<PAGE>

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
 
                                  FORM 10-QSB
 
      /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
 
                 For The Quarterly Period Ended December 31, 1997 

                                       or 

          / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
                         SECURITIES EXCHANGE ACT OF 1934
 
                     For the transition period from          to
 
                        Commission file number: 000-20865 

                                  e-Net, Inc. 
          (Exact name of small business issuer as specified in its charter)
 
               Delaware                                    52-1929282
     (State or other jurisdiction of                    (I.R.S. Employer
      incorporation or organization                    Identification No.)

           12800 Middlebrook Road, Suite 200, Germantown, MD    20874
          (Address of principal executive offices)            (Zip Code)

                                (301) 601-8700 
               (Issuer's telephone number, including area code)
 
                                Not Applicable 
         (Former name, former address and former fiscal year, if changed 
                              since last report.)
 
              Check whether the issuer (1) has filed all reports 
 required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
   1934 during the preceding 12 months (or for such shorter periods 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
                                ---             ---
 
   State the number of shares outstanding of each of the issuer's classes of 
    common equity, as of the latest practicable date: common stock, $.01 par 
             value per share, outstanding as of February 10, 1997.
 
           Transitional Small Business Disclosure Format (check one): 
                              Yes       No  X
                                  ---      ---

         The Exhibit Index Appears in Sequentially Numbered Page   N/A

                                       1


<PAGE>
 
                               TABLE OF CONTENTS
 
                         PART I. FINANCIAL INFORMATION
 
<TABLE>
<CAPTION>
                                                                                                          PAGE
                                                        
<S>                                                                                                       <C>
Item 1. Financial Statements (Unaudited)
   Accountants' Review Report.............................................................................  3
   Balance Sheets as of December 31 and March 31, 1997....................................................  4
   Statements of Operations for the three months ended December 31, 1997 and 1996.........................  5
   Statements of Operations for the nine months ended December 31, 1997 and 1996..........................  6
   Statements of Cash Flows for the nine months ended December 31, 1997 and 1996..........................  7
   Statements of Stockholders' Equity as of December 31, 1997.............................................  8
   Notes to Financial Statements..........................................................................  9
Item 2. Management's Discussion and Analysis of Financial
   Condition and Results of Operations....................................................................  10

                             PART II OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K..................................................................  13
Signatures................................................................................................  14

</TABLE>
 
                                       2


<PAGE>

Board of Directors 
e-Net, Inc.
 
We have reviewed the accompanying balance sheet of e-Net, Inc. (a Delaware 
Corporation), as of December 31, 1997, and the related statements of 
operations, stockholders' equity and cash flows for nine month periods ended 
December 31, 1997 and 1996, and the statements of operations for the three 
month periods ended December 31, 1997 and 1996. These financial statements 
are the responsibility of the Company's management.
 
We conducted our review in accordance with standards established by the 
American Institute of Certified Public Accountants. A review of interim 
financial information consists principally of applying analytical procedures 
to financial data and making inquiries of persons responsible for financial 
and accounting matters. It is substantially less in scope than an audit 
conducted in accordance with generally accepted auditing standards, the 
objective of which is the expression of an opinion regarding the financial 
statements taken as a whole. Accordingly, we do not express such an opinion.
 
Based on our review, we are not aware of any material modifications that 
should be made to the accompanying financial statements for them to be in 
conformity with generally accepted accounting principles.
 
We have previously audited, in accordance with generally accepted auditing 
standards, the balance sheet as of March 31, 1997, and the related statements 
of operations, stockholders' equity and cash flows for the year then ended 
(not presented herein), and in our report dated May 2, 1997, we expressed an 
unqualified opinion on those financial statements. In our opinion, the 
information set forth in the accompanying condensed balance sheet as of March 
31, 1997, is fairly stated, in all material respects, in relation to the 
balance sheet from which it has been derived.
 

                                                GRANT THORNTON LLP
 
Vienna, Virginia 
January 19, 1998 

                                       3

<PAGE>

                                  e-NET, INC. 
                                BALANCE SHEETS
 
                                     ASSETS
 
<TABLE>
<CAPTION>
                                                                      DECEMBER 31, 1997  MARCH 31, 1997
                                                                      -----------------  --------------
                                                                         (UNAUDITED)       (AUDITED)
<S>                                                                   <C>                <C>
Current Assets
  Cash and cash equivalents.........................................    $     894,650     $    379,441
  Short-term investments............................................        2,254,180          --
  Accounts receivable...............................................           95,729          113,181
  Inventory.........................................................          233,144          --
  Prepaid expenses..................................................           86,318           14,800
                                                                      -----------------  --------------
Total Current Assets................................................        3,564,021          507,422

Deposits and other assets...........................................         --                  7,530

Property, Plant and Equipment, Net..................................          371,152          203,125

Deferred Initial Public Offering Costs..............................         --                964,706

Other Assets........................................................           54,000          --

Software Development Costs..........................................          894,172          520,853
                                                                      -----------------  --------------
                                                                        $   4,883,345     $  2,203,636
                                                                      -----------------  --------------
                                                                      -----------------  --------------
                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
  Accounts payable--trade...........................................           69,722          105,301
  Accrued liabilities...............................................          390,132          330,580
  Capital lease obligation..........................................         --                  4,480
                                                                      -----------------  --------------
Total Current Liabilities...........................................          459,854          440,361

Accrued Initial Public Offering Costs...............................         --                887,843
                                                                      -----------------  --------------
Total Liabilities...................................................          459,854        1,328,204

Stockholders' Equity
  Common stock, $.01 par value, 50,000,000 shares authorized,
    5,750,000 and 4,250,000 shares outstanding at September 30, and
    March 31, 1997, respectively....................................           57,500           42,500
  Stock subscriptions...............................................              (46)             (46)
  Additional paid-in capital........................................       14,163,090        8,307,627
  Retained deficit..................................................       (9,797,053)      (7,474,649)
                                                                      -----------------  --------------
Total Stockholders' Equity..........................................        4,423,491          875,432
                                                                      -----------------  --------------
                                                                        $   4,883,345     $  2,203,636
                                                                      -----------------  --------------
                                                                      -----------------  --------------
</TABLE>
 
        The accompanying notes are an integral part of these statements.
 
                                       4

<PAGE>

                                  e-NET, INC. 
                           STATEMENTS OF OPERATIONS 
                                  (Unaudited) 
                        Three Months Ended December 31,
 
<TABLE>
<CAPTION>
                                                                                            1997          1996
                                                                                        -------------  -----------
<S>                                                                                     <C>            <C>
Sales
  Products............................................................................  $      99,235  $       --
  Services............................................................................         65,505      114,389
                                                                                        -------------  -----------
Total sales...........................................................................        164,740      114,389

Cost of product sold and service provided
  Products............................................................................         32,412          --
  Services............................................................................         65,003      117,739
                                                                                        -------------  -----------
Total cost of product sold and service provided.......................................         97,415      117,739


Gross profit..........................................................................         67,325       (3,350)

Operating Expenses
  Selling, general and administrative.................................................        818,544      157,644
  Research and development............................................................        310,470       54,342
                                                                                        -------------  -----------
Loss from Operations..................................................................     (1,061,689)    (215,336)

Other Income (Expense)
  Interest and financing expense......................................................            --         7,219
  Other expenses......................................................................        (20,404)     (20,250)
  Interest income.....................................................................         48,128        4,773
                                                                                        -------------  -----------
Loss Before Income Taxes..............................................................     (1,033,965)    (223,594)

Income Tax Provision..................................................................            --           --
                                                                                        -------------  -----------
Net Loss..............................................................................  $  (1,033,965) $  (223,594)
                                                                                        -------------  -----------
                                                                                        -------------  -----------

Loss per Share........................................................................  $        (.18) $      (.06)
                                                                                        -------------  -----------
                                                                                        -------------  -----------
Weighted Average Shares Outstanding...................................................      5,750,000    4,000,000

</TABLE>
 
        The accompanying notes are an integral part of these statements.
 
                                       5

<PAGE>

                                  e-NET, INC. 
                           STATEMENTS OF OPERATIONS 
                                  (Unaudited) 
                         Nine Months Ended December 31,
 
<TABLE>
<CAPTION>
                                                                                           1997           1996
                                                                                      -------------  -------------
<S>                                                                                   <C>            <C>
Sales
  Products..........................................................................  $     128,176  $      24,000
  Services..........................................................................        250,079        414,517
                                                                                      -------------  -------------
Total sales.........................................................................        378,255        438,517

Cost of product sold and service provided
  Products..........................................................................         48,017         12,822
  Services..........................................................................        160,045        290,487
                                                                                      -------------  -------------
Total cost of product sold and service provided.....................................        208,062        303,309

Gross profit........................................................................        170,193        135,208

Operating Expenses
  Selling, general and administrative...............................................      1,990,798        593,971
  Research and development..........................................................        573,651        158,684
                                                                                      -------------  -------------
Loss from Operations................................................................     (2,394,256)      (617,447)

Other Income (Expense)
  Interest expense--bridge financing................................................            --      (5,385,135)
  Cost of abandoned stock registration..............................................            --        (284,575)
  Interest and financing expense....................................................         (5,158)       (15,581)
  Other expenses....................................................................       (101,082)       (41,849)
  Interest income...................................................................        178,092         15,019
                                                                                      -------------  -------------
Loss Before Income Taxes............................................................     (2,322,404)    (6,329,568)

Income Tax Provision................................................................            --             --

Net Loss............................................................................  $  (2,322,404) $  (6,329,568)
                                                                                      -------------  -------------
                                                                                      -------------  -------------
Loss per Share......................................................................  $        (.41) $       (1.59)
                                                                                      -------------  -------------
                                                                                      -------------  -------------
Weighted Average Shares Outstanding.................................................      5,695,455      3,972,727

</TABLE>
 
        The accompanying notes are an integral part of these statements.
 
                                       6

<PAGE>

                                 e-NET, INC. 
                          STATEMENTS OF CASH FLOWS 
                                 (Unaudited) 
                        Nine Months Ended December 31,
 
<TABLE>
<CAPTION>
                                                                            1997             1996
                                                                       -------------     -------------
<S>                                                                   <C>               <C>
Increase (Decrease) in Cash and
  Cash Equivalents

Cash Flows from Operating Activities
  Net loss...........................................................   $(2,322,404)      $(6,329,568)
  Adjustments to reconcile net loss to net
    cash from operating activities
      Interest expense--bridge financing.............................           --          5,385,135
      Depreciation and amortization..................................       128,976            28,011
      Stock-Based Compensation.......................................        62,244               --
      Changes in operating assets and liabilities
        (Increase) Decrease in accounts receivable...................        17,452           (76,364)
        (Increase) in inventory......................................      (233,144)              --
        (Increase) in prepaid expenses, deposits receivable and 
           other assets..............................................      (117,987)          (25,530)
        Increase in accounts payable
          and accrued liabilities....................................        23,972           127,183
        (Decrease) in deferred revenue...............................           --            (20,000)
                                                                       -------------     -------------

Net Cash Used in Operating Activities................................    (2,440,891)         (911,133)
                                                                       -------------     -------------

Cash Flows from Investing Activities
  Capital expenditures...............................................      (290,353)          (94,580)
  Capitalized software development costs.............................      (379,969)         (367,598)
  Investment in short term securities................................    (2,254,180)              --
                                                                       -------------     -------------

Net Cash Used in Investing Activities................................    (2,924,502)         (462,178)
                                                                       -------------     -------------

Cash Flows from Financing Activities
  Net proceeds from initial public offering of common stock..........     5,870,082               --
  Issuance of common stock...........................................        15,000               --
  Payment of shareholder/officer loans...............................           --            (12,050)
  Proceeds from issuance of bridge notes payable.....................           --            500,000
  Proceeds from issuance of long-term debt...........................           --          1,000,000
  Payments on capital leases.........................................        (4,480)           (3,719)
                                                                       -------------     -------------

Net Cash Provided by Financing Activities............................     5,880,602         1,484,231
                                                                       -------------     -------------

Net Increase in Cash and Cash Equivalents............................       515,209           110,920


Cash and Cash Equivalents at Beginning of Period.....................       379,441           557,960
                                                                       -------------     -------------

Cash and Cash Equivalents at End of Period...........................   $   894,650       $   668,880
                                                                       -------------     -------------
                                                                       -------------     -------------
Supplemental Disclosures:
  Income Taxes Paid..................................................   $       --        $       --
                                                                       -------------     -------------
                                                                       -------------     -------------
  Interest Paid......................................................   $       158       $     6,284
                                                                       -------------     -------------
                                                                       -------------     -------------

</TABLE>
 
        The accompanying notes are an integral part of these statements.
 
                                       7

<PAGE>


                                 e-NET, INC. 
                     STATEMENTS OF STOCKHOLDERS' EQUITY 
                                 (Unaudited)
 
<TABLE>
<CAPTION>
                                             COMMON STOCK            STOCK
                                         ---------------------   SUBSCRIPTIONS    ADDITIONAL                      TOTAL
                                           NO. OF                  AND NOTES        PAID-IN       RETAINED     STOCKHOLDERS'
                                           SHARES     AMOUNT      RECEIVABLE        CAPITAL        DEFICIT        EQUITY
                                         ----------  ---------  ---------------  -------------  -------------  ------------
<S>                                      <C>         <C>        <C>              <C>            <C>            <C>
Balance, April 1, 1997.................   4,250,000  $  42,500     $     (46)    $   8,307,627  $  (7,474,649)  $  875,432
Sale of common stock in initial public
  offering.............................   1,500,000     15,000           --          5,793,219            --     5,808,219
Stock-based compensation...............         --         --            --             62,244            --        62,244
Net loss...............................         --         --            --                --      (2,322,404)  (2,322,404)
                                         ----------  ---------  ---------------  -------------  -------------  ------------
Balance, December 31, 1997.............   5,750,000  $  57,500     $     (46)    $  14,163,090  $  (9,797,053)  $4,423,491
                                         ----------  ---------  ---------------  -------------  -------------  ------------
                                         ----------  ---------  ---------------  -------------  -------------  ------------

</TABLE>
 
        The accompanying notes are an integral part of these statements.


                                       8
 
<PAGE>

                                  e-NET, INC.
                         NOTES TO FINANCIAL STATEMENTS
 
NOTE A--BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
 
    The accompanying unaudited financial statements include the accounts of 
e-Net, Inc. (the "Company"). Such statements have been prepared in accordance 
with generally accepted accounting principles for interim financial 
information and pursuant to the regulations of the Securities and Exchange 
Commission; accordingly, they do not include all of the information and notes 
required by generally accepted accounting principles for complete financial 
statements. In the opinion of management, all adjustments considered 
necessary for a fair presentation (consisting of normal recurring accruals) 
have been included. The results of operations for the quarter and nine months 
ended December 31, 1997 are not necessarily indicative of the results for the 
fiscal year ending March 31, 1998. The accompanying unaudited financial 
statements should be read in conjunction with the financial statements and 
notes thereto included in the Company's Annual Report on Form 10-K for the 
fiscal year ended March 31, 1997.
 
INVENTORY--Inventory is stated at the lower of cost or market value. Cost is 
determined by the first-in, first-out method. The elements of cost include 
subcontracted costs and materials handling charges.
 
SOFTWARE DEVELOPMENT COSTS--The Company has capitalized certain software 
development costs incurred after establishing technological feasibility. 
Software costs are amortized over the estimated useful life of the software 
once the product is available for general release to customers. At December 
31, 1997, the Company has capitalized $900,822, net of accumulated 
amortization of $ 6,650. Should sufficient product sales fail to materialize, 
the carrying amount of capitalized software costs may be reduced accordingly 
in the future. The costs associated with development of a software product 
prior to reaching the point of technological feasibility and with a product's 
post-general availability support are charged to research and development 
expense in the period incurred.
 
REVENUE RECOGNITION--Revenue is recognized on the sale of software products 
upon shipment unless future obligations exist wherein a portion of the 
revenue is deferred until the obligation is satisfied. Revenue from services 
rendered is recognized either as the services are rendered based upon fixed 
hourly rates or at contractually determined fixed monthly fees. The Company 
has recorded, as an element of cost of product sales, an estimated accrual 
for product warranty costs.

NOTE B--INITIAL PUBLIC OFFERING
 
    In April 1997, the Company completed an initial public offering of 
securities consisting of 1,500,000 shares of common stock and 1,725,000 
common stock warrants. In connection with the offering, the Company received 
proceeds of $5,808,219 net of all expenses associated with the offering.
 
NOTE C--LINE OF CREDIT FACILITY
 
    On May 31, 1997, the Company signed a one (1) year promissory note for a 
$1,000,000 line of credit facility that is collateralized by investments, 
receivables and fixed assets of the Company. To date, the Company has not 
borrowed on this facility.
 
NOTE D--NON-QUALIFIED STOCK OPTION PLAN
 
    In April, 1997, the Board of Directors approved the adoption of the 
e-Net, Inc. 1997 Non-Qualified Stock Option Plan, including the allocation of 
up to 500,000 shares for option grants. The options are exercisable at fair 
market value measured at the grant date with varying vesting schedules. 
Options granted and vested under the plan in the nine months ended December 
31, 1997 were recorded as compensation expense of $62,244. Since the plan's 
inception the Company has granted 255,323 options, of which 115,990 are 
exercisable at December 31, 1997.
 
NOTE E--INCOME TAXES
 
    The Company has generated net operating losses since its inception. At 
December 31, 1997, the Company recorded a valuation allowance in an amount 
equal to the deferred tax asset due to the uncertainty of generating future 
taxable income.
 
NOTE F--CONCENTRATION
 
    Approximately 56% of the Company's accounts receivable balance at 
December 31, 1997, and approximately 75% of the Company's sales for the nine 
months ended December 31, 1997, are from one customer.

                                       9

<PAGE>

 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.
 
    This information should be read in conjunction with the Management's 
Discussion and Analysis of Financial Condition and Results of Operations and 
the consolidated financial statements and notes thereto contained in the 
Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1997.
 
RESULTS OF OPERATIONS
 
THIRD QUARTER ENDED DECEMBER 31, 1997 AND DECEMBER 31, 1996
 
SALES
 
    Sales for the third quarter ended December 31, 1997 were approximately 
$164,700, an increase of 44% over the approximately $114,400 recorded for the 
corresponding quarter of 1996. The revenue increase was due to the general 
availability of the Company's T2000 product line. Product sales for the 
T2000 product line resulted in approximately $99,000 of sales for the third 
quarter ended December 31, 1997, compared to $-0- of product sales for the 
corresponding quarter of 1996. The services revenue decline was due 
primarily to the completion of several installation and support services 
contracts in 1996. Services sales for the quarter ended December 31, 1997, 
were primarily from one customer.

GROSS PROFIT
 
    Gross profits for the third quarter ended December 31, 1997 were 
approximately $67,300 or 40% of sales, compared to the approximately $(3,300) 
or (3)% of sales for the corresponding quarter of 1996. The gross profit 
increase was due to the increased emphasis on product sales that have a 
higher gross profit contribution than software installation and support 
services sales.
 
OPERATING EXPENSES
 
    Selling, general & administrative expenses for the third quarter ended 
December 31, 1997, were approximately $818,500, an increase of 419% over the 
approximately $157,600 recorded for the corresponding quarter of 1996. The 
dollar increase in these expenses over the prior year reflected additional 
spending for personnel and programs consistent with the Company's emphasis on 
the T2000 product line. The increased spending level in the third quarter of 
1997 also reflected higher spending for programs and promotions needed to 
generate and support product roll-out of, as well as substantial marketing 
expenditures made in connection with the general availability of, the 
Company's T2000 product line.
 
    Research & development expenses for the third quarter ended December 31, 
1997, were approximately $310,500, a 471% increase over the approximately 
$54,300 recorded for the corresponding quarter of 1996. The increased 
expenditures for research and development are due to the increase in number 
of employees and other expenditures devoted to the general development of the 
Company's technology products.
 
OTHER INCOME (EXPENSE)
 
    Other income (expense) for the third quarter ended December 31, 1997, was 
approximately $27,700, an increase over the approximately $(8,300) recorded 
for the corresponding quarter of 1996. In the third quarter ended December 
31, 1997, the Company's other income and expenses included interest income 
earned on investments in marketable securities, which did not exist in the 
corresponding quarter in 1996.
 
NINE MONTHS ENDED DECEMBER 31, 1997 AND DECEMBER 31, 1996
 
SALES
 
    Sales for the nine months ended December 31, 1997 were approximately 
$378,300, a decrease of 14% from the approximately $438,500 recorded for the 
corresponding nine months of 1996. The revenue decline was due primarily to 
the completion of several installation and support services contracts in 
1996, and an increased emphasis on development and preparation for the 
general availability of the Company's T2000 product line. The services sales 
for the nine months ended December 30, 1997, were primarily from one customer.
 
GROSS PROFIT
 
    Gross profits for the nine months ended December 31, 1997 were 
approximately $170,100 or 45% of sales, compared to the approximately 
$135,200 or 31% of sales for the corresponding quarter of 1996. The gross 
profit percentage increase was due to the increased emphasis on product sales 
that have a higher gross profit contribution than software installation and 
support service sales.

                                      10

<PAGE>

 
OPERATING EXPENSES
 
    Selling, general & administrative expenses for the nine months ended 
December 31, 1997, were approximately $1,990,800, an increase of 235% over 
the approximately $594,000 recorded for the corresponding nine months of 
1996. The dollar increase in these expenses over the prior year reflected 
additional spending for personnel and programs consistent with the Company's 
emphasis on the T2000 product line. The increased spending level in the nine 
months of 1997 also reflected higher spending for programs and promotions 
needed to generate and support product roll-out of, as well as substantial 
marketing expenditures made in connection with the general availability of, 
the Company's T2000 product line.
 
    Research & development expenses for the nine months ended December 31, 
1997, were approximately $573,700, a 262% increase over the approximately 
$158,700 recorded for the corresponding nine months of 1996. The increased 
expenditures for research and development are due to the increase in number 
of employees and other expenditures devoted to the general development of the 
Company's technology products.
 
OTHER INCOME (EXPENSE)
 
    Other income (expense) charges for the nine months ended December 31, 
1997, were approximately $71,900, a decrease from the approximately 
$(5,712,100) recorded for the corresponding nine months of 1996. In the nine 
months ended December 31, 1996, the Company's other income and expenses 
included several one-time charges associated with the issuance of bridge 
loans which were subsequently converted to equity of approximately 
$5,385,100, and with the cost of an abandoned stock registration of 
approximately $284,600. The Company also had an increase in funds invested 
over the same period in 1996.
 
OTHER
 
    To date, inflation and seasonality have not had a material impact on the 
Company's results of operations.
 
LIQUIDITY AND CAPITAL RESOURCES
 
    In the nine months ended December 31, 1997, the Company received net 
proceeds of approximately $5,885,100 from an initial public offering of the 
Company's common stock and common stock warrants. The Company also secured a 
$1,000,000 one year credit facility in the nine months ended December 31, 
1997, which is secured by investments, receivables and fixed assets. The 
Company used approximately $(2,131,200) in cash flows from operating 
activities, excluding changes in assets and liabilities, during the nine 
months ended December 31, 1997, compared to approximately $(916,400) for the 
corresponding nine months of 1996. The increase in cash flows used in 
operating activities excluding changes in assets and liabilities was mainly 
due to the increase in selling, general and administrative expenses and 
research and development expenses discussed above. The total net cash used by 
operating activities was approximately $(2,440,900) for the nine months ended 
December 31, 1997, compared to approximately $(911,100) for the corresponding 
nine months of 1996.
 
    Cash used by investing activities totalled approximately $2,924,500 for 
the nine months ended December 31, 1997 as compared to approximately $462,200 
for the corresponding nine months of 1996. The main component of that 
investing activity was the investment in short-term securities of 
approximately $2,254,200, as well as continued expenditures for capitalized 
software development and property and equipment of approximately $290,400 and 
$380,000, respectively. The majority of the expenditures related to continued 
development of the T2000 product line.
 
    Cash provided by financing activities totalled approximately $5,880,600 
for the nine months ended December 31, 1997, compared to approximately 
$1,484,200 for the corresponding period of 1996. The Company successfully 
completed an initial public offering in April 1997, which yielded net 
proceeds of approximately $5,885,100. The Company has access to a $1,000,000 
credit line secured by investments, fixed assets and receivables, but did not 
borrow against that line of credit during the nine months ended December 31, 
1997.

    The Company expects to continue to make significant investments in the 
future to support its overall growth. Currently, it is anticipated that 
ongoing operations will be financed primarily from net proceeds of the 
initial public offering, the line of credit facility, from internally 
generated funds and from other potential financing sources under 
consideration. The Company presently has a line of credit, investments, and 
cash and cash equivalents on hand and believes that these will be sufficient 
to meet short-term cash requirements as needed. However, as indicated in the 
Company's most recent Annual Report on Form 10-KSB, while operating 
activities have provided and may provide cash in certain periods, to the 
extent the Company has experienced or experiences growth, the Company's 
operating and product development activities have used and may use cash and 
consequently, such growth may require the Company to obtain additional 
sources of financing. There can be no assurances that unforeseen events may 
not require more working capital than the Company currently has at its 
disposal, or that the Company will be able to obtain financing from 
additional sources.

                                      11

<PAGE>

 
FUTURE OPERATING RESULTS
 
    The preceding paragraphs and the following discussion include 
forward-looking statements regarding the Company's future financial position 
and results of operations. Actual financial position and results of 
operations may differ materially from these statements. All such statements 
are qualified by the following cautionary statements.
 
    The Company has invested significant amounts in the research and 
development and the initial product roll-out marketing and selling for the 
T2000 product line. The emphasis, attention, and dedication of Company's 
limited resources for the T2000 product line have caused and, in management's 
view, will continue to cause negative operating earnings. However, the 
Company believes that the value and sales potential of the T2000 product line 
outweighs the risk of continued operating losses. 


    The first products of the T2000 product line became generally available 
during the second quarter of fiscal 1998 and the Company believes that 
revenues will continue to grow as contracts are finalized and products are 
delivered over the remainder of fiscal 1998 and into fiscal 1999. The 
protracted process of obtaining governmental regulatory approval of products 
(i.e. Federal Communication Commission product certification) and 
difficulties in hiring of senior telecommunications sales and technical staff 
in the current low-unemployment-rate economy have caused, and may continue to 
cause, an effect on the delivery of the Company's products to market.  To 
date the Company has achieved all regulatory approvals, which it has sought, 
and has been able to hire senior telecommunications sales and technical 
staff, although no assurance can be given to such results in the future.

    The Company does not expect revenue growth to occur ratably over the 1998 
and 1999 fiscal years; instead, the Company expects that the major impact of 
the T2000 product introduction on revenues and earnings will occur during 
fiscal 1999. Revenue growth in fiscal 1999 will depend to a large extent on 
the timing of the Company's rollout for products in the T2000 product line.
 
    The Company's revenue growth and profitability in fiscal 1999 will depend 
on many factors beyond the Company's control. These include the timing and 
market acceptance of the T2000 product line and other new products and 
features announced and introduced by the Company and its competitors, and the 
extent to which the Company is successful in implementing its ongoing 
strategy of providing high fidelity or "toll quality" data telephony. Other 
factors include rapid changes in technologies and standards relating to 
telecommunications and data telephony.
 
    The foregoing forward-looking statements involve a number of risks and 
uncertainties. In addition to the factors discussed above, among the other 
factors that could cause actual results to differ materially are those listed 
in the Company's most recent Annual Report on Form 10-KSB under the headings 
"Item 1-- Description of Business--Forward-Looking and Cautionary Statements" 
and "Item 6--Management's Discussion and Analysis of Financial Condition and 
Results of Operations" and in the Company's Registration Statement on Form 
SB-2, effective April 7, 1997, under the headings "Risk Factors" and 
"Business", which are incorporated by reference herein, and included from 
time to time in other documents filed by the Company with the Securities and 
Exchange Commission.
 
    Because of the foregoing uncertainties affecting the Company's future 
operating results, past performance should not be considered to be a reliable 
indicator of future performance. The use of historical trends to anticipate 
results or trends in future periods may be inappropriate. In addition, the 
Company's participation in a highly dynamic industry may result in 
significant volatility in the price of the Company's common stock.

    The Company cautions that the preceding list of cautionary statements is 
not exclusive. The Company does not undertake to update any forward-looking 
statements that may be made from time to time by or on behalf of the Company.

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<PAGE>
 
PART II--OTHER INFORMATION
 
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
 

(a)     Exhibit Description
 
        None.
 
(b)     Since the end of its most recent fiscal year on March 31, 1997, 
e-Net, Inc. has filed the following reports on Form 8-K:
 

        Date of Report      Item Reported
 
        None.
 




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<PAGE>

SIGNATURES
 
    Pursuant to the requirements of the Exchange Act, the Registrant has duly 
caused this report to be signed on its behalf by the undersigned, thereunto 
duly authorized. 



              e-Net, Inc. 
              (Registrant)
 
DATE: February 11, 1998    /s/ Donald J. Shoff 
                           -------------------------
                           Donald J. Shoff 
                           Vice President and Chief Financial Officer 
                           (Principal Financial Officer)
 



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