usually have  agreements  with our  customers to deliver the
requested terminals for a fixed price. Any insignificant  post-contract  support
obligations  are  accrued  for at the time of the sale.  Post-contract  customer
support ("PCS") that is bundled with the initial purchase and is for one year or
less is recognized at the time of the initial purchase, if collectability of the
resulting  receivables  is probable.  The  estimated  cost to us to provide such
services is accrued and amortized over the expected weighted average life of the
obligation period of nine months. We also recognize revenue from tournament play
and  league  play at the time the entry fees are paid and accrue the cost of the
estimated payouts.

FORWARD LOOKING STATEMENTS

We make written and oral statements  from time to time in this Quarterly  Report
regarding our business and prospects, such as projections of future performance,
statements of management's plans and objectives, forecasts of market trends, and
other matters that are forward-looking  statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934.  Statements  containing the words or phrases "will likely result," "are
expected  to,"  "will  continue,"  "is  anticipated,"  "estimates,"  "projects,"
"believes,"  "expects,"  "anticipates,"  "intends,"  "target,"  "goal," "plans,"
"objective,"   "should"   or  similar   expressions   identify   forward-looking
statements, which may appear in documents,  reports, filings with the Securities
and Exchange  Commission,  news releases,  written or oral presentations made by
officers  or  other  representatives  made  by  us  to  analysts,  stockholders,
investors,  news  organizations and others,  and discussions with management and
other representatives of us. For such statements, we claim the protection of the
safe harbor for forward-looking  statements  contained in the Private Securities
Litigation Reform Act of 1995.

Our future results,  including  results related to  forward-looking  statements,
involve a number of risks and uncertainties  described in our 2003 Annual Report
on Form 10-KSB,  including  our ability to obtain  development  financing as and
when  need;  the  market's  acceptance  of  our  products;  the  completion  and
successful  shipment of our purchase orders;  our present  financial  condition;
increased competition and overall economic conditions. No assurance can be given
that the results reflected in any  forward-looking  statements will be achieved.
Any  forward-looking  statement made by or on behalf of us speaks only as of the
date on which such statement is made. Our  forward-looking  statements are based
upon assumptions that are sometimes based upon estimates,  data,  communications
and other information from suppliers, government agencies and other sources that
may be subject to revision.  Except as required by law, we do not  undertake any
obligation to update or keep current either (i) any forward-looking statement to

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<PAGE>

reflect events or  circumstances  arising after the date of such  statement,  or
(ii) the  important  factors  that  could  cause our  future  results  to differ
materially from historical results or trends,  results anticipated or planned by
us, or which are reflected  from time to time in any  forward-looking  statement
which may be made by or on behalf of us.

ITEM 3.  CONTROLS AND PROCEDURES

As required by SEC rules, we have evaluated the  effectiveness of the design and
operation of our  disclosure  controls and  procedures  at the end of the period
covered by this report.  This  evaluation was carried out under the  supervision
and with the participation of our management,  including our principal executive
officer  and  principal  financial  officer.  Based  on this  evaluation,  these
officers have concluded that the design and operation of our disclosure controls
and procedures are effective. There were no changes in our internal control over
financial  reporting or in other factors that have materially  affected,  or are
reasonably  likely to materially  affect,  our internal  control over  financial
reporting.

Our disclosure  controls and procedures are designed to ensure that  information
required to be  disclosed  by us in the reports that we file or submit under the
Exchange Act is recorded,  processed,  summarized and reported,  within the time
periods  specified  in the  SEC's  rules  and  forms.  Disclosure  controls  and
procedures  include,  without  limitation,  controls and procedures  designed to
ensure that  information  required to be  disclosed by us in the reports that we
file under the Exchange Act is accumulated  and  communicated to our management,
including  principal  executive  officer and  principal  financial  officer,  as
appropriate, to allow timely decisions regarding required disclosure.

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<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, 2004, we sold unregistered shares of our
securities in the following transactions:

      1.    During  January and  February  of 2004,  we sold  719,525  shares of
            common stock for gross proceeds of $1,439,050.  Falcon Capital acted
            as a placement  agent for this  offering and received a finder's fee
            of $190,865  and a warrant to purchase  71,952  shares of our common
            stock.  These  issuances  were made only to  "accredited  investors"
            pursuant to the exemption from registration provided by Section 4(2)
            of the Securities Act of 1933 (the "Securities Act") and Rule 506 of
            Regulation D.

      2.    On November 15, 2002, uWink California  entered into agreements with
            its employees  allowing  them to convert their accrued  compensation
            into equity  (collectively,  the "Employee  Notes").  We assumed the
            Employee  Notes  in  connection   with  our   acquisition  of  uWink
            California.  During the three months ended March 31, 2004, we issued
            48,584  shares of common stock in exchange for accrued  compensation
            of $108,710  pursuant to the terms and  conditions  set forth in the
            Employee Notes.  These issuances were made pursuant to the exemption
            from registration provided by Section 4(2) of the Securities Act and
            Rule 506 of Regulation D.



ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Effective  December  5,  2003,  our board of  directors  approved  a  resolution
authorizing  us  to  seek   shareholder   approval  to  amend  our  articles  of
incorporation.  Effective  January 5,  2004,  the  holders of a majority  of the
outstanding  shares of our common  stock  entitled  to vote  thereon  executed a
written consent in accordance with Section 16-10a-704 of the General Corporation
Law of the State of Utah  approving and adopting an amendment to our articles of
incorporation regarding: (i) the change of our corporate name from "Prologue" to
"uWink,  Inc.;" (ii) the  authorization  of 5,000,000 shares of preferred stock,
whereby our 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,  and (iii) the  deletion  from our  articles of  incorporation
Article XII in its entirety  regarding  mandatory  indemnification of directors,
officers and employees.  This amendment to our articles of incorporation  became
effective on January 28, 2004.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

REGULATION
S-B NUMBER                                    EXHIBIT

      3.1   Articles  of  Incorporation  of  uWink,  Inc.   (formerly  known  as
            Prologue) (1)

      3.2   Articles of Amendment of uWink,  Inc.  (formerly  known as Prologue)
            (2)

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<PAGE>

      3.3   Amended and Restated Bylaws of uWink, Inc. (3)

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

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

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

(1)   Incorporated  by  reference  to Exhibit  3.1 of our Annual  Report on Form
      10-KSB filed on April 14, 2004.

(2)   Incorporated  by  reference  to Exhibit  3.2 of our Annual  Report on Form
      10-KSB filed on April 14, 2004.

(3)   Incorporated  by  reference  to Exhibit  3.3 of our Annual  Report on Form
      10-KSB filed on April 14, 2004.

(b)   Reports on Form 8-K

On February 4, 2004,  we filed a Current  Report on Form 8-K under Items 5 and 9
announcing  that on January 28,  2004,  we filed an amendment to our articles of
incorporation  with the  Secretary  of State of Utah to  change  the name of the
corporation  from  "Prologue"  to "uWink,  Inc." The change was  effective as of
January 28,  2004.  Our trading  symbol  changed from  "PRLG.OB"  to  "UWNK.OB,"
effective at the commencement of trading February 2, 2004.

On  January  20,  2004,  we filed a  Current  Report  on Form 8-K  under  Item 4
announcing that on January 16, 2004, our Board of Directors approved a change in
auditors.  Our Board of Directors  approved the  dismissal of Pritchett  Siler &
Hardy PC ("Pritchett Siler & Hardy") as our independent  public  accountants and
the selection of Stonefield Josephson, Inc. as their replacement.



                                   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 24, 2004                           By: /S/ NOLAN K BUSHNELL
                                          -------------------------------------
                                           Nolan K. Bushnell
                                           Chief Executive Officer and Chief
                                           Financial Officer


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